Document:

Exhibit 10.13

 

***Text Omitted and Filed Separately with the Securities and Exchange Commission

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

WHITEHEAD INSTITUTE FOR BIOMEDICAL RESEARCH

 

and

 

RUBIUS THERAPEUTICS, INC.

 

EXCLUSIVE PATENT LICENSE AGREEMENT

 

***Confidential Treatment Requested***

 

 

***Text Omitted and Filed Separately with the Securities and Exchange Commission

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

TABLE OF CONTENTS

 

	
R   E C I T A L S
    	
1
    
	
1 .
    	
DEFINITIONS
    	
2
    
	
2 .
    	
GRANT OF RIGHTS
    	
7
    
	
3 .
    	
COMPANY DILIGENCE   OBLIGATIONS
    	
11
    
	
4 .
    	
ROYALTIES AND PAYMENT   TERMS
    	
13
    
	
5 .
    	
REPORTS AND RECORD   KEEPING
    	
18
    
	
6 .
    	
PATENT PROSECUTION
    	
20
    
	
7 .
    	
INFRINGEMENT
    	
21
    
	
8 .
    	
PATENT CHALLENGE
    	
23
    
	
9 .
    	
INDEMNIFICATION AND   INSURANCE
    	
25
    
	
10 .
    	
REPRESENTATIONS AND   WARRANTIES
    	
26
    
	
11 .
    	
ASSIGNMENT
    	
27
    
	
12 .
    	
GENERAL COMPLIANCE WITH   LAWS
    	
27
    
	
13 .
    	
TERMINATION
    	
29
    
	
14 .
    	
DISPUTE RESOLUTION
    	
31
    
	
15 .
    	
CONFIDENTIALITY
    	
32
    
	
16 .
    	
MISCELLANEOUS
    	
33
    
	
APPENDIX   A
    	
34
    
	
APPENDIX   B
    	
38
    
	
APPENDIX   C
    	
39
    
	
APPENDIX   D
    	
40
    

 

i

 

***Confidential Treatment Requested***

 

 

***Text Omitted and Filed Separately with the Securities and Exchange Commission

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

WHITEHEAD INSTITUTE FOR BIOMEDICAL RESEARCH
 EXCLUSIVE PATENT LICENSE AGREEMENT

 

This Agreement, effective as of January 28, 2016, (the “EFFECTIVE DATE”), is by and between the Whitehead Institute for Biomedical Research (“WHITEHEAD”), a Delaware corporation, with a principal office at Nine Cambridge Center, Cambridge, MA 02142, and Rubius Therapeutics, Inc. (“COMPANY”), formerly known as VL26, Inc., a Delaware corporation, with a principal place of business at 620 Memorial Drive, Suite 100 West, Cambridge, MA 02139.

 

R E C I T A L S

 

WHEREAS, WHITEHEAD is the owner of certain PATENT RIGHTS (as later defined herein), including [***] entitled “[***]” by [***]; and [***] entitled “[***]” by [***];

 

WHEREAS, WHITEHEAD received a subcontract from Celgene Corporation (“CELGENE”) under the Defense Advanced Research Projects Agency Agreement No. [***] (the “DARPA Award”), which funded research resulting in [***];

 

WHEREAS, WHITEHEAD has the right to grant licenses under the PATENT RIGHTS, subject to a royalty-free, nonexclusive, nontransferable license to practice the PATENT RIGHTS reserved by the United States Government, and subject to a worldwide, irrevocable, nonexclusive, royalty-free right to use [***] of the PATENT RIGHTS reserved by CELGENE for research and development purposes;

 

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

 

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

 

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

 

NOW, THEREFORE, WHITEHEAD and COMPANY hereby agree as follows:

 

***Confidential Treatment Requested***

 

 

***Text Omitted and Filed Separately with the Securities and Exchange Commission

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

1.                                      DEFINITIONS

 

1.1                               “AFFILIATE” means any legal entity (such as a corporation, partnership, or limited liability company) that is controlled by COMPANY, and which Company has designated in a written communication to WHITEHEAD as an AFFILIATE under this Agreement.  For the purposes of this definition, the term “control” means (i) beneficial ownership of at least fifty percent (50%) of the voting securities of a corporation or other business organization with voting securities or (ii) a fifty percent (50%) or greater interest in the net assets or profits of a partnership or other business organization without voting securities.

 

1.2                               “FIELD” means all fields.

 

1.3                               “FIRST COMMERCIAL SALE” in a country means the first sale of a LICENSED PRODUCT in such country that results in a NET SALE subject to royalties hereunder.

 

1.4                               “IMPROVEMENTS” means any new inventions created after the EFFECTIVE DATE and until [***] months ([***]) from the EFFECTIVE DATE and no longer:  (i) which WHITEHEAD owns or has rights to license; and (ii) that are from the activities at WHITEHEAD of [***], and/or others working under his/their supervision; and (iii) not included in the PATENT RIGHTS; and (iv) are fully or partially dominated by one or more VALID CLAIMS and whose practice infringes or is required to practice one or more VALID CLAIMS.  For the purpose of illustration and not limitation, IMPROVEMENTS may include immortalization, improved expansion, novel fusion partners, novel proteins and/or applications, etc., pertaining to red blood cells and the expression of proteins in and on red blood cells.

 

1.5                               “IND” means, with respect to a particular LICENSED PRODUCT, an Investigational New Drug application submitted to the FDA, or a corresponding application filed with any other regulatory agency, seeking approval to begin tests of a new drug in human subjects.

 

1.6                               “LICENSED PROCESS” means any process that, absent the license granted hereunder, would infringe one or more VALID CLAIMS or which uses a LICENSED PRODUCT as defined in Section 1.7(i), below.

 

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***Text Omitted and Filed Separately with the Securities and Exchange Commission

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

1.7                               “LICENSED PRODUCT” means any product that, in whole or in part, (i) absent the license granted hereunder, would infringe one or more VALID CLAIMS; or (ii) is manufactured by using a LICENSED PROCESS or that, when used, practices a LICENSED PROCESS.

 

1.8                               “MARKETING APPROVAL” means receipt of all approvals, licenses, registrations, or authorizations of any federal, state, or local regulatory agency, department, bureau, or other governmental entity, including but not limited to pricing approvals, necessary for the marketing and sale of LICENSED PRODUCTS, as applicable, in a country or regulatory jurisdiction in the TERRITORY.

 

1.9                               “NDA” means a New Drug Application submitted to the FDA seeking approval to market and sell a LICENSED PRODUCT in the United States of America, or a corresponding application filed with any other regulatory agency seeking approval to market and sell a LICENSED PRODUCT in a country in the TERRITORY.

 

1.10                        “NET SALES” means the gross amount billed by COMPANY and its AFFILIATES and SUBLICENSEES for LICENSED PRODUCTS to a third party who is neither COMPANY, an AFFILIATE nor SUBLICENSEE, less the following:

 

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

 

(ii)                                  amounts repaid or credited by reason of rejection or return, charge-backs or rebates;

 

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

 

(iv)                              outbound transportation costs prepaid or allowed and costs of insurance in transit;

 

(v)                                 discounts, rebates or other payments required by law to be made under Medicaid, Medicare or other governmental special medical assistance programs, to the extent actually allowed and taken.

 

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***Text Omitted and Filed Separately with the Securities and Exchange Commission

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

No deductions will be made for commissions paid to individuals whether they are with independent sales agencies or regularly employed by COMPANY and on its payroll, or for cost of collections.  NET SALES will occur on the date of billing for a LICENSED PRODUCT.  If a LICENSED PRODUCT is distributed for non-cash consideration, NET SALES will be calculated based on the fair market value of such non-cash consideration received by COMPANY, an AFFILIATE or SUBLICENSEE.  For clarity, transfer of a LICENSED PRODUCT within COMPANY or between or among COMPANY and any of its AFFILIATES or SUBLICENSEES shall not be considered a NET SALE hereunder, except where the transferee is an end user of such LICENSED PRODUCT.  Transfers of LICENSED PRODUCT to third parties in connection with clinical trials, early access programs (such as to provide patients with LICENSED PRODUCT prior to regulatory approval pursuant to treatment INDs or protocols, named patient programs, compassionate use programs or any similar uses), humanitarian and charitable donations or indigent programs, shall be excluded from NET SALES.

 

Non-monetary consideration may be accepted by COMPANY, any AFFILIATE, or any SUBLICENSEE for any LICENSED PRODUCT subsequent to or concurrently with written notification to WHITEHEAD describing such non-monetary consideration.  NET SALES includes the fair-market value of any non-cash consideration from sale of LICENSED PRODUCT received by COMPANY or AFFILIATES, calculated in accordance with this Section 1.10.

 

1.11                        “PATENT CHALLENGE” means a challenge to the validity, patentability or enforceability of any of the PATENT RIGHTS (as defined below) or otherwise opposing the validity, patentability or enforceability of any of the PATENT RIGHTS, including without limitation a declaratory judgment of invalidity or unenforceability, an inter partes review (IPR) application or an inter partes reexamination application.

 

1.12                        “PATENT RIGHTS” means:

 

(i)                                     the United States and international patents listed on Appendix A:

 

(ii)                                  the United States and international patent applications and/or provisional applications listed on Appendix A and the resulting patents;

 

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***Text Omitted and Filed Separately with the Securities and Exchange Commission

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

(iii)                               any patent applications resulting from the provisional applications listed on Appendix A, and any divisional, continuations, continuation-in-part applications, and continued prosecution applications (and their relevant international equivalents) of the patent applications listed on Appendix A and of such patent applications that claim priority from or result from the provisional applications listed on Appendix A (including any related provisional patent applications filed during the one-year pendency of such provisional applications listed on Appendix A, provided it names [***] at WHITEHEAD as an inventor(s) and WHITEHEAD has an ownership interest therein), to the extent the claims are directed to subject matter specifically described in the patent applications listed on Appendix A, and the resulting patents;

 

(iv)                              any patents resulting from reissues, reexaminations, or extensions (and their relevant international equivalents) of the patents described in (i), (ii), and (iii) above; and

 

(v)                                 international (non-United States) patent applications filed after the EFFECTIVE DATE and the relevant international equivalents to divisional, continuations, continuation-in-part applications and continued prosecution applications of the patent applications to the extent the claims are directed to subject matter specifically described in the patents or patent applications referred to in (i), (ii), (iii), and (iv) above, and the resulting patents, and the relevant international equivalents of reissues, reexaminations, or extensions of such patents.

 

1.13                        “PHASE I TRIAL” means a clinical study of the first introduction of a LICENSED PRODUCT into a human subject under an IND.

 

1.14                        “PHASE III TRIAL” means a clinical study of a LICENSED PRODUCT in human subjects that is “adequate and well controlled”, as defined in 21 CFR § 314.126, for the purpose of gathering the definitive information about efficacy, dosage, and safety in the proposed therapeutic indication that is needed for the FDA or other appropriate regulatory agency to evaluate the overall benefit-risk relationship of the LICENSED PRODUCT in order to grant (or deny) approval to market the drug, or a clinical study of a LICENSED PRODUCT that otherwise is described in 21 CFR § 312.21(c).

 

1.15                        “REPORTING PERIOD” will begin on the first day of each calendar quarter and end on the last day of such calendar quarter.

 

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***Text Omitted and Filed Separately with the Securities and Exchange Commission

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

1.16                        “SUBLICENSE” means any sublicense granted by COMPANY or an AFFILIATE or SUBLICENSEE of any of the rights granted to COMPANY and AFFILIATES under Section 2.1.

 

1.17                        “SUBLICENSE INCOME” means any payments that COMPANY or AFFILIATE receives from a SUBLICENSEE (whether received by COMPANY or an AFFILIATE from a direct SUBLICENSEE of COMPANY or an AFFILIATE or from a SUBLICENSEE down multiple tiers) specifically in consideration of the SUBLICENSE, including without limitation upfront fees, license fees, milestone payments, annual license maintenance fees, distribution or joint marketing fees, and premiums above the fair-market value on bona fide equity investments, debt, or other types of investments in the COMPANY or any AFFILIATE.  Notwithstanding the foregoing, SUBLICENSE INCOME shall not include:  (i) royalties on NET SALES; (ii) payments received from a SUBLICENSEE or any of its affiliates for bona fide security investments, debt or other types of investments in the COMPANY or any AFFILIATE, including the right to acquire COMPANY’S or AFFILIATE’S securities in the future, such as warrants, convertible debt and the like (other than premiums above the fair-market value of such investments, debt or other types of investments as of the date of receipt of such payments), or (iii) reimbursement by a SUBLICENSEE of future bona fide research, development, manufacturing, and commercialization costs actually incurred (including, without limitation, payments for FTEs).  COMPANY and AFFILIATES will be entitled to reduce any fees payable to WHITEHEAD for SUBLICENSE INCOME by the amount of any payments paid or due to WHITEHEAD for the same milestone(s) achieved by COMPANY, AFFILIATES or SUBLICENSEES for sublicensed LICENSED PRODUCTS and for patent costs paid to COMPANY or AFFILIATES as reimbursement of amounts owed to WHITEHEAD.  For the avoidance of doubt, the limitation of Milestone Payments due to WHITEHEAD under Section 4.1(c) does not limit the amount payable as SUBLICENSE INCOME.

 

1.18                        “SUBLICENSEE” means any non-AFFILIATE entity granted a SUBLICENSE of the rights granted to COMPANY under Section 2.1.

 

1.19                        “TERM” means the term of this Agreement, which will commence on the EFFECTIVE DATE and will remain in effect until the expiration or abandonment of all issued

 

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***Text Omitted and Filed Separately with the Securities and Exchange Commission

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

patents and filed patent applications within the PATENT RIGHTS, unless earlier terminated in accordance with the provisions of this Agreement.

 

1.20                        “TERRITORY” means worldwide.

 

1.21                        “VALID CLAIM” means a claim in (i) an issued and unexpired patent within the PATENT RIGHTS, which claim has not been revoked or held unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal and which has not been admitted to be invalid or unenforceable through reissue or disclaimer or otherwise; or (ii) a pending patent application under the PATENT RIGHTS which (A) has not been abandoned or finally disallowed without possibility of appeal or re-filing of such application and (B) solely for purposes of payments under this Agreement, has not been pending for more than the shorter of (1) [***] years from the date such application was first examined or (2) [***] years from its earliest priority date.  The invalidity of a particular claim in one or more countries shall not invalidate such claim in the remaining countries of the TERRITORY if it otherwise meets the definition of VALID CLAIM.

 

2.                                      GRANT OF RIGHTS

 

2.1                               License Grants.  Subject to the terms of this Agreement, WHITEHEAD hereby grants to COMPANY and its AFFILIATES for the TERM an exclusive, royalty-bearing license under the PATENT RIGHTS to research, develop, make, have made, use, sell, have sold, offer to sell, lease, and import LICENSED PRODUCTS in the FIELD in the TERRITORY and to develop and perform LICENSED PROCESSES in the FIELD in the TERRITORY.

 

2.2                               Sublicenses.  Provided that COMPANY maintains an exclusive license to the PATENT RIGHTS in the FIELD in the TERRITORY, COMPANY (and its AFFILIATES) will have the right to grant, through multiple tiers, SUBLICENSES; provided however that such multiple-tier SUBLICENSES shall be consistent with the provisions herein with respect to SUBLICENSES.  COMPANY shall, or shall require its AFFILIATES and SUBLICENSEES to, incorporate terms and conditions into its SUBLICENSE agreements sufficient to enable COMPANY to comply with this Agreement.  COMPANY shall also, or shall require its AFFILIATES and SUBLICENSEES to, include provisions in all SUBLICENSES to provide that in the event that SUBLICENSEE brings a PATENT CHALLENGE against WHITEHEAD or

 

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***Text Omitted and Filed Separately with the Securities and Exchange Commission

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

assists another party in bringing a PATENT CHALLENGE against WHITEHEAD (except as required under a court order or subpoena) then COMPANY may terminate the SUBLICENSE, to the extent such termination is enforceable in accordance with applicable laws.

 

COMPANY shall furnish WHITEHEAD with a fully signed photocopy of any SUBLICENSE agreement between COMPANY or an AFFILIATE, on the one hand, and a SUBLICENSEE, on the other hand, within [***] days of its effective date, which copies may be reasonably redacted except for matters relevant to COMPANY’S obligations or WHITEHEAD’S rights under this Agreement.  WHITEHEAD shall treat any such copies of SUBLICENSE agreements as Information in accordance with Article 15 of this Agreement.

 

COMPANY shall provide written notification to WHITEHEAD within [***] days of the effective date of multiple-tier SUBLICENSE (i.e., a SUBLICENSEE sublicensing PATENT RIGHTS to a third party).  COMPANY shall provide information to WHITEHEAD related to the parties of such agreement, grant of rights, and payments due to COMPANY or an AFFILIATE from such SUBLICENSEE as it relates to SUBLICENSE INCOME.

 

Upon termination of this Agreement for any reason, any SUBLICENSEE not then in default will have the right to seek a direct license from WHITEHEAD under rights and terms substantially identical to the SUBLICENSE rights and terms which COMPANY previously granted to such SUBLICENSEE, where such SUBLICENSEE will pay WHITEHEAD as if it were COMPANY under the terms of this Agreement.  WHITEHEAD agrees to execute such direct license and any non-identical terms in good faith under reasonable terms and conditions.

 

2.3                               Mandatory Sublicensing.  Beginning [***] years from the EFFECTIVE DATE, if WHITEHEAD receives a bona fide request from a third party for a sublicense to the PATENT RIGHTS to develop, make, have made, use, sell, offer to sell, lease, and import a LICENSED PRODUCT or LICENSED PROCESS, which proposed product or process (“PROPOSED PRODUCT”) is not directly competitive with any LICENSED PRODUCT or LICENSED PROCESS that is being, or is planned to be, researched, developed or commercialized by, or with the then current business interests of, COMPANY or an AFFILIATE or SUBLICENSEE, then COMPANY shall enter into good-faith negotiations toward granting at least a non-exclusive sublicense, limited to the proposed field only, to such third party for such third party’s

 

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***Text Omitted and Filed Separately with the Securities and Exchange Commission

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

PROPOSED PRODUCT.  COMPANY obligation to negotiate will extend for up to [***] but not thereafter.

 

2.4                               U.S. Manufacturing.  To the extent required by applicable law, COMPANY agrees that any LICENSED PRODUCTS used or sold in the United States will be manufactured substantially in the United States.  If requested, WHITEHEAD agrees to provide reasonable assistance to COMPANY, its AFFILIATES or SUBLICENSEES, as applicable, to seek a waiver from this requirement from the applicable federal agency.

 

2.5                               Retained Rights.

 

(a)                                 WHITEHEAD.  WHITEHEAD retains the right to practice under the PATENT RIGHTS for research, teaching, and educational purposes including sponsored research and collaborations.

 

(b)                                 Academic and Not-For-Profit Research Institutes.  WHITEHEAD retains the right to grant non-exclusive licenses to academic and not-for-profit research institutes to practice under the PATENT RIGHTS for research, teaching, and educational purposes only; excluding use in sponsored research.

 

(c)                                  Federal Government.  COMPANY acknowledges that the U.S. federal government retains a royalty-free, non-exclusive, non-transferable license to practice any government-funded invention claimed in any PATENT RIGHTS as set forth in 35 U.S.C. §§ 201-211 and Executive Order 12591 and the regulations promulgated thereunder, as amended, or any successor statutes or regulations.

 

(d)                                 Celgene License.  COMPANY acknowledges that CELGENE, under the DARPA Award, retains a worldwide, irrevocable, non-exclusive, royalty-free right to use [***] of the PATENT RIGHTS for research and development purposes.

 

(e)                                  License to COMPANY Exclusive.  Neither the rights described in Sections 2.5(a)-(d), nor the granting of any SUBLICENSE, shall be deemed to make COMPANY’S rights in the PATENT RIGHTS in the FIELD in the TERRITORY non-exclusive

 

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Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

or otherwise less than exclusive for purposes of those provisions that pertain only while COMPANY has an exclusive license.

 

2.6                               IMPROVEMENTS.  Provided that COMPANY is not then in default or breach of this Agreement, and subject to (a) WHITEHEAD’S obligations under conflict of interest regulations or guidelines from the federal government, (b) policies of WHITEHEAD or (c) WHITEHEAD’S obligations under the [***] or to the U.S. Government, WHITEHEAD hereby grants to COMPANY a first exclusive option to negotiate an exclusive or non-exclusive license to WHITEHEAD’S ownership rights, and any other rights that WHITEHEAD has the right to license, to all IMPROVEMENTS (“OPTION”), whether or not such IMPROVEMENTS arise from work performed under any third-party corporate sponsorship (other than the [***]).  For the purpose of this Section 2.6, “[***]” is the scientific research collaboration agreement between WHITEHEAD and [***], as in effect on the EFFECTIVE DATE, limited to those research projects in the laboratory of [***] performed with funds from [***], to WHITEHEAD pursuant to such agreement, as delineated by WHITEHEAD’S internal records.

 

The OPTION must be exercised within [***] days from the date of disclosure of any such IMPROVEMENT to COMPANY and the resulting license will be incorporated into this Agreement as an amendment to the PATENT RIGHTS definition.  COMPANY shall agree with WHITEHEAD on the field(s) for such IMPROVEMENT and terms which are reasonable and appropriate in licenses between industry and academic institutions, to-be negotiated in good faith within [***] days of exercising the OPTION (the “Negotiation Period”), which will be added to the COMPANY’S diligence obligations under Article 3 with respect to such IMPROVEMENTS, and COMPANY and WHITEHEAD shall timely amend Appendix A to include all relevant information for such IMPROVEMENT.  Should no license result from this process, WHITEHEAD will be free to license IMPROVEMENTS to any third party, provided however, during [***] after the end of the Negotiation Period for such IMPROVEMENT, WHITEHEAD shall not license such IMPROVEMENT to any third party on terms that are more favorable to the third party, alone or in the aggregate, than the terms last offered to COMPANY.

 

2.7                               No Additional Rights.  Nothing in this Agreement will be construed to confer any rights upon COMPANY by implication, estoppel, or otherwise as to any technology or patent

 

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Confidential Treatment Requested Under

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rights of WHITEHEAD or any other entity other than the PATENT RIGHTS, and IMPROVEMENTS as provided in Section 2.6, regardless of whether such technology or patent rights shall be dominant or subordinate to any PATENT RIGHTS.

 

3.                                      COMPANY DILIGENCE OBLIGATIONS

 

3.1                               COMPANY shall use commercially reasonable efforts, or shall cause its AFFILIATES and SUBLICENSEES to use commercially reasonable efforts, to develop at least one (1) LICENSED PRODUCT or LICENSED PROCESS and to introduce at least one (1) LICENSED PRODUCT or LICENSED PROCESS into the commercial market; thereafter, COMPANY or its AFFILIATES or SUBLICENSEES shall use commercially reasonable efforts to make LICENSED PRODUCTS or LICENSED PROCESSES reasonably available to the public.  Specifically, COMPANY or AFFILIATE or SUBLICENSEE shall fulfill the following obligations:

 

(i)                                     Within [***] months after the EFFECTIVE DATE, COMPANY shall furnish WHITEHEAD with a written research and development plan describing the major tasks to be achieved in order to bring to market a LICENSED PRODUCT or LICENSED PROCESS, specifying the resources to be devoted to such commercialization effort.

 

(ii)                                  Within [***] days after [***], COMPANY shall furnish WHITEHEAD with a written report (consistent with Section 5.1(a)) on the progress of its efforts during [***] to develop and commercialize a LICENSED PRODUCT or LICENSED PROCESS.  The report shall also contain a discussion of intended efforts and sales projections for the year in which the report is submitted.  At WHITEHEAD’S request, COMPANY will provide its commercially diligent assessment on embodiments of PATENT RIGHTS.

 

(iii)                               Within [***] years after the EFFECTIVE DATE, COMPANY, AFFILIATE, or SUBLICENSEE shall file an IND for a LICENSED PRODUCT.

 

In the event that COMPANY, AFFILIATE, or SUBLICENSEE, alone or together, has not performed Section 3.1(iii), and such failure is because of a bona fide and documented scientific, technical, or regulatory issue, then WHITEHEAD and COMPANY shall negotiate in good faith a reasonable extension of time for COMPANY, AFFILIATE, or SUBLICENSEE to

 

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achieve the specific obligation, and WHITEHEAD will not unreasonably deny or condition such extension.  If the parties are unable to agree on the length of such extension of time, then the matter will be resolved in accordance with Article 14.

 

Subject to the immediately preceding paragraph, in the event that COMPANY, AFFILIATE, or SUBLICENSEE, alone or together, has not performed Sections 3.1(i) through (iii), then WHITEHEAD may treat such failure as a material breach in accordance with Section 13.3(b).

 

3.2                               Diligence Requirements.  If, in any calendar year, COMPANY, AFFILIATE, or SUBLICENSEE, alone or together, has performed any one of the following with respect to a LICENSED PRODUCT, then COMPANY shall be deemed to have complied with COMPANY’S obligations under this Section 3.2 with respect to a LICENSED PRODUCT:

 

(i)                                     has expended a minimum of [***] for research, development, manufacture or commercialization of a LICENSED PRODUCT annually;

 

(ii)                                  is actively conducting a PHASE I TRIAL, Phase II trial, and/or PHASE III TRIAL with respect to a LICENSED PRODUCT;

 

(iii)                               is preparing or has prepared documents for filing an NDA with respect to a LICENSED PRODUCT within [***] years of completion of a PHASE III TRIAL;

 

(iv)                              has filed or is pursuing an NDA for MARKETING APPROVAL for a LICENSED PRODUCT;

 

(v)                                 has received MARKETING APPROVAL for a LICENSED PRODUCT; or

 

(vi)                              a LICENSED PRODUCT is launched or is being sold.

 

In the event that COMPANY, AFFILIATE, or SUBLICENSEE, alone or together, has not performed at least one of Sections 3.2(i) through (vi) during such calendar year with respect to a LICENSED PRODUCT, then, subject to COMPANY’S rights in the second paragraph of Section 3.1, WHITEHEAD may treat such failure as a material breach in accordance with Section 13.3(b).

 

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4.                                      ROYALTIES AND PAYMENT TERMS

 

4.1                               Consideration for Grant of Rights.

 

(a)                                 License Issue Fee and Patent Cost Reimbursement.  COMPANY shall pay to WHITEHEAD within [***] days of the EFFECTIVE DATE a license issue fee of [***], and such amounts required as reimbursement in accordance with Section 6.3, relating to actual expenses incurred as of the EFFECTIVE DATE in connection with obtaining the PATENT RIGHTS.  These payments are nonrefundable.

 

(b)                                 License Maintenance Fees.  COMPANY shall pay to WHITEHEAD the following license maintenance fees on January 1 of each year set forth below:

 

	
Year
    	
 
    	
Maintenance Fee
    
	
[***]
    	
 
    	
[***]
    
	
[***]
    	
 
    	
[***]
    
	
[***]
    	
 
    	
[***]
    

 

This license maintenance fee is nonrefundable; however, the license maintenance fee may be credited to running royalties subsequently due on NET SALES earned during the same calendar year and any milestone payments in the same calendar year, if any.  License maintenance fees paid in excess of running royalties and milestone payments due in such calendar year will not be creditable to amounts due for future years.

 

(c)                                  Milestone Payments.  COMPANY shall pay to WHITEHEAD the following milestone payments upon first achievement of the following milestones for a LICENSED PRODUCT whether by COMPANY, AFFILIATE, or SUBLICENSEE.  These milestone payments are nonrefundable, and each milestone is payable once only, not to exceed One Million Six Hundred Twenty Five Thousand Dollars $1,625,000 in any event:

 

(i)                                     [***] upon initiation of pre-IND enabling toxicology study.

 

(ii)                                  [***] upon the first dosing in a PHASE I TRIAL.

 

(iii)                               [***] upon the first dosing in a PHASE III TRIAL.

 

(iv)                              [***] upon MARKETING APPROVAL in USA or European Union.

 

(v)                                 [***] upon MARKETING APPROVAL in USA or European Union for second LICENSED PRODUCT or second indication for first LICENSED PRODUCT.

 

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Confidential Treatment Requested Under

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(vi)                              [***] upon MARKETING APPROVAL in Japan.

 

For the avoidance of doubt, the limitation of milestone payments in this Section 4.1(c) will not limit the amount of SUBLICENSE INCOME due to WHITEHEAD from the achievement of milestones.

 

(d)                                 Running Royalties:  COMPANY shall pay to WHITEHEAD a running royalty of [***] on NET SALES of LICENSED PRODUCTS by COMPANY, AFFILIATES, and SUBLICENSEES.

 

On a LICENSED PRODUCT-by-LICENSED PRODUCT and country-by-country basis, running royalties will commence on the date of FIRST COMMERCIAL SALE of such LICENSED PRODUCT in such country and will continue until the expiration of the last VALID CLAIM that would be infringed by the sale of such LICENSED PRODUCT in such country.  Thereafter, the license for such LICENSED PRODUCT in such country will be fully paid up, royalty-free, perpetual and irrevocable.  Running royalties will be payable for each REPORTING PERIOD and will be due to WHITEHEAD within [***] days of the end of each REPORTING PERIOD.

 

(e)                                  Royalty Offset.  If COMPANY, or an AFFILIATE is obligated to pay royalties to one or more third parties in order to obtain a license or similar right necessary to make, have made, use, sell, have sold, offer to sell, lease, or import a LICENSED PRODUCT, and COMPANY or an AFFILIATE actually pays said third-party royalties, COMPANY will be entitled to credit up to [***] of the amounts actually paid to such third parties against the royalties due to WHITEHEAD under this Agreement in the same REPORTING PERIOD, provided, however, that in no event shall the royalty payments under Section 4.1 (d) be reduced to less than [***] of NET SALES of such LICENSED PRODUCT in such REPORTING PERIOD; provided, further, that such offset shall only be available in connection with such payments to third party(ies) pursuant to agreements that permit a similar right of offset against royalties payable thereunder as a result of royalties payable to WHITEHEAD for the PATENT RIGHTS under this Section.

 

For clarification, COMPANY may only offset royalties paid to third parties from the sales in the same country as the royalties due to WHITEHEAD.  For example, if COMPANY

 

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Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

owes royalties to third parties for NET SALES in country Y and country Z, and COMPANY owes royalties to WHITEHEAD for NET SALES in country Y, COMPANY may only offset third-party royalties on NET SALES from country Y against royalties due to WHITEHEAD for NET SALES in country Y.

 

(f)                                   Sharing of SUBLICENSE INCOME.  COMPANY shall pay WHITEHEAD the following percentage of all SUBLICENSE INCOME received by COMPANY or AFFILIATES.  Such amount will be payable for each REPORTING PERIOD and will be due to WHITEHEAD within [***] days of the end of each REPORTING PERIOD.

 

·                  [***], for SUBLICENSES effective before [***].

 

·                  [***], for SUBLICENSES effective after [***], but prior to [***].

 

·                  [***], for SUBLICENSES effective thereafter.

 

To the extent that other patent rights, other intellectual property rights or other rights or obligations are granted to a SUBLICENSEE, other than PATENT RIGHTS which are sublicensed hereunder, by COMPANY or AFFILIATES, the consideration received by COMPANY will, subject to this Section 4.1(f), be equitably apportioned between the PATENT RIGHTS and those other rights and obligations, and such apportionment will be reasonable and in accordance with customary standards in the industry, such that only the portion of consideration received from the third party that is reasonably attributable to the SUBLICENSE of rights under the PATENT RIGHTS shall be considered SUBLICENSE INCOME.  Deductions taken under SUBLICENSE INCOME (e.g., future bona fide research, development and commercialization costs) also will be apportioned, as applicable.

 

COMPANY shall deliver to WHITEHEAD promptly a written report setting forth such apportionment.  In the event WHITEHEAD disagrees with the determination made by COMPANY, WHITEHEAD will so notify COMPANY within [***] days of receipt of COMPANY’S report and the parties shall meet to discuss and resolve such disagreement in good faith.  If the parties are unable to agree in good faith as to such fair-market values within [***] days, then the matter will be submitted in accordance with the dispute resolution process set forth in Article 14.  If COMPANY owes additional monies to WHITEHEAD after the conclusion of

 

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Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

such process, COMPANY will have [***] days after the completion of such process to make such payment to WHITEHEAD.

 

(g)                                  No Multiple Royalties.  If the manufacture, use, lease, or sale of any LICENSED PRODUCT or the performance of any LICENSED PROCESS is covered by more than one of the PATENT RIGHTS, multiple royalties will not be due.

 

(h)                                 Equity.

 

(1)                                 Initial Grant.  COMPANY shall issue to WHITEHEAD a total of [***] shares of Common Stock of COMPANY, $0.001 par value per share, (the “Shares”) in the name of WHITEHEAD, which shares represent the equivalent to [***] of the capitalization of COMPANY on a Fully-Diluted Basis (as defined below), after giving effect to the sale of [***] in COMPANY equity, subject to WHITEHEAD and, to the extent WHITEHEAD has transferred such Shares, any of its transferees (the “Whitehead Holders”) entering into a representation letter in substantially the form attached hereto as Appendix C with respect to such issuance of shares to WHITEHEAD and the Whitehead Holders.

 

(2)                                 Participation in Future Private Equity Offerings.  After the EFFECTIVE DATE, WHITEHEAD will have the right to purchase additional shares of the COMPANY’S Capital Stock in any private offering by the COMPANY of such Capital Stock in exchange for cash, to maintain its pro rata ownership as calculated immediately prior to such offering on a Fully Diluted Basis, pursuant to the terms and conditions at least as favorable as those granted to the other offerees; provided, that the right set forth in this Section 4.1(h)(2) shall not apply with respect to the offer or issuance by COMPANY of (i) Exempted Securities (as such term is defined in the Certificate of Incorporation of COMPANY), (ii) shares of Capital Stock or Convertible Instruments issued to banks, equipment lessors or other financial institutions, or to real property lessors, pursuant to a debt financing, equipment leasing or real property leasing transaction; (iii) shares of Capital Stock or Convertible Instruments issued pursuant to the acquisition of another corporation by the COMPANY by merger, purchase of substantially all of the assets or other reorganization or to a joint venture agreement or (iv) shares of Capital Stock or Convertible Instruments issued in connection with sponsored research, collaboration, technology license, development, OEM, marketing or other similar agreements or strategic

 

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Confidential Treatment Requested Under

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partnerships.  All rights granted pursuant to this Section 4.1(h)(2) will terminate immediately prior to the earliest of (i) a firm commitment underwritten public offering of the COMPANY’S Capital Stock resulting in gross proceeds to the COMPANY of at least [***], (ii) a Deemed Liquidation Event, as such term is defined in the Company’s Certificate of Incorporation or (iii) the date on which COMPANY has raised [***] in cash from its sale of its Capital Stock.  The right under this Section 4.1(h)(2) may only be assigned (and only with all related obligations) by WHITEHEAD to a transferee of the Shares that (i) is an AFFILIATE of WHITEHEAD, provided COMPANY is provided notice of such transfer; or (ii) is not an AFFILIATE of WHITEHEAD, provided COMPANY has provided its prior written consent to such transfer.

 

The following definitions will apply to this Section 4.1(h):

 

“Capital Stock” will mean any form of COMPANY’S capital stock.

 

“Convertible Instrument” will mean any instrument issued by COMPANY that is convertible into, or may be exercised in exchange for, any Capital Stock.

 

“Fully Diluted Basis” will mean the total number of issued and outstanding shares of the COMPANY’S Common Stock calculated to include conversion of all issued and outstanding securities convertible into Common Stock, the exercise of all then outstanding options and warrants to purchase shares of Common Stock, whether or not then exercisable, the conversion or exercise of all rights to purchase or acquire Common Stock, whether or not then convertible or exercisable, and will assume the issuance or grant of all securities reserved for issuance pursuant to any COMPANY stock or stock option plan in effect on the date of the calculation.

 

4.2                               Payments.

 

(a)                                 Method of Payment.  All payments under this Agreement should be made payable to “Whitehead Institute for Biomedical Research” and sent to WHITEHEAD’S address identified in Section 16.1.  Each payment should reference this Agreement (Reference:  “[***]”) and identify the obligation under this Agreement that the payment satisfies.

 

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Confidential Treatment Requested Under

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(b)                                 Payments in U.S. Dollars.  All payments due under this Agreement will be drawn on a United States bank and will be payable in United States dollars.  Conversion of foreign currency to U.S. dollars will be made at the conversion rate existing in the United States (as reported in the Wall Street Journal) on the last working day of the calendar quarter of the applicable REPORTING PERIOD.  Such payments will be without deduction of exchange, collection, or other charges, and, specifically, without deduction of withholding or similar taxes or other government imposed fees or taxes, except as permitted definition of NET SALES.  To the extent it has the legal right to do so and at the request of COMPANY, WHITEHEAD will assist COMPANY in reclaiming or seeking reimbursement of any amounts withheld under this Section 4.2(b) from the appropriate government, agency, or taxing authority.

 

(c)                                  Late Payments.  Any payments by COMPANY that are not paid on or before the date such payments are due under this Agreement will bear interest, to the extent permitted by law, at two percentage points above the Prime Rate of interest as reported in the Wall Street Journal on the date payment is due.

 

5.                                      REPORTS AND RECORD KEEPING

 

5.1                               Frequency of Reports.

 

(a)                                 Before FIRST COMMERCIAL SALE.  Prior to the FIRST COMMERCIAL SALE of any LICENSED PRODUCT or first commercial performance of any LICENSED PROCESS, COMPANY shall deliver reports to WHITEHEAD [***], within [***] days of the end of [***], containing information concerning the immediately preceding [***], as further described in Section 5.2.

 

(b)                                 Upon FIRST COMMERCIAL SALE or Commercial Performance of a LICENSED PROCESS.  COMPANY shall report to WHITEHEAD the date of FIRST COMMERCIAL SALE and the date of first commercial performance of a LICENSED PROCESS within [***] days of occurrence in each country.

 

(c)                                  After FIRST COMMERCIAL SALE.  After the FIRST COMMERCIAL SALE or first commercial performance of a LICENSED PROCESS, COMPANY shall

 

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deliver reports to WHITEHEAD within [***] days of the end of each REPORTING PERIOD, containing information concerning the immediately preceding REPORTING PERIOD, as further described in Section 5.2.

 

5.2                               Content of Reports and Payments.  Each report delivered by COMPANY to WHITEHEAD pursuant to Section 5.1 will contain at least the following information for the immediately preceding REPORTING PERIOD, as applicable; provided that, for any information required with respect to a SUBLICENSEE, COMPANY shall be deemed to fulfill its obligation under this Section 5.2 if it exercises commercially reasonable efforts to obtain such information:

 

(i)                                     the number of LICENSED PRODUCTS sold, leased or distributed by COMPANY, AFFILIATES, and SUBLICENSEES to independent third parties in each country;

 

(ii)                                  a description of LICENSED PROCESSES performed by COMPANY, its AFFILIATES and SUBLICENSEES in each country as may be pertinent to a royalty accounting hereunder;

 

(iii)                               the gross price charged by COMPANY, AFFILIATES, and SUBLICENSEES for each LICENSED PRODUCT; and the gross price charged for each LICENSED PROCESS performed by COMPANY, AFFILIATES, and SUBLICENSEES in each country;

 

(iv)                              calculation of NET SALES for the applicable REPORTING PERIOD in each country, including a listing of applicable deductions;

 

(v)                                 total royalty payable on NET SALES in U.S. dollars, together with the exchange rates used for conversion;

 

(vi)                              the amount of SUBLICENSE INCOME received by COMPANY from each SUBLICENSEE and the amount deliverable to WHITEHEAD from such SUBLICENSE INCOME, including an itemized breakdown of the sources of income comprising the SUBLICENSE INCOME;

 

(vii)                           the number of SUBLICENSE agreements entered into for the PATENT RIGHTS, LICENSED PRODUCTS, and/or LICENSED PROCESSES and (viii) achievement of any Milestones under Section 4.1(c) (and COMPANY shall pay the related milestone payments concurrently with the delivery of such report).

 

If no amounts are due for any REPORTING PERIOD, die report will so state.

 

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5.3                               Financial Statements.  On or before the [***] day following the COMPANY’S fiscal year end, COMPANY shall provide WHITEHEAD with COMPANY’S financial statements for the preceding fiscal year including, at a minimum, a balance sheet and an income statement, certified by COMPANY’S treasurer or chief financial officer or by an independent auditor.  During any time period in which COMPANY is required to make filings of its annual financial information with the SEC (as defined below), and such reports are available via a publicly accessible website, COMPANY shall not be required to actually deliver copies of the foregoing reports to WHITEHEAD.

 

5.4                               Record keeping.  COMPANY shall maintain, and shall cause its AFFILIATES and SUBLICENSEES to maintain, complete and accurate records relating to the rights and obligations under this Agreement and any amounts payable to WHITEHEAD in relation to this Agreement, which records shall contain sufficient information to permit WHITEHEAD to confirm the accuracy of any reports delivered to WHITEHEAD and compliance in other respects with this Agreement.  The relevant party shall retain such records for at least [***] years following the end of the calendar year to which they pertain, during which time WHITEHEAD or WHITEHEAD’S appointed agents, will have the right, at WHITEHEAD’S expense, to inspect such records during normal business hours to verify any reports and payments made or compliance in other respects under this Agreement.  In the event that any audit performed under this Section 5.4 reveals an underpayment in excess of [***], COMPANY shall bear the full out-of-pocket cost of such audit and shall remit any amounts due to WHITEHEAD within [***] days of receiving notice thereof from WHITEHEAD.  In the event that any audit performed under this Section 5.4 reveals an overpayment, COMPANY may take the amount of any overpayment as a credit under this Agreement.

 

6.                                      PATENT PROSECUTION

 

6.1                               Responsibility for PATENT RIGHTS.  WHITEHEAD shall prepare, file, prosecute, and maintain all of the PATENT RIGHTS.  WHITEHEAD shall instruct counsel to copy COMPANY on all draft material correspondence and draft submissions relating to the PATENT RIGHTS so that COMPANY may review and comment on same.  COMPANY will have reasonable opportunities to advise WHITEHEAD regarding prosecution of the PATENT RIGHTS, and which, if any, of the PATENT RIGHTS shall be subject to patent term extension,

 

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supplementary protection certificate or similar extensions, and WHITEHEAD shall reasonably consider all comments from COMPANY.  WHITEHEAD shall not abandon, or otherwise elect to forego its rights in, any PATENT RIGHTS without COMPANY’S prior written consent, which consent shall not be unreasonably withheld.  COMPANY shall cooperate with WHITEHEAD in such filing, prosecution and maintenance.

 

6.2                               International (non-United States’! Filings.  Appendix B is a list of countries in which patent applications corresponding to the United States patent applications listed in Appendix A will be filed, prosecuted, and maintained.  Appendix B may be amended by mutual agreement of COMPANY and WHITEHEAD.

 

6.3                               Payment of Expenses.  Payment of all fees and costs, including attorneys* fees, relating to the filing, prosecution and maintenance of the PATENT RIGHTS will be the responsibility of COMPANY, whether such amounts were incurred before or after the EFFECTIVE DATE.  WHITEHEAD has incurred the following amounts for such patent-related fees and costs:

 

	
Patent Case
    	
 
    	
As of service date
    	
 
    	
Patent Expenses
    	
 
    
	
[***]
    	
 
    	
December 31, 2015
    	
 
    	
[***]
    	
 
    
	
[***]
    	
 
    	
December 30, 2015
    	
 
    	
[***]
    	
 
    

 

COMPANY shall reimburse all amounts due pursuant to this Section 6.3 within [***] days of invoicing; late payments will accrue interest pursuant to Section 4.2(c).  In all instances, WHITEHEAD shall pay the fees prescribed for large entities to the United States Patent and Trademark Office.

 

7.                                      INFRINGEMENT

 

7.1                               Notification of Infringement.  Each party agrees to provide written notice to the other parties promptly after becoming aware of any infringement of the PATENT RIGHTS.

 

7.2                               Right to Prosecute Infringements.

 

(a)                                 COMPANY Right to Prosecute.  So long as COMPANY remains the exclusive licensee of the PATENT RIGHTS in the FIELD in the TERRITORY, COMPANY, to the extent permitted by law, will have the right (but not the obligation),

 

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under its own control and at its own expense, to prosecute any third-party infringement of the PATENT RIGHTS in the FIELD in the TERRITORY, subject to Sections 7.4 and 7.5.  If required by law, WHITEHEAD shall permit any action under this Section to be brought in its name, including being joined as a party-plaintiff, provided that, as set forth in Section 7.6, COMPANY shall hold WHITEHEAD harmless from, and indemnify WHITEHEAD against, any reasonable out-of-pocket costs or expenses that WHITEHEAD incurs in connection with such action.

 

Prior to commencing any such action, COMPANY shall consult with WHITEHEAD and shall consider the views of WHITEHEAD regarding the advisability of the proposed action and its effect on the public interest.  COMPANY shall not enter into any settlement, consent judgment, or other voluntary final disposition of any infringement action under this Section 7.2 without the prior written consent of WHITEHEAD, which consent shall not be unreasonably withheld, conditioned or delayed.

 

(b)                                 WHITEHEAD Right to Prosecute.  In the event that COMPANY is unsuccessful in persuading the alleged infringer to desist or fails to have initiated an infringement action within a reasonable time (no sooner than [***] months) after COMPANY first becomes aware of the basis for such action in writing from WHITEHEAD, WHITEHEAD will have the right, at its sole discretion, to prosecute such infringement under its sole control and at its sole expense, and any recovery obtained shall belong to WHITEHEAD.

 

7.3                               Declaratory Judgment Actions.  In the event that a PATENT CHALLENGE or any suit or action alleging that the PATENT RIGHTS are not infringed is brought against WHITEHEAD or COMPANY or any AFFILIATES or SUBLICENSEES by a third party, the subject party shall promptly notify the other parties in writing and COMPANY, at its option, and upon written notice to WHITEHEAD, shall have the right, but shall not be obligated, within [***] days after commencement of such action to take over the sole defense of the action at its own expense, subject to Sections 7.4 and 7.5.  If COMPANY does not exercise this right, WHITEHEAD may take over the sole defense of the action at WHITEHEAD’S sole expense, but shall not be obligated to do so.

 

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7.4                               Offsets.  COMPANY may offset a total of [***] of any expenses it incurs under Sections 7.2 and 7.3 against any payments due to WHITEHEAD under Article 4, provided that in no event will such payments under Article 4, when aggregated with any other offsets and credits allowed under this Agreement, be reduced by more than [***] in any REPORTING PERIOD.

 

7.5                               Recovery.  Any recovery obtained in an action brought by COMPANY under Sections 7.2 or 7.3 will be distributed as follows:

 

(i)                                     each party will be reimbursed for any expenses incurred in the action (including the amount of any royalty or other payments withheld from WHITEHEAD as described in Section 7.4);

 

(ii)                                  as to ordinary damages, such amounts shall be paid to COMPANY and deemed NET SALES hereunder, subject to payment of applicable royalties by COMPANY, and payment of applicable unpaid Milestone Payments (as though such milestones were achieved by COMPANY); and

 

(iii)                               as to special or punitive damages, the parties shall share equally in any award.

 

7.6                               Cooperation.  Each party agrees to cooperate in any action under this Article 7 which is controlled by any other party, provided that the controlling party reimburses the cooperating party promptly for any reasonable out-of-pocket costs and expenses incurred by the cooperating party in connection with providing such assistance.

 

7.7                               Right to Sublicense.  So long as COMPANY remains the exclusive licensee of the PATENT RIGHTS in the FIELD in the TERRITORY, COMPANY will have the sole right to sublicense any alleged infringer in the FIELD in the TERRITORY for future use of the PATENT RIGHTS in accordance with the terms and conditions of this Agreement relating to sublicenses.  Any SUBLICENSE INCOME arising from such SUBLICENSE will be treated as set forth in Article 4.

 

8.                                      PATENT CHALLENGE

 

8.1                               In the event that COMPANY or AFFILIATES brings a PATENT CHALLENGE against WHITEHEAD, or COMPANY or AFFILIATES assists another party in bringing a

 

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PATENT CHALLENGE against WHITEHEAD (except as required under a court order or subpoena), WHITEHEAD, in its sole discretion, may terminate this Agreement immediately upon written notice to COMPANY without any liability and without any opportunity to cure by COMPANY.  COMPANY will have no right to recoup any royalties paid or other payments made during the period of challenge.

 

8.2                               In the event that SUBLICENSEE brings a PATENT CHALLENGE or assists another party in bringing a PATENT CHALLENGE against WHITEHEAD (except as required under a court order or subpoena), then WHITEHEAD may send a written demand to COMPANY to terminate such SUBLICENSE.  COMPANY agrees that it will, to the extent enforceable in accordance with applicable laws, terminate such SUBLICENSE within [***] days of its receipt of written notice by WHITEHEAD requesting such termination.  COMPANY will have no right to recoup any royalties paid or other payments made during the period of challenge.

 

8.3                               In the event that (a) COMPANY or AFFILIATES brings a PATENT CHALLENGE or assists another party in bringing a PATENT CHALLENGE against WHITEHEAD (except as required under a court order or subpoena) and WHITEHEAD does not terminate this Agreement; or (b) a SUBLICENSEE brings a PATENT CHALLENGE or assists another party in bringing a PATENT CHALLENGE against WHITEHEAD (except as required under a court order or subpoena) and COMPANY fails to terminate a SUBLICENSE to a SUBLICENSEE as required under Section 8.2 (except to the extent termination is unenforceable in accordance with applicable laws), then the following:

 

(i)                                     (A) solely with respect to Section 8.3(a), the license to PATENT RIGHTS granted under Section 2.1 will convert to a non-exclusive license upon notice from WHITEHEAD to COMPANY and the royalty rate payable to WHITEHEAD under Section 4.1(d) on NET SALES shall thereafter double, and (B) solely with respect to Section 8.3(b), (1) if the SUBLICENSE to PATENT RIGHTS had been granted to the applicable SUBLICENSEE under Section 2.1 on an exclusive basis, such SUBLICENSE will convert to a non-exclusive SUBLICENSE upon notice from WHITEHEAD to COMPANY, and (2) the royalty rate payable to WHITEHEAD under Section 4.1(d) on NET SALES by such SUBLICENSEE shall thereafter double;

 

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(ii)                                  COMPANY will have no right to recoup any royalties paid or other payments made during the period of the PATENT CHALLENGE; and

 

(iii)                               COMPANY shall reimburse WHITEHEAD for all reasonable out-of-pocket legal fees and expenses incurred in its defense against the PATENT CHALLENGE.

 

9.                                      INDEMNIFICATION AND INSURANCE

 

9.1                               Indemnification.

 

(a)                                 Indemnity.  COMPANY shall indemnify, defend, and hold harmless WHITEHEAD and its trustees, officers, faculty, students, employees, and agents and their respective successors, heirs and assigns (the “Indemnitees”), against any liability, damage, loss, or expense (including reasonable attorneys’ fees and expenses) incurred by or imposed upon any of the Indemnitees in connection with any claims, suits, investigations, actions, demands, or judgments brought by third parties arising out of or related to the exercise of any rights granted to COMPANY under this Agreement or any breach of this Agreement by COMPANY, except if arising out of or related to WHITEHEAD’S breach of this Agreement or any gross negligence or willful misconduct of any indemnitee.

 

(b)                                 Procedures.  The Indemnitees agree to provide COMPANY with prompt written notice of any claim, suit, action, demand, or judgment for which indemnification is sought under Section 9.1(a) of this Agreement.  COMPANY agrees, at its own expense, to provide attorneys reasonably acceptable to the Indemnitees to defend against any such claim.  The Indemnitees shall cooperate fully with COMPANY in such defense and will permit COMPANY to conduct and control such defense and the disposition of such claim, suit, or action (including all decisions relative to litigation, appeal, and settlement); provided however, that any Indemnitee will have the right to retain its own counsel, at the expense of COMPANY, if representation of such Indemnitee by the counsel retained by COMPANY would be inappropriate because of actual or potential differences in the interests of such Indemnitee and any other party represented by such counsel.  COMPANY agrees to keep WHITEHEAD informed of the progress in the

 

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17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

defense and disposition of such claim and to consult with WHITEHEAD with regard to any proposed settlement.

 

9.2                               Insurance.  At such time as any product, process, or service relating to, or developed pursuant to, this Agreement is being used in a human clinical trial, commercially distributed or sold by COMPANY or one of its AFFILIATES or SUBLICENSEES, COMPANY shall obtain and carry in full force and effect commercial general liability insurance, product liability, and errors and omissions insurance which will protect COMPANY and Indemnitees with respect to events covered by Section 9.1(a) above.  Such insurance will:

 

(i)                                     be issued by a reputable insurer licensed to practice in the Commonwealth of Massachusetts;

 

(ii)                                  list WHITEHEAD as an additional insured thereunder;

 

(iii)                               require no less than [***] days written notice to be given to WHITEHEAD prior to any non-renewal or cancellation thereof.

 

The limits of such insurance will not be less than [***] per occurrence with an aggregate of [***] for bodily injury, death or property damage; and [***] per occurrence with an aggregate of [***] for errors and omissions.  COMPANY shall, upon WHITEHEAD’S reasonable request, provide WHITEHEAD with Certificates of Insurance evidencing compliance with this Section 9.2.  COMPANY shall continue to maintain such insurance after the expiration or termination of this Agreement during any period in which COMPANY or any AFFILIATE or SUBLICENSEE continues (i) to make, use in human clinical trials, or sell a product that was a LICENSED PRODUCT under this Agreement or (ii) to perform a service that was a LICENSED PROCESS under this Agreement, and thereafter for a period of [***] years.

 

10.                               REPRESENTATIONS AND WARRANTIES

 

10.1                        WHITEHEAD represents that as of the EFFECTIVE DATE, it is the owner of all right, title, and interest in and to the PATENT RIGHTS (excluding future PATENT RIGHTS claiming inventions in the disclosures in Appendix D), and that it has the lawful right to grant the rights as set forth in this Agreement.

 

10.2                        Limitations.  EXCEPT AS MAY OTHERWISE BE EXPRESSLY SET FORTH IN THIS AGREEMENT, WHITEHEAD MAKES NO REPRESENTATIONS OR

 

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Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

WARRANTIES OF ANY KIND CONCERNING THE PATENT RIGHTS, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, VALIDITY OF PATENT RIGHTS CLAIMS, WHETHER ISSUED OR PENDING, AND THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE.  Specifically, and not to limit the foregoing, WHITEHEAD makes no warranty or representation (i) regarding the validity or scope of the PATENT RIGHTS, and (ii) that the exploitation of the PATENT RIGHTS or any LICENSED PRODUCT or LICENSED PROCESS will not infringe any patents or other intellectual property rights of WHITEHEAD or of a third party.

 

IN NO EVENT SHALL COMPANY, WHITEHEAD, OR ANY OF THEIR RESPECTIVE TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES, AFFILIATES OR AFFILIATED ENTITIES BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING ECONOMIC DAMAGES OR INJURY TO PROPERTY AND LOST PROFITS, ARISING OUT OF THIS AGREEMENT, REGARDLESS OF WHETHER SUCH PERSON OR ENTITY SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT SHALL KNOW OF THE POSSIBILITY OF THE FOREGOING.

 

11.                               ASSIGNMENT

 

COMPANY may assign its rights and obligations under this Agreement to an AFFILIATE or to a successor in connection with the merger, consolidation, or sale of all or substantially all of its assets or equity or that portion of its business to which this Agreement relates; provided  however, that if the Agreement is assigned upon such merger, consolidation, or sale, the Agreement will immediately terminate if the proposed assignee has not agreed in writing to be bound by the terms and conditions of this Agreement within [***] days after the effective date of the assignment.

 

12.                               GENERAL COMPLIANCE WITH LAWS

 

12.1                        Compliance with Laws.  COMPANY shall comply with all local, state, federal, and international laws and regulations relating to the development, manufacture, use, and sale of LICENSED PRODUCTS and LICENSED PROCESSES.

 

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***Text Omitted and Filed Separately with the Securities and Exchange Commission

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

12.2                        Export Control.  COMPANY, AFFILIATES, and SUBLICENSEES shall comply with all United States laws and regulations controlling the export of certain commodities and technical data, including without limitation all Export Administration Regulations of the United States Department of Commerce.  Among other things, these laws and regulations prohibit or require a license for the export of certain types of commodities and technical data to specified countries.  COMPANY hereby gives written assurance that it will comply with, and will cause its AFFILIATES and SUBLICENSEES to comply with, all United States export control laws and regulations, that it bears sole responsibility for any violation of such laws and regulations by itself or its AFFILIATES or SUBLICENSEES, and that it will indemnify, defend, and hold WHITEHEAD harmless (in accordance with Section 9.1) for the consequences of any such violation.

 

12.3                        Non-Use of Name.  COMPANY, AFFILIATES and SUBLICENSEES shall not use the name of “Whitehead Institute for Biomedical Research” or any variation, adaptation, or abbreviation thereof, or any of its trustees, officers, faculty, students, employees (including [***], except as permitted under their separate consulting agreements between [***] and COMPANY effective on [***] and [***], and between [***] and COMPANY effective on [***] and [***]), or agents, or any trademark owned by WHITEHEAD or any terms of this Agreement in any promotional material or other public announcement or disclosure without the prior written consent of WHITEHEAD.  WHITEHEAD shall not use the name of “Rubius Therapeutics, Inc.”, “VL26, Inc.”, or any variation, adaptation, or abbreviation of either of the foregoing, or any of its directors, officers, employees or agents, or any trademark owned by COMPANY or any terms of this Agreement in any promotional material or other public announcement or disclosure without the prior written consent of COMPANY.  The foregoing notwithstanding, without the consent of WHITEHEAD, COMPANY may make (a) disclosures required by law, (b) factual statements during the TERM that COMPANY has a license from WHITEHEAD under one or more of the patents and/or patent applications comprising the PATENT RIGHTS, (c) disclosures of the terms of the Agreement to its or its AFFILIATE’S or affiliated entity’s directors, officers, employees, consultants, advisors and agents, or actual or potential licensors, licensees, sublicensees, acquirers, investors and financing sources; provided that, COMPANY shall bind them to reasonable confidentiality obligations.  In addition, COMPANY shall have the right to issue a press release upon execution of this Agreement and the achievement of any

 

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***Text Omitted and Filed Separately with the Securities and Exchange Commission

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

milestone, which will be reviewed and approved in advance by WHITEHEAD if WHITEHEAD is named in such press release and such naming is not required by law.

 

12.4                        Marking of LICENSED PRODUCTS.  To the extent commercially feasible and required by applicable patent laws, COMPANY shall mark, shall cause its AFFILIATES to mark and shall use commercially reasonable efforts to cause its SUBLICENSEES to mark, all LICENSED PRODUCTS that are manufactured or sold under this Agreement with the number of each issued patent under the PATENT RIGHTS that applies to such LICENSED PRODUCT.

 

13.                               TERMINATION

 

13.1                        Voluntary Termination by COMPANY.  COMPANY will have the right to terminate this Agreement in its entirety or in part, including on a patent-by-patent and country-by-country basis, for any reason, (i) upon at least [***] months prior written notice to WHITEHEAD, such notice to state the date at least [***] months in the future upon which termination is to be effective, and (ii) upon payment of all undisputed amounts due to WHITEHEAD through such termination effective date.

 

13.2                        Cessation of Business.  If COMPANY and all AFFILIATES and SUBLICENSEES cease to carry on its business related to this Agreement for a period in excess of six (6) months, WHITEHEAD will have the right to terminate this Agreement immediately upon written notice to COMPANY.

 

13.3                        Termination for Default.

 

(a)                                 Nonpayment.  In the event COMPANY fails to pay any amounts due and payable to WHITEHEAD hereunder, and fails to make such payments within [***] days after receiving written notice of such failure, WHITEHEAD may terminate this Agreement immediately upon written notice to COMPANY.

 

(b)                                 Material Breach.  In the event COMPANY commits a material breach of its obligations under this Agreement, except for breach as described in Section 13.3(a), and fails to cure that breach within [***] days after receiving written notice thereof,

 

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***Text Omitted and Filed Separately with the Securities and Exchange Commission

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

WHITEHEAD may terminate this Agreement immediately upon written notice to COMPANY.

 

(c)                                  Dispute Resolution.  For termination pursuant to Section 13.3(a) or 13.3(b), if COMPANY disputes in good faith that such breach entitles WHITEHEAD to terminate this Agreement, and COMPANY provides notice to WHITEHEAD of such dispute within the applicable cure period, such cure period shall be tolled while the process pursuant to Section 14 is conducted as described below, WHITEHEAD shall not have the right to terminate this Agreement unless and until a determination is reached in accordance with Section 14.3 that WHITEHEAD is entitled to terminate this Agreement and COMPANY fails to cure such breach prior to the later of (i) the remainder of the applicable cure period and (ii) the [***] day following such determination.  It is understood and acknowledged that during the pendency of such a dispute, all of the terms and conditions of this Agreement shall remain in effect and the Parties shall continue to perform all of their respective obligations hereunder.

 

13.4                        Effect of Termination.

 

(a)                                 Survival.  The following provisions shall survive the expiration or termination of this Agreement in its entirety:  Articles 1 (“Definitions”), 9 (“Indemnification and Insurance”), 10 (“Representations and Warranties”), 11 (“Assignment”), 14 (“Dispute Resolution”), 15 (“Confidentiality”), and 16 (“Miscellaneous”), and Sections 2.2 (last two sentences only), 4.1(d) (second sentence of second paragraph only, to the extent applicable as of the date of expiration or termination of this Agreement), 5.2 (obligation to provide a final report and related payment), 5.4 (“Record Keeping”), 12.2 indemnification for violation of export control laws), 12.3 (“Non-Use of Name”) and 13.4 (“Effect of Termination”).

 

(b)                                 Inventory.  Upon the early termination of this Agreement related to PATENT RIGHTS or parts thereof that cover LICENSED PRODUCTS, COMPANY, AFFILIATES, and SUBLICENSEES may complete and sell any work-in-progress and inventory of such LICENSED PRODUCTS that exist as of the effective date of termination, provided that:

 

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Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

(i)                                     COMPANY pays WHITEHEAD the applicable running royalty or other amounts due on such sales of LICENSED PRODUCTS in accordance with the terms and conditions of this Agreement; and

 

(ii)                                  COMPANY, AFFILIATES, and SUBLICENSEES shall complete and sell all work-in-progress and inventory of such LICENSED PRODUCTS within [***] months after the effective date of termination.

 

(c)                                  Pre-termination Obligations.  In no event will termination of this Agreement release COMPANY, AFFILIATES, or SUBLICENSEES from the obligation to pay any amounts that became due on or before the effective date of termination.

 

14.                               DISPUTE RESOLUTION

 

14.1                        Mandatory Procedures.  The parties agree that any dispute arising out of or relating to this Agreement shall be resolved solely by means of the procedures set forth in this Article, and that such procedures constitute legally binding obligations that are an essential provision of this Agreement.  If any party fails to observe the procedures of this Article, as may be modified by their written agreement, the other parties may bring an action for specific performance of these procedures in any court of competent jurisdiction.

 

14.2                        Equitable Remedies.  Although the procedures specified in this Article are the sole and exclusive procedures for the resolution of disputes arising out of or relating to this Agreement, any party may seek a preliminary injunction or other provisional equitable relief if, in its reasonable judgment, such action is necessary to avoid irreparable harm to itself or to preserve its rights under this Agreement.

 

14.3                        Dispute Resolution Procedures.

 

(a)                                 Mediation.  In the event any dispute arising out of or relating to this Agreement remains unresolved within [***] days from the date the affected party informed the other parties of such dispute, any party may initiate mediation upon written notice to the other party (“Notice Date”), whereupon all parties shall be obligated to engage in a mediation proceeding under the then current Center for Public Resources (“CPR”) Model Procedure for Mediation of Business Disputes (http://www.cpradr.org), except that specific provisions of this Article will override inconsistent provisions of the

 

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Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

CPR Model Procedure.  The mediator will be selected from the CPR Panels of Neutrals.  If the parties cannot agree upon the selection of a mediator within [***] business days after the Notice Date, then upon the request of any party, the CPR shall appoint the mediator.  The parties shall attempt to resolve the dispute through mediation until the first of the following occurs:

 

(i)                                     the parties reach a written settlement;

 

(ii)                                  the mediator notifies the parties in writing that they have reached an impasse;

 

(iii)                               the parties agree in writing that they have reached an impasse; or

 

(iv)                              the parties have not reached a settlement within [***] days after the Notice Date.

 

(b)                                 Trial Without Jury.  If the parties fail to resolve the dispute through mediation, or if no party elects to initiate mediation, each party will have the right to pursue any other remedies legally available to resolve the dispute, provided, however, that the parties expressly waive any right to a jury trial in any legal proceeding under this Article 14.

 

14.4                        Performance to Continue.  Each party shall continue to perform its undisputed obligations under this Agreement pending final resolution of any dispute arising out of or relating to this Agreement; provided, however, that a party may suspend performance of its undisputed obligations during any period in which any other party fails or refuses to perform its undisputed obligations.  Nothing in this Article is intended to relieve COMPANY from its obligation to make undisputed payments pursuant to Articles 4 and 6 of this Agreement.

 

14.5                        Statute of Limitations.  The parties agree that all applicable statutes of limitation and time-based defenses (such as estoppel and laches) will be tolled while the procedures set forth in Section 14.3(a) are pending.  The parties shall cooperate in taking any actions necessary to achieve this result.

 

 

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***Text Omitted and Filed Separately with the Securities and Exchange Commission

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

15.                               CONFIDENTIALITY

 

15.1                        Non-disclosure and Non-use.

 

(a)                                 All information disclosed by one party to the other party hereunder (“Information”) shall be maintained in confidence by the receiving party and shall not be disclosed to any third party or used for any purpose except as set forth herein without the prior written consent of the disclosing party, for a period of [***] years from disclosure of such information, except to the extent that such information:

 

(i)                                     is known by receiving party at the time of its receipt, and not through a prior disclosure by the disclosing party, as documented by the receiving party’s business records;

 

(ii)                                  is or becomes part of the public domain or generally known to the public through no fault of the receiving party;

 

(iii)                               is subsequently disclosed to the receiving party by a third party who may lawfully do so and is not under an obligation of confidentiality to the disclosing party;

 

(iv)                              is developed by the receiving party independently of Information received from the disclosing party, as documented by the receiving party’s business records;

 

(b)                                 Notwithstanding the foregoing, a party may disclose Information:

 

(i)                                     to governmental or other regulatory agencies in order to obtain patents or to gain or maintain approval to conduct clinical trials or to market LICENSED PRODUCTS or LICENSED PROCESSES, provided however that such disclosure may be only to the extent reasonably necessary to obtain patents or authorizations.

 

(ii)                                  deemed necessary by COMPANY to be disclosed to AFFILIATES, affiliated entities, SUBLICENSEES, agents, consultants, and/or other third parties for the research, development, manufacture and/or commercialization of a LICENSED PRODUCT or LICENSED PROCESS, and/or in connection with a licensing/sublicensing transaction and/or a permitted assignment under this Agreement, and/or loan, financing or investment and/or acquisition, merger, consolidation or similar transaction (or for such entities to determine their interest in performing such activities) in each case on the condition that any third party to whom such disclosures are made agree to be bound by a confidentiality agreement.

 

Information that is disclosed under 15.1(b)(i) or 15.1(b)(ii) shall remain otherwise subject to the confidentiality and non-use provisions hereof.

 

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***Text Omitted and Filed Separately with the Securities and Exchange Commission

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

15.2                        Judicial or Administrative Process.  If a party is required by judicial or administrative process to disclose Information that is subject to the non-disclosure provisions of this Section 15, such party, to the extent permitted by law, shall promptly inform the other party of the disclosure that is being sought in order to provide the other party an opportunity to challenge or limit the disclosure obligations.

 

Information that is disclosed by judicial or administrative process shall remain otherwise subject to the confidentiality and non-use provisions hereof, and the disclosing party, pursuant to law or court order, shall take all steps reasonably necessary, including without limitation obtaining an order of confidentiality, to ensure the continued confidential treatment of such Information.

 

15.3                        SEC Filings.  Either party may publicly disclose the terms of this Agreement to the extent required, in the reasonable opinion of such party’s legal counsel, to comply with applicable laws, including without limitation the rules and regulations promulgated by the United States Securities and Exchange Commission (the “SEC”).  Notwithstanding the foregoing, before disclosing this Agreement or any of the terms hereof pursuant to this Section 15.3, the parties will consult with one another on the terms of this Agreement to be redacted in making any such disclosure, but such consultation shall not prevent a party from fulfilling its obligations under law.  If a party discloses this Agreement or any of the terms hereof in accordance with this Section 15.3, such party agrees, at its own expense, to seek confidential treatment of portions of this Agreement or such terms, as may be reasonably requested by the other party.

 

16.                               MISCELLANEOUS

 

16.1                        Notice.  Any notices required or permitted under this Agreement will be in writing, will specifically refer to this Agreement, and will be sent by hand, recognized national overnight courier, confirmed facsimile transmission, confirmed electronic mail, or registered or certified mail, postage prepaid, return receipt requested, to the following addresses or facsimile numbers of the parties:

 

If to WHITEHEAD:
  Whitehead Institute for Biomedical Research
 9 Cambridge Center
 Cambridge, MA 02142

 

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Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

Attention:  Intellectual Property Office
 Tel:  617-258-5000

 

If to COMPANY:
 Rubius Therapeutics, Inc.
 620 Memorial Drive, Suite 100 West
 Cambridge, MA 02139
 Attention:
 Tel:

 

All notices under this Agreement will be deemed effective upon receipt.  A party may change its contact information immediately upon written notice to the other parties in the manner provided in this Section 16.1.

 

16.2                        Governing Law.  This Agreement and all disputes arising out of or related to this Agreement, or the performance, enforcement, breach or termination hereof, and any remedies relating thereto, will be construed, governed, interpreted and applied in accordance with the laws of the Commonwealth of Massachusetts, U.S.A., without regard to conflict of laws principles, except that questions affecting the construction and effect of any patent will be determined by the law of the country in which the patent will have been granted.  The state and federal courts having jurisdiction over Cambridge, MA, U.S.A., provide the exclusive forum for any court action between the parties relating to this Agreement COMPANY submits to the jurisdiction of such courts and waives any claim that such court lacks jurisdiction over COMPANY or its AFFILIATES or constitutes an inconvenient or improper forum.

 

16.3                        Force Majeure.  No party will be responsible for delays resulting from causes beyond the reasonable control of such party, including without limitation fire, explosion, flood, war, strike, or riot, provided that the nonperforming party uses commercially reasonable efforts to avoid or remove such causes of nonperformance and continues performance under this Agreement with reasonable dispatch whenever such causes are removed.

 

16.4                        Amendment and Waiver.  This Agreement may be amended, supplemented, or otherwise modified only by means of a written instrument signed by all parties.  Any waiver of any rights or failure to act in a specific instance will relate only to such instance and will not be construed as an agreement to waive any rights or fail to act in any other instance, whether or not similar.

 

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Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

16.5                        Severability.  In the event that any provision of this Agreement will be held invalid or unenforceable for any reason, such invalidity or unenforceability will not affect any other provision of this Agreement, and the parties shall negotiate in good faith to modify the Agreement to preserve (to the extent possible) their original intent.  If the parties fail to reach a modified agreement within [***] days after the relevant provision is held invalid or unenforceable, then the dispute will be resolved in accordance with the procedures set forth in Article 14.  While the dispute is pending resolution, this Agreement will be construed as if such provision were deleted by agreement of the parties.

 

16.6                        Binding Effect.  This Agreement will be binding upon and inure to the benefit of the parties and their respective permitted successors and assigns.

 

16.7                        Headings; Interpretation.  All headings are for convenience only and will not affect the meaning of any provision of this Agreement.  Except as otherwise explicitly specified to the contrary, (a) words in the singular or plural form include the plural and singular form, respectively; (b) unless the context requires a different interpretation, the word “or” has the inclusive meaning that is typically associated with the phrase “and/or”; (c) the terms “including,” “include(s),” “such as,” “e.g.” and “for example” will be deemed to be followed by “without limitation”; and (d) “$” or “dollars” means U.S. Dollars.

 

16.8                        Entire Agreement.  This Agreement constitutes the entire agreement between the parties with respect to its subject matter and supersedes all prior agreements or understandings between the parties relating to its subject matter.  Notwithstanding the foregoing, WHITEHEAD and COMPANY entered into a Bilateral Nondisclosure Agreement, dated March 10, 2014, as amended on March 12,2014 (as amended, the “BNDA”), and such BNDA shall continue to apply with respect to information which was considered Confidential Information (as defined therein) as of the Effective Date.

 

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***Text Omitted and Filed Separately with the Securities and Exchange Commission

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives.

 

 

	
For WHITEHEAD
    	
 
    	
For COMPANY:
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Carla DeMaria
    	
 
    	
By:
    	
/s/ Avak Kahvejian
    
	
 
    	
 
    	
 
    
	
Name: Carla DeMaria
    	
 
    	
Name: Avak Kahvejian
    
	
 
    	
 
    	
 
    
	
Title: Director of Intellectual Property
    	
 
    	
Title: President & CEO
    
	
& Sponsored Programs
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
January 29, 2016
    	
 
    	
Date:
    	
January 29, 2016
    

 

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Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

APPENDIX A

 

List of Patent Applications and Patents

 

[***]

 

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***Text Omitted and Filed Separately with the Securities and Exchange Commission

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

APPENDIX B

 

List of Countries (excluding United States) for which
 PATENT RIGHTS Applications Will Be Filed. Prosecuted and Maintained

 

[***]

 

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Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

APPENDIX C

 

RUBIUS THERAPEUTICS, INC.
 620 Memorial Drive
 Suite 100 West
 Cambridge, MA 02139

 

Dear Sirs:

 

Pursuant to Section 4.1(h) of that certain EXCLUSIVE PATENT LICENSE AGREEMENT dated as of January 28, 2016 by and between WHITEHEAD INSTITUTE FOR BIOMEDICAL RESEARCH (“Whitehead”) and RUBIUS THERAPEUTICS, INC. (the “Company”), in connection with the issuance of the Shares (as defined in such Exclusive Patent License Agreement), Whitehead represents, warrants and covenants as follows:

 

1.                                      It is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Shares.

 

2.                                      It is acquiring the Shares for its own account for investment only, and not with a view to, or for sale in connection with, any “distribution” of the Shares in violation of the Securities Act of 1933 (the “Securities Act”), or any rule or regulation under the Securities Act.

 

3.                                      It can afford a complete loss of the value of the Shares and is able to bear the economic risk of holding such Shares for an indefinite period.

 

4.                                      It understands that (i) the Shares have not been registered under the Securities Act by reason of a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the investment intent as expressed herein, and are “restricted securities” within the meaning of Rule 144 under the Securities Act; (ii) the Shares cannot be sold, transferred or otherwise disposed of unless they are subsequently registered under the Securities Act or an exemption from registration is then available; (iii) in any event, the exemption from registration under Rule 144 or otherwise may not be available for at least one year and even then will not be available unless a public market then exists for the Common Stock, adequate information concerning the Company is then available to the public, and other terms and conditions of Rule 144 are complied with; and (iv) there is now no registration statement on file with the Securities and Exchange Commission with respect to any stock of the Company and the Company has no obligation or current intention to register the Shares under the Securities Act.

 

5.                                      It further acknowledges and understands that the Company is under no obligation to register the Shares.  It understands that the certificate evidencing the Shares will be endorsed with the following legend, in addition to any legends that may be required by applicable law:

 

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.  NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE

 

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Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

6.                                      It is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.

 

	
Very   truly yours,
    	
 
    
	
 
    	
 
    
	
Whitehead   Institute
    	
 
    
	
for   Biomedical Research
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    

 

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Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

APPENDIX D

 

List of disclosures

 

1.                                      [***]

 

2.                                      [***]

 

***Confidential Treatment Requested***

 

 

***Text Omitted and Filed Separately with the Securities and Exchange Commission

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

This FIRST AMENDMENT, effective as of December 12, 2017 (the “AMENDMENT EFFECTIVE DATE”), amends the Exclusive Patent License Agreement dated January 28, 2016 (the “LICENSE”), between the Whitehead Institute for Biomedical Research (“WHITEHEAD”) and Rubius Therapeutics, Inc. (“COMPANY”).

 

WHEREAS, WHITEHEAD and COMPANY wish to modify Appendix A of the LICENSE;

 

WHEREAS, WHITEHEAD and Tufts University having offices at 136 Harrison Avenue, Boston, Massachusetts 02111 (“TUFTS”) are co-owners of certain FIRST AMENDMENT PATENT RIGHTS, as later defined herein, relating to [***];

 

WHEREAS, WHITEHEAD and TUFTS entered into the Joint Invention Administration Agreement dated November 9, 2017 (WHITEHEAD Reference:  J7269), giving WHITEHEAD the right to grant licenses under said FIRST AMENDMENT PATENT RIGHTS;

 

WHEREAS, WHITEHEAD and TUFTS desire to have the PATENT RIGHTS developed and commercialized to benefit the public, and WHITEHEAD is willing to grant a license thereunder;

 

WHEREAS, COMPANY desires to add such FIRST AMENDMENT PATENT RIGHTS to the LICENSE.

 

NOW, THEREFORE, WHITEHEAD and COMPANY hereby agree as follows:

 

Capitalized terms used herein and not defined herein shall have the respective meanings ascribed to such terms in the LICENSE.

 

***Confidential Treatment Requested***

 

 

***Text Omitted and Filed Separately with the Securities and Exchange Commission

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

1.             The following (hereinafter the “FIRST AMENDMENT PATENT RIGHTS”) is included under the definition of PATENT RIGHTS and is added to Appendix A of the LICENSE:

 

[***].

 

Appendix A of the LICENSE is deleted in its entirety and replaced with the Appendix A of this FIRST AMENDMENT, attached hereto.

 

2.             For the avoidance of doubt, per Section 6.3 of the LICENSE, payment of all fees and costs, including attorneys’ fees relating to the filing, prosecution, and maintenance of the FIRST AMENDMENT PATENT RIGHTS shall be the responsibility of COMPANY, whether such amounts were incurred before or after the AMENDMENT EFFECTIVE DATE.

 

3.             Section 2.5 (a) of the LICENSE is deleted in its entirety and replaced with the following:

 

(a)           WHITEHEAD.  WHITEHEAD retains the right to practice under the PATENT RIGHTS for research, teaching, and educational purposes including sponsored research and collaborations.  TUFTS retains the right to practice under the FIRST AMENDMENT PATENT RIGHTS for research, teaching, and educational purposes including sponsored research and collaborations.

 

4.             Section 2.5 (b) of the LICENSE is deleted in its entirety and replaced with the following:

 

(b)           Academic and Not-For-Profit Research Institutes.  WHITEHEAD retains the right to grant non-exclusive licenses to academic and not-for-profit research institutes to practice under the PATENT RIGHTS for research, teaching, and educational purposes only; excluding use in sponsored research.  TUFTS retains the right to grant non-exclusive licenses to academic and not-for-profit research institutes to practice under the FIRST AMENDMENT PATENT RIGHTS for research, teaching, and educational purposes only; excluding use in sponsored research.

 

2

 

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***Text Omitted and Filed Separately with the Securities and Exchange Commission

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

5.             Article 9 (INDEMNIFICATION AND INSURANCE) and Article 10 (REPRESENTATIONS AND WARRANTIES) of the LICENSE are deleted in their entirety and replaced with the following:

 

9.             INDEMNIFICATION AND INSURANCE

 

9.1          Indemnification.

 

(a)           Indemnity.  COMPANY shall indemnify, defend, and hold harmless WHITEHEAD, TUFTS, and their trustees, officers, faculty, students, employees, and agents and their respective successors, heirs and assigns (the “Indemnitees”), against any liability, damage, loss, or expense (including reasonable attorneys’ fees and expenses) incurred by or imposed upon any of the Indemnitees in connection with any claims, suits, investigations, actions, demands, or judgments brought by third parties arising out of or related to the exercise of any rights granted to COMPANY under this Agreement or any breach of this Agreement by COMPANY, except if arising out of or related to WHITEHEAD’S and/or TUFTS’s breach of this Agreement or any gross negligence or willful misconduct of any Indemnitee.

 

(b)           Procedures.  The Indemnitees agree to provide COMPANY with prompt written notice of any claim, suit, action, demand, or judgment for which indemnification is sought under Section 9.1(a) of this Agreement.  COMPANY agrees, at its own expense, to provide attorneys reasonably acceptable to the Indemnitees to defend against any such claim.  The Indemnitees shall cooperate fully with COMPANY in such defense and will permit COMPANY to conduct and control such defense and the disposition of such claim, suit, or action (including all decisions relative to litigation, appeal, and settlement); provided however, that any Indemnitee will have the right to retain its own counsel, at the expense of COMPANY, if representation of such Indemnitee by the counsel retained by COMPANY would be inappropriate because of actual or potential differences in the interests of such Indemnitee and any other party represented by such counsel.  COMPANY agrees to keep WHITEHEAD and TUFTS informed of the progress in the defense and disposition of such claim and to consult with WHITEHEAD and TUFTS with regard to any proposed settlement.

 

3

 

***Confidential Treatment Requested***

 

 

***Text Omitted and Filed Separately with the Securities and Exchange Commission

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

9.2          Insurance.  At such time as any product, process, or service relating to, or developed pursuant to, this Agreement is being used in a human clinical trial, commercially distributed or sold by COMPANY or one of its AFFILIATES or SUBLICENSEES, COMPANY shall obtain and carry in full force and effect commercial general liability insurance, product liability, and errors and omissions insurance which will protect COMPANY and Indemnitees with respect to events covered by Section 9.1(a) above.  Such insurance will:

 

(i)                                     be issued by a reputable insurer licensed to practice in the Commonwealth of Massachusetts;

 

(ii)                                  list WHITEHEAD and TUFTS as an additional insured thereunder;

 

(iii)                               require no less than [***] days written notice to be given to WHITEHEAD and TUFTS prior to any non-renewal or cancellation thereof.

 

The limits of such insurance will not be less than [***] per occurrence with an aggregate of [***] for bodily injury, death or property damage; and [***] per occurrence with an aggregate of [***] for errors and omissions.  COMPANY shall, upon WHITEHEAD’S or TUFTS’s reasonable request, provide WHITEHEAD or TUFTS with Certificates of Insurance evidencing compliance with this Section 9.2.  COMPANY shall continue to maintain such insurance after the expiration or termination of this Agreement during any period in which COMPANY or any AFFILIATE or SUBLICENSEE continues (i) to make, use in human clinical trials, or sell a product that was a LICENSED PRODUCT under this Agreement or (ii) to perform a service that was a LICENSED PROCESS under this Agreement, and thereafter for a period of [***] years.

 

10.          REPRESENTATIONS AND WARRANTIES

 

10.1        WHITEHEAD represents that as of the AMENDMENT EFFECTIVE DATE, it is the owner of all right, title, and interest in and to [***] and [***] of the PATENT RIGHTS, and it as the lawful right to grant the rights as set forth in this Agreement.  WHITEHEAD and TUFTS represent that as of the AMENDMENT EFFECTIVE DATE, they are the owners of all right, title, and interest in and to [***], and they have the lawful right to grant the rights as set forth in this Agreement.

 

4

 

***Confidential Treatment Requested***

 

 

***Text Omitted and Filed Separately with the Securities and Exchange Commission

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

10.2        Limitations.  EXCEPT AS MAY OTHERWISE BE EXPRESSLY SET FORTH IN THIS AGREEMENT, WHITEHEAD AND TUFTS MAKE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND CONCERNING THE PATENT RIGHTS, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, VALIDITY OF PATENT RIGHTS CLAIMS, WHETHER ISSUED OR PENDING, AND THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE.  Specifically, and not to limit the foregoing, WHITEHEAD and TUFTS make no warranty or representation (i) regarding the validity or scope of the PATENT RIGHTS, and (ii) that the exploitation of the PATENT RIGHTS or any LICENSED PRODUCT or LICENSED PROCESS will not infringe any patents or other intellectual property rights of WHITEHEAD, TUFTS, or of a third party.

 

IN NO EVENT SHALL COMPANY, WHITEHEAD, TUFTS, OR ANY OF THEIR RESPECTIVE TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES, AFFILIATES OR AFFILIATED ENTITIES BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING ECONOMIC DAMAGES OR INJURY TO PROPERTY AND LOST PROFITS, ARISING OUT OF THIS AGREEMENT, REGARDLESS OF WHETHER SUCH PERSON OR ENTITY SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT SHALL KNOW OF THE POSSIBILITY OF THE FOREGOING.

 

6.             Section 12.3 (Non-Use of Name) of the LICENSE is deleted in its entirety and replaced with the following:

 

12.3        Non-Use of Name.  COMPANY, AFFILIATES, and SUBLICENSEES shall not use the name of “Whitehead Institute for Biomedical Research”, “Tufts University”, or any variation, adaptation, or abbreviation thereof, or any of its trustees, officers, faculty, students, employees (including [***], except as permitted under their separate consulting agreements between [***] and COMPANY effective on [***] and [***], and between [***] and COMPANY effective on [***] and [***]), or agents, or

 

5

 

***Confidential Treatment Requested***

 

 

***Text Omitted and Filed Separately with the Securities and Exchange Commission

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

any trademark owned by WHITEHEAD, TUFTS, or any terms of this Agreement in any promotional material or other public announcement or disclosure without the prior written consent of WHITEHEAD or TUFTS, as applicable.  WHITEHEAD and TUFTS shall not use the name of “Rubius Therapeutics, Inc.”, “VL26, Inc.”, or any variation, adaptation, or abbreviation of either of the foregoing, or any of its directors, officers, employees or agents, or any trademark owned by COMPANY or any terms of this Agreement in any promotional material or other public announcement or disclosure without the prior written consent of COMPANY.  The foregoing notwithstanding, without the consent of WHITEHEAD or TUFTS, COMPANY may make (a) disclosures required by law, (b) factual statements during the TERM that COMPANY has a license from WHITEHEAD under one or more of the patents and/or patent applications comprising the PATENT RIGHTS, (c) disclosures of the terms of the Agreement to its or its AFFILIATE’S or affiliated entity’s directors, officers, employees, consultants, advisors and agents, or actual or potential licensors, licensees, sublicensees, acquirers, investors and financing sources; provided that, COMPANY shall bind them to reasonable confidentiality obligations.  In addition, COMPANY shall have the right to issue a press release upon execution of this Agreement and the achievement of any milestone, which will be reviewed and approved in advance by WHITEHEAD or TUFTS, if WHITEHEAD or TUFTS is named in such press release and such naming is not required by law.

 

7.             Section 16.1 (Notice) of the LICENSE is deleted in its entirety and replaced with the following:

 

16.1        Notice.  Any notices required or permitted under this Agreement will be in writing, will specifically refer to this Agreement, and will be sent by hand, recognized national overnight courier, confirmed facsimile transmission, confirmed electronic mail, or registered or certified mail, postage prepaid, return receipt requested, to the following addresses or facsimile numbers of the parties:

 

If to WHITEHEAD:
 Whitehead Institute for Biomedical Research
 455 Main Street

 

6

 

***Confidential Treatment Requested***

 

 

***Text Omitted and Filed Separately with the Securities and Exchange Commission

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

Cambridge, MA 02142
 Attention:  Intellectual Property Office
 Tel:  617-258-5000

 

If to TUFTS:
  Tufts University
 136 Harrison Avenue, 75K-950
 Boston, MA 02111
 Attention:  Office for Technology Licensing & Industry Collaboration

 

If to COMPANY:
 Rubius Therapeutics, Inc.
 325 Vassar St Suite 1A
 Cambridge, MA 02139
 Attention:  Legal Affairs

 

All notices under this Agreement will be deemed effective upon receipt.  A party may change its contact information immediately upon written notice to the other parties in the manner provided in this Section 16.1.

 

8.             Appendix D (List of disclosures) of the LICENSE is deleted in its entirety.

 

9.             As consideration for this Amendment, COMPANY shall pay WHITEHEAD a case addition fee of [***] within [***] days of the AMENDMENT EFFECTIVE DATE.  This payment is nonrefundable.

 

10.          The LICENSE, as amended hereby, is hereby ratified and confirmed in all respects and shall continue in full force and effect.  The LICENSE will, together with this FIRST AMENDMENT, be read and construed as a single instrument.  All other terms and conditions of the LICENSE are confirmed and remain in full force and effect.  This FIRST AMENDMENT shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and assigns.

 

7

 

***Confidential Treatment Requested***

 

 

***Text Omitted and Filed Separately with the Securities and Exchange Commission

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives.

 

 

	
For WHITEHEAD
    	
 
    	
For COMPANY:
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Carla DeMaria
    	
 
    	
By:
    	
/s/ Torben Straight Nissen
    
	
 
    	
 
    	
 
    
	
Name: Carla DeMaria
    	
 
    	
Name: Torben Straight Nissen
    
	
 
    	
 
    	
 
    
	
Title: Director of Intellectual Property
    	
 
    	
Title: President
    
	
& Sponsored Programs
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
December 12, 2017
    	
 
    	
Date:
    	
December 12, 2017
    

 

8

 

***Confidential Treatment Requested***

 

 

***Text Omitted and Filed Separately with the Securities and Exchange Commission

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

APPENDIX A

 

List of Patent Applications and Patents

 

[***]

 

***Confidential Treatment Requested***Exhibit 10.14

RUBIUS THERAPEUTICS, INC.

 

[FORM OF] DIRECTOR INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement (“Agreement”) is made as of [        ] by and between Rubius Therapeutics, Inc., a Delaware corporation (the “Company”), and [Director] (“Indemnitee”).

 

RECITALS

 

WHEREAS, the Company desires to attract and retain the services of highly qualified individuals, such as Indemnitee, to serve the Company;

 

WHEREAS, in order to induce Indemnitee to provide or continue to provide services to the Company, the Company wishes to provide for the indemnification of, and advancement of expenses to, Indemnitee to the maximum extent permitted by law;

 

WHEREAS, the Amended and Restated Certificate of Incorporation (as amended and in effect from time to time, the “Charter”) and the Amended and Restated Bylaws (as amended and in effect from time to time, the “Bylaws”) of the Company require indemnification of the officers and directors of the Company, and Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the “DGCL”);

 

WHEREAS, the Charter, the Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification;

 

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that the increased difficulty in attracting and retaining highly qualified persons such as Indemnitee is detrimental to the best interests of the Company’s stockholders;

 

WHEREAS, it is reasonable and prudent for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law, regardless of any amendment or revocation of the Charter or the Bylaws, so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;

 

WHEREAS, this Agreement is a supplement to and in furtherance of the indemnification provided in the Charter, the Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder; and

 

[WHEREAS, Indemnitee has certain rights to indemnification and/or insurance provided by [Affiliated Entity] (“[Affiliated Entity]”) which Indemnitee and [Affiliated Entity ] intend to be secondary to the primary obligation of the Company to indemnify Indemnitee as provided in

 

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this Agreement, with the Company’s acknowledgment and agreement to the foregoing being a material condition to Indemnitee’s willingness to serve or continue to serve on the Board.]

 

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

 

Section 1.                                           Services to the Company.  Indemnitee agrees to [continue to] serve as a director of the Company.  Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by law), in which event the Company shall have no obligation under this Agreement to continue Indemnitee in such position.  This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee.

 

Section 2.                                           Definitions.

 

As used in this Agreement:

 

(a)                                 “Change in Control” shall mean (i) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity, (ii) a merger, reorganization or consolidation pursuant to which the holders of the Company’s outstanding voting power and outstanding stock immediately prior to such transaction do not own a majority of the outstanding voting power and outstanding stock or other equity interests of the resulting or successor entity (or its ultimate parent, if applicable) immediately upon completion of such transaction, (iii) the sale of all of the Stock of the Company to an unrelated person, entity or group thereof acting in concert, or (iv) any other transaction in which the owners of the Company’s outstanding voting power immediately prior to such transaction do not own at least a majority of the outstanding voting power of the Company or any successor entity immediately upon completion of the transaction other than as a result of the acquisition of securities directly from the Company.

 

(b)                                 “Corporate Status” describes the status of a person as a current or former director of the Company or current or former director, manager, partner, officer, employee, agent or trustee of any other Enterprise which such person is or was serving at the request of the Company.

 

(c)                                  “Enforcement Expenses” shall include all reasonable attorneys’ fees, court costs, transcript costs, fees of experts, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other out-of-pocket disbursements or expenses of the types customarily incurred in connection with an action to enforce indemnification or advancement rights, or an appeal from such action.  Expenses, however, shall not include fees, salaries, wages or benefits owed to Indemnitee.

 

(d)                                 “Enterprise” shall mean any corporation (other than the Company), partnership, joint venture, trust, employee benefit plan, limited liability company, or other legal entity of which Indemnitee is or was serving at the request of the Company as a director, manager, partner, officer, employee, agent or trustee.

 

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(e)                                  “Expenses” shall include all reasonable attorneys’ fees, court costs, transcript costs, fees of experts, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other out-of-pocket disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding or an appeal resulting from a Proceeding.  Expenses, however, shall not include amounts paid in settlement by Indemnitee, the amount of judgments or fines against Indemnitee or fees, salaries, wages or benefits owed to Indemnitee.

 

(f)                                   “Independent Counsel” means a law firm, or a partner (or, if applicable, member or shareholder) of such a law firm, that is experienced in matters of Delaware corporation law and neither presently is, nor in the past five (5) years has been, retained to represent: (i) the Company, any subsidiary of the Company, any Enterprise or Indemnitee in any matter material to any such party; or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder.  Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.  The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

 

(g)                                  The term “Proceeding” shall include any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, regulatory or investigative nature, and whether formal or informal, in which Indemnitee was, is or will be involved as a party or otherwise by reason of the fact that Indemnitee is or was a director of the Company or is or was serving at the request of the Company as a director, manager, partner, officer, employee, agent or trustee of any Enterprise or by reason of any action taken by Indemnitee or of any action taken on his or her part while acting as a director of the Company or while serving at the request of the Company as a director, manager, partner, officer, employee, agent or trustee of any Enterprise, in each case whether or not serving in such capacity at the time any liability or expense is incurred for which indemnification, reimbursement or advancement of expenses can be provided under this Agreement; provided, however, that the term “Proceeding” shall not include any action, suit or arbitration, or part thereof, initiated by Indemnitee to enforce Indemnitee’s rights under this Agreement as provided for in Section 12(a) of this Agreement.

 

Section 3.                                           Indemnity in Third-Party Proceedings.  The Company shall indemnify Indemnitee to the extent set forth in this Section 3 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor.  Pursuant to this Section 3, Indemnitee shall be indemnified against all Expenses, judgments, fines, penalties, excise taxes, and amounts paid in settlement actually and reasonably incurred by Indemnitee or on his or her behalf in connection

 

3

 

with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal proceeding, had no reasonable cause to believe that his or her conduct was unlawful.

 

Section 4.                                           Indemnity in Proceedings by or in the Right of the Company.  The Company shall indemnify Indemnitee to the extent set forth in this Section 4 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding by or in the right of the Company to procure a judgment in its favor.  Pursuant to this Section 4, Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee or on his or her behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company.  No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery (the “Delaware Court”) shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification for such expenses as the Delaware Court shall deem proper.

 

Section 5.                                           Indemnification for Expenses of a Party Who is Wholly or Partly Successful.  Notwithstanding any other provisions of this Agreement and except as provided in Section 7, to the extent that Indemnitee is a party to or a participant in any Proceeding and is successful in such Proceeding or in defense of any claim, issue or matter therein, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or her in connection therewith.  If Indemnitee is not wholly successful in such Proceeding but is successful as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on his or her behalf in connection with each successfully resolved claim, issue or matter.  For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

 

Section 6.                                           Reimbursement for Expenses of a Witness or in Response to a Subpoena.  Notwithstanding any other provision of this Agreement, to the extent that Indemnitee, by reason of his or her Corporate Status, (i) is a witness in any Proceeding to which Indemnitee is not a party and is not threatened to be made a party or (ii) receives a subpoena with respect to any Proceeding to which Indemnitee is not a party and is not threatened to be made a party, the Company shall reimburse Indemnitee for all Expenses actually and reasonably incurred by him or her or on his or her behalf in connection therewith.

 

Section 7.                                           Exclusions.  Notwithstanding any provision in this Agreement to the contrary, the Company shall not be obligated under this Agreement:

 

(a)                                 to indemnify for amounts otherwise indemnifiable hereunder (or for which advancement is provided hereunder) if and to the extent that Indemnitee has otherwise actually received such amounts under any insurance policy, contract, agreement or otherwise; provided

 

4

 

that the foregoing shall not affect the rights of Indemnitee or the Secondary Indemnitors as set forth in Section 13(c);

 

(b)                                 to indemnify for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of state statutory law or common law, or from the purchase or sale by Indemnitee of such securities in violation of Section 306 of the Sarbanes Oxley Act of 2002, as amended (“SOX”);

 

(c)                                  to indemnify with respect to any Proceeding, or part thereof, brought by Indemnitee against the Company, any legal entity which it controls, any director or officer thereof or any third party, unless (i) the Board has consented to the initiation of such Proceeding or part thereof and (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law; provided, however, that this Section 7(c) shall not apply to (A) counterclaims or affirmative defenses asserted by Indemnitee in an action brought against Indemnitee or (B) any action brought by Indemnitee for indemnification or advancement from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company in the suit for which indemnification or advancement is being sought as described in Section 12; or

 

(d)                                 to provide any indemnification or advancement of expenses that is prohibited by applicable law (as such law exists at the time payment would otherwise be required pursuant to this Agreement).

 

Section 8.                                           Advancement of Expenses.  Subject to Section 9(b), the Company shall advance, to the extent not prohibited by law, the Expenses incurred by Indemnitee in connection with any Proceeding, and such advancement shall be made as incurred, and such advancement shall be made within thirty (30) days after the receipt by the Company of a statement or statements requesting such advances (including any invoices received by Indemnitee, which such invoices may be redacted as necessary to avoid the waiver of any privilege accorded by applicable law) from time to time, whether prior to or after final disposition of any Proceeding.  Advances shall be unsecured and interest free.  Advances shall be made without regard to Indemnitee’s (i) ability to repay the expenses, (ii) ultimate entitlement to indemnification under the other provisions of this Agreement, and (iii) entitlement to and availability of insurance coverage, including advancement, payment or reimbursement of defense costs, expenses of covered loss under the provisions of any applicable insurance policy (including, without limitation, whether such advancement, payment or reimbursement is withheld, conditioned or delayed by the insurer(s)).  Indemnitee shall qualify for advances upon the execution and delivery to the Company of this Agreement which shall constitute an undertaking providing that Indemnitee undertakes to the fullest extent required by law to repay the advance if and to the extent that it is ultimately determined by a court of competent jurisdiction in a final judgment, not subject to appeal, that Indemnitee is not entitled to be indemnified by the Company.  The right to advances under this paragraph shall in all events continue until final disposition of any Proceeding, including any appeal therein.  Nothing in this Section 8 shall limit Indemnitee’s right to advancement pursuant to Section 12(e) of this Agreement.

 

5

 

Section 9.                                         Procedure for Notification and Defense of Claim.

 

(a)                                 To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request therefor specifying the basis for the claim, the amounts for which Indemnitee is seeking payment under this Agreement, and all documentation related thereto as reasonably requested by the Company.

 

(b)                                 In the event that the Company shall be obligated hereunder to provide indemnification for or make any advancement of Expenses with respect to any Proceeding, the Company shall be entitled to assume the defense of such Proceeding, or any claim, issue or matter therein, with counsel approved by Indemnitee (which approval shall not be unreasonably withheld or delayed) upon the delivery to Indemnitee of written notice of the Company’s election to do so.  After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees or expenses of separate counsel subsequently employed by or on behalf of Indemnitee with respect to the same Proceeding; provided that (i) Indemnitee shall have the right to employ separate counsel in any such Proceeding at Indemnitee’s expense and (ii) if (A) the employment of separate counsel by Indemnitee has been previously authorized by the Company, (B) Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company and Indemnitee in the conduct of such defense, or (C) the Company shall not continue to retain such counsel to defend such Proceeding, then the fees and expenses actually and reasonably incurred by Indemnitee with respect to his or her separate counsel shall be Expenses hereunder.

 

(c)                                  In the event that the Company does not assume the defense in a Proceeding pursuant to paragraph (b) above, then the Company will be entitled to participate in the Proceeding at its own expense.

 

(d)                                 The Company shall not be liable to indemnify Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding effected without its prior written consent (which consent shall not be unreasonably withheld or delayed).  The Company shall not, without the prior written consent of Indemnitee (which consent shall not be unreasonably withheld or delayed), enter into any settlement which (i) includes an admission of fault of Indemnitee, any non-monetary remedy imposed on Indemnitee or any monetary damages for which Indemnitee is not wholly and actually indemnified hereunder or (ii) with respect to any Proceeding with respect to which Indemnitee may be or is made a party or may be otherwise entitled to seek indemnification hereunder, does not include the full release of Indemnitee from all liability in respect of such Proceeding.

 

Section 10.                                    Procedure Upon Application for Indemnification.

 

(a)                                 Upon written request by Indemnitee for indemnification pursuant to Section 9(a), a determination, if such determination is required by applicable law, with respect to Indemnitee’s entitlement to indemnification hereunder shall be made in the specific case by one of the following methods:  (x) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board; or (y) if a Change in Control shall not have occurred: (i) by a majority vote of the disinterested directors, even though less than a quorum; (ii) by a

 

6

 

committee of disinterested directors designated by a majority vote of the disinterested directors, even though less than a quorum; or (iii) if there are no disinterested directors or if the disinterested directors so direct, by Independent Counsel in a written opinion to the Board.  For purposes hereof, disinterested directors are those members of the Board who are not parties to the action, suit or proceeding in respect of which indemnification is sought.  In the case that such determination is made by Independent Counsel, a copy of Independent Counsel’s written opinion shall be delivered to Indemnitee and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within thirty (30) days after such determination.  Indemnitee shall cooperate with the Independent Counsel or the Company, as applicable, in making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such counsel or the Company, upon reasonable advance request, any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination.  Any out-of-pocket costs or expenses (including reasonable attorneys’ fees and disbursements) actually and reasonably incurred by Indemnitee in so cooperating with the Independent Counsel or the Company shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

 

(b)                                 If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 10(a), the Independent Counsel shall be selected by the Board if a Change in Control shall not have occurred or, if a Change in Control shall have occurred, by Indemnitee.  Indemnitee or the Company, as the case may be, may, within ten (10) days after written notice of such selection, deliver to the Company or Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion.  Absent a proper and timely objection, the person so selected shall act as Independent Counsel.  If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or the Delaware Court has determined that such objection is without merit.  If, within twenty (20) days after the later of (i) submission by Indemnitee of a written request for indemnification pursuant to Section 9(a), and (ii) the final disposition of the Proceeding, including any appeal therein, no Independent Counsel shall have been selected without objection, either Indemnitee or the Company may petition the Delaware Court for resolution of any objection which shall have been made by Indemnitee or the Company to the selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate.   The person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 10(a) hereof.  Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 12(a) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

 

7

 

Section 11.                                  Presumptions and Effect of Certain Proceedings.

 

(a)                                 To the extent permitted by applicable law, in making a determination with respect to entitlement to indemnification hereunder, it shall be presumed that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 9(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption.  Neither (i) the failure of the Company or of Independent Counsel to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor (ii) an actual determination by the Company or by Independent Counsel that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

 

(b)                                 The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of guilty, nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his or her conduct was unlawful.

 

(c)                                  The knowledge and/or actions, or failure to act, of any director, manager, partner, officer, employee, agent or trustee of the Company, any subsidiary of the Company, or any Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

 

Section 12.                                    Remedies of Indemnitee.

 

(a)                                 Subject to Section 12(f), in the event that (i) a determination is made pursuant to Section 10 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 8 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 10(a) of this Agreement within sixty (60) days after receipt by the Company of the request for indemnification for which a determination is to be made other than by Independent Counsel, (iv) payment of indemnification or reimbursement of expenses is not made pursuant to Section 5 or 6 or the last sentence of Section 10(a) of this Agreement within thirty (30) days after receipt by the Company of a written request therefor (including any invoices received by Indemnitee, which such invoices may be redacted as necessary to avoid the waiver of any privilege accorded by applicable law) or (v) payment of indemnification pursuant to Section 3 or 4 of this Agreement is not made within thirty (30) days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication by the Delaware Court of his or her entitlement to such indemnification or advancement.  Alternatively, Indemnitee, at his or her option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the

 

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American Arbitration Association.  Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 12(a); provided, however, that the foregoing time limitation shall not apply in respect of a proceeding brought by Indemnitee to enforce his or her rights under Section 5 of this Agreement.  The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

 

(b)                                 In the event that a determination shall have been made pursuant to Section 10(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 12 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination.  In any judicial proceeding or arbitration commenced pursuant to this Section 12, the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement, as the case may be.

 

(c)                                  If a determination shall have been made pursuant to Section 10(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 12, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

 

(d)                                 The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 12 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement.

 

(e)                                  The Company shall indemnify Indemnitee to the fullest extent permitted by law against any and all Enforcement Expenses and, if requested by Indemnitee, shall (within thirty (30) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Enforcement Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advancement from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company in the suit for which indemnification or advancement is being sought.  Such written request for advancement shall include invoices received by Indemnitee in connection with such Enforcement Expenses but, in the case of invoices in connection with legal services, any references to legal work performed or to expenditures made that would cause Indemnitee to waive any privilege accorded by applicable law need not be included with the invoice.

 

(f)                                   Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding, including any appeal therein.

 

9

 

Section 13.                                  Non-exclusivity; Survival of Rights; Insurance; Primacy of Indemnification; Subrogation.

 

(a)                                 The rights of indemnification and to receive advancement as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Charter, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise.  No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his or her Corporate Status prior to such amendment, alteration or repeal.  To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement than would be afforded currently under the Charter, Bylaws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change.  No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

 

(b)                                 To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, managers, partners, officers, employees, agents or trustees of the Company or of any other Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, manager, partner, officer, employee, agent or trustee under such policy or policies.  If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies.  The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies.

 

(c)                                  [The Company hereby acknowledges that Indemnitee has certain rights to indemnification, advancement of expenses and/or insurance provided by [Affiliated Entity] and certain of its affiliates (collectively, the “Secondary Indemnitors”).  The Company hereby agrees (i) that it is the indemnitor of first resort (i.e., its obligations to Indemnitee are primary and any obligation of the Secondary Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by Indemnitee are secondary), (ii) that it shall be required to advance the full amount of expenses incurred by Indemnitee and shall be liable for the full amount of all Expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of this Agreement and the Charter and/or Bylaws (or any other agreement between the Company and Indemnitee), without regard to any rights Indemnitee may have against the Secondary Indemnitors, and (iii) that it irrevocably waives, relinquishes and releases the Secondary Indemnitors from any and all claims against the Secondary Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof.  The Company further agrees that no advancement or payment by the Secondary Indemnitors on behalf of Indemnitee with respect to any claim for which Indemnitee has sought indemnification from the Company shall affect the foregoing and the Secondary Indemnitors 

 

10

 

shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of Indemnitee against the Company.  The Company and Indemnitee agree that the Secondary Indemnitors are express third party beneficiaries of the terms of this Section 13(c).]

 

(d)                                 [Except as provided in paragraph (c) above,] in the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee [(other than against the Secondary Indemnitors)], who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

 

(e)                                  [Except as provided in paragraph (c) above,] the Company’s obligation to provide indemnification or advancement hereunder to Indemnitee who is or was serving at the request of the Company as a director, manager, partner, officer, employee, agent or trustee of any other Enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement from such other Enterprise.

 

Section 14.                                    Duration of Agreement.  This Agreement shall continue until and terminate upon the later of: (a) ten (10) years after the date that Indemnitee shall have ceased to serve as a director of the Company or (b) one (1) year after the final termination of any Proceeding, including any appeal, then pending in respect of which Indemnitee is granted rights of indemnification or advancement hereunder and of any proceeding commenced by Indemnitee pursuant to Section 12 of this Agreement relating thereto.  This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his or her heirs, executors and administrators.  The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

 

Section 15.                                    Severability.  If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

 

11

 

Section 16.                                    Enforcement.

 

(a)                                 The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve or continue to serve as a director of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director of the Company.

 

(b)                                 This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Charter, the Bylaws and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

 

Section 17.                                    Modification and Waiver.  No supplement, modification or amendment, or waiver of any provision, of this Agreement shall be binding unless executed in writing by the parties thereto.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver.  No supplement, modification or amendment of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee prior to such supplement, modification or amendment.

 

Section 18.                                    Notice by Indemnitee.  Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification, reimbursement or advancement as provided hereunder.  The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement or otherwise.

 

Section 19.                                    Notices.  All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (iii) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (iv) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:

 

(a)                                 If to Indemnitee, at such address as Indemnitee shall provide to the Company.

 

(b)                                 If to the Company to:

 

Rubius Therapeutics, Inc.

325 Vassar Street, Suite 1A

 

12

 

Cambridge, MA 02139

Attention: Chief Executive Officer

 

or to any other address as may have been furnished to Indemnitee by the Company.

 

Section 20.                                    Contribution.  To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any Proceeding in such proportion as is deemed fair and reasonable in light of all of the circumstances in order to reflect (i) the relative benefits received by the Company and Indemnitee in connection with the event(s) and/or transaction(s) giving rise to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transactions.

 

Section 21.                                    Internal Revenue Code Section 409A.  The Company intends for this Agreement to comply with the Indemnification exception under Section 1.409A-1(b)(10) of the regulations promulgated under the Internal Revenue Code of 1986, as amended (the “Code”), which provides that indemnification of, or the purchase of an insurance policy providing for payments of, all or part of the expenses incurred or damages paid or payable by Indemnitee with respect to a bona fide claim against Indemnitee or the Company do not provide for a deferral of compensation, subject to Section 409A of the Code, where such claim is based on actions or failures to act by Indemnitee in his or her capacity as a service provider of the Company.  The parties intend that this Agreement be interpreted and construed with such intent.

 

Section 22.                                    Applicable Law and Consent to Jurisdiction.  This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules.  Except with respect to any arbitration commenced by Indemnitee pursuant to Section 12(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Delaware Court, and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) consent to service of process at the address set forth in Section 19 of this Agreement with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.

 

Section 23.                                    Headings.  The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

 

Section 24.                                    Identical Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which

 

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together shall constitute one and the same Agreement.  Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.

 

	
 
    	
RUBIUS   THERAPEUTICS, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[Indemnitee]

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