EX-10.2 3 edit-20180630ex102f1598a.htm EX-10.2 EXECUTION VERSION Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Double asterisks denote omissions. Sponsored Research Agreement
Exhibit 10.2
EXECUTION VERSION
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Double asterisks denote omissions.
This Sponsored Research Agreement (this “Agreement”), dated as of June 7, 2018 (the “Effective Date”), is made by and between the Broad Institute, Inc. (“Broad”), a non-profit Massachusetts corporation, with a principal office at 000 Xxxx Xxxxxx, Xxxxxxxxx, XX 00000, and Editas Medicine, Inc. (“Company”), a Delaware corporation, with a principal office at 00 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000. Each of Broad and Company may be referred to herein as a “Party” or together as the “Parties.”
NOW, THEREFORE, the Parties hereto, intending to be legally bound, hereby agree as follows:
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[**], then Broad shall make each such principal investigator available to meet with Company, upon reasonable advance notice and during normal business hours, either in person or by telephone, as reasonably requested by Company, but no more frequently than [**], to discuss the research within the Sponsored Research conducted by or under the supervision of such principal investigator and such principal investigator’s assessment of the progress and objectives of his or her research. If Broad conducts Sponsored Research during a [**], then, upon Company’s request, Broad shall provide Company, within [**]days after the end of such [**], with a written report identifying the research (by principal investigator and objective) within the Sponsored Research and summarizing the results of such research since the prior such [**] report or the Effective Date in the case of the first such [**] report. All reports and other information provided by Broad to Company in accordance with this Section 2.2 shall be referred to herein as “Reports of Broad.”
2.4. Option to Negotiate a License Agreement.
2.4.1. Exclusive Option. Broad grants to Company, on an Invention-by-Invention basis, an exclusive first option (the “Company License Option”) during the Option Period for such Invention to negotiate a license agreement (“Invention License Agreement”) to obtain a non-exclusive or exclusive license, as requested by Company and permitted in accordance with Broad’s institutional policies in effect at such time, under the intellectual property rights in each Invention that are Controlled by Broad (the “Optioned IP”), to research, develop, make, have made, use, sell, have sold, offer for sale, import and export products covered by such Inventions. “Controlled” shall mean, as to any intellectual property right, the possession (whether by ownership or license, other than by a license granted pursuant to this Agreement, or by right under an inter-institutional agreement or other arrangement) by Broad of the ability to grant to Company access, ownership, a license or a sublicense as required herein to such intellectual property right, without (a) violating the terms of any agreement or other arrangement with any Third Party in existence as of the time Broad would be required hereunder to grant Company such access, ownership, license or sublicense, and (b) violating any law or regulation. If at the time of providing a Disclosure Notice, Broad does not have the right to license the interests of an academic institution that is not a Participating Institution (as defined below) in the applicable Optioned IP by virtue of a pre-existing agreement between Broad and such academic institution, then Broad shall make good faith efforts to secure an inter-institutional agreement with such academic institution within [**] days after the date of filing of the first patent application (provisional or utility) covering the applicable Invention pursuant to which Broad would acquire the exclusive right to license such interests in the Optioned IP (or the right to license such interests in the Optioned IP non-exclusively if Company requests a non-exclusive license from Broad) on
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reasonable terms. Where the grant of access, ownership, a license or a sublicense would result in any payment or other obligations to a Third Party, “Controlled” requires a written undertaking of Company to take over any payments or other obligations resulting from Company’s use of the respective intellectual property right. “Third Party” shall mean any individual or entity other than the Parties and their Affiliates. For the avoidance of doubt, each Company License Option is a separate option; however, if Company exercises more than one Company License Option, Broad will consider reasonably a request by Company to group Inventions related by subject matter or field of use into a single Invention License Agreement to be negotiated and agreed by the Parties; provided that Broad’s consideration of such request will be determined by factors including but not limited to the economic terms related to a license under any Optioned IP.
2.4.2. Option Exercise. With respect to each Company License Option, to exercise such Company License Option, Company shall give written notice (an “Option Notice”) of the exercise of such Company License Option within [**] calendar days following Company’s receipt of the applicable Disclosure Notice (such period as it may be extended in accordance with the terms of this Agreement, the “Option Period”). In the event that Company exercises a Company License Option during the Option Period, then, subject to Section 2.4.3 (Participating Institution Approval), during the period beginning on the date of the Option Notice and ending on the date that is [**] calendar days thereafter (the “Negotiation Period”), the Parties shall negotiate in good faith an Invention License Agreement for fair market value on terms consistent with Broad’s standard agreements with industry licensees. If, no later than the end of [**] calendar days following Company’s receipt of the applicable Disclosure Notice, Company notifies Broad in writing that Company has a possible interest in exercising the Company License Option and agrees to pay the out-of-pocket costs of preparing a patent application covering the Invention that is the subject of such Disclosure Notice (such written notice, the “Extension Notice,” and such costs, the “Prosecution Costs”), the Option Period shall be extended so that it expires on the date that is [**] calendar days after the date of the first filing of the first patent application (provisional or utility) covering such Invention. If after providing an Extension Notice, Company fails to pay any portion of the applicable Prosecution Costs within [**] calendar days after presentation of an invoice therefore (including reasonably detailed back-up for the charges shown thereon), then the applicable Option Period and applicable Company License Option shall terminate immediately upon written notice to Company by Broad. Any such non-payment of Prosecution Costs in any calendar year shall be considered a material breach of this Agreement. Company shall not have the right to prepare, file, prosecute or maintain any Optioned IP; provided, however, that during an Option Period, Broad shall permit Company to review and comment on any draft patent application covering an Invention subject to the applicable Company License Option, on the express condition that Company will not propose any claim amendment or new claim that it believes, or has reason to believe, would result in the addition of new inventor(s) to the application in question. Broad will consider reasonably a request by Company to group Inventions related by subject matter or field of use into a single patent application; provided, however, that the decision on the content of any patent application shall
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remain solely Broad’s. All information provided by Broad regarding a patent application in accordance with the terms of this Section 2.4.2 (Option Exercise) shall be referred to herein as “Application Information.”
2.4.3. Participating Institution Approval. If, pursuant to that certain Operating Agreement by and among the Massachusetts Institute of Technology, President and Fellows of Harvard College, the Xxx and Xxxxxx Broad Foundation and Broad, dated as of July 1, 2009 (the “Operating Agreement”), the approval of a Third Party subject to the Operating Agreement (a “Participating Institution”) is required before the execution of a given Invention License Agreement for which Company has exercised the Company License Option, Broad shall request such approval in accordance with the Operating Agreement.
2.4.4. Retained Rights and Third Party Rights. Each Company License Option and any subsequent Invention License Agreement shall be subject to (a) Broad’s right, retained on behalf of itself and all other non-profit institutions and government agencies, to make, use, perform and practice the subject matter described or claimed in any patent rights under the applicable Inventions for non-commercial research, teaching and educational purposes, including within the field of the Invention License Agreement; provided, however, that sponsored research funded by a commercial entity shall be considered non-commercial research for purposes of this Section 2.4.4 (Retained Rights and Third Party Rights); and (b) the applicable rights and requirements of the United States government, and obligations of Broad, as set forth in 35 U.S.C. §§ 200-212 and the regulations promulgated thereunder, as amended, or any successor statutes or regulations, and, to the extent applicable, the requirement that any product under an Invention License Agreement used or sold in the United States be manufactured substantially in the United States (see 35 U.S.C. §202 et seq. and regulations pertaining thereto).
2.4.5. Termination of Option. If Company fails to exercise a Company License Option during the Option Period for such Company License Option or, having exercised the Company License Option, the Parties do not execute an Invention License Agreement within the Negotiation Period, then (a) such Company License Option shall be deemed to have expired with respect to the applicable Invention, and (b) Broad shall have no further obligations to Company with respect to such Invention and may develop and commercialize such Invention itself or with or through Third Parties without restriction.
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3.4. Payment in the Event of a Company Sale. If Company undergoes a Company Sale prior to the [**] anniversary of the Effective Date, then (a) Broad shall receive the applicable Company Sale Research Payment no later [**] and (b) no further Research Payment shall become due and payable under this Agreement. With respect to any (i) Company Sale or (ii) Asset Sale to an Affiliate of Company, Company shall cause the acquirer, successor, assignee or licensee of Company or of Company’s assets, as applicable, to assume Company’s obligations hereunder.
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Date and that is not paid in connection with a Company Sale pursuant to Section 3.4 (Payment in the Event of a Company Sale), shall be paid by Company in cash or by issuance of a Promissory Note in the aggregate principal amount of such Research Payment, which Promissory Note shall be issued to Broad (or its designee(s) in accordance with Section 3.6.1 (Designation of Recipient of Notes)) no later than [**] days after the applicable Trigger Date.
3.5.1. Payment in [**]. In the event that Company is able [**] to issue shares of Common Stock [**] in full or partial satisfaction of a Research Payment, Company may, upon notice to Broad, issue such shares of Common Stock [**] no later than [**] days after the applicable Trigger Date to satisfy the obligation to pay such Research Payment (or any portion thereof) in lieu of the issuance of a Promissory Note. If Company does not pay the entire Research Payment with the issuance of such shares of Common Stock in accordance with this Section 3.5.1 (Payment in [**]), it shall issue a Promissory Note for the value of such Research Payment minus the value of the shares of Common Stock issued pursuant to this Section 3.5.1 (Payment in [**]) in partial satisfaction of such Research Payment. The dollar value of any shares of Common Stock issued pursuant to this Section 3.5.1 (Payment in [**]) shall equal the product of (x) the number of shares of Common Stock issued multiplied by (y) [**].
3.6. Issuance and Payment of Notes.
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by Broad within [**] days after the applicable Trigger Date. In the event such instructions are not received by [**] days after the applicable Trigger Date, Company shall issue the Promissory Notes (and any Note Shares issuable in payment thereof in accordance with Section 3.6.3 (Payment of Note with Shares)) to Broad. Broad and any designee of Broad pursuant to this Section 3.6.1 (Designation of Recipient of Notes) that receives a Promissory Note are individually referred to as a “Noteholder” and collectively as the “Noteholders.”
3.6.2. Installments; Interest; Prepayment; Transfer.
3.6.2.1. Installments. Subject to Section 3.5.3 (Initial Research Payments), Company shall pay the principal and any accrued interest under any Promissory Note in one or more installments (each an “Installment”) over the period beginning on the Issuance Date of such Promissory Note and ending one hundred and fifty (150) days following such Issuance Date (each such end date, the “Maturity Date” for such Promissory Note).
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interest on such Promissory Note by [**]. Following such payment, Company shall promptly notify the Noteholder of the applicable Promissory Note of the number and dollar value of the Note Shares that are [**] that shall be considered payment of the applicable Promissory Note and that shall be considered payment of interest accrued on the principal amount of such Promissory Note, and the principal amount of such Promissory Note remaining unpaid and the unpaid accrued interest on such Promissory Note. All expenses related [**] of the Note Shares shall be borne by Company.
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3.6.6. [**]. Notwithstanding the foregoing, [**], Company shall [**] to the Company [**] referred to in this Agreement. [**] to Company [**] to Company [**]. Prior to the Effective Date, Broad shall have provided to Company evidence, in form and substance satisfactory to Company, that Broad’s designees, if any, have consented to (i) receive a Promissory Note, (ii) deliver a certificate as required by Section 3.6.8 (Representations and Warranties by Broad), (iii) provide all requisite information in a timely fashion with respect to [**] and (iv) [**].
(a) Broad is acquiring the Promissory Notes for its own account for investment purposes and not with a view to, or for offer or sale in connection with, any distribution thereof;
(b) Broad acknowledges that the Promissory Notes and any Note Shares are not, and shall not be, registered under the Securities Act (provided that the resale of any such Note Shares shall be [**]), or any state securities laws, and that the Promissory Notes may not be transferred or sold except pursuant to the registration provisions of the Securities Act or pursuant to an applicable exemption therefrom and subject to state securities laws and regulations, as applicable; and
(c) Broad has had an opportunity to discuss Company’s business, management, financial affairs and the terms and conditions of the offering of the Promissory Notes and any Note Shares with Company’s management and has had an opportunity to review Company’s facilities.
(d) Broad has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the Company. Broad acknowledges receipt of copies of Company’s filings pursuant to the Exchange Act.
(e) Broad represents that it is an accredited investor (as that term is defined in Rule 501 of Regulation D under the Securities Act).
In the case of any issuance of Promissory Notes and any Note Shares to any designee of Broad, Company’s obligation to issue such Promissory Notes and any Note Shares shall be conditioned on a receipt of a letter from such Person making the foregoing representations and warranties (with such Person’s name substituted for Broad therein) as of the date of issuance of such Promissory Note, and, for clarity, notwithstanding anything to the contrary herein, Company shall have no obligation to issue any Promissory Notes or any Note Shares to any designee of Broad unless and until receipt of such letter from such applicable Person.
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“The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended, and may not be sold, transferred or otherwise disposed of in the absence of an effective registration statement under such Act or an opinion of counsel satisfactory to the corporation to the effect that such registration is not required.”
3.6.10. Removal of Legend. The legend set forth in Section 3.6.9 (Legends) shall be removed and the Company shall issue a certificate or book-entry statement without such legend or any other legend to the holder of the applicable Note Shares upon which it is stamped or issue to such Noteholder by electronic delivery at the applicable balance account at the DTC, if (a) such Note Shares are registered for resale under the Securities Act, (b) such Note Shares are sold pursuant to Rule 144 under the Securities Act (“Rule 144”) (if the transferor is not an Affiliate of the Company), or (c) such Note Shares are eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such securities and without volume or manner-of-sale restrictions. Following the earlier of (i) the receipt of a certificate in the form attached hereto as Exhibit 3.6.10 from a Noteholder in connection with the resale of Note Shares pursuant to the effective Registration Statement or (ii) Rule 144 becoming available for the resale of Note Shares, without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such securities and without volume or manner-of-sale restrictions, the Company shall cause its counsel to issue to the Company’s transfer agent (the “Transfer Agent”) the legal opinion referred to in the legend set forth in Section 3.6.9 (Legends). Any fees associated with the issuance of such opinion or the removal of such legend shall be borne by the Company. Following such time as a legend is no longer required for certain Note Shares, the Company will no later than [**] Trading Days following the delivery by a Noteholder to the Transfer Agent (with notice to the Company) of (i) a legended certificate representing Note Shares (endorsed or with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer) or (ii) other applicable evidence of ownership (together with such documentation reasonably required by the Transfer Agent), deliver or cause to be delivered to such Noteholder a certificate or book-entry statement representing such Note Shares that is free from all restrictive and other legends. The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in Section 3.6 (Issuance and Payment of Notes). For the avoidance doubt, in the event that Note Shares are issued to a Noteholder who desires to dispose of such Notes Shares in a transaction other than a transaction described in clauses (a) or (b) of this Section 3.6.10 (Removal of Legend), such Notes Shares may be transferred but shall retain the legend set forth in Section 3.6.9 (Legends).
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3.6.11. If the Company shall fail to issue to a Noteholder unlegended certificates or book-entry statements within [**] Trading Days of receipt of all documents necessary for the removal of the legend set forth above (the “Deadline Date”), then, in addition to all other remedies available to such Noteholder, if on or after the Trading Day immediately following the Deadline Date, such Noteholder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Noteholder of shares of Common Stock that such Noteholder anticipated receiving from the Company without any restrictive legend (a “Buy-In”), then the Company shall, within [**] after such Noteholder’s request and in such Noteholder’s sole discretion, either (i) pay cash to the Noteholder in an amount equal to such Noteholder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate or book-entry statement (and to issue such shares of Common Stock) shall terminate, or (ii) promptly honor its obligation to deliver to such Noteholder a certificate(s) or book-entry statement representing such shares of Common Stock and pay cash to the Noteholder in an amount equal to the excess (if any) of the Buy-In Price over the product of (x) such number of shares of Common Stock, times (y) [**].
Bank Name: |
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Account Name: |
The Broad Institute Inc. |
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Account Number: |
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Wire ABA: |
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ACH ABA: |
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SWIFT Code: |
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Each payment should reference this Agreement and identify the obligation under this Agreement that the payment satisfies.
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law. Interest shall accrue beginning on the first day following the due date for payment and shall be compounded [**]. Payment of such interest by Company shall not limit, in any way, Broad’s right to exercise any other remedies Broad may have as a consequence of the lateness of any payment.
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Party’s obligations of confidentiality and non-use hereunder. Notwithstanding any other provisions herein, Confidential Information of a Party does not include information which (1) was known to the receiving Party prior to the time of disclosure; (2) is at the time of disclosure hereunder, or later becomes, public knowledge through no fault or omission of the receiving Party; (3) is obtained by the receiving Party from a Third Party that, to the knowledge of the receiving Party at the time of obtaining the Confidential Information, does not have an obligation of confidentiality to the disclosing Party; or (4) has been independently developed by employees, subcontractors, consultants or agents of the receiving Party without the aid, application or use of such information, as evidenced by contemporaneous written records.
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provide a copy of the manuscript to Company at least [**] days prior to publication of the manuscript for publication review, in order to permit Company to identify any disclosure of patentable information that should be protected by the filing of a patent application before publication or disclosure of such manuscript, to the extent such patent application would be subject to the applicable Company License Option. If necessary to permit the preparation and filing of a United States patent application, an additional [**] day review period shall be granted. The total review period under this Section 4.4 (Publication) shall not exceed [**] days, unless the Parties mutually agree in writing to extend this review period.
5. WARRANTIES; LIMITATION OF LIABILITY; REMEDY
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ANY INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES, INCLUDING INCIDENTAL, ECONOMIC DAMAGES OR INJURY TO PROPERTY AND LOST PROFITS, EVEN IF SUCH PARTY OR PARTICIPATING INSTITUTION HAS BEEN INFORMED, SHOULD HAVE KNOWN OR IN FACT KNEW OF THE POSSIBILITY OF SUCH DAMAGES.
5.3.1. Monetary Limitation for Broad. THE MAXIMUM AGGREGATE LIABILITY OF BROAD AND THE PARTICIPATING INSTITUTIONS TO COMPANY FOR CLAIMS ARISING FROM OR RELATING TO THIS AGREEMENT SHALL NOT EXCEED THE GREATER OF FIVE MILLION U.S. DOLLARS (US $5,000,000) OR THE UNEXPENDED RESEARCH FUNDING (LESS AMOUNTS NECESSARY FOR BROAD TO PAY NON-CANCELLABLE COMMITMENTS) HELD BY BROAD AT THE TIME A CLAIM BY COMPANY IS FIRST BROUGHT IN A LEGAL ACTION. The foregoing limitation applies regardless of whether the claim is brought under contract, tort, warranty or otherwise.
5.3.2. Monetary Limitation for Company. EXCEPT WITH RESPECT TO ANY PAYMENTS THAT COMPANY MAY OWE UNDER THE TERMS OF THIS AGREEMENT, THE MAXIMUM AGGREGATE LIABILITY OF COMPANY AND ITS AFFILIATES TO BROAD FOR CLAIMS ARISING FROM OR RELATING TO THIS AGREEMENT SHALL NOT EXCEED FIVE MILLION U.S. DOLLARS (US $5,000,000). The foregoing limitation applies regardless of whether the claim is brought under contract, tort, warranty or otherwise.
5.5. Remedy for Material Breach by Broad. Notwithstanding the foregoing Section 5.4 (Remedy for Breach), in the event of a material breach of this Agreement by Broad, if Broad fails to cure such material breach within [**] days after the date of receipt of a written notice thereof from Company, then:
5.5.1. Company may credit an amount equal to the amount of Research Funding expended by Broad on the research program associated with such material breach (the “Creditable Amount”) against a future Research Payment payable by Company, which Creditable Amount Broad shall determine and report to Company in writing within [**] days after having failed to cure such material breach; and
5.5.2. Company shall have recourse to any remedy, other than termination, available at law or in equity with respect to such material breach, including an action for specific performance of this Agreement, subject to the terms of this Agreement
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and provided that any damages payable by Broad to Company in connection with such material breach shall (i) be reduced by any Creditable Amount for such material breach already credited against a future Research Payment pursuant to Section 5.5.1 and (ii) reduce any Creditable Amount for material breach not yet credited against a future Research Payment pursuant to Section 5.5.1.
The Parties acknowledge that (A) any breach of failure to give notice under the Agreement can be cured by notice given and (B) the cure period shall be tolled pending resolution of any bona fide dispute between the Parties as to whether any such material breach has occurred.
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If to Broad: |
The Broad Institute, Inc. |
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Attn: [**] |
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Chief Business Officer |
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000 Xxxx Xxxxxx |
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Xxxxxxxxx, XX 00000 |
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If to Company: |
Editas Medicine, Inc. |
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Attention: Chief Executive Officer |
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00 Xxxxxx Xxxxxx |
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Xxxxxxxxx, XX 00000 |
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With a copy to: |
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Editas Medicine, Inc. |
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Attention: Legal Affairs |
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00 Xxxxxx Xxxxxx |
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Xxxxxxxxx, XX 00000 |
Any notice shall be deemed to have been received as follows: (a) by personal delivery or expedited delivery, upon receipt; or (b) by certified mail, as evidenced by the return receipt.
7.2. Non-Use of Name. Except as provided below, Company shall not, and shall ensure that its Affiliates shall not, use or register the name “The Broad Institute, Inc.,” “President and Fellows of Harvard College,” “Massachusetts Institute of Technology,” or any variation, adaptation, or abbreviation thereof (alone or as part of another name) or any logos, seals, insignia or other words, names, symbols or devices that identify Broad or any Participating Institution, or any school, unit, division or Affiliate of Broad or any Participating Institution (“Institution Names”) for any purpose except with the prior written approval of, and in accordance with restrictions required by, Broad or the applicable Participating Institution, as applicable. Without limiting the foregoing, Company shall, and shall ensure that its Affiliates shall, cease all use of Institution Names as permitted under or in connection with this Agreement on the termination or expiration of this Agreement except as otherwise approved in writing by Broad or the applicable Participating Institution, as applicable. This restriction shall not apply to any information required by law to be disclosed to any governmental entity.
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7.4. Governing Law and Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the substantive laws of the Commonwealth of Massachusetts, without giving effect to any choice or conflict of law provision. Any action, suit or other proceeding arising under or relating to this Agreement (a “Suit”) shall be brought in a court of competent jurisdiction in the Commonwealth of Massachusetts and the Parties hereby consent to the sole jurisdiction of the state and federal courts sitting in the Commonwealth of Massachusetts. Each Party agrees not to raise any objection at any time to the laying or maintaining of the venue of any Suit in any of the specified courts, irrevocably waives any claim that Suit has been brought in any inconvenient forum and further irrevocably waives the right to object, with respect to any Suit, that such court does not have any jurisdiction over such Party. Notwithstanding any provision of this Agreement to the contrary, any Party may immediately initiate litigation in any court of competent jurisdiction to obtain temporary or preliminary equitable remedies, including temporary or preliminary injunctive relief as necessary to enforce such Party’s rights under this Agreement.
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[Signatures Follow]
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THE BROAD INSTITUTE, INC.: |
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EDITAS MEDICINE, INC.: | ||
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By: |
/s/ Xxxx Xxxxx |
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By: |
/s/ Xxxxxx Hack |
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Name: |
Xxxx Xxxxx |
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Name: |
Xxxxxx Hack |
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Title: |
Chief Business Officer |
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Title: |
Chief Financial Officer |
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SCHEDULE 1
Defined Terms
“Acquisition Value” means, with respect to a Company Sale, the amount equal to the total gross non-contingent consideration paid or payable (regardless of whether such consideration is paid or payable in cash, stock, by assumption of debt or otherwise) by the acquirer (or its designees, successors or assigns, as applicable) in a Company Sale, with such amount grossed up for any applicable Deduction taken. For the purpose of determining Acquisition Value, the valuation of any securities or other non-cash assets paid or payable as consideration with respect to a Company Sale shall be determined by reference to the operative transaction agreement(s) for such Company Sale, provided that, if no such valuation is readily determinable from such operative transaction agreement(s), then:
(a) for securities primarily listed and quoted for trading on New York Stock Exchange, the NYSE Amex Equities (formerly the American Stock Exchange), the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or other securities exchange, the per share value shall be deemed to be the average of the closing prices of such securities on such exchange or market, as applicable, over the [**]-day period ending [**] days prior to the Company Sale Date;
(b) for securities primarily listed and quoted for trading on the OTC Bulletin Board or equivalent, the per share value shall be deemed to be the average of the closing bid prices over the [**]-day period ending [**] days prior to the Company Sale Date;
(c) for all other securities or for assets other than securities or cash, the value shall be determined in good faith by mutual agreement of Broad and Company (or Company’s acquirer or successor entity, as applicable). If the parties are not able to agree in good faith on such value within [**] days after payment of such securities or property, then such dispute will be handled pursuant to Section 7.3
(Dispute Resolution) of the Agreement.
“Affiliate” means, as to any Person, any other Person that controls, is controlled by, or is under common control with, such Person. For purposes of this definition only, “control” and, with correlative meanings, the terms “controlled by” and “under common control with” means the possession, directly or indirectly, of the power to direct the management or policies of an organization or entity, whether through the ownership of voting securities or by contract relating to voting rights or corporate governance, or otherwise. Without limiting the foregoing, control shall be presumed to exist when a Person (a) owns or directly controls more than fifty percent (50%) of the voting securities or other ownership interest of another Person or (b) possesses, directly or indirectly, the power to elect or appoint more than fifty percent (50%) of the members of the governing body of the other Person.
“Applicable Product” means (i) any product that is based on or incorporates an Invention that is the subject of an exclusive license to Company under an Invention License Agreement or (ii) any gene editing, gene targeting or genomic medicine human therapeutic product, other than an [**] Product, that is based on or incorporates in whole or in part CRISPR Technology that is owned, co-owned or controlled by Broad and licensed to Company.
“Asset Sale” means the sale, lease, assignment, transfer, exclusive license or other disposition of all or substantially all of the assets of Company.
Schedule 1 - 1
“Average Market Capitalization” means the result of (a) the sum of the Market Capitalizations on each Trading Day during a specified period of time divided by (b) the number of Trading Days during such specified period of time.
“Change of Control” means, with respect to Company, (a) a merger or consolidation of Company with a Third Party which results in the voting securities of Company outstanding immediately prior thereto ceasing to represent at least fifty percent (50%) of the combined voting power of the surviving entity immediately after such merger or consolidation, (b) a transaction or series of related transactions in which a Third Party, together with its Affiliates, becomes the owner of fifty percent (50%) or more of the combined voting power of Company’s outstanding securities other than through issuances by Company of securities of Company in a bona fide financing transaction or series of related bona fide financing transactions, or (c) the sale or other transfer to a Third Party of all or substantially all of Company’s assets or all or substantially all of Company’s business to which this Agreement relates.
“Closing Price” means, with respect to a particular date, the last reported sales price on (i) such date if such date is a Trading Day, or (ii) if such date is not a Trading Day, the most recent date prior to such date that is a Trading Day.
“Common Stock” means the common stock, par value $0.0001 per share, of Company.
“Company Sale” means (i) an Asset Sale to one or more Person(s), (ii) a Merger or (iii) an acquisition of at least [**] percent ([**]%) of Company’s shares by a Person or by a Group in a single transaction or a series of related transactions. Notwithstanding anything to the contrary, (a) any Person that controls, is controlled by, or is under common control with, Company shall not be a “Person” for the purpose of this definition, (b) any Group that is solely comprised of Persons that control, are controlled by, or are under common control with, Company shall not be a “Group” for the purpose of this definition, and (c) for the purpose of this definition only, “control” and, with correlative meanings, the terms “controlled by” and “under common control with” means the (1) ownership or control of more than fifty percent (50%) of the voting securities or other ownership interest of another Person or (2) the possession, directly or indirectly, of the power to elect or appoint more than fifty percent (50%) of the members of the governing body of the other Person.
“Company Sale Date” means the date of closing of a Company Sale.
“Company Sale Research Payment” means the amount equal to the sum of all Research Payments that (a) correspond to Value Triggers that are lower than or equal to the Company Sale Value Trigger and (b) are unpaid as of the day immediately prior to the Company Sale Date. By way of example, if Company has only paid the first two Research Payments to Broad as of the day immediately prior to the Company Sale Date, and the Company Sale Value Trigger is $[**], then the Company Sale
Research Payment shall be $[**].
“Company Sale Value Trigger” means the lowest Value Trigger that (a) corresponds to a Research Payment that is unpaid and not due and payable under Section 3.3 (Achievement of Value Triggers) as of the day immediately prior to the Company Sale Date and (b) is higher than the Acquisition Value. By way of example, if the lowest Value Trigger under clause (a) of the foregoing sentence is $[**] and the Acquisition Value is $[**] then the Company Sale Value Trigger is $[**]. By way of further example, if the lowest Value Trigger under clause (a) of the foregoing sentence is $[**] and the Acquisition Value is $[**] then the Company Sale Value Trigger is $[**].
Schedule 1 - 2
“CRISPR Technology” means an enzymatically active or inactive endonuclease combined with a nucleic acid moiety that preferentially binds to a specified nucleic acid sequence and targets the endonuclease to the nucleic acid sequence, where either the endonuclease or nucleic acid moiety can be engineered and/or linked to an effector moiety.
“Deductions” means, with respect to a Company Sale, any amounts that are deducted from the gross proceeds, and thereby reduce the amount paid to the holders of capital stock of Company, including, without limitation: (a) amounts paid to investment bankers, accountants or attorneys in connection with the transaction, (b) severance or change of control payments made to employees or directors of Company, (c) payments made to a Third Party to pay off indebtedness, (d) liquidation preference payments or (e) amounts placed into escrow or a similar holdback.
“Enterprise Value” means, with respect to an entity, the equity value of such entity as determined in a Valuation Analysis.
“Exchange Act” means the United States Securities and Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“[**] Product” means a product that [**].
“FMV of Common Stock” means (a) if Company’s shares of Common Stock are Public Securities as of the applicable determination date, the Closing Price, or (b) if Company’s shares of Common Stock are not Public Securities as of the applicable determination date, the value determined by dividing (1) the Enterprise Value as determined in the most recent Valuation Analysis prior to such date by (2) the total number of issued and outstanding shares of Common Stock (assuming conversion of all outstanding stock other than common stock into common stock).
“Group” means two or more Persons acting as a partnership, limited partnership, syndicate or other group for the purposes of acquiring, holding, voting or disposing of the securities of a company.
“Issuance Date” means the date of issuance of any Promissory Note or any Note Shares.
“Market Capitalization” means, with respect to a particular Trading Day, the closing price per share of Common Stock on such Trading Day multiplied by the number of shares of Common Stock outstanding as set forth [**] or (b) [**], in each case (a) and (b) [**] on or prior to such Trading Day. In the event that Common Stock are not Public Securities, Market Capitalization shall mean with respect to a particular Trading Day, the Enterprise Value of Company and any Affiliate(s) to which Company has materially contributed or transferred assets, as determined in the most recent Valuation Analysis prior to such date.
“Merger” means any merger or consolidation of Company with or into another Person where the pre-merger or pre-consolidation, as the case may be, stockholders of Company (or, in the event that there is a related tender offer for Company’s shares prior to the merger or consolidation by a Person or a Group that is a party to such merger or consolidation, the stockholders of Company immediately prior to the commencement of such related tender offer) do not own, immediately after such merger or consolidation, as the case may be, a majority of the total voting power represented by the outstanding voting securities of the surviving entity.
Schedule 1 - 3
“Person” means an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or other similar entity or organization, including a government or political subdivision, department or agency of a government.
“Principal Trading Market” means the Trading Market on which the Common Stock is primarily listed on and quoted for trading, which, as of the Effective Date is the NASDAQ Global Select Market.
“Promissory Note” means a promissory note in the form attached hereto as Exhibit 3.5.
“Public Securities” means securities that are listed on a national securities exchange registered under the Exchange Act or if not listed on a national securities exchange registered under the Exchange Act, quoted on NASDAQ, OTCQB or other similar quotation system.
“Resale Registration Statement” means a registration statement on Form S-1 or Form S-3 filed by Company with the Securities and Exchange Commission under the Securities Act [**].
“Securities Act” means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Trading Day” means (i) a day on which the Common Stock is listed or quoted and traded on its Principal Trading Market (other than the OTC Bulletin Board), or (ii) if the Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported in the “pink sheets” by Pink Sheets LLC (or any similar organization or agency succeeding to its functions of reporting prices). In the event that Common Stock are not Public Securities, Trading Day shall mean a business day in Cambridge, Massachusetts.
“Trading Market” means whichever of the New York Stock Exchange, the NYSE Amex Equities (formerly the American Stock Exchange), the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or the OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date in question.
“Trigger Date” means [**].
“Trigger Date Value Trigger” shall have the meaning set forth in the definition of “Trigger Date” in this Schedule 1 (Defined Terms).
“Valuation Analysis” means, with respect to an entity, a valuation analysis of such entity conducted by an independent valuation expert for purposes of compliance with Section 409A and approved by the Board of Directors (or equivalent body) of such entity in good faith. In the event that the Common Stock cease to be Public Securities during the Term and prior to the earliest of (a) the [**] anniversary of the Effective Date, (b) a Company Sale and (c) the payment by Company of all Research Payments that may become due hereunder, Company shall commission such a valuation analysis of Company and any Affiliate(s) to which Company has materially contributed or transferred assets no less frequently than once every six (6) months.
Schedule 1 - 4
“Value Trigger” means each amount shown in the column labeled “Value Trigger” in Schedule 2 (Research Funding Payments).
The following terms shall have the meaning ascribed to them in the Sections set forth opposite such terms below:
Term |
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Section Reference |
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Agreement |
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Preamble |
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Application Information |
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Section 2.4.2 |
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Broad |
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Preamble |
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Buy-In |
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Section 3.6.11 |
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Buy-In Price |
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Section 3.6.11 |
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Company |
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Preamble |
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Company License Option |
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Section 2.4.1 |
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Confidential Information |
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Section 4.1 |
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Confidential Information of Broad |
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Section 4.1 |
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Confidential Information of Company |
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Section 4.1 |
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Controlled |
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Section 2.4.1 |
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Creditable Amount |
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Section 5.5.1 |
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Deadline Date |
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Section 3.6.11 |
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Disclosure Notice |
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Section 2.3 |
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Dispute |
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Section 7.3 |
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Effective Date |
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Preamble |
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Executive Officers |
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Section 7.3 |
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Extension Notice |
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Section 2.4.2 |
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Installment |
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Section 3.6.2.1 |
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Institution Names |
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Section 7.2 |
Schedule 1 - 5
Term |
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Section Reference |
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Invention |
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Section 2.3 |
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Invention License Agreement |
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Section 2.4.1 |
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Maturity Date |
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Section 3.6.2.1 |
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Negotiation Period |
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Section 2.4.2 |
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Note Shares |
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Section 3.6.3 |
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Noteholder |
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Section 3.6.1 |
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Operating Agreement |
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Section 2.4.3 |
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Option Notice |
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Section 2.4.2 |
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Option Period |
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Section 2.4.2 |
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Optioned IP |
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Section 2.4.1 |
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Participating Institution |
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Section 2.4.3 |
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Party |
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Preamble |
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Prosecution Costs |
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Section 2.4.2 |
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Reports of Broad |
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Section 2.2 |
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Representatives |
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Section 4.1 |
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Research Funding |
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Section 3.1 |
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Research Payment |
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Section 3.3 |
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Rule 144 |
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Section 3.6.10 |
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Sponsored Research |
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Section 2.1 |
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Suit |
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Section 7.4 |
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Term |
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Section 6.1 |
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Third Party |
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Section 2.4.1 |
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Transfer Agent |
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Section 3.6.10 |
Schedule 1 - 6
SCHEDULE 2
Research Funding Payments
Value Trigger |
Research Payment |
[**] |
US$ 5 million |
[**] |
US$ 7.5 million |
[**] |
[**] |
[**] |
[**] |
[**] |
[**] |
[**] |
[**] |
Schedule 2 - 1
EXHIBIT 3.5
Form of Promissory Note
THIS NOTE AND ANY SHARES ACQUIRED UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN OPINION OF COUNSEL SATISFACTORY TO COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
No. [_____]
EDITAS MEDICINE, INC.
PROMISSORY NOTE
$[_____] |
Cambridge, Massachusetts |
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[_____], 20[__] |
Editas Medicine, Inc., a Delaware corporation (the “Company”), for value received, hereby promises to pay to [_____] (the “Noteholder”) (collectively, the “Parties”), the principal sum of [_____] Dollars ($_________) on [_____], 20[__], and to pay interest from the date hereof on the unpaid balance of such principal amount from time to time outstanding at the rate of four and eight-tenths percent (4.8%) per annum, such interest to be due and payable on the same schedule as the principal amount of this Promissory Note (the “Maturity Date”).
Interest on this Promissory Note (the “Note”) shall be computed on the basis of a year of 365 days for the actual number of days elapsed. All payments by the Company under this Note shall be in immediately available funds.
1. Conversion; Payment for Notes in Stock of the Company.
1.1 General. This Note shall, at the election of the Company, be subject to payment in common stock of the Company, par value $0.0001 per share (the “Common Stock”), as provided and subject to the requirements of Sections 3.6.3 through 3.6.12 of that certain Sponsored Research Agreement, dated [____________, 2018], by and between the Company and the Broad Institute, Inc. (the “Agreement”). Notwithstanding the foregoing, the Company shall have no obligation to make such election to issue Note Shares (as defined in the Agreement) as payment for this Note.
1.2 Amount of Note Remaining Unpaid. In the event the Company converts a portion of the principal and interest payable under this Note into shares of Common Stock in accordance with Section 1.1 of this Note, the principal amount and accrued interest of this Note remaining unpaid by the Company immediately after the Noteholder’s receipt of any given Note Shares shall equal the original principal amount and accrued interest of this Note remaining unpaid by the Company immediately prior to the date of receipt of such Note Shares less the product of (i) the number of such Note Shares received by the Noteholder that the Company has notified the
Noteholder shall be considered payment of the principal or accrued interest, as applicable, on this Note times (ii) [**]. For purposes of calculating interest on the principal amount of this Note remaining unpaid, each payment of a portion of the principal amount of this Note shall be deemed to have occurred on the Trading Day (as defined in the Agreement) immediately prior to the date of receipt by the Noteholder of Note Shares that the Company has notified the Noteholder are considered payment of the principal amount of this Note. If any principal amount of this Note or accrued interest remains unpaid on the Maturity Date of this Note, then the Company shall pay all such remaining principal and accrued interest within five (5) business days after such Maturity Date by paying cash to the Noteholder in an amount equal to such unpaid amounts, with interest calculated to such Maturity Date.
1.3 Fractional Shares. No fractional shares of Common Stock shall be issuable upon conversion of this Note.
2. Prepayment. The Company may prepay this Note at any time, upon at least five (5) business days’ prior notice to the Noteholder, by paying to such Noteholder an amount in cash equal to any principal and accrued interest remaining unpaid under this Note, with interest calculated to the business day immediately prior to such payment.
3. Default. The entire unpaid principal of this Note and the interest then accrued on this Note shall become and be immediately due and payable, without any notice or demand of any kind or any presentment or protest, if any one of the following events shall occur and be continuing at the time of such demand, whether voluntarily or involuntarily, or, without limitation, occurring or brought about by operation of law or pursuant to or in compliance with any judgment, decree or order of any court or any order, rule or regulation of any governmental body:
3.1 If default shall be made in the payment of principal or interest on the Note, and if any such default shall remain unremedied for ten (10) days; or
3.2 If the Company (i) makes a composition or an assignment for the benefit of creditors or trust mortgage, (ii) applies for, consents to, acquiesces in, files a petition seeking or admits (by answer, default or otherwise) the material allegations of a petition filed against it seeking the appointment of a trustee, receiver or liquidator, in bankruptcy or otherwise, of itself or of all or a substantial portion of its assets, or a reorganization, arrangement with creditors or other remedy, relief or adjudication available to or against a bankrupt, insolvent or debtor under any bankruptcy or insolvency law or any law affecting the rights of creditors generally, or (iii) admits in writing its inability to pay its debts generally as they become due; or
3.3 If an order for relief shall have been entered by a bankruptcy court or if a decree, order or judgment shall have been entered adjudging the Company insolvent, or appointing a receiver, liquidator, custodian or trustee, in bankruptcy or otherwise, for it or for all or a substantial portion of its assets, or approving the winding-up or liquidation of its affairs on the grounds of insolvency or nonpayment of debts, and such order for relief, decree, order or judgment shall remain undischarged or unstayed for a period of sixty (60) days; or if any substantial part of the property of the Company is sequestered or attached and shall not be returned to the possession of the Company or such subsidiary or released from such attachment within sixty (60) days.
4. General.
4.1 Successors and Assigns. This Note, and the obligations and rights of the Company hereunder, shall be binding upon and inure to the benefit of the Company, the Noteholder, and their respective heirs, successors and assigns.
4.3 Amendments and Waivers. Amendments or additions to this Note may be made or compliance with any term, covenant, agreement, condition or provision set forth herein may be omitted or waived (either generally or in a particular instance and either retroactively or prospectively), upon written consent of the Company and the Noteholder. The delay or failure of either the Company or the Noteholder at any time or times to require performance of any provisions hereof shall in no manner affect the rights at a later time to enforce the same.
4.4 Currency. All cash payments shall be made in such coin or currency of the United States of America as at the time of payment shall be legal tender therein for the payment of public and private debts.
4.5 Notices. All notices, requests, consents and demands shall be made in writing and shall be mailed postage prepaid, or delivered by hand, to the Company or to the Noteholder at their respective addresses set forth below or to such other address as may be furnished in writing to the other party hereto:
If to the Noteholder: |
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If to Company: |
Editas Medicine, Inc. |
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00 Xxxxxx Xxxxxx |
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Xxxxxxxxx, Xxxxxxxxxxxxx 00000 |
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Facsimile: 000-000-0000 |
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Attn: Chief Executive Officer |
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Copy to: Legal Affairs |
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With a copy to: |
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WilmerHale |
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00 Xxxxx Xxxxxx |
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Xxxxxx, XX 00000 |
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Facsimile: 617-526-5000 |
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Attn: Xxxxxx Xxxxxxx |
4.6 Governing Law. This Note shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the Commonwealth of Massachusetts, without giving effect to any choice or conflict of law provision. Any action, suit or other proceeding arising under or relating to this Note (a “Suit”) shall be brought in a court of competent jurisdiction in the Commonwealth of Massachusetts, and the Parties consent to the sole jurisdiction of the state and federal courts sitting in the Commonwealth of Massachusetts. Each Party agrees not to raise any objection at any time to the laying or maintaining of the venue of any Suit in any of the specified courts, irrevocably waives any claim that Suit has been brought in any inconvenient forum and further irrevocably waives the right to object, with respect to any Suit, that such court does not have any jurisdiction over such Party.
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EDITAS MEDICINE, INC. | ||
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Date: |
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By: |
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Name: |
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Title: |
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EXHIBIT 3.6.10
Form of Legend Removal Certificate – Resale with Effective Registration Statement
Date: _______________________
Editas Medicine, Inc.
x/x XxxxxxXxxx
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxxx
Re: Sale of Shares of Common Stock of Editas Medicine, Inc. (the “Company”) pursuant to the Registration Statement on Form S-3, as amended (File No. 333- ________)(the “Registration Statement”)
Dear Sir/Madam:
The undersigned (the “Seller”) proposes to sell _____ shares (the “Shares”) of common stock of the Company pursuant to the Registration Statement. To induce you to remove the restrictive legend or stop order in effect with respect to the Shares so that the Seller can consummate the sale of the Shares, the Seller hereby represents, warrants and agrees as follows:
1. The certificate(s) or account(s) evidencing the Shares (the “Certificate”) are as follows:
Certificate or Account Number |
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Date |
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Number of Shares |
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Registered Holder |
2. If the Certificate represents a greater number of shares than those proposed to be sold at this time, it is understood that a new certificate for the balance of the shares which are not sold will be sent to the Seller with the same restrictive legend as is currently affixed to the Certificate.
3. With respect to the offer and sale of the Shares, the Seller and any broker or dealer acting on the Seller’s behalf will comply with all applicable requirements of the Securities Act of 1933, as amended (the “Act”), and the rules and regulations thereunder.
4. The Seller and any broker or dealer acting on the Seller’s behalf will comply with the plan of distribution set forth in the Company’s Prospectus dated ________ (the “Prospectus”).1
1 Include applicable prospectus supplements in the description of the Prospectus.
5. The Seller is listed as a selling stockholder in the Prospectus.
6. The Seller acknowledges that it is responsible for complying with all applicable laws, rules and regulations relating to the offer and sale of the Shares, including without limitation applicable “Blue Sky” or state securities laws.
The Company, its counsel and its transfer agent may rely upon the statements, representations and warranties made herein as if this letter had been addressed to them.
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Very truly yours, |
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(Signature of Stockholder) |
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Please print or type name and address of Stockholder |
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