As filed with the Securities and Exchange Commission on November 7, 2016

File No.            

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10

GENERAL FORM FOR REGISTRATION OF SECURITIES

Pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of 1934

AquaBounty Technologies, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware   04-3156167

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

2 Mill and Main Place, Suite 395

Maynard, Massachusetts

  01754
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code (978) 648-6000

Copies of correspondence to:

 

David A. Frank

Chief Financial Officer

AquaBounty Technologies, Inc.

2 Mill and Main Place, Suite 395

Maynard, Massachusetts 01754

Telephone: (978) 648-6000

 

Bradley C. Brasser

Michael P. Earley

Jones Day

77 W. Wacker Dr.

Chicago, Illinois 60601

Telephone: (312) 782-3939

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

 

Title of each class to be so registered

  

Name of each exchange on

which each class is to be registered

Common Stock, par value $0.001 per share    The NASDAQ Stock Market LLC

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

None

(Title of class)

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer   ¨   Accelerated filer   ¨
Non-accelerated filer   x   (Do not check if a smaller reporting company)   Smaller reporting company   ¨

The Company qualifies as an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933, or the Securities Act.

 

 

 


AQUABOUNTY TECHNOLOGIES, INC.

INFORMATION REQUIRED AND INCORPORATED BY REFERENCE IN FORM 10

CROSS-REFERENCE SHEET BETWEEN INFORMATION STATEMENT AND ITEMS OF FORM 10

Certain information required to be included herein is incorporated by reference to specifically identified portions of the information statement filed herewith as Exhibit 99.1.

 

Item 1. Business.

The information required by this item is contained under the sections of the information statement entitled “Summary,” “Risk Factors,” “Information on AquaBounty,” “Certain Relationships and Related Transactions, and Director Independence,” “Relationship with Intrexon Following the Distribution,” and “Where You Can Find More Information.”

 

Item 1A. Risk Factors.

The information required by this item is contained under the section of the information statement entitled “Risk Factors.”

 

Item 2. Financial Information

The information required by this item is contained under the sections of the information statement entitled “Capitalization,” “Selected Financial Data,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operation.”

 

Item 3. Properties.

The information required by this item is contained under the section of the information statement entitled “Information on AquaBounty — Properties.”

 

Item 4. Security Ownership of Certain Beneficial Owners and Management.

The information required by this item is contained under the section of the information statement entitled “Security Ownership of Certain Beneficial Owners and Management.”

 

Item 5. Directors and Executive Officers.

The information required by this item is contained under the sections of the information statement entitled “Management,” “Certain Relationships and Related Transactions, and Director Independence,” and “Corporate Governance.”

 

Item 6. Executive Compensation.

The information required by this item is contained under the section of the information statement entitled “Executive Compensation.”

 

Item 7. Certain Relationships and Related Transactions, and Director Independence.

The information required by this item is contained under the sections of the information statement entitled “Management,” “Certain Relationships and Related Transactions, and Director Independence,” and “Corporate Governance.”

 

Item 8. Legal Proceedings.

The information required by this item is contained under the section of the information statement entitled “Information on AquaBounty—Legal Proceedings.”


Item 9. Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters.

The information required by this item is contained under the sections of the information statement entitled “Risk Factors,” “The Distribution,” “Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters,” “Description of Capital Stock,” and “Security Ownership of Certain Beneficial Owners and Management.”

 

Item 10. Recent Sales of Unregistered Securities.

The information required by this item is contained under the sections of the information statement entitled “The Distribution,” and “Recent Sales of Unregistered Securities.”

 

Item 11. Description of Registrant’s Securities to be Registered.

The information required by this item is contained under the sections of the information statement entitled “Risk Factors,” “The Distribution,” and “Description of Capital Stock.”

 

Item 12. Indemnification of Directors and Officers.

The information required by this item is contained under the section of the information statement entitled “Limitation of Liability and Indemnification of Directors and Officers.”

 

Item 13. Financial Statements and Supplementary Data.

The information required by this item is contained under the section of the information statement entitled “Index to Financial Statements” (and the financial statements referenced therein).

 

Item 14. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

 

Item 15. Financial Statements and Exhibits.

(a) Financial Statements

The information required by this item is contained under the section of the information statement entitled “Index to Financial Statements” (and the financial statements referenced therein).


(b) Exhibits

The following documents are filed as exhibits hereto:

 

Exhibit Number

  

Exhibit Description

  3.1    Third Amended and Restated Certificate of Incorporation of AquaBounty Technologies, Inc.
  3.2    Amended and Restated Bylaws of AquaBounty Technologies, Inc.
  4.1    Specimen Certificate of Common Stock
10.1    Stock Purchase Agreement, by and between AquaBounty Technologies, Inc. and Intrexon Corporation, dated November 7, 2016
10.2    AquaBounty Technologies, Inc. 2006 Equity Incentive Plan
10.3    Amendment No. 1 to AquaBounty Technologies, Inc. 2006 Equity Incentive Plan
10.4    Form of Stock Option Agreement pursuant to AquaBounty Technologies, Inc. 2006 Equity Incentive Plan
10.5    Form of Restricted Stock Agreement pursuant to AquaBounty Technologies, Inc. 2006 Equity Incentive Plan
10.6    AquaBounty Technologies, Inc. 2016 Equity Incentive Plan
10.7    Relationship Agreement, by and between AquaBounty Technologies, Inc. and Intrexon Corporation, dated December 5, 2012
10.8    Exclusive Channel Collaboration Agreement, by and between AquaBounty Technologies, Inc. and Intrexon Corporation, dated February 14, 2013
10.9    Subscription Agreement, by and between AquaBounty Technologies, Inc. and the investors listed therein, dated February 14, 2013
10.10    Subscription Agreement, by and between AquaBounty Technologies, Inc. and Intrexon Corporation, dated March 5, 2014
10.11    Subscription Agreement, by and between AquaBounty Technologies, Inc. and Intrexon Corporation, dated June 24, 2015
10.12    Promissory Note Purchase Agreement, by and between AquaBounty Technologies, Inc. and Intrexon Corporation, dated February 22, 2016
10.13    Lease and Management Agreement, by and between AquaBounty Panama, S. de R.L. and Luis Lamastus, dated October 1, 2013
10.14    Agreement, by and among Atlantic Canada Opportunities Agency and AQUA Bounty Canada Inc. and AquaBounty Technologies Inc., dated December 16, 2009
10.15    Employment Agreement, by and between Ronald Stotish and AquaBounty Technologies, Inc., dated April 1, 2006
10.16    Employment Agreement, by and between David Frank and AquaBounty Technologies, Inc., dated October 1, 2007
10.17    Employment Agreement, by and between Alejandro Rojas and AquaBounty Technologies, Inc., dated December 30, 2013
10.18    Collaborative Research Agreement, by and between AQUA Bounty Canada Inc. and Tethys Aquaculture Canada, Inc., dated March 22, 2012.
10.19    Intellectual Property License and Full and Final Release among Genesis Group, Inc., HSC Research and Development Partnership and AquaBounty Technologies, Inc., dated February 28, 2014


Exhibit Number

  

Exhibit Description

10.20    Amended and Restated Lease Agreement, by and between AquaBounty Panama, S. de R.L. and Ligia Gabriela Surgeon de Lamastus, dated May 1, 2016
21.1    List of Subsidiaries of AquaBounty Technologies, Inc.
99.1    Preliminary Information Statement


SIGNATURES

Pursuant to the requirements Section 12 of the Securities Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: November 7, 2016   AQUABOUNTY TECHNOLOGIES, INC.
  (Registrant)
  By:  

/s/ Ronald L. Stotish

    (Signature)
  Name:   Ronald L. Stotish
  Title:   Chief Executive Officer and President


EXHIBIT INDEX

 

Exhibit Number

  

Exhibit Description

  3.1    Third Amended and Restated Certificate of Incorporation of AquaBounty Technologies, Inc.
  3.2    Amended and Restated Bylaws of AquaBounty Technologies, Inc.
  4.1    Specimen Certificate of Common Stock
10.1    Stock Purchase Agreement, by and between AquaBounty Technologies, Inc. and Intrexon Corporation, dated November 7, 2016
10.2    AquaBounty Technologies, Inc. 2006 Equity Incentive Plan
10.3    Amendment No. 1 to AquaBounty Technologies, Inc. 2006 Equity Incentive Plan
10.4    Form of Stock Option Agreement pursuant to AquaBounty Technologies, Inc. 2006 Equity Incentive Plan
10.5    Form of Restricted Stock Agreement pursuant to AquaBounty Technologies, Inc. 2006 Equity Incentive Plan
10.6    AquaBounty Technologies, Inc. 2016 Equity Incentive Plan
10.7    Relationship Agreement, by and between AquaBounty Technologies, Inc. and Intrexon Corporation, dated December 5, 2012
10.8    Exclusive Channel Collaboration Agreement, by and between AquaBounty Technologies, Inc. and Intrexon Corporation, dated February 14, 2013
10.9    Subscription Agreement, by and between AquaBounty Technologies, Inc. and the investors listed therein, dated February 14, 2013
10.10    Subscription Agreement, by and between AquaBounty Technologies, Inc. and Intrexon Corporation, dated March 5, 2014
10.11    Subscription Agreement, by and between AquaBounty Technologies, Inc. and Intrexon Corporation, dated June 24, 2015
10.12    Promissory Note Purchase Agreement, by and between AquaBounty Technologies, Inc. and Intrexon Corporation, dated February 22, 2016
10.13    Lease and Management Agreement, by and between AquaBounty Panama, S. de R.L. and Luis Lamastus, dated October 1, 2013
10.14    Agreement, by and among Atlantic Canada Opportunities Agency and AQUA Bounty Canada Inc. and AquaBounty Technologies Inc., dated December 16, 2009
10.15    Employment Agreement, by and between Ronald Stotish and AquaBounty Technologies, Inc., dated April 1, 2006
10.16    Employment Agreement, by and between David Frank and AquaBounty Technologies, Inc., dated October 1, 2007
10.17    Employment Agreement, by and between Alejandro Rojas and AquaBounty Technologies, Inc., dated December 30, 2013
10.18    Collaborative Research Agreement, by and between AQUA Bounty Canada Inc. and Tethys Aquaculture Canada, Inc., dated March 22, 2012.
10.19    Intellectual Property License and Full and Final Release among Genesis Group, Inc., HSC Research and Development Partnership and AquaBounty Technologies, Inc., dated February 28, 2014


Exhibit Number

  

Exhibit Description

10.20   

Amended and Restated Lease Agreement, by and between AquaBounty Panama, S. de R.L. and Ligia Gabriela Surgeon de Lamastus, dated May 1, 2016

21.1    List of Subsidiaries of AquaBounty Technologies, Inc.
99.1    Preliminary Information Statement

Exhibit 3.1

THIRD AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

AQUABOUNTY TECHNOLOGIES, INC.

(ORIGINALLY INCORPORATED AS A/F PROTEIN, INC.)

AQUABOUNTY TECHNOLOGIES, INC., a corporation organized and existing under the laws of the state of Delaware (the “Corporation”) hereby certifies that:

1. The name of the Corporation is AquaBounty Technologies, Inc.

2. The date of filing of the Corporation’s original Certificate of Incorporation was December 17, 1991 and was amended and restated on March 17, 2006 (as amended and restated, the “Original Certificate”).

3. The Third Amended and Restated Certificate of Incorporation, which restates, integrates and further amends the Original Certificate as provided in Exhibit A hereto, has been duly adopted in accordance with the provisions of Section 242 and Section 245 of the General Corporation Law of the State of Delaware (the “DGCL”) by the Board of Directors of the Corporation.

4. Pursuant to Section 245 of the DGCL, approval of the stockholders of the Corporation has been obtained.

5. The Third Amended and Restated Certificate of Incorporation so adopted reads in full as set forth in Exhibit A attached hereto and is hereby incorporated by reference.

IN WITNESS WHEREOF, the undersigned have signed this certificate this 8th day of May, 2015, and hereby affirm and acknowledge under penalty of perjury that the filing of this Third Amended and Restated Certificate of Incorporation is the act and deed of AquaBounty Technologies, Inc.

Effective as of May 8, 2015 .

 

AQUABOUNTY TECHNOLOGIES, INC.:
 

/s/ David A. Frank

  Name: David A. Frank
  Title: Chief Financial Officer


ATTEST:
  /s/ Maria Chan
  Name: Maria Chan
  Title: Controller

 

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EXHIBIT A

THIRD AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

AQUABOUNTY TECHNOLOGIES, INC.

(ORIGINALLY INCORPORATED AS A/F PROTEIN, INC.)

1.     The name of this corporation is AquaBounty Technologies, Inc. (the “Corporation”).

2.     The address, including street, number, city and county of the registered officer of the Corporation in the State of Delaware is 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808 in the county of New Castle; and the name of the registered agent of the Corporation in the State of Delaware at such address is Corporation Service Company.

3.     The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State of Delaware or any applicable successor act thereto, as the same may be amended from time to time (the “DGCL”).

4.     (a) The Corporation is authorized to issue two (2) classes of stock to be designated Common Stock and Preferred Stock. The Corporation is authorized to issue Two Hundred Million (200,000,000) shares of Common Stock, with a par value of One Tenth of One Cent ($0.001) per share, and Forty Million (40,000,000) shares of Preferred Stock, with a par value of One Cent ($0.01) per share.

(b) The Preferred Stock may be issued in any number of series, as determined by the Corporation’s board of directors (the “Board of Directors”). The Board of Directors is hereby authorized to issue the shares of Preferred Stock in such series and to fix from time to time before issuance the number of shares to be included in any such series and the designation, relative powers, preferences, and rights and qualifications, limitations, or restrictions of all shares of such series. The authority of the Board of Directors with respect to each such series will include, without limiting the generality of the foregoing, the determination of any or all of the following:

(i) the number of shares of any series and the designation to distinguish the shares of such series from the shares of all other series;

(ii) the voting powers, if any, and whether such voting powers are full or limited in such series;

(iii) the redemption provisions, if any, applicable to such series, including the redemption price or prices to be paid;

(iv) whether dividends, if any, will be cumulative or noncumulative, the dividend rate of such series, and the dates and preferences of dividends on such series;


(v) the rights of such series upon the voluntary or involuntary dissolution of, or upon any distribution of the assets of, the Corporation;

(vi) the provisions, if any, pursuant to which the shares of such series are convertible into, or exchangeable for, shares of any other class or classes or of any other series of the same or any other class or classes of stock, or any other security, of the Corporation or any other corporation or other entity, and the price or prices or the rates of exchange applicable thereto;

(vii) the right, if any, to subscribe for or to purchase any securities of the Corporation or any other corporation or other entity;

(viii) the provisions, if any, of a sinking fund applicable to such series; and

(ix) any other relative, participating, optional, or other special powers, preferences, rights, qualifications, limitations, or restrictions thereof;

all as may be determined from time to time by the Board of Directors and stated in the resolution or resolutions providing for the issuance of such Preferred Stock.

(c) Subject to the rights of the holders of any series of Preferred Stock, the number of authorized shares of any of the Common Stock or Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority in voting power of the stock of the Corporation entitled to vote thereon irrespective of the provisions of Section 242(b)(2) of the DGCL, and no vote of the holders of any of the Common Stock or Preferred Stock voting separately as a class shall be required therefor.

5.     For the management of the business and for the conduct of the affairs of the Corporation, and in further definition, limitation and regulation of the powers of the Corporation, of its directors and of its stockholders or any class thereof, as the case may be, it is further provided that:

(a)     (i) The management of the business and the conduct of the affairs of the Corporation shall be vested in its Board of Directors. Subject to the rights of holders of any series of Preferred Stock to elect directors, the number of directors which shall constitute the whole Board of Directors shall be fixed by the Board of Directors in accordance with the bylaws of the Corporation (the “Bylaws”).

(ii) Subject to the rights of holders of any series of Preferred Stock, holders of record of the shares of Common Stock and of any other class or series of voting stock (including the Preferred Stock), exclusively and voting together as a single class, shall be entitled to elect the directors of the Corporation. At any meeting held for the purpose of electing a director, the presence in person or by proxy of the holders of a majority of the outstanding shares of the class or series entitled to elect such director shall constitute a quorum for the purpose of electing such director. The term of each director shall be one year and shall continue until the election and qualification of his or her successor and be subject to his or her earlier death, disqualification, resignation or removal.

 

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(iii) Subject to the rights of the holders of any series of Preferred Stock, the Board of Directors or any individual director may be removed from office at any time (i) with cause by the affirmative vote of the holders of at least a majority of the voting power of the then outstanding voting stock of the Corporation entitled to vote thereon (the “Voting Stock”) or (ii) without cause by the affirmative vote of the holders of at least sixty-six and two-thirds percent (66 2/3%) of the voting power of the then outstanding shares of Voting Stock.

(iv) Subject to the rights of holders of any series of Preferred Stock, newly created directorships resulting from any increase in the number of directors and any vacancies on the Board of Directors resulting from death, disability, resignation, disqualification, removal, or other cause will be filled solely by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board of Directors, or by a sole remaining director. No decrease in the number of directors constituting the Board of Directors will shorten the term of an incumbent director. Any director elected to fill a vacancy not resulting from an increase in the number of directors shall hold office for the remaining term of his or her predecessor.

(b)     (i) Notwithstanding any other provision of this Certificate of Incorporation or any provision of law that might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any series of Preferred Stock required by law, by this Certificate of Incorporation or by the certificate of designation of a series of Preferred Stock, the Bylaws may also be amended, altered or repealed and new Bylaws may be adopted by the affirmative vote of the holders of at least sixty-six and two-thirds percent (66 2/3%) in voting power of the stock of the Corporation entitled to vote thereon. In furtherance and not in limitation of the powers conferred upon it by law, the Board of Directors is expressly authorized and empowered to adopt, amend and repeal the Bylaws by the affirmative vote of a majority of the total number of directors present at a regular or special meeting of the Board of Directors at which there is a quorum or by written consent.

(ii) The directors of the Corporation need not be elected by written ballot unless the Bylaws so provide.

(iii) Subject to the terms of any series of Preferred Stock, any action required or permitted to be taken by the stockholders of the Corporation must be effected at an annual or special meeting of stockholders called in accordance with the Bylaws and no action may be taken by the stockholders by written consent in lieu of a meeting.

(iv) Special meetings of the stockholders of the Corporation (i) may be called by the Chairman of the Board of Directors or the Corporation’s Chief Executive Officer, and (ii) shall be called by the Corporation’s Chief Executive Officer or Secretary at the request in writing of a majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time any such written request is made by the Board of Directors), and may not be called by another other person or persons. Business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting.

 

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(v) Advance notice of stockholder nominations for the election of directors and of other business to be brought by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in the Bylaws of the Corporation.

6.     (a) To the fullest extent permitted by the DGCL or any other laws presently or hereinafter in effect, directors of the Corporation shall have no personal liability to the Corporation or its stockholders for monetary damages for or with respect to any acts or omissions in the performance of such person’s duties as a director of the Corporation, except to the extent now or hereafter required by law; provided , however , that nothing contained in this Section 6(a) shall eliminate or limit the liability of a director (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to the provisions of Section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit. No repeal or modification of this Section 6(a) shall apply to or have any adverse effect on any right or protection of, or any limitation of the liability of, a director of the Corporation existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification. If the Delaware DGCL is amended after approval by the stockholders of this Section 6(a) to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL as so amended.

(b) The Corporation may indemnify, and advance expenses to, to the fullest extent permitted by law, any person who was or is a party to or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of the fact that the person is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise.

(c) No amendment to or repeal of the provisions of this Section 6 shall apply to or have any effect on the liability or alleged liability of any person for or with respect to any acts or omissions of such person occurring prior to such amendment.

7.     (a) The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, except as provided in subsection (b) of this Section 7, and all rights conferred upon the stockholders herein are granted subject to this reservation.

(b) Notwithstanding any other provisions of this Certificate of Incorporation or any provision of law which might otherwise permit a lesser vote or no vote, the affirmative vote of a majority of the voting power of the stock of the Corporation entitled to vote thereon, voting together as a single class, shall be required to alter, amend or repeal any provision of this

 

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Certificate of Incorporation, or to adopt any new provision of this Certificate of Incorporation. Notwithstanding any other provisions of this Certificate of Incorporation or any provision of law which might otherwise permit a lesser vote or no vote, the affirmative vote of at least sixty-six and two-thirds percent (66 2/3%) of the voting power of the stock of the Corporation entitled to vote thereon, voting together as a single class, shall be required to alter, amend or repeal Section 5(a), Section 5(b)(i), Section 5(b)(iii), Section 6(a), Section 6(b), Section 8 and this sentence of this Certificate of Incorporation (other than any amendment of such Sections and this sentence in connection with a restatement of the Certificate of Incorporation), or in each case, the definition of any capitalized terms used therein or any successor provision (including, without limitation, any such article or section as renumbered as a result of any amendment, alteration, change, repeal or adoption of any other provision of this Certificate of Incorporation).

8.     Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for (1) any derivative action or proceeding brought on behalf of the Corporation, (2) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (3) any action asserting a claim arising pursuant to any provision of the DGCL, or (4) any action asserting a claim governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Section 8.

9.     The Corporation renounces, to the fullest extent permitted by law, any interest or expectancy of the Corporation in, or in being offered an opportunity to participate in, any Excluded Opportunity. An “Excluded Opportunity” is any matter, transaction or interest that is presented to, or acquired, created or developed by, or which otherwise comes into the possession of (i) any director of the Corporation who is not an employee of the Corporation or any of its subsidiaries, or (ii) any stockholder of the Corporation or any partner, member, director, stockholder, employee or agent of any such holder, other than someone who is an employee of the Corporation or any of its subsidiaries (collectively, “Covered Persons”), unless such matter, transaction or interest is presented to, or acquired, created or developed by, or otherwise comes into the possession of, a Covered Person expressly and solely in such Covered Person’s capacity as a director of the Corporation.

10.     The Corporation shall not be subject to the provisions of Section 203 of the DGCL (Business Combination with Interested Stockholders). This Article shall be amended only by the affirmative vote of a majority of the Corporation’s stockholders entitled to vote on such matter.

 

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Exhibit 3.2

 

 

AQUABOUNTY TECHNOLOGIES INC.

AMENDED AND RESTATED BYLAWS

As Adopted and in

Effect as of May 18, 2012

 

 

/s/ David A. Frank

David A. Frank

Corporate Secretary


TABLE OF CONTENTS

 

     Page  

STOCKHOLDERS’ MEETINGS

     1   

1. Time and Place of Meetings

     1   

2. Annual Meeting

     1   

3. Special Meetings

     1   

4. Notice of Meetings

     1   

5. Inspectors

     2   

6. Quorum

     2   

7. List of Stockholders

     2   

8. Voting; Proxies

     2   

9. Order of Business

     3   

DIRECTORS

     5   

10. Function

     5   

11. Number, Election, and Terms

     5   

12. Vacancies and Newly Created Directorships

     5   

13. Removal

     5   

14. Nominations of Directors; Election

     5   

15. Resignation

     7   

16. Regular Meetings

     7   

17. Special Meetings

     7   

18. Quorum

     7   

19. Participation in Meetings by Remote Communications

     7   

20. Committees

     7   

21. Compensation

     8   

22. Rules

     8   

23. Action without Meeting

     9   

NOTICES

     9   

24. Generally

     9   

25. Waivers

     9   

OFFICERS

     9   

26. Generally

     9   

27. Compensation

     10   


28. Succession

     10   

29. Voting Securities Owned by the Company

     10   

30. Authority and Duties

     10   

STOCK

     10   

31. Certificates

     10   

32. Classes of Stock

     10   

33. Lost, Stolen, or Destroyed Certificates

     11   

34. Transfer

     11   

35. Setting of Record Date

     11   

36. Transfer Agents

     12   

37. Anti-greenmail

     12   

DIVIDENDS

     12   

38. Dividends

     12   

INDEMNIFICATION OF DIRECTORS AND OFFICERS

     13   

39. Indemnification

     13   

GENERAL

     15   

40. Fiscal Year

     15   

41. Seal

     15   

42. Location and Reliance Upon Books, Reports, and Records

     15   

43. Time Periods

     16   

44. Amendments

     16   

45. Certain Defined Terms

     16   


STOCKHOLDERS’ MEETINGS

1. Time and Place of Meetings . All meetings of the stockholders for the election of Directors or for any other purpose will be held at such time and place, within or without the State of Delaware, as may be designated by the Board of Directors (the “Board”) of Aquabounty Technologies Inc. (the “Company”) or, in the absence of a designation by the Board, the Chairman of the Board (the “Chairman”), the Chief Executive Officer, or the Secretary, and stated in the notice of meeting. Notwithstanding the foregoing, the Board may, in its sole discretion, determine that meetings of the stockholders shall not be held at any place, but may instead be held by means of remote communications, subject to the guidelines and procedures as the Board may adopt from time to time. The Board may postpone and reschedule any previously scheduled annual or special meeting of the stockholders.

2. Annual Meeting . An annual meeting of the stockholders will be held at such date and time as may be designated from time to time by the Board, at which meeting the stockholders will elect by a plurality vote the Directors to succeed those whose terms expire at such meeting and will transact such other business as may properly be brought before the meeting in accordance with Bylaw 8.

3. Special Meetings . Special meetings of the stockholders of the Company (i) may be called by the Chairman of the Board of Directors or the Chief Executive Officer, and (ii) shall be called by the Chief Executive Officer or Secretary at the request in writing of a majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time any such written request is made by the Board of Directors) or the holders of not less than a majority of the outstanding common stock of the Company (the “Common Stock”).

4. Notice of Meetings . Written notice of every meeting of the stockholders, stating the place, if any, date, and time thereof, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, will be given not less than 10 nor more than 60 calendar days before the date of the meeting to each stockholder of record entitled to vote at such meeting, except as otherwise provided herein or by law. Written notice of every meeting of stockholders shall be given by personal delivery or by mail or by electronic communication to the extent permitted by the Delaware General Corporation Law. If mailed, such notice shall be deemed given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the Company. If electronically transmitted, such notice shall be deemed given when directed to an electronic mail address at which the stockholder has consented to receive notice. Confirmation of receipt will not be required. When a meeting is adjourned to another place, date, or time, written notice need not be given of the adjourned meeting if the place, if any, date, and time thereof, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken; provided , however , that if the adjournment is for more than 30 calendar days, or if after the adjournment a new record date is fixed for the adjourned meeting, written notice of the place, if


any, date, and time thereof, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting must be given in conformity herewith. At any adjourned meeting, any business may be transacted which properly could have been transacted at the original meeting.

5. Inspectors . The Board shall appoint one or more inspectors of election to act as judges of the voting, to determine those entitled to vote at any meeting of the stockholders and to make a written report thereof, or any adjournment thereof, in advance of such meeting subject to, and in accordance with, Delaware General Corporation Law. The Board 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 of the meeting may appoint one or more substitute inspectors. Each inspector, before entering upon the discharge of the duties of inspector, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of such inspector’s ability.

6. Quorum . Except as otherwise provided by law or by the Company’s Certificate of Incorporation, as it may be amended from time to time or supplemented by any Certificate of Designation setting forth the rights of any series of Preferred Stock that the Company may file from time to time (as so amended and supplemented, the “Certificate of Incorporation”), the holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, will constitute a quorum at all meetings of the stockholders for the transaction of business thereat. If, however, such quorum is not present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, will have the power to adjourn the meeting from time to time, as provided in these Bylaws and the Delaware General Corporation Law, until a quorum is present or represented. When a quorum is once present it is not broken by the subsequent withdrawal of any stockholder.

7. List of Stockholders . It shall be the duty of the Secretary or other officer who has charge of the stock ledger to prepare and make, at least 10 days before the meeting of the stockholders, a complete list of the stockholders entitled to vote thereat, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in such stockholder’s name. Such list shall be produced and kept available at the times and places required by Delaware General Corporation Law.

8. Voting; Proxies . (a) Except as otherwise provided by law or the Certificate of Incorporation, each stockholder will be entitled at every meeting of the stockholders to one vote for each share of the Common Stock standing in the name of such stockholder on the books of the Company on the record date for the meeting and such votes may be cast either in person or by proxy but no such proxy shall be voted upon after three years from its date, unless such proxy provides for a longer period. Every proxy must be in a form permitted by the Delaware General Corporation Law. Without affecting any vote previously taken, a stockholder may revoke any proxy that is not irrevocable by attending the meeting and voting in person, by revoking the proxy by giving notice to the Secretary of the Company, or by a later appointment of a proxy. The vote upon any question brought before a meeting of the stockholders may be by voice vote, unless otherwise required by the Delaware General Corporation Law, the Certificate of

 

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Incorporation or these Bylaws or unless the Chairman or the holders of a majority of the outstanding shares of all classes of stock entitled to vote thereon present in person or by proxy at such meeting otherwise determine. Every vote taken by written ballot will be counted by the inspectors of election. When a quorum is present at any meeting, the affirmative vote of the holders of a majority of the stock present in person or represented by proxy at the meeting and entitled to vote on the subject matter and which has actually been voted will be the act of the stockholders, except in the election of Directors or as otherwise provided in these Bylaws, the Certificate of Incorporation, or by law.

(b) If any stockholder of the Company who is not a U.S. person (as defined under Regulation S of the Securities Act of 1933 (the “Securities Act”)) or any other person appearing to have an interest, economic or otherwise, in shares held by such stockholder, has been duly served with a written notice from the Company demanding information concerning the beneficial ownership and voting rights and powers of shares of the Company held by such stockholder and is in default for a period of fourteen (14) days from the date of service of such notice in supplying to the Company the information thereby required or, in purported compliance with such a notice, has made a statement which is false or inadequate in a material respect, then (unless the Board of Directors otherwise determines) in respect of shares of capital stock held by such stockholder (the “Default Shares”), the stockholder shall not (for so long as the default continues) nor shall any transferee to whom any of such shares are transferred, with certain exceptions, be entitled to attend or vote either personally or by proxy at a stockholders’ meeting of the Company or to exercise any other rights conferred by share ownership in relation to stockholders’ meetings. Where the Default Shares represent 1 per cent. or more of the issued and outstanding shares of a particular class of capital stock, the Board of Directors may in their absolute discretion by notice to such stockholder direct (i) that any dividend or other money which would otherwise be available be payable in respect of the Default Shares shall be retained by the Company; and/or (ii) no transfer of any of the shares held by such stockholder shall be registered unless the transfer is approved by the Board of Directors in its sole discretion.

9. Order of Business . (a) The Chairman, or such other officer of the Company designated by the Board, will call meetings of the stockholders to order and will act as presiding officer thereof. Unless otherwise determined by the Board prior to the meeting, the presiding officer of the meeting of the stockholders will also determine the order of business and have the authority in his or her sole discretion to regulate the conduct of any such meeting, including without limitation by imposing restrictions on the persons (other than stockholders of the Company or their duly appointed proxies) that may attend any such stockholders’ meeting, by ascertaining whether any stockholder or his proxy may be excluded from any meeting of the stockholders based upon any determination by the presiding officer, in his sole discretion, that any such person has unduly disrupted or is likely to disrupt the proceedings thereat, and by determining the circumstances in which any person may make a statement or ask questions at any meeting of the stockholders.

(b) At an annual meeting of the stockholders, only such business will be conducted or considered as is properly brought before the annual meeting. To be properly brought before an annual meeting, business must be (i) specified in the notice of the annual meeting (or any supplement thereto) given by or at the direction of the Board in accordance with Bylaw 4, (ii)

 

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otherwise properly brought before the meeting by the presiding officer or by or at the direction of the Board, or (iii) otherwise properly requested to be brought before the annual meeting by a stockholder of the Company in accordance with Bylaw 9(c).

(c) For business to be properly requested by a stockholder to be brought before an annual meeting, (i) the stockholder must be a stockholder of the Company of record at the time of the giving of the notice for such annual meeting provided for in these Bylaws, (ii) the stockholder must be entitled to vote at such meeting, and (iii) the stockholder must have given timely notice thereof in writing to the Secretary. To be timely, a stockholder’s notice must be delivered to or mailed and received at the principal executive offices of the Company not less than 45 calendar days prior to the first anniversary of the date on which the Company first mailed its proxy materials for the preceding year’s annual meeting of stockholders; provided , however , that if the date of the annual meeting is advanced more than 30 calendar days prior to or delayed by more than 30 calendar days after the anniversary of the preceding year’s annual meeting, notice by the stockholder to be timely must be so delivered not later than the close of business on the later of the 90th calendar day prior to such annual meeting or the 20th calendar day following the day on which public disclosure of the date of such meeting is first made. In no event shall the public disclosure of an adjournment of an annual meeting commence a new time period for the giving of a stockholder’s notice as described above. With respect to the annual meeting of stockholders of the Company to be held in the year 2006, to be timely, a stockholder’s notice must be so received not later than the close of business on the later of (A) the 90 th calendar day prior to such annual meeting and (B) the 20 th day following the calendar day on which public disclosure of the date of such annual meeting was first made, whichever first occurs. A stockholder’s notice to the Secretary must set forth as to each matter the stockholder proposes to bring before the annual meeting (A) a description in reasonable detail of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (B) the name and address, as they appear on the Company’s books, of the stockholder proposing such business and the beneficial owner, if any, on whose behalf the proposal is made, (C) the class or series and number of shares of the Common Stock of the Company that are owned beneficially and of record by the stockholder proposing such business and by the beneficial owner, if any, on whose behalf the proposal is made, and (D) a description of all arrangements or understandings among such stockholder, the beneficial owner on whose behalf the notice is given and any other person or persons (including their names) in connection with the proposal of such business of such stockholder and any material interest of such stockholder in such business, and (E) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the annual meeting. Notwithstanding the foregoing provisions of this Bylaw 9(c), if the Company then has any class of equity securities registered under the Securities Exchange Act of 1934 (the “Exchange Act”) a stockholder must 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 9(c). For purposes of these Bylaws, at any time that the Company has a class of equity securities registered under the Exchange Act, it shall be referred to as a “U.S. Reporting Company.” Nothing in this Bylaw 9(c) will be deemed to affect any rights of stockholders to request inclusion of proposals in the Company’s proxy statement pursuant to Rule 14a-8 under the Exchange Act, if the Company is then a U.S. Reporting Company. For purposes of this Bylaw 9(c) and Bylaw 14, “public disclosure” means disclosure in a press release reported by the

 

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Dow Jones News Service, Associated Press, Reuters, Bloomberg or comparable national news service or in a document filed by the Company with the Alternative Investment Market (“AIM”) (if the Company’s shares are listed on AIM at such time) or the Securities and Exchange Commission pursuant to the Exchange Act (if the Company is then a U.S. Reporting Company) or furnished to stockholders.

(d) At a special meeting of stockholders, only such business may be conducted or considered as is properly brought before the meeting. To be properly brought before a special meeting, business must be (i) specified in the notice of the meeting (or any supplement thereto) given in accordance with Bylaws 3 and 4 or (ii) otherwise properly brought before the meeting by the presiding officer or by or at the direction of the Board.

(e) The determination of whether any business sought to be brought before any annual or special meeting of the stockholders is properly brought before such meeting in accordance with this Bylaw 9 will be made by the presiding officer of such meeting. If the presiding officer determines that any business is not properly brought before such meeting, he or she will so declare to the meeting and any such business will not be conducted or considered.

DIRECTORS

10. Function . The business and affairs of the Company will be managed by or under the direction of its Board which may exercise all such powers of the Company and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these Bylaws required to be exercised or done by the stockholders.

11. Number . The authorized number of Directors shall be 7 or such other number as shall from time to time be fixed by the Board.

12. Vacancies and Newly Created Directorships . Newly created directorships resulting from any increase in the number of Directors and any vacancies on the Board resulting from death, resignation, disqualification, removal, or other cause will be filled solely by the affirmative vote of a majority of the remaining Directors then in office, even though less than a quorum of the Board, or by a sole remaining Director. No decrease in the number of Directors constituting the Board will shorten the term of an incumbent Director.

13. Removal . Any Director may be removed from office by the stockholders only in the manner provided in the Certificate of Incorporation.

14. Nominations of Directors; Election . (a) Only persons who are nominated in accordance with this Bylaw 14 will be eligible for election at a meeting of stockholders as Directors of the Company.

(b) Nominations of persons for election as Directors of the Company may be made only at an annual meeting of stockholders (i) by or at the direction of the Board or a committee thereof or (ii) by any stockholder that is a stockholder of record at the time of giving of notice provided for in this Bylaw 14, who is entitled to vote for at such meeting, and who complies with the procedures set forth in this Bylaw 14. All nominations by stockholders must be made pursuant to timely notice in proper written form to the Secretary.

 

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(c) To be timely, a stockholder’s notice with respect to nominations of persons for election as Directors of the Company must be delivered to or mailed and received at the principal executive offices of the Company not less than 45 calendar days prior to the first anniversary of the date on which the Company first mailed its proxy materials for the preceding year’s annual meeting of stockholders; provided , however , that if the date of the annual meeting is advanced more than 30 calendar days prior to or delayed by more than 30 calendar days after the anniversary of the preceding year’s annual meeting, notice by the stockholder to be timely must be so delivered not later than the close of business on the later of the 90th calendar day prior to such annual meeting or the 20th calendar day following the day on which public disclosure of the date of such meeting is first made. In no event shall the public disclosure of an adjournment of an annual meeting commence a new time period for the giving of a stockholder’s notice as described above. With respect to the annual meeting of stockholders of the Company to be held in the year 2006, to be timely, a stockholder’s notice must be so received not later than the close of business on the later of (i) the 90 th calendar day prior to such annual meeting and (ii) the 20 th day following the calendar day on which public disclosure of the date of such annual meeting was first made, whichever first occurs. To be in proper written form, such stockholder’s notice must set forth or include (i) the name and address, as they appear on the Company’s books, of the stockholder giving the notice and of the beneficial owner, if any, on whose behalf the nomination is made; (ii) a representation that the stockholder giving the notice is a holder of record of Common Stock of the Company entitled to vote at such annual meeting; (iii) the class and number of shares of the Common Stock of the Company owned beneficially and of record by the stockholder giving the notice and by the beneficial owner, if any, on whose behalf the nomination is made; (iv) a description of all arrangements or understandings between or among any of (A) the stockholder giving the notice, (B) the beneficial owner on whose behalf the notice is given, (C) each nominee, and (D) any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder giving the notice; (v) the name, age, business address, residence address and occupation of the nominee proposed by the stockholder; (vi) such other information regarding each nominee proposed by the stockholder giving the notice as would be required to be included in a proxy statement filed pursuant to the proxy rules of AIM (or if the Company is then a U.S. Reporting Company, the proxy rules of the Securities and Exchange Commission) had the nominee been nominated, or intended to be nominated, by the Board; (vii) the signed consent of each nominee to serve as a Director of the Company if so elected; and (viii) a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice. At the request of the Board, any person nominated by the Board for election as a Director must furnish to the Secretary that information required to be set forth in a stockholder’s notice of nomination which pertains to the nominee. The presiding officer of any annual meeting will, if the facts warrant, determine that a nomination was not made in accordance with the procedures prescribed by this Bylaw 14, and if he or she should so determine, he or she will so declare to the meeting and the defective nomination will be disregarded. Notwithstanding the foregoing provisions of this Bylaw 14, a stockholder must also comply with all applicable requirements of AIM and, if the Company is then a U.S. Reporting Company, all applicable requirements of the Exchange Act with respect to the matters set forth in this Bylaw 14. Nothing in the foregoing

 

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provision shall obligate the Company or the Board to include in any proxy statement or other stockholder communication distributed on behalf of the Company or the Board information with respect to any nominee for Directors submitted by a stockholder. For purposes of this Bylaw 14(c), “public disclosure” shall have the meaning set forth in Bylaw 9(c).

15. Resignation . Any Director may resign at any time by giving notice in writing or by electronic submission of his or her resignation to the Chairman or the Secretary. Unless otherwise stated in such notice of resignation, the acceptance thereof shall not be necessary to make it effective; and such resignation shall take effect at the time specified therein or, in the absence of such specification, it shall take effect upon the receipt thereof.

16. Regular Meetings . Regular meetings of the Board may be held immediately after the annual meeting of the stockholders and at such other time and place either within or without the State of Delaware as may from time to time be determined by the Board. Notice of regular meetings of the Board need not be given.

17. Special Meetings . Special meetings of the Board may be called by the Chairman, by the Chief Executive Officer or by the Board and notice will be deemed given to each Director by whom such notice is not waived, if it is given 24 hours before the start of the meeting (i) in person, (ii) by facsimile telecommunication, when directed to a number at which the Director has consented to receive notice, (iii) by electronic mail, when directed to an electronic mail address at which the Director has consented to receive notice or (iv) by other similar medium of communication, or if it is given 72 hours before the start of the meeting by mail, when deposited in the United States mail, postage prepaid, and when directed to an address to which the Director has consented to receive notice. Special meetings of the Board may be held at such time and place either within or without the State of Delaware as is determined by the Board or specified in the notice of any such meeting.

18. Quorum . At all meetings of the Board, the lowest whole number of directors as shall from time to time constitute not less than a majority of the authorized number of directors in accordance with Bylaw 11 will constitute a quorum for the transaction of business. The act of a majority of the Directors present at any meeting at which there is a quorum will be the act of the Board. If a quorum is not present at any meeting of the Board, the Directors present thereat may adjourn the meeting from time to time to another place, time, or date, without notice other than announcement at the meeting, until a quorum is present.

19. Participation in Meetings by Remote Communications . Members of the Board or any committee designated by the Board may participate in a meeting of the Board or any such committee, as the case may be, by means of telephone conference or other means by which all persons participating in the meeting can hear each other, and such participation in a meeting will constitute presence in person at the meeting.

20. Committees . (a) The Board may designate an executive committee (the “ Executive Committee” ) of not less than two members of the Board, one of whom will be the Chairman. The Executive Committee will have and may exercise the powers of the Board, except the power to amend these Bylaws or the Certificate of Incorporation, fill any vacancy on

 

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the Executive Committee, adopt an agreement of merger or consolidation, authorize the issuance of stock, declare a dividend, or recommend to the stockholders the sale, lease, or exchange of all or substantially all of the Company’s property and assets, a dissolution of the Company, or a revocation of a dissolution, and except as otherwise provided by law.

(b) The Board, by resolution passed by the Board, may designate one or more additional committees. Each such committee will consist of one or more Directors and each to have such lawfully delegable powers and duties as the Board may confer; provided, however, that no committee shall exercise any power or duty expressly required by the Delaware General Corporation Law, as it may be amended from time to time, to be acted upon by the Board.

(c) The members of each committee of the Board will serve in such capacity at the pleasure of the Board or as may be specified in any resolution from time to time adopted by the Board. The Board may designate one or more Directors as alternate members of any such committee, who may replace any absent or disqualified member at any meeting of such committee. In lieu of such designation by the Board, in the absence or disqualification of any member of a committee of the Board, the members thereof present at any such meeting of such committee and not disqualified from voting, whether or not they constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member.

(d) Except as otherwise provided in these Bylaws or by law, any committee of the Board, to the extent provided in Bylaw 20(a) or, if applicable, in the resolution of the Board, will have and may exercise all the powers and authority of the Board in the direction of the management of the business and affairs of the Company. Any such committee designated by the Board will have such name as may be determined from time to time by resolution adopted by the Board. Unless otherwise prescribed by the Board, a majority of the members of any committee of the Board will constitute a quorum for the transaction of business, and the act of a majority of the members present at a meeting at which there is a quorum will be the act of such committee. Each committee of the Board may prescribe its own rules for calling and holding meetings and its method of procedure, subject to any rules prescribed by the Board. Each committee of the Board shall keep written minutes of its proceedings and shall report on such proceedings to the Board.

21. Compensation . The Board may establish the compensation for, and reimbursement of the expenses of, Directors for membership on the Board and on committees of the Board, attendance at meetings of the Board or committees of the Board, and for other services by Directors to the Company or any of its majority-owned subsidiaries. No such payment shall preclude any director from serving the Company in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for service as committee members.

22. Rules . The Board may adopt rules and regulations for the conduct of meetings and the oversight of the management of the affairs of the Company.

 

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23. Action without Meeting . Any action required or permitted to be taken at any meeting of the Board or any committee thereof may be taken without a meeting if all of the members of the Board or of any such committee consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filled with the minutes or proceedings of the Board or of such committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

NOTICES

24. Generally . Except as otherwise provided by law, these Bylaws, or the Certificate of Incorporation, whenever by law or under the provisions of the Certificate of Incorporation or these Bylaws notice is required to be given to any Director or stockholder, it will not be construed to require personal notice, but such notice may be given in writing, by mail or courier service, addressed to such Director or stockholder, at the address of such Director or stockholder as it appears on the records of the Company, with postage thereon prepaid, and such notice will be deemed to be given at the time when the same is deposited in the United States mail. Notice to Directors may also be given by telephone, telegram, facsimile, electronic transmission or similar medium of communication or as otherwise may be permitted by these Bylaws.

25. Waivers . Whenever any notice is required to be given by law or under the provisions of the Certificate of Incorporation or these Bylaws, a waiver thereof in writing, signed by the person or persons entitled to such notice or such person’s duly authorized attorney, or a waiver by electronic transmission by the person whether before or after the time of the event for which notice is to be given, will be deemed equivalent to such notice. Attendance of a person at a meeting will constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

OFFICERS

26. Generally . The officers of the Company will be elected by the Board and will consist of a Chairman, a Chief Executive Officer, a Secretary, and a Treasurer. The Board may also choose any or all of the following: one or more Vice Chairmen, one or more Assistants to the Chairman, one or more Vice Presidents (who may be given particular designations with respect to authority, function, or seniority), one or more Assistant Secretaries, one or more Assistant Treasurers and such other officers as the Board may from time to time determine. Notwithstanding the foregoing, by specific action the Board may authorize the Chairman or Chief Executive Officer to appoint any person to any office other than Chairman, Chief Executive Officer, Secretary, or Treasurer. Any number of offices may be held by the same person. Any of the offices may be left vacant from time to time as the Board may determine. In the case of the absence or disability of any officer of the Company or for any other reason deemed sufficient by the Board, the Board may delegate the absent or disabled officer’s powers or duties to any other officer or to any Director.

 

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27. Compensation . The compensation of all officers and agents of the Company who are also Directors of the Company will be fixed by the Board or by a committee of the Board. The Board may fix, or delegate the power to fix, the compensation of other officers and agents of the Company to an officer of the Company.

28. Succession . The officers of the Company will hold office until their successors are elected and qualified or until their earlier resignation, retirement, removal or death. Any officer may be removed at any time by the Board. Any vacancy occurring in any office of the Company may be filled by the Board or by the Chairman as provided in Bylaw 26.

29. Voting Securities Owned by the Company . Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Company may be executed in the name of and on behalf of the Company by the Chief Executive Officer or any Vice President or any other officer authorized to do so by the Board and any such officer may, in the name of and on behalf of the Company, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Company may own securities and at any such meeting shall possess and may exercise any and all rights and power incident to the ownership of such securities and which, as the owner thereof, the Company might have exercised and possessed if present. The Board may, by resolution, from time to time confer like powers upon any other person or persons.

30. Authority and Duties . Each of the officers of the Company will have such authority and will perform such duties as are customarily incident to their respective offices or as may be specified from time to time by the Board.

STOCK

31. Certificates . The shares of stock of the Company shall be represented by a certificate or shall be uncertificated. Certificates representing shares of stock of the Company will be in such form as is determined by the Board, subject to applicable legal requirements. Each such certificate will be numbered and its issuance recorded in the books of the Company, and such certificate will exhibit the holder’s name and the number of shares and will be signed by, or in the name of, the Company by the Chairman or the Chief Executive Officer and the Secretary or an Assistant Secretary, or the Treasurer or an Assistant Treasurer, and will also be signed by, or bear the facsimile signature of, a duly authorized officer or agent of any properly designated transfer agent of the Company. Any or all of the signatures and the seal of the Company, if any, upon such certificates may be facsimiles, engraved, or printed. Such certificates may be issued and delivered notwithstanding that the person whose facsimile signature appears thereon may have ceased to be such officer at the time the certificates are issued and delivered.

32. Classes of Stock . The designations, powers, preferences, and relative participating, optional, or other special rights of the various classes of stock or series thereof, and the qualifications, limitations, or restrictions thereof, will be set forth in full or summarized on the face or back of the certificates which the Company issues to represent its stock or, in lieu thereof, such certificates will set forth the office of the Company from which the holders of certificates may obtain a copy of such information at no charge.

 

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33. Lost, Stolen, or Destroyed Certificates . The Secretary may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Company alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact, satisfactory to the Secretary, by the person claiming the certificate of stock to be lost, stolen, or destroyed. As a condition precedent to the issuance of a new certificate or certificates, the Secretary may require the owners of such lost, stolen, or destroyed certificate or certificates to give the Company a bond in such sum and with such surety or sureties as the Secretary may direct as indemnity against any claims that may be made against the Company with respect to the certificate alleged to have been lost, stolen, or destroyed or the issuance of the new certificate.

34. Transfer . (a) Stock of the Company shall be transferable in the manner prescribed by applicable law and in these Bylaws. Transfers of stock shall be made on the books of the Company only by the person named in the certificate or by such person’s attorney lawfully constituted in writing and upon the surrender of the certificate therefor, properly endorsed for transfer and payment of all necessary transfer taxes; provided, however, that such surrender and endorsement or payment of taxes shall not be required in any case in which the officers of the Company shall determine to waive such requirement. Every certificate exchanged, returned or surrendered to the Company shall be marked “Cancelled,” with the date of cancellation, by the Secretary or Assistant Secretary of the Company or the transfer agent thereof. No transfer of stock shall be valid as against the Company for any purpose until it shall have been entered in the stock records of the Company by an entry showing from and to whom transferred.

(b) The Company will not register any subsequent transfer of Common Stock which is issued or sold pursuant to Regulation S under the Securities Act unless such subsequent transfer is made in accordance with the provisions of Regulation S, pursuant to registration under the Securities Act or pursuant to an available exemption from registration under the Securities Act.

35. Setting of Record Date . The Board of Directors shall have the power to fix in advance a date not exceeding sixty (60) days and not less than ten (10) days preceding the date of any meeting of stockholders, or the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect, or (in the event the Certificate of Incorporation is amended to permit action to be taken by stockholders by consent) the final date for obtaining the consent of stockholders for any purpose, as a record date for the determination of the stockholders entitled to notice of and to vote at such meeting, entitled to receive payment of such dividend or to such allotment of rights or to exercise the right in respect of such change, conversion or exchange of capital stock, or to give such consent, and in such case only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to such notice of and to vote at such meeting or to receive payment of such dividend or to receive such allotment of rights or to exercise such rights or to give such consent, as the case may be, notwithstanding any transfer of any stock on the books of the Company after such record date fixed as aforesaid.

 

11


36. Transfer Agents . The Company may from time to time maintain one or more transfer offices or agencies at such place or places as may be determined from time to time by the Board.

37. Anti-greenmail . (a) Any direct purchase or other acquisition by the Company of any Voting Stock from any Significant Stockholder who has beneficially owned such Common Stock for less than two years prior to the date of such purchase or other acquisition shall, except as otherwise expressly provided in these Bylaws, require the affirmative vote of the holders of at least a majority of the total number of the then outstanding shares of Common Stock. In calculating such total number of outstanding shares, all Common Stock beneficially owned by such Significant Stockholder shall be excluded. Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage may be specified, by law or any agreement with any securities exchange or automated quotation system on which the Company’s Voting Stock is listed or traded or otherwise. No such affirmative vote shall be required with respect to any purchase or other acquisition of Common Stock made as part of a tender or exchange offer by the Company to purchase Common Stock on the same terms from all holders of the same class of Voting Stock and in compliance with the applicable requirements of AIM (if the Voting Stock is listed on AIM at such time), the London Stock Exchange (if the Common Stock is listed on the London Stock Exchange at such time) or the Exchange Act (if the Company is then a U.S. Reporting Company).

(b) For the purpose of this Bylaw 37, “Significant Stockholder” means any person (other than the corporation or any corporation of which a majority of any class of Common Stock is owned, directly or indirectly, by the Company or any other person who at the date of adoption of these Bylaws was the beneficial owner, directly or indirectly, of 5 per cent. or more of the voting power of the Common Stock outstanding on such date) or who or which is the beneficial owner, directly or indirectly, of 5 per cent. or more of the voting power of the outstanding Common Stock.

(c) As used in this Bylaw 37, a “beneficial owner” shall mean any person who, directly or indirectly with or through any other person, by means of any contract, arrangement, understanding, relationship or otherwise has or shares: (i) voting power as to the Common Stock, which includes the power to vote, or to direct the voting of, the Common Stock or (ii) investment power which includes the power to dispose, or to direct the disposition of, Common Stock.

DIVIDENDS

38. Dividends . Subject to the provisions of Delaware General Corporation Law and the Certificate of Incorporation, the Board may declare and pay dividends on the capital stock of the Company. Before payment of any dividend, there may be set aside out of any funds of the Company available for dividends such sum or sums as the Board from time to time, in its absolute discretion, may determine for any proper purpose, and the Board may modify or abolish such reserve.

 

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INDEMNIFICATION OF DIRECTORS AND OFFICERS

39. Indemnification . (a) The Company shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Company) by reason of the fact that he is or was a director or officer of the Company, or is or was serving at the request of the Company as a director or officer of another corporation, partnership, joint venture, trust or other enterprise (and the Company, in the discretion of the Board of Directors, may so indemnify a person by reason of the fact that he is or was an employee or agent of the Company or is or was serving at the request of the Company in any other capacity for or on behalf of the Company or was serving at the request of the Company as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise), against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

(b) The Company shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Company to procure a judgment in its favor by reason of the fact that he is or was a director or officer of the Company, or is or was serving at the request of the Company as a director or officer of another corporation, partnership, joint venture, trust or other enterprise (and the Company, in the discretion of the Board of Directors, may so indemnify a person by reason of the fact that he is or was an employee or agent of the Company or is or was serving at the request of the Company in any other capacity for or on behalf of the Company or was serving at the request of the Company as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise) against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Company unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

(c) To the extent that a present or former director, officer, employee, agent or representative of the Company has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Sections 1 and 2 of this article, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection therewith.

 

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(d) Any indemnification under Sections 1 and 2 of this article (unless ordered by a court) shall be made by the Company only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee, agent or representative is proper in the circumstances because he has met the applicable standard of conduct set forth in Sections 1 and 2 of this article. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (1) by the Board of Directors by a majority vote of the directors who were not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of the Board of Directors designated by a majority vote of such directors, even though less than a quorum or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders.

(e) Expenses (including attorneys’ fees) incurred in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the Company in advance of the final disposition of such action, suit or proceeding as authorized by the Board of Directors in the manner provided in Section 4 of this article upon receipt of an undertaking by or on behalf of the director, officer, employee, agent or representative to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the Company under this article. Such expenses (including attorneys’ fees) incurred by any present or former director, officer, employee, agent or representative may be paid upon such terms and conditions, if any, as the Company deems appropriate.

(f) The Company shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, (i) arising under the Employee Retirement Income Security Act of 1974 or regulations promulgated thereunder, or under any other law or regulation of the United States or any agency or instrumentality thereof or law or regulation of any state or political subdivision or any agency or instrumentality of either, or under the common law of any of the foregoing, against expenses (including attorneys’ fees), judgments, fines, penalties, taxes and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding by reason of the fact that he is or was a fiduciary, disqualified person or party in interest with respect to an employee benefit plan covering employees of the Company or of a subsidiary corporation, or is or was serving in any other capacity with respect to such plan, or has or had any obligations or duties with respect to such plan by reason of such laws or regulations, provided that such person was or is a director or officer of the Company (and the Company, in the discretion of the Board of Directors, may so indemnify a person by reason of the fact that he is or was an employee or agent of the Company), or (ii) in connection with any matter arising under federal, state or local revenue or taxation laws or regulations, against expenses (including attorneys’ fees), judgments, fines, penalties, taxes, amounts paid in settlement and amounts paid as penalties or fines necessary to contest the imposition of such penalties or fines, actually and reasonably incurred by him in connection with such action, suit or proceeding by reason of the fact that he is or was a director or officer of the Company, or is or was serving at the request of the Company as a director or officer of another corporation, partnership, joint venture, trust or other enterprise and had responsibility for or participated in activities relating to compliance with such revenue or taxation laws and regulations (and the Company, in the discretion of the Board of Directors, may so indemnify a person by reason of

 

14


the fact that he is or was an employee or agent of the Company or is or was serving at the request of the Company in any other capacity for or on behalf of the Company or was serving at the request of the Company as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise and had responsibility for or participated in activities relating to compliance with such revenue or taxation laws and regulations); provided, however, that such person did not act dishonestly or in willful or reckless violation of the provisions of the law or regulation under which such suit or proceeding arises. Unless the Board of Directors determines that under the circumstances then existing, it is probable that such director, officer, employee, agent or representative will not be entitled to be indemnified by the Company under this section, expenses incurred in defending such suit or proceeding, including the amount of any penalties or fines necessary to be paid to contest the imposition of such penalties or fines, shall be paid by the Company in advance of the final disposition of such suit or proceeding upon receipt of an undertaking by or on behalf of the director, officer, employee, agent or representative to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Company under this section.

(g) The indemnification and advancement of fees provided by this article shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of fees may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, agent or representative and shall inure to the benefit of the heirs, executors and administrators of such a person.

(h) The Company may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, agent or representative of the Company, or is or was serving at the request of the Company as a director, officer, employee, agent or representative of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not he would be entitled to indemnity against such liability under the provisions of this article.

GENERAL

40. Fiscal Year . The fiscal year of the Company will end on December 31 st of each year or such other date as may be fixed from time to time by the Board.

41. Seal . The Board may adopt a corporate seal and use the same by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

42. Location and Reliance Upon Books, Reports, and Records . The books and records of the Company may be kept at such place or places as the Board or the respective officers in charge thereof may from time to time determine. The record books containing the names and addresses of all stockholders, the number and class of shares of stock held by each and the dates when they respectively became the owners of record thereof shall be kept by the Secretary as prescribed in the Bylaws or by such officer or agent as shall be designated by the

 

15


Board. Each Director, each member of a committee designated by the Board, and each officer of the Company will, in the performance of his or her duties, be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports, or statements presented to the Company by any of the Company’s officers or employees, or committees of the Board, or by any other person or entity as to matters the Director, committee member, or officer believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Company.

43. Time Periods . In applying any provision of these Bylaws that requires that an act be performed or not be performed a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days will be used unless otherwise specified, the day of the doing of the act will be excluded, and the day of the event will be included.

44. Amendments . Except as otherwise provided by law or by the Certificate of Incorporation or these Bylaws, these Bylaws or any of them may be amended in any respect or repealed at any time, either (i) at any meeting of stockholders, provided that any amendment or supplement proposed to be acted upon at any such meeting has been described or referred to in the notice of such meeting, or (ii) at any meeting of the Board, provided that no amendment adopted by the Board may vary or conflict with any amendment adopted by the stockholders in accordance with the Certificate of Incorporation and these Bylaws. Notwithstanding the foregoing and anything contained in these Bylaws to the contrary, the Bylaws may not be amended or repealed by the stockholders, and no provision inconsistent therewith may be adopted by the stockholders, without the affirmative vote of the holders of a majority of the Common Stock, voting together as a single class.

45. Certain Defined Terms . Terms used herein with initial capital letters that are not otherwise defined are used herein as defined in the Certificate of Incorporation.

 

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Exhibit 4.1

 

LOGO

THIS CERTIFIES THAT is the owner of CUSIP DATED COUNTERSIGNED AND REGISTERED: COMPUTERSHARE TRUST COMPANY, N.A. TRANSFER AGENT AND REGISTRAR, FULLY-PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK OF AquaBounty Technologies, Inc. (hereinafter called the “Company”), transferable on the books of the Company in person or by duly authorized attorney, upon surrender of this Certificate properly endorsed. This Certificate and the shares represented hereby, are issued and shall be held subject to all of the provisions of the Articles of Incorporation, as amended, and the By-Laws, as amended, of the Company (copies of which are on file with the Company and with the Transfer Agent), to all of which each holder, by acceptance hereof, assents. This Certificate is not valid unless countersigned and registered by the Transfer Agent and Registrar. Witness the facsimile seal of the Company and the facsimile signatures of its duly authorized officers. COMMON SHARES PAR VALUE $0.001 COMMON SHARES THIS CERTIFICATE IS TRANSFERABLE IN CANTON, MA, JERSEY CITY, NJ AND COLLEGE STATION, TX SEE REVERSE FOR CERTAIN DEFINITIONS Certificate Number Shares . AQUABOUNTY TECHNOLOGIES, INC. INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE FACSIMILE SIGNATURE TO COME FACSIMILE SIGNATURE TO COME President Secretary By AUTHORIZED SIGNATURE ZQ|CERT#|COY|CLS|RGSTRY|ACCT#|TRANSTYPE|RUN#|TRANS# XXXXXX XX X DD-MMM-YYYY * * 000000* * * * * * * * * * * * * * * * * * * * * 000000* * * * * * * * * * * * * * * * * * * * * 000000* * * * * * * * * * * * * * * * * * * * * 000000* * * * * * * * * * * * * * * * * * * * * 000000* * * * * * * * * * * * * * ** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Sample **** Mr. Sample **000000 **Shares**** 000000 **Shares ****000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares ****000000 **Shares**** 000000 **Shares*** *000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares ****000000 **Shares**** 000000**Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000**Shares****0 00000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000**Shares****00 0000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000**Shares****000 000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000**Shares****0000 00 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000**Shares****00000 0 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000* *Shares****000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000** Shares****000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000 **Shares**** 000000**S ***ZERO HUNDRED THOUSAND ZERO HUNDRED AND ZERO*** MR. SAMPLE & MRS. SAMPLE & MR. SAMPLE & MRS. SAMPLE ZQ00000000 Certificate Numbers 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 Total Transaction Num/No. 123456 Denom. 123456 Total 1234567 MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 AquaBounty Technologies, Inc. PO BOX 43004, Providence, RI 02940-3004 CUSIP XXXXXX XX X Holder ID XXXXXXXXXX Insurance Value 1,000,000.00 Number of Shares 123456 DTC 12345678 123456789012345


LOGO

The IRS requires that we report the cost basis of certain shares acquired after January 1, 2011. If your shares were covered by the legislation and you have sold or transferred the shares and requested a specific cost basis calculation method, we have processed as requested. If you did not specify a cost basis calculation method, we have defaulted to the first in, first out (FIFO) method. Please visit our website or consult your tax advisor if you need additional information about cost basis. If you do not keep in contact with us or do not have any activity in your account for the time periods specified by state law, your property could become subject to state unclaimed property laws and transferred to the appropriate state. For value received, hereby sell, assign and transfer unto Shares Attorney Dated: 20 Signature: Signature: Notice: The signature to this assignment must correspond with the name as written upon the face of the certificate, in every particular, without alteration or enlargement, or any change whatever. PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE) of the common stock represented by the within Certificate, and do hereby irrevocably constitute and appoint to transfer the said stock on the books of the within-named Company with full power of substitution in the premises. . AQUABOUNTY TECHNOLOGIES, INC. THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH SHAREHOLDER WHO SO REQUESTS, A SUMMARY OF THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OF THE COMPANY AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND RIGHTS, AND THE VARIATIONS IN RIGHTS, PREFERENCES AND LIMITATIONS DETERMINED FOR EACH SERIES, WHICH ARE FIXED BY THE ARTICLES OF INCORPORATION OF THE COMPANY, AS AMENDED, AND THE RESOLUTIONS OF THE BOARD OF DIRECTORS OF THE COMPANY, AND THE AUTHORITY OF THE BOARD OF DIRECTORS TO DETERMINE VARIATIONS FOR FUTURE SERIES. SUCH REQUEST MAY BE MADE TO THE OFFICE OF THE SECRETARY OF THE COMPANY OR TO THE TRANSFER AGENT. THE BOARD OF DIRECTORS MAY REQUIRE THE OWNER OF A LOST OR DESTROYED STOCK CERTIFICATE, OR HIS LEGAL REPRESENTATIVES, TO GIVE THE COMPANY A BOND TO INDEMNIFY IT AND ITS TRANSFER AGENTS AND REGISTRARS AGAINST ANY CLAIM THAT MAY BE MADE AGAINST THEM ON ACCOUNT OF THE ALLEGED LOSS OR DESTRUCTION OF ANY SUCH CERTIFICATE. Signature(s) Guaranteed: Medallion Guarantee Stamp THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings and Loan Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15. The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian (Cust) (Minor) TEN ENT - as tenants by the entireties under Uniform Gifts to Minors Act (State) JT TEN - as joint tenants with right of survivorship UNIF TRF MIN ACT - Custodian (until age ) and not as tenants in common (Cust) under Uniform Transfers to Minors Act (Minor) (State) Additional abbreviations may also be used though not in the above list

Exhibit 10.1

EXECUTION VERSION

STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (including all exhibits hereto, this “ Agreement ”) is made as of November 7, 2016 (the “ Effective Date ”), between AquaBounty Technologies, Inc., a Delaware corporation (“ AquaBounty ”), and Intrexon Corporation, a Virginia corporation (“ Intrexon ”).

WHEREAS, Intrexon currently owns 99,114,668 shares of Common Stock of AquaBounty;

WHEREAS, pursuant to a Promissory Note Purchase Agreement, dated as of February 16, 2016, between AquaBounty and Intrexon, AquaBounty issued to Intrexon convertible promissory notes in an aggregate principal amount of $10,000,000 (the “ Notes ”); and

WHEREAS, AquaBounty desires to sell and issue to Intrexon, and Intrexon desires to purchase from AquaBounty, additional Common Stock at the price and upon the terms and conditions herein set forth.

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

ARTICLE I

DEFINITIONS

Section 1.1 Definitions.

In addition to the terms defined elsewhere herein, when used herein, the following terms shall have the meanings indicated hereunder:

Affiliate ” means, with respect to any Person, any other Person who controls, is controlled by, or is under common control with such Person.

AIM Market ” means AIM, a market operated by the London Stock Exchange.

AIM Rules ” means the AIM Rules for Companies published by the London Stock Exchange.

Board ” means the Board of Directors of AquaBounty.

Business Day ” means any day other than a Saturday, Sunday, or other day on which commercial banks in the State of Delaware are authorized or required by law or executive order to close.

Closing Conditions ” means the respective obligations of Intrexon and AquaBounty as set forth in Articles   V and VI .

Common Stock ” means the shares of common stock, par value $0.001 per share, of AquaBounty.


Contractual Obligation ” means, as to any Person, any provision of any security issued by such Person or of any agreement, undertaking, contract, indenture, mortgage, deed of trust, or other instrument to which such Person is a party or by which it or any of its property is bound.

Copyright ” means copyright, which includes all rights in computer software and in databases and all rights or forms of protection which have equivalent or similar effect to the foregoing and which subsist anywhere in the world.

Exchange Act ” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC thereunder.

FCA ” means the Financial Conduct Authority.

FSMA ” means the Financial Services and Markets Act 2000, as amended.

GAAP ” means U.S. generally accepted accounting principles as in effect from time to time.

Governmental Authority ” means the AIM Market; any federal, state, or local governmental or quasi-governmental instrumentality, agency, board, commission, or department; or any regulatory agency, bureau, commission, or authority.

Group ” means AquaBounty and its subsidiaries, and references to “ Group Company ” and “ member of the Group ” shall be construed accordingly.

Information Statement ” means the Information Statement of Intrexon relating to the proposed distribution by Intrexon of a portion of the shares of Common Stock of AquaBounty (other than the Shares) held by Intrexon, which is to be prepared in accordance with the requirements of the Exchange Act and included as an exhibit to the Form 10 (as defined in Section   5.7(a) ).

Intellectual Property Rights ” means patents, inventions, Know-How, trade secrets and other confidential information, registered designs, Copyright, database rights, design rights, rights affording equivalent protection to copyright, database rights and design rights, topography rights, trademarks, service marks, business names, trade names, domain names, registration of an application to register any of the aforesaid items, rights to sue for passing-off and rights in the nature of any of the aforesaid items in any country.

Know-How ” means inventions, discoveries, improvement, processes, formulae, techniques, specifications, technical information, methods, tests, reports, component lists, manuals, instructions, drawings and information relating to customers and suppliers (whether written, unwritten or in any other form and whether confidential or not).

Lien ” means any mortgage, deed of trust, pledge, hypothecation, assignment, encumbrance, lien (statutory or other) or preference, priority, right, or other security interest or preferential arrangement of any kind or nature whatsoever (excluding preferred stock and equity-related preferences), including, without limitation, those created by, arising under, or evidencing substantially the same economic effect as any of the foregoing.

 

2


Material Adverse Effect ” means, subject to any applicable cure or grace periods, a material adverse effect upon (a) the financial condition, operations, business, or properties of AquaBounty; (b) the ability of AquaBounty to perform its material obligations under this Agreement; or (c) the legality, validity, or enforceability of any of this Agreement.

NASDAQ ” means the Nasdaq Stock Market.

Order ” means any judgment, injunction, writ, award, decree, or order of any nature.

Person ” means any individual, group of individuals, firm, corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company, Governmental Authority, or other entity of any kind and shall include any successor (by merger or otherwise) of such entity.

Prospectus Rules ” means the Prospectus Rules made by the Financial Services Authority under Part VI of the FSMA.

Publicly Announced ” means (i) information that has been disclosed by or on behalf of AquaBounty via an announcement on a Regulatory Information Service provided by the London Stock Exchange, within the six-month period immediately preceding the date of this Agreement, or (ii) information that has been disclosed in the Information Statement draft last circulated by AquaBounty to Intrexon prior to the Effective Date.

Requirement of Law ” means, as to any Person, any law, statute, treaty, rule, regulation, or determination of an arbitrator or a court or other Governmental Authority that is applicable to or binding upon such Person or any of its property, or to which such Person or any of its property is subject, or that pertains to the transactions contemplated or referred to herein.

SEC ” means the Securities and Exchange Commission or any similar agency then having jurisdiction to enforce the Securities Act and Exchange Act.

Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC thereunder.

Securities Filings ” means the filing of any filing required by the SEC under the Securities Act, Exchange Act, any filing required pursuant to the rules of the AIM Market, or any filing with the Delaware Corporations Commission under the Delaware General Corporation Law by AquaBounty, in each case in respect of its issuance of the Shares.

Shareholder Approval ” means the approval by AquaBounty shareholders of any reverse split of the Common Stock that (i) is required to qualify the Common Stock for listing on NASDAQ or (ii) is necessary to have sufficient authorized, unissued shares of Common Stock for the issuance and sale by AquaBounty of the Shares.

Specified Officers ” mean Ronald L. Stotish, David A. Frank, Christopher H. Martin and Alejandro Rojas.

 

3


Warranties ” means the warranties and representations set out in Articles   III and IV of this Agreement.

Section 1.2 Accounting Terms; Financial Statements.

All accounting terms used herein not expressly defined in this Agreement shall have the respective meanings given to them in accordance with GAAP applied on a consistent basis.

ARTICLE II

PURCHASE AND SALE OF THE SHARES

Section 2.1 Purchase and Sale of the Shares.

 

  (a) Subject to the terms and conditions of this Agreement, and on reliance upon the representations, warranties and covenants contained herein, AquaBounty hereby agrees to sell to Intrexon, and Intrexon hereby agrees to purchase from AquaBounty, 72,632,190 shares of Common Stock (the “ Shares ”), for the purchase price of $0.3442 per share (subject to appropriate adjustment to the number of shares and purchase price per share in the event of any stock dividend, stock split, combination or other similar recapitalization after the Effective Date affecting such shares), for an aggregate purchase price of $24,999,999.80.

Section 2.2 Closing.

 

  (a) The closing of the sale and purchase of the Shares (“ Closing ”) shall take place remotely via the exchange of documents and signatures on the date on which the Closing Conditions are satisfied or such other date as may be mutually agreed upon by AquaBounty and Intrexon (“ Closing Date ”).

 

  (b) At Closing, AquaBounty shall deliver to Intrexon either (i) a stock certificate representing the Shares being purchased or (ii) confirmation from AquaBounty’s transfer agent that such Shares have been issued to, and registered in book form in the name of, Intrexon against payment of the purchase price therefor by wire transfer into a bank account of AquaBounty designated in advance by AquaBounty and such payment shall constitute full and proper discharge by Intrexon of its obligations under this Section   2.2 .

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF AQUABOUNTY

AquaBounty represents and warrants to Intrexon that the statements contained in this Article   III are true, complete, and correct as of the Effective Date. For purposes of the representations and warranties set forth in this Article   III , AquaBounty will be deemed to have “ knowledge ” of, or be “ aware ” of, a particular fact or other matter if any Specified Officer of AquaBounty is actually aware of such fact or other matter.

 

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Section 3.1 Organization and Standing.

AquaBounty is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to carry on its business as now conducted. AquaBounty is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a Material Adverse Effect.

Section 3.2 Authorization; Enforceability.

 

  (a) AquaBounty has all requisite corporate power and authority to execute and deliver, and, subject to receipt of the Shareholder Approval if applicable, to perform its obligations under this Agreement.

 

  (b) AquaBounty and its officers, directors and shareholders have taken all corporate action necessary for the authorization, execution and delivery of this Agreement and, subject to receipt of the Shareholder Approval if applicable, for the performance of this Agreement and the issuance and sale by AquaBounty of the Shares hereunder.

 

  (c) This Agreement, when executed and delivered by AquaBounty and each other party thereto, shall constitute a valid and legally binding obligation of AquaBounty, enforceable in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally or by equitable principles; (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies; and (iii) to the extent that the enforceability of the indemnification provisions may be limited by applicable laws (such limitations in the foregoing clauses (i), (ii) and (iii), collectively, the “ Equitable Exceptions ”).

Section 3.3 Capitalization.

 

  (a) As of the date of this Agreement, the authorized capital of AquaBounty consists of 200,000,000 shares of Common Stock, 157,527,974 shares of which are issued and outstanding, and 40,000,000 shares of preferred stock, par value $0.01 per share, 0 shares of which are issued and outstanding.

 

  (b) The Shares, subject to receipt of the Shareholder Approval if applicable, (i) will be duly authorized, (ii) when issued and sold to Intrexon will be validly issued, (iii) after receipt of all consideration due therefore, will be fully paid and nonassessable with no personal liability attaching to the ownership thereof and (iv) will be free and clear of any and all liens, charges, restrictions, claims and encumbrances, except as set forth in this Agreement.

 

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  (c) Except for the Notes, as Publicly Announced, or as disclosed in writing to Intrexon prior to the execution of this Agreement, there are no options, warrants or other convertible securities or agreements or arrangements in force which call for the issue to any Person, or accord to any Person the right to call for the issue of any shares in the capital of the Group or any other securities of any member of the Group.

 

  (d) To AquaBounty’s knowledge, there are no outstanding agreements affecting or relating to the voting, issuance, purchase, redemption, repurchase or transfer of AquaBounty’s Common Stock or any other securities of AquaBounty, except for the Notes or as contemplated hereunder. AquaBounty has reserved 36,699,681 shares of Common Stock for issuance to Intrexon upon conversion of the Notes. AquaBounty has reserved 19,067,000 shares of Common Stock for issuance to officers, directors, employees and consultants of AquaBounty pursuant to the AquaBounty 2006 Equity Incentive Plan and the AquaBounty 2016 Equity Incentive Plan, in each case, duly adopted by the Board and approved by the AquaBounty stockholders (the “ Stock Plans ”). Of such shares of Common Stock, 5,567,000 shares of Common Stock are subject to outstanding option awards granted under the Stock Plans, and 13,500,000 shares of Common Stock remain available for future awards to individuals qualified to receive awards pursuant to the Stock Plans. AquaBounty has furnished to Intrexon substantially complete and accurate copies of the Stock Plans and forms of agreements currently used thereunder.

Section 3.4 Compliance with Law and Instruments.

 

  (a) To AquaBounty’s knowledge, the execution and delivery and, subject to receipt of the Shareholder Approval if applicable, the performance of and compliance with this Agreement and the issuance and sale of the Shares will not, with or without the passage of time or giving of notice, violate (i) any applicable statute, rule, regulation, order, or restriction of any domestic or foreign government or any instrumentality or agency thereof in respect of the conduct of its business or the ownership of its properties; (ii) any term of AquaBounty’s organizational documents; (iii) any provision of any mortgage, indenture, contract, agreement, instrument, or contract to which it is party or by which it is bound; or (iv) any Order by which it is bound.

 

  (b)

Assuming the accuracy of the representations of Intrexon set forth in Article   IV , and following receipt of the Shareholder Approval, the execution of this Agreement by AquaBounty and the issuance of the Shares will comply in all respects with the FSMA, the rules and regulations of the FCA and the London Stock Exchange, the Prospectus Rules, the AIM Rules, the General Corporation Law of the State of Delaware, the United States federal securities laws, and all applicable state and federal laws and regulations of the United States (collectively, the “ US

 

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  Laws ”), and all other relevant laws and regulations of the United Kingdom and elsewhere and will comply with and will not infringe or exceed any limits, powers or restrictions or the terms of any agreement, obligation or commitment to which AquaBounty or any Group Company is a party or by which AquaBounty or any Group Company is bound.

 

  (c) Each Group Company and its officers, agents and employees (past and present) in the course of their respective duties have complied in all material respects with all applicable US Laws and laws and regulations of the United Kingdom, the European Community and any other jurisdiction in which the business of such Group Company is carried on.

Section 3.5 Licenses and Consents.

 

  (a) Except as Publicly Announced, the Group has all material licenses, consents, approvals, permissions, permits, certificates, qualifications, registrations and other authorizations (public and private) necessary for the proper and efficient operation of its current businesses in the places and in the manner in which the business is now carried on.

 

  (b) No consent, approval, order, or authorization of, or registration, qualification, designation, declaration, or filing with, any federal, state, or local Governmental Authority or any other Person is required in connection with the consummation of the transactions contemplated by this Agreement, except for compliance with notice filings and other requirements under the Securities Act and the Exchange Act and other federal and applicable state securities laws.

Section 3.6 Litigation.

Except as Publicly Announced, no member of the Group is engaged in any material legal or arbitration proceedings or is the subject of any disciplinary proceedings or inquiries by any Governmental Authorities which individually or collectively has had during the 12 months preceding the date of this Agreement or would reasonably be expected to have, a Material Adverse Effect and, to the knowledge of AquaBounty, no such legal or arbitration proceeding is threatened or pending nor, to the knowledge of AquaBounty, is there any circumstance of which AquaBounty is aware which would reasonably be expected to give rise to any such legal or arbitration proceedings being threatened or commenced.

Section 3.7 Intellectual Property.

AquaBounty owns or possesses sufficient legal rights to all Intellectual Property Rights necessary for its business as now conducted, without, to the knowledge of AquaBounty, any infringement of the rights of others. AquaBounty does not have any knowledge of any allegations that AquaBounty is presently violating any of the Intellectual Property Rights of any other Person.

 

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Section 3.8 Liabilities.

Except as Publicly Announced or the Notes, AquaBounty has no outstanding borrowings of any nature or amount (including, without limitation, any overdraft facilities; loans; invoice discounting factoring or other financial facilities).

Section 3.9 Assets.

All the material assets necessary for the operation of the business of the Group, as currently carried on, are legally and beneficially owned, leased or licensed by AquaBounty or the applicable member of the Group.

Section 3.10 Changes.

Except as Publicly Announced, since June 30, 2016:

 

  (a) the business of the Group has been carried on in the ordinary and usual course;

 

  (b) there has been no significant adverse change in the financial or trading position of the Group taken as a whole;

 

  (c) no member of the Group has acquired or disposed of or agreed to acquire or dispose of any of its assets or businesses other than in the ordinary course of business;

 

  (d) no member of the Group has paid or made any payment or transfer to stockholders of any dividend, bonus, loan or distribution; and

 

  (e) there have been no changes resulting in a Material Adverse Effect.

Section 3.11 Offering Exemption.

Based in part on the representations of Intrexon set forth in Article   IV , the offer, sale, and issuance of the Shares in conformity with the terms and conditions set forth in this Agreement are exempt from the registration requirements of the Securities Act and are exempt from the qualification or registration requirements of applicable state securities laws (subject to filings pursuant to applicable state securities laws that have been made or will be made in a timely manner). Neither AquaBounty nor any agent on its behalf has solicited or will solicit any offers to sell or has offered to sell or will offer to sell all or any part of the Shares to any Person or Persons so as to bring the sale of such Shares by AquaBounty within the registration provisions of the Securities Act or any state securities laws.

Section 3.12 Disclosure.

The information supplied or to be supplied by or on behalf of AquaBounty specifically for inclusion or incorporation by reference in (i) the Form 10 or the Information Statement does not, at the time the Form 10 is filed with the SEC, at any time it is amended or supplemented,

 

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and at the time it becomes effective under the Exchange Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading and (ii) the Information Statement will not, at the date it (and any amendment or supplement thereto) is first mailed to the stockholders of Intrexon and on the Distribution Date (as such term will be fined therein), contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, except that no representation or warranty is made by AquaBounty with respect to statements made therein based on information supplied by or on behalf of Intrexon. The Form 10, including the Information Statement, will, with respect to information regarding AquaBounty, comply as to form in all material respects with the requirements of the Exchange Act, and will not contain material misstatements or omissions, provided, however, that no representation or warranty is being made with respect to material misstatements or omissions based on information supplied by or on behalf of Intrexon specifically for inclusion in the Form 10 or Information Statement.

Section 3.13 Brokers and Finders.

AquaBounty has not agreed to incur, nor will it incur, directly or indirectly, any liability for brokerage or finders’ fees, agents’ commissions, or other similar charges in connection with this Agreement or any of the transactions contemplated hereby.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF INTREXON

As a material inducement to AquaBounty to enter into and perform its obligations under this Agreement, Intrexon represents and warrants to AquaBounty that the statements contained in this Article IV are true, complete, and correct as of the Effective Date.

Section 4.1 Authorization; Enforceability.

Intrexon has all requisite power and authority to execute, deliver, and perform this Agreement. Intrexon and, as applicable, its directors, officers, members, partners, and shareholders have taken all action necessary for the authorization, execution, delivery, and performance of all obligations of Intrexon under this Agreement. This Agreement constitutes the valid and legally binding obligation of Intrexon, enforceable in accordance with its terms, except as limited by the Equitable Exceptions.

Section 4.2 Investor Representations.

 

  (a) Intrexon is acquiring the Shares for Intrexon’s own account for investment purposes only and not with a view to or for the sale in connection with any distribution of all or any part of such Shares.

 

  (b) Intrexon is an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated pursuant to the Securities Act.

 

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  (c) Intrexon understands that the Shares are “restricted securities” under the federal securities laws inasmuch as they are being acquired from AquaBounty in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold only pursuant to a registration statement under the Securities Act or pursuant to an exemption therefrom.

 

  (d) Intrexon acknowledges and agrees that it can bear the economic risk of its investment in the Shares and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Shares.

 

  (e) Intrexon was not contacted by AquaBounty or its representatives for the purpose of investing in any securities of AquaBounty offered hereby through any advertisement, article, notice, or any other communication published in any newspaper, magazine, or similar media or broadcast over television or radio, or any seminar or meeting whose attendees were invited by any general advertising. The Shares purchased under this Agreement were not offered or sold to Intrexon by any form of general solicitation or general advertising.

 

  (f) Intrexon has not agreed to incur, nor will it incur, directly or indirectly, any liability for brokerage or finders’ fees, agents’ commissions, or other similar charges in connection with this Agreement or any of the transactions contemplated hereby.

Section 4.3 Disclosure.

The information supplied or to be supplied by or on behalf of Intrexon specifically for inclusion or incorporation by reference in (i) the Form 10 or the Information Statement does not, at the time the Form 10 is filed with the SEC, at any time it is amended or supplemented and at the time it becomes effective under the Exchange Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading, and (ii) the Information Statement will not, at the date it (and any amendment or supplement thereto) is first mailed to the stockholders of Intrexon at the time of the Distribution Date (as such term will be defined therein) contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, except that no representation or warranty is made by Intrexon with respect to statements made therein based on information supplied by or on behalf of AquaBounty. The Information Statement will, with respect to information regarding Intrexon, comply as to form in all material respects with the requirements of the Exchange Act.

 

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Section 4.4 Legends.

Intrexon acknowledges and agrees that the instrument evidencing the Shares may bear customary restrictive legends.

ARTICLE V

CONDITIONS TO THE OBLIGATION OF INTREXON TO CLOSE

The obligation of Intrexon to purchase the Shares at the Closing shall be subject to the satisfaction as determined by, or waiver by, Intrexon of the following conditions on or before the Closing Date.

Section 5.1 Representations and Warranties.

The representations and warranties of AquaBounty contained in Article   III shall be true and correct in all material respects as of the Closing Date (except with respect to such representations and warranties that address matters only as of a particular date, which shall be true and correct as of such particular date).

Section 5.2 Compliance with this Agreement.

AquaBounty shall have performed and complied in all material respects with all of its agreements and conditions set forth herein that are required to be performed or complied with by AquaBounty on or before the Closing Date.

Section 5.3 Opinion of AquaBounty Counsel.

Intrexon shall have received from Jones Day, counsel to AquaBounty an opinion, dated as of the Closing Date, in form customary for a private placement of an issuer’s equity securities, consistent with Jones Day opinion practice and reasonably acceptable to Intrexon.

Section 5.4 Secretary’s Certificate.

The Secretary of AquaBounty shall have signed and delivered to Intrexon on behalf of AquaBounty a certificate, in form and substance satisfactory to Intrexon and dated as of the Closing Date, certifying (a) that the Board resolutions attached thereto approving this Agreement and the transactions contemplated hereby are all true, complete, and correct and remain unamended and in full force and effect and (b) as to the incumbency and specimen signature of each officer of AquaBounty executing this Agreement or other document delivered in connection with Closing on behalf of AquaBounty.

Section 5.5 Compliance Certificate

The President of the Company shall deliver to Intrexon at Closing a certificate certifying that the conditions specified in this Section 5 have been fulfilled.

 

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Section 5.6 Consents and Approvals.

 

  (a) Except for the Securities Filings, all consents, exemptions, authorizations, and other actions by, or notices to, or filings with, any Governmental Authority or any other Person required in respect of any Requirement of Law and with respect to each Contractual Obligation of AquaBounty that is necessary in connection with the execution, delivery, or performance by, or enforcement against, AquaBounty of this Agreement shall have been obtained and be in full force and effect, and Intrexon shall have been furnished with appropriate evidence thereof.

 

  (b) The admission of the Shares to trading on the AIM Market shall have become effective in accordance with the latest edition of the AIM Rules. AquaBounty shall provide such evidence as Intrexon may reasonably request as to the satisfaction of this condition.

Section 5.7 Registration and Listing.

 

  (a) AquaBounty shall have filed with the SEC a Form 10 for the registration of the Common Stock pursuant to Section 12(b) of the Exchange Act (the “ Form 10 ”), which shall include the Information Statement in form and substance approved by Intrexon, and such registration statement shall have become effective in accordance with the Exchange Act.

 

  (b) AquaBounty shall have received notice that the Common Stock has been approved for listing on NASDAQ. AquaBounty shall provide such evidence as Intrexon may reasonably request as to the satisfaction of this condition.

Section 5.8 No Material Judgment or Order.

There shall be no Order of a court of competent jurisdiction, Lien under any Contractual Obligation, ruling or communication of any Governmental Authority, or condition imposed under any Requirement of Law that, in the reasonable judgment of Intrexon, would prohibit the purchase of the Shares, the distribution contemplated by the Information Statement or subject Intrexon to any penalty or other onerous condition under or pursuant to any Requirement of Law if the Shares were to be purchased hereunder.

Section 5.9 No Material Adverse Effect.

No Material Adverse Effect shall have occurred and Intrexon shall not have concluded that the distribution contemplated by the Information Statement would be materially adverse to Intrexon or its shareholders.

 

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Section 5.10 No Litigation.

No action, suit, proceeding, claim, or dispute shall have been brought or otherwise arisen against AquaBounty (whether at law, in equity, in arbitration, or before any Governmental Authority) that would, if adversely determined, have a Material Adverse Effect.

Section 5.11 Exclusive Channel Collaboration

The Exclusive Channel Collaboration Agreement, dated as of February 14, 2013, between Intrexon and AquaBounty (the “ ECC ”) shall be in full force and effect and AquaBounty shall not be in material breach of the ECC.

ARTICLE VI

CONDITIONS TO THE OBLIGATIONS OF AQUABOUNTY TO CLOSE

The obligations of AquaBounty to issue and sell the Shares to Intrexon at the Closing, shall be subject to the satisfaction, as determined by, or written waiver by, AquaBounty of the following conditions on or before Closing.

Section 6.1 Representations and Warranties.

The representations and warranties of Intrexon contained in Article   IV shall be true and correct in all material respects as of the Closing Date (except with respect to such representations and warranties that address matters only as of a particular date, which are true and correct as of such particular date), and AquaBounty shall have received a certificate signed on behalf of Intrexon by the Chief Legal Officer of Intrexon to such effect.

Section 6.2 Compliance with this Agreement.

Intrexon shall have performed and complied in all material respects with all of the agreements and conditions set forth herein that are required to be performed or complied with by Intrexon on or before the Closing Date.

Section 6.3 No Material Judgment or Order.

At Closing, there shall be no Order of a court of competent jurisdiction, Lien under any Contractual Obligation, ruling of any Governmental Authority, or condition imposed under any Requirement of Law that, in the reasonable judgment of AquaBounty, would prohibit the sale of the Shares or subject AquaBounty to any material penalty or other onerous condition under or pursuant to any Requirement of Law if the Shares were to be purchased hereunder.

Section 6.4 Registration and Shareholder Approval.

 

  (a) The Form 10 shall have become effective in accordance with the Exchange Act.

 

  (b) AquaBounty shall have received the Shareholder Approval.

 

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ARTICLE VII

TERMINATION

Section 7.1 Failure of Closing Conditions.

If the Closing Conditions have not been satisfied in full on or before March 31, 2017 (the “ End Date ”), this Agreement (other than this Section   7.1 , Article III (AquaBounty Warranties), and Article IX (Miscellaneous)) shall have no further effect and, in such event, no party to this Agreement shall have any claim against the other party to this Agreement for costs, damages, compensation or otherwise, provided that such termination shall be without prejudice to any accrued rights or obligations of any party under this Agreement.

Section 7.2 Mutual Agreement

This Agreement may be terminated at any time upon mutual agreement of Intrexon and AquaBounty, or by either party if the Closing has not occurred by the End Date.

Section 7.3 Termination for Cause

 

  (a) Intrexon shall be entitled to terminate this Agreement by giving notice to AquaBounty at any time prior to Closing, if at any time prior to the Closing Date:

(i) it comes to the knowledge of Intrexon (whether by way of receipt of a notification or otherwise) that any of the AquaBounty Warranties was materially untrue, inaccurate or misleading when made and/or that any of the AquaBounty Warranties have ceased to be materially true or accurate or have become materially misleading by reference to the facts and circumstances then subsisting, provided, that for purposes of this Section   7.3 , any materiality qualifier in a Warranty shall be read without such qualifier;

(ii) AquaBounty shall fail, in a material way, to comply with any of its obligations under this Agreement; or

(iii) Intrexon shall reasonably determine that a closing condition set forth in Article V is incapable of being satisfied.

 

  (b) AquaBounty shall be entitled to terminate this Agreement by giving notice to Intrexon at any time prior to Closing, if at any time prior to the Closing Date:

(i) it comes to the knowledge of AquaBounty (whether by way of receipt of a notification or otherwise) that any of the Intrexon Warranties was materially untrue, inaccurate or misleading when made and/or that any of the Intrexon Warranties has ceased to be materially true or accurate or has become materially misleading, provided that for purposes of this Section   7.3 , any materiality qualifier in a Warranty shall be read without such qualifier; or

 

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(ii) AquaBounty shall reasonably determine that a closing condition set forth in Article   VI is incapable of being satisfied.

ARTICLE VIII

COVENANTS

Section 8.1 Noncontravention.

From the Effective Date until the Closing (or the earlier termination of this Agreement), AquaBounty shall take no action that is inconsistent with the provisions of this Agreement or the consummation of the purchase of Shares as contemplated by this Agreement.

Section 8.2 Changes in Capitalization.

From the Effective Date until the Closing (or the earlier termination of this Agreement), without the prior written consent of Intrexon, except as referenced in Section   3.3 and except with respect to any reverse split of the Common Stock required to qualify the Common Stock for listing on NASDAQ or necessary to have sufficient authorized, unissued shares of Common Stock for the issuance and sale by AquaBounty of the Shares, AquaBounty shall not (i) issue any shares of its capital stock or any options, warrants or other rights to subscribe for or purchase any shares of its capital stock or any securities convertible into or exchangeable for shares of its capital stock; (ii) declare, set aside or pay any dividend or distribution with respect to shares of its capital stock; (iii) directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock; or (iv) effect a split, reclassification or other change in or of the shares of its capital stock.

Section 8.3 Shareholder Approval.

(a) From the Effective Date until the Closing (or the earlier termination of this Agreement), AquaBounty shall use commercially reasonable efforts to obtain the Shareholder Approval.

(b) From the Effective Date until the Closing (or the earlier termination of this Agreement), Intrexon shall vote or cause to be voted all shares of Common Stock it owns, beneficially or of record, in favor of any reverse split of the Common Stock in a ratio of either 1:10, 1:20, 1:30, 1:40, or 1:50, or any other ratio reasonably acceptable to Intrexon, that (i) is required to qualify the Common Stock for listing on NASDAQ or (ii) necessary to have sufficient authorized, unissued shares of Common Stock for the issuance and sale by AquaBounty of the Shares.

 

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ARTICLE IX

MISCELLANEOUS

Section 9.1 Survival of Representations and Warranties.

All of the representations and warranties made herein shall survive the execution and delivery of this Agreement until the third anniversary of the Effective Date, unless otherwise terminated in accordance with Article VII.

Section 9.2 Notices.

All notices, demands, and other communications required or permitted hereunder shall be in writing and shall be given by registered or certified first-class mail (return receipt requested), facsimile, electronic mail, courier service, or personal delivery to the address or number for the intended recipient set forth below or such other address or number as may be provided by written notice from the intended recipient from time to time.

 

  (a) if to AquaBounty:

AquaBounty Technologies, Inc.

Two Clock Tower Place, Suite 395

Maynard, MA 01754

Attention: David Frank

Facsimile: 978-897-3217

E-mail: dfrank@aquabounty.com

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

Jones Day

77 W. Wacker Dr.

Chicago, IL 60601

Attention: Brad Brasser

Telephone: 312-269-4252

Facsimile: 312-782-8585

Email: bcbrasser@jonesday.com

 

  (b) if to Intrexon:

Intrexon Corporation

1750 Kraft Drive, Suite 1400

Blacksburg, VA 24060

Attention: Rick L. Sterling, Chief Financial Officer

Facsimile: 540-961-0925

E-mail: rsterling@intrexon.com

 

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

Intrexon Corporation

20358 Seneca Meadows Parkway

Germantown, MD 20876

Attention: Legal Department

Facsimile: 301-556-9901

E-mail: dlehr@intrexon.com

All such communications shall be deemed to have been duly given when delivered by hand, if personally delivered; when delivered by courier, if delivered by commercial courier service; five Business Days after being deposited in the mail, postage prepaid, if mailed; and upon receipt, if sent via facsimile or electronic mail.

Section 9.3 Successors and Assigns; Third-Party Beneficiaries.

This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of the parties hereto. Subject to applicable securities laws and the terms of this Agreement, Intrexon may, with the prior written consent of AquaBounty (not to be unreasonably withheld, delayed or conditioned), assign any of its rights under this Agreement to any of its Affiliates. AquaBounty may not assign any of its rights under this Agreement without the prior written consent of Intrexon. No Person other than the parties hereto and their successors are intended to be beneficiaries of the provisions of this Agreement.

Section 9.4 Amendment and Waiver.

 

  (a) No failure or delay on the part of AquaBounty or Intrexon in exercising any right, power, or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, power, or remedy. The remedies provided for herein are cumulative and are not exclusive of any remedies that may be available to AquaBounty or Intrexon at law, in equity, or otherwise.

 

  (b) Any amendment, supplement, modification, or waiver of or to any provision of this Agreement must be in a written agreement signed by both parties hereto. Any such waiver shall be effective only in the specific instance and for the specific purpose for which made or given. Except where notice is specifically required by this Agreement, no notice to or demand on either party in any case shall entitle such party to any other further notice or demand in similar or other circumstances.

Section 9.5 Counterparts; Facsimile or Electronic Transmission.

This Agreement may be executed in any number of counterparts, each being deemed to be an original and all of which taken together being deemed to constitute a single agreement. Such counterparts may be delivered by facsimile or as a .pdf file by electronic mail.

 

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Section 9.6 Headings.

The headings in this Agreement are for convenience only and shall not limit or otherwise affect the meaning hereof.

Section 9.7 Governing Law.

This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflict of laws principles thereof.

Section 9.8 Severability.

If any provision of this Agreement, or the application thereof in any circumstance, is held invalid, illegal, or unenforceable in any respect for any reason, the validity, legality, and enforceability of such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provision held invalid, illegal, or unenforceable shall substantially impair the benefits of the remaining provisions hereof.

Section 9.9 Rules of Construction.

Unless the context otherwise requires, references to articles, sections, or subsections refer to articles, sections, or subsections of this Agreement.

Section 9.10 Entire Agreement.

This Agreement is intended by the parties hereto as a complete and final expression of their agreement in respect of the subject matter of this Agreement and supersedes all prior agreements and understandings between the parties with respect to such subject matter. There are no restrictions, promises, representations, warranties, or undertakings other than those set forth or referred to in this Agreement.

Section 9.11 Fees.

Each party hereto shall be responsible for all costs, fees, and expenses it incurs (including, without limitation, those of counsel) in connection with the transactions contemplated hereby, including, without limitation, any amendment or modification of this Agreement.

Section 9.12 Further Assurances.

Each of the parties shall execute such documents and perform such further acts (including, without limitation, obtaining any consents, exemptions, authorizations, or other actions of, or giving any notices to, or making any filings with, any Governmental Authority or any other Person) as may be reasonably required to carry out or to perform the provisions of this Agreement.

 

18


Section 9.13 Waiver of Jury Trial and Setoff; Consent to Jurisdiction; Etc.

 

  (a) In any litigation with respect to, in connection with, or arising out of this Agreement or any instrument or document delivered pursuant to this Agreement, or the validity, protection, interpretation, collection, or enforcement hereof or thereof, or any other claim or dispute howsoever arising, between AquaBounty and Intrexon, the parties hereby waive, to the fullest extent they may legally do so, (i) the right to interpose any setoff, recoupment, counterclaim, or cross-claim in connection with any such litigation, irrespective of the nature of such setoff, recoupment, counterclaim, or cross-claim, unless such setoff, recoupment, counterclaim, or cross-claim could not, by reason of any applicable federal or state procedural laws, be interposed, pleaded, or alleged in any other action and (ii) TRIAL BY JURY IN CONNECTION WITH ANY SUCH LITIGATION. AQUABOUNTY AGREES THAT THIS SECTION   9.13(A) IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND ACKNOWLEDGES THAT INTREXON WOULD NOT EXTEND ANY CREDIT TO AQUABOUNTY IF THIS SECTION   9.13(A) WERE NOT PART OF THIS AGREEMENT.

 

  (b) The parties hereby irrevocably consent to the exclusive jurisdiction of the courts located within the State of Delaware in connection with any action or proceeding arising out of or relating to this Agreement or any document or instrument delivered in connection with the transactions contemplated hereby. In such litigation, each of the parties waives, to the fullest extent it may effectively do so, any personal service of any summons, complaint, or other process and agrees that the service thereof may be made by certified or registered mail directed to its address set forth in this Agreement. Each of the parties hereby waives, to the fullest extent it may effectively do so, the defenses of forum non conveniens and improper venue.

[remainder of page intentionally left blank]

 

19


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their respective officers hereunto duly authorized on the date first set forth above.

 

AQUABOUNTY TECHNOLOGIES, INC.

By:  

/s/ David A. Frank

  Name:  David A. Frank
  Title:  Chief Financial Officer
INTREXON CORPORATION
By:  

/s/ Donald P. Lehr

  Name:  Donald P. Lehr
  Title:  Chief Legal Officer

[Signature Page to Stock Purchase Agreement]

Exhibit 10.2

AQUA BOUNTY TECHNOLOGIES INC.

 

 

2006 EQUITY INCENTIVE PLAN

 

 

Approved by the Company on 20 th  February 2006


INDEX

 

         Page  

1.

  Purpose      1   

2.

  Administration      1   

3.

  Participants      1   

4.

  Shares available under the Plan      2   

5.

  Types of benefits      2   

6.

  Share Options      2   

7.

  Incentive Stock Options      3   

8.

  Share appreciation rights      4   

9.

  Restricted Shares and Deferred Shares      4   

10.

  Other awards      4   

11.

  Performance targets      5   

12.

  Change in Control      5   

13.

  Termination of employment/service      6   

14.

  Adjustments      6   

15.

  Sub Plans      6   

17.

  Amendments      7   

18.

  Termination      7   


AQUA BOUNTY TECHNOLOGIES INC.

2006 EQUITY INCENTIVE PLAN

 

1. Purpose

The purpose of the Aqua Bounty Technologies Inc. 2006 Equity Incentive Plan (the “ Plan ”) is to attract and retain directors, officers, consultants and other employees for Aqua Bounty Technologies Inc. (the “ Company ”) and its subsidiaries (together the “ Group ”) and to provide such persons with incentives and rewards for superior performance.

 

2. Administration

 

2.1 The Plan will be administered by a duly authorised committee of the board of directors of the Company (the “ Board ”).

 

2.2 The Board will have authority to construe and interpret the Plan and any benefits granted under the Plan, to establish and amend rules for the administration of the Plan, to change the terms and conditions of options and other benefits at or after grant, and to make all other determinations which it deems necessary or advisable for the administration of the Plan.

 

2.3 In considering the making of awards under this Plan:

 

  (a) the Board will have regard to the provisions of the code of dealing adopted by the Company relating to dealings in securities by directors and other relevant employees and, at any time while Shares of the Company are traded on AiM (being the market of that name operated by the London Stock Exchange), to the provisions of AiM Rule 21 (as amended or replaced from time to time) and, at any time, to any other applicable legislation or regulations of similar effect or purpose to AiM Rule 21; and

 

  (b) awards over Shares of the Company or by reference to the value of such Shares may only be authorised by the Board during a period of 42 days following (i) the date of admission of the Shares of the Company to trading on AiM (“ Admission ”), (ii) the date of announcement of the annual or interim results of the Company or (iii) the date on which listing particulars or a prospectus or document containing equivalent information in relation to Shares of the Company is published, provided that grants outside these periods may be authorised by the Board in circumstances which, in its discretion and acting in good faith, it considers sufficiently exceptional to justify the grant of awards at that time.

 

3. Participants

 

3.1 Participants in the Plan may be directors, officers, consultants or other employees of the Company or any one or more of its subsidiaries selected by the Board considering all factors that it deems relevant in such selection and in determining the type and amount of their respective benefits.

 

1


3.2 Designation of a participant in any year shall not require the Board to designate that person to receive a benefit in any other year or to receive the same type or amount of benefit as granted to that participant in any other year or as granted to any other participant in any year.

 

4. Shares available under the Plan

 

4.1 The maximum aggregate number of ordinary Shares of [●] cents each (“ Shares ”) which may be issued and/or transferred pursuant to awards made under the Plan, when aggregated with the number of Shares issued or remaining issuable or transferred or remaining transferable in respect of awards made under the Plan and any other employee stock incentive programme, may not exceed ten per cent. of the number of Shares then in issue. (When calculating this limit, regard will be had only to Shares issued or remaining issuable and treasury shares transferred or remaining transferable by the Company and by reference to awards made under the Plan and any other employee stock incentive programme after the date of Admission.)

 

4.2 The fair market value per Share at any time for the purposes of this Plan will be determined in such manner as the Board considers equitable, or as required by law or regulation.

 

4.3 The Company will, with respect to all Shares issued pursuant to an award under the Plan, apply for the same listings as are applicable to Shares already in issue.

 

5. Types of benefits

 

5.1 Benefits under the Plan shall consist of share options, share appreciation rights, restricted shares, deferred shares and other share, share based or cash awards, all as described below. Such benefits will not be pensionable.

 

5.2 Each right granted under the Plan will be evidenced by means of an agreement, certificate or other form of written record approved by the Board setting out the terms and conditions of the award and may be in an electronic medium or limited to a notation in the books and records of the Company.

 

5.3 Each award will be personal to the participant and will not be capable of being assigned, transferred, mortgaged, charged or otherwise disposed of or encumbered (whether in whole or in part). If the participant does or suffers any act or thing whereby he or she would or might be deprived of the legal or beneficial ownership of an award, the award will be forfeited immediately.

 

6. Share Options

 

6.1 Share options (“ Share Options ”) consist of a right to purchase Shares which may be granted to participants at any time as determined by the Board, subject to the provisions of this Plan.

 

2


6.2 The Board will determine the terms of any Share Option including, but without limitation, (a) the number of Shares subject to each Share Option, (b) the option price per Share (which may not be less than the fair market value per Share on the date of grant), (c) the terms and conditions upon which the Share Option may be exercised and its expiry date (being no later than the tenth anniversary of its grant), and (d) the terms for payment of the option price upon exercise, including by way of cash payment or such other methods of payment as the Board, in its discretion, deems appropriate.

 

7. Incentive Stock Options

 

7.1 Notwithstanding the other provisions of this Plan to the contrary, to the extent that Share Options are granted to U.S. persons, which options are intended to qualify as “ Incentive Stock Options ” under Section 422 of the U.S. Internal Revenue Code, the following provisions will apply:

 

  (a) the maximum aggregate number of Shares for which Incentive Stock Options may be issued shall be [●] Shares, subject to section 4.1 of this Plan and to adjustment as provided in section 14 of this Plan provided that any such adjustment will be made only if and to the extent that such adjustment would not cause any option intended to qualify as an Incentive Stock Option to fail so to qualify;

 

  (b) the persons eligible to receive Incentive Stock Options (potential “ Optionees ”) shall be U.S. persons who are determined to be key employees of the Group who meet the definition of “ employees ” under Section 3401(c) of the Code;

 

  (c) the price payable on exercise of an Incentive Stock Option (the “ Option Price ”) shall be not less than the fair market value of the underlying Shares on the date that the Incentive Stock Option is granted.

 

7.2 The Incentive Stock Option shall not be exercisable after the expiration of ten years from the date of grant. Such Incentive Stock Option shall be granted within ten years from the date this Plan is adopted or the date this Plan is approved by shareholders, whichever is earlier.

 

7.3 The Incentive Stock Option shall not be transferable other than by will or the laws of descent and distribution and is exercisable during the Optionee’s lifetime only by him.

 

7.4 If the Optionee owns stock possessing more than ten per cent. of the combined voting power of all classes of stock of the Company, such Optionee may only be granted an Incentive Stock Option if the Option price is at least 110 per cent. of the fair market value of a Share on and the Option is not exercisable after the expiration of five years from the date that the Option is granted.

 

7.5 To the extent that the aggregate fair market value of Shares with respect to which Incentive Stock Options are exercisable for the first time by any individual during any calendar year (under the Plan and any other employee incentive stock programme of the Group) exceeds US$100,000, such options shall be treated as Share Options which are not Incentive Stock Options.

 

3


8. Share appreciation rights

 

8.1 Share appreciation rights (“ SARs ”) consist of a right to receive from the Company an amount determined by the Board being no greater than the difference between the fair market value per Share on the date of grant of the SAR and on the date of exercise. SARs may be granted to participants at any time as determined by the Board, subject to the terms of this Plan, in tandem with Share Options or on a free-standing basis.

 

8.2 The Board will determine the terms of any SAR including, but without limitation, (a) the number of Shares subject to each SAR, (b) the amount payable on exercise of a SAR (being not less than the option price per Share if granted in tandem with a Share Option and not less than the fair market value per Share on the date of grant if granted on a free-standing basis), (c) the terms and conditions upon which the SAR may be exercised and its expiry date (being no later than the tenth anniversary of its grant), and (d) the terms for payment by the Company on exercise of the SAR, whether in cash or Shares or any combination thereof as determined by the Board at the time of grant.

 

9. Restricted Shares and Deferred Shares

 

9.1 Restricted Shares (“ Restricted Shares ”) consist of Shares which may be granted or sold to participants subject to such terms and conditions (including the risk of forfeiture and prohibition on transfer) as determined by the Board, subject to the provisions of this Plan.

 

9.2 Deferred shares (“ Deferred Shares ”) consist of a right which may be granted or sold to participants to receive Shares or cash at the end of a specified period after vesting in accordance with the terms and conditions of such grant as determined by the Board subject to the provisions of this Plan.

 

9.3 The Board will determine the terms of any award of Restricted Shares or Deferred Shares including, but without limitation, restrictions and conditions such as (a) a prohibition against sale, assignment, transfer, mortgage, charge or other disposal or encumbrance for a specified period and (b) a requirement that the participant forfeits (or, in the case of shares or rights sold to the participant, resells to the Company) such shares or rights in the event of termination of employment during the period of restriction.

 

9.4 The grant or sale of Restricted Shares or Deferred Shares may be made without additional consideration or in consideration of a payment by a participant that is less than the market value per Share at the date of award of such Shares.

 

10. Other awards

 

10.1 The Board may, subject to limitations under applicable law, grant to any participants such other award that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to Shares or factors that may influence the value of such Shares including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into Shares,

 

4


  purchase rights for Shares, awards with the value in payment contingent upon performance of the Company or specified companies in the Group, affiliates or other business units thereof or any other factors designated by the Board, and awards valued by reference to the book value of Shares or the value of securities of, or the performance of specified companies in the Group or affiliates or other business units of the Company or companies in the Group.

 

10.2 The Board will determine the terms and conditions of such awards.

 

10.3 Shares delivered pursuant to an award in the nature of a purchase right granted under this section 10 will be purchased for such consideration, paid for at such time, by such methods and in such forms (including, without limitation, cash, Shares, other awards, notes or other property) as the Board will determine.

 

10.4 Cash awards, as the only element of or part of or supplemental to any other award granted under this Plan, may also be granted pursuant to this section 10.

 

10.5 The Board may grant Shares as a bonus, or may grant other awards in lieu of obligations of the Company or any company in the Group to pay cash or deliver other property under this Plan or under other plans or compensatory arrangements, subject to such terms as will be determined by the Board.

 

11. Performance targets

 

11.1 Awards under this Plan may be made subject to the attainment of performance targets in such objective manner as the Board considers appropriate. Performance targets may be set by reference to the performance of any one or more of the Company and other companies in the Group or to the performance of the participant or of the subsidiary, division, department, regional function within the Company or a Group company in which the participant is employed or engaged. Performance targets may also be made relative to the performance of other companies.

 

11.2 The Board may, in circumstances it considers in good faith to be appropriate, subsequently amend any target or condition imposed in accordance with this section 11 should an event or events have occurred that cause the Board reasonably to consider that the amended target or condition would be a fairer measure of the performance of the participant and that the amended condition would be no more difficult to satisfy than it would have been without such amendment.

 

12. Change in Control

 

12.1 All awards under this Plan shall prescribe the extent to which, subject to any reasonable Board discretion, upon a Change in Control (as defined below) of the Company, outstanding Share Options and SARs will become vested and exercisable, restrictions on Restricted Shares and Deferred Shares will lapse and performance targets will be deemed achieved and all other terms and conditions met, and all other awards will be delivered or paid.

 

12.2 For the purposes of this Plan, a “ Change in Control ” shall mean such event or events as are prescribed at the time of the grant of an award under this Plan relating to changes in ownership of the Shares or in the voting control of the Company and any reconstruction or winding up of the Company.

 

5


13. Termination of employment/service

 

13.1 Awards under this Plan may prescribe the extent to which, subject to any reasonable Board discretion, in the case of termination of employment or service by reason of death, disability, redundancy or normal or early retirement, or in the case of hardship or other special circumstances, Share Options and SARs will become vested and exercisable, restrictions on Restricted Shares and Deferred Shares will lapse and performance targets will be deemed achieved and all other terms and conditions met, and all other awards will be delivered or paid.

 

13.2 In all other circumstances, awards under the Plan will lapse on termination of employment or service.

 

14. Adjustments

 

14.1 The Board may make or provide for such adjustments in the number and kind of Shares and/or the option price or other price of Shares subject to outstanding awards granted under this Plan as it may, in its discretion and in good faith, determine as equitably required to prevent dilution or enlargement of the rights of participants that would otherwise result from any change in the capital structure of the Company including, but without limitation, from (a) any stock dividend, stock split, combination of Shares, recapitalisation or other change in the capital structure of the Company, or (b) any merger, consolidation, spin off, reorganisation, partial or complete liquidation or other distribution of assets, issuance of rights or warrants to purchase securities, or (c) any other corporate transaction or event having an effect similar to any of the foregoing (other than a Change in Control).

 

14.2 In the event of any transaction or event described in section 14.1 above, the Board, in its discretion, may provide in substitution for any or all outstanding awards under this Plan such alternative consideration as it, in good faith, may determine to be equitable in the circumstances, and the Board may require in connection therewith the surrender of all awards so replaced.

 

15. Sub Plans

 

15.1 In order to facilitate the making of any grant or combination of grants under this Plan, the Board may provide such special terms for awards to participants as the Board may consider necessary or appropriate to accommodate differences in local law, tax policy or custom.

 

15.2 The Board may approve such supplements to or amendments, restatements or alternative versions of this Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of this Plan as in effect for any other purpose provided that the provisions in this Plan in relation to:

 

  (a) the definition and scope of participants under this Plan (see section 3.1 above);

 

6


  (b) the limitations on the amount of Shares subject to the Plan (see section 4.1 and section 7.1(a) above); and

 

  (c) the adjustment provisions in section 14 above,

cannot be altered to the advantage of participants without the prior approval of shareholders of the Company in general meeting (except for minor amendments to benefit the administration of the Plan, to take account of any change in legislation or to obtain or maintain favourable tax, exchange control or regulatory treatment for participants in the Plan or for the Company or any companies in the Group).

 

16. Taxes

 

16.1 To the extent that the Company or any other company in the Group is required to withhold any taxes in any jurisdiction (including, without limitation, social security or equivalent contributions) in connection with any payment made or benefit realised by a participant or other person under this Plan, and the amounts available to the Company or relevant Group company for such withholding are insufficient, it will be a condition of receipt of such payment or the realisation of such benefit that the participant or such other person makes arrangements satisfactory to the Company for payment of the balance of such taxes required to be withheld, which arrangements (in the discretion of the Board) may include relinquishment of a portion of such benefit.

 

17. Amendments

 

17.1 The Board may at any time amend the Plan in whole or in part provided that any amendment which may require approval by the shareholders of the Company in order to comply with applicable law and the rules of AiM and/or any other relevant investment exchange will not be effective until such approval has been obtained.

 

17.2 The Board may amend the terms of any award granted under this Plan provided that no amendment to the material advantage of participants may be made without the prior approval of the shareholders of the Company (other than a change to the performance targets in accordance with section 11 of this Plan) and no such amendment may impair the rights of any participant without his or her consent.

 

18. Termination

 

18.1 No grant will be made under this Plan more than ten years after the date on which it is first approved by shareholders of the Company but all grants made on or prior to such date will continue in effect thereafter subject to the terms of such grant and of this Plan.

 

7

Exhibit 10.3

Aqua Bounty Technologies Inc.

Amendment No. 1 to the

Aqua Bounty Technologies Inc.

2006 Equity Incentive Plan

Aqua Bounty Technologies Inc., a Delaware corporation (the “Company”), by action of its Board of Directors taken in accordance with the authority granted to it by Section 17.1 of the Aqua Bounty Technologies Inc. 2006 Equity Incentive Plan (the “Plan”), hereby amends the Plan in the following respect effective June 26, 2007:

 

  1. By deleting Section 13.1 of the Plan and inserting in lieu thereof the following:

 

  “13.1 Awards under this Plan may prescribe the extent to which, subject to any reasonable Board discretion, in the case of termination of employment or service by reason of death, disability, redundancy, normal or early retirement or any other reason, or in the case of hardship or other special circumstances, Share Options and SARs will become vested and exercisable, restrictions on Restricted Shares and Deferred Shares will lapse and performance targets will be deemed achieved and all other terms and conditions met, and all other awards will be delivered or paid.”

EXHIBIT 10.4

AquaBounty Technologies Inc.

FORM OF STOCK OPTION AGREEMENT

This Stock Option Agreement (this “Agreement”) is made and entered into as of                          by and between AquaBounty Technologies Inc., a Delaware corporation (the “Company”), and                         , an individual (“Optionee”), with respect to options to purchase shares of the Company’s Common Stock pursuant to the AquaBounty Technologies Inc. 2006 Equity Incentive Plan (the “Plan”). All capitalized terms used herein and not defined shall have the meaning set forth in the Company’s 2006 Equity Incentive Plan.

1. Grant of Option . Pursuant to resolutions of the Company’s Board of Directors (the “Board”), the Company hereby grants to Optionee an option (the “Option”) to purchase shares of the Company’s Common Stock upon the terms and conditions hereinafter set forth and as set forth in the Plan. The number of shares to be purchased upon exercise of the Option, subject to adjustment as provided herein (the “Shares”), are set forth on Exhibit A hereto. The Option is intended to be: (Check One)

¨ - a nonstatutory option and not an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.

¨ - an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.

2. Exercise Price . The exercise price of the Option (the “Exercise Price”) is as set forth on Exhibit A hereto (being not less than the fair market value of a share of Common Stock on the date the Option is granted), subject to adjustment as provided herein.

3. Exercise Period . The Option granted hereby shall be exercisable for a period or periods of time, commencing on the exercise date or dates (each, an “Exercise Date”) as set forth on Exhibit A hereto and continuing until such date or dates as set forth on Exhibit A (each, an “Expiration Date”), unless it sooner terminates or expires as provided in Section 7 hereof.

4. Manner of Exercise . The Option granted hereby to the extent exercisable may be exercised in lots of 100 Shares or multiples thereof during the applicable Exercise Period (as defined below), by written notice delivered to the Chief Financial Officer of the Company. Such notice shall state the number of Shares with respect to which the Option is being exercised and shall be accompanied by payment of the purchase price in full in cash. As soon as practicable after any such exercise of the Option, the Company shall issue and register in the name of and deliver to Optionee a certificate or certificates for the Shares issuable upon such exercise; provided that, if any law or regulation requires the Company to delay, or to take any action with respect to such Shares before, the issuance thereof, then the date of delivery of such Shares shall be extended for the period necessary until such requirement is met; and provided further that the Company shall have no obligation to deliver any such certificate unless and until appropriate provision has been made for any withholding taxes in respect of such exercise. If permitted by and subject to applicable law, the payment of the purchase price may also be made on a cashless exercise basis by delivery to the Chief Financial Officer of the Company of a properly executed

 

AquaBounty Technologies


notice, directing the Company to withhold from the number of Shares to be issued upon exercise a sufficient number of Shares to satisfy the purchase price (based upon the fair market value of a share of Common Stock on the Exercise Date). A cashless exercise may also be effected using broker-assistance by delivering a properly executed notice to the Chief Financial Officer of the Company, together with a copy of irrevocable instructions to a broker to deliver promptly to the Company the amount of the proceeds of the sale of the Shares issued pursuant to the exercise of the Option or loan proceeds from the brokerage firm to pay the purchase price, and, if requested by the Company, the amount of any required federal, state, local or foreign withholding taxes. The term “Exercise Period” with respect to the Option or any applicable portion thereof shall mean such period of time from the Exercise Date on which the Option or the applicable portion becomes exercisable as provided in Section 3 hereof through the Expiration Date, unless the Option sooner terminates or expires as provided in Section 7 hereof.

5. Adjustment Provisions . If, at any time or from time to time from the date of grant through the end of the Exercise Period, any of the following events shall occur, the Exercise Price and the number of and kind of Shares then subject to the Option shall in each instance be adjusted as follows:

(a) Stock Dividends, Split-Ups and Combinations

If a change is effected in the number of outstanding shares of Common Stock by a stock dividend in Common Stock or by a subdivision or combination of such shares, the Exercise Price shall be proportionately reduced or increased, as the case may be, so that it will bear the same ratio to the Exercise Price in effect immediately before such change as the number of shares outstanding immediately before such change bears to the number of shares outstanding immediately thereafter.

(b) A djustment of Number of Optioned Shares

Upon any adjustment of the Exercise Price as provided above, the number of Shares subject to the Option shall be increased or decreased, as appropriate, so that the total purchase price that would be payable upon exercise of the Option, to the extent not previously exercised, shall be the same immediately after the adjustment as the total purchase price payable upon such exercise of the Option, immediately before the adjustment.

(c) Other Changes in Capital Structure

In the case of any reclassification or other change in the outstanding Common Stock not covered by the foregoing provisions, other than a change in par value, or from par value to no par value, or from no par value to par value, or in the case of any consolidation or merger of the Company with or into another corporation (other than a merger in which the Company is the continuing corporation and which does not result in any reclassification or change of outstanding shares of the Company), or in the case of any sale or conveyance to another corporation of the property of the Company as an entirety, or substantially as an entirety, the Optionee shall have the right, upon exercise of Option, to receive solely a like amount and kind of shares of stock and other securities and property receivable upon such reclassification, change, consolidation, merger, sale or conveyance as Optionee would have been entitled to

 

   2    AquaBounty Technologies


receive if the Option, to the extent not previously exercised, had been exercised in full immediately prior to such reclassification, change, consolidation, merger, sale or conveyance, and the Board shall adjust the Exercise Price as it shall determine in its discretion to be equitable to prevent a dilution or enlargement of rights hereunder.

(d) Notice of Adjustment

Upon any adjustment of the Exercise Price and change in the number of Shares or other securities purchasable hereunder, the Company shall give written notice thereof to Optionee, stating the new price and the increased or decreased number of Shares or other securities purchasable upon exercise of the Option and setting forth in reasonable detail the method of calculation and the pertinent facts upon which such calculation is based. All determinations with respect to such adjustments shall be made by the Board and shall be conclusive and binding.

6. Non-Transferability of Option . The Option may be exercised during the lifetime of Optionee only by Optionee or by the guardian or legal representative of the Optionee and may not be transferred in any manner other than by will or by the laws of descent and distribution. In the event of death of Optionee, the person or persons entitled to exercise the Option under Optionee’s will or under the laws of descent and distribution shall have the right to exercise any previously unexercised portion of the Option as of the date of Optionee’s death as provided in Section 7, provided that the Company has been supplied with documentation satisfactory to it with respect to the appointment of such person or persons as such. The terms of this Option shall be binding upon the executors, administrators, heirs and successors of the Optionee.

7. Exer cise in the Event of Death, Disability, Retirement or Other Termination .

(a) Termination of Employment By Death . If the Optionee’s employment within the Group is terminated by reason of death, the Option will become immediately exercisable in full and may thereafter be exercised by the holder for a period of one year from the date of death or until the Expiration Date, whichever period is shorter. Any part of the Option not so exercised shall expire.

(b) Termination of Employment By Reason of Disability . If the Optionee’s employment within the Group is terminated by reason of permanent and total disability as determined by the Board (“Disability”), the Option will become immediately exercisable in full and may thereafter be exercised by the Optionee for a period of one year from the date of such termination or until the Expiration Date, whichever period is shorter; provided, however, that if the Optionee dies within such one-year period and prior to the Expiration Date, any unexercised portion of the Option shall, notwithstanding the expiration of such one-year period, continue to be exercisable for a period of 12 months from the date of death or until the Expiration Date, whichever period is shorter. Any part of the Option not so exercised shall expire.

(c) Termination of Employment By Reason of Retirement . If the Optionee’s employment within the Group is terminated by reason of retirement on or after the Optionee reaches age sixty five (65), the Option will become immediately exercisable in full and may thereafter be exercised by Optionee for a period of one year from the date of such retirement or

 

   3    AquaBounty Technologies


until the Expiration Date, whichever period is shorter; provided, however, that if the Optionee dies within such one-year period and prior to the Expiration Date, any unexercised portion of the Option shall, notwithstanding the expiration of such one-year period, continue to be exercisable for a period of 12 months from the date of death or until the Expiration Date, whichever period is shorter. Any part of the Option not so exercised shall expire.

(d) Other Termination of Employment . Unless otherwise determined by the Board, if for any reason other than death, retirement after reaching age sixty five (65), or Disability, the Optionee’s employment within the Group is terminated, the Option shall thereupon terminate, except that the Option, to the extent exercisable immediately prior to a termination for any reason other than death, retirement after reaching age sixty five (65), or Disability, may be exercised for a period of sixty (60) days from the date of such termination or until the Expiration Date, whichever period is shorter. Notwithstanding the foregoing, if the Optionee’s employment is terminated at or after a Change of Control (as defined in Section 8), other than by reason of death, retirement on or after reaching age sixty five (65), or Disability, the Option shall be exercisable for the lesser of (1) sixty (60) days from the date of such termination, or (2) until the Expiration Date, whichever period is shorter. Any part of the Option not so exercised shall expire.

8. Change of Control . In the event of a Change of Control (as defined below), the Option shall become fully exercisable and vested. “Change of Control” means the occurrence of any of the following events:

(a) The Company is merged, consolidated or reorganized into or with another corporation or other legal person, and as a result of such merger, consolidation or reorganization less than a majority of the combined voting power of the then-outstanding securities of such corporation or person immediately after such transaction is held in the aggregate, directly or indirectly, by the holders of the then-outstanding securities entitled to vote generally in the election of directors (the “Voting Stock”) of the Company immediately prior to such transaction;

(b) The Company sells or otherwise transfers all or substantially all of its assets to another corporation or other legal person, and as a result of such sale or transfer, less than a majority of the combined voting power of the then-outstanding Voting Stock of such corporation or person immediately after such sale or transfer is held in the aggregate, directly or indirectly, by the holders of Voting Stock of the Company immediately prior to such sale or transfer;

(c) There is a report filed on Schedule 13D or Schedule 14D-1 (or any successor schedule, form or report), each as promulgated pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), disclosing that any person (as the term “person” is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the beneficial owner (as the term “beneficial owner” is defined under Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act) of securities representing 35% or more of the combined voting power of the then outstanding Voting Stock of the Company;

 

   4    AquaBounty Technologies


(d) There is a report or notification filed with any regulatory body in the United Kingdom or issued pursuant to the AIM Rules or any other applicable laws or regulations, disclosing that any person has become the beneficial owner of securities representing 35% or more of the combined voting power of the then outstanding Voting Stock of the Company.

(e) If, during any period of two consecutive years, individuals who at the beginning of any such period constitute the members of the Board of Directors of the Company cease for any reason to constitute at least a majority thereof; provided, however, that for purposes of this paragraph (e) each director who is first elected, or first nominated for election, by the Company’s shareholders, by a vote of at least two-thirds of the directors of the Company (or a committee thereof) then still in office who were directors of the Company at the beginning of any such period will be deemed to have been a director of the Company at the beginning of such period; or

(f) The approval of the shareholders of the Company of a complete liquidation or dissolution of the Company.

Notwithstanding the foregoing provisions of paragraphs (c) and (d) above, unless otherwise determined in a specific case by majority vote of the Board, a “Change of Control” shall not be deemed to have occurred for purposes of paragraph (c) and (d) solely because (i) the Company, (ii) a subsidiary of the Company, or (iii) any employee stock ownership plan or any other employee benefit plan of the Company or any Subsidiary either files or becomes obligated to file a report or a proxy statement under or in response to Schedule 13D or Schedule 14D-1 (or any successor schedule, form or report or item therein) under the Exchange Act or a report or notification is filed or issued with any regulatory body in the United Kingdom or pursuant to the AIM Rules or other applicable laws or regulations, disclosing beneficial ownership by it of shares of Voting Stock, whether in excess of 35% or otherwise.

9. Representations of Optionee . Optionee acknowledges that he has been informed that the Shares subject to the Option, if and when issued, will not be registered under the Securities Act of 1933, as amended (the “Act”). Optionee acknowledges that he has been informed that the Company is granting the Option in reliance upon exemptions contained in the Act and the General Rules and Regulations under the Act as promulgated and from time to time amended by the Securities and Exchange Commission on the grounds that the grant of the Option and the issuance and sale of the Shares subject to the Option when exercised are transactions not involving any public offering and that, consequently, such transactions are exempt from registration under the Act by virtue of the provisions of Section 4(2) thereof. Optionee acknowledges that reliance upon this exemption is predicated in part upon his representation that he has no intention of dividing his participation for any interest in the Option and the Shares subject to the Option with others or otherwise distributing all or any part thereof but that any Shares acquired by him upon exercise of the Option will be acquired for investment only. In addition, Optionee specifically authorizes the Company to place an appropriate legend on the Shares in the form set forth in Section 11 hereof.

10. Representation of the Company . The Company represents and warrants that the Shares issuable upon any exercise of the Option, when purchased and paid for as herein provided, will be validly issued, fully paid and non-assessable.

 

   5    AquaBounty Technologies


11. Legend . The certificates representing the Shares issued upon any exercise of the Option granted hereby shall bear the following legend:

THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR UNLESS, IN THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER, IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION OR IS OTHERWISE IN COMPLIANCE WITH THE ACT AND SUCH LAWS.

12. No Employment Contract . Nothing in this Agreement shall confer upon the Optionee any right to become or to continue to be an employee of the Company or shall interfere with or restrict in any way the rights of the Company, which are hereby expressly reserved, to discharge the Optionee, if an employee, at any time for any reason whatsoever, with or without cause, subject to the provisions of applicable law. This Agreement is not an employment contract.

13. Income Tax Withholding . Optionee authorizes the Company or other Group company to withhold in accordance with applicable law from any compensation payable to him or her any taxes required to be withheld by Federal, state, local or foreign laws as a result of the exercise of the Option. The Optionee may elect that all or any part of such withholding requirement be satisfied by retention by the Company of a portion of the Shares purchased upon the exercise of the Option. If such election is made, the Shares so retained shall be credited against such withholding requirement based on the fair market value of a share of Common Stock on the Exercise Date. Furthermore, in the event of any determination that the Company or other Group company has failed to withhold a sum sufficient to pay all withholding taxes due in connection with the exercise of the Option, Optionee agrees to pay the Company the amount of any such deficiency in cash within five (5) days after receiving a written demand from the Company to do so, whether or not Optionee is an employee of the Company at that time.

14. Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.

15. Option Subject to Terms of Plan . The granting of the Option is being made pursuant to the Plan and the Option shall be exercisable only in accordance with the applicable terms of the Plan. The Plan contains certain definitions, restrictions, limitations and other terms and conditions all of which shall be applicable to the Option. ALL THE PROVISIONS OF THE PLAN ARE INCORPORATED HEREIN BY REFERENCE AND ARE MADE A PART OF THIS AGREEMENT IN THE SAME MANNER AS IF EACH AND EVERY SUCH PROVISION WERE FULLY WRITTEN INTO THIS AGREEMENT. Should the Plan become void or unenforceable by operation of law or judicial decision, this Agreement shall have no force or effect. Nothing set forth in this Agreement is intended, nor shall any of its

 

   6    AquaBounty Technologies


provisions be construed, to limit or exclude any definition, restriction, limitation or other term or condition of the Plan as is relevant to this Agreement and as may be specifically applied to it by the Board. In the event of a conflict in the provisions of this Agreement and the Plan, as a rule of construction, the terms of the Plan shall be deemed superior and apply. The Optionee acknowledges receipt of a copy of the Plan.

16. No Rights in Stock . The holder of the Option shall have no rights as a shareowner in respect of any shares of Common Stock of the Company unless and until a certificate or certificates representing such shares shall have been delivered to him.

IN WITNESS WHEREOF, the parties have executed this Stock Option Agreement as of the date first above written.

 

AQUABOUNTY TECHNOLOGIES INC.

 

Name:
Title:
OPTIONEE

 

Name:

EXHIBIT A

TERMS OF OPTIONS

 

Date of Grant

   Number of Shares      Exercise Price
Per Share
     Vesting Period    Expiration
Date
 
      $              

 

 

   7    AquaBounty Technologies

Exhibit 10.5

AQUA BOUNTY TECHNOLOGIES INC.

2006 EQUITY INCENTIVE PLAN

 

 

FORM OF RESTRICTED STOCK AGREEMENT

(United Kingdom Residents)

This Agreement (the “ Agreement ”) is made as of              , 201      (the “ Date of Grant ”) by and between Aqua Bounty Technologies Inc., a Delaware corporation (the “ Company ”) and                              (“ Grantee ”) on behalf of itself and of any subsidiary of the Company (a “ Subsidiary ”) which is the employer of or deemed to be the employer of Grantee or to which Grantee provides services.

 

1. Grant of Restricted Shares . Subject to and upon the terms, conditions and restrictions set forth in this Agreement and in the Company’s 2006 Equity Incentive Plan (the “ Plan ”), the Company hereby grants to Grantee as of the Date of Grant                              (               ) shares of the Company’s Common Stock as Restricted Shares (the “ Restricted Shares ”). The Restricted Shares shall be fully paid and nonassessable and shall be represented by a certificate or certificates registered in Grantee’s name, endorsed with an appropriate legend referring to the restrictions hereinafter set forth.

 

2. Restrictions on Transfer of Restricted Shares . The Restricted Shares may not be sold, exchanged, assigned, transferred, pledged, encumbered or otherwise disposed of by Grantee, except to the Company, until the Restricted Shares have become nonforfeitable as provided in Section 3 hereof. Any purported transfer or encumbrance in violation of the provisions of this Section 2 shall be void, and the other party to any such purported transaction shall not obtain any rights to or interest in such Restricted Shares.

 

3. Vesting of Restricted Shares . The Restricted Shares shall become nonforfeitable on the                      anniversary of the Date of Grant (the “ Vesting Date ”) if Grantee remains in the continuous employ or service of the Company or a Subsidiary from the Date of Grant until the Vesting Date.

 

4. Forfeiture of Shares . Notwithstanding any other provision of this Agreement or of the Plan to the contrary, the Restricted Shares shall be forfeited without further consideration if Grantee ceases to be an employee of or to provide services to the Company or any Subsidiary prior to the Vesting Date. In the event of a forfeiture, the certificate(s) representing the Restricted Shares covered by this Agreement shall be canceled.

Form Restricted Stock Agreement


5. Dividend, Voting and Other Rights . Except as otherwise provided herein, from and after the Date of Grant, Grantee shall have all of the rights of a stockholder with respect to the Restricted Shares; provided , however , that any additional shares of Common Stock or other securities that Grantee may become entitled to receive pursuant to a stock dividend, stock split, combination of shares, recapitalization, merger, consolidation, separation or reorganization or any other change in the capital structure of the Company shall be subject to the same restrictions as the Restricted Shares covered by this Agreement.

 

6. Retention of Stock Certificate(s) by the Company . The certificate(s) representing the Restricted Shares shall be held in custody by the Company, together with a stock power endorsed in blank by Grantee with respect thereto, until those shares have become nonforfeitable in accordance with Section 3 of this Agreement.

 

7. Compliance with Law . The Company shall make reasonable efforts to comply with all applicable federal and state securities laws; provided , however , notwithstanding any other provision of this Agreement, the Company shall not be obligated to issue any shares of Common Stock pursuant to this Agreement if the issuance thereof would result in a violation of any such law.

 

8. Taxes and Withholding .

(a) To the extent that the Company or a Subsidiary shall be required to withhold any federal, state, local or foreign taxes and social security contributions (including, without limitation, UK primary class 1 (employee’s) national insurance contributions) in connection with the issuance, vesting or disposal of the Restricted Shares or non restricted Common Stock of the Company or other securities obtained pursuant to this Agreement (including in the event of Grantee making an election under Section 431 of the United Kingdom Income Tax (Earnings and Pensions) Act 2003 (b) with respect to the Restricted Shares), and the amounts available to the Company for such withholding are insufficient, Grantee shall pay such taxes or make provisions that are satisfactory to the Company for the payment thereof.

(b) Grantee hereby acknowledges and agrees that he shall be fully responsible for and hereby indemnifies the Company and its Subsidiaries for and in respect of any income tax, national insurance and social security contributions and any other liability, deduction, contribution, assessment or claim arising from or made in connection with the grant of Restricted Shares pursuant to this Agreement, where the recovery is not prohibited by law. The Grantee hereby further indemnifies the Company and its Subsidiaries against all reasonable costs, expenses and any penalty, final interest incurred or payable by the Company or any Subsidiary in connection with or in consequence of any such liability, deduction, contribution, assessment or claim.

 

9. Continuous Employment . For purposes of this Agreement, the continuous employment or service of Grantee with the Company or a Subsidiary shall not be deemed to have been interrupted, and Grantee shall not be deemed to have ceased to be an employee of or provider of services to the Company or a Subsidiary, by reason of the transfer of his employment or service among the Company and its Subsidiaries or a leave of absence approved by the Board.

 

   2    Form Restricted Stock Agreement


10. No Employment Contract .

(a) Nothing contained in this Agreement shall confer upon Grantee any right with respect to continuance of employment or service with the Company or any Subsidiary, nor limit or affect in any manner the right of the Company or any Subsidiary to terminate the employment or service or to adjust the compensation of Grantee.

(b) This grant of Restricted Shares is a voluntary, discretionary bonus being made on a one time basis and does not constitute a commitment to make any future grants. This grant and any payments made hereunder will not be considered salary or other compensation for purposes of any severance pay or similar allowance. Grantee shall not be entitled to any compensation in connection with Grantee’s termination of employment or service for any loss of any right or benefit or prospective right or benefit under this Agreement or the Plan which he might otherwise have enjoyed, whether such compensation is claimed by way of damages for breach of contract or by way of compensation for loss of office or otherwise.

 

11. Amendments . Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided , however , that no amendment shall adversely affect the rights of Grantee under this Agreement without Grantee’s consent.

 

12. Severability . In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.

 

13. Relation to Plan . This Agreement is subject to the terms and conditions of the Plan. In the event of any inconsistency between the provisions of this Agreement and the Plan, the Plan shall govern. Capitalized terms used herein without definition shall have the meanings assigned to them in the Plan. The Board acting pursuant to the Plan, as constituted from time to time, shall, except as expressly provided otherwise herein, have the right to determine any questions which arise in connection with the grant of Restricted Shares.

 

14. Data Privacy . Information about Grantee may be collected, recorded and held, used and disclosed in electronic or other form for the exclusive purpose of implementing, administering and managing Grantee’s participation in the Plan. By accepting this grant of Restricted Shares, Grantee agrees and understands that processing of such information may need to be carried out by the Company and any Subsidiary and by third party administrators, whether such persons are located within Grantee’s country of residence or elsewhere, including outside the European Economic Area. Grantee hereby consents to the processing of information relating to him and his participation in the Plan in any one or more of the ways referred to above.

 

   3    Form Restricted Stock Agreement


15. Counterparts . This Agreement may be executed in separate counterparts, each of which shall be deemed to be an original and both of which taken together shall constitute one and the same agreement.

 

16. Governing Law . This agreement is made under, and shall be construed in accordance with, the internal substantive laws of the State of Delaware.

[SIGNATURES ON NEXT PAGE]

 

   4    Form Restricted Stock Agreement


This Agreement is executed by the Company on the day and year first set forth above.

 

 
By:    
Name:  
Title:  

The undersigned hereby acknowledges receipt of an executed original of this Agreement and accepts the award of Restricted Shares granted thereunder on the terms and conditions set forth herein and in the Company’s 2006 Equity Incentive Plan.

 

Date:              , 201           
                      GRANTEE
                      Name: _______________

 

Form Restricted Stock Agreement

Exhibit 10.6

AQUABOUNTY TECHNOLOGIES, INC.

2016 EQUITY INCENTIVE PLAN

Adopted by the Board of Directors on March 11, 2016

Termination Date: March 11, 2026

 

1. General

a. Eligible Award Recipients . Employees, Directors, and Consultants (definitions for capitalized terms can be found in Section 13) are eligible to receive Awards.

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

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

 

2. Administration

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

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

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

ii. construe and interpret the Plan and Awards granted under it;

iii. establish, amend, and revoke rules and regulations for its administration of the Plan and Awards;

iv. correct any defect, omission, or inconsistency in the Plan or in any Award Agreement in a manner and to the extent it will deem necessary or expedient to make the Plan or Award fully effective;

v. settle all controversies regarding the Plan and Awards granted under it;


vi. accelerate, in whole or in part, the time at which an Award may be exercised or vest (or at which cash or shares of Common Stock may be issued);

vii. amend, suspend, or terminate the Plan at any time, as long as such action does not materially impair any Participant’s rights under any then-outstanding Award without that Participant’s written consent or a provision in the Plan or the applicable Award Agreement permitting such action without consent; provided, however, that a Participant’s rights will not be deemed to have been impaired by an amendment if (A) the Board, in its sole discretion, determines that the amendment, taken as a whole, does not materially impair those rights or (B) subject to any limitations of applicable law, the amendment is effected to (I) maintain the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code, (II) change the terms of an Incentive Stock Option, if such change results in impairment of the Award solely because it impairs the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code, (III) clarify the manner of exemption from, or to bring the Award into compliance with, Section 409A, (IV) correct clerical or typographical errors, or (V) comply with other applicable laws or listing requirements;

viii. submit any amendment to the Plan for stockholder approval, including, but not limited to, amendments to the Plan intended to satisfy the requirements of Section 422 of the Code regarding incentive stock options or to satisfy other applicable laws, regulations, or listing requirements;

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

x. adopt such procedures and sub-plans as are necessary or appropriate to permit participation in the Plan by Employees, Directors, or Consultants who are foreign nationals or employed outside the United States; and

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

c. Delegation to Committee . The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration of the Plan is delegated to a Committee, the Committee will have, in connection with the administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee of the Committee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board will thereafter be to the Committee or subcommittee). Any delegation of administrative powers will

 

2


be reflected in resolutions, not inconsistent with the provisions of the Plan, adopted from time to time by the Board or Committee (as applicable). The Board may retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously delegated.

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

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

 

3. Shares Subject to the Plan

a. Share Reserve . Subject to Section 9(a) relating to Capitalization Adjustments, the aggregate number of shares of Common Stock that may be issued pursuant to Awards will not exceed 13,500,000 shares (the “ Share Reserve ”).

b. Reversion of Shares to the Share Reserve . Shares will return to the Plan, and will not reduce (or otherwise offset) the number of shares of Common Stock that may be available for issuance under the Plan, if the Award, or any portion thereof:

i. expires or otherwise terminates without all of the shares covered by such Award having been issued;

ii. is settled in cash ( i.e. , the Participant receives cash rather than stock);

iii. is forfeited back to or repurchased by the Company because of the failure to meet a contingency or condition required to vest such shares in the Participant;

iv. is reacquired by the Company in satisfaction of tax withholding obligations or as consideration for the exercise or purchase price of an Award (provided, for clarity, that such shares are treated as having been issued, and then returned to the Plan).

c. Incentive Stock Option Limit . Subject to the Plan provisions relating to Capitalization Adjustments, the aggregate maximum number of shares of Common Stock that

 

3


may be issued pursuant to the exercise of Incentive Stock Options will be equal to twice the expressly stated Share Reserve (with each increase to the Share Reserve authorized by the Board and stockholders also resulting in a corresponding increase in this Incentive Stock Option limit).

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

 

4. Eligibility

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

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

 

5. Provisions Relating to Options and Stock Appreciation Rights

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

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

b. Exercise Price . Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, the exercise or strike price of each Option or SAR will be not less than 100% of the Fair Market Value of the Common Stock subject to the Option or SAR on the date the Award

 

4


is granted. However, an Option or SAR may be granted with an exercise price (or strike price) lower than 100% of the Fair Market Value if such Award is granted pursuant to an assumption of or substitution for another option or stock appreciation right pursuant to a Change in Control and in a manner consistent with the provisions of Section 409A and, if applicable, Section 424(a) of the Code. Each SAR will be denominated in shares of Common Stock equivalents.

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

i. by cash, check, bank draft, electronic funds, wire transfer, or money order payable to the Company;

ii. through a program developed under Regulation T as established by the Federal Reserve Board that, prior to the issuance of the stock subject to the Option, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds (sometimes called a “same-day sale” or “sell to cover”);

iii. by tendering the cash proceeds resulting from a sale to a third party investor of some of the shares to be exercised, but only if the investor is approved by the Company at the time of exercise, under a private company liquidity assistance program approved by the Company;

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

v. if an option is a Nonstatutory Stock Option, by a “net exercise” arrangement by which the Company will reduce the number of shares of Common Stock received on exercise by the largest whole number of shares with a fair market value that does not exceed the aggregate exercise price, coupled with a cash payment for any remaining balance of the aggregate exercise price not satisfied by such reduction in the number of whole shares to be issued (and for clarity, these shares used to pay the exercise price will be issued at exercise, and then immediately reacquired by the Company);

vi. according to a deferred payment or similar arrangement with the Participant, but only if interest will compound at least annually and will be charged at the minimum rate of interest necessary to avoid (A) the imputation of interest income to the Company and compensation income to the Participant under any applicable provisions of the Code and (B) the classification of the Award as a liability for financial accounting purposes; or

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

 

5


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

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

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

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

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

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

 

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g. Termination of Continuous Service . Except as otherwise provided below or in the applicable Award Agreement or other agreement between the Participant and the Company, if a Participant’s Continuous Service terminates (other than for Cause and other than on the Participant’s death or Disability), the Participant may exercise his or her Option or SAR (if the Participant was entitled to exercise such Award as of the date of termination of Continuous Service) within the period of time ending on the earlier of (i) the date three months following the termination of the Participant’s Continuous Service and (ii) the expiration of the term of the Option or SAR as set forth in the Award Agreement. If, after termination of Continuous Service, the Participant does not exercise his or her Option or SAR within the applicable time frame, the Option or SAR will terminate. In all cases, the unvested piece of an Option or SAR will terminate on the termination of Continuous Service.

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

i. Disability of Participant . Except as otherwise provided in the applicable Award Agreement or other agreement between the Participant and the Company, if a Participant’s Continuous Service terminates as a result of the Participant’s Disability, the Participant may exercise his or her Option or SAR (if the Participant was entitled to exercise such Option or SAR as of the date of termination of Continuous Service), but only within such period of time ending on the earlier of (i) the date that is twelve months following such termination of Continuous Service and (ii) the expiration of the term of the Option or SAR as set forth in the Award Agreement. If, after termination of Continuous Service, the Participant does not exercise his or her Option or SAR within the applicable time frame, the Option or SAR (as applicable) will terminate.

j. Death of Participant . Except as otherwise provided in the applicable Award Agreement or other agreement between the Participant and the Company, if (i) a Participant’s Continuous Service terminates as a result of the Participant’s death or (ii) a Participant dies within three months after the termination of the Participant’s Continuous Service (for a reason other than death or Cause), then the Option or SAR may be exercised (to the extent the

 

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Participant was entitled to exercise such Option or SAR as of the date of death) by the Participant’s estate, by a person who acquired the right to exercise the Option or SAR by bequest or inheritance, or by a person designated to exercise the Option or SAR on the Participant’s death, but only within the period ending on the earlier of (A) the date that is twelve months following the date of death and (B) the expiration of the term of such Option or SAR as set forth in the Award Agreement. If, after the Participant’s death, the Option or SAR is not exercised within the applicable time frame, the Option or SAR will terminate.

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

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

m. Early Exercise . An Option may, but need not, include a provision whereby the Participant may elect before the Participant’s Continuous Service terminates to exercise the Option as to any part or all of the shares of Common Stock subject to the Option prior to the full vesting of the Option, except as would be inconsistent with Section 5(l). Subject to the repurchase limitation in Section 8(l), any unvested shares of Common Stock so purchased may be subject to a repurchase option in favor of the Company or to any other restriction the Board determines to be appropriate. Provided that the repurchase limitation in Section 8(l) is not violated, the Company shall not be required to exercise its repurchase option until at least six months (or such longer or shorter period of time required to avoid classification of the Option as a liability for financial accounting purposes) have elapsed following exercise of the Option unless the Board otherwise specifically provides in the Award Agreement.

 

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6. Provisions of Awards Other than Options and SARs

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

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

ii. Vesting . Shares of Common Stock awarded under the Restricted Stock Award may be subject to forfeiture to the Company in accordance with a vesting schedule (also referred to as a schedule for lapsing of the Company’s unvested share repurchase rights) to be determined by the Board.

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

iv. Transferability . The right to acquire shares of Common Stock under a Restricted Stock Award will not be transferable by the Participant. Once the shares of Common Stock are issued, the Board may allow the holder to transfer unvested shares, but only on the terms and conditions in the Award Agreement, and only so long as the Common Stock awarded under the Award Agreement remains subject to the terms of the Award Agreement in the hands of the recipient.

v. Dividends . In the absence of an Award Agreement expressly providing otherwise, any dividends paid on Restricted Stock will be subject to the same vesting and forfeiture restrictions as apply to the shares subject to the Restricted Stock Award to which they relate.

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

 

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

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

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

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

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

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

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

 

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7. Covenants of the Company

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

b. Compliance with Laws and Rules . The Company will use reasonable efforts to seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Awards and to issue and sell shares of Common Stock on exercise of the Awards. However, this undertaking will not require the Company to register under the Securities Act or any other securities laws the Plan, any Award, or any Common Stock issued or issuable pursuant to any such Award. If, after reasonable efforts and at a reasonable cost, the Company is unable to obtain from any such regulatory commission or agency the authority that counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company will be relieved from any liability for failure to issue and sell Common Stock on exercise of such Awards unless and until such authority is obtained. A Participant will not be eligible for the grant of an Award or the subsequent issuance of cash or Common Stock pursuant to the Award if such grant or issuance would be in violation of any applicable law or the rules of any stock exchange, including, but not limited to, the rules of the London Stock Exchange or Nasdaq.

c. No Obligation to Notify or Minimize Taxes . The Company will have no duty or obligation to any Participant to advise such holder as to the time or manner of exercising such 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.

 

8. Miscellaneous

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

b. 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 Board, regardless of when the instrument, certificate, or letter evidencing the Award is communicated to, or actually received or accepted by, the Participant. If the corporate records ( e.g. , Board consents, resolutions, or minutes) documenting the corporate action constituting the grant contain terms ( e.g. , exercise price, vesting schedule, or number of shares) that are inconsistent with those in the 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.

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

 

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Stock subject to such Award has been entered into the books and records of the Company. The Board may require, as a condition to the grant, exercise, or settlement of an Award, the Participant to appoint the Company’s CEO (or other member of the Board) as having the sole and exclusive power of attorney to vote all shares of Common Stock subject to Participant’s Award, which power shall be effective until the earlier of the completion of a Change in Control or the Company’s initial public offering.

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

e. Change in Time Commitment . If a Participant’s regular level of time commitment in the performance of his or her services for the Company and any Affiliates is reduced (for example, and without limitation, if the Participant is an Employee of the Company and the Employee has a change in status from a full-time Employee to a part-time Employee or goes out on a leave of absence from his or her duties) after the date of grant of any Award to the Participant, the Board has the right in its sole discretion (and without the need to seek or obtain the consent of the affected Participant) to (i) make a corresponding reduction in the number of shares or cash amount 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.

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

g. Investment Assurances . The Company may require a Participant, as a condition of exercising or acquiring Common Stock under any Award, to (i) give written assurances satisfactory to the Company as to the Participant’s knowledge and experience in financial and business matters; (ii) employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters, and as to the Participant’s capability of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Award; and (iii) give written assurances satisfactory to the

 

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Company stating that the Participant is acquiring Common Stock subject to the Award for the Participant’s own account and not with any present intention of selling or otherwise distributing the Common Stock. The foregoing requirements, and any assurances given pursuant to such requirements, will be inoperative if (A) the issuance of the shares on the exercise or acquisition of Common Stock under the Award has been registered under a then-currently effective registration statement under the Securities Act and any other applicable foreign securities laws or (B) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then-applicable securities laws. The Company may, on advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the Common Stock.

h. Withholding Obligations . Unless prohibited by the terms of an Award Agreement, the Company may, in its sole discretion, satisfy any federal, state, or local tax or social insurance withholding obligation relating to an Award by any of the following means or by a combination of such means: (i) causing the Participant to tender a cash payment; (ii) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to the Participant in connection with the Award; (iii) withholding cash from an Award settled in cash; (iv) withholding payment from any amounts otherwise payable to the Participant; or (v) by such other method as may be set forth in the Award Agreement. If shares of Common Stock are withheld to satisfy tax obligations, such shares will be deemed issued and then immediately tendered to the Company and no shares of Common Stock will be withheld for these purposes to the extent they have a value exceeding the minimum amount of tax required to be withheld by law (or such lesser amount as may be necessary to avoid classification of the Award as a liability for financial accounting purposes). For clarity, no partial shares will be withheld, and the Participant must satisfy the tax obligation related to any such partial share using another permitted form of payment.

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

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

 

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k. Compliance with Section   409A . Unless otherwise expressly provided for in an Award Agreement, the Plan and Award Agreements will be interpreted to the greatest extent possible in a manner that makes the Plan and the Awards granted hereunder exempt from Section 409A of the Code, and, to the extent not so exempt, in compliance with Section 409A of the Code. If the Board determines that any Award granted hereunder is not exempt from and is therefore subject to Section 409A of the Code, the Award Agreement evidencing such Award will incorporate the terms and conditions necessary to avoid the consequences specified in Section 409A(a)(1) of the Code. If an Award Agreement is silent on terms necessary for compliance, such terms are hereby incorporated by reference into the Award Agreement, with the permitted distribution events and timing being the earlier of the date of termination of Continuous Service and the date of a Change in Control. However, and unless the Award Agreement specifically provides otherwise, if the shares of Common Stock are publicly traded, and if a Participant holding an Award that constitutes “deferred compensation” under Section 409A of the Code is a “specified employee” for purposes of Section 409A of the Code, no distribution or payment of any amount that is due because of a “separation from service” (as defined in Section 409A of the Code without regard to alternative definitions thereunder) will be issued or paid before the date that is six months following the date of such Participant’s “separation from service” or, if earlier, the date of the Participant’s death, unless such distribution or payment can be made in a manner that complies with Section 409A of the Code, and any amounts so deferred will be paid in a lump sum on the day after such six-month period elapses, with the balance paid thereafter on the original schedule.

l. Right of Repurchase . An Award may include a provision whereby the Company may elect to repurchase all or any part of the shares of Common Stock acquired by the Participant, whether or not vested. The terms of any repurchase option shall be specified in the Award Agreement. Unless otherwise determined by the Board and subject to compliance with applicable laws, the repurchase price for vested shares of Common Stock will be the Fair Market Value of the shares of Common Stock on the date of repurchase, and the repurchase price for unvested shares of Common Stock (or vested shares, in the case of a termination of Continuous Service for Cause) will be the lower of (i) the Fair Market Value of the shares of Common Stock on the date of repurchase or (ii) their original purchase price. The Company will not exercise its repurchase option until at least six months (or such longer or shorter period of time necessary to avoid classification of the Award as a liability for financial accounting purposes) have elapsed following delivery of shares of Common Stock subject to the Award, unless otherwise specifically provided by the Board. The Board reserves the right to assign the Company’s right of repurchase.

m. Right of First Refusal . An Award may also include a provision whereby the Company may elect to exercise a right of first refusal following receipt of notice from the Participant of the intent to transfer all or any part of the shares of Common Stock received under the Award. Except as expressly provided in this paragraph or in the Award Agreement, such right of first refusal shall otherwise comply with any applicable provisions of the bylaws of the Company. The Board reserves the right to assign the Company’s right of first refusal.

n. Compliance with Exemption from Registration . Unless otherwise determined by the Board, during any period in which the Company does not have a class of its securities registered under Section 12 of the Exchange Act and is not required to file reports under

 

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Section 15(d) of the Exchange Act, the shares of Common Stock issued under Awards may not be transferred until the Company is no longer relying on the exemption provided by Rule 12h-1(f) promulgated under the Exchange Act, except: (i) as permitted by Rule 701(c) promulgated under the Securities Act, (ii) to a guardian on the disability of the Participant, or (iii) to an executor on the death of the Participant (collectively, the “ Permitted Transferees ”). In addition, the Board may permit transfers by the Participant to the Company and transfers in connection with a change in control or other acquisition involving the Company. Any Permitted Transferees may not further transfer the Awards. Except as otherwise expressly permitted in this paragraph, Awards and shares of Common Stock issued under Awards are restricted as to any pledge, hypothecation, or other transfer, including any short position, any “put equivalent position” as defined by Rule 16a-1(h) promulgated under the Exchange Act, or any “call equivalent position” as defined by Rule 16a-1(b) promulgated under the Exchange Act by the Participant if doing so would require the Company to register a class of its securities under Section 12 of the Exchange Act or to file reports under Section 15(d) of the Exchange Act. To the extent required by law, including to maintain an exemption from registration under Section 12 of the Exchange Act, the Company shall deliver to Participants (whether by physical or electronic delivery or written notice of the availability of the information on an internet site) the information required by Rule 701(e)(3), (4), and (5) promulgated under the Securities Act every six months, including financial statements that are not more than 180 days old. However, the Company may condition the delivery of such information on the Participant’s agreement to maintain its confidentiality.

o. Non U.S. Participants . To facilitate the making of any grant or combination of grants under this Plan, the Board may provide for such special terms or procedures for awards to Participants who are foreign nationals, are employed by the Company or any Affiliate outside of the United States of America, or provide services to the Company under an agreement with a foreign nation or agency, as the Board may consider necessary or appropriate to accommodate differences in local law, tax policy, custom securities, or exchange control laws. Moreover, the Board may approve such supplements to or amendments of this Plan (including, without limitation, sub-plans) as it may consider necessary or appropriate for such purposes, without thereby affecting the terms of this Plan as in effect for any other purpose, and the Secretary or other appropriate officer of the Company may certify any such document as having been approved and adopted in the same manner as this Plan. No such special terms, supplements, amendments, or restatements, however, will include any provisions that are inconsistent with the terms of this Plan as then in effect unless this Plan could have been amended to eliminate such inconsistency without further approval by the stockholders of the Company.

p. Clawback/Recovery . All Awards granted under the Plan will be subject to recoupment in accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. In addition, the Board may impose such other clawback, recovery, or recoupment provisions in an Award Agreement as the Board determines necessary or appropriate, including, but not limited to, a reacquisition right in respect of previously acquired shares of Common Stock or other cash or property on the occurrence of Cause. The implementation of any clawback policy will not be deemed a triggering event for purposes of any definition of “good reason” for resignation or “constructive termination.”

 

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9. Adjustments On Changes In Common Stock; Other Corporate Events

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

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

c. Change in Control . The following provisions will apply to Awards in the event of a Change in Control unless otherwise provided (i) in the Award Agreement or any other written agreement between the Company or any Affiliate and the Participant or (ii) by the Board expressly at the time of grant of an Award. In the event of a Change in Control, and despite any other provision of the Plan, the Board may take one or more of the following actions with respect to Awards, contingent on the closing or completion of the Change in Control:

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

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

iii. accelerate the vesting, in whole or in part, of the Award (and, if applicable, the time at which the Award may be exercised) to a date prior to the effective time of such Change in Control as the Board determines (or, if the Board does not determine such a date, to the date that is five days prior to the effective date of the Change in Control), with such Award terminating if not exercised (if applicable) immediately prior to the effective time of the Change in Control;

 

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iv. arrange for the lapse, in whole or in part, of any reacquisition or repurchase rights held by the Company with respect to the Award on a date prior to the effective time of such Change in Control as the Board will determine (or, if the Board will not determine such a date, on the date that is five days prior to the effective date of the Change in Control);

v. cancel or arrange for the cancellation of the Award, to the extent not vested or not exercised prior to the effective time of the Change in Control, in exchange for such cash consideration, if any, as the Board, in its sole discretion, may consider appropriate; and

vi. make a payment, in such form as may be determined by the Board equal to the excess, if any, of (A) the value of the property the Participant would have received on the exercise of the Award immediately prior to the effective time of the Change in Control, over (B) any exercise price payable by such holder in connection with such exercise, in consideration for the termination of such Award at or immediately prior to the closing. For clarity, this payment may be zero if the fair market value of the property is equal to or less than the exercise price.

The Board need not take the same action or actions with respect to all Awards or portions thereof or with respect to all Participants. The Board may take different actions with respect to the vested and unvested portions of an Award. Only to the extent permitted under Code Section 409A may the Board provide that payments under this provision may be delayed to the same extent that payment of consideration to the holders of the Company’s Common Stock in connection with the Change in Control is delayed as a result of escrows, earn outs, holdbacks, or other contingencies. In addition, the Board may provide that such payments made over time will remain subject to substantially the same vesting schedule as the Award, including any performance-based vesting metrics that applied to the Award immediately prior to the closing of the Change in Control. An Award may be subject to additional acceleration of vesting and exercisability in connection with a Change in Control as may be provided in the Award Agreement for such Award or as may be provided in any other written agreement between the Company or any Affiliate and the Participant, but in the absence of such provision, no such acceleration will occur. The Board may require that any award, cash, or property paid in consideration for a cancelled or exchanged Award be subject to the same terms and conditions (including earn out, escrow, or milestone payments) as apply to the consideration paid to the Company’s stockholders in the deal, but only if doing so would not result in adverse tax penalties under Section 409A.

 

10. Term, Termination, and Suspension of the Plan

The Board may suspend or terminate the Plan at any time. This Plan will terminate, and no Incentive Stock Option will be granted after, the tenth anniversary of the earlier of (a) the date the Plan is adopted by the Board and (b) the date the Plan is approved by the stockholders of the Company. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated. Suspension or termination of the Plan will not materially impair rights and obligations under any Award granted while the Plan is in effect except with the written consent of the affected Participant or as otherwise permitted in the Plan.

 

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11. Effective Date of the Plan

This Plan became effective on the Effective Date.

 

12. Choice of Law

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

 

13. Definitions

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

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

Award ” means (a) Incentive Stock Options, (b) Nonstatutory Stock Options, (c) Stock Appreciation Rights, (d) Restricted Stock Awards, (e) Restricted Stock Unit Awards, and (f) Other Awards.

Award Agreement ” means a written agreement between the Company and a Participant evidencing the terms and conditions of an Award.

Board ” means the Board of Directors of the Company.

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

Cause ” will have the meaning ascribed to such term in any written agreement between the Participant and the Company defining such term as applicable to an Award and, in the absence of such agreement, such term means, with respect to a Participant, such Participant’s: (a) commission of any felony; (b) commission of a crime involving fraud, dishonesty, or moral turpitude under the laws of the United States or any state thereof that is reasonably likely to result in material adverse effects on the Company; (c) commission of a crime of fraud,

 

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embezzlement, or other intentional malfeasance against the Company; (d) intentional, material violation of any contract or agreement between the Participant and the Company or of any statutory duty owed to the Company; (e) unauthorized use or disclosure of the Company’s confidential information or trade secrets; or (f) gross misconduct that is reasonably likely to result in a material adverse effect on the Company. The determination that a termination of the Participant’s Continuous Service is either for Cause or without Cause will be made by the Board, in its sole discretion. Any determination by the Board that the Continuous Service of a Participant was terminated with or without Cause for the purposes of outstanding Awards held by such Participant will have no effect on any determination of the rights or obligations of the Company or such Participant for any other purpose.

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

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

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

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

 

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However, the term Change in Control will not include a sale of assets, merger, or other transaction effected exclusively for the purpose of changing the domicile of the Company, and the definition of Change in Control (or any analogous term) in an individual written agreement between the Company or any Affiliate and the Participant will supersede the foregoing definition with respect to Awards subject to such agreement. If necessary for compliance with Code Section 409A, no transaction will be a Change in Control unless it is also a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the Company’s assets, as provided in Section 409A(a)(2)(A)(v) of the Code and Treasury Regulations Section 1.409A-3(i)(5). The Board may, in its sole discretion and without a Participant’s consent, amend the definition of “Change in Control” to conform to the definition of “Change in Control” under Section 409A of the Code, and the regulations thereunder.

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

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

Common Stock ” means the common stock of the Company.

Company ” means AquaBounty Technologies, Inc., a Delaware corporation.

Consultant ” means any person, including an advisor, who is (a) engaged by the Company or an Affiliate to render consulting or advisory services and is compensated for such services or (b) serving as a member of the board of directors of an Affiliate and is compensated for such services, in either case, only if such person satisfies the requirements to be a consultant for purposes of Rule 701.

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, Consultant, or Director 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. If the entity for which a Participant is rendering services ceases to qualify as an Affiliate, as determined by the Board, such Participant’s Continuous Service will be considered to have terminated on the date such Entity ceases to qualify as an Affiliate. If permitted by law, the Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service will be considered interrupted in the case of (a) any leave of absence approved by the Board or chief executive officer of the Company, including sick leave, military leave, or any other personal leave, or (b) transfers between the Company, an Affiliate, or their successors. However, 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 leave of absence policy, in the written terms of any leave of absence agreement or policy

 

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applicable to the Participant, or as otherwise required by law. In addition, if required for exemption from or compliance with Section 409A of the Code, the determination of Continuous Service will be made, and such term will be construed, in a manner that is consistent with the definition of “separation from service” as defined under Treasury Regulation Section 1.409A-1(h) (without regard to any alternative definition thereunder).

Director ” means a member of the Board.

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

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

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

Entity ” means a corporation, partnership, limited liability company, or other entity.

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

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

Fair Market Value ” means, as of any date, the value of the Common Stock determined as follows:

(a) Unless otherwise determined by the Board, if the Common Stock is listed on any established stock exchange or traded on any established market, the Fair Market Value of a share of Common Stock will be the closing sales price for such stock as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the date of determination, or, if there is no closing sales price for the Common Stock on the date of determination, then the Fair Market Value will be the closing selling price on the last preceding date for which such quotation exists.

 

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(b) In the absence of such markets for the Common Stock, the Fair Market Value will be determined by the Board in good faith and in a manner that complies with Sections 409A and 422 of the Code.

In determining the value of a share for purposes of tax reporting on the exercise, issuance, or transfer of shares subject to Awards, fair market value may be calculated using the definition of Fair Market Value, the actual sales price in the transaction at issue ( e.g. , “sell to cover”), or such other value determined by the Company’s General Counsel in good faith in a manner that complies with applicable tax laws.

Good Reason ” will have the meaning ascribed to such term in any written agreement between the Participant and the Company defining such term as applicable to an Award and, in the absence of such agreement, such terms means, with respect to a Participant, the Participant’s resignation from all positions he or she then holds with the Company following: (a) a reduction in the Participant’s base salary of more than 10%, (b) the required relocation of the Participant’s primary work location to a facility that increases his or her one-way commute by more than 50 miles, or (c) a material reduction in the Participant’s duties or authority (other than a material reduction inherent in the transition of the Company from operating as a stand-alone entity to becoming a subsidiary or division of the acquiring entity), in each case, only if (i) the Participant provides written notice to the Company’s Chief Executive Officer or Board within 30 days following such event identifying the nature of the event, (ii) the Company fails to cure such event within 30 days following receipt of such written notice, and (iii) the Participant’s resignation is effective not later than 30 days thereafter.

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

Nonstatutory Stock Option ” means any option granted under the Plan that does not qualify as an Incentive Stock Option.

Officer ” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act.

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

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

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

 

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

Plan ” means this AquaBounty Technologies, Inc. 2016 Equity Incentive Plan.

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

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

Rule 405 ” means Rule 405 promulgated under the Securities Act.

Rule 701 ” means Rule 701 promulgated under the Securities Act.

Section 409A ” means Section 409A of the Code and the regulations and other guidance thereunder and any state law of similar effect.

Securities Act ” means the Securities Act of 1933, as amended.

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

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

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

Treasury Regulations ” means the final or temporary regulations that have been issued by the U.S. Department of Treasury pursuant to its authority under the Code, and any successor regulations.

US Public Market ” means a national stock exchange or stock market in the United States, such as the NYSE or Nasdaq.

 

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Exhibit 10.7

 

D ATED December 5, 2012

I NTREXON C ORPORATION

- and -

A QUA B OUNTY T ECHNOLOGIES , I NC .

R ELATIONSHIP A GREEMENT

- relating to -

A QUA B OUNTY T ECHNOLOGIES , I NC .

 

LOGO

Hogan Lovells


C ONTENTS

 

CLAUSE    PAGE  
1.    D EFINITIONS AND I NTERPRETATION      2   
2.    I NTREXON N OMINEE ; I NTREXON R EPRESENTATIVE      3   
3.    R EPORTING C OMPLIANCE      5   
4.    C ONFIDENTIALITY      7   
5.    C APACITY AND L IABILITY      7   
6.    D URATION      7   
7.    E NTIRE A GREEMENT      8   
8.    W AIVERS AND A MENDMENTS      8   
9.    A SSIGNMENT      8   
10.    N OTICES      8   
11.    I NVALIDITY      9   
12.    C OUNTERPARTS      9   
13.    G OVERNING L AW      9   

Hogan Lovells


T HIS R ELATIONSHIP A GREEMENT (this “Agreement”) is made on December 5, 2012 by and between Intrexon Corporation, Incorporated in Virginia, USA, with offices at [                     ] ( Intrexon ), and AquaBounty Technologies, Inc., incorporated in Delaware, USA, with offices at 935 Main Street, Waltham, Mass 02451, USA (the “ Company ”).

R ECITALS

 

(A) On 31 October 2012, Intrexon agreed to acquire shares constituting 47.56% of the current issued share capital of AquaBounty from Linnaeus Capital Partners B.V. and Tethys Ocean B.V., which acquisition was completed on 16 November 2012 with Intrexon becoming the owner of such shares.

 

(B) In accordance with the Company’s Certificate of Incorporation, Intrexon intends to make a conditional cash offer for any and all shares of common stock of AquaBounty not already owned by Intrexon (the Mandatory Offer ).

 

(C) The parties to this Agreement wish to record the current and future basis of Intrexon’s relationship with the Company as a major shareholder.

O PERATIVE P ROVISIONS

 

1. D EFINITIONS AND I NTERPRETATION

 

1.1 In this Agreement the following words and expressions shall have the following meanings unless they are inconsistent with the context:

“Affiliate” means, as to any person, any other person or entity that, directly or indirectly through one or more intermediaries, controls, or is controlled by such person;

“Board” means the board of directors of the Company from time to time;

“Business Day” means any day (other than Saturday or Sunday) on which clearing banks are open for a full range of banking transactions in both London and New York City;

“Closing Date” means the date on which the Mandatory Offer becomes or is declared unconditional in all respects or lapses or is withdrawn in accordance with its terms;

“Confidential Information” mean’s all information which is not publicly known, and which is used in or otherwise relates to the Company’s business, customers, or financial or other affairs, including, without limitation, information relating to:

 

  (a) trade secrets, know-how, ideas, computer systems and computer software;

 

  (b) future projects, business development or planning, commercial relationships and negotiations; and

 

  (c) the marketing of goods or services including customer names and lists, sales targets and statistics;

“Director” means a director of the Company from time to time;

“First Annual Meeting” has the meaning given in clause 2.1.

Hogan Lovells

 

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“Intrexon Director” has the meaning given in clause 2.5;

“Intrexon Nominee” has the meaning given in clause 2.2(a);

“Intrexon Representative” has the meaning given in clause 2.5; and

“Mandatory Offer” has the meaning given in Recital (B).

 

1.2 In this Agreement:

 

  (a) references to clauses and parties are, unless otherwise stated, to the clauses of and the parties to this Agreement;

 

  (b) words importing the singular include the plural and vice versa, words importing a gender include every gender and references to persons include bodies corporate or unincorporated;

 

  (c) the headings to the clauses are for convenience only and shall not affect the construction or interpretation of this Agreement; and

 

  (d) references to any statute or statutory provision include, unless the context otherwise requires, a reference to the statute or statutory provision as modified, replaced or reenacted and in force from time to time prior to the date hereof and any subordinate legislation made under the relevant statute or statutory provision (as so modified, replaced or re-enacted) in force prior to the date hereof.

 

2. I NTREXON N OMINEE ; I NTREXON R EPRESENTATIVE

 

2.1 As soon as practicable after the Closing Date, and in any case no later than the later of (x) ten (10) Business Days after the Closing Date and (y) thirty (30) days after the date on which Intrexon submits names to the Company’s Nominated Advisor, the Company shall take or cause to be taken all necessary actions to (A) increase the size of the Board from three (3) to six (6) directors and (B) appoint three (3) nominees of Intrexon (each an “Intrexon Nominee” and together the “Intrexon Nominees”) as directors of the Company with terms expiring at the next annual meeting of the shareholders of the Company occurring after the date of such appointment (the “First Annual Meeting” ), provided, however that if as a result of the Mandatory Offer Intrexon becomes the beneficial owner of greater than 50% of the outstanding common stock of the Company, the Company shall take or cause to be taken all necessary actions to (A) increase the size of the Board from three (3) to seven (7) directors and (B) appoint four (4) Intrexon Nominees as directors of the Company with terms expiring at the First Annual Meeting. Intrexon shall have the right to nominate each Intrexon Nominee from among the officers and directors of Intrexon (or any such other persons with at least similar stature and experience, in the reasonable judgment of the Board), provided, however, that for so long as the Company is listed on the AIM Market of the London Stock Exchange that (i) Intrexon acknowledges the obligation of the Company’s Nominated Advisor under the AIM Rules to undertake due diligence on any prospective Intrexon Nominee and agrees to cooperate with the Nominated Advisor’s reasonable enquiries and (ii) Intrexon will not exercise its voting rights in a manner designed to prevent the Company from having on the Board at all times two directors who are independent of Intrexon and the Company.

 

Hogan Lovells

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2.2 The Company agrees that so long as (i) this Agreement continues in full force and effect and has not been terminated pursuant to clause 6 ( Duration ) and (ii) Intrexon itself or together with its Affiliates control 25% or more of the voting rights exercisable at meetings of the shareholders of the Company, the Company will procure that the Board will, in advance of the First Annual Meeting and thereafter in advance of each annual meeting of the shareholders of the Company:

 

  (a) nominate such number of Intrexon Nominees as may be designated by Intrexon for election as directors of the Company at each forthcoming annual meeting of shareholders of the Company occurring after the date of such nomination so that Intrexon shall have representation on the Board proportional to Intrexon’s percentage shareholding in the capital of the Company rounded up to the nearest whole person in the event that Intrexon’s representation on the Board would not as a result constitute at least a majority of the directors on the Board and rounded arithmetically to the nearest whole person in the event that Intrexon’s representation on the Board would as a result constitute a majority of the Board; provided, that each such nomination shall not include any individual whose membership on the Board would be a violation of law and shall be in accordance with the Bylaws of the Company then in effect; and provided, further, that should the Board determine that any such designee of Intrexon is inappropriate, consistent with the standards set forth in this clause 2.2(a), Intrexon shall be entitled to designate, as a substitute, an additional individual for election as a director of the Company that shall meet the standards set forth in this clause 2.2(a) and such individual shall be deemed an Intrexon Nominee; and

 

  (b) recommend that the shareholders of the Company vote to elect each such Intrexon Nominee as a director of the Company at the next annual meeting of shareholders of the Company occurring after the date of such nomination.

 

2.3 In the event that an Intrexon Nominee, nominated for election to the Board in accordance with clause 2.2(a), fails to be elected to the Board by the shareholders at the applicable annual meeting, the Company shall, as an ongoing obligation, procure that the Board take such steps as are permitted by the Bylaws and any applicable law to appoint such Intrexon Nominee to fill any vacancy.

 

2.4 If a member, of the Board that has been designated by Intrexon resigns or is removed from the Board and Intrexon indicates that it does not wish to designate a nominee to fill the vacancy or fails to nominate a designee that meets the standards set forth in clause 2.2(a) to replace such individual within ten (10) Business Days following receipt of notice of such resignation or removal, the Company will take or cause to be taken all necessary actions to reduce the size of the Board so that there is no vacancy as a result thereof and then to promptly increase the size of the Board to create a vacancy at such time as Intrexon indicates that it wishes to designate a nominee to fill the vacancy that meets the standards set forth in clause 2.2(a). Upon termination of this Agreement pursuant to clause 6 (Duration), Intrexon shall, upon the written request of the Board, cause such member(s) of the Board that have been designated by Intrexon to resign from the Board, effective immediately.

 

2.5 Intrexon shall be entitled to, and the Company shall procure that it may, send a representative (an “Intrexon Representative” ) to attend and speak at, but not to vote at, any meetings of the board of subsidiary of the Company if at such time it has no Intrexon-appointed director serving on the board of directors of that subsidiary (any such Intrexon-appointed director, an “Intrexon Director” ).

 

Hogan Lovells

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2.6 The Company agrees that, for so long as there is an Intrexon Nominee on the Board, it will procure director insurance of a type and at a level of coverage that is customary for members of a board of directors of a publicly listed company and reasonably acceptable to Intrexon.

 

2.7 The Company agrees that, for so long as there is an Intrexon Nominee on the Board, it will enter into a customary form of indemnification agreement with each Intrexon Nominee in a form reasonably acceptable to Intrexon.

 

3. R EPORTING C OMPLIANCE .

 

3.1 For so long as Intrexon itself or together with its Affiliates controls 10% or more of the voting rights exercisable at meetings of the shareholders of the Company, for any time period for which Intrexon has notified. AquaBounty that Intrexon has reasonably concluded, after consultation with its outside advisors, that Intrexon is required to consolidate or include AquaBounty’s financial statements with its own, AquaBounty shall comply with the following additional obligations:

 

  (a) AquaBounty shall maintain at its principal place of business or, upon notice to Intrexon, at such other place as AquaBounty shall determine:

 

  (i) a copy of AquaBounty’s Certificate of Incorporation or organizational document and all amendments thereto, together with executed copies of any powers of attorney pursuant to which any amendment has been executed;

 

  (ii) a copy of this Agreement;

 

  (iii) a copy of AquaBounty’s federal, state, and local income tax returns and reports, if any; and

 

  (iv) minutes of meetings of AquaBounty’s board of directors and shareholders or actions by written consent in lieu thereof, redacted as necessary by AquaBounty to exclude any sensitive or confidential information that Intrexon, by operation of law or contractual stipulation, is not permitted to receive.

 

  (b) AquaBounty shall keep its books and records consistent with United States generally accepted accounting principles (US GAAP).

 

  (c) Intrexon at its own expense and upon reasonable notice, may examine any information it may reasonably request (including, to the extent AquaBounty has the right to provide such, the work papers of AquaBounty’s internal and independent auditors) and make copies of and abstracts from the financial and operating records and books of account of AquaBounty, and discuss the affairs, finances and accounts of AquaBounty with AquaBounty and independent auditors of AquaBounty, all at such reasonable times and as often as Intrexon or any agents or representatives of Intrexon may reasonably request. The rights granted pursuant to this clause 3.1(c) are expressly subject to compliance by Intrexon with the safety, security and confidentiality procedures and guidelines of AquaBounty, as such procedures and guidelines may be established from time to time.

 

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  (d) Unless waived by Intrexon, in its sole discretion, as soon as available but no later than ninety (90) days after the end of each fiscal year, AquaBounty shall cause to be prepared and Intrexon to be furnished with an audited balance sheet as of the last day of such fiscal year and an audited income statement, a statement of stockholders’ equity and statement of cash flows for AquaBounty for such fiscal year and notes associated with each, in each case prepared in accordance with US GAAP, together with a report of AquaBounty’s independent auditor that such statements have been prepared in accordance with US GAAP and present fairly, in all material respects, the financial position, results of operations and cash flows of AquaBounty.

 

  (e) As soon as available but no later than forty five (45) days after the end of each calendar quarter, AquaBounty shall furnish the following to Intrexon an unaudited balance sheet as of the last day of such period, and an unaudited income statement, a statement of cash flows and a statement of stockholders’ equity for AquaBounty for such period, in each case prepared in accordance with US GAAP.

 

  (f) As requested by Intrexon on no more than a quarterly basis, a certificate, executed by the Chief Executive Officer or Chief Financial Officer of AquaBounty, certifying on behalf of AquaBounty the following:

 

  (i) AquaBounty maintains accurate books and records reflecting its assets and liabilities and maintains proper and adequate internal accounting controls that provide assurance that (1) transactions are executed with management’s authorization; (2) transactions are recorded as necessary to permit preparation of the consolidated financial statements of AquaBounty and to maintain accountability for AquaBounty’s consolidated assets; (3) access to the assets of AquaBounty is permitted only in accordance with management’s authorization; (4) the reporting of assets of AquaBounty is compared with existing assets at regular intervals; and (5) accounts, notes and other receivables and inventory are recorded accurately, and proper and adequate procedures are implemented to effect the collection of accounts, notes and other receivables on a current and timely basis.

 

  (ii) under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder; any such controls and procedures are adequate to ensure that all material information concerning AquaBounty is made known on a timely basis to those individuals responsible for the preparation of any filings that may be required to be made by Intrexon with the SEC and other public disclosure documents.

 

  (iii) AquaBounty shall promptly prepare and furnish to Intrexon any information, whether written or oral, requested by Intrexon that is reasonably necessary for purposes of Intrexon’s ongoing compliance with applicable law.

 

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3.2 The parties agree that the delivery deadlines in clause 3.1 will be modified to the extent necessary to ensure that such deliverables are provided by AquaBounty no less than thirty (30) days prior to the date necessary for Intrexon to meet any disclosure obligation under rules or regulations to which Intrexon may be or become subject from time to time. Intrexon will provide AquaBounty with notice as promptly as practicable regarding any changes in Intrexon’s disclosure obligations that would require a change in delivery deadlines under this clause 3.

 

4. C ONFIDENTIALITY

 

4.1 The parties acknowledge the existence and continuing effect of the Mutual Confidentiality Agreement effective January 13, 2012 between Intrexon and the Company, as amended June 25, 2012 and as further amended by this Section 4.1 (the “Mutual Confidentiality Agreement”). The first section of Section 3 of the Mutual Confidentiality Agreement is hereby replaced in its entirety with the following “The disclosure period of this Agreement shall expire on the date that the Relationship Agreement dated [ ], 2012 between Intrexon and AquaBounty Technologies terminates (the “Disclosure Period”), unless such Disclosure Period is extended by the agreement of the parties in writing.” The definition of “Confidential Information” in Section 1 of the Mutual Confidentiality Agreement is hereby amended to replace the period at the end of such definition with the following: “; provided, however, that Confidential Information shall not include any such information that Intrexon can demonstrate was developed by Intrexon independently of and without reference to any Confidential Information or became known to Intrexon (independently of disclosure by the Company) on a non-confidential basis from a third party lawfully possessing and entitled to disclose such information.”.

 

4.2 For the avoidance of doubt, information shared by or on behalf of the Company with an Intrexon Nominee is deemed to be shared with such individual in his or her capacity as an Intrexon Nominee and not in his or her capacity as an employee, consultant or agent of Intrexon; provided, however, that each Intrexon Nominee shall be entitled to disclose to Intrexon such information concerning the Company as he or she thinks fit, to the extent permitted by applicable law, and that information that constitutes Confidential Information under the Confidentiality Agreement that is disclosed to Intrexon shall be subject to the terms of the Confidentiality Agreement.

 

5. C APACITY AND L IABILITY

Each party warrants and represents to the other that it has the power to enter into this Agreement and to exercise its rights and to perform its obligations hereunder and all corporate and other action required to authorise its execution of this Agreement and its performance of its obligations hereunder has been duly taken.

 

6. D URATION

This Agreement will continue in full force and effect until Intrexon itself or together with its Affiliates ceases to control 10% or more of the voting rights exercisable at meetings of the shareholders of the Company, save that the provisions of clauses 4 ( Confidentiality ), 10 (Notices) and 13 (Governing Law) shall survive termination of this Agreement.

 

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7. E NTIRE A GREEMENT

This Agreement (together with any documents referred to herein) constitutes the entire agreement between the parties hereto in connection with the subject matter of this Agreement.

 

8. W AIVERS AND A MENDMENTS

 

8.1 No waiver of any term, provision or condition of this Agreement shall be effective unless such waiver is evidenced in writing and signed by the waiving party.

 

8.2 No omission or delay on the part of any party to this Agreement in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof or of any other right, power or privilege. The rights and remedies in this Agreement are cumulative with and not exclusive of any rights or remedies provided by law.

 

8.3 No amendment or modification to this Agreement shall be effective unless in writing and signed by all parties.

 

9. A SSIGNMENT

No party to this Agreement may assign, transfer or charge all or any of the other parties’ obligations nor any of its rights or benefits arising under this Agreement without the prior written consent of the other party; except that Intrexon may assign, transfer or charge all or any of its obligations, rights and benefits arising under this Agreement without the prior written consent of the Company to (i) an Affiliate of Intrexon or (ii) to the transferee in the event Intrexon sells, conveys, disposes or otherwise transfers all of its shares of AquaBounty common stock.

 

10. N OTICES

Any demand, notice or other communication in connection with this Agreement will be in writing and will, if otherwise given or made in accordance with this clause 10, be deemed to have been duly given or made as follows:

 

  (a) if sent by prepaid first class post to the recipient at its registered office (or such other address as may be notified to the other parties by a recipient in writing), on the second Business Day after the date of posting;

 

  (b) if sent by air mail to the recipient at its registered office (or such other address as may be notified to the other parties by a recipient in writing), on the sixth Business Day after the date of posting; or

 

  (c) if delivered by hand, upon delivery to the recipient at its registered office (or such other address as may be notified to the other parties by a recipient in writing),

provided that, if it is delivered by hand or sent by facsimile on a day which is not a Business Day or after 4 p.m. (at the location of the recipient) on a Business Day, it will instead be deemed given or made on the next Business Day.

 

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11. I NVALIDITY

If at any time any one or more of the provisions of this Agreement is or becomes invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions shall not be in any way affected or impaired thereby.

 

12. C OUNTERPARTS

This Agreement may be executed in any number of counterparts and by the parties on separate counterparts, each of which when so executed and delivered shall be an original, but all the counterparts shall together constitute one and the same instrument.

 

13. G OVERNING L AW

All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the principles of conflicts of law thereof. Each party agrees that all Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, employees or agents) shall be commenced exclusively in the New York Courts. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any such New York Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. For the purposes of this Agreement, “Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

[Signatures Appear on the Following Page]

 

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T HIS A GREEMENT is executed and delivered on the date stated at the beginning of this Agreement.

 

Intrexon Corporation
By:  

/s/ Thomas R. Kasser

Name:   Thomas R. Kasser
Title:  

President, Animal Science Division

SVP, Intrexon Corporation

AquaBounty Technologies, Inc.
By:  

/s/ David A. Frank

Name:   David A. Frank
Title:   Chief Financial Officer

Hogan Lovells

 

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EXHIBIT 10.8

E XCLUSIVE C HANNEL C OLLABORATION A GREEMENT

T HIS E XCLUSIVE C HANNEL C OLLABORATION A GREEMENT (the “ Agreement ”) is made and entered into effective as of February 14, 2013 (the “ Effective Date ”) by and between I NTREXON C ORPORATION , a Virginia corporation with offices at 20358 Seneca Meadows Parkway, Germantown, MD 20876 (“ Intrexon ”), and A QUA B OUNTY T ECHNOLOGIES , I NC ., a Delaware corporation having its principal place of business at Two Clock Tower Place, Suite 395, Maynard, MA 01754 (“ AquaBounty ”). Intrexon and AquaBounty may be referred to herein individually as a “ Party ”, and collectively as the “ Parties .”

R ECITALS

W HEREAS , Intrexon has expertise in and owns or controls proprietary technology relating to the identification, design and production of genetically modified cells and DNA vectors, and the control of peptide expression; and

W HEREAS , AquaBounty now desires to become Intrexon’s exclusive channel collaborator with respect to such technology for the purpose of developing the Aquaculture Program (as defined herein), and Intrexon is willing to appoint AquaBounty as a channel collaborator in the Field (as defined herein, and subject to amendments to the definition as permitted herein) under the terms and conditions of this Agreement.

N OW T HEREFORE , in consideration of the foregoing and the covenants and promises contained herein, the Parties agree as follows:

ARTICLE 1

D EFINITIONS

As used in this Agreement, the following capitalized terms shall have the following meanings:

1.1 AAA Rules ” has the meaning set forth in Section 11.2.

1.2 Affiliate ” means, with respect to a particular Party, any other person or entity that directly or indirectly controls, is controlled by, or is in common control with such Party. As used in this Section 1.2, the term “controls” (with correlative meanings for the terms “controlled by” and “under common control with”) means the ownership, directly or indirectly, of more than fifty percent (50%) of the voting securities or other ownership interest of an entity, or the possession, directly or indirectly, of the power to direct the management or policies of an entity, whether through the ownership of voting securities, by contract, or otherwise. Notwithstanding the foregoing, Third Security shall be deemed not to be an Affiliate of Intrexon, and neither Party shall be deemed to be an Affiliate of the other Party. In addition, any other person, corporation, partnership, or other entity that would be an Affiliate of Intrexon solely because it and Intrexon are under common control by Randal J. Kirk or by investment funds managed by Third Security or an affiliate of Third Security shall also be deemed not to be an Affiliate of Intrexon.

1.3 Applicable Laws ” has the meaning set forth in Section 8.2(d)(xii).


1.4 AquaBounty Indemnitees ” has the meaning set forth in Section 9.1.

1.5 AquaBounty Product ” means any product in the Field that is created, produced, developed, or identified in whole or in part, directly or indirectly, by or on behalf of AquaBounty during the Term through use or practice of Intrexon Channel Technology, Intrexon IP, or the Intrexon Materials.

1.6 AquaBounty Program Patent ” has the meaning set forth in Section 6.2(b).

1.7 AquaBounty Termination IP ” means all Patents or other intellectual property that AquaBounty or any of its Affiliates Controls as of the Effective Date or during the Term that cover, or is otherwise necessary or useful for, the development, manufacture or Commercialization of a Reverted Product or necessary or useful for Intrexon to operate in the Field.

1.8 Aquaculture Program ” has the meaning set forth in Section 2.1(a).

1.9 Authorizations ” has the meaning set forth in Section 8.2(d)(xii).

1.10 Channel-Related Program IP ” has the meaning set forth in Section 6.1(c).

1.11 Claims ” has the meaning set forth in Section 9.1.

1.12 Committees ” has the meaning set forth in Section 2.2(a).

1.13 Commercialize ” or “ Commercialization ” means any activities directed to marketing, promoting, distributing, importing for sale, offering to sell and/or selling AquaBounty Products.

1.14 Commercial Sale ” means for a given product and country the sale for value of that product by a Party (or, as the case may be, by an Affiliate or permitted sublicensee of a Party), to a Third Party after regulatory approval (if necessary) has been obtained for such product in such country.

1.15 Complementary In-Licensed Third Party IP ” has the meaning set forth in Section 3.9(a).

1.16 Confidential Information ” means all Information which is not publicly known, and which is used in or otherwise relates to each Party’s business, customers, or financial or other affairs and disclosed by a Party pursuant to this Agreement or any other confidentiality agreement between the Parties, regardless of whether in oral, written, graphic, electronic, or other tangible and intangible forms, including, without limitation, information relating to (a) trade secrets, know-how, ideas, computer systems and computer software; (b) future projects, business development or planning, commercial relationships and negotiations; and (c) the marketing of goods or services including customer names and lists, sales targets and statistics.

 

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1.17 Control ” means, with respect to Information, a Patent or other intellectual property right, that a Party owns or has a license from a Third Party to such right and has the ability to grant a license or sublicense as provided for in this Agreement under such right without violating the terms of any agreement or other arrangement with any Third Party.

1.18 Costs of Goods Sold ” or “ COGS ” means all Manufacturing Costs that are directly and reasonably attributable to manufacturing of an AquaBounty Product in accordance with US GAAP for commercial sale in the countries where such AquaBounty Product has been launched.

1.19 Diligent Efforts ” means, with respect to a Party’s obligation under this Agreement, the level of efforts and resources reasonably required to diligently develop, manufacture, and/or Commercialize (as applicable) each AquaBounty Product in a sustained manner, consistent with the efforts and resources a similarly situated company working in the Field would typically devote to a product of similar market potential, profit potential, strategic value and/or proprietary protection, based on market conditions then prevailing.

1.20 Excess Product Liability Costs ” has the meaning set forth in Section 9.3.

1.21 Executive Officer ” means : (a) the Chief Executive Officer of the applicable Party, or (b) another senior executive officer of such Party who has been duly appointed in writing by the Chief Executive Officer to act as the representative of the Party to resolve, as the case may be, (i) a Committee dispute, provided that such appointed officer is not a member of the applicable Committee and occupies a position senior to the positions occupied by the applicable Party’s members of the applicable Committee, or (ii) a dispute described in Section 11.1.

1.22 FDA ” has the meaning set forth in Section 8.2(d)(xii).

1.23 Field ” means the development, breeding, hatching, and farming of genetically modified finfish to be used for human food consumption.

1.24 Field Infringement ” has the meaning set forth in Section 6.3(b).

1.25 Fully Loaded Cost ” means the direct cost of the applicable good, product or service plus indirect charges and overheads reasonably allocable to the provision of such good, product or service in accordance with US GAAP. Subject to the approval of a project and its associated budget by the JSC and the terms of Sections 4.5 and 4.6 (as appropriate), Intrexon will bill for its internal direct costs incurred through the use of annualized standard full-time equivalents; such rate shall be based upon the actual fully loaded costs of those personnel directly involved in the provision of such good, product or service. Intrexon may, from time to time, adjust such full-time equivalent rate based on changes to its actual fully loaded costs and will review the accuracy of its full-time equivalent rate at least quarterly, and any increase to the full-time equivalent rate must be communicated in advance to AquaBounty. Intrexon shall provide AquaBounty with documentation reasonably acceptable to AquaBounty indicating the basis for any direct and indirect charges, any allocable overhead, and any such adjustment in full-time equivalent rate.

 

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1.26 Gross Profit ” means, with respect to sales of a particular product by a seller who is the producer of such product, the gross revenues derived by that seller or an Affiliate of that seller (including without limitation net sales of the product to a non-Affiliate sublicensee but not including net sales by such non-Affiliate sublicensee), as determined in accordance with US GAAP as the gross amount invoiced on account of sales of the product less COGS as determined in accordance with US GAAP. In the case of any sale for value, such as barter or counter-trade other than in an arm’s length transaction exclusively for cash, Gross Profit shall be deemed to be the net sales at which substantially similar quantities of the product are sold for cash in an arm’s length transaction in the relevant country. If an AquaBounty Product is sold to any Third Party together with other products or services, the price of such product, solely for purposes of the calculation of Gross Profit, shall be deemed to be no less than the price at which such product would be sold in a similar transaction to a third party not also purchasing the other products or services.

1.27 In-Licensed Program IP ” has the meaning set forth in Section 3.9(a).

1.28 Information ” means information, results and data of any type whatsoever, in any tangible or intangible form whatsoever, including without limitation, databases, inventions, practices, methods, techniques, specifications, formulations, formulae, knowledge, know-how, skill, experience, test data including pharmacological, biological, chemical, biochemical, toxicological and regulatory test data, analytical and quality control data, stability data, studies and procedures, and patent and other legal information or descriptions.

1.29 Infringement ” has the meaning set forth in Section 6.3(a).

1.30 Intrexon Channel Technology ” means Intrexon’s current and future technology directed towards the design, identification, culturing, and/or production of genetically modified cells, including without limitation the technology embodied in the Intrexon Materials and the Intrexon IP, and specifically including without limitation the following of Intrexon’s platform areas and capabilities: (1) UltraVector ® , (2) LEAP TM , (3) DNA and RNA MOD engineering, (4) protein engineering, (5) transcription control chemistry, (6) genome engineering, and (7) cell system engineering.

1.31 Intrexon Indemnitees ” has the meaning set forth in Section 9.2.

1.32 Intrexon IP ” means the Intrexon Patents and Intrexon Know-How.

1.33 Intrexon Know-How ” means all Information (other than Intrexon Patents) that (a) is Controlled by Intrexon as of the Effective Date or during the Term and (b) is reasonably required or useful for AquaBounty to conduct the Aquaculture Program. For the avoidance of doubt, the Intrexon Know-How shall include any Information (other than Intrexon Patents) in the Channel-Related Program IP.

1.34 Intrexon Materials ” means the gene constructs, in each case that are Controlled by Intrexon, used alone or in combination and such other proprietary reagents and biological materials including but not limited to plasmid vectors, virus stocks, cells and cell lines, antibodies, and ligand-related chemistry, in each case that are reasonably required or useful for and provided to AquaBounty by or on behalf of Intrexon to conduct the Aquaculture Program.

 

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1.35 Intrexon Patents ” means all Patents that (a) are Controlled by Intrexon as of the Effective Date or during the Term; and (b) are reasonably required or useful for AquaBounty to conduct the Aquaculture Program. For the avoidance of doubt, the Intrexon Patents shall include any Patent in the Channel-Related Program IP.

1.36 Intrexon Trademarks ” means those trademarks related to the Intrexon Channel Technology that are established from time to time by Intrexon for use across its channel partnerships or collaborations.

1.37 Inventions ” has the meaning set forth in Section 6.1(b).

1.38 IPC ” has the meaning set forth in Section 2.2(b).

1.39 JSC ” has the meaning set forth in Section 2.2(b).

1.40 Losses ” has the meaning set forth in Section 9.1.

1.41 Manufacturing Costs ” means, with respect to a given AquaBounty Product, the full-time equivalent costs (under a reasonable accounting mechanism to be agreed upon by the Parties) and out-of-pocket costs that AquaBounty or any of its Affiliates incurred in manufacturing such products, including costs and expenses incurred in connection with (a) the development or validation of any manufacturing process, formulations or delivery systems, or improvements to the foregoing; (b) manufacturing scale-up; (c) in-process testing, stability testing and release testing; (d) quality assurance/quality control development; (e) internal and Third Party costs and expenses incurred in connection with qualification and validation of Third Party contract manufacturers, including scale up, process and equipment validation, and initial manufacturing licenses, approvals and inspections; (f) packaging development and final packaging and labeling; (g) shipping configurations and shipping studies; and (h) overseeing the conduct of any of the foregoing. “Manufacturing Costs” shall further include: (i) to the extent that any such AquaBounty Product is manufactured by a Third Party manufacturer, the out-of-pocket costs incurred by AquaBounty or any of its Affiliates to the Third Party for the manufacture and supply (including packaging and labeling) thereof, and any reasonable out-of-pocket costs and direct labor costs incurred by AquaBounty or any of its Affiliates in managing or overseeing the Third Party relationship determined in accordance with the books and records of such Party or its Affiliates maintained in accordance with US GAAP; and (ii) to the extent that any such AquaBounty Product is manufactured by AquaBounty or any of its Affiliates, direct material and direct labor costs attributable to such product, as well as reasonably allocable overhead expenses, determined in accordance with the books and records of AquaBounty or its Affiliates maintained in accordance with US GAAP.

1.42 Patents ” means (a) all patents and patent applications (including provisional applications), (b) any substitutions, divisions, continuations, continuations-in-part, reissues, renewals, registrations, requests for continued examination, confirmations, re-examinations, extensions, supplementary protection certificates and the like of the foregoing, and (c) any foreign or international equivalents of any of the foregoing.

 

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1.43 Product-Specific Program Patent ” means any issued Intrexon Patent where all the claims are directed to Inventions that relate solely and specifically to AquaBounty Products. In the event of a disagreement between the Parties as to whether a particular Intrexon Patent is or is not a Product-Specific Program Patent, the Parties shall seek to resolve the issue through discussions at the IPC, provided that if the Parties are unable to resolve the disagreement, the issue shall be submitted to arbitration pursuant to Section 11.2. Any Intrexon Patent that is subject to such a dispute shall be deemed not to be a Product-Specific Program Patent unless and until (a) Intrexon agrees in writing that such Patent is a Product-Specific Program Patent or (b) an arbitrator or arbitration panel determines, pursuant to Article 11, that such Intrexon Patent is a Product-Specific Program Patent

1.44 Product Sublicense ” has the meaning set forth in Section 3.2(c).

1.45 Product Sublicensee ” has the meaning set forth in Section 3.2(c).

1.46 Proposed Terms ” has the meaning set forth in Section 11.2.

1.47 Prosecuting Party ” has the meaning set forth in Section 6.2(c).

1.48 Recovery ” has the meaning set forth in Section 6.3(f).

1.49 Retained Product ” has the meaning set forth in Section 10.4(a).

1.50 Reverted Product ” has the meaning set forth in Section 10.4(c).

1.51 SEC ” means the United States Securities and Exchange Commission.

1.52 Sublicensing Revenue ” means any cash consideration, or the cash equivalent value of non-cash consideration, regardless of whether in the form of upfront payments, milestones, or royalties, actually received by AquaBounty or its Affiliate from a Third Party in consideration for a grant of a sublicense under the Intrexon IP or any rights to develop or Commercialize AquaBounty Products, but excluding: (a) any amounts paid as bona fide reimbursement for research and development costs to the extent incurred following such grant; (b) bona fide loans or any payments in consideration for a grant of equity of AquaBounty to the extent that such consideration is equal to or less than fair market value (i.e. any amounts in excess of fair market value shall be Sublicensing Revenue); and (c) amounts received from sublicensees in respect of any AquaBounty Product sales that are included in the calculation of revenue sharing payments made to Intrexon under Section 5.1(a).

1.53 Superior Animal Product ” means a genetically modified animal product in the Field that, based on the data then available, (a) demonstrably appears to offer either superior farming yield or safety or significantly lower cost of production, as compared with both (i) those animal products that are marketed (either by AquaBounty or others) at such time for similar commercial use and (ii) those animal products that are being actively developed by AquaBounty for such indication; (b) demonstrably appears to represent a substantial improvement over such existing animal products; and (c) has intellectual property protection and a regulatory approval pathway that, in each case, would not present a significant barrier to commercial development.

1.54 Supplemental In-Licensed Third Party IP ” has the meaning set forth in Section 3.9(a).

 

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1.55 Support Memorandum ” has the meaning set forth in Section 11.2.

1.56 Term ” has the meaning set forth in Section 10.1.

1.57 Territory ” means the world.

1.58 Third Party ” means any individual or entity other than the Parties or their respective Affiliates.

1.59 Third Security ” means Third Security, LLC.

1.60 US GAAP ” means generally accepted accounting principles in the United States.

ARTICLE 2

S COPE OF C HANNEL C OLLABORATION ; M ANAGEMENT

2.1 Scope .

(a) Generally . The general purpose of the channel collaboration described in this Agreement will be to use the Intrexon Channel Technology to research, develop and Commercialize products for use in the Field (collectively, the “ Aquaculture Program ”). As provided below, the JSC shall establish, monitor, and govern projects for the Aquaculture Program. Either Party may propose potential projects in the Field for review and consideration by the JSC.

2.2 Committees .

(a) Generally . The Parties desire to establish several committees (collectively, “ Committees ”) to oversee the Aquaculture Program and to facilitate communications between the Parties with respect thereto. Each of such Committees shall have the responsibilities and authority allocated to it in this Article 2. Each of the Committees shall have the obligation to exercise its authority consistent with the respective purpose for such Committee as stated herein and any such decisions shall be made in good faith.

(b) Formation and Purpose . Promptly following the Effective Date, the Parties shall confer and then create a Joint Steering Committee (“ JSC ”) and an Intellectual Property Committee (“ IPC ”). The JSC shall have authority, subject to Section 2.5 and except as otherwise delegated to the IPC, to (i) establish research and development projects for the Aquaculture Program (including establishing the priorities and budgets for such projects), (ii) oversee manufacturing and controls for AquaBounty Products, (iii) review and approve all regulatory trial projects and associated regulatory filings and correspondence under the Aquaculture Program (including reviewing and approving itemized budgets with respect to the foregoing), (iv) establish project plans and review and approve activities and budgets for Commercialization activities under the Aquaculture Program, and (v) approve the projects and plans of any subcommittee it establishes consistent with this authority. The IPC shall have authority, subject to Section 2.5, to evaluate all intellectual property issues and approve

 

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associated collaborative activities in connection with the Aquaculture Program, including the protection of Inventions or Confidential Information, the filing of Patents, licensing of Third Party intellectual property, the establishment or enforcement of controls concerning the dissemination or use of intellectual property (including Intrexon Channel Technology, Intrexon IP, or Intrexon Materials) for the development or manufacturing of AquaBounty Products.

(c) JSC Governance Activities . Promptly following creation of the JSC, the JSC shall meet and deliberate on a regular basis as set forth in Section 2.3 below. The JSC shall review information and make recommendations as necessary to the Parties to implement the Aquaculture Program and, subject to Section 2.5, authorize activities of the Parties under the Aquaculture Program consistent with the terms and provisions of this Agreement. The activities of the JSC shall include, from time to time as warranted or necessary: (i) preparation of written plans for each Aquaculture Program project detailing for each project its purpose and objectives, the activities to be performed, a timeline for achievement of such activities and a budget (including Intrexon activities and associated budget for support services), and timing for the transfer of relevant Information and materials between the Parties; (ii) preparation of research and development plans associated with any necessary regulatory approvals for any projects for the Aquaculture Program, all associated publications, and all regulatory filings and correspondence related to gaining regulatory approval for new AquaBounty Projects under the Aquaculture Program; (iii) review of the overall progress of a project against any approved plan and advising the Parties accordingly; (iv) establishment of procedures for any necessary technology transfer between the Parties; (v) preparation of plans relating to regulatory approval and Commercialization activities under the Aquaculture Program; and (vi) establishment and oversight of any subcommittees as it deems appropriate (and within its authority) for carrying out activities under this Agreement. The representatives from each Party to the JSC shall be responsible for reporting to their respective Party and obtaining any necessary delegations, authorizations or approvals required by their respective Party in accordance with Section 2.5.

2.3 General Committee Membership and Procedure .

(a) Membership . For each Committee, each Party shall designate an equal number of representatives (not to exceed three (3) for each Party) with appropriate expertise to serve as members of such Committee. For the JSC, the representatives must all be employees of such Party or an Affiliate of such Party, and for Committees other than the JSC, the representatives must all be employees of such Party or an Affiliate of such Party with the caveat that each Party may designate for each such other Committee up to one (1) representative who is not an employee if: (i) such non-employee representative agrees in writing to be bound by the terms of this Agreement for the treatment and ownership of Confidential Information and Inventions of the Parties, and (ii) the other Party consents to the designation of such non-employee representative, which consent shall not be unreasonably withheld. For purposes of this Section 2.3, employees of Third Security may, at Intrexon’s election, serve as members of a Committee as if they were employees of Intrexon. Each representative as qualified above may serve on more than one (1) Committee as appropriate in view of the individual’s expertise. Each Party may replace its Committee representatives at any time upon written notice to the other Party. Each Committee shall have a chairperson; the chairperson of each committee shall serve for a two-year term and the right to designate which representative to the Committee will act as chairperson shall alternate between the Parties, with AquaBounty selecting the chairperson first

 

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for the JSC, and Intrexon selecting the chairperson first for the IPC. The chairperson of each Committee shall be responsible for calling meetings, preparing and circulating an agenda in advance of each meeting of such Committee, and preparing and issuing minutes of each meeting within fifteen (15) days thereafter.

(b) Meetings . Each Committee shall hold meetings at such times as it elects to do so, but in no event shall such meetings be held less frequently than once every six (6) months. Meetings of any Committee may be held in person or by means of telecommunication (telephone, video, or web conferences). To the extent that a Committee holds any meetings in person, the Parties will alternate in designating the location for such in-person meetings, with AquaBounty selecting the first meeting location for each Committee. A reasonable number of additional representatives of a Party may attend meetings of a Committee in a non-voting capacity. Each Party shall be responsible for all of its own expenses of participating in any Committee excepting that an Intrexon employee or agent serving on a Committee shall not prevent Intrexon from recouping the Fully Loaded Costs otherwise derived from the labor of that employee or agent in the course of providing manufacturing or support services as set forth in Sections 4.5 and 4.6 below.

(c) Meeting Agendas . Each Party will disclose to the other proposed agenda items along with appropriate information at least three (3) business days in advance of each meeting of the applicable Committee; provided, that a Party may provide its agenda items to the other Party within a lesser period of time in advance of the meeting, or may propose that there not be a specific agenda for a particular meeting, so long as such other Party consents to such later addition of such agenda items or the absence of a specific agenda for such Committee meeting.

(d) Limitations of Committee Powers . Each Committee shall have only such powers as are specifically delegated to it hereunder or from time to time as agreed to in writing by the mutual consent of the Parties and shall not be a substitute for the rights of the Parties. Without limiting the generality of the foregoing, no Committee shall have any power to amend this Agreement. Any amendment to the terms and conditions of this Agreement shall be implemented pursuant to Section 12.7 below. Additionally, no member of any Committee shall be able to vote in such Committee and thereby bind its respective Party on any material matter accept as otherwise properly authorized, approved, or delegated by such Party in accordance with Section 2.5.

 

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2.4 Committee Decision-Making . If a Committee is unable to reach unanimous consent on a particular matter within thirty (30) days of its initial consideration of such matter, then either Party may provide written notice of such dispute to the Executive Officer of the other Party. The Executive Officers of each of the Parties will meet at least once in person or by means of telecommunication (telephone, video, or web conferences) to discuss the dispute and use their good faith efforts to resolve the dispute within thirty (30) days after submission of such dispute to the Executive Officers. If any such dispute is not resolved by the Executive Officers within thirty (30) days after submission of such dispute to such Executive Officers, then the Executive Officer of the Party specified in the applicable subsection below shall have the authority to finally resolve such dispute acting in good faith.

(a) Casting Vote at JSC . If a dispute at the JSC is not resolved pursuant to Section 2.4 above, then the Executive Officer of AquaBounty shall have the authority to finally resolve such dispute.

(b) Casting Vote at IPC . If a dispute at the IPC is not resolved pursuant to Section 2.4 above, then the Executive Officer of Intrexon shall have the authority to finally resolve such dispute, provided that such authority shall be shared by the Parties with respect to Product-Specific Program Patents (i.e., neither Party shall have the casting vote on such matters, and any such disputes shall be resolved pursuant to Article 11).

(c) Other Committees . If any additional Committee or subcommittee other than those set forth in Section 2.2(b) is formed, then the Parties shall, at the time of such formation, agree on which Party shall have the authority to finally resolve a dispute that is not resolved pursuant to Section 2.4 above.

(d) Restrictions . Neither Party shall exercise its right to finally resolve a dispute at a Committee in accordance with this Section 2.4 in a manner that (i) excuses such Party from any of its obligations specifically enumerated under this Agreement; (ii) expands the obligations of the other Party under this Agreement; (iii) negates any consent rights or other rights specifically allocated to the other Party under this Agreement; (iv) purports to resolve any dispute involving the breach or alleged breach of this Agreement; (v) resolves a matter if the provisions of this Agreement specify that mutual agreement is required for such matter; or (vi) would require the other Party to perform any act that is inconsistent with applicable law.

2.5 Authorization of Committee Representatives . Each Committee representative shall be able to bind his or her respective appointing Party via any Committee vote or other material Committee activity only to the extent such vote or other activity (a) has been previously approved by the Party, (b) is within the authority duly delegated to the representative by the respective Party, or (c) is otherwise authorized by its respective Party as may be required by that Party’s corporate charter or bylaws, or by its board of directors. Any action or vote taken by a Party’s representative at any Committee without valid authority shall be considered null and void and shall be without effect unless subsequently and expressly approved by the Party appointing the representative on the Committee.

 

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ARTICLE 3

L ICENSE G RANTS

3.1 Licenses to AquaBounty .

(a) Subject to the terms and conditions of this Agreement, Intrexon hereby grants to AquaBounty a license under the Intrexon IP to research, develop, use, make, have made, sell, import, and offer for sale AquaBounty Products in the Field in the Territory. Such license shall be exclusive (even as to Intrexon) with respect to any development, selling, making or having made (except as permitted in Section 4.5), using (except for uses in connection with research), importing, offering for sale or other Commercialization of AquaBounty Products in the Field, and shall be otherwise non-exclusive.

(b) Subject to the terms and conditions of this Agreement, Intrexon hereby grants to AquaBounty a non-exclusive, royalty-free license to use and display the Intrexon Trademarks, solely in connection with the Commercialization of AquaBounty Products in the promotional materials, packaging, and labeling for AquaBounty Products, as provided under and in accordance with Section 4.8.

3.2 Sublicensing . Except as provided in this Section 3.2, AquaBounty shall not sublicense the rights granted under Section 3.1 to any Third Party, or transfer the Intrexon Materials to any Third Party, or otherwise grant any Third Party the right to research, develop, use, or Commercialize AquaBounty Products or use or display the Intrexon Trademarks, in each case except with Intrexon’s written consent, which written consent may be withheld in Intrexon’s sole discretion. Notwithstanding the foregoing, AquaBounty (and its Product Sublicensees only to the extent explicitly set forth in Section 3.2(a) below) shall have a limited right to sublicense under the circumstances described in Sections 3.2(a) through 3.2(c).

(a) AquaBounty may transfer, to the extent reasonably necessary and after providing Intrexon with reasonable advance notice thereof, Intrexon Materials to a Third Party contractor performing (i) farming, cultivation, or harvesting of food animals from AquaBounty Products under bailment from AquaBounty or (ii) contract manufacturing, fill, and/or finish responsibilities for AquaBounty Products, and may in connection therewith grant limited sublicenses necessary to enable such Third Party to perform such activities. If AquaBounty transfers any Intrexon Materials under this Section 3.2(a), AquaBounty will take commercially reasonable steps, including contractually obligating any such Third Party contractors, to ensure that the rights of Intrexon in and to the Intrexon Materials and Intrexon IP and under the provisions of Articles 6 and 7 of this Agreement are not violated by any such Third Party contractor. A Product Sublicensee may transfer, to the extent reasonably necessary and upon the consent of Intrexon (which consent shall not be unreasonably withheld), Intrexon Materials that are ingredients for the AquaBounty Product sublicensed by the Product Sublicensee to a Third Party contractor performing on behalf of that Product Sublicensee (A) farming, cultivation, or harvesting of food animals from AquaBounty Products under bailment from AquaBounty or (B) contract manufacturing, fill, and/or finish responsibilities for AquaBounty Products, and may in connection therewith grant limited sublicenses to the extent necessary to enable such Third Party to perform such activities. AquaBounty will require and ensure that if any Product

 

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Sublicensee transfers any Intrexon Materials under this Section 3.2(a), that such Product Sublicensee, after obtaining Intrexon’s consent, will take commercially reasonable steps, including contractually obligating any such Third Party contractors, to ensure that the rights of Intrexon in and to the Intrexon Materials and Intrexon IP and under the provisions of Articles 6 and 7 of this Agreement are not violated by any Third Party contractors of such Product Sublicensees.

(b) AquaBounty may, with Intrexon’s written consent, which consent shall not be unreasonably withheld, sublicense the rights granted under Section 3.1 to an Affiliate, or transfer the Intrexon Materials to an Affiliate, or grant an Affiliate the right to display the Intrexon Trademarks. In the event that Intrexon consents to any such grant or transfer to an Affiliate, AquaBounty shall remain responsible for, and be guarantor of, the performance by any such Affiliate and shall cause such Affiliate to comply with the provisions of this Agreement in connection with such performance (as though such Affiliate were AquaBounty), including any payment obligations owed to Intrexon hereunder.

(c) AquaBounty may grant a sublicense of the rights granted under Section 3.1 (and not including a right to sublicense under this Section 3.1(c)) to a Third Party licensee of any AquaBounty Product (a “ Product Sublicensee ”) to the extent necessary to permit such Third Party to research, develop, use, import, export, make, have made, sell, and offer for sale that AquaBounty Product (a “ Product Sublicense ”), provided that (i) such Product Sublicense is expressly limited to the appropriate AquaBounty Product, (ii) such Product Sublicense does not grant the Product Sublicensee any rights to Intrexon IP other than as incorporated into the AquaBounty Product at the time of the Product Sublicense, (iii) such Product Sublicense does not purport to relieve AquaBounty of any of its obligations under this Agreement, (iv) the Product Sublicensee agrees in writing, in a document in form reasonably acceptable to Intrexon and to which Intrexon is an express third party beneficiary, to abide by the following provisions of this Agreement: Sections 3.1, 3.3 through 3.6, 3.8, 3.10, and 3.11 and Articles 6, 7, and 10), and (v) the Product Sublicense is presented in full to the JSC by AquaBounty before execution by AquaBounty and the prospective Product Sublicensee and as soon as is reasonably practical for the purpose of allowing the JSC to review and comment upon the terms and scope of the Product Sublicense agreement before execution.

3.3 Limitation on Sublicensees . None of the enforcement rights under the Intrexon Patents that are granted to AquaBounty pursuant to Section 6.3 shall be transferred to, or exercised by, a sublicensee except with Intrexon’s prior written consent, which may be withheld in Intrexon’s sole discretion.

3.4 No Non-Permitted Use . AquaBounty hereby covenants that it shall not, nor shall it permit any Affiliate or, if applicable, (sub)licensee, to use or practice, directly or indirectly, any Intrexon IP, Intrexon Channel Technology, or Intrexon Materials for any purposes other than those expressly permitted by this Agreement.

3.5 Exclusivity . Neither Intrexon nor its Affiliates shall make the Intrexon Channel Technology or Intrexon Materials available to any Third Party for the purpose of developing or Commercializing products in the Field (except as set forth in Section 3.2), and neither Intrexon nor any Affiliate shall pursue (either by itself or with a Third Party or Affiliate) the research,

 

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development or Commercialization of any product for purpose of commercial use or sale in the Field, outside of the Aquaculture Program. Further, neither AquaBounty nor its Affiliates shall pursue (either by itself or with a Third Party or Affiliate) outside of the Aquaculture Program the research, development or Commercialization of any genetically modified product for purpose of commercial use or sale in the Field where such genetically modified products would compete with AquaBounty Products.

3.6 No Prohibition on Intrexon . Except as explicitly set forth in Sections 3.1 and 3.5, nothing in this Agreement shall prevent Intrexon from practicing or using the Intrexon Materials, Intrexon Channel Technology, and Intrexon IP for any purpose, and to grant to Third Parties the right to do the same. Without limiting the generality of the foregoing, AquaBounty acknowledges that Intrexon has all rights, in Intrexon’s sole discretion, to make the Intrexon Materials, Intrexon Channel Technology (including any genetic materials used in an AquaBounty Product), and Intrexon IP available to Third Party channel partners or collaborators for use in fields outside the Field.

3.7 Rights to Regulatory Data . AquaBounty shall own and control all regulatory trial data and regulatory filings relating to Commercialization of AquaBounty Products (except to the extent such become Reverted Products). AquaBounty shall provide (or shall cause an applicable Product Sublicensee to provide) to Intrexon, upon its request, access to review all trial data and reports, regulatory filings, and communications from regulatory authorities that relate specifically and solely to AquaBounty Products. To the extent that there exist any trial data and reports, regulatory filings, and communications from regulatory authorities owned by AquaBounty (or a Product Sublicensee) that relate both to AquaBounty Products and other products produced by AquaBounty (or a Product Sublicensee) outside the Field or outside the Aquaculture Program, upon Intrexon’s request, AquaBounty shall provide (or shall cause an applicable Product Sublicensee to provide) to Intrexon access to review the portions of such data, reports, filings, and communications that relate to AquaBounty Products. Subject to its ongoing obligations of exclusivity under Section 3.5, Intrexon shall be permitted, directly or in conjunction with or through partners or other channel collaborators, to reference these data, reports, filings, and communications relating to AquaBounty Products in regulatory filings made to obtain regulatory approval for products for use in fields outside the Field. Intrexon shall have the right to use any such information in developing and Commercializing products outside the Field and to license any Third Parties to do so. Notwithstanding the provisions of this Section 3.7, Intrexon shall not, outside of the Aquaculture Program, utilize knowingly any AquaBounty trial data or reports in support of obtaining regulatory approval for a product for use in the Field.

3.8 Third Party Licenses .

(a) Intrexon shall obtain, at its sole expense, any licenses from Third Parties that are required in order to practice the Intrexon Channel Technology in the Field where the licensed intellectual property is reasonably necessary for Intrexon to conduct genetic and cell engineering and related analytic activities under JSC-approved project plans for the Aquaculture Program (but specifically excluding intellectual property directed to any specific target genes, genetic transformation methodologies, or processes or methods for harvesting, culturing, formulating, or otherwise manufacturing AquaBounty Products) (“ Supplemental In-Licensed

 

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Third Party IP ”). Other than with respect to Supplemental In-Licensed Third Party IP, AquaBounty shall be solely responsible for obtaining, at its sole expense, any licenses from Third Parties that AquaBounty determines, in its sole discretion, are required in order to lawfully make, use, sell, offer for sale, or import AquaBounty Products (“ Complementary In-Licensed Third Party IP ”). Supplemental In-Licensed Third Party IP and Complementary In-Licensed Third Party IP are collectively referred to as “ In-Licensed Program IP ”.

(b) In the event that either Party desires to license from a Third Party any Supplemental In-Licensed Third Party IP or Complementary In-Licensed Third Party IP, such Party shall so notify the other Party, and the IPC shall discuss such In-Licensed Program IP and its applicability to the AquaBounty Products and to the Field. As provided above in Section 3.8(a), Intrexon shall have the sole right and responsibility to pursue a license under Supplemental In-Licensed Third Party IP, and AquaBounty hereby covenants that it shall not itself directly license such Supplemental In-Licensed Third Party IP at any time, provided that AquaBounty may (but shall not be obligated to) obtain such a license directly if the Third Party owner or licensee of such Supplemental In-Licensed Third Party IP brings an infringement action against AquaBounty or its Affiliates or threatens to bring such action (to the extent such threats would reasonably be considered to subject the Third Party owner or licensee to declaratory judgment jurisdiction) and, after written notice to Intrexon of such action, Intrexon fails to obtain a license to such Supplemental In-Licensed Third Party IP using Diligent Efforts within ninety (90) days after such notice. Following the IPC’s discussion of any Complementary In-Licensed Third Party IP, subject to Section 3.8(c), AquaBounty shall have the right to pursue a license under Complementary In-Licensed Third Party IP, at AquaBounty’s sole expense. Intrexon hereby covenants that during the Term it shall not directly license Complementary In-Licensed IP in the Field except in cooperation with AquaBounty and for the benefit of an AquaBounty Product or the Aquaculture Program. For the avoidance of doubt, Intrexon may at any time obtain a license under Complementary In-Licensed Third Party IP outside the Field, at Intrexon’s sole expense, provided that if Intrexon decides to seek to obtain such a license, it shall use reasonable efforts to coordinate its licensing activities in this regard with AquaBounty.

(c) AquaBounty shall provide the proposed terms of any license under Complementary In-Licensed Third Party IP and the final version of the definitive license agreement for any Complementary In-Licensed Third Party IP to the IPC for review and discussion prior to signing, and shall consider Intrexon’s comments thereto in good faith. To the extent that AquaBounty obtains a license under Supplemental In-Licensed Third Party IP, AquaBounty shall provide the final version of the definitive license agreement for such Supplemental In-Licensed Third Party IP to the IPC. If AquaBounty acquires rights under any In-Licensed Program IP outside the Field, it will do so on a non-exclusive basis unless it obtains the prior written consent of Intrexon for such license outside the Field to be exclusive. Any Party that is pursuing a license to any In-Licensed Program IP with respect to the Field under this Section 3.8 shall keep the other Party reasonably informed of the status of any negotiations relating thereto. For purposes of clarity, (i) any costs incurred by Intrexon in obtaining and maintaining licenses to Supplemental In-Licensed Third Party IP shall be borne solely by Intrexon, and (ii) any costs incurred by AquaBounty in obtaining and maintaining licenses to Complementary In-Licensed Third Party IP (and, to the limited extent provided in subsection (b), Supplemental In-Licensed Third Party IP) shall be borne solely by AquaBounty except as set forth in Section 10.4(h).

 

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(d) For any Third Party license under which AquaBounty or its Affiliates obtain a license under Patents claiming inventions or know-how specific to or used or incorporated into the development, manufacture, and/or Commercialization of AquaBounty Products, AquaBounty shall use commercially reasonable efforts to ensure that AquaBounty will have the ability, pursuant to Section 10.4(h), to assign such agreement to Intrexon or grant a sublicense to Intrexon thereunder (having the scope set forth in Section 10.4(h)).

(e) The licenses granted to AquaBounty under Section 3.1 may include sublicenses under Intrexon IP that has been or will be licensed to Intrexon by one or more Third Parties. Any such sublicenses may be subject to the terms and conditions set forth in the applicable upstream license agreement, subject to the cost allocation set forth in Section 3.8(c), provided that Intrexon shall either provide unredacted copies of such upstream license agreements to AquaBounty or shall disclose in writing to AquaBounty all of such terms and conditions that are applicable to AquaBounty. AquaBounty shall not be responsible for complying with any provisions of such upstream license agreements unless, and to the extent that, such provisions have been disclosed to AquaBounty as provided in the preceding sentence.

(f) If either Party receives notice from a Third Party concerning activities of a Party taken in conjunction with performance of obligations under this Agreement, which notice alleges infringement by a Party of, or offers license under, Patents or other intellectual property rights owned or controlled by that Third Party, the receiving Party shall inform the other party thereof within five (5) business days.

3.9 Licenses to Intrexon . Subject to the terms and conditions of this Agreement, AquaBounty hereby grants to Intrexon a non-exclusive, worldwide, fully-paid, royalty-free license, under any applicable Patents or other intellectual property Controlled by AquaBounty or its Affiliates, solely to the extent necessary for Intrexon to conduct those responsibilities assigned to it under this Agreement, which license shall be sublicensable solely to Intrexon’s Affiliates or to any Intrexon subcontractors as permitted in accordance with Section 4.5 or as otherwise permitted to be used by Intrexon in conjunction with support services under Section 4.6 (subject to JSC research plan approval).

3.10 Restrictions Relating to Intrexon Materials . AquaBounty and its permitted sublicensees shall use the Intrexon Materials solely for purposes of the Aquaculture Program and not for any other purpose without the prior written consent of Intrexon. With respect to the Intrexon Materials comprising Intrexon’s vector assembly technology, AquaBounty shall not, and shall ensure that AquaBounty personnel and permitted sublicensees do not, except as otherwise permitted in this Agreement (a) distribute, sell, lend or otherwise transfer such Intrexon Materials to any Third Party; (b) except as is reasonably necessary for the Commercialization of AquaBounty Products, co-mingle such Intrexon Materials with any other proprietary biological or chemical materials without Intrexon’s written consent; or (c) analyze such Intrexon Materials or in any way attempt to reverse engineer or sequence such Intrexon Materials.

 

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ARTICLE 4

O THER R IGHTS AND O BLIGATIONS

4.1 Development and Commercialization . Subject to Sections 4.5 and 4.6, AquaBounty shall be solely responsible for the development and Commercialization of AquaBounty Products. AquaBounty shall be responsible for all costs incurred in connection with the Aquaculture Program except that Intrexon shall be responsible for the following: (a) costs of establishing manufacturing capabilities and facilities in connection with Intrexon’s manufacturing obligation under Section 4.5 (provided, however, that Intrexon may include an allocable portion of such costs, through depreciation and amortization, when calculating the Fully Loaded Cost of manufacturing an AquaBounty Product, to the extent such allocation, depreciation, and amortization is permitted by US GAAP, it being recognized that the majority of non-facilities scale-up costs cannot be capitalized and amortized under US GAAP); (b) costs of basic research with respect to the Intrexon Channel Technology (i.e., improvements to Intrexon’s synthetic biology platforms) but, for clarity, excluding research described in Section 4.6 or research requested by AquaBounty for the development of an AquaBounty Product (which research costs shall be reimbursed by AquaBounty); (c) payments under Section 3.9(c)(i) in respect of Supplemental In-Licensed Third Party IP; and (d) costs of filing, prosecution and maintenance of Intrexon Patents. The costs encompassed within clause (a) of the previous sentence shall include the scale-up of Intrexon Materials for generating data for regulatory approval submissions and Commercialization of AquaBounty Products undertaken pursuant to Section 4.5, which shall be at Intrexon’s cost whether it elects to conduct such efforts internally or through Third Party contractors retained by either Intrexon or AquaBounty (with Intrexon’s consent).

4.2 Information and Reporting . AquaBounty will keep Intrexon informed about AquaBounty’s efforts to develop and Commercialize AquaBounty Products, including reasonable and accurate summaries of AquaBounty’s (and its Affiliates’ and, if applicable, (sub)licensees’) development plans (as updated), including regulatory plans, marketing plans (as updated), progress towards meeting the goals and milestones in such plans and explanations of any material deviations, significant developments in the development and/or Commercialization of the AquaBounty Products, including initiation or completion of a regulatory trial, submission of a United States or international regulatory filing, receipt of a response to such United States or international regulatory filing, product safety event, receipt of Regulatory Approval, or commercial launch, and manufacturing costs and pricing information. As set forth in Section 3.7 above, AquaBounty shall also provide Intrexon access to all final regulatory trial protocols and reports, and regulatory correspondence and filings generated by AquaBounty as soon as practical after they become available. Intrexon will keep AquaBounty informed about Intrexon’s efforts (a) to establish manufacturing capabilities and facilities for AquaBounty Products (and Intrexon Materials relevant thereto) and (b) to undertake discovery-stage research for the Aquaculture Program with respect to the Intrexon Channel Technology and Intrexon Materials. Unless otherwise provided herein or directed by the JSC in accordance with Section 4.2 above, such disclosures by AquaBounty and Intrexon will be coordinated by the JSC and made in connection with JSC meetings at least once every six (6) months while AquaBounty Products are being developed or Commercialized anywhere in the world, and shall be reflected in the minutes of such meetings.

 

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4.3 Regulatory Matters . At all times after the Effective Date, AquaBounty shall own and maintain, at its own cost, all regulatory filings and regulatory approvals for AquaBounty Products that AquaBounty is developing or Commercializing pursuant to this Agreement. As such, AquaBounty shall be responsible for reporting all adverse events related to such AquaBounty Products to the appropriate regulatory authorities in the relevant countries, in accordance with the applicable laws and regulations of such countries. To the extent that Intrexon will itself develop, or in collaboration with other third parties develop, Intrexon Materials outside of the Field, Intrexon may request that AquaBounty and Intrexon enter into a separate safety data exchange agreement governing the timely exchange of safety information generated by AquaBounty, Intrexon, and relevant third parties with respect to specific Intrexon Materials.

4.4 Diligence .

(a) AquaBounty shall use, and shall require its sublicensees to use, Diligent Efforts to develop and Commercialize AquaBounty Products. Intrexon shall use, and shall require its sublicensees to use, Diligent Efforts in conducting any activities undertaken by Intrexon in support of any JSC-approved research plan for the Aquaculture Program.

(b) Without limiting the generality of the foregoing, Intrexon may, from time to time, notify AquaBounty that it believes it has identified a Superior Animal Product, and in such case Intrexon shall provide to AquaBounty its then-available information about such animal product and reasonable written support for its conclusion that the animal product constitutes a Superior Animal Product. AquaBounty shall have the following obligations with respect to such proposed Superior Animal Product: (i) within sixty (60) days after such notification, AquaBounty, in conjunction with the members of the JSC, shall prepare and deliver to the JSC for review and approval a development plan detailing how AquaBounty will pursue the Superior Animal Product (including a proposed budget); (ii) AquaBounty shall revise the development plan as directed by the JSC; and (iii) following approval of the development plan by the JSC, AquaBounty shall use Diligent Efforts to pursue the development of the Superior Animal Product under the Aquaculture Program in accordance with such development plan. If AquaBounty fails to comply with the foregoing obligations, or if AquaBounty unreasonably exercises its casting vote at the JSC to either (x) prevent the approval of a development plan for a Superior Animal Product; (y) delay such approval more than sixty (60) days after delivery of the development plan to the JSC; or (z) approve a development plan that is insufficient in view of the nature and magnitude of the opportunity presented by the Superior Animal Product, then Intrexon shall have the termination right set forth in Section 10.2(b) (subject to the limitation set forth therein). For clarity, any dispute arising under this 4.4, including any dispute as to whether a proposed project constitutes a Superior Animal Product (as with any other dispute under this Agreement) shall be subject to dispute resolution in accordance with Article 11.

(c) The activities of AquaBounty’s Affiliates and any permitted sublicensees shall be attributed to AquaBounty for the purposes of evaluating AquaBounty’s fulfillment of the obligations set forth in this Section 4.4, and the activities of Intrexon’s Affiliates and any permitted sublicensees shall be attributed to Intrexon for the purposes of evaluating Intrexon’s fulfillment of the obligations set forth in this Section 4.4.

 

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4.5 Manufacturing . Intrexon shall have the option and, in the event it so elects, shall use Diligent Efforts, to perform any manufacturing activities in connection with the Aquaculture Program that relate to the Intrexon Materials, including through the use of a suitable Third Party contract manufacturer. To the extent that Intrexon so elects, Intrexon may request that AquaBounty and Intrexon establish and execute a separate manufacturing and supply agreement, which agreement will establish and govern the production, quality assurance, and regulatory activities associated with manufacture of Intrexon Materials. Except as provided in Section 4.1, any manufacturing undertaken by Intrexon pursuant to the preceding sentence shall be performed in exchange for cash payments equal to Intrexon’s Fully Loaded Cost in connection with such manufacturing, on terms to be negotiated by the Parties in good faith. In the event that Intrexon does not manufacture Intrexon Materials or bulk quantities of other components of AquaBounty Products, then Intrexon shall provide to AquaBounty or a contract manufacturer selected by AquaBounty and approved by Intrexon (such approval not to be unreasonably withheld) all Information Controlled by Intrexon that is (a) related to the manufacturing of such Intrexon Materials or bulk qualities of other components of AquaBounty Products for use in the Field and (b) reasonably necessary to enable AquaBounty or such contract manufacturer (as appropriate) for the sole purpose of manufacturing such Intrexon Materials or bulk quantities of other components of AquaBounty Products. The costs and expenses incurred by Intrexon in carrying out such transfer shall be borne by Intrexon. Any manufacturing Information transferred hereunder to AquaBounty or its contract manufacturer shall not be further transferred to any Third Party, including any Product Sublicensee, or any AquaBounty Affiliate without the prior written consent of Intrexon; provided, however, that Intrexon shall not unreasonably withhold such consent if necessary to permit AquaBounty to switch manufacturers.

4.6 Support Services . Subject to Section 2.4, the JSC will meet promptly following the Effective Date and establish a plan under which Intrexon will provide support services to AquaBounty for the research and development of AquaBounty Products under the Aquaculture Program, which initial plan may be amended from time to time by the JSC. AquaBounty will compensate Intrexon for such support services with cash payments equal to Intrexon’s Fully Loaded Cost in connection with such services. Additionally, from time to time, on an ongoing basis, AquaBounty may request, or Intrexon may propose, that Intrexon perform certain additional support services with respect to researching and developing new AquaBounty Products or improving the manufacturing or processing methods for any existing AquaBounty Products. To the extent that the Parties mutually agree that Intrexon should perform such additional services, the Parties shall negotiate in good faith the terms under which services would be performed, it being understood that Intrexon would be compensated for such services by cash payments equal to Intrexon’s Fully Loaded Cost in connection with such services.

4.7 Compliance with Law . Each Party shall comply, and shall ensure that its Affiliates, (sub)licensees and Third Party contractors comply, with all applicable laws, regulations, and guidelines applicable to the Aquaculture Program, including without limitation those relating to the transport, storage, and handling of Intrexon Materials and AquaBounty Products.

 

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4.8 Trademarks and Patent Marking . To the extent permitted by applicable law and regulations, AquaBounty shall ensure that the packaging, promotional materials, and labeling for AquaBounty Products, as appropriate, shall carry, in a conspicuous location, the applicable Intrexon Trademark(s), subject to AquaBounty’s reasonable approval of the size, position, and location thereof. Consistent with the U.S. patent laws, AquaBounty shall ensure that AquaBounty Products, or their respective packaging or accompanying literature, as appropriate, bear applicable and appropriate patent markings for Intrexon Patent numbers. AquaBounty shall provide Intrexon with copies of any materials containing the Intrexon Trademarks or patent markings prior to using or disseminating such materials in order to obtain Intrexon’s approval thereof. AquaBounty’s use of the Intrexon Trademarks and patent markings shall be subject to prior review and approval of the IPC. AquaBounty acknowledges Intrexon’s sole ownership of the Intrexon Trademarks and agrees not to take any action inconsistent with such ownership. AquaBounty covenants that it shall not use any trademark confusingly similar to any Intrexon Trademarks in connection with any products (including any AquaBounty Product). From time to time during the Term, Intrexon shall have the right to obtain from AquaBounty samples of AquaBounty Product sold by AquaBounty or its Affiliates or sublicensees, or other items which reflect public uses of the Intrexon Trademarks or patent markings, for the purpose of inspecting the quality of such AquaBounty Products, the use of the Intrexon Trademarks, or the accuracy of the patent markings. In the event that Intrexon inspects under this Section 4.8, Intrexon shall notify the result of such inspection to AquaBounty in writing thereafter. AquaBounty shall comply with commercially reasonable policies provided by Intrexon from time-to-time to maintain the goodwill and value of the Intrexon Trademarks.

ARTICLE 5

C OMPENSATION

5.1 Revenue Sharing .

(a) No later than thirty (30) days after each calendar quarter in which there are positive aggregate Gross Profits arising from the sale of AquaBounty Products in the Field and Territory, AquaBounty shall pay to Intrexon a royalty equal to sixteen point sixty-six percent (16.66%) of such Gross Profits during that calendar quarter. Commencing with the Effective Date, in the event that there are negative Gross Profits for a particular AquaBounty Product in any calendar quarter, neither AquaBounty nor Intrexon shall owe any payments hereunder with respect to such AquaBounty Product. Any negative Gross Profits for a given AquaBounty Product, including any that result from Excess Product Liability Costs, may be carried forward to future quarters and offset against positive Gross Profits in such future quarters for the same AquaBounty Product. Except as set forth in the preceding sentence, AquaBounty shall not be permitted to carry forward any negative Gross Profits to subsequent quarters.

(b) No later than thirty (30) days after each calendar quarter in which AquaBounty or any AquaBounty Affiliate receives Sublicensing Revenue, AquaBounty shall pay to Intrexon fifty percent (50%) of such Sublicensing Revenue.

5.2 Method of Payment . Payments due to Intrexon under this Agreement shall be paid in United States dollars by wire transfer to a bank in the United States designated in writing by Intrexon. All references to “dollars” or “$” herein shall refer to United States dollars.

 

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5.3 Payment Reports and Records Retention . Within thirty (30) days after the end of each calendar quarter during which Gross Profits have been generated, during which Sublicensing Revenue has been received, or during which negative Gross Profits have occurred, AquaBounty shall deliver to Intrexon a written report that shall contain at a minimum for the applicable calendar quarter:

(a) gross sales of each AquaBounty Product on a country-by-country basis;

(b) itemized calculation of Gross Profits, showing all applicable COGS deductions;

(c) itemized calculation of Sublicensing Revenue;

(d) the amount of any negative Gross Profits for the applicable calendar quarter, and any negative Gross Profits amount carried forward from a prior quarter and applied during the present quarter (as per Section 5.1(a));

(e) the amount of the payment (if any) due pursuant to each of Sections 5.1(a) and 5.1(b);

(f) the amount of taxes, if any, withheld to comply with any applicable law; and

(g) the exchange rates used in any of the foregoing calculations.

For three (3) years after each sale of AquaBounty Product, or after incurring any component item AquaBounty incorporated into its calculation of Sublicensing Revenues, Gross Profits or COGS as reported to Intrexon, AquaBounty shall keep (and shall ensure that its Affiliates and, if applicable, (sub)licensees shall keep) complete and accurate records of such sales or component item in sufficient detail to confirm the accuracy of the payment calculations hereunder.

5.4 Audits .

(a) Upon no less than thirty (30) days’ prior written request from Intrexon, AquaBounty shall permit an independent certified public accounting firm of internationally recognized standing selected by Intrexon, and reasonably acceptable to AquaBounty, to have access to and to review, during normal business hours and upon no less than thirty (30) days’ prior written notice, the applicable records of AquaBounty and, if applicable, its Affiliates to verify the accuracy and timeliness of the reports and payments made by AquaBounty under this Agreement. Such review may cover the records for sales made in any calendar year ending not more than three (3) years prior to the date of such request, provided that such records for any given year are not subject to re-review in a subsequent audit for the same AquaBounty Product. The accounting firm shall disclose to both Parties whether the royalty reports and/or know-how reports conform to the provisions of this Agreement and/or US GAAP, as applicable, and the specific details concerning any discrepancies. Such audit may not be conducted more than once in any calendar year.

 

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(b) If such accounting firm concludes that additional amounts were owed during such period, AquaBounty shall pay additional amounts, with interest from the date originally due as set forth in Section 5.6, within thirty (30) days of receipt of the accounting firm’s written report. If the amount of the underpayment is greater than five percent (5%) of the total amount actually owed for the period audited, then AquaBounty shall in addition reimburse Intrexon for all costs related to such audit; otherwise, Intrexon shall pay all costs of the audit. In the event of overpayment, any amount of such overpayment shall be fully creditable against amounts payable for the immediately succeeding calendar quarter(s).

(c) Intrexon shall (i) treat all information that it receives under this Section 5.4 in accordance with the confidentiality provisions of Article 7 and (ii) cause its accounting firm to enter into a confidentiality agreement with and acceptable to AquaBounty, such confidentiality agreement obligating such firm to retain all such financial information in confidence pursuant to such confidentiality agreement, in each case except to the extent necessary for Intrexon to enforce its rights under this Agreement.

5.5 Taxes . The Parties will cooperate in good faith to obtain the benefit of any relevant tax treaties to minimize as far as reasonably possible any taxes which may be levied on any amounts payable hereunder. AquaBounty shall deduct or withhold from any payments any taxes that it is required by applicable law to deduct or withhold. Notwithstanding the foregoing, if Intrexon is entitled under any applicable tax treaty to a reduction of the rate of, or the elimination of, applicable withholding tax, it may deliver to AquaBounty or the appropriate governmental authority (with the assistance of AquaBounty to the extent that this is reasonably required and is expressly requested in writing) the prescribed forms necessary to reduce the applicable rate of withholding or to relieve AquaBounty of its obligation to withhold tax, and AquaBounty shall apply the reduced rate of withholding tax, or dispense with withholding tax, as the case may be, provided that AquaBounty has received evidence of Intrexon’s delivery of all applicable forms (and, if necessary, its receipt of appropriate governmental authorization) at least fifteen (15) days prior to the time that the payment is due. If, in accordance with the foregoing, AquaBounty withholds any amount, (a) it shall make timely payment to the proper taxing authority of the withheld amount, and send to Intrexon proof of such payment within forty-five (45) days following that latter payment, and (b) Intrexon agrees to indemnify and hold harmless AquaBounty from and against any loss, damage, liability, penalty or expense, including reasonable attorneys’ fees and expenses, which AquaBounty may incur by reason of, or in connection with, any failure to withhold or make payment based upon the instruction of Intrexon.

5.6 Late Payments . Any amount owed by AquaBounty to Intrexon under this Agreement that is not paid within the applicable time period set forth herein shall accrue interest at the lower of (a) two percent (2%) per month, compounded, or (b) the highest rate permitted under applicable law.

 

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ARTICLE 6

I NTELLECTUAL P ROPERTY

6.1 Ownership .

(a) Subject to the license granted under Section 3.1, all rights in the Intrexon IP shall remain with Intrexon.

(b) AquaBounty and/or Intrexon may solely or jointly conceive, reduce to practice or develop discoveries, inventions, processes, techniques, and other technology, whether or not patentable, in the course of performing the Aquaculture Program (collectively “ Inventions ”). Each Party shall promptly provide the other Party with a detailed written description of any such Inventions that relate to the Field. Inventorship shall be determined in accordance with applicable United States patent laws. Except as otherwise provided in this Section 6.1, ownership of Inventions shall be dictated by inventorship.

(c) Intrexon shall solely own all right, title and interest in all Inventions made with, using, or otherwise incorporating Intrexon Channel Technology, together with all Patent rights and other intellectual property rights therein (the “ Channel-Related Program IP ”). AquaBounty hereby assigns all of its right, title and interest in and to the Channel-Related Program IP to Intrexon. AquaBounty agrees to execute such documents and perform such other acts as Intrexon may reasonably request to obtain, perfect and enforce its rights to the Channel-Related Program IP and the assignment thereof.

(d) Notwithstanding anything to the contrary in this Agreement, any discovery, invention, process, technique, or other technology, whether or not patentable, that is conceived, reduced to practice or developed by AquaBounty solely or jointly through the use of the Intrexon Channel Technology, Intrexon IP, or Intrexon Materials in breach of the terms and conditions of this Agreement, together with all patent rights and other intellectual property rights therein, shall be solely owned by Intrexon and shall be included in the Channel-Related Program IP.

(e) All Information regarding Channel-Related Program IP shall be Confidential Information of Intrexon. AquaBounty shall be under appropriate written agreements with each of its employees, contractors, or agents working on the Aquaculture Program, pursuant to which such person shall grant all rights in the Inventions to AquaBounty (so that AquaBounty may convey certain of such rights to Intrexon, as provided herein) and agree to protect all Confidential Information relating to the Aquaculture Program.

6.2 Patent Prosecution .

(a) Intrexon shall have the sole right, but not the obligation, to (i) conduct and control the filing, prosecution and maintenance of the Intrexon Patents, and (ii) conduct and control the filing, prosecution, and maintenance of any applications for patent term extension and/or supplementary protection certificates that may be available as a result of the regulatory approval of any AquaBounty Product. At the reasonable request of Intrexon, AquaBounty shall cooperate with Intrexon in connection with such filing, prosecution, and maintenance, at

 

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Intrexon’s expense. Under no circumstances shall AquaBounty (A) file, attempt to file, or assist anyone else in filing, or attempting to file, any Patent application, either in the United States or elsewhere, that claims or uses or purports to claim or use or relies for support upon an Invention owned by Intrexon, (B) use, attempt to use, or assist anyone else in using or attempting to use, the Intrexon Know-How, Intrexon Materials, or any Confidential Information of Intrexon to support the filing of a Patent application, either in the United States or elsewhere, that contains claims directed to the Intrexon IP, Intrexon Materials, or the Intrexon Channel Technology, or (C) without prior approval of the IPC, file, attempt to file, or assist anyone else in filing, or attempting to file, any application for patent term extension or supplementary protection certificate, either in the United States or elsewhere, that relies upon the regulatory approval of an AquaBounty Product.

(b) AquaBounty shall have the sole right, but not the obligation, to conduct and control the filing, prosecution and maintenance of any Patents claiming Inventions that are owned by AquaBounty or its Affiliates and not assigned to Intrexon under Section 6.1(c) (“ AquaBounty Program Patents ”). At the reasonable request of AquaBounty, Intrexon shall cooperate with AquaBounty in connection with such filing, prosecution, and maintenance, at AquaBounty’s expense. Under no circumstances shall Intrexon (i) file, attempt to file, or assist anyone else in filing, or attempting to file, any Patent application, either in the United States or elsewhere, that claims or uses or purports to claim an Invention owned by AquaBounty, or (ii) without prior approval of the IPC, file, attempt to file, or assist anyone else in filing, or attempting to file, any application for patent term extension or supplementary protection certificate, either in the United States or elsewhere, that relies upon the regulatory approval of an AquaBounty Product.

(c) As used in this Section, “ Prosecuting Party ” means Intrexon in the case of Intrexon Patents and AquaBounty in the case of AquaBounty Program Patents. The Prosecuting Party shall be entitled to use patent counsel selected by it and reasonably acceptable to the non-Prosecuting Party (including in-house patent counsel as well as outside patent counsel) for the prosecution of the Intrexon Patents and AquaBounty Program Patents, as applicable. The Prosecuting Party shall:

(i) regularly provide the other Party in advance with reasonable information relating to the Prosecuting Party’s prosecution of Patents hereunder, including by providing copies of substantive communications, notices and actions submitted to or received from the relevant patent authorities and copies of drafts of filings and correspondence that the Prosecuting Party proposes to submit to such patent authorities (it being understood that, to the extent that any such information is readily accessible to the public, the Prosecuting Party may, in lieu of directly providing copies of such information to such other Party, provide such other Party with sufficient information that will permit such other Party to access such information itself directly);

(ii) consider in good faith and consult with the non-Prosecuting Party regarding its timely comments with respect to the same; provided, however, that if, within fifteen (15) days after providing any documents to the non-Prosecuting Party for comment, the Prosecuting Party does not receive any written communication from the non-Prosecuting Party indicating that it has or may have comments on such document, the Prosecuting Party shall be entitled to assume that the non-Prosecuting Party has no comments thereon;

 

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(iii) consult with the non-Prosecuting Party before taking any action that would reasonably be expected to have a material adverse impact on the scope of claims within the Intrexon Patents and AquaBounty Program Patents, as applicable.

(d) If, for an Invention that (i) comprises Channel-Related Program IP, and (ii) covers an AquaBounty Product in development or Commercialization, Intrexon determines in its discretion to refrain from filing a patent application on such Invention or to abandon (without re-filing) or to discontinue prosecution of (without re-filing) or maintenance of any Intrexon Patent claiming such Invention, Intrexon shall notify AquaBounty in writing, at least thirty (30) days prior to the final, non-extendable date by which any action must be taken to preserve such patent application or Patent, of Intrexon’s determination so as to provide AquaBounty with an opportunity to assume responsibility for such filing, prosecution, or maintenance. If AquaBounty elects to assume, at its sole discretion and expense, such responsibility, AquaBounty shall notify Intrexon in writing to that effect and Intrexon shall cooperate with AquaBounty to effect a smooth transfer of such responsibilities to AquaBounty. Such transfer of responsibility shall not otherwise modify the rights, license and obligations of the Parties hereunder.

6.3 Infringement of Patents by Third Parties .

(a) Except as expressly provided in the remainder of this Section 6.3, Intrexon shall have the sole right to take appropriate action against any person or entity directly or indirectly infringing any Intrexon Patent (or asserting that an Intrexon Patent is invalid or unenforceable) (collectively, “ Infringement ”), either by settlement or lawsuit or other appropriate action.

(b) Notwithstanding the foregoing, AquaBounty shall have the first right, but not the obligation, to take appropriate action to enforce Product-Specific Program Patents against any Infringement that involves a commercially material amount of allegedly infringing activities in the Field (“ Field Infringement ”), either by settlement or lawsuit or other appropriate action. If AquaBounty exercises the foregoing right, Intrexon agrees to be named in any such action if required. If AquaBounty fails to take the appropriate steps to enforce Product-Specific Program Patents against any Field Infringement within one hundred eighty (180) days of the date one Party has provided notice to the other Party pursuant to Section 6.3(g) of such Field Infringement, then Intrexon shall have the right (but not the obligation), at its own expense, to enforce Product-Specific Program Patents against such Field Infringement, either by settlement or lawsuit or other appropriate action.

(c) With respect to any Field Infringement that cannot reasonably be abated through the enforcement of Product-Specific Program Patents pursuant to Section 6.3(b) but can reasonably be abated through the enforcement of Intrexon Patent(s) (other than the Product-Specific Program Patents), Intrexon shall be obligated to choose one of the following courses of action: (i) enforce one or more of the applicable Intrexon Patent(s) in a commercially reasonable manner against such Field Infringement, or (ii) enable AquaBounty to do so directly. To the

 

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extent AquaBounty shall be entitled to a share of the Recovery as set forth in Section 6.3(f), Intrexon and AquaBounty shall bear the costs and expenses of such enforcement equally. The determination of which Intrexon Patent(s) to assert shall be made by Intrexon in its sole discretion after consulting in good faith with AquaBounty on such determination. For the avoidance of doubt, Intrexon has no obligations under this Agreement to enforce any Intrexon Patents against, or otherwise abate, any Infringement that is not a Field Infringement.

(d) In the event a Party pursues an action under this Section 6.3, the other Party shall reasonably cooperate with the enforcing Party with respect to the investigation and prosecution of any alleged, threatened, or actual Infringement, at the enforcing Party’s expense (except with respect to an action under Section 6.3(c), where all costs and expenses will be shared equally in accordance with terms thereof).

(e) AquaBounty shall not settle or otherwise compromise any action under this Section 6.3 in a way that diminishes the rights or interests of Intrexon outside the Field or adversely affects any Intrexon Patent without Intrexon’s prior written consent, which consent shall not be unreasonably withheld. Intrexon shall not settle or otherwise compromise any action under this Section 6.3 in a way that diminishes the rights or interests of AquaBounty in the Field or adversely affects any Intrexon Patent with respect to the Field without AquaBounty’s prior written consent, which consent shall not be unreasonably withheld.

(f) Except as otherwise agreed to by the Parties in writing, any settlements, damages or other monetary awards recovered pursuant to a suit, proceeding, or action brought pursuant to Section 6.3 will be allocated first to the costs and expenses of the Party controlling such action, and second, to the costs and expenses (if any) of the other Party (to the extent not otherwise reimbursed), and any remaining amounts (the “ Recovery ”) will be shared by the Parties as follows: In any action initiated by Intrexon pursuant to Section 6.3(a) that does not involve Field Infringement, or in any action initiated by Intrexon pursuant to Section 6.3(b), Intrexon shall retain one hundred percent (100%) of any Recovery. In any action initiated by AquaBounty pursuant to Section 6.3(b), AquaBounty shall retain one hundred percent (100%) of any Recovery, but such Recovery shall be shared with Intrexon as Sublicensing Revenue. In any action initiated by Intrexon or AquaBounty pursuant to Section 6.3(c), the Parties shall share the Recovery equally, and such Recovery shall not be deemed to constitute Sublicensing Revenue.

(g) AquaBounty shall promptly notify Intrexon in writing of any suspected, alleged, threatened, or actual Infringement of which it becomes aware, and Intrexon shall promptly notify AquaBounty in writing of any suspected, alleged, threatened, or actual Field Infringement of which it becomes aware.

ARTICLE 7

C ONFIDENTIALITY

7.1 Confidentiality . Except to the extent expressly authorized by this Agreement or otherwise agreed in writing by the Parties, each Party agrees that it shall keep confidential and shall not publish or otherwise disclose and shall not use for any purpose other than as provided for in this Agreement any Confidential Information disclosed to it by the other Party pursuant to this Agreement, except to the extent that the receiving Party can demonstrate by competent evidence that specific Confidential Information:

 

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(a) was already known to the receiving Party, as can be demonstrated by written records, other than under an obligation of confidentiality, at the time of disclosure by the other Party;

(b) was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving Party;

(c) became generally available to the public or otherwise part of the public domain after its disclosure other than through any act or omission of the receiving Party in breach of this Agreement;

(d) was disclosed to the receiving Party, other than under an obligation of confidentiality to a Third Party, by a Third Party who had no obligation to the disclosing Party not to disclose such information to others; or

(e) was independently discovered or developed by the receiving Party without the use of Confidential Information belonging to the disclosing Party, as documented by the receiving Party’s written records.

The foregoing non-use and non-disclosure obligation shall continue (i) indefinitely, for all Confidential Information that qualifies as a trade secret under applicable law; or (ii) for the Term of this Agreement and for seven (7) years thereafter, in all other cases.

7.2 Authorized Disclosure . Notwithstanding the limitations in this Article 7, either Party may disclose the Confidential Information belonging to the other Party to the extent such disclosure is reasonably necessary in the following instances:

(a) complying with applicable laws or regulations or valid court orders, provided that the Party making such disclosure provides the other Party with reasonable prior written notice of such request or demand for disclosure and makes a reasonable effort to obtain, or to assist the other Party in obtaining, a protective order preventing or limiting the disclosure and/or requiring that the terms and conditions of this Agreement be used only for the purposes for which the law or regulation required, or for which the order was issued;

(b) to regulatory authorities in order to seek or obtain approval to conduct regulatory trials, or to gain regulatory approval, of AquaBounty Products or any products being developed by Intrexon or its other licensees and/or channel partners or collaborators, provided that the Party making such disclosure (i) provides the other Party with reasonable opportunity to review any such disclosure in advance and to suggest redactions or other means of limiting the disclosure of such other Party’s Confidential Information and (ii) does not unreasonably reject any such suggestions;

 

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(c) disclosure to investors and potential investors, acquirers, or merger candidates who agree to maintain the confidentiality of such information, provided that such disclosure is used solely for the purpose of evaluating such investment, acquisition, or merger (as the case may be);

(d) disclosure on a need-to-know basis to Affiliates, licensees, sublicensees, employees, consultants, advisors, or agents (such as CROs) who agree to be bound by obligations of confidentiality and non-use at least equivalent in scope to those set forth in this Article 7; and

(e) disclosure of the terms of this Agreement by a Party to collaborators and other channel partners or collaborators who agree to be bound by obligations of confidentiality and non-use at least equivalent in scope to those set forth in this Article 7.

7.3 Publicity; Publications . The Parties agree that the public announcement of the execution of this Agreement shall be substantially in the form of a press release and/or the filing of a Form 8-K by AquaBounty, which shall be mutually agreed to by the Parties. Each Party will provide the other Party with the opportunity to review and comment, prior to submission or presentation, on external reports, publications and presentations (e.g., press releases, reports to government agencies, abstracts, posters, manuscripts and oral presentations) that refer to the Aquaculture Program or programs that are approved by the JSC. For such reports, publications, and presentations, the disclosing Party will provide the other Party at least fifteen (15) calendar days for review of the proposed submission or presentation. In the case of a Form 8-K filing, such shall be provided to Intrexon by AquaBounty as soon as practicable prior to filing. For reports and manuscripts, the disclosing Party will provide the other Party at least thirty (30) days for review of the report or manuscript. The presenting Party will act in good faith to incorporate the comments of the other Party and shall, in any event, redact any Confidential Information of the other Party and cooperate with the other Party to postpone such submissions or presentations if necessary to provide the other Party with sufficient time to prepare and file any related Patent applications before the submission or presentation occurs, as appropriate.

7.4 Terms of the Agreement . Each Party shall treat the terms of this Agreement as the Confidential Information of other Party, subject to the exceptions set forth in Section 7.2. Notwithstanding the foregoing, each Party acknowledges that the other Party may be obligated to file a copy of this Agreement with the SEC, either as of the Effective Date or at some point during the Term. Each Party shall be entitled to make such a required filing, provided that it requests confidential treatment of certain commercial terms and sensitive technical terms hereof to the extent such confidential treatment is reasonably available to it. In the event of any such filing, the filing Party shall provide the other Party with a copy of the Agreement marked to show provisions for which the filing Party intends to seek confidential treatment and shall reasonably consider and incorporate the other Party’s comments thereon to the extent consistent with the legal requirements governing redaction of information from material agreements that must be publicly filed. The other Party shall promptly provide any such comments.

7.5 Proprietary Information and Operational Audits .

(a) For the purpose of confirming compliance with the Field-limited licenses granted in Article 3, the diligence obligations of Article 4, and the confidentiality obligations under Article 7, AquaBounty acknowledges that Intrexon’s authorized representative(s), during

 

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regular business hours may (i) examine and inspect AquaBounty’s facilities and (ii) inspect all data and work products relating to this Agreement, subject to restrictions imposed by applicable laws. Any examination or inspection hereunder shall require five (5) business days written notice from Intrexon to AquaBounty. AquaBounty will make itself and the pertinent employees and/or agents available, on a reasonable basis, to Intrexon for the aforementioned compliance review.

(b) For the purpose of confirming compliance with the diligence obligations of Section 4.6, and the confidentiality obligations under Article 7, Intrexon acknowledges that AquaBounty authorized representative(s), during regular business hours may (i) examine and inspect Intrexon’s facilities and (ii) inspect all data and work products relating to this Agreement. Any examination or inspection hereunder shall require five (5) business days written notice from AquaBounty to Intrexon. Intrexon will make itself and the pertinent employees and/or agents available, on a reasonable basis, to AquaBounty for the aforementioned compliance review.

(c) In view of the Intrexon Confidential Information, Intrexon Know-How, and Intrexon Materials transferred to AquaBounty hereunder, Intrexon from time-to-time, but no more than quarterly, may request that AquaBounty confirm the status of the Intrexon Materials at AquaBounty (i.e. how much used, how much shipped, to whom and any unused amounts destroyed (by whom, when) as well as any amounts returned to Intrexon or destroyed). Within ten (10) business days of AquaBounty’s receipt of any such written request, AquaBounty shall provide the written report to Intrexon.

7.6 Intrexon Commitment . Intrexon shall use reasonable efforts to obtain an agreement with its other licensees and channel partners or collaborators to enable AquaBounty to disclose confidential information of such licensees and channel partners or collaborators to regulatory authorities in order to seek or obtain approval to conduct regulatory trials, or to gain regulatory approval of, AquaBounty Products, in a manner consistent with the provisions of Section 7.2(b).

ARTICLE 8

R EPRESENTATIONS A ND W ARRANTIES

8.1 Representations and Warranties of AquaBounty . AquaBounty hereby represents and warrants to Intrexon that, as of the Effective Date:

(a) Corporate Power . AquaBounty is duly organized and validly existing under the laws of Delaware and has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof.

(b) Due Authorization . AquaBounty is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder, and the person executing this Agreement on AquaBounty’s behalf has been duly authorized to do so by all requisite corporate action.

 

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(c) Binding Agreement . This Agreement is a legal and valid obligation binding upon AquaBounty and enforceable in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar laws affecting creditors’ rights, and subject to general equity principles and to limitations on availability of equitable relief, including specific performance. The execution, delivery and performance of this Agreement by AquaBounty does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound. AquaBounty is aware of no action, suit or inquiry or investigation instituted by any governmental agency which questions or threatens the validity of this Agreement.

8.2 Representations and Warranties of Intrexon . Intrexon hereby represents and warrants to AquaBounty that, as of the Effective Date:

(a) Corporate Power . Intrexon is duly organized and validly existing under the laws of Virginia and has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof.

(b) Due Authorization . Intrexon is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder, and the person executing this Agreement on Intrexon’s behalf has been duly authorized to do so by all requisite corporate action.

(c) Binding Agreement . This Agreement is a legal and valid obligation binding upon Intrexon and enforceable in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar laws affecting creditors’ rights, and subject to general equity principles and to limitations on availability of equitable relief, including specific performance. The execution, delivery and performance of this Agreement by Intrexon does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound. Intrexon is aware of no action, suit or inquiry or investigation instituted by any governmental agency which questions or threatens the validity of this Agreement.

(d) Additional Intellectual Property Representations .

(i) Intrexon possesses sufficient rights to enable Intrexon to grant all rights and licenses it purports to grant to AquaBounty with respect to the Intrexon Patents under this Agreement;

(ii) The Intrexon Patents existing as of the Effective Date constitute all of the Patents Controlled by Intrexon as of such date that are necessary for the development, manufacture and Commercialization of AquaBounty Products;

(iii) Intrexon has not granted, and during the Term Intrexon will not grant, any right or license, to any Third Party under the Intrexon IP that conflicts with the rights or licenses granted or to be granted to AquaBounty hereunder;

(iv) There is no pending litigation, and Intrexon has not received any written notice of any claims or litigation, seeking to invalidate or otherwise challenge the Intrexon Patents or Intrexon’s rights therein;

 

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(v) None of the Intrexon Patents is subject to any pending re-examination, opposition, interference or litigation proceedings;

(vi) All of the Intrexon Patents have been filed and prosecuted in accordance with all applicable laws and have been maintained, with all applicable fees with respect thereto (to the extent such fees have come due) having been paid;

(vii) Intrexon has entered into agreements with each of its current and former officers, employees and consultants involved in research and development work, including development of Intrexon’s products and technology, providing Intrexon, to the extent permitted by law, with title and ownership to patents, patent applications, trade secrets and inventions conceived, developed, reduced to practice by such person, solely or jointly with other of such persons, during the period of employment or contract by Intrexon (except where the failure to have entered into such an agreement would not have a material adverse effect on the rights granted to AquaBounty herein), and Intrexon is not aware that any of its employees or consultants is in material violation thereof;

(viii) To Intrexon’s knowledge, there is no infringement, misappropriation or violation by third parties of any Intrexon Channel Technology in the Field;

(ix) There is no pending or, to Intrexon’s knowledge, threatened action, suit, proceeding or claim by others against Intrexon that Intrexon infringes, misappropriates or otherwise violates any intellectual property or other proprietary rights of others in connection with the use of the Intrexon Channel Technology, and Intrexon has not received any written notice of such claim;

(x) To Intrexon’s knowledge, no former or current employee or contractor of Intrexon is the subject of any claim or proceeding involving a violation of any term of any contract, patent disclosure agreement, invention assignment agreement, non-competition agreement, non-solicitation agreement, non-disclosure agreement or any restrictive covenant to or with a former employer or other Third Party (A) where the basis of such violation relates to such employee’s employment or contractor’s contractual relationship with Intrexon or actions undertaken by the employee or contractor while employed or under contract, as applicable, with Intrexon and (B) where such violation is relevant to the use of the Intrexon Channel Technology in the Field;

(xi) None of the Intrexon Patents owned by Intrexon or its Affiliates, and, to Intrexon’s knowledge, the Intrexon Patents licensed to Intrexon or its Affiliates, have been adjudged invalid or unenforceable by a court of competent jurisdiction or applicable government agency, in whole or in part, and there is no pending or, to Intrexon’s knowledge, threatened action, suit, proceeding or claim by others challenging the validity or scope of any such Intrexon Patents;

(xii) Except as otherwise disclosed in writing to AquaBounty, Intrexon: (A) is in material compliance with all statutes, rules or regulations applicable to the ownership, testing, development, manufacture, packaging, processing, use, distribution, marketing, labeling, promotion, sale, offer for sale, storage, import, export or disposal of any product that is under

 

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development, manufactured or distributed by Intrexon in the Field (“ Applicable Laws ”); (B) has not received any FDA Form 483, notice of adverse finding, warning letter, untitled letter or other correspondence or notice from the United States Food and Drug Administration (the “ FDA ”) or any other federal, state, local or foreign governmental or regulatory authority alleging or asserting material noncompliance with any Applicable Laws or any licenses, certificates, approvals, clearances, authorizations, permits and supplements or amendments thereto required by any such Applicable Laws (“ Authorizations ”), which would, individually or in the aggregate, result in a material adverse effect; (C) possesses all material Authorizations necessary for the operation of its business as described in the Field and such Authorizations are valid and in full force and effect and Intrexon is not in material violation of any term of any such Authorizations; and (D) since January 1, 2011, (1) has not received notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from the FDA or any other federal, state, local or foreign governmental or regulatory authority or third party alleging that any product operation or activity is in material violation of any Applicable Laws or Authorizations and has no knowledge that the FDA or any other federal, state, local or foreign governmental or regulatory authority or third party is considering any such claim, litigation, arbitration, action, suit investigation or proceeding; (2) has not received notice that the FDA or any other federal, state, local or foreign governmental or regulatory authority has taken, is taking or intends to take action to limit, suspend, modify or revoke any material Authorizations and has no knowledge that the FDA or any other federal, state, local or foreign governmental or regulatory authority is considering such action; (3) has filed, obtained, maintained or submitted all material reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required by any Applicable Laws or Authorizations and that all such reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were materially complete and correct on the date filed (or were corrected or supplemented by a subsequent submission); and (4) has not, either voluntarily or involuntarily, initiated, conducted, or issued or caused to be initiated, conducted or issued, any recall, market withdrawal or replacement, safety alert, post sale warning, letters to customers, or other notice or action relating to the alleged lack of safety or efficacy of any product or any alleged product defect or violation and, to Intrexon’s knowledge, no third party has initiated, conducted or intends to initiate any such notice or action; and

(xiii) Except, in each of (ix) through (xii), for any instances which would not, individually or in the aggregate, result in a material adverse effect on the rights granted to AquaBounty hereunder or Intrexon’s ability to perform its obligations hereunder.

8.3 Warranty Disclaimer . EXCEPT FOR THE EXPRESS WARRANTIES PROVIDED IN THIS ARTICLE 8, EACH PARTY HEREBY DISCLAIMS ANY AND ALL OTHER WARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF TITLE, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

 

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ARTICLE 9

I NDEMNIFICATION

9.1 Indemnification by Intrexon . Intrexon agrees to indemnify, hold harmless, and defend AquaBounty and its Affiliates and their respective directors, officers, employees, and agents (collectively, the “ AquaBounty Indemnitees ”) from and against any and all liabilities, damages, costs, expenses, or losses (including reasonable legal expenses and attorneys’ fees) (collectively, “ Losses ”) resulting from any claims, suits, actions, demands, or other proceedings brought by a Third Party (collectively, “ Claims ”) to the extent arising from (a) the gross negligence or willful misconduct of Intrexon or any of its Affiliates, or their respective employees or agents; (b) the use, handling, storage or transport of Intrexon Materials by or on behalf of Intrexon or its Affiliates, licensees (other than AquaBounty) or sublicensees; or (c) breach by Intrexon of any representation, warranty, covenant, or other material provision in this Agreement. Notwithstanding the foregoing, Intrexon shall not have any obligation to indemnify the AquaBounty Indemnitees to the extent that a Claim arises from (i) the gross negligence or willful misconduct of AquaBounty or any of its Affiliates, licensees, or sublicensees, or their respective employees or agents; or (ii) a breach by AquaBounty of a representation, warranty, covenant, or other material provision of this Agreement.

9.2 Indemnification by AquaBounty . AquaBounty agrees to indemnify, hold harmless, and defend Intrexon, its Affiliates and Third Security, and their respective directors, officers, employees, and agents (and any Third Parties which have licensed to Intrexon intellectual property rights within Intrexon IP on or prior to the Effective Date, to the extent required by the relevant upstream license agreement) (collectively, the “ Intrexon Indemnitees ”) from and against any Losses resulting from Claims, to the extent arising from any of the following: (a) the gross negligence or willful misconduct of AquaBounty or any of its Affiliates or their respective employees or agents; (b) the use, handling, storage, or transport of Intrexon Materials by or on behalf of AquaBounty or its Affiliates, licensees, or sublicensees; (c) breach by AquaBounty of any material representation, warranty, covenant, or other material provision in this Agreement; or (d) the design, development, manufacture, regulatory approval, handling, storage, transport, distribution, sale or other disposition of any AquaBounty Product by or on behalf of AquaBounty or its Affiliates, licensees, or sublicensees. Notwithstanding the foregoing, AquaBounty shall not have any obligation to indemnify the Intrexon Indemnitees to the extent that a Claim arises from (i) the gross negligence or willful misconduct of Intrexon or any of its Affiliates, or their respective employees or agents; or (ii) a breach by Intrexon of a representation, warranty, covenant, or other material provision of this Agreement.

9.3 Product Liability Claims . Notwithstanding the provisions of Section 9.2, any Losses arising out of any Third Party claim, suit, action, proceeding, liability or obligation involving any actual or alleged death or bodily injury arising out of or resulting from the development, manufacture or Commercialization of any AquaBounty Products for use or sale in the Field, to the extent that such Losses exceed the amount (if any) covered by the applicable Party’s product liability insurance (“ Excess Product Liability Costs ”), shall be paid by AquaBounty, except to the extent such Losses arise out of any Third Party Claim based on the gross negligence or willful misconduct of a Party, its Affiliates, or its Affiliates’ sublicensees, or any of the respective officers, directors, employees and agents of each of the foregoing entities, in the performance of obligations or exercise of rights under this Agreement.

 

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9.4 Control of Defense . As a condition precedent to any indemnification obligations hereunder, any entity entitled to indemnification under this Article 9 shall give written notice to the indemnifying Party of any Claims that may be subject to indemnification, promptly after learning of such Claim, provided that, no delay in giving or failure to give notice by the indemnified Party to the indemnifying Party of any Claims that may be subject to indemnification under this Agreement will adversely affect any of the other rights or remedies that the indemnified Party has under this Agreement, or alter or relieve the indemnifying Party of its obligation to indemnify the indemnified Party, except to the extent that the indemnifying Party is prejudiced thereby. If such Claim falls within the scope of the indemnification obligations of this Article 9, then the indemnifying Party shall assume the defense of such Claim with counsel reasonably satisfactory to the indemnified Party, provided that, in the case of a conflict of interest, the indemnified Party may be represented by separate counsel of its choosing at the indemnifying Party’s expense. The indemnified Party shall cooperate with the indemnifying Party in such defense. Except in the case of a conflict as provided above, the indemnified Party may, at its option and expense, be represented by counsel of its choice in any action or proceeding with respect to such Claim. The indemnifying Party shall not be liable for any litigation costs or expenses incurred by the indemnified Party without the indemnifying Party’s written consent, which consent shall not be unreasonably withheld. The indemnifying Party shall not settle any such Claim if such settlement (a) does not fully and unconditionally release the indemnified Party from all liability relating thereto or (b) adversely impacts the exercise of the rights granted to the indemnified Party under this Agreement, unless the indemnified Party otherwise agrees in writing.

9.5 Insurance . Immediately prior to, and during marketing of AquaBounty Products, AquaBounty shall maintain in effect and good standing a product liability insurance policy issued by a reputable insurance company in amounts considered standard for the industry. Immediately prior to, and during the conduct of any regulatory trials, AquaBounty shall maintain in effect and good standing a regulatory trials liability insurance policy issued by a reputable insurance company in amounts considered standard for the industry. At Intrexon’s reasonable request, AquaBounty shall provide Intrexon with all details regarding such policies, including without limitation copies of the applicable liability insurance contracts. AquaBounty shall use commercially reasonable efforts to include Intrexon as an additional insured on any such policies.

ARTICLE 10

T ERM ; T ERMINATION

10.1 Term . The term of this Agreement shall commence upon the Effective Date and shall continue until terminated pursuant to Section 10.2 or 10.3 (the “ Term ”).

 

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10.2 Termination for Material Breach; Termination Under Section 4.4(b)

(a) Either Party shall have the right to terminate this Agreement upon written notice to the other Party if the other Party commits any material breach of any provision of this Agreement that such breaching Party fails to cure within sixty (60) days following written notice from the nonbreaching Party specifying such breach. Notwithstanding the foregoing, if a breach is capable of being cured, but is not reasonably capable of being cured within the sixty (60) day period above, such cure period shall be extended to such time as needed to cure the breach within a reasonable timeframe thereafter if (i) the breaching Party proposed within such relevant cure period a written notice thereof and plan reasonably acceptable to the non-breaching party to cure the breach and, (ii) the breaching Party uses Diligent Efforts to implement such written cure plan.

(b) Intrexon shall have the right to terminate this Agreement under the circumstances set forth in Section 4.4(b) upon written notice to AquaBounty, such termination to become effective (i) sixty (60) days following such written notice unless AquaBounty remedies the circumstances giving rise to such termination within such sixty (60) day period, or (ii) in the event that the Parties have commenced a dispute resolution process pursuant to Section 4.4(b) and Article 11, in accordance with any determination made with respect to termination of this Agreement as part of that proceeding.

(c) Intrexon shall have the right to terminate this Agreement should AquaBounty execute any purported assignment of this Agreement contrary to the prohibitions in Section 12.8, such termination occurring upon Intrexon providing written notice to AquaBounty and becoming effective immediately upon such written notice.

10.3 Termination by AquaBounty . AquaBounty shall have the right to voluntarily terminate this Agreement in its entirety upon ninety (90) days’ written notice to Intrexon at any time. Additionally, AquaBounty has the right to terminate this Agreement within those ninety (90) days if it fails to receive equity financing in an amount of at least six million dollars ($6,000,000) from existing or new shareholders, said amount including any amount received by AquaBounty from Intrexon by way of the Subscription Agreement, dated as of even date herewith, by and between AquaBounty and Intrexon, as may be amended from time to time.

10.4 Effect of Termination . In the event of termination of this Agreement pursuant to Section 10.2 or Section 10.3, the following shall apply:

(a) Retained Products . AquaBounty shall be permitted, but not obligated, to continue the development and Commercialization in the Field of any product resulting from the Aquaculture Program that, at the time of termination, satisfies at least one of the following criteria (a “ Retained Product ”):

(i) the particular product is an AquaBounty Product that is being sold by AquaBounty (or, as may be permitted under this Agreement, its Affiliates and, if applicable, (sub)licensees) triggering profit sharing payments therefor under Section 5.1(a) or (b) of this Agreement,

(ii) the particular product is an AquaBounty Product that has received regulatory approval, or

(iii) the particular product is an AquaBounty Product that is the subject of an application for regulatory approval in the Field, including, but not limited to, a filed application for an Investigational New Animal Drug, that is pending before the applicable regulatory authority.

 

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Such right to continue development and Commercialization shall be subject to AquaBounty’s full compliance with the payment provisions in Article 5, a continuing obligation for AquaBounty to use in accordance with Sections 4.5(a) and 4.5(c) Diligent Efforts to develop and Commercialize any Retained Products, and all other provisions of this Agreement that survive termination.

(b) Termination of Licenses . After the Term, all rights and licenses granted to AquaBounty shall continue only for Retained Products in the Field as permitted by Section 10.4(a), all rights and licenses granted by Intrexon to AquaBounty under this Agreement shall terminate and shall revert to Intrexon without further action by either Intrexon or AquaBounty. AquaBounty’s license with respect to Retained Products shall be exclusive or non-exclusive, as the case may be, on the same terms as set forth in Section 3.1.

(c) Reverted Products . All AquaBounty Products other than the Retained Products shall be referred to herein as the “ Reverted Products .” AquaBounty shall immediately cease, and shall cause its Affiliates and, if applicable, (sub)licensees to immediately cease, all development and Commercialization of the Reverted Products, and AquaBounty shall not use or practice, nor shall it cause or permit any of its Affiliates or, if applicable, (sub)licensees to use or practice, directly or indirectly, any Intrexon IP with respect to the Reverted Products. AquaBounty shall immediately discontinue making any representation regarding its status as a licensee or channel collaborator of Intrexon with respect to the Reverted Products.

(d) Intrexon Materials . AquaBounty shall promptly return, or at Intrexon’s request, destroy, any Intrexon Materials in AquaBounty’s possession or control at the time of termination other than any Intrexon Materials necessary for the continued development, regulatory approval, use, manufacture and Commercialization of the Retained Products in the Field.

(e) Licenses to Intrexon . AquaBounty is automatically deemed to grant to Intrexon a worldwide, fully paid, royalty-free (except for any payment due to Third Parties to license AquaBounty Termination IP, as applicable), exclusive (even as to AquaBounty and its Affiliates), irrevocable license (with full rights to sublicense upon AquaBounty’s prior written consent, which consent shall not be unreasonably withheld) under the AquaBounty Termination IP, to make, have made, import, use, offer for sale and sell Reverted Products and to use the Intrexon Channel Technology, the Intrexon Materials, and/or the Intrexon IP in the Field, subject to any exclusive rights held by AquaBounty in Reverted Products pursuant to Section 10.4(c). The Parties shall also take such actions and execute such other instruments and documents as may be reasonably necessary to document such license to Intrexon. For clarity, with respect to Reverted Products, Intrexon shall be responsible for any license payments due to any Third Party under an AquaBounty license with such Third Party for portions of the AquaBounty Termination IP to the extent that such license payments are attributable to such AquaBounty Termination IP being used by or on behalf of Intrexon in the Commercialization of Reverted Products.

 

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(f) Regulatory Filings . AquaBounty shall promptly assign to Intrexon, and will provide full copies of, all regulatory approvals and regulatory filings that relate specifically and solely to Reverted Products. AquaBounty shall also take such actions and execute such other instruments, assignments and documents as may be necessary to effect the transfer of rights thereunder to Intrexon. To the extent that there exist any regulatory approvals and regulatory filings that relate both to Reverted Products and other products, AquaBounty shall provide copies of the portions of such regulatory filings that relate to Reverted Products and shall reasonably cooperate to assist Intrexon in obtaining the benefits of such regulatory approvals with respect to the Reverted Products.

(g) Data Disclosure . AquaBounty shall provide to Intrexon copies of the relevant portions of all material reports and data, including regulatory trial data and reports, obtained or generated by or on behalf of AquaBounty or its Affiliates to the extent that they relate to Reverted Products, within sixty (60) days of such termination unless otherwise agreed, and Intrexon shall have the right to use any such Information in developing and Commercializing Reverted Products and to license any Third Parties to do so.

(h) Third Party Licenses . At Intrexon’s request, AquaBounty shall promptly provide to Intrexon copies of all Third Party agreements under which AquaBounty or its Affiliates obtained a license under Patents claiming inventions or know-how specific to or used or incorporated into the development, manufacture and/or Commercialization of the Reverted Products. At Intrexon’s request such that Intrexon may Commercialize the Reverted Products, AquaBounty shall promptly work with Intrexon to either, as appropriate, (i) assign to Intrexon the Third Party agreement(s), or (ii) grant a sublicense (with an appropriate scope) to Intrexon under the Third Party agreement(s). Thereafter Intrexon shall be fully responsible for all obligations due for its actions under the sublicensed or assigned Third Party agreements. Notwithstanding the above, if Intrexon does not wish to assume any financial or other obligations associated with a particular Third Party agreement identified to Intrexon under this Section 10.4(h), then Intrexon shall so notify AquaBounty and AquaBounty shall not make such assignment or grant such sublicense (or cause it to be made or granted).

(i) Remaining Materials . At the request of Intrexon, AquaBounty shall transfer to Intrexon all quantities of Reverted Product (including final products or work-in-process) in the possession of AquaBounty or its Affiliates. AquaBounty shall transfer to Intrexon all such quantities of Reverted Products without charge, except that Intrexon shall pay the reasonable costs of shipping.

(j) Third Party Vendors . At Intrexon’s request, AquaBounty shall promptly provide to Intrexon copies of all agreements between AquaBounty or its Affiliates and Third Party suppliers, vendors, or distributors that relate to the supply, sale, or distribution of Reverted Products in the Territory. At Intrexon’s request, AquaBounty shall promptly: (i) with respect to such Third Party agreements relating solely to the applicable Reverted Products and permitting assignment without consent of such Third Party, immediately assign (or cause to be assigned), such agreements to Intrexon, and (ii) with respect to all other such Third Party agreements, AquaBounty shall use its commercially reasonable efforts to assist Intrexon in obtaining the benefits of such agreements. AquaBounty shall be liable for any costs associated with assigning a Third Party agreement to Intrexon or otherwise obtaining the benefits of such agreement for Intrexon, to the extent such costs are directly related to AquaBounty’s breach. For the avoidance of doubt, Intrexon shall have no obligation to assume any of AquaBounty’s obligations under any Third Party agreement.

 

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(k) Commercialization . Intrexon shall have the right to develop and Commercialize the Reverted Products itself or with one or more Third Parties, and shall have the right, without obligation to AquaBounty, to take any such actions in connection with such activities as Intrexon (or its designee), at its discretion, deems appropriate.

(l) Confidential Information . Each Party shall promptly return, or at the other Party’s request destroy, any Confidential Information of the other Party in such Party’s possession or control at the time of termination; provided, however, that each Party shall be permitted to retain (i) a single copy of each item of Confidential Information of the other Party in its confidential legal files for the sole purpose of monitoring and enforcing its compliance with Article 7, (ii) Confidential Information of the other Party that is maintained as archive copies on the recipient Party’s disaster recovery and/or information technology backup systems, or (iii) Confidential Information of the other Party necessary to exercise such Party’s rights in Retained Products (in the case of AquaBounty) or Reverted Products (in the case of Intrexon). The recipient of Confidential Information shall continue to be bound by the terms and conditions of this Agreement with respect to any such Confidential Information retained in accordance with this Section 10.4(l).

10.5 Surviving Obligations . Termination or expiration of this Agreement shall not affect any rights of either Party arising out of any event or occurrence prior to termination, including, without limitation, any obligation of AquaBounty to pay any amount which became due and payable under the terms and conditions of this Agreement prior to expiration or such termination. The following portions of this Agreement shall survive termination or expiration of this Agreement: Sections 3.1 (as applicable with respect to 10.4(b)), 5.2, 5.4, 6.1, 6.2 (with subsection (c) surviving only to the extent relating to Intrexon Patents that are relevant to Retained Products that, to Intrexon’s knowledge, are being developed or Commercialized at such time, if any), 7.1, 7.2, 7.4, 7.5, 10.4, and 10.5; Articles 9, 11, and 12; and any relevant definitions in Article 1. Further, Article 7 and Sections 4.4(a), 4.4(c), 5.1 through 5.5, and 9.4 will survive termination of this Agreement to the extent there are applicable Retained Products.

ARTICLE 11

D ISPUTE R ESOLUTION

11.1 Disputes . It is the objective of the Parties to establish procedures to facilitate the resolution of disputes arising under this Agreement in an expedient manner by mutual cooperation and without resort to litigation. In the event of any disputes, controversies or differences which may arise between the Parties out of or in relation to or in connection with this Agreement (other than disputes arising from a Committee, except for disputes at the IPC with respect to Product-Specific Program Patents, as provided in Section 2.4(b)), including, without limitation, any alleged failure to perform, or breach, of this Agreement, or any issue relating to the interpretation or application of this Agreement, then upon the request of either Party by written notice, the Parties agree to meet and discuss in good faith a possible resolution thereof,

 

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which good faith efforts shall include at least one in-person meeting between the Executive Officers of each Party. If the matter is not resolved within thirty (30) days following the written request for discussions, either Party may then invoke the provisions of Section 11.2. For the avoidance of doubt, any disputes, controversies or differences arising from a Committee pursuant to Article 2 shall be resolved solely in accordance with Section 2.4.

11.2 Arbitration . Any dispute, controversy, difference or claim which may arise between the Parties and not from a Committee, out of or in relation to or in connection with this Agreement (including, without limitation, arising out of or relating to the validity, construction, interpretation, enforceability, breach, performance, application or termination of this Agreement) that is not resolved pursuant to Section 11.1 shall, subject to Section 11.10, be settled by binding “baseball arbitration” as follows. Either Party, following the end of the thirty (30) day period referenced in Section 11.1, may refer such issue to arbitration by submitting a written notice of such request to the other Party, with the arbitration to be held in the state where the other Party’s principal office is located (or some other place as may be mutually agreed by the Parties). Promptly following receipt of such notice, the Parties shall meet and discuss in good faith and choose one arbitrator from a list of arbitrators provided by the American Arbitration Association in accordance with its Commercial Arbitration Rules (the “ AAA Rules ”) as being suitable to arbitrate the Parties’ dispute. The Parties agree that the chosen arbitrator shall be neutral and independent of both Parties and all of their respective Affiliates, and shall have significant experience and expertise in licensing and partnering agreements in the biotechnology industry and concerning related intellectual property rights (as appropriate in light of the subject matter of the Parties’ disputed issues), and shall have some experience in mediating or arbitrating issues relating to such agreements and/or related intellectual property rights. The AAA Rules shall govern the arbitration between the Parties, except as set forth in, and to the extent not inconsistent with, this Section 11.2. Within fifteen (15) days after an arbitrator is selected, each Party will deliver to both the arbitrator and the other Party a detailed written proposal setting forth its proposed terms for the resolution for the matter at issue (the “ Proposed Terms ” of the Party) and a memorandum (the “ Support Memorandum ”) in support thereof. The Parties will also provide the arbitrator a copy of this Agreement, as it may be amended at such time. Within fifteen (15) days after receipt of the other Party’s Proposed Terms and Support Memorandum, each Party may submit to the arbitrator (with a copy to the other Party) a response to the other Party’s Support Memorandum. Neither Party may have any other communications (either written or oral) with the arbitrator other than for the sole purpose of engaging the arbitrator or as expressly permitted in this Section 11.2; provided that, the arbitrator may convene a hearing if the arbitrator so chooses to ask questions of the Parties and hear oral argument and discussion regarding each Party’s Proposed Terms. Within sixty (60) days after the arbitrator’s appointment, the arbitrator will select one of the two Proposed Terms (without modification) provided by the Parties that he or she believes is most consistent with the intention underlying and agreed principles set forth in this Agreement. The decision of the arbitrator shall be final, binding, and unappealable. For clarity, the arbitrator must select as the only method to resolve the matter at issue one of the two sets of Proposed Terms, and may not combine elements of both Proposed Terms or award any other relief or take any other action.

11.3 Governing Law . This Agreement shall be governed by and construed under the substantive laws of the State of New York, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.

 

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11.4 Award . Any award to be paid by one Party to the other Party as determined by the arbitrator as set forth above under Section 11.2 shall be promptly paid in United States dollars free of any tax, deduction or offset; and any costs, fees or taxes incident to enforcing the award shall, to the maximum extent permitted by law, be charged against the losing Party. Each Party agrees to abide by the award rendered in any arbitration conducted pursuant to this Article 11, and agrees that, subject to the United States Federal Arbitration Act, 9 U.S.C. §§ 1-16, judgment may be entered upon the final award in any United States District Court located in New York and that other courts may award full faith and credit to such judgment in order to enforce such award. The award shall include interest from the date of any damages incurred for breach of the Agreement, and from the date of the award until paid in full, at a rate fixed by the arbitrator. With respect to money damages, nothing contained herein shall be construed to permit the arbitrator or any court or any other forum to award consequential, incidental, special, punitive or exemplary damages. By entering into this agreement to arbitrate, the Parties expressly waive any claim for consequential, incidental, special, punitive or exemplary damages. The only damages recoverable under this Agreement are direct compensatory damages.

11.5 Costs . Each Party shall bear its own legal fees. The arbitrator shall assess his or her costs, fees and expenses against the Party losing the arbitration.

11.6 Injunctive Relief . Nothing in this Article 11 will preclude either Party from seeking equitable relief or interim or provisional relief from a court of competent jurisdiction, including a temporary restraining order, preliminary injunction or other interim equitable relief, concerning a dispute either prior to or during any arbitration if necessary to protect the interests of such Party or to preserve the status quo pending the arbitration proceeding. Specifically, the Parties agree that a material breach by either Party of its obligations in Section 3.5 or Article 7 of this Agreement may cause irreparable harm to the other Party, for which damages may not be an adequate remedy. Therefore, in addition to its rights and remedies otherwise available at law, including, without limitation, the recovery of damages for breach of this Agreement, upon an adequate showing of material breach of such Section 3.5 or Article 7, and without further proof of irreparable harm other than this acknowledgement, such non-breaching Party shall be entitled to seek (a) immediate equitable relief, specifically including, but not limited to, both interim and permanent restraining orders and injunctions, without bond, and (b) such other and further equitable relief as the court may deem proper under the circumstances. For the avoidance of doubt, nothing in this Section 11.6 shall otherwise limit a breaching Party’s opportunity to cure a material breach as permitted in accordance with Section 10.2.

11.7 Confidentiality . The arbitration proceeding shall be confidential and the arbitrator shall issue appropriate protective orders to safeguard each Party’s Confidential Information. Except as required by law, no Party shall make (or instruct the arbitrator to make) any public announcement with respect to the proceedings or decision of the arbitrator without prior written consent of the other Party. The existence of any dispute submitted to arbitration, and the award, shall be kept in confidence by the Parties and the arbitrator, except as required in connection with the enforcement of such award or as otherwise required by applicable law.

 

39


11.8 Survivability . Any duty to arbitrate under this Agreement shall remain in effect and be enforceable after termination of this Agreement for any reason.

11.9 Jurisdiction . For the purposes of this Article 11, the Parties acknowledge their diversity and agree to accept the non-exclusive jurisdiction of any United States District Court located in the Southern District of New York for the purposes of enforcing or appealing any awards entered pursuant to this Article 11 and for enforcing the agreements reflected in this Article 11.

11.10 Patent Disputes . Notwithstanding any other provisions of this Article 11, and subject to the provisions of Section 6.2, any dispute, controversy or claim relating to the scope, validity, enforceability or infringement of any Intrexon Patents shall be submitted to a court of competent jurisdiction in the country in which such Patent was filed or granted.

ARTICLE 12

G ENERAL P ROVISIONS

12.1 Use of Name . No right, express or implied, is granted by this Agreement to either Party to use in any manner the name of the other or any other trade name or trademark of the other in connection with the performance of this Agreement, except that (a) either Party may use the name of the other Party as required by regulations and in press releases accompanying quarterly and annual earnings reports approved by the issuer’s Board of Directors, and (b) AquaBounty may use the Intrexon Trademarks in accordance with licenses and restrictions set forth herein.

12.2 LIMITATION OF LIABILITY . EXCEPT FOR FRAUD, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR INDIRECT DAMAGES ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS PARAGRAPH IS INTENDED TO LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF ANY PARTY UNDER ARTICLE 9, OR DAMAGES AVAILABLE FOR BREACHES OF THE OBLIGATIONS SET FORTH IN ARTICLE 7.

12.3 Independent Parties . The Parties are not employees or legal representatives of the other Party for any purpose. Neither Party shall have the authority to enter into any contracts in the name of or on behalf of the other Party. This Agreement shall not constitute, create, or in any way be interpreted as a joint venture, partnership, or business organization of any kind.

12.4 Notice . All notices, including notices of address change, required or permitted to be given under this Agreement shall be in writing and deemed to have been given (a) when delivered if personally delivered or sent by facsimile (provided that the party providing such notice promptly confirms receipt of such transmission with the other party by telephone), (b) on the business day after dispatch if sent by a nationally-recognized overnight courier and (c) on the third business day following the date of mailing if sent by certified mail, postage prepaid, return receipt requested. All such communications shall be sent to the address or facsimile number set forth below (or any updated addresses or facsimile number communicated to the other Party in writing in accordance with this Section 12.4):

 

40


 

If to Intrexon:

  

Intrexon Corporation

20358 Seneca Meadows Parkway

Germantown, MD 20876

Attention: President, Animal Sciences Division

Fax: (301) 556-9901

 

with a copy to:

  

Intrexon Corporation

20358 Seneca Meadows Parkway

Germantown, MD 20876

Attention: Legal Department

Fax: (301) 556-9902

 

If to AquaBounty:

  

AquaBounty Technologies, Inc.

Two Clock Tower Place, Suite 395

Maynard, MA 01754

Attention: Chief Executive Officer

Fax: (978) 897-3217

12.5 Severability . In the event any provision of this Agreement is held to be invalid or unenforceable, the valid or enforceable portion thereof and the remaining provisions of this Agreement will remain in full force and effect.

12.6 Waiver . Any waiver (express or implied) by either Party of any breach of this Agreement shall not constitute a waiver of any other or subsequent breach.

12.7 Entire Agreement; Amendment . This Agreement, including any exhibits attached hereto, constitutes the entire, final, complete and exclusive agreement between the Parties and supersede all previous agreements or representations, written or oral, with respect to the subject matter of this Agreement (including any prior confidentiality agreement between the Parties). All information of Intrexon or AquaBounty to be kept confidential by the other Party under any prior confidentiality agreement, as of the Effective Date, shall be maintained as Confidential Information by such other Party under the obligations set forth in Article 7 of this Agreement. This Agreement may not be modified or amended except in a writing signed by a duly authorized representative of each Party.

12.8 Non-assignability; Binding on Successors . Any attempted assignment of the rights or delegation of the obligations under this Agreement shall be void without the prior written consent of the non-assigning or non-delegating Party; provided, however, that either Party may assign its rights or delegate its obligations under this Agreement without such consent (a) to an Affiliate of such Party or (b) to its successor in interest in connection with any merger, acquisition, consolidation, corporate reorganization, or similar transaction, or sale of all or substantially all of its assets, provided that such assignee agrees in writing to assume and be

 

41


bound by the assignor’s obligations under this Agreement. This Agreement shall be binding upon, and inure to the benefit of, the successors, executors, heirs, representatives, administrators and permitted assigns of the Parties. Notwithstanding the foregoing, in the event that either Party assigns this Agreement to its successor in interest by way of merger, acquisition, consolidation, corporate reorganization, or similar transaction, or sale of all or substantially all of its assets (whether this Agreement is actually assigned or is assumed by such successor in interest or its affiliate by operation of law (e.g., in the context of a reverse triangular merger)), the intellectual property rights of such successor in interest or any of its Affiliates other than those licensed in this Agreement shall be automatically excluded from the rights licensed to the other Party under this Agreement.

12.9 Force Majeure . Neither Party shall be liable to the other for its failure to perform any of its obligations under this Agreement, except for payment obligations, during any period in which such performance is delayed because rendered impracticable or impossible due to circumstances beyond its reasonable control, including without limitation earthquakes, governmental regulation, fire, flood, labor difficulties, civil disorder, acts of terrorism and acts of God, provided that the Party experiencing the delay promptly notifies the other Party of the delay.

12.10 No Other Licenses . Neither Party grants to the other Party any rights or licenses in or to any intellectual property, whether by implication, estoppel, or otherwise, except to the extent expressly provided for under this Agreement.

12.11 Non-Solicitation . During the Term and for a period of one (1) year following the end of the Term, neither AquaBounty nor Intrexon may directly or indirectly solicit in order to offer to employ, engage in any discussion regarding employment with, or hire any employee of the other Party or an individual who was employed by the other party within one (1) year prior to such solicitation, discussion, or hire, without the prior approval of such other Party. General employment solicitations or advertisements shall not be considered direct or indirect solicitations, and the hiring of any employee as a result of such general solicitations or advertisements is not prohibited under this Agreement.

12.12 Legal Compliance . The Parties shall review in good faith and cooperate in taking such actions to ensure compliance of this Agreement with all applicable laws.

12.13 Counterparts . This Agreement may be executed in any number of counterparts (including by facsimile, PDF, or other means of electronic communication), each of which will be deemed an original and, when taken together, will constitute one and the same instrument, and any of the Parties hereto may execute this Agreement by signing any such counterpart.

[Remainder of page intentionally left blank.]

 

42


I N W ITNESS W HEREOF , the Parties hereto have duly executed this Exclusive Channel Collaboration Agreement.

 

I NTREXON C ORPORATION     A QUA B OUNTY T ECHNOLOGIES , I NC .
By:  

/s/ Thomas R. Kasser

    By:  

/s/ David Frank

Name:   Thomas R. Kasser     Name:   David Frank
Title:   Senior Vice President     Title:   Chief Financial Officer and Secretary

SIGNATURE PAGE FOR EXCLUSIVE CHANNEL COLLABORATION AGREEMENT

Exhibit 10.9

D ATED 14 F EBRUARY 2013

(1) A QUA B OUNTY T ECHNOLOGIES , I NC .

(2) T HE INVESTORS LISTED ON E XHIBIT  A HERETO

SUBSCRIPTION AGREEMENT


CONTENTS

 

Clause        Page  
1.  

Definitions and Interpretation

     1   
2.  

Subscription

     6   
3.  

Termination

     8   
4.  

Company Warranties

     9   
5.  

Investor Warranties

     10   
6.  

Participation by Shareholders

     13   
7.  

Assignment

     13   
8.  

Applicable Law and Jurisdiction

     14   
9.  

General

     14   
10.  

Notices

     16   

Exhibit A


THIS SUBSCRIPTION AGREEMENT (this “ Agreement ”) is made on 14 February 2013

BETWEEN:

 

(1) AQUABOUNTY TECHNOLOGIES, INC. , incorporated and registered in the state of Delaware, USA with registered number 2282110 and whose principal place of business is at Two Clock Tower Place, Suite 395, Maynard, MA 01754 USA (the “ Company ”); and

 

(2) Each of the investors listed on Exhibit A hereto (each an “ Investor ” and, collectively, the “ Investors ”).

WHEREAS:

The Investors have agreed to subscribe for the New Shares (as defined below) in the capital of the Company and the parties have agreed to regulate the terms of the Subscription (as defined below) on the terms and conditions of this Agreement.

IT IS AGREED as follows:

 

1. DEFINITIONS AND INTERPRETATION

 

1.1 The following words and expressions where used in this Agreement have the meanings given to them below:

Admission shall have the meaning given to it in clause 2.1.3 of this Agreement.

Admission Condition shall have the meaning given to it in clause 2.2 of this Agreement.

Aggregate Subscription Amount means the sum of $6,000,000, being the aggregate subscription price payable by the Investors for the New Shares.

Agreement shall have the meaning given to it in the preamble of this Agreement.

AIM means AIM, a market operated by the London Stock Exchange.

AIM Rules means the AIM Rules for Companies published by the London Stock Exchange.

Authorities shall have the meaning given to it in clause 5.1 of Schedule 1 of this Agreement.

Board means the board of directors of the Company from time to time.


Business Day means any day other than a Saturday, Sunday or English bank or public holiday.

Bylaws means the corporate bylaws of the Company in effect as at the date of this Agreement.

Certificate of Incorporation means the amended and restated certificate of incorporation of the Company, as amended.

Circular shall have the meaning given to it in clause 2.5 of this Agreement.

Common Shares means the shares of common stock, par value one tenth of one cent ($0.001) per share of the Company.

Companies Act means the Companies Act 2006.

Company shall have the meaning given to it in the preamble of this Agreement.

Completion means completion of the Subscription, (subject to the full satisfaction of the Conditions) in accordance with clause 2.12.

Completion Date means the date on which Completion occurs.

Conditions means the conditions to Completion set out in clause 2.1.

Copyright means copyright, which includes all rights in computer software and in databases and all rights or forms of protection which have equivalent or similar effect to the foregoing and which subsist anywhere in the world.

Directors means the directors of the Company from time to time.

FSA means the Financial Services Authority.

FSMA means the Financial Services and Markets Act 2000.

Group means the Company and any company which is a subsidiary undertaking of the Company from time to time and references to “ Group Company ” and “ member of the Group ” shall be construed accordingly.

Intellectual Property Rights includes patents, inventions, Know-How, trade secrets and other confidential information, registered designs, Copyright, database rights, design rights, rights affording equivalent protection to copyright, database rights and design rights, topography rights, trade marks, service marks, business names, trade names, domain names, registration of an application to register any of the aforesaid items, rights to sue for passing-off and rights in the nature of any of the aforesaid items in any country.


International Jurisdiction means a country other than the United States.

International Securities Laws means, in respect of each and every offer or sale of New Shares, any securities laws having application to an Investor and the Subscription other than the laws of the USA and all regulatory notices, orders, rules, regulations, policies and other instruments incident thereto.

Intrexon means Intrexon Corporation, a Virginia corporation.

Investor shall have the meaning given to it in the preamble of this Agreement.

Investor Representatives shall have the meaning given to it in clause 5.1.1 of this Agreement.

Investor Warranties means the warranties set out in clause 5.

Know-How means inventions, discoveries, improvement, processes, formulae, techniques, specifications, technical information, methods, tests, reports, component lists, manuals, instructions, drawings and information relating to customers and suppliers (whether written, unwritten or in any other form and whether confidential or not).

London Stock Exchange means London Stock Exchange plc.

Mandatory Offer Waiver means a waiver of the requirement under paragraph 7(b) of the Certificate of Incorporation that a person who is an Offeror makes an Offer as a consequence of (i) the Subscription or (ii) a related transaction prior to the Subscription, made pursuant to paragraph 7(n) of the Certificate of Incorporation by way of independent vote or consent of a majority of all Shareholders with voting rights other than those Shareholders who would be an Offeror under paragraph 7(b) of the Certificate of Incorporation had the requirement to make an Offer thereunder not been waived.

New Shares means the 22,883,295 Common Shares in the capital of the Company to be subscribed by the Investors under the terms of this Agreement.

Notice has the meaning set forth in clause 9.1.

Offer shall be as defined in the Certificate of Incorporation.

Offeror shall be as defined in the Certificate of Incorporation.


Participating Shareholder has the meaning set forth in clause 6.

Pre-Completion means the satisfaction of the conditions and obligations set forth in clauses 2.7 to 2.10 (inclusive).

Prospectus Rules means the Prospectus Rules made by the Financial Services Authority under Part VI of the FSMA.

Publicly Announced means the making by the Company of an announcement on a Regulatory Information Service provided by the London Stock Exchange, within the 6 month period immediately preceding the date of this Agreement.

Purchased Shares means, with respect to each Investor, the number of New Shares for which such Investor is subscribing pursuant to this Agreement, as set forth opposite such Investor’s name on Exhibit A .

Resolutions means the resolutions of the Shareholders of the Company in the approved terms, inter alia , waiving the application of the pre-emption rights contained in Section 4(c) of the Certificate of Incorporation, approving the Mandatory Offer Waiver and waiving the application of Section 4(d) of the Certificate of Incorporation.

Securities Act means the U.S. Securities Act of 1933, as amended.

Share means any share in or of capital stock issued by the Company from time to time.

Share Price means $0.2622 per share.

Shareholder means any holder of any Share from time to time.

Subscription means the subscription by the Investors for the New Shares in accordance with the terms of this Agreement.

Subscription Amount means, with respect to each Investor, the amount listed on Exhibit A , which is a product of such Investor’s Purchased Shares, multiplied by the Share Price.

Terminating Investor shall have the meaning given to it in clause 3.3 of this Agreement.

Terminating Investor Shares shall have the meaning given to it in clause 3.4 of this Agreement.


US Laws shall have the meaning given to it in clause 3.1 of Schedule 1 of this Agreement.

USA or U.S. means the United States of America.

Warranties means the warranties and representations set out in Schedule 1 of this Agreement.

 

1.2 Unless the context otherwise requires, words and expressions defined in or having a meaning provided by the Companies Act shall have the same meaning in this Agreement.

 

1.3 Unless the context otherwise requires, references in this Agreement to:

 

  1.3.1 any of the masculine, feminine and neuter genders shall include other genders;

 

  1.3.2 the singular shall include the plural and vice versa;

 

  1.3.3 a person shall include a reference to any natural person, body corporate, unincorporated association, partnership, firm and trust;

 

  1.3.4 any statute or statutory provision shall be deemed to include any instrument, order, regulation or direction made or issued under it and shall be construed as a reference to the same as it may have been, or may from time to time be, amended, modified, consolidated, re-enacted or replaced except to the extent that any amendment or modification made after the date of this Agreement would increase any liability or impose any additional obligation under this Agreement;

 

  1.3.5 any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall, in respect of any jurisdiction other than that of England, be deemed to include what most nearly approximates in that jurisdiction to the English legal term; and

 

  1.3.6 any time or date shall be construed as a reference to the time or date prevailing in England.

 

1.4 The headings in this Agreement are for convenience only and shall not affect its meaning. References to a clause, Schedule, Exhibit or paragraph are (unless otherwise stated) to a clause or paragraph of, or Schedule or Exhibit to, this Agreement. The Schedules and Exhibits form part of this Agreement and shall have the same force and effect as if expressly set out in the body of this Agreement.

 

1.5 A document expressed to be “ in the approved terms ” means a document, the terms of which have been approved by the parties to the Agreement and a copy of which has been identified as such and initialled by or on behalf of each such party.


1.6 In construing this Agreement, general words introduced by the word “ other ” shall not be given a restrictive meaning by reason of the fact that they are preceded by words indicating a particular class of acts, matters or things and general words shall not be given a restrictive meaning by reason of the fact that they are followed by particular examples intended to be embraced by the general words.

 

2. SUBSCRIPTION

Conditions

 

2.1 Subject to clause 3, Completion shall be conditional in all respects on:

 

  2.1.1 the passing of the Resolutions;

 

  2.1.2 the obtaining by the Company of the Mandatory Offer Waiver; and

 

  2.1.3 the admission of the New Shares to trading on AIM becoming effective in accordance with the latest edition of the AIM Rules (“ Admission ”).

 

2.2 The Company agrees to notify the Investors in writing within one Business Day of the last of the Conditions in clauses 2.1.1 and 2.1.2 (but not clause 2.1.3 (the “ Admission Condition ”)) being satisfied and the Company shall provide such evidence as the Investors may reasonably request as to the satisfaction of these Conditions.

 

2.3 From the date of this Agreement until Completion (or termination of this Agreement), the Company undertakes to the Investors that it shall take no action that is inconsistent with the provisions of this Agreement or the consummation of the Subscription as contemplated by this Agreement.

 

2.4 If the Conditions have not been satisfied in full on or before April 1, 2013, this Agreement (other than this clause 2.4 and clauses 4, 7, 8, 9 and 10) shall have no further effect and in such event no party to this Agreement shall have any claim against the other parties to this Agreement for costs, damages, compensation or otherwise, provided that such termination shall be without prejudice to any accrued rights or obligations of any party under this Agreement or the ability of the Investors to bring a claim against the Company for a breach of the Warranties.

Signing of this Agreement

 

2.5

The Company agrees that, promptly (but in no event more than five days) following the date of


  this Agreement, it will send to each Shareholder entitled thereto a circular incorporating a notice convening a special meeting of the Shareholders of the Company (the “ Circular ”) containing the Resolutions, including the request for the Mandatory Offer Waiver, in accordance with the requirements of the Bylaws and the Certificate of Incorporation.

 

2.6 Upon signing of this Agreement, the Company shall deliver to each of the Investors duly passed resolutions of the Board in terms reasonably satisfactory to the Investors approving the entry into this Agreement and granting all necessary authorities to implement its terms including, subject to the satisfaction of the Conditions and receipt of the subscription monies from the Investors, the issue of the New Shares to the Investors in accordance with the terms of this Agreement.

Pre-Completion

 

2.7 Pre-Completion shall take place remotely via the exchange of documents and signatures on the Business Day immediately following notification by the Company to the Investors, under clause 2.2, of all of the Conditions (other than the Admission Condition) being satisfied.

 

2.8 At Pre-Completion, the Company shall deliver to each of the Investors certified copies of the Resolutions and the Mandatory Offer Waiver.

 

2.9 Subject to clause 2.11, at Pre-Completion each Investor shall subscribe in cash (conditional upon Admission) for its Purchased Shares, at a price per share equal to the Share Price, and each Investor shall pay its Subscription Amount into the following bank account of the Company and such payment shall constitute a full and proper discharge by each Investor of its obligations under this clause 2.9:

 

Bank:    Citizens Bank
Bank Address:    28 State Street, Boston, MA 02109
Account number:    XXXXXXXXX
Routing number:    XXXXXXXXX
ABA:    XXXXXXXXX

 

2.10 Subject to clause 2.11, at Pre-Completion, upon receipt by the Company of each Investor’s Subscription Amount pursuant to clause 2.9, the Company shall allot (conditional upon Admission) each Investor its Purchased Shares, shall deliver to each Investor a share certificate in respect of its Purchased Shares and enter the name of such Investor in the Company’s stock register as the holder of such Purchased Shares.

 

2.11 Clauses 2.7 to 2.10 (inclusive) shall not apply to any Investor whose obligations under this Agreement have been terminated pursuant to clause 3.


Completion

 

2.12 Completion shall take place automatically upon Admission. Promptly following Completion, the Company shall deliver to each Investor a share certificate in respect of its Purchased Shares and enter the name of such Investor in the Company’s stock register as the holder of such Purchased Shares.

 

3. TERMINATION

 

3.1 If at any time prior to Completion:

 

  3.1.1 it comes to the knowledge of any of the Investors (whether by way of receipt of a notification pursuant to clause 4.4 or otherwise) that any of the Warranties was materially untrue, inaccurate or misleading when made and/or that any of the Warranties has ceased to be materially true or accurate or has become materially misleading by reference to the facts and circumstances then subsisting, provided, that for purposes of this clause 3.1.1 any materiality qualifier in a Warranty shall be read without such qualifier; or

 

  3.1.2 the Company shall fail, in a material way, to comply with any of its obligations under this Agreement,

then each Investor shall be entitled to terminate its obligations under this Agreement by giving notice to the Company at any time prior to Completion.

 

3.2 If at any time prior to Completion it comes to the knowledge of the Company that any of the Investor Warranties was, in relation to any particular Investor, materially untrue, inaccurate or misleading when made and/or that any of the Investor Warranties has, in relation to any particular Investor, ceased to be materially true or accurate or has become materially misleading, the Company shall be entitled to terminate its obligations under this Agreement in relation to that particular Investor only, by giving notice to such Investor at any time prior to Completion.

 

3.3 If this Agreement is terminated under clause 3.1 or 3.2 in relation to any particular Investor (the “ Terminating Investor ”), this Agreement (other than this clause 3.3 and clauses 4, 7 and 8) shall have no further effect in respect of the Terminating Investor.

 

3.4

In the event that the obligations of any one or more Investors, other than Intrexon, are terminated pursuant to clauses 3.1 or 3.2, Intrexon shall subscribe for the Purchased Shares of each Terminating Investor (the “ Terminating Investor Shares ”) (in addition to Intrexon’s


  Purchased Shares) at the Share Price and otherwise in accordance with the terms of this Agreement; provided, however, if Intrexon is terminated pursuant to clauses 3.1 or 3.2, it shall not be obligated to subscribe for or purchase any Terminating Investor Shares.

 

4. COMPANY WARRANTIES

 

4.1 The Company, upon the execution of this Agreement, warrants and represents to the Investors in the terms of the Warranties. The Company acknowledges that the Investors have relied on the Warranties in entering into this Agreement.

 

4.2 No fact, matter, event or circumstance of which the Investors have or may be deemed to have knowledge (actual, constructive or imputed) shall prejudice any claim made by the Investors under the Warranties or operate to reduce any amount recoverable.

 

4.3 The Warranties are given at the date of this Agreement. The Warranties shall continue in full force and effect until Completion.

 

4.4 The Company undertakes to the Investors that it will immediately notify the Investors upon its becoming aware at any time up to Completion:

 

  4.4.1 that any of the Warranties was materially untrue, inaccurate or misleading at the date of this Agreement; or

 

  4.4.2 that any of the Warranties would be materially untrue, inaccurate or misleading if it were to be repeated at any time before Completion by reference to the facts and circumstances then subsisting.

 

4.5 Each Warranty shall be separate and independent and, save as expressly provided, shall not be limited by reference to any other Warranty or any other provision in this Agreement.

 

4.6 Where any statement in the Warranties is qualified by the expression “ so far as the Company is aware ” or any similar expression, the Company shall be deemed to have knowledge of:

 

  4.6.1 anything of which any of the Directors or officers of the Company has knowledge or is deemed by clause 4.6.2 or 4.6.3 to have knowledge;

 

  4.6.2 anything of which a Director or officer of the Company ought reasonably to have knowledge given his particular position in and responsibility to the Group; and

 

  4.6.3 anything of which it would have had knowledge had it made enquiry immediately before giving the Warranties.


4.7 The Company agrees with the Investors:

 

  4.7.1 to waive any right or claim which it may have against any of its officers, employees, agents or advisers for any error, omission or misrepresentation of any such information or opinion (provided that nothing in this clause shall exclude any liability of any person for fraudulent misrepresentation); and

 

  4.7.2 that any such right or claim shall not constitute a defence to any claim by the Investors under or in relation to this Agreement (including the Warranties).

LIMITATIONS

Time Limits

 

4.8 The Company shall not be liable for any claim under the Warranties (other than clauses 3, 10 and 11 of the Warranties) unless the Investors who are bringing such claim give written notice thereof to the Company before the expiry of six months following the Completion Date (containing such details of the claim under the Warranties, including its anticipated value, as the relevant Investors have available to them within 60 days after becoming aware of the claim under the Warranties).

Maximum Liability

 

4.9 For all claims under the Warranties or other claims under this Agreement, the aggregate amount of the liability of the Company shall not exceed the Aggregate Subscription Amount and the liability of the Company to each Investor shall not exceed the Subscription Amount actually paid by such Investor.

 

5. INVESTOR WARRANTIES

 

5.1 Each Investor severally and not jointly and severally, represents and warrants that:

 

  5.1.1 The Company has afforded each Investor and each Investor’s attorneys, accountants, investment advisors and other representatives (the “ Investor Representatives ”) full, complete and unrestricted access to all financial reports and information of the Company requested by the Investors or the Investor Representatives. The Investors are familiar with the business and operations of the Company and have had the opportunity to obtain the advice of the Investor Representatives with respect to all aspects of this Agreement. The Investors are entering into this Agreement and purchasing the New Shares from the Company of their own free will and the Aggregate Subscription Amount and terms of payment are fair, equitable and desired by the Investors.


  5.1.2 If an Investor is in the United States or is a resident of the United States, such Investor is an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated pursuant to the Securities Act. Each Investor understands and acknowledges that: (i) the New Shares are being offered and sold to it without registration under the Securities Act in a private placement that is exempt from registration provisions of the Securities Act, and (ii) the availability of such exemption depends in part on, and the Company will rely upon the accuracy and truthfulness of, the representations, warranties and covenants of such Investor set forth in this clause 5, and such Investor hereby consents to such reliance.

 

  5.1.3 If an Investor is not in the United States, then such Investor represents that (i) it is not a “U.S. Person” (as defined in Regulation S under the Securities Act); (ii) the Investor has not been subject to any “directed selling efforts” (within the meaning of Regulation S under the Securities Act) by or on behalf of the Company, its affiliates or any person controlled by its or their affiliates; and (iii) at the time the buy order for the New Shares was placed, the Investor was outside of the United States.

 

  5.1.4 Each Investor understands that the New Shares have not been registered under the Securities Act, the securities laws of any state of the USA or the securities laws of any other jurisdiction, nor is such registration contemplated, and such Investor will not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit offers to buy, purchase, or otherwise acquire or take a pledge of) any of the New Shares, except in compliance with the Securities Act and other applicable securities laws and the respective rules and regulations promulgated thereunder.

 

  5.1.5 If an Investor is a resident of an International Jurisdiction, then such Investor on its own behalf and, if applicable, on behalf of others for whom it is hereby acting, confirms that:

 

  (i) such Investor is knowledgeable of, or has been independently advised as to, the International Securities Laws which would apply to this Subscription, if any;

 

  (ii) such Investor is purchasing the New Shares pursuant to an applicable exemption from any prospectus, registration or similar requirements under the International Securities Laws of that International Jurisdiction, or, if such is not applicable, such Investor is permitted to purchase the New Shares under the International Securities Laws of the International Jurisdiction without the need to rely on exemptions;


  (iii) the Subscription by such Investor does not contravene any of the International Securities Laws applicable to the Investor and the Company and does not give rise to any obligation of the Company to prepare and file a prospectus or similar document or to register the New Shares or to be registered with any governmental or regulatory authority; and

 

  (iv) the International Securities Laws do not require the Company to make any filings or seek any approvals of any kind whatsoever from any regulatory authority of any kind whatsoever in the International Jurisdiction.

 

  5.1.6 Each Investor acknowledges that (i) transfers of the New Shares are restricted by the provisions of the Certificate of Incorporation and (ii) that legends stating that the New Shares have not been registered under the Securities Act or other applicable securities laws and setting out or referring to the restrictions on the transferability and resale of the New Shares will be placed on all documents evidencing the New Shares, and accordingly, it may not be possible for an Investor to readily, if at all, liquidate its investment in the Company in the case of an emergency or otherwise.

 

  5.1.7 Each Investor has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the New Shares, is able to bear the risks of an investment in the Company and understands the risks of, and other considerations relating to, a purchase of New Shares.

 

  5.1.8 Each Investor undertakes to the Company that it will immediately notify the Company upon its becoming aware at any time up to Completion:

 

  (i) that in relation to that Investor, any of the Investor Warranties was materially untrue, inaccurate or misleading at the date of this Agreement; or

 

  (ii) that in relation to that Investor, any of the Investor Warranties would be materially untrue, inaccurate or misleading if it were to be repeated at any time before Completion.

 

  5.1.9 Each Investor is acquiring the New Shares to be acquired hereunder for such Investor’s own account for investment purposes only and not with a view to or for the sale in connection with any distribution of all or any part of such New Shares. Each Investor has become aware of the Company and the opportunity to subscribe for New Shares directly from the Company or its affiliates or agents, and not by means of any general solicitation or general advertising (including, without limitation, any advertisement, article, notice or other communication published in any newspaper, magazine, website or similar media or broadcast over television or radio, and any seminars or meetings whose attendees have been invited by any general solicitation or advertising).


  5.1.10 If an Investor is not a natural person, (i) such Investor has the power and authority to enter into this Agreement and each other document required to be executed and delivered by such Investor in connection with this Subscription for New Shares, and to perform its obligations hereunder and thereunder and consummate the transactions contemplated hereby and thereby and (ii) the person signing this Agreement on behalf of such Investor has been duly authorized to execute and deliver this Agreement and each other document required to be executed and delivered by such Investor in connection with this Subscription for New Shares. If an Investor is a natural person, such Investor has all requisite legal capacity to acquire and hold the New Shares and to execute, deliver and comply with the terms of each of the documents required to be executed and delivered by such Investor in connection with this Subscription for New Shares. The execution and delivery by such Investor of, and compliance by such Investor with, this Agreement and each other document required to be executed and delivered by such Investor in connection with this Subscription for New Shares do not violate, represent a breach of, or constitute a default under, any instruments governing such Investor, any permit, franchise, judgment, decree, statute, order, rule or regulation applicable to such Investor or such Investor’s business or properties, or any agreement to which such Investor is a party or by which such Investor is bound. This Agreement has been duly executed by each Investor and when executed by the Company will constitute a valid and legally binding agreement of each Investor, enforceable against it in accordance with its terms.

 

6. PARTICIPATION BY SHAREHOLDERS

In the event that, during the period starting on the date the Company mails the Circular to the Shareholders and ending on the date the Resolutions are approved by the Shareholders, any holder of Common Shares provides notice to the Company that it wishes to participate in the Subscription (each a “ Participating Shareholder ”), the Company may elect to sell a portion of the New Shares to any Participating Shareholder and, to give effect to that participation, the number of Purchased Shares to which Intrexon is entitled shall be reduced to permit the participation of each Participating Shareholder; provided, however, that Intrexon’s Purchased Shares shall not be reduced below 14,874,142 Shares.

 

7. ASSIGNMENT

If at any time any Investor (or any person holding the legal title to the Common Shares as nominee, custodian or trustee or otherwise on behalf of such Investor) transfers any of its


Common Shares, its rights and/or benefits arising from, or in connection with, this Agreement (including the benefit of the Warranties) shall be assignable in whole or in proportionate part to the transferee of such Common Shares or any interest therein.

 

8. APPLICABLE LAW AND JURISDICTION

 

8.1 This Agreement and the rights and obligations of the parties including all non-contractual obligations arising under or in connection with this Agreement shall be governed by and construed in accordance with the laws of Delaware.

 

8.2 The parties irrevocably submit to the non-exclusive jurisdiction of the courts of Massachusetts in respect of any claim, dispute or difference arising out of or in connection with this Agreement and/or any non-contractual obligation arising in connection with this Agreement, provided that nothing contained in this clause shall be taken to have limited the right of the Investors to proceed in the courts of any other competent jurisdiction.

 

9. GENERAL

Entire agreement

 

9.1 This Agreement (together with any documents referred to herein or entered into pursuant to this Agreement including, in the case of Intrexon, the Exclusive Channel Collaboration Agreement between the Company and Intrexon dated as of even date herewith) contains the entire agreement and understanding of the parties and supersedes all prior agreements, understandings or arrangements (both oral and written) relating to the subject matter of this Agreement and any such document. Each of the parties acknowledges that it is entering into this Agreement without reliance on any undertaking or representation given by or on behalf of the other party, other than as expressly contained in this Agreement, provided that nothing in this clause shall exclude any liability of either party for fraudulent misrepresentation.

 

9.2 This Agreement shall not be construed as creating any partnership or agency relationship between any of the parties.

Variations and waivers

 

9.3 No variation of this Agreement shall be effective unless made in writing and signed by or on behalf of all the parties and expressed to be such a variation.

 

9.4 No failure or delay by the Investors or time or indulgence given in exercising any remedy or right under or in relation to this Agreement shall operate as a waiver of the same nor shall any single or partial exercise of any remedy or right preclude any further exercise of the same or the exercise of any other remedy or right.


9.5 No waiver by any party of any requirement of this Agreement, or of any remedy or right under this Agreement, shall have effect unless given in writing and signed by such party. No waiver of any particular breach of the provisions of this Agreement shall operate as a waiver of any repetition of such breach.

Effect of Completion

 

9.6 The provisions of this Agreement, insofar as the same shall not have been performed at Completion, shall remain in full force and effect notwithstanding Completion.

Counterparts

 

9.7 This Agreement may be executed as two or more counterparts and execution by any of the parties of any one of such counterparts will constitute due execution of this Agreement.

Further assurance

 

9.8 Each party shall, and shall use all reasonable endeavours to procure that any necessary third party shall, do and execute and perform all such further deeds, documents, assurances, acts and things as may reasonably be required to give effect to this Agreement.

Other remedies

 

9.9 Any remedy or right conferred upon the Investors for breach of this Agreement shall be in addition, and without prejudice, to all other rights and remedies available to them.

Third party rights

 

9.10 Where, in connection with this Agreement (or any other agreement or arrangement to be entered into by the Investors in accordance with this Agreement), the Company undertakes any obligation in respect of any person (other than, or in addition to, the Investors), the Company unconditionally and irrevocably acknowledges and agrees that each Investor is entering into this Agreement (or any such other agreement or arrangement) and accepting the benefits of such obligations not only for itself but also as agent and trustee for such other person.

 

9.11 No provision of this Agreement is intended to benefit or be enforceable by any third party pursuant to the Contracts (Rights of Third Parties) Act 1999, but this shall not affect any right or remedy of a third party which exists or is available apart from the Contracts (Rights of Third Parties) Act 1999. Notwithstanding any benefits or rights conferred by this Agreement on any third party by virtue of the Contracts (Rights of Third Parties) Act 1999, the parties to this Agreement may vary, terminate or rescind this Agreement without obtaining the consent of any such third party.


10. NOTICES

Form of Notice

 

10.1 Any notice, consent, request, demand, approval or other communication to be given or made under or in connection with this Agreement (each a “ Notice ” for the purposes of this clause) shall be in writing and signed by or on behalf of the person giving it.

Method of service

 

10.2 Service of a Notice must be effected by one of the following methods;

 

  10.2.1 by hand to the relevant address set out in clause 10.4 and shall be deemed served upon delivery if delivered during a Business Day, or at the start of the next Business Day if delivered at any other time;

 

  10.2.2 by prepaid international airmail to the relevant address set out in clause 10.4 and shall be deemed served at the start of the fourth Business Day after the date of posting; or

 

  10.2.3 by facsimile transmission to the relevant facsimile number set out in clause 9.4 and shall be deemed served on despatch if despatched during a Business Day, or at the start of the next Business Day if despatched at any other time, provided that in each case a receipt indicating complete transmission of the Notice is obtained by the sender and that a copy of the Notice is also despatched to the recipient using a method described in clause 10.2.1 or clause 10.2.2 no later than the end of the next Business Day.

 

10.3 In clause 10.2 “ during a Business Day ” means any time between 9.30 a.m. and 5.30 p.m. on a Business Day based on the local time where the recipient of the Notice is located. References to “ the start of a Business Day ” and “ the end of a Business Day ” shall be construed accordingly.


Address for service

 

10.4 Notices shall be addressed as follows:

 

  10.4.1 Notices for the Company shall be marked for the attention of:

 

Name:    the Company Secretary
Address:    Two Clock Tower Place, Suite 395, Maynard, MA 01754 USA
Fax number:    +1 978-897-3217

 

  10.4.2 Notices for the Investors shall be marked for the attention of the persons listed on Exhibit A hereto.

Change of details

 

10.5 A party may change its address for service provided that it gives all other parties not less than 14 days’ prior notice in accordance with this clause 10. Until the end of such notice period, service on either address shall remain effective.

THIS AGREEMENT has been duly executed and delivered as a deed on the date stated above.

[Signature page follows]


IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be executed as of the day and year first above written.

 

AQUABOUNTY TECHNOLOGIES, INC.
By:  

/s/ David Frank

Name:   David Frank
Title:   Chief Financial Officer and Secretary
INTREXON CORPORATION
By:  

/s/ Thomas R. Kasser

Name:   Thomas R. Kasser
Title:   Senior Vice President

[Signature Page to AquaBounty Subscription Agreement]


SCHEDULE 1

Warranties

 

1. Circular

Statements of fact contained in the Circular are true and accurate in all material respects and not misleading in any material respect and there are no facts, matters or circumstances known, or which could after due and proper consideration and enquiry have been known, to the Company or any of the Directors which are not disclosed in the Circular, the omission of which would, or might reasonably be expected to, materially affect the ability of the Company’s Shareholders to properly consider the matters contained therein.

 

2. Liabilities

 

2.1 Save as Publicly Announced or disclosed in the Circular, the Company has no outstanding borrowings of any nature or amount (including, without limitation, any overdraft facilities; loans; invoice discounting factoring or other financial facilities).

 

3. Compliance with Laws

 

3.1 Subject to the passing of the Resolutions, the execution of this Agreement by the Company and the creation and issue of the New Shares will comply in all respects with the FSMA, the rules and regulations of the FSA and the London Stock Exchange, the Prospectus Rules, the AIM Rules, the General Corporation Law of the State of Delaware, the federal securities laws of the USA, and all applicable state and federal laws and regulations of the USA (collectively, the “ US Laws ”), and all other relevant laws and regulations of the United Kingdom and elsewhere and will comply with and will not infringe or exceed any limits, powers or restrictions or the terms of any agreement, obligation or commitment to which the Company or any Group Company is a party or by which the Company or any Group Company is bound.

 

3.2 Each Group Company and its officers, agents and employees (past and present) in the course of their respective duties have complied in all material respects with all applicable laws and regulations of the United Kingdom, the European Community and any foreign jurisdiction in which the business of such Group Company is carried on, including, without limitation, the US Laws.


4. Position Since the Accounts Date

 

4.1 Save as Publicly Announced or disclosed in the Circular, since June 30, 2012:

 

  4.1.1 the business of the Group has been carried on in the ordinary and usual course;

 

  4.1.2 there has been no significant adverse change in the financial or trading position of the Group taken as a whole;

 

  4.1.3 no member of the Group has acquired or disposed of or agreed to acquire or dispose of any of its assets or businesses other than in the ordinary course of trading; and

 

  4.1.4 no member of the Group has paid or made any payment or transfer to shareholders of any dividend, bonus, loan or distribution.

 

5. Licences and Consents

 

5.1 Save as Publicly Announced or disclosed in the Circular, the Group has all material licences, consents, approvals, permissions, permits, certificates, qualifications, registrations and other authorisations (public and private) necessary for the proper and efficient operation of its current businesses in the places and in the manner in which the business is now carried on (together the “ Authorities ”).

 

5.2 Save as Publicly Announced or disclosed in the Circular, all of the Authorities are in full force and effect and are not limited in duration or subject to any unusual or onerous conditions, and have been complied with in all material respects.

 

5.3 Save as Publicly Announced or disclosed in the Circular, so far as the Company is aware, there are no circumstances which indicate that any of the Authorities will be revoked or not renewed, in whole or in part, whether as a result of the transactions contemplated by this Agreement or otherwise.

 

6. Intellectual Property

 

6.1 The Company owns or possesses sufficient legal rights to all Intellectual Property Rights necessary for its business as now conducted, without any known infringement of the rights of others. The Company is not aware of any allegations that the Company is presently violating any of the Intellectual Property Rights of any other Person.


7. Options and Warrants

 

7.1 Save as Publicly Announced or disclosed in the Circular, there are no options, warrants or other agreements or arrangements in force which call for the issue to any person, or accord to any person the right to call for the issue of any shares in the capital of the Group or any other securities of any member of the Group.

 

8. Assets

 

8.1 All the material assets necessary for the operation of the business of the Group, as currently carried on, are legally and beneficially owned or leased by the Company or the applicable member of the Group.

 

8.2 The Group’s fixed asset register provided to the Investors sets out a complete and accurate record of the plant, machinery, vehicles and equipment owned or used by it.

 

9. Litigation

No member of the Group nor any Director nor any other person for whom the Company or any member of the Group is or may be vicariously liable is engaged in any material legal or arbitration proceedings or is the subject of any disciplinary proceedings or enquiries by any governmental or regulatory bodies which individually or collectively may have, or have had during the 12 months preceding the date of this Agreement, a material effect on the financial position of the Group and, so far as the Company is aware, no such legal or arbitration proceedings are threatened or pending nor are there any circumstances of which the Company is aware which may give rise to any such legal or arbitration proceedings being threatened or commenced.

 

10. Capitalization and Issuance

 

10.1 As of the date of this Agreement, the authorized capital of the Company consists of 200,000,000 shares of Common Stock, par value of $0.001 per share, and 40,000,000 shares of Preferred Stock, par value $0.01 per share, of which 102,255,688 shares of Common Stock are issued and outstanding.

 

10.2 The New Shares (i) are duly authorized, (ii) when issued and sold to Investors will be validly issued, (iii) after receipt of all consideration due therefore, will be fully paid and nonassessable with no personal liability attaching to the ownership thereof and (iv) will be free and clear of any and all liens, charges, restrictions, claims and encumbrances, except as set forth in this Agreement or the Certificate of Incorporation.


10.3 Based in part on, and in reliance upon the accuracy of, the representations and warranties of Investors set forth in clause 5 of this Agreement, the offer, sale and issuance of the New Shares in conformity with the terms of this Agreement are exempt from the registration requirements of the Securities Act and are exempt from the qualification or registration requirements of applicable U.S. state securities laws. Neither the Company nor any agent on its behalf has solicited or will solicit any offers to sell or has offered to sell or will offer to sell all or any part of the New Shares to any Person or Persons so as to bring the sale of such New Shares by the Company within the registration provisions of the Securities Act or any U.S. state securities laws.

 

11. Authorization

 

11.1 This Agreement has been duly executed by the Company and when executed by an Investor will constitute a valid and legally binding agreement of the Company, enforceable against it by such Investor in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally or by equitable principles, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) to the extent that the enforceability of the indemnification provisions may be limited by applicable laws.

 

11.2 Except for the conditions listed in clause 2.1 of this Agreement, all corporate action on the part of the Company and its officers and Directors necessary for (i) the authorization, execution, delivery and performance of all obligations of the Company under each of this Agreement and the Certificate of Incorporation has been taken and (ii) the issuance and sale by the Company of the New Shares hereunder has been taken.


EXHIBIT A

 

Investor

   Shares      Subscription Amount  

Intrexon Corporation

20358 Seneca Meadows Parkway

Germantown, MD 20876

     22,883,295       $ 6,000,000   
  

 

 

    

 

 

 

Total:

     22,883,295       $ 6,000,000   
  

 

 

    

 

 

 

Exhibit 10.10

D ATED 5 M ARCH 2014

(1) A QUA B OUNTY T ECHNOLOGIES , I NC .

(2) I NTREXON C ORPORATION

SUBSCRIPTION AGREEMENT


THIS SUBSCRIPTION AGREEMENT (this “ Agreement ”) is made on 5 March 2014

BETWEEN:

 

(1) AQUABOUNTY TECHNOLOGIES, INC. , incorporated and registered in the state of Delaware, USA with registered number 2282110 and whose principal place of business is at Two Clock Tower Place, Suite 395, Maynard, MA 01754 USA (the “ Company ”); and

 

(2) INTREXON CORPORATION , incorporated and registered in the state of Virginia, USA with registered number 06154801 and whose principal place of business is at 20358 Seneca Meadows Parkway, Germantown, MD 20876 USA (“ Intrexon ”).

WHEREAS:

Intrexon has agreed to subscribe for the New Shares (as defined below) in the capital of the Company and the parties have agreed to regulate the terms of the Subscription (as defined below) on the terms and conditions of this Agreement.

IT IS AGREED as follows:

 

1. DEFINITIONS AND INTERPRETATION

 

1.1 The following words and expressions where used in this Agreement have the meanings given to them below:

Admission shall have the meaning given to it in clause 2.1.2 of this Agreement.

Admission Condition shall have the meaning given to it in clause 2.2 of this Agreement.

Advisers Act shall have the meaning given to it in clause 5.1.11(d) of this Agreement.

Agreement shall have the meaning given to it in the preamble of this Agreement.

AIM means AIM, a market operated by the London Stock Exchange.

AIM Rules means the AIM Rules for Companies published by the London Stock Exchange.

Authorities shall have the meaning given to it in clause 5.1 of Schedule 1 of this Agreement.

Board means the board of directors of the Company from time to time.


Business Day means any day other than a Saturday, Sunday or English bank or public holiday.

Bylaws means the corporate bylaws of the Company in effect as at the date of this Agreement.

Certificate of Incorporation means the amended and restated certificate of incorporation of the Company, as amended.

Circular shall have the meaning given to it in clause 2.5 of this Agreement.

Common Shares means the shares of common stock, par value one tenth of one cent ($0.001) per share of the Company.

Companies Act means the Companies Act 2006.

Company shall have the meaning given to it in the preamble of this Agreement.

Completion means completion of the Subscription, (subject to the full satisfaction of the Conditions) in accordance with clause 2.12.

Completion Date means the date on which Completion occurs.

Conditions means the conditions to Completion set out in clause 2.1.

Copyright means copyright, which includes all rights in computer software and in databases and all rights or forms of protection which have equivalent or similar effect to the foregoing and which subsist anywhere in the world.

Directors means the directors of the Company from time to time.

Exchange Act shall have the meaning given to it in clause 5.1.11(d) of this Agreement.

FSA means the Financial Services Authority.

FSMA means the Financial Services and Markets Act 2000.

Group means the Company and any company which is a subsidiary undertaking of the Company from time to time and references to “ Group Company ” and “ member of the Group ” shall be construed accordingly.

 

2


Intellectual Property Rights includes patents, inventions, Know-How, trade secrets and other confidential information, registered designs, Copyright, database rights, design rights, rights affording equivalent protection to copyright, database rights and design rights, topography rights, trade marks, service marks, business names, trade names, domain names, registration of an application to register any of the aforesaid items, rights to sue for passing-off and rights in the nature of any of the aforesaid items in any country.

Intrexon shall have the meaning given to it in the preamble of this Agreement.

Intrexon Representatives shall have the meaning given to it in clause 5.1.1 of this Agreement.

Intrexon Warranties means the warranties set out in clause 5.

Know-How means inventions, discoveries, improvement, processes, formulae, techniques, specifications, technical information, methods, tests, reports, component lists, manuals, instructions, drawings and information relating to customers and suppliers (whether written, unwritten or in any other form and whether confidential or not).

London Stock Exchange means London Stock Exchange plc.

New Shares means the 19,040,366 Common Shares in the capital of the Company to be subscribed by Intrexon under the terms of this Agreement.

Notice has the meaning set forth in clause 9.1.

Pre-Completion means the satisfaction of the conditions and obligations set forth in clauses 2.7 to 2.10 (inclusive).

Prospectus Rules means the Prospectus Rules made by the Financial Services Authority under Part VI of the FSMA.

Publicly Announced means the making by the Company of an announcement on a Regulatory Information Service provided by the London Stock Exchange, within the 6 month period immediately preceding the date of this Agreement.

Resolutions means the resolutions of the Stockholders of the Company in the approved terms, inter alia , waiving the application of the pre-emption rights contained in Section 4(c) of the Certificate of Incorporation, waiving the application of Section 4(d) of the Certificate of Incorporation, and approving the Second Amended and Restated Certificate of Incorporation.

SEC shall have the meaning given to it in clause 5.1.11(a) of this Agreement.

Securities Act means the U.S. Securities Act of 1933, as amended.

 

3


Share means any share in or of capital stock issued by the Company from time to time.

Share Price means US$0.5252 per share, which represents (i) the closing price per share for the Company’s Common Shares on AIM (which will be quoted in British pounds sterling) on the day before the date of this Agreement, divided by (ii) the exchange rate for British pounds sterling and U.S. dollars on the date of this Agreement.

Stockholder means any holder of any Share from time to time.

Subscription means the subscription by Intrexon for the New Shares in accordance with the terms of this Agreement.

Subscription Amount means the sum of $10,000,000, being the aggregate subscription price payable by Intrexon for the New Shares.

US Laws shall have the meaning given to it in clause 3.1 of Schedule 1 of this Agreement.

USA or U.S. means the United States of America.

Warranties means the warranties and representations set out in Schedule 1 of this Agreement.

 

1.2 Unless the context otherwise requires, words and expressions defined in or having a meaning provided by the Companies Act shall have the same meaning in this Agreement.

 

1.3 Unless the context otherwise requires, references in this Agreement to:

 

  1.3.1 any of the masculine, feminine and neuter genders shall include other genders;

 

  1.3.2 the singular shall include the plural and vice versa;

 

  1.3.3 a person shall include a reference to any natural person, body corporate, unincorporated association, partnership, firm and trust;

 

  1.3.4 any statute or statutory provision shall be deemed to include any instrument, order, regulation or direction made or issued under it and shall be construed as a reference to the same as it may have been, or may from time to time be, amended, modified, consolidated, re-enacted or replaced except to the extent that any amendment or modification made after the date of this Agreement would increase any liability or impose any additional obligation under this Agreement;

 

4


  1.3.5 any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall, in respect of any jurisdiction other than that of England, be deemed to include what most nearly approximates in that jurisdiction to the English legal term; and

 

  1.3.6 any time or date shall be construed as a reference to the time or date prevailing in England.

 

1.4 The headings in this Agreement are for convenience only and shall not affect its meaning. References to a clause, Schedule, Exhibit or paragraph are (unless otherwise stated) to a clause or paragraph of, or Schedule or Exhibit to, this Agreement. The Schedules and Exhibits form part of this Agreement and shall have the same force and effect as if expressly set out in the body of this Agreement.

 

1.5 A document expressed to be “ in the approved terms ” means a document, the terms of which have been approved by the parties to the Agreement and a copy of which has been identified as such and initialled by or on behalf of each such party.

 

1.6 In construing this Agreement, general words introduced by the word “ other ” shall not be given a restrictive meaning by reason of the fact that they are preceded by words indicating a particular class of acts, matters or things and general words shall not be given a restrictive meaning by reason of the fact that they are followed by particular examples intended to be embraced by the general words.

 

2. SUBSCRIPTION

Conditions

 

2.1 Subject to clause 3, Completion shall be conditional in all respects on:

 

  2.1.1 the passing of the Resolutions; and

 

  2.1.2 the admission of the New Shares to trading on AIM becoming effective in accordance with the latest edition of the AIM Rules (“ Admission ”).

 

2.2 The Company agrees to notify Intrexon in writing within one Business Day of the last of the Condition in clause 2.1.1 (but not clause 2.1.2 (the “ Admission Condition ”)) being satisfied and the Company shall provide such evidence as Intrexon may reasonably request as to the satisfaction of these Conditions.

 

5


2.3 From the date of this Agreement until Completion (or termination of this Agreement), the Company undertakes to Intrexon that it shall take no action that is inconsistent with the provisions of this Agreement or the consummation of the Subscription as contemplated by this Agreement.

 

2.4 If the Conditions have not been satisfied in full on or before April 15, 2013, this Agreement (other than this clause 2.4 and clauses 4, 7, 8, 9 and 10) shall have no further effect and in such event no party to this Agreement shall have any claim against the other parties to this Agreement for costs, damages, compensation or otherwise, provided that such termination shall be without prejudice to any accrued rights or obligations of any party under this Agreement or the ability of Intrexon to bring a claim against the Company for a breach of the Warranties.

Signing of this Agreement

 

2.5 The Company agrees that, promptly (but in no event more than five days) following the date of this Agreement, it will send to each Stockholder entitled thereto a circular incorporating a notice convening a special meeting of the Stockholders of the Company (the “ Circular ”) containing the Resolutions, in accordance with the requirements of the Bylaws and the Certificate of Incorporation.

 

2.6 Upon signing of this Agreement, the Company shall deliver to Intrexon duly passed resolutions of the Board in terms reasonably satisfactory to Intrexon approving the entry into this Agreement and granting all necessary authorities to implement its terms including, subject to the satisfaction of the Conditions and receipt of the subscription monies from Intrexon, the issue of the New Shares to Intrexon in accordance with the terms of this Agreement.

Pre-Completion

 

2.7 Pre-Completion shall take place remotely via the exchange of documents and signatures on the Business Day immediately following notification by the Company to Intrexon, under clause 2.2, of all of the Conditions (other than the Admission Condition) being satisfied.

 

2.8 At Pre-Completion, the Company shall deliver to Intrexon certified copies of the Resolutions.

 

2.9 Subject to clause 2.11, at Pre-Completion Intrexon shall subscribe in cash (conditional upon Admission) for the New Shares, at a price per share equal to the Share Price, and Intrexon shall pay its Subscription Amount into the following bank account of the Company and such payment shall constitute a full and proper discharge by Intrexon of its obligations under this clause 2.9:

 

Bank:    Citizens Bank
Bank Address:    28 State Street, Boston, MA 02109
Account number:    XXXXXXXXXX
Routing number:    XXXXXXXXX
ABA:    XXXXXXXXX

 

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2.10 Subject to clause 2.11, at Pre-Completion, upon receipt by the Company of the Subscription Amount pursuant to clause 2.9, the Company shall allot (conditional upon Admission) Intrexon the New Shares and enter the name of Intrexon in the Company’s stock register as the holder of the New Shares.

Completion

 

2.11 Completion shall take place automatically upon Admission. Promptly following Completion, the Company shall deliver to Intrexon a share certificate in respect of the New Shares and enter the name of Intrexon in the Company’s stock register as the holder of the New Shares.

 

3. TERMINATION

 

3.1 If at any time prior to Completion:

 

  3.1.1 it comes to the knowledge of Intrexon (whether by way of receipt of a notification pursuant to clause 4.4 or otherwise) that any of the Warranties was materially untrue, inaccurate or misleading when made and/or that any of the Warranties has ceased to be materially true or accurate or has become materially misleading by reference to the facts and circumstances then subsisting, provided, that for purposes of this clause 3.1.1 any materiality qualifier in a Warranty shall be read without such qualifier; or

 

  3.1.2 the Company shall fail, in a material way, to comply with any of its obligations under this Agreement,

then Intrexon shall be entitled to terminate its obligations under this Agreement by giving notice to the Company at any time prior to Completion.

 

3.2 If at any time prior to Completion it comes to the knowledge of the Company that any of the Intrexon Warranties was materially untrue, inaccurate or misleading when made and/or that any of the Intrexon Warranties has ceased to be materially true or accurate or has become materially misleading, the Company shall be entitled to terminate its obligations under this Agreement by giving notice to Intrexon at any time prior to Completion.

 

4. COMPANY WARRANTIES

 

4.1 The Company, upon the execution of this Agreement, warrants and represents to Intrexon in the terms of the Warranties. The Company acknowledges that Intrexon has relied on the Warranties in entering into this Agreement.

 

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4.2 No fact, matter, event or circumstance of which Intrexon has or may be deemed to have knowledge (actual, constructive or imputed) shall prejudice any claim made by Intrexon under the Warranties or operate to reduce any amount recoverable.

 

4.3 The Warranties are given at the date of this Agreement. The Warranties shall continue in full force and effect until Completion.

 

4.4 The Company undertakes to Intrexon that it will immediately notify Intrexon upon its becoming aware at any time up to Completion:

 

  4.4.1 that any of the Warranties was materially untrue, inaccurate or misleading at the date of this Agreement; or

 

  4.4.2 that any of the Warranties would be materially untrue, inaccurate or misleading if it were to be repeated at any time before Completion by reference to the facts and circumstances then subsisting.

 

4.5 Each Warranty shall be separate and independent and, save as expressly provided, shall not be limited by reference to any other Warranty or any other provision in this Agreement.

 

4.6 Where any statement in the Warranties is qualified by the expression “ so far as the Company is aware ” or any similar expression, the Company shall be deemed to have knowledge of:

 

  4.6.1 anything of which any of the Directors or officers of the Company has knowledge or is deemed by clause 4.6.2 or 4.6.3 to have knowledge;

 

  4.6.2 anything of which a Director or officer of the Company ought reasonably to have knowledge given his particular position in and responsibility to the Group; and

 

  4.6.3 anything of which it would have had knowledge had it made enquiry immediately before giving the Warranties.

 

4.7 The Company agrees with Intrexon:

 

  4.7.1 to waive any right or claim which it may have against any of its officers, employees, agents or advisers for any error, omission or misrepresentation of any such information or opinion (provided that nothing in this clause shall exclude any liability of any person for fraudulent misrepresentation); and

 

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  4.7.2 that any such right or claim shall not constitute a defence to any claim by Intrexon under or in relation to this Agreement (including the Warranties).

LIMITATIONS

Time Limits

 

4.8 The Company shall not be liable for any claim under the Warranties (other than clauses 3, 10 and 11 of the Warranties) unless Intrexon gives written notice thereof to the Company before the expiry of six months following the Completion Date (containing such details of the claim under the Warranties, including its anticipated value, as Intrexon has available to them within 60 days after becoming aware of the claim under the Warranties).

Maximum Liability

 

4.9 For all claims under the Warranties or other claims under this Agreement, the aggregate amount of the liability of the Company shall not exceed the Subscription Amount.

 

5. INTREXON WARRANTIES

 

5.1 Intrexon represents and warrants that:

 

  5.1.1 The Company has afforded Intrexon and each of Intrexon’s attorneys, accountants, investment advisors and other representatives (the “ Intrexon Representatives ”) full, complete and unrestricted access to all financial reports and information of the Company requested by Intrexon or the Intrexon Representatives. Intrexon is familiar with the business and operations of the Company and has had the opportunity to obtain the advice of the Intrexon Representatives with respect to all aspects of this Agreement. Intrexon is entering into this Agreement and purchasing the New Shares from the Company of its own free will and the Subscription Amount and terms of payment are fair, equitable and desired by Intrexon.

 

  5.1.2 Intrexon is an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated pursuant to the Securities Act. Intrexon understands and acknowledges that: (i) the New Shares are being offered and sold to it without registration under the Securities Act in a private placement that is exempt from registration provisions of the Securities Act, and (ii) the availability of such exemption depends in part on, and the Company will rely upon the accuracy and truthfulness of, the representations, warranties and covenants of Intrexon set forth in this clause 5, and Intrexon hereby consents to such reliance.

 

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  5.1.3 [Reserved]

 

  5.1.4 Intrexon understands that the New Shares have not been registered under the Securities Act, the securities laws of any state of the USA or the securities laws of any other jurisdiction, nor is such registration contemplated, and Intrexon will not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit offers to buy, purchase, or otherwise acquire or take a pledge of) any of the New Shares, except in compliance with the Securities Act and other applicable securities laws and the respective rules and regulations promulgated thereunder.

 

  5.1.5 [Reserved]

 

  5.1.6 Intrexon acknowledges that (i) transfers of the New Shares are restricted by the provisions of the Certificate of Incorporation and (ii) that legends stating that the New Shares have not been registered under the Securities Act or other applicable securities laws and setting out or referring to the restrictions on the transferability and resale of the New Shares will be placed on all documents evidencing the New Shares, and accordingly, it may not be possible for Intrexon to readily, if at all, liquidate its investment in the Company in the case of an emergency or otherwise.

 

  5.1.7 Intrexon has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the New Shares, is able to bear the risks of an investment in the Company and understands the risks of, and other considerations relating to, a purchase of New Shares.

 

  5.1.8 Intrexon undertakes to the Company that it will immediately notify the Company upon its becoming aware at any time up to Completion:

 

  (i) that any of the Intrexon Warranties was materially untrue, inaccurate or misleading at the date of this Agreement; or

 

  (ii) that any of the Intrexon Warranties would be materially untrue, inaccurate or misleading if it were to be repeated at any time before Completion.

 

  5.1.9 Intrexon is acquiring the New Shares to be acquired hereunder for Intrexon’s own account for investment purposes only and not with a view to or for the sale in connection with any distribution of all or any part of such New Shares. Intrexon has become aware of the Company and the opportunity to subscribe for New Shares directly from the Company or its affiliates or agents, and not by means of any general solicitation or general advertising (including, without limitation, any advertisement, article, notice or other communication published in any newspaper, magazine, website or similar media or broadcast over television or radio, and any seminars or meetings whose attendees have been invited by any general solicitation or advertising).

 

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  5.1.10 Intrexon has the power and authority to enter into this Agreement and each other document required to be executed and delivered by Intrexon in connection with this Subscription for New Shares, and to perform its obligations hereunder and thereunder and consummate the transactions contemplated hereby and thereby and (ii) the person signing this Agreement on behalf of Intrexon has been duly authorized to execute and deliver this Agreement and each other document required to be executed and delivered by Intrexon in connection with this Subscription for New Shares. The execution and delivery by Intrexon of, and compliance by Intrexon with, this Agreement and each other document required to be executed and delivered by Intrexon in connection with this Subscription for New Shares do not violate, represent a breach of, or constitute a default under, any instruments governing Intrexon, any permit, franchise, judgment, decree, statute, order, rule or regulation applicable to Intrexon or Intrexon’s business or properties, or any agreement to which Intrexon is a party or by which Intrexon is bound. This Agreement has been duly executed by Intrexon and when executed by the Company will constitute a valid and legally binding agreement of Intrexon, enforceable against it in accordance with its terms.

 

  5.1.11 Neither (x) Intrexon, (y) any other person who, through Intrexon’s ownership, would be deemed to beneficially own 20% or more of the outstanding voting equity securities 1 of the Company, and (z) any person(s) who have the authority to make decisions with respect to the undersigned’s outstanding securities of the Company (collectively, the “ Intrexon Parties ”):

 

  (a) has, within the last 10 years, been convicted of a felony or misdemeanor, (i) in connection with the purchase or sale of any security, (ii) involving the making of any false filing with the U.S. Securities and Exchange Commission (the “ SEC ”) or (iii) arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities;

 

  (b) is currently subject to any order, judgment or decree of any court of competent jurisdiction, entered in the last 5 years, that restrains or enjoins Intrexon from engaging in any conduct or practice (i) in connection with

 

 

1  

Note that the term “voting securities” has not been specifically defined by the U.S. Securities and Exchange Commission (the “ SEC ”). The SEC intends such term to be applied based on whether securityholders have or share the ability, either currently or on a contingent basis, to control or significantly influence the management and policies of the issuer through the exercise of a voting right. For example, the SEC would consider that securities that confer to securityholders the right to elect or remove the directors or equivalent controlling persons of the issuer, or to approve significant transactions such as acquisitions, dispositions or financings, would be considered voting securities for these purposes. Conversely, securities that confer voting rights limited solely to approval of changes to the rights and preferences of the class would not be considered voting securities for these purposes.

 

11


  the purchase or sale of any security, (ii) involving the making of a false filing with the SEC or (iii) arising out of the conduct of the business of an underwriter, broker-dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities;

 

  (c) is currently subject to a Final Order 2 of a state securities commission (or an agency or officer of a state performing similar functions), a state authority that supervises or examines banks, savings associations, or credit unions, a state insurance commission (or an agency or officer of a State performing like functions), an appropriate federal banking agency, the National Credit Union Administration, or the U.S. Commodity Futures Trading Commission, that (i) bars any Intrexon Party from (A) association with an entity regulated by such commission, authority, agency, or officer; (B) engaging in the business of securities, insurance, or banking; or (C) engaging in savings association or credit union activities; or (ii) constitutes a Final Order based on a violation of any law or regulation that prohibits fraudulent, manipulative, or deceptive conduct within the last 10 years;

 

  (d) is currently subject to an order of the SEC pursuant to Section 15(b) or 15B(c) of the U.S. Securities Exchange Act of 1934, as amended (the “ Exchange Act ”) or Section 203(e) or (f) of the U.S. Investment Advisers Act of 1940, as amended (the “ Advisers Act ”) that (i) suspends or revokes such Intrexon Party’s registration as a broker, dealer, municipal securities dealer or investment adviser, (ii) places limitations on Intrexon’s activities, functions or operations or (iii) bars such Intrexon Party from being associated with any entity or from participating in the offering of any penny stock;

 

  (e) is currently subject to any order of the SEC, entered in the last 5 years, that orders Intrexon to cease and desist from committing or causing a violation or future violation of (i) any scienter-based antifraud provision of the federal securities laws (including without limitation Section 17(a)(1) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, Section 15(c)(1) of the Exchange Act and Section 206(1) of the Advisers Act, or any other rule or regulation thereunder) or (ii) Section 5 of the Securities Act;

 

 

2   A “ Final Order ” is a written directive or declaratory statement issued by a federal or State agency under applicable statutory authority that provides for notice and an opportunity for hearing, which constitutes a final disposition or action by that federal or State agency. A Final Order may still be subject to appeal and otherwise meet this definition.

 

12


  (f) is currently suspended or expelled from membership in, or suspended or barred from association with a member of, a registered national securities exchange or registered national or affiliated securities association for any act or omission to act constituting conduct inconsistent with just and equitable principles of trade;

 

  (g) has filed as a registrant or issuer, or the issuer has been named as an underwriter in, a registration statement or Regulation A offering statement filed with the SEC that, within the last 5 years, (i) was the subject of a refusal order, stop order, or order suspending the Regulation A exemption or (ii) is currently the subject of an investigation or a proceeding to determine whether such a stop order or suspension order should be issued;

 

  (h) has been subject to (i) a United States Postal Service false representation order entered into within the last 5 years, or (ii) a temporary restraining order or preliminary injunction with respect to conduct alleged by the United States Postal Service to constitute a scheme or device for obtaining money or property through the mail by means of false representations; or

 

  (i) If the statements described in clauses (a) through (h) of this Section 5.1.11 apply to any Intrexon Party, the Intrexon Party has obtained a waiver from disqualification under Rule 506(d) either (i) from the SEC or (ii) from the court or regulatory authority that entered the relevant order, judgment or decree.

 

6. ASSIGNMENT

If at any time Intrexon (or any person holding the legal title to the Common Shares as nominee, custodian or trustee or otherwise on behalf of Intrexon) transfers any of its Common Shares, its rights and/or benefits arising from, or in connection with, this Agreement (including the benefit of the Warranties) shall be assignable in whole or in proportionate part to the transferee of such Common Shares or any interest therein.

 

7. APPLICABLE LAW AND JURISDICTION

 

7.1 This Agreement and the rights and obligations of the parties including all non-contractual obligations arising under or in connection with this Agreement shall be governed by and construed in accordance with the laws of Delaware.

 

13


7.2 The parties irrevocably submit to the non-exclusive jurisdiction of the courts of Massachusetts in respect of any claim, dispute or difference arising out of or in connection with this Agreement and/or any non-contractual obligation arising in connection with this Agreement, provided that nothing contained in this clause shall be taken to have limited the right of Intrexon to proceed in the courts of any other competent jurisdiction.

 

8. GENERAL

Entire agreement

 

8.1 This Agreement (together with any documents referred to herein or entered into pursuant to this Agreement contains the entire agreement and understanding of the parties and supersedes all prior agreements, understandings or arrangements (both oral and written) relating to the subject matter of this Agreement and any such document. Each of the parties acknowledges that it is entering into this Agreement without reliance on any undertaking or representation given by or on behalf of the other party, other than as expressly contained in this Agreement, provided that nothing in this clause shall exclude any liability of either party for fraudulent misrepresentation.

 

8.2 This Agreement shall not be construed as creating any partnership or agency relationship between any of the parties.

Variations and waivers

 

8.3 No variation of this Agreement shall be effective unless made in writing and signed by or on behalf of all the parties and expressed to be such a variation.

 

8.4 No failure or delay by Intrexon or time or indulgence given in exercising any remedy or right under or in relation to this Agreement shall operate as a waiver of the same nor shall any single or partial exercise of any remedy or right preclude any further exercise of the same or the exercise of any other remedy or right.

 

8.5 No waiver by any party of any requirement of this Agreement, or of any remedy or right under this Agreement, shall have effect unless given in writing and signed by such party. No waiver of any particular breach of the provisions of this Agreement shall operate as a waiver of any repetition of such breach.

Effect of Completion

 

8.6 The provisions of this Agreement, insofar as the same shall not have been performed at Completion, shall remain in full force and effect notwithstanding Completion.

 

14


Counterparts

 

8.7 This Agreement may be executed as two or more counterparts and execution by any of the parties of any one of such counterparts will constitute due execution of this Agreement.

Further assurance

 

8.8 Each party shall, and shall use all reasonable endeavours to procure that any necessary third party shall, do and execute and perform all such further deeds, documents, assurances, acts and things as may reasonably be required to give effect to this Agreement.

Other remedies

 

8.9 Any remedy or right conferred upon Intrexon for breach of this Agreement shall be in addition, and without prejudice, to all other rights and remedies available to them.

Third party rights

 

8.10 Where, in connection with this Agreement (or any other agreement or arrangement to be entered into by Intrexon in accordance with this Agreement), the Company undertakes any obligation in respect of any person (other than, or in addition to, Intrexon), the Company unconditionally and irrevocably acknowledges and agrees that Intrexon is entering into this Agreement (or any such other agreement or arrangement) and accepting the benefits of such obligations not only for itself but also as agent and trustee for such other person.

 

8.11 No provision of this Agreement is intended to benefit or be enforceable by any third party pursuant to the Contracts (Rights of Third Parties) Act 1999, but this shall not affect any right or remedy of a third party which exists or is available apart from the Contracts (Rights of Third Parties) Act 1999. Notwithstanding any benefits or rights conferred by this Agreement on any third party by virtue of the Contracts (Rights of Third Parties) Act 1999, the parties to this Agreement may vary, terminate or rescind this Agreement without obtaining the consent of any such third party.

 

9. NOTICES

Form of Notice

 

9.1 Any notice, consent, request, demand, approval or other communication to be given or made under or in connection with this Agreement (each a “ Notice ” for the purposes of this clause) shall be in writing and signed by or on behalf of the person giving it.

 

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Method of service

 

9.2 Service of a Notice must be effected by one of the following methods;

 

  9.2.1 by hand to the relevant address set out in clause 9.4 and shall be deemed served upon delivery if delivered during a Business Day, or at the start of the next Business Day if delivered at any other time;

 

  9.2.2 by prepaid international airmail to the relevant address set out in clause 9.4 and shall be deemed served at the start of the fourth Business Day after the date of posting; or

 

  9.2.3 by facsimile transmission to the relevant facsimile number set out in clause 9.4 and shall be deemed served on despatch if despatched during a Business Day, or at the start of the next Business Day if despatched at any other time, provided that in each case a receipt indicating complete transmission of the Notice is obtained by the sender and that a copy of the Notice is also despatched to the recipient using a method described in clause 9.2.1 or clause 9.2.2 no later than the end of the next Business Day.

 

9.3 In clause 9.2 “ during a Business Day ” means any time between 9.30 a.m. and 5.30 p.m. on a Business Day based on the local time where the recipient of the Notice is located. References to “ the start of a Business Day ” and “ the end of a Business Day ” shall be construed accordingly.

Address for service

 

9.4 Notices shall be addressed as follows:

 

  9.4.1 Notices for the Company shall be marked for the attention of:

 

Name:    the Company Secretary
Address:    Two Clock Tower Place, Suite 395, Maynard, MA 01754 USA
Fax number:    +1 978-897-3217

 

  9.4.2 Notices for the Intrexon shall be marked for the attention of:

 

Name:    General Counsel
Address:    20358 Seneca Meadows Parkway, Germantown, MD 20876 USA
Fax number:    +1 301-556-9902

Change of details

 

9.5 A party may change its address for service provided that it gives all other parties not less than 14 days’ prior notice in accordance with this clause 9. Until the end of such notice period, service on either address shall remain effective.

 

16


THIS AGREEMENT has been duly executed and delivered as a deed on the date stated above.

[Signature page follows]

 

17


IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be executed as of the day and year first above written.

 

AQUABOUNTY TECHNOLOGIES, INC.
By:  

/s/ David Frank

Name:   David Frank
Title:   Chief Financial Officer and Secretary
INTREXON CORPORATION
By:  

/s/ Don Lehr

Name:   Don Lehr
Title:   Chief Legal Officer

AquaBounty – Subscription Agreement


SCHEDULE 1

Warranties

 

1. Circular

Statements of fact contained in the Circular are true and accurate in all material respects and not misleading in any material respect and there are no facts, matters or circumstances known, or which could after due and proper consideration and enquiry have been known, to the Company or any of the Directors which are not disclosed in the Circular, the omission of which would, or might reasonably be expected to, materially affect the ability of the Company’s Stockholders to properly consider the matters contained therein.

 

2. Liabilities

 

2.1 Save as Publicly Announced or disclosed in the Circular, the Company has no outstanding borrowings of any nature or amount (including, without limitation, any overdraft facilities; loans; invoice discounting factoring or other financial facilities).

 

3. Compliance with Laws

 

3.1 Subject to the passing of the Resolutions, the execution of this Agreement by the Company and the creation and issue of the New Shares will comply in all respects with the FSMA, the rules and regulations of the FSA and the London Stock Exchange, the Prospectus Rules, the AIM Rules, the General Corporation Law of the State of Delaware, the federal securities laws of the USA, and all applicable state and federal laws and regulations of the USA (collectively, the “ US Laws ”), and all other relevant laws and regulations of the United Kingdom and elsewhere and will comply with and will not infringe or exceed any limits, powers or restrictions or the terms of any agreement, obligation or commitment to which the Company or any Group Company is a party or by which the Company or any Group Company is bound.

 

3.2 Each Group Company and its officers, agents and employees (past and present) in the course of their respective duties have complied in all material respects with all applicable laws and regulations of the United Kingdom, the European Community and any foreign jurisdiction in which the business of such Group Company is carried on, including, without limitation, the US Laws.


4. Position Since the Accounts Date

 

4.1 Save as Publicly Announced or disclosed in the Circular, since June 30, 2013:

 

  4.1.1 the business of the Group has been carried on in the ordinary and usual course;

 

  4.1.2 there has been no significant adverse change in the financial or trading position of the Group taken as a whole;

 

  4.1.3 no member of the Group has acquired or disposed of or agreed to acquire or dispose of any of its assets or businesses other than in the ordinary course of trading; and

 

  4.1.4 no member of the Group has paid or made any payment or transfer to stockholders of any dividend, bonus, loan or distribution.

 

5. Licences and Consents

 

5.1 Save as Publicly Announced or disclosed in the Circular, the Group has all material licences, consents, approvals, permissions, permits, certificates, qualifications, registrations and other authorisations (public and private) necessary for the proper and efficient operation of its current businesses in the places and in the manner in which the business is now carried on (together the “ Authorities ”).

 

5.2 Save as Publicly Announced or disclosed in the Circular, all of the Authorities are in full force and effect and are not limited in duration or subject to any unusual or onerous conditions, and have been complied with in all material respects.

 

5.3 Save as Publicly Announced or disclosed in the Circular, so far as the Company is aware, there are no circumstances which indicate that any of the Authorities will be revoked or not renewed, in whole or in part, whether as a result of the transactions contemplated by this Agreement or otherwise.

 

6. Intellectual Property

 

6.1 Except as disclosed on Schedule 2, the Company owns or possesses sufficient legal rights to all Intellectual Property Rights necessary for its business as now conducted, without any known infringement of the rights of others. The Company is not aware of any allegations that the Company is presently violating any of the Intellectual Property Rights of any other Person.

 

2


7. Options and Warrants

 

7.1 Save as Publicly Announced or disclosed in the Circular, there are no options, warrants or other agreements or arrangements in force which call for the issue to any person, or accord to any person the right to call for the issue of any shares in the capital of the Group or any other securities of any member of the Group.

 

8. Assets

 

8.1 All the material assets necessary for the operation of the business of the Group, as currently carried on, are legally and beneficially owned or leased by the Company or the applicable member of the Group.

 

8.2 The Group’s fixed asset register provided to Intrexon sets out a complete and accurate record of the plant, machinery, vehicles and equipment owned or used by it.

 

9. Litigation

Save as Publicly Announced or disclosed in the Circular or on Schedule 2, no member of the Group nor any Director nor any other person for whom the Company or any member of the Group is or may be vicariously liable is engaged in any material legal or arbitration proceedings or is the subject of any disciplinary proceedings or enquiries by any governmental or regulatory bodies which individually or collectively may have, or have had during the 12 months preceding the date of this Agreement, a material effect on the financial position of the Group and, so far as the Company is aware, no such legal or arbitration proceedings are threatened or pending nor are there any circumstances of which the Company is aware which may give rise to any such legal or arbitration proceedings being threatened or commenced.

 

10. Capitalization and Issuance

 

10.1 As of the date of this Agreement, the authorized capital of the Company consists of 200,000,000 shares of Common Stock, par value of $0.001 per share, and 40,000,000 shares of Preferred Stock, par value $0.01 per share, of which 125,305,471 shares of Common Stock are issued and outstanding.

 

10.2 The New Shares (i) are duly authorized, (ii) when issued and sold to Intrexon will be validly issued, (iii) after receipt of all consideration due therefore, will be fully paid and nonassessable with no personal liability attaching to the ownership thereof and (iv) will be free and clear of any and all liens, charges, restrictions, claims and encumbrances, except as set forth in this Agreement or the Certificate of Incorporation.

 

3


10.3 Based in part on, and in reliance upon the accuracy of, the representations and warranties of Intrexon set forth in clause 5 of this Agreement, the offer, sale and issuance of the New Shares in conformity with the terms of this Agreement are exempt from the registration requirements of the Securities Act and are exempt from the qualification or registration requirements of applicable U.S. state securities laws. Neither the Company nor any agent on its behalf has solicited or will solicit any offers to sell or has offered to sell or will offer to sell all or any part of the New Shares to any Person or Persons so as to bring the sale of such New Shares by the Company within the registration provisions of the Securities Act or any U.S. state securities laws.

 

11. Authorization

 

11.1 This Agreement has been duly executed by the Company and when executed by Intrexon will constitute a valid and legally binding agreement of the Company, enforceable against it by Intrexon in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally or by equitable principles, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) to the extent that the enforceability of the indemnification provisions may be limited by applicable laws.

 

11.2 Except for the conditions listed in clause 2.1 of this Agreement, all corporate action on the part of the Company and its officers and Directors necessary for (i) the authorization, execution, delivery and performance of all obligations of the Company under each of this Agreement and the Certificate of Incorporation has been taken and (ii) the issuance and sale by the Company of the New Shares hereunder has been taken.

 

4


SCHEDULE 2

On July 25, 2013, the Company set a notice of termination to Genesis Group, Inc. (“ Genesis ”) which terminated the License Agreement dated July 10,1996 (as amended), which was originally entered into by and among the Company’s predecessors in interest, A/F Protein Inc. and A/F Protein Canada Inc, and HSC Research and Development Partnership and Genesis (the “ License Agreement ”). On October 18, 2013, the Company received a letter from Genesis’ counsel disputing the termination of the License Agreement. The Company and Genesis are currently negotiating a settlement agreement under which the Company will pay Genesis C$150,000 in return for (i) a complete release from Genesis for any claims it may have against the Company under the License Agreement, and (ii) a perpetual license for the Company to make use of the technology and licensed patents covered under the License Agreement.

Exhibit 10.11

Execution Version

Dated 24 June 2015

(1) AquaBounty Technologies, Inc.

(2) Intrexon Corporation

SUBSCRIPTION AGREEMENT

 


THIS SUBSCRIPTION AGREEMENT (this “ Agreement ”) is made on 24 June 2015,

BETWEEN:

 

(1) AQUABOUNTY TECHNOLOGIES, INC. , incorporated and registered in the state of Delaware, USA with registered number 2282110 and whose principal place of business is at Two Clock Tower Place, Suite 395, Maynard, MA 01754 USA (the “ Company ”); and

 

(2) INTREXON CORPORATION , incorporated and registered in the state of Virginia, USA with registered number 06154801 and whose principal place of business is at 20358 Seneca Meadows Parkway, Germantown, MD 20876 USA (“ Intrexon ”).

WHEREAS:

Intrexon has agreed to subscribe for the New Shares (as defined below) in the capital of the Company and the parties have agreed to regulate the terms of the Subscription (as defined below) on the terms and conditions of this Agreement.

IT IS AGREED as follows:

 

1. DEFINITIONS AND INTERPRETATION

 

1.1 The following words and expressions where used in this Agreement have the meanings given to them below:

Admission shall have the meaning given to it in clause 2.1 of this Agreement.

Admission Condition means the condition to Completion set out in clause 2.1 of this Agreement.

Advisers Act shall have the meaning given to it in clause 5.1.11(d) of this Agreement.

Agreement shall have the meaning given to it in the preamble of this Agreement.

AIM means AIM, a market operated by the London Stock Exchange.

AIM Rules means the AIM Rules for Companies published by the London Stock Exchange.

Authorities shall have the meaning given to it in clause 4.1 of Schedule 1 of this Agreement.

Board means the board of directors of the Company from time to time.

Business Day means any day other than a Saturday, Sunday or English bank or public holiday.