Document:

Exhibit 10.8

 

EQUITY PURCHASE AGREEMENT

 

This equity purchase agreement is entered into as of March 21, 2017 (this "Agreement"), by and between Acacia Diversified Holdings, Inc., a Texas corporation (the "Company"), and Peak One Opportunity Fund, L.P., a Delaware limited partnership (the "Investor").

 

WHEREAS, the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall issue and sell to the Investor, from time to time as provided herein, and the Investor shall purchase up to Five Million Dollars ($5,000,000.00) of the Company’s Common Stock (as defined below);

NOW, THEREFORE, the parties hereto agree as follows:

 

ARTICLE I

CERTAIN DEFINITIONS

 

Section 1.1 DEFINED TERMS.  As used in this Agreement, the following terms shall have the following meanings specified or indicated (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

 

"Agreement" shall have the meaning specified in the preamble hereof.

“Average Daily Trading Value” shall mean the average trading volume of the Company’s Common Stock in the ten (10) Trading Days immediately preceding the respective Put Date multiplied by the lowest closing bid price of the Company’s Common Stock in the ten (10) Trading Days immediately preceding the respective Put Date.

“Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.

 

"Claim Notice" shall have the meaning specified in Section 9.3(a).

 

“Clearing Costs” shall mean all of the Investor’s broker and Transfer Agent fees, excluding commissions.

“Clearing Date” shall be the date on which the Investor receives the Put Shares in its brokerage account.

 

"Closing" shall mean one of the closings of a purchase and sale of shares of Common Stock pursuant to Section 2.3.

"Closing Certificate" shall mean the closing certificate of the Company in the form of Exhibit B hereto.

“Closing Date” shall mean the date of any Closing hereunder.

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“Commitment Shares” shall mean the 110,000 shares of the Restricted Company’s common stock as a commitment fee hereunder, issued to the Investor or Investor’s designee.

"Commitment Period" shall mean the period commencing on the Execution Date, and ending on the earlier of (i) the date on which the Investor shall have purchased Put Shares pursuant to this Agreement equal to the Maximum Commitment Amount, (ii) 24 months after the initial effectiveness of the Registration Statement, (iii) written notice of termination by the Company to the Investor (which shall not occur during any Valuation Period or at any time that the Investor holds any of the Put Shares), (iv) the Registration Statement is no longer effective, or (v) the date that, pursuant to or within the meaning of any Bankruptcy Law, the Company commences a voluntary case or any Person commences a proceeding against the Company, a Custodian is appointed for the Company or for all or substantially all of its property or the Company makes a general assignment for the benefit of its creditors; provided, however, that the provisions of Articles III, IV, V, VI, IX and the agreements and covenants of the Company and the Investor set forth in Article X shall survive the termination of this Agreement.

"Common Stock" shall mean the Company's common stock, $0.001 par value per share, and any shares of any other class of common stock whether now or hereafter authorized, having the right to participate in the distribution of dividends (as and when declared) and assets (upon liquidation of the Company).

“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

"Company" shall have the meaning specified in the preamble to this Agreement.

“Custodian” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.

"Damages" shall mean any loss, claim, damage, liability, cost and expense (including, without limitation, reasonable attorneys' fees and disbursements and costs and expenses of expert witnesses and investigation).

"Dispute Period" shall have the meaning specified in Section 9.3(a).

“DTC” shall mean The Depository Trust Company, or any successor performing substantially the same function for the Company.

“DTC/FAST Program” shall mean the DTC’s Fast Automated Securities Transfer Program.

“DWAC” shall mean Deposit Withdrawal at Custodian as defined by the DTC.

 

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“DWAC Eligible” shall mean that (a) the Common Stock is eligible at DTC for full services pursuant to DTC’s Operational Arrangements, including, without limitation, transfer through DTC’s DWAC system, (b) the Company has been approved (without revocation) by the DTC’s underwriting department, (c) the Transfer Agent is approved as an agent in the DTC/FAST Program, (d) the Commitment Shares or Put Shares, as applicable, are otherwise eligible for delivery via DWAC, and (e) the Transfer Agent does not have a policy prohibiting or limiting delivery of the Commitment Shares or Put Shares, as applicable, via DWAC.

 “DWAC Shares” means shares of Common Stock that are (i) issued in electronic form, (ii) freely tradable and transferable and without restriction on resale and (iii) timely credited by the Company to the Investor’s or its designee’s specified DWAC account with DTC under the DTC/FAST Program, or any similar program hereafter adopted by DTC performing substantially the same function.

"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Exchange Cap” shall have the meaning set forth in Section 7.1(c).

 

"Execution Date" shall mean the date of this Agreement.

 

"FINRA" shall mean the Financial Industry Regulatory Authority, Inc.

 

"Investment Amount" shall mean the Put Shares referenced in the Put Notice multiplied by the Purchase Price minus the Clearing Costs.

 

"Indemnified Party" shall have the meaning specified in Section 9.2.

 

"Indemnifying Party" shall have the meaning specified in Section 9.2.

 

"Indemnity Notice" shall have the meaning specified in Section 9.3(e).

“Initial Purchase Price” shall mean 90% of the lowest closing price of the Company’s Common Stock in the ten (10) Trading Days immediately preceding the respective Put Date.

"Investor" shall have the meaning specified in the preamble to this Agreement.

“Lien” means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

"Market Price" shall mean the lesser of the (i) lowest closing price of the Common Stock on the Principal Market for any Trading Day during the ten (10) Trading Days immediately preceding the respective Put Date, or (ii) lowest closing bid price of the Common Stock on the Principal Market for any Trading Day during the Valuation Period.

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"Material Adverse Effect" shall mean any effect on the business, operations, properties, or financial condition of the Company and the Subsidiaries that is material and adverse to the Company and the Subsidiaries and/or any condition, circumstance, or situation that would prohibit or otherwise materially interfere with the ability of the Company to enter into and perform its obligations under any Transaction Document.

"Maximum Commitment Amount" shall mean Five Million Dollars ($5,000,000.00).

"Person" shall mean an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

 

"Principal Market" shall mean any of the national exchanges (i.e. NYSE, NYSE AMEX, Nasdaq), or principal quotation systems (i.e. OTCQX, OTCQB, OTC Pink, the OTC Bulletin Board), or other principal exchange or recognized quotation system which is at the time the principal trading platform or market for the Common Stock.

 

"Purchase Price" shall mean 90% of the Market Price on such date on which the Purchase Price is calculated in accordance with the terms and conditions of this Agreement.

 

"Put" shall mean the right of the Company to require the Investor to purchase shares of Common Stock, subject to the terms and conditions of this Agreement.

 

"Put Date" shall mean any Trading Day during the Commitment Period that a Put Notice is deemed delivered pursuant to Section 2.2(b).

 

"Put Notice" shall mean a written notice, substantially in the form of Exhibit A hereto, to Investor setting forth the Put Shares which the Company intends to require Investor to purchase pursuant to the terms of this Agreement.

 

"Put Shares" shall mean all shares of Common Stock issued, or that the Company shall be entitled to issue, per any applicable Put Notice in accordance with the terms and conditions of this Agreement.

 

"Registration Statement" shall have the meaning specified in Section 6.4.

"Regulation D" shall mean Regulation D promulgated under the Securities Act.

“Required Minimum” shall mean, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable in the future pursuant to the Transaction Documents, including any Commitment Shares.

"Rule 144" shall mean Rule 144 under the Securities Act or any similar provision then in force under the Securities Act.

 

"SEC" shall mean the United States Securities and Exchange Commission.

 

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“SEC Documents” shall have the meaning specified in Section 4.5.

“Securities" means, collectively, the Put Shares and Commitment Shares.

"Securities Act" shall mean the Securities Act of 1933, as amended.

 

 “Short Sales” shall mean all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act.

“Subsidiary” means any Person the Company wholly-owns or controls, or in which the Company, directly or indirectly, owns a majority of the voting stock or similar voting interest, in each case that would be disclosable pursuant to Item 601(b)(21) of Regulation S-K promulgated under the Securities Act.

"Third Party Claim" shall have the meaning specified in Section 9.3(a).

 

“Trading Day” shall mean a day on which the Principal Market shall be open for business.

 

“Transaction Documents” shall mean this Agreement, the registration rights agreement of even date, and all schedules and exhibits hereto and thereto.

"Transfer Agent" shall mean Pacific Stock Transfer Co., the current transfer agent of the Company, with a mailing address of 6725 Via Austi Parkway, Suite 300, Las Vegas, NV 89119, and any successor transfer agent of the Company.

"Valuation Period" shall mean the period of seven (7) Trading Days immediately following the Clearing Date associated with the applicable Put Notice during which the Purchase Price of the Common Stock is valued. The Investor shall notify the Company in writing of the occurrence of the Clearing Date associated with a Put Notice. The Valuation Period shall begin on the first Trading Day following the Clearing Date.

 

ARTICLE II

PURCHASE AND SALE OF COMMON STOCK

 

Section 2.1            PUTS. Upon the terms and conditions set forth herein (including, without limitation, the provisions of Article VII), the Company shall have the right, but not the obligation, to direct the Investor, by its delivery to the Investor of a Put Notice from time to time, to purchase Put Shares (i) in a minimum amount not less than $15,000.00 and (ii) in a maximum amount up to the lesser of (a) $150,000.00 or (b) 250% of the Average Daily Trading Value; provided that such minimum amount of Put Shares may be decreased and such maximum amount of Put Shares may be increased subject to the Investor’s written approval.

 

Section 2.2            MECHANICS.

 

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(a)                     PUT NOTICE. At any time and from time to time during the Commitment Period, except during the Valuation Period with respect to any Put, the Company may deliver a Put Notice to Investor, subject to satisfaction of the conditions set forth in Section 7.2 and otherwise provided herein.  The initial price per share identified in the respective Put Notice shall be equal to the Initial Purchase Price, subject to adjustment during the Valuation Period as provided in this Agreement.  The Company shall deliver, or cause to be delivered, the Put Shares as DWAC Shares to the Investor within two (2) Trading Days following the Put Date.

(b)                     DATE OF DELIVERY OF PUT NOTICE. A Put Notice shall be deemed delivered on (i) the Trading Day it is received by email by the Investor if such notice is received on or prior to 9:00 a.m. New York time or (ii) the immediately succeeding Trading Day if it is received by email after 9:00 a.m. New York time on a Trading Day or at any time on a day which is not a Trading Day. The Valuation Period shall begin on the first Trading Day following the Clearing Date.  The Company shall not deliver another Put Notice to the Investor during the Valuation Period with respect to any Put, or at any time that Investor is holding any of the Put Shares.

Section 2.3            CLOSINGS. At the end of the Valuation Period, the Purchase Price for the respective Put Shares shall be established as provided in this Agreement.  If the value of the Put Shares delivered to the Investor causes the Company to exceed the Maximum Commitment Amount, then immediately after the Valuation Period the Investor shall return to the Company the surplus amount of Put Shares associated with such Put and the Purchase Price with respect to such Put shall be reduced by any Clearing Costs related to the return of such Put Shares. The Closing of a Put shall occur within three (3) Trading Days following the end of the Valuation Period, whereby the Investor shall deliver the Investment Amount by wire transfer of immediately available funds to an account designated by the Company.  The Company shall use at least 20% of each Investment Amount received to pay off any outstanding promissory notes of the Company that are convertible into common stock, beginning with any held by the Investor.  In addition, on or prior to such Closing, each of the Company and the Investor shall deliver to each other all documents, instruments and writings required to be delivered or reasonably requested by either of them pursuant to this Agreement in order to implement and effect the transactions contemplated herein.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF INVESTOR

 

The Investor represents and warrants to the Company that:

 

Section 3.1           INTENT. The Investor is entering into this Agreement for its own account and the Investor has no present arrangement (whether or not legally binding) at any time to sell the Securities to or through any Person in violation of the Securities Act or any applicable state securities laws; provided, however, that the Investor reserves the right to dispose of the Securities at any time in accordance with federal and state securities laws applicable to such disposition.

  

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Section 3.2           NO LEGAL ADVICE FROM THE COMPANY. The Investor acknowledges that it has had the opportunity to review this Agreement and the transactions contemplated by this Agreement with its own legal counsel and investment and tax advisors. The Investor is relying solely on such counsel and advisors and not on any statements or representations of the Company or any of its representatives or agents for legal, tax or investment advice with respect to this investment, the transactions contemplated by this Agreement or the securities laws of any jurisdiction.

 

Section 3.3           ACCREDITED INVESTOR. The Investor is an accredited investor as defined in Rule 501(a)(3) of Regulation D, and the Investor has such experience in business and financial matters that it is capable of evaluating the merits and risks of an investment in the Securities. The Investor acknowledges that an investment in the Securities is speculative and involves a high degree of risk.

 

Section 3.4           AUTHORITY. The Investor has the requisite power and authority to enter into and perform its obligations under this Agreement and the other Transaction Documents and to consummate the transactions contemplated hereby and thereby.  The execution and delivery of this Agreement and the other Transaction Documents and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action and no further consent or authorization of the Investor is required. Each Transaction Document to which it is a party has been duly executed by the Investor, and when delivered by the Investor in accordance with the terms hereof, will constitute the valid and binding obligation of the Investor enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, or similar laws relating to, or affecting generally the enforcement of, creditors' rights and remedies or by other equitable principles of general application.

 

Section 3.5           NOT AN AFFILIATE. The Investor is not an officer, director or "affiliate" (as that term is defined in Rule 405 of the Securities Act) of the Company.

 

Section 3.6           ORGANIZATION AND STANDING. The Investor is an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by this Agreement and the other Transaction Documents.

 

Section 3.7           ABSENCE OF CONFLICTS. The execution and delivery of this Agreement and the other Transaction Documents, and the consummation of the transactions contemplated hereby and thereby and compliance with the requirements hereof and thereof, will not (a) violate any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on the Investor, (b) violate any provision of any indenture, instrument or agreement to which the Investor is a party or is subject, or by which the Investor or any of its assets is bound, or conflict with or constitute a material default thereunder, (c) result in the creation or imposition of any lien pursuant to the terms of any such indenture, instrument or agreement, or constitute a breach of any fiduciary duty owed by the Investor to any third party, or (d) require the approval of any third-party (that has not been obtained) pursuant to any material contract, instrument,

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agreement, relationship or legal obligation to which the Investor is subject or to which any of its assets, operations or management may be subject.

 

Section 3.8           DISCLOSURE; ACCESS TO INFORMATION. The Investor had an opportunity to review copies of the SEC Documents filed on behalf of the Company and has had access to all publicly available information with respect to the Company.

 

Section 3.9           MANNER OF SALE. At no time was the Investor presented with or solicited by or through any leaflet, public promotional meeting, television advertisement or any other form of general solicitation or advertising.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company represents and warrants to the Investor that, except as disclosed in the SEC Documents or except as set forth in the disclosure schedules hereto:

 

Section 4.1           ORGANIZATION OF THE COMPANY.  The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.  Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents.  Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in a Material Adverse Effect and no proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

 

Section 4.2           AUTHORITY.  The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and the other Transaction Documents.  The execution and delivery of this Agreement and the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action and no further consent or authorization of the Company or its Board of Directors or stockholders is required.  Each of this Agreement and the other Transaction Documents has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, or similar laws relating to, or affecting generally the enforcement of, creditors' rights and remedies or by other equitable principles of general application.

 

Section 4.3           CAPITALIZATION. Except as set forth on Schedule 4.3, the Company has not issued any capital stock since its most recently filed periodic report under the

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Exchange Act, other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act.  No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents.  Except as set forth on Schedule 4.3 and except as a result of the purchase and sale of the Securities, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents.  The issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Investor) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities.  There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.

 

Section 4.4           LISTING AND MAINTENANCE REQUIREMENTS.  The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the SEC is contemplating terminating such registration.  The Company has not, in the twelve (12) months preceding the date hereof, received notice from the Principal Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Principal Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements.

 

Section 4.5           SEC DOCUMENTS; DISCLOSURE.  Except as set forth on Schedule 4.5, the Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the one (1) year preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Documents”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Documents prior to the expiration of any such extension.  As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and other federal laws, rules and regulations applicable to such SEC Documents, and none of the SEC Documents when filed contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Documents comply as to form

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and substance in all material respects with applicable accounting requirements and the published rules and regulations of the SEC or other applicable rules and regulations with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved (except (a) as may be otherwise indicated in such financial statements or the notes thereto or (b) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments).  Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided the Investor or its agents or counsel with any information that it believes constitutes or might constitute material, non-public information.  The Company understands and confirms that the Investor will rely on the foregoing representation in effecting transactions in securities of the Company.

 

Section 4.6           VALID ISSUANCES. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid, and non-assessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents.

 

Section 4.7           NO CONFLICTS. The execution, delivery and performance of this Agreement and the other Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby, including, without limitation, the issuance of the Put Shares and the Commitment Shares, do not and will not: (a) result in a violation of the Company’s or any Subsidiary’s certificate or articles of incorporation, by-laws or other organizational or charter documents, (b) conflict with, or constitute a material default (or an event that with notice or lapse of time or both would become a material default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture, instrument or any "lock-up" or similar provision of any underwriting or similar agreement to which the Company or any Subsidiary is a party, or (c) result in a violation of any federal, state or local law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Company or any Subsidiary or by which any property or asset of the Company or any Subsidiary is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect) nor is the Company otherwise in violation of, conflict with or in default under any of the foregoing. The business of the Company is not being conducted in violation of any law, ordinance or regulation of any governmental entity, except for possible violations that either singly or in the aggregate do not and will not have a Material Adverse Effect. The Company is not required under federal, state or local law, rule or regulation to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement or the other Transaction Documents (other than any SEC, FINRA or state securities filings that may be required to be made by the Company subsequent to any Closing

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or any registration statement that may be filed pursuant hereto); provided that, for purposes of the representation made in this sentence, the Company is assuming and relying upon the accuracy of the relevant representations and agreements of Investor herein.

 

Section 4.8           NO MATERIAL ADVERSE CHANGE. No event has occurred that would have a Material Adverse Effect on the Company that has not been disclosed in subsequent SEC filings.

 

Section 4.9           LITIGATION AND OTHER PROCEEDINGS. Except as disclosed in the SEC Documents or as set forth on Schedule 4.9, there are no actions, suits, investigations, inquiries or proceedings pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties, nor has the Company received any written or oral notice of any such action, suit, proceeding, inquiry or investigation, which would have a Material Adverse Effect.  No judgment, order, writ, injunction or decree or award has been issued by or, to the knowledge of the Company, requested of any court, arbitrator or governmental agency which would have a Material Adverse Effect.  There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the SEC involving the Company, any Subsidiary or any current or former director or officer of the Company or any Subsidiary.

 

Section 4.10           REGISTRATION RIGHTS. Except as set forth on Schedule 4.10, no Person (other than the Investor) has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company or any Subsidiary.

ARTICLE V

COVENANTS OF INVESTOR

 

 Section 5.1           COMPLIANCE WITH LAW; TRADING IN SECURITIES. The Investor's trading activities with respect to shares of Common Stock will be in compliance with all applicable state and federal securities laws and regulations and the rules and regulations of FINRA and the Principal Market.

 

Section 5.2           SHORT SALES AND CONFIDENTIALITY. Neither the Investor, nor any affiliate of the Investor acting on its behalf or pursuant to any understanding with it, will execute any Short Sales during the period from the date hereof to the end of the Commitment Period. For the purposes hereof, and in accordance with Regulation SHO, the sale after delivery of a Put Notice of such number of shares of Common Stock reasonably expected to be purchased under a Put Notice shall not be deemed a Short Sale.  The Investor shall, until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company in accordance with the terms of this Agreement, maintain the confidentiality of the existence and terms of this transaction and the information included in the Transaction Documents.

 

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ARTICLE VI

COVENANTS OF THE COMPANY

Section 6.1           [Intentionally Omitted.]

 

Section 6.2           LISTING OF COMMON STOCK.  The Company shall promptly secure the listing of all of the Put Shares and Commitment Shares to be issued to the Investor hereunder on the Principal Market (subject to official notice of issuance) and shall use commercially reasonable best efforts to maintain, so long as any shares of Common Stock shall be so listed, the listing of all such Put Shares and Commitment Shares from time to time issuable hereunder.  The Company shall use its commercially reasonable efforts to continue the listing and trading of the Common Stock on the Principal Market (including, without limitation, maintaining sufficient net tangible assets) and will comply in all respects with the Company's reporting, filing and other obligations under the bylaws or rules of FINRA and the Principal Market.

 

Section 6.3           OTHER EQUITY LINES. So long as this Agreement remains in effect, the Company covenants and agrees that it will not, without the prior written consent of the Investor, enter into any other equity line of credit agreement with any other party. For the avoidance of doubt, nothing contained in the Transaction Documents shall restrict, or require the Investor's consent for, any agreement providing for the issuance or distribution of any equity securities of the Company pursuant to any agreement or arrangement that is not covered in this Section 6.3.

 

Section 6.4           FILING OF CURRENT REPORT AND REGISTRATION STATEMENT. The Company agrees that it shall file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the SEC within the time required by the Exchange Act, relating to the transactions contemplated by, and describing the material terms and conditions of, the Transaction Documents (the “Current Report”). The Company shall permit the Investor to review and comment upon the final pre-filing draft version of the Current Report at least one (1) Trading Day prior to its filing with the SEC, and the Company shall give reasonable consideration to all such comments. The Investor shall use its reasonable best efforts to comment upon the final pre-filing draft version of the Current Report within one (1) Trading Day from the date the Investor receives it from the Company.  The Company shall also file with the SEC, within thirty (30) calendar days from the date hereof, a new registration statement (the “Registration Statement”) covering only the resale of the Put Shares and the Commitment Shares. The Company shall use its reasonable best efforts to have the Registration Statement declared effective by the SEC within ninety (90) calendar days from the date hereof (or at the earliest possible date if prior to ninety (90) calendar days from the date hereof).

ARTICLE VII

CONDITIONS TO DELIVERY OF

PUT NOTICES AND CONDITIONS TO CLOSING

 

Section 7.1           CONDITIONS PRECEDENT TO THE RIGHT OF THE COMPANY TO ISSUE AND SELL PUT SHARES. The right of the Company to issue and sell the Put Shares to the Investor is subject to the satisfaction of each of the conditions set forth below:

 

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(a)              ACCURACY OF INVESTOR'S REPRESENTATIONS AND WARRANTIES. The representations and warranties of the Investor shall be true and correct in all material respects as of the date of this Agreement and as of the date of each Closing as though made at each such time.

 

(b)              PERFORMANCE BY INVESTOR. Investor shall have performed, satisfied and complied in all respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Investor at or prior to such Closing.

 

(c)              PRINCIPAL MARKET REGULATION. The Company shall not issue any Put Shares, and the Investor shall not have the right to receive any Put Shares, if the issuance of such Put Shares would exceed the aggregate number of shares of Common Stock which the Company may issue without breaching the Company’s obligations under the rules or regulations of the Principal Market (the “Exchange Cap”).

 

Section 7.2           CONDITIONS PRECEDENT TO THE OBLIGATION OF INVESTOR TO PURCHASE PUT SHARES. The obligation of the Investor hereunder to purchase Put Shares is subject to the satisfaction of each of the following conditions:

  

(a)              EFFECTIVE REGISTRATION STATEMENT. The Registration Statement, and any amendment or supplement thereto, shall remain effective for the resale by the Investor of the Put Shares and the Commitment Shares and (i) neither the Company nor the Investor shall have received notice that the SEC has issued or intends to issue a stop order with respect to such Registration Statement or that the SEC otherwise has suspended or withdrawn the effectiveness of such Registration Statement, either temporarily or permanently, or intends or has threatened to do so and (ii) no other suspension of the use of, or withdrawal of the effectiveness of, such Registration Statement or related prospectus shall exist.

 

(b)              ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES. The representations and warranties of the Company shall be true and correct in all material respects as of the date of this Agreement and as of the date of each Closing (except for representations and warranties specifically made as of a particular date).

 

(c)              PERFORMANCE BY THE COMPANY. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company.

 

(d)              NO INJUNCTION. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or adopted by any court or governmental authority of competent jurisdiction that prohibits or directly and materially adversely affects any of the transactions contemplated by the Transaction Documents, and no proceeding shall have been commenced that may have the effect of prohibiting or materially adversely affecting any of the transactions contemplated by the Transaction Documents.

 

13

(e)              ADVERSE CHANGES. Since the date of filing of the Company's most recent SEC Document, no event that had or is reasonably likely to have a Material Adverse Effect has occurred.

 

(f)              NO SUSPENSION OF TRADING IN OR DELISTING OF COMMON STOCK. The trading of the Common Stock shall not have been suspended by the SEC, the Principal Market or FINRA, or otherwise halted for any reason, and the Common Stock shall have been approved for listing or quotation on and shall not have been delisted from the Principal Market.  In the event of a suspension, delisting, or halting for any reason, of the trading of the Common Stock, as contemplated by this Section 7.2(f), the Investor shall have the right to return to the Company any remaining amount of Put Shares associated with such Put, and the Purchase Price with respect to such Put shall be reduced accordingly.

 

(g)              BENEFICIAL OWNERSHIP LIMITATION. The number of Put Shares then to be purchased by the Investor shall not exceed the number of such shares that, when aggregated with all other shares of Common Stock then owned by the Investor beneficially or deemed beneficially owned by the Investor, would result in the Investor owning more than the Beneficial Ownership Limitation (as defined below), as determined in accordance with Section 16 of the Exchange Act and the regulations promulgated thereunder.  For purposes of this Section 7.2(g), in the event that the amount of Common Stock outstanding, as determined in accordance with Section 16 of the Exchange Act and the regulations promulgated thereunder, is greater on a Closing Date than on the date upon which the Put Notice associated with such Closing Date is given, the amount of Common Stock outstanding on such Closing Date shall govern for purposes of determining whether the Investor, when aggregating all purchases of Common Stock made pursuant to this Agreement, would own more than the Beneficial Ownership Limitation following such Closing Date. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable pursuant to a Put Notice.

(h)              PRINCIPAL MARKET REGULATION. The issuance of the Put Shares shall not exceed the Exchange Cap.

 

(i)              NO KNOWLEDGE. The Company shall have no knowledge of any event more likely than not to have the effect of causing the Registration Statement to be suspended or otherwise ineffective (which event is more likely than not to occur within the fifteen (15) Trading Days following the Trading Day on which such Put Notice is deemed delivered).

 

(j)             NO VIOLATION OF SHAREHOLDER APPROVAL REQUIREMENT. The issuance of the Put Shares shall not violate the shareholder approval requirements of the Principal Market.

 

(k)            OFFICER’S CERTIFICATE. On the date of delivery of each Put Notice, the Investor shall have received the Closing Certificate executed by an executive officer of the Company and to the effect that all the conditions to such Closing shall have been satisfied as of the date of each such certificate.

14

(l)          DWAC ELIGIBLE. The Common Stock must be DWAC Eligible and not subject to a “DTC chill.”

(m)          SEC DOCUMENTS. All reports, schedules, registrations, forms, statements, information and other documents required to have been filed by the Company with the SEC pursuant to the reporting requirements of the Exchange Act shall have been filed with the SEC within the applicable time periods prescribed for such filings under the Exchange Act.

(n)          [Intentionally Omitted.]

(o)          MINIMUM PRICING.  The lowest closing price of the Common Stock in the ten (10) Trading Days immediately preceding the respective Put Date must exceed $0.01 per share, unless waived in writing by the Investor.

ARTICLE VIII

LEGENDS

 

Section 8.1           NO RESTRICTIVE STOCK LEGEND. No restrictive stock legend shall be placed on the share certificates representing the Put Shares.

 

Section 8.2           INVESTOR'S COMPLIANCE. Nothing in this Article VIII shall affect in any way the Investor's obligations hereunder to comply with all applicable securities laws upon the sale of the Common Stock.

ARTICLE IX

NOTICES; INDEMNIFICATION

 

Section 9.1           NOTICES. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (a) personally served, (b) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (c) delivered by reputable air courier service with charges prepaid, or (d) transmitted by hand delivery, telegram, or email as a PDF, addressed as set forth below or to such other address as such party shall have specified most recently by written notice given in accordance herewith. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (i) upon hand delivery or delivery by email at the address designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (ii) on the second business day following the date of mailing by express courier service or on the fifth business day after deposited in the mail, in each case, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.

The addresses for such communications shall be:

15

If to the Company:

Acacia Diversified Holdings, Inc.

13575 58th Street North, #138

Clearwater, FL 33760

Email: rick@marijinc.com

Attention: Richard K. Pertile

If to the Investor:

 

Peak One Opportunity Fund, L.P.

Attention: Jason Goldstein

Either party hereto may from time to time change its address or email for notices under this Section 9.1 by giving at least ten (10) days' prior written notice of such changed address to the other party hereto.

Section 9.2           INDEMNIFICATION. Each party (an “Indemnifying Party”) agrees to indemnify and hold harmless the other party along with its officers, directors, employees, and authorized agents, and each Person or entity, if any, who controls such party within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (an “Indemnified Party”) from and against any Damages, joint or several, and any action in respect thereof to which the Indemnified Party becomes subject to, resulting from, arising out of or relating to (i) any misrepresentation, breach of warranty or nonfulfillment of or failure to perform any covenant or agreement on the part of the Indemnifying Party contained in this Agreement, (ii) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any post-effective amendment thereof or supplement thereto, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, (iii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in the light of the circumstances under which the statements therein were made, not misleading, or (iv) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation under the Securities Act, the Exchange Act or any state securities law, as such Damages are incurred, except to the extent such Damages result primarily from the Indemnified Party's failure to perform any covenant or agreement contained in this Agreement or the Indemnified Party's negligence, recklessness or bad faith in performing its obligations under this Agreement; provided, however, that the foregoing indemnity agreement shall not apply to any Damages of an Indemnified Party to the extent, but only to the extent, arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission made by an Indemnifying Party in reliance upon and in conformity with written information furnished to the Indemnifying Party by the Indemnified Party expressly for use in the Registration Statement, any post-effective amendment thereof or supplement thereto, or any preliminary prospectus or final prospectus (as amended or supplemented).

 

16

Section 9.3           METHOD OF ASSERTING INDEMNIFICATION CLAIMS. All claims for indemnification by any Indemnified Party under Section 9.2 shall be asserted and resolved as follows:

 

(a)              In the event any claim or demand in respect of which an Indemnified Party might seek indemnity under Section 9.2 is asserted against or sought to be collected from such Indemnified Party by a Person other than a party hereto or an affiliate thereof (a "Third Party Claim"), the Indemnified Party shall deliver a written notification, enclosing a copy of all papers served, if any, and specifying the nature of and basis for such Third Party Claim and for the Indemnified Party's claim for indemnification that is being asserted under any provision of Section 9.2 against an Indemnifying Party, together with the amount or, if not then reasonably ascertainable, the estimated amount, determined in good faith, of such Third Party Claim (a "Claim Notice") with reasonable promptness to the Indemnifying Party. If the Indemnified Party fails to provide the Claim Notice with reasonable promptness after the Indemnified Party receives notice of such Third Party Claim, the Indemnifying Party shall not be obligated to indemnify the Indemnified Party with respect to such Third Party Claim to the extent that the Indemnifying Party's ability to defend has been prejudiced by such failure of the Indemnified Party. The Indemnifying Party shall notify the Indemnified Party as soon as practicable within the period ending thirty (30) calendar days following receipt by the Indemnifying Party of either a Claim Notice or an Indemnity Notice (as defined below) (the "Dispute Period") whether the Indemnifying Party disputes its liability or the amount of its liability to the Indemnified Party under Section 9.2 and whether the Indemnifying Party desires, at its sole cost and expense, to defend the Indemnified Party against such Third Party Claim.

 

(i)              If the Indemnifying Party notifies the Indemnified Party within the Dispute Period that the Indemnifying Party desires to defend the Indemnified Party with respect to the Third Party Claim pursuant to this Section 9.3(a), then the Indemnifying Party shall have the right to defend, with counsel reasonably satisfactory to the Indemnified Party, at the sole cost and expense of the Indemnifying Party, such Third Party Claim by all appropriate proceedings, which proceedings shall be vigorously and diligently prosecuted by the Indemnifying Party to a final conclusion or will be settled at the discretion of the Indemnifying Party (but only with the consent of the Indemnified Party in the case of any settlement that provides for any relief other than the payment of monetary damages or that provides for the payment of monetary damages as to which the Indemnified Party shall not be indemnified in full pursuant to Section 9.2). The Indemnifying Party shall have full control of such defense and proceedings, including any compromise or settlement thereof; provided, however, that the Indemnified Party may, at the sole cost and expense of the Indemnified Party, at any time prior to the Indemnifying Party's delivery of the notice referred to in the first sentence of this clause (i), file any motion, answer or other pleadings or take any other action that the Indemnified Party reasonably believes to be necessary or appropriate to protect its interests; and provided, further, that if requested by the Indemnifying Party, the Indemnified Party will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnifying Party in contesting any Third Party Claim that the Indemnifying Party elects to contest. The Indemnified Party may participate in, but not control, any defense or settlement of any Third Party Claim controlled by the Indemnifying Party pursuant to this clause (i), and except as

17

provided in the preceding sentence, the Indemnified Party shall bear its own costs and expenses with respect to such participation. Notwithstanding the foregoing, the Indemnified Party may takeover the control of the defense or settlement of a Third Party Claim at any time if it irrevocably waives its right to indemnity under Section 9.2 with respect to such Third Party Claim.

 

(ii)             If the Indemnifying Party fails to notify the Indemnified Party within the Dispute Period that the Indemnifying Party desires to defend the Third Party Claim pursuant to Section 9.3(a), or if the Indemnifying Party gives such notice but fails to prosecute vigorously and diligently or settle the Third Party Claim, or if the Indemnifying Party fails to give any notice whatsoever within the Dispute Period, then the Indemnified Party shall have the right to defend, at the sole cost and expense of the Indemnifying Party, the Third Party Claim by all appropriate proceedings, which proceedings shall be prosecuted by the Indemnified Party in a reasonable manner and in good faith or will be settled at the discretion of the Indemnified Party(with the consent of the Indemnifying Party, which consent will not be unreasonably withheld). The Indemnified Party will have full control of such defense and proceedings, including any compromise or settlement thereof; provided, however, that if requested by the Indemnified Party, the Indemnifying Party will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnified Party and its counsel in contesting any Third Party Claim which the Indemnified Party is contesting. Notwithstanding the foregoing provisions of this clause (ii), if the Indemnifying Party has notified the Indemnified Party within the Dispute Period that the Indemnifying Party disputes its liability or the amount of its liability hereunder to the Indemnified Party with respect to such Third Party Claim and if such dispute is resolved in favor of the Indemnifying Party in the manner provided in clause (iii) below, the Indemnifying Party will not be required to bear the costs and expenses of the Indemnified Party's defense pursuant to this clause (ii) or of the Indemnifying Party's participation therein at the Indemnified Party's request, and the Indemnified Party shall reimburse the Indemnifying Party in full for all reasonable costs and expenses incurred by the Indemnifying Party in connection with such litigation. The Indemnifying Party may participate in, but not control, any defense or settlement controlled by the Indemnified Party pursuant to this clause (ii), and the Indemnifying Party shall bear its own costs and expenses with respect to such participation.

 

(iii)            If the Indemnifying Party notifies the Indemnified Party that it does not dispute its liability or the amount of its liability to the Indemnified Party with respect to the Third Party Claim under Section 9.2 or fails to notify the Indemnified Party within the Dispute Period whether the Indemnifying Party disputes its liability or the amount of its liability to the Indemnified Party with respect to such Third Party Claim, the amount of Damages specified in the Claim Notice shall be conclusively deemed a liability of the Indemnifying Party under Section 9.2 and the Indemnifying Party shall pay the amount of such Damages to the Indemnified Party on demand. If the Indemnifying Party has timely disputed its liability or the amount of its liability with respect to such claim, the Indemnifying Party and the Indemnified Party shall proceed in good faith to negotiate a resolution of such dispute; provided, however, that if the dispute is not resolved within thirty (30) days after the Claim Notice, the Indemnifying Party shall be entitled to institute such legal action as it deems appropriate.

 

18

(b)              In the event any Indemnified Party should have a claim under Section 9.2 against the Indemnifying Party that does not involve a Third Party Claim, the Indemnified Party shall deliver a written notification of a claim for indemnity under Section 9.2 specifying the nature of and basis for such claim, together with the amount or, if not then reasonably ascertainable, the estimated amount, determined in good faith, of such claim (an "Indemnity Notice") with reasonable promptness to the Indemnifying Party. The failure by any Indemnified Party to give the Indemnity Notice shall not impair such party's rights hereunder except to the extent that the Indemnifying Party demonstrates that it has been irreparably prejudiced thereby. If the Indemnifying Party notifies the Indemnified Party that it does not dispute the claim or the amount of the claim described in such Indemnity Notice or fails to notify the Indemnified Party within the Dispute Period whether the Indemnifying Party disputes the claim or the amount of the claim described in such Indemnity Notice, the amount of Damages specified in the Indemnity Notice will be conclusively deemed a liability of the Indemnifying Party under Section 9.2 and the Indemnifying Party shall pay the amount of such Damages to the Indemnified Party on demand. If the Indemnifying Party has timely disputed its liability or the amount of its liability with respect to such claim, the Indemnifying Party and the Indemnified Party shall proceed in good faith to negotiate a resolution of such dispute; provided, however, that if the dispute is not resolved within thirty (30) days after the Claim Notice, the Indemnifying Party shall be entitled to institute such legal action as it deems appropriate. 

 

(c)              The Indemnifying Party agrees to pay the Indemnified Party, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim.

 

(d)              The indemnity provisions contained herein shall be in addition to (i) any cause of action or similar rights of the Indemnified Party against the Indemnifying Party or others, and (ii) any liabilities the Indemnifying Party may be subject to.

 

ARTICLE X

MISCELLANEOUS

 

Section 10.1           GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Nevada without regard to the principles of conflicts of law. Each of the Company and the Investor hereby submits to the exclusive jurisdiction of the United States federal and state courts located in Florida, County of Miami-Dade, with respect to any dispute arising under the Transaction Documents or the transactions contemplated thereby.

 

Section 10.2           [Intentionally Omitted.]

 

Section 10.3           ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the Company and the Investor and their respective successors.  Neither this Agreement nor any rights of the Investor or the Company hereunder may be assigned by either party to any other Person.

 

19

Section 10.4           NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the benefit of the Company and the Investor and their respective successors, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as set forth in Section 9.3.

 

Section 10.5         TERMINATION. The Company may terminate this Agreement at any time by written notice to the Investor, except during any Valuation Period or at any time that the Investor holds any of the Put Shares.  In addition, this Agreement shall automatically terminate at the end of the Commitment Period.

 

Section 10.6           ENTIRE AGREEMENT. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the Company and the Investor with respect to the matters covered herein and therein and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

 

Section 10.7           FEES AND EXPENSES.  Except as expressly set forth in the Transaction Documents or any other writing to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.  The Company shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Investor.  Upon execution of this Agreement, the Company shall issue 110,000 shares of its common stock to Investor or Investor’s designee for its commitment to enter into this Agreement.

 

Section 10.8           COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which may be executed by less than all of the parties and shall be deemed to be an original instrument which shall be enforceable against the parties actually executing such counterparts and all of which together shall constitute one and the same instrument. This Agreement may be delivered to the other parties hereto by email of a copy of this Agreement bearing the signature of the parties so delivering this Agreement.

 

Section 10.9           SEVERABILITY. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided that such severability shall be ineffective if it materially changes the economic benefit of this Agreement to any party.

 

Section 10.10           FURTHER ASSURANCES. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

20

Section 10.11         NO STRICT CONSTRUCTION. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

 

Section 10.12           EQUITABLE RELIEF. The Company recognizes that in the event that it fails to perform, observe, or discharge any or all of its obligations under this Agreement, any remedy at law may prove to be inadequate relief to the Investor. The Company therefore agrees that the Investor shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving actual damages.

 

Section 10.13           TITLE AND SUBTITLES. The titles and subtitles used in this Agreement are used for the convenience of reference and are not to be considered in construing or interpreting this Agreement.

 

Section 10.14           AMENDMENTS; WAIVERS. No provision of this Agreement may be amended or waived by the parties from and after the date that is one (1) Trading Day immediately preceding the initial filing of the Registration Statement with the SEC. Subject to the immediately preceding sentence, (i) no provision of this Agreement may be amended other than by a written instrument signed by both parties hereto and (ii) no provision of this Agreement may be waived other than in a written instrument signed by the party against whom enforcement of such waiver is sought. No failure or delay in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.

 

Section 10.15           PUBLICITY. The Company and the Investor shall consult with each other in issuing any press releases or otherwise making public statements with respect to the transactions contemplated hereby and no party shall issue any such press release or otherwise make any such public statement, other than as required by law, without the prior written consent of the other parties, which consent shall not be unreasonably withheld or delayed, except that no prior consent shall be required if such disclosure is required by law, in which such case the disclosing party shall provide the other party with prior notice of such public statement.  Notwithstanding the foregoing, the Company shall not publicly disclose the name of the Investor without the prior written consent of the Investor, except to the extent required by law. The Investor acknowledges that this Agreement and all or part of the Transaction Documents may be deemed to be "material contracts," as that term is defined by Item 601(b)(10) of Regulation S-K, and that the Company may therefore be required to file such documents as exhibits to reports or registration statements filed under the Securities Act or the Exchange Act.  The Investor further agrees that the status of such documents and materials as material contracts shall be determined solely by the Company, in consultation with its counsel.

 

[Signature Page Follows]

 

21

           IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written.

THE COMPANY:

ACACIA DIVERSIFIED HOLDINGS, INC.

By:  /s/: Richard K. Pertile                                              

Name: Richard K. Pertile

Title: Chief Executive Officer

INVESTOR:

PEAK ONE OPPORTUNITY FUND, L.P.

By:   Peak One Investments, LLC,

        General Partner

By:  /s/:  Jason Goldstein                                      

Name: Jason Goldstein

Title:   Managing Member

[Signature Page to equity purchase agreement]

22

DISCLOSURE SCHEDULES TO

EQUITY PURCHASE AGREEMENT

Schedule 4.3 – Capitalization

None.

Schedule 4.5 – SEC Documents

None.

Schedule 4.9 – Litigation

None.

Schedule 4.10 – Registration Rights

None.

 

EXHIBIT A

 

FORM OF PUT NOTICE

 

TO: PEAK ONE OPPORTUNITY FUND, L.P.

DATE: ____________________

 

We refer to the equity purchase agreement, dated March 21, 2017 (the “Agreement”), entered into by and between Acacia Diversified Holdings, Inc. and you. Capitalized terms defined in the Agreement shall, unless otherwise defined herein, have the same meaning when used herein.

 

We hereby:

 

1)  Give you notice that we require you to purchase                      Put Shares at an initial purchase price per share of ____________; and

 

2)  Certify that, as of the date hereof, the conditions set forth in Section 7.2 of the Agreement are satisfied.

 

ACACIA DIVERSIFIED HOLDINGS, INC.

By: _______________________

Name: Richard K. Pertile

Title: Chief Executive Officer

 

 

 

 

 

 

EXHIBIT B

 

FORM OF OFFICER’S CERTIFICATE

OF ACACIA DIVERSIFIED HOLDINGS, INC.

 

Pursuant to Section 7.2(k) of that certain equity purchase agreement, dated March 21, 2017 (the “Agreement”), by and between Acacia Diversified Holdings, Inc. (the “Company”) and Peak One Opportunity Fund, L.P. (the “Investor”), the undersigned, in his capacity as Chief Executive Officer of the Company, and not in his individual capacity, hereby certifies, as of the date hereof (such date, the “Condition Satisfaction Date”), the following:

 

1.              The representations and warranties of the Company are true and correct in all material respects as of the Condition Satisfaction Date as though made on the Condition Satisfaction Date (except for representations and warranties specifically made as of a particular date) with respect to all periods, and as to all events and circumstances occurring or existing to and including the Condition Satisfaction Date, except for any conditions which have temporarily caused any representations or warranties of the Company set forth in the Agreement to be incorrect and which have been corrected with no continuing impairment to the Company or the Investor; and

 

2.              All of the conditions precedent to the obligation of the Investor to purchase Put Shares set forth in the Agreement, including but not limited to Section 7.2 of the Agreement, have been satisfied as of the Condition Satisfaction Date.

 

Capitalized terms used herein shall have the meanings set forth in the Agreement unless otherwise defined herein.

 

IN WITNESS WHEREOF, the undersigned has hereunto affixed his hand as of the March 21, 2017.

By: _______________________

Name: Richard K. Pertile

Title: Chief Executive OfficerEX-10.33

 Exhibit 10.33 
  

 
 May 12, 2017 
 Jason Kim

 Chief Financial Officer 
 Molecular Templates, Inc. 

9301 Amberglen Blvd., Suite 100 
 Austin, Texas 78729 

Dear Jason: 
 It is my pleasure to inform you that Molecular
Templates has been approved for a no-cost extension for grant ID: CC121020. Details are as follows: 
  

			
	 Contract Start Date:
	  	 01 Dec 2011

	 Original Contract End Date:
	  	 30 Nov 2015

	 No-Cost Extension:
	  	 30 May 2016

	 No-Cost Extension:
	  	 30 May 2017

	No-Cost Extension:	  	30 May 2018

 Please let me know if you have any questions by calling me at 512/305-7676. I look
forward to continuing to work with you and your staff. 
 Best regards, 

/S/ Cathy Allen 
 Cathy Allen 

Program Manager 
 Product Development Research Program 

Cancer Prevention Research Institute of Texas 

Callen@cprit.texas.state 
  

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
  
 1 

 

 
 STATE OF TEXAS 
 COUNTY OF
TRAVIS 
 This CANCER RESEARCH GRANT CONTRACT (“Contract”) is by and between the Cancer Prevention and Research Institute of
Texas (“CPRIT”), hereinafter referred to as the “INSTITUTE”, acting through its Executive Director, and Molecular Templates, Inc., hereinafter referred to as the
“RECIPIENT”, acting through its authorized signing official. 
 RECITALS 

WHEREAS, pursuant to TEX. HEALTH & SAFETY CODE, Ch. 102, the INSTITUTE may make grants to public and private persons in this state for research into
the causes and cures for all types of cancer in humans; facilities for use in research into the causes and cures for cancer; research to develop therapies, protocols, medical pharmaceuticals, or procedures for the cure or substantial mitigation of
all types of cancer; and cancer prevention and control programs. 
 WHEREAS, Article III, Section 67 of the Texas Constitution expressly authorizes the
State of Texas to sell general obligation bonds on behalf of the INSTITUTE and for the INSTITUTE to use the proceeds from the sale of the bonds for the purposes of cancer research and prevention programs in this state. 

WHEREAS, the INSTITUTE issued a request for applications for RFA C-12-COMP-1: Company Commercialization Awards on or about January 2011. 
 WHEREAS, pursuant to TEX.
HEALTH & SAFETY CODE § 102.251, and after a review by the INSTITUTE’s scientific research and prevention program committees, the INSTITUTE’s Executive Director has approved a Grant (defined below) to be awarded to the
RECIPIENT. 
 WHEREAS, to ensure that the Grant provided to the RECIPIENT pursuant to this Contract is utilized in a manner consistent with Tex. Const.
Article III, Section 67 and other laws, and in exchange for receiving such Grant, the RECIPIENT agrees to comply with certain conditions and deliver certain performance. 

WHEREAS, the RECIPIENT and the INSTITUTE desire to set forth herein the provisions relating to the awarding of such monies and the disbursement thereof to the
RECIPIENT. 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
  
 2 

 IN CONSIDERATION of the Grant and the premises, covenants, agreements, and provisions contained in this
Contract, the parties agree to the following terms and conditions: 
 Article I 

DEFINITIONS 
 The following terms shall
have the following meaning throughout this Contract and any Attachments and amendments. Other terms may be defined elsewhere in this Contract. 
 (1)
Collaborator – any entity other than the RECIPIENT having one or more personnel participating in the Project and (a) designated as a collaborator in the application submitted by the RECIPIENT requesting the Grant funds
awarded by the INSTITUTE, or (b) otherwise approved in writing as a collaborator by the INSTITUTE. 
 (2) Contractor – any person or
entity, other than a Collaborator or the RECIPIENT (or their respective personnel), who is contracted by the RECIPIENT to perform activities for the Project. 

(3) Equipment - an article of tangible, nonexpendable personal property having a useful life of more than one year and an acquisition cost of
$5,000 or more per unit. 
 (4) Grant – the funding assistance authorized by TEX. HEALTH & SAFETY CODE, Ch. 102 in the amount
specified in Section 2.01 and awarded by the INSTITUTE to the RECIPIENT to carry out the Project pursuant to the terms and conditions of this Contract. 

(5) Indirect Costs – the expenses of doing business that are not readily identified with a particular grant, contract, project, function or
activity, but are necessary for the general operation of the organization or the performance of the organization’s activities. 
 (6)
Institute-Funded Activity – all aspects of work conducted on or as part of the Project. 
 (7)
Non-Profit Organization – a university or other institution of higher education or an organization of the type described in 501(c)(3) of the Internal Revenue Code of 1986, as amended (26
U.S.C. 501 (c)(3)) and exempt from taxation under 501 (a) of the Internal Revenue Code (26 U.S.C. 501 (a)) or any nonprofit scientific or educational organization qualified under a state nonprofit organization statute. 

(8) Principal Investigator/Program Director – the individual designated by the RECIPIENT to direct the Project who is principally
responsible and accountable to the RECIPIENT and the INSTITUTE for the proper conduct of the Project. References herein to “Principal Investigator/Program Director” include Co-Principal Investigators
or Co-Program Directors as well. The Principal Investigator/Program Director and Co-Principal Investigators or Co-Program
Directors are set forth on Attachment A. 
 (9) Project – the activities specified or generally described in the Scope of Work or
otherwise in this Contract (including without limitation any of the Attachments to the Contract) that are approved by the INSTITUTE for funding, regardless of whether the INSTITUTE funding constitutes all or only a portion of the financial support
necessary to carry them out. 
 (10) Recipient Personnel – The RECIPIENT’s Principal Investigator/Program Director and
RECIPIENT’s employees and consultants working on the Project. 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
  
 3 

 Article II 

GRANT AWARD 

Section 2.01 Award of Monies. In accordance with the provisions of this Contract, the INSTITUTE shall disburse
the proceeds of the Grant to the RECIPIENT in an amount not to exceed $10,600,000 to be used solely for the Project. This award is subject to compliance with the Scope of Work and demonstration of progress towards achievement of the
milestones set forth in Section 2.02. The INSTITUTE, in its sole discretion, may award supplemental funding not to exceed ten percent (10%) of the total Grant amount based upon progress made by the RECIPIENT pursuant to the Scope of Work. This
Grant is not intended to be a loan of money. 
 Section 2.02 Scope of Work and Milestones. The RECIPIENT shall perform the Project
in accordance with this Agreement and as outlined in Application CC121020 submitted by the RECIPIENT and approved by the INSTITUTE. The RECIPIENT shall conduct the Project within the State of Texas with Texas-based employees, Contractors
and/or Collaborators unless otherwise specified in the Scope of Work or the Approved Budget. The INSTITUTE and the RECIPIENT hereby adopt the terms of Attachment A in their entirety, incorporate them as if fully set forth herein, and agree that the
Project description, goals, timeline and milestones included as Attachment A accurately reflect the Scope of Work of the Project to be undertaken by the RECIPIENT (the “Scope of Work”) and the milestones expected to be
achieved. RECIPENT and the INSTITUTE mutually agree that the outcome of scientific research is unpredictable and cannot be guaranteed. The RECIPIENT shall use commercially reasonable efforts to complete the goals of the Project pursuant to the
timeline reflected in Attachment A and shall timely notify the INSTITUTE if circumstances occur that materially and adversely affect completion thereof. Modifications, if any, to the Scope of Work must be agreed to in writing by both parties as set
forth in Section 2.06 “Amendments and Modifications” herein. Material changes to the Scope of Work include, but are not limited to, changes in key personnel involved with the Project, the site of the Project, and the milestones
expected to be achieved. 
 Section 2.03 Contract Term. The Contract shall be effective as of December 1,
2011 (the “Effective Date”) and terminate on November 30, 2014 or in accordance with the Contract termination provisions set forth in Article VIII herein, whichever shall occur first (the
“Termination Date”). Unless otherwise approved by the INSTITUTE as evidenced by written communication from the INSTITUTE to the RECIPIENT and appended to the Contract, Grant funds distributed pursuant to the Contract shall be
expended no earlier than the Effective Date or subsequent to the Termination Date. If, as of the Termination Date, the RECIPIENT has not used Grant money awarded by the INSTITUTE for permissible services, expenses, or costs related to the Project
and has not received approval from the INSTITUTE for a no cost extension to the contract term pursuant to Section 3.11 “Carry Forward of Unspent Funds and No Cost Extension” herein, then the RECIPIENT shall not be entitled to retain
such unused Grant funds from the INSTITUTE. Certain obligations as set forth in Section 9.09 of this Contract shall extend beyond the Termination Date. 

Section 2.04 Contract Documentation. The Contract between the INSTITUTE and the RECIPIENT shall consist of this final, executed
Contract, including the following Attachments to the Contract, all of which are hereby incorporated by reference: 
  

	 	(a)	Attachment A – Project Description, Goals and Timeline 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
  
 4 

	 	(b)	Attachment B – Approved Budget, including changes approved by the INSTITUTE subsequent to execution of the Contract. 

  

	 	(c)	Attachment C – Assurances and Certifications 

  

	 	(d)	Attachment D – Intellectual Property and Revenue Sharing 

  

	 	(e)	Attachment E – Reporting Requirements 

  

	 	(f)	Attachment F – Approved Amendments to Contract, excluding budget amendments reflected in Attachment B. 

Section 2.05 Entire Agreement. All agreements, covenants, representations, certifications and understandings between the parties
hereto concerning this Contract have been merged into this written Contract. No prior or contemporaneous representation, agreement or understanding, express or implied, oral or otherwise, of the parties or their agents that may have related to the
subject matter hereof in any way shall be valid or enforceable unless embodied in this Contract. 
 Section 2.06 Amendments and
Modifications. Requested amendments and modifications to the Contract must be submitted in writing to the INSTITUTE for review and approval (such approval shall not be unreasonably withheld.) Amendments and modifications (including alterations,
additions, deletions, assignments and extensions) to the terms of this Contract shall be made solely in writing and shall be executed by both parties. The approved amendment shall be reflected in Attachment A if it is change to the Scope of Work, or
as part of Attachment B if it is a budget amendment, or as part of Attachment F for all other changes. No handwritten changes to this Contract shall be effective unless initialed and dated by authorized signatories of both parties. 

Section 2.07 Relationship of the Parties. The RECIPIENT shall be responsible for the conduct of the Project that is the subject of
this Contract and shall direct the activities and at all times be responsible for the performance of Recipient Personnel, Collaborators, Contractors and other agents. The INSTITUTE does not assume responsibility for the conduct of the Project or any
Institute-Funded Activity that is the subject of this Contract. The INSTITUTE and the RECIPIENT shall perform their respective obligations under this Contract as independent contractors and not as agents, employees, partners, joint venturers, or
representatives of the other party. Neither party is permitted to make representations or commitments that bind the other party. 

Section 2.08 Subcontracting. Any and all subcontracts entered into by the RECIPIENT in relation to the performance of
activities under the Project shall be in writing and shall be subject to the requirements of this Contract. Without in any way limiting the foregoing, the RECIPIENT shall enter into and maintain a written agreement with each such permitted
Contractor with terms and conditions sufficient to ensure the RECIPIENT fully complies with the terms of this Contract, including without limitation the terms set forth in Attachments C, D, and E. The RECIPIENT agrees that it shall be responsible to
the INSTITUTE for the performance of and payment to any Contractor. Any reimbursements made by the RECIPIENT to a Contractor shall be made in accordance with the applicable provisions of TEX. GOV’T. CODE, Ch. 2251. 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
  
 5 

 Section 2.09 Transfer or Assignment by the Recipient. This Contract is not transferable
or otherwise assignable by the RECIPIENT, whether by operation of law or otherwise, without the prior written consent of the INSTITUTE, except as provided in this Section 2.09. Any such attempted transfer or assignment without the prior written
consent of the INSTITUTE (except as provided in this Section 2.09) shall be null, void and of no effect. For purposes of this section, an assignment or transfer of this Contract by the RECIPIENT in connection with a merger, transfer or sale of
all or substantially all of the RECIPIENT’s assets or business related to this Contract or a consolidation, change of control or similar transaction involving the RECIPIENT shall not be deemed to constitute a transfer or assignment, so long as
such action does not impair or otherwise negatively impact the revenue sharing terms in Attachment D. Nothing herein shall be interpreted as superseding the requirement that the Project be undertaken in Texas with Texas-based employees. 

If the Principal Investigator leaves the employment of the RECIPIENT or is replaced by the RECIPIENT for any reason during the course of the Grant with
someone who is not already designated a co-Principal Investigator in Attachment A, the RECIPIENT shall notify the INSTITUTE prior to replacing the Principal Investigator. Written approval by the INSTITUTE is
required for the replacement of the Principal Investigator with someone who is not already a co-Principal Investigator in Attachment A, which approval shall not be unreasonably withheld, conditioned or
delayed. 
 Section 2.10 Representations and Certifications. The RECIPIENT represents and certifies to the best of
its knowledge and belief to the INSTITUTE as follows: 
  

	 	(a)	It has legal authority to enter into, execute, and deliver this Contract, and all documents referred to herein, and it has taken all corporate actions necessary to its execution and delivery of such documents;

  

	 	(b)	It will comply with all of the terms, conditions, provisions, covenants, requirements, and certifications in this Contract, and all other documents incorporated herein by reference; 

 

	 	(c)	It has made no material false statement or misstatement of fact in connection with this Contract and its receipt of the Grant, and all of the information it previously submitted to the INSTITUTE or that it is required
under this Contract to submit to the INSTITUTE relating to the Grant or the disbursement of any of the Grant is and will be true and correct at the time such statement is made; 

 

	 	(d)	It is in compliance in all material respects with provisions of its charter and of the laws of the State of Texas, and of the laws of the jurisdiction in which it was formed, and (i) there are no actions, suits, or
proceedings pending, or threatened, before any judicial body or governmental authority against or affecting its ability to enter into this Contract, or any document referred to herein, or to perform any of the material acts required of it in such
documents and (ii) it is not in default with respect to any order, writ, injunction, decree, or demand of any court or any governmental authority which would impair its ability to enter into this Contract, or any document referred to herein, or
to perform any of the material acts required of it in such documents; 

  

	 	(e)	Neither the execution and delivery of this Contract or any document referred to herein, nor compliance with any of the terms, conditions, requirements, or provisions contained in this Contract or any documents referred
to herein, is prevented by, is a breach of, or will result in a breach of, any term, condition, or provision of any agreement or document to which it is now a party or by which it is bound; and 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
  
 6 

	 	(f)	It shall furnish such satisfactory evidence regarding the representations and certifications described herein as may be required and requested by the INSTITUTE from time to time. 

Section 2.11 Reliance upon Representations. By awarding the Grant and executing this Contract, the INSTITUTE is relying, and will
continue to rely throughout the term of this Contract, upon the truthfulness, accuracy, and completeness of the RECIPIENT’s written assurances, certifications and representations. Moreover, the INSTITUTE would not have entered into this
Contract with the RECIPIENT but for such written assurances, certifications and representations. The RECIPIENT acknowledges that the INSTITUTE is relying upon such assurances, certifications and representations and acknowledges their materiality and
significance. 
 Section 2.12 Contingent upon Availability of Grant Funds. This Contract is contingent upon funding being
available for the term of the Contract and the RECIPIENT shall have no right of action against the INSTITUTE in the event that the INSTITUTE is unable to perform its obligations under this Contract as a result of the suspension, termination,
withdrawal, or failure of funding to the INSTITUTE or lack of sufficient funding of the INSTITUTE for this Contract. If funds become unavailable to the INSTITUTE during the term of the Contract, Section 8.01(c) shall apply. For the sake of
clarity, and except as otherwise provided by this Contract, if this Contract is not funded, then both parties are relieved of all of their obligations under this Contract. The INSTITUTE acknowledges and agrees that the Project is a multiyear project
subject to Tex. Health & Safety Code, Chr. 102, Section 102.257. 
 Section 2.13 Confidentiality of Documents and
Information. In connection with work contemplated for the Project or pursuant to complying with various provisions of this Contract, the RECIPIENT may disclose its confidential business, financial, technical, scientific information and other
information to the INSTITUTE (“Confidential Information”). To assist the INSTITUTE in identifying such information, the RECIPIENT shall mark or designate the information as “confidential,” provided however that the failure to so
designate does not operate as a waiver to protections provided by applicable law or this Contract. The INSTITUTE shall use no less than reasonable care to protect the confidentiality of the Confidential Information to the fullest extent permissible
under the Texas Public Information Act, Texas Government Code, Chapter 552 (the “TPIA”), and, except as otherwise provided in the TPIA to prevent the disclosure of the Confidential Information to third parties for a period of
time equal to three (3) years from the termination of the contract, unless the INSTITUTE and the RECIPIENT agree in writing to extend such time period, provided that this obligation shall not apply to information that: 

 

	 	(a)	was in the public domain at the time of disclosure or later became part of the public domain through no act or omission of the INSTITUTE in breach of this Contract; 

 

	 	(b)	was lawfully disclosed to the INSTITUTE by a third party having the right to disclose it without an obligation of confidentiality; 

  

	 	(c)	was already lawfully known to the INSTITUTE without an obligation of confidentiality at the time of disclosure; 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
  
 7 

	 	(d)	was independently developed by the INSTITUTE without using or referring to the RECIPIENT’s Confidential Information; or 

  

	 	(e)	is required by law or regulation to be disclosed. 

 The INSTITUTE shall hold the Confidential Information in
confidence, shall not use such Confidential Information except as provided by the terms of this Contract, and shall not disclose such Confidential Information to third parties without the prior written approval of the RECIPIENT or as otherwise
allowed by the terms of the Contract. Subject in all respects to the terms of this Contract and the TPIA, the INSTITUTE has the right to use and disclose the Confidential Information reasonably in connection with the exercise of its rights under the
Contract. 
 In the event that the INSTITUTE is requested or required (by oral questions, interrogatories, requests for information or documents in legal
proceedings, subpoena, civil investigative demand or other similar process by a court of competent jurisdiction or by any administrative, legislative, regulatory or self- regulatory authority or entity) to disclose any Confidential Information, the
INSTITUTE shall provide the RECIPIENT with prompt written notice of any such request or requirement so that the RECIPIENT may seek a protective order or other appropriate remedy. If, in the absence of a protective order or other remedy, the
INSTITUTE is nonetheless legally compelled to make any such disclosure of Confidential Information to any person, the INSTITUTE may, without liability hereunder, disclose only that portion of the Confidential Information that is legally required to
be disclosed, provided that the INSTITUTE will use reasonable efforts to assist the RECIPIENT, at the RECIPIENT’s expense, in obtaining an appropriate protective order or other reliable assurance that confidential treatment will be accorded the
Confidential Information. To the extent that such Confidential Information does not become part of the public domain by virtue of such disclosure, it shall remain Confidential Information hereunder. 

Article III 

DISBURSEMENT OF GRANT AWARD PROCEEDS 

Section 3.01 Payment of Grant Award Proceeds. The INSTITUTE will advance Grant award proceeds upon request by the RECIPIENT,
consistent with the amounts and schedule as provided in Attachment B. If the RECIPIENT does not request advancement of funds for some or the entire Grant award proceeds, disbursement of Grant award proceeds for services performed and allowable
expenses and costs incurred pursuant to the Scope of Work will be on a reimbursement basis. To the extent that completion of certain milestones is associated with a specific tranche of funding as reflected in the Scope of Work, those milestones
shall be accomplished before funding may be provided for next tranche of funding. The Institute reserves the right to terminate the Contract should a key milestone not be met. 

Section 3.02 Requests for Reimbursement and Quarterly Financial Status Reports. If the RECIPIENT does not elect to receive an
advance disbursement of Grant proceeds, the RECIPIENT’s requests for reimbursement shall be made on INSTITUTE Form 269a (Financial Status Report). If the RECIPIENT has elected to receive an advance disbursement of Grant proceeds, RECIPIENT
shall submit INSTITUTE Form 269a (Financial Status Report) to document all costs and allowable expenses paid with Grant proceeds. The RECIPIENT shall submit the INSTITUTE Form 269a quarterly to the INSTITUTE within 90 days following the end of the
quarter covered by the bill. A final INSTITUTE Form 269a shall be submitted by RECIPIENT not later than 90 days after the Termination Date. An extension of time for submission deadlines specified herein must be expressly authorized in writing by the
INSTITUTE. 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
  
 8 

 Section 3.03 Actual Costs and Allowable Expenses. Because the Approved
budget for the Project(s) as set forth in Attachment B is only an estimate, the parties agree that the RECIPIENT’s billings under this Contract will reflect the actual costs and expenses incurred in performing the Project(s), regardless of the
Approved Budget, up to the total contracted amount specified in Section 2.01 “Award of Monies.” The RECIPIENT shall use Grant proceeds only for allowable expenses consistent with state law and agency administrative rules. Allowable
expenses for the Project(s) shall be only as outlined in the Approved Budget and any modifications to same. 
 Section 3.04
Travel Expenses. Reimbursement for travel expenditures shall be in accordance with the Approved Budget. Prior written approval from the INSTITUTE must be obtained before travel that exceeds the amount included in the Approved
Budget commences. Failure to obtain such prior written approval shall result in such excess travel costs constituting expenses that may not be taken into account for the purposes of calculating expenditure of Grant funds under this Contract. 

Section 3.05 Budget Modifications. The total Approved Budget and the assignment of costs may be adjusted based on implementation of
the Scope of Work, spending patterns, and unexpended funds, but only by an amendment to the Approved Budget. In no event shall an amendment to the Approved Budget result in payments in excess of the aggregate amount specified in Section 2.01
“Award of Monies” or in approved supplemental funding for the Project, if any. The RECIPIENT may make transfers between or among lines within budget categories without prior written approval provided that: 

 

	 	(a)	The total dollar amount of all changes of any single line item within budget categories (individually and in the aggregate) is less than 10% of the total Approved Budget; 

 

	 	(b)	The transfer will not increase or decrease the total Approved Budget; 

  

	 	(c)	The transfer will not materially change the nature, performance level, or Scope of Work of the Project; and 

  

	 	(d)	The RECIPIENT submits a revised copy of the Approved Budget including a narrative justification of the changes prior to incurring costs in the new category. 

All other budget changes or transfers require the INSTITUTE’s express prior written approval. Transfer of funds between categories in the Project’s
Approved Budget may be allowed if requests are in writing, fit within the Scope of Work and the total Approved Budget, are beneficial to the achievement of the objectives of the Project, and appear to be an efficient, effective use of the
INSTITUTE’s funds. 
 Section 3.06 Withholding Payment. The INSTITUTE may withhold Grant award proceeds from the RECIPIENT if
required Financial Status Reports (Form 269a) are not on file for previous quarters or for the final period, if material program requirements are not met and remain uncured after a reasonable time period to cure, if the RECIPIENT is in breach of any
material term of this Contract, or in accordance with provisions of this Contract as well as applicable state or federal laws, regulations or administrative rules, and the breach remains uncured after a reasonable time period to cure. The INSTITUTE
shall have the right to withhold all or part of any future payments to the RECIPIENT to offset any prior advance payments made to the RECIPIENT for ineligible expenditures that have not been refunded to the INSTITUTE by the RECIPIENT 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
  
 9 

 Section 3.07 Grant Funds as Supplement to Budget. The RECIPIENT shall use the Grant
proceeds awarded pursuant to this Contract to supplement its overall budget. These funds will in no event supplant existing funds currently available to the RECIPIENT that have been previously budgeted and set aside for the Project. The RECIPIENT
will not bill the INSTITUTE for any costs under this Contract that also have been billed or should have been billed to any other funding source. 

Section 3.08 Buy Texas. The RECIPIENT shall apply good faith efforts to purchase goods and services from suppliers in Texas to the
extent reasonably possible, to achieve a goal of more than 50 percent of such purchases from suppliers in Texas. 
 Section 3.09
Historically Underutilized Businesses. The RECIPIENT shall use reasonable efforts to purchase materials, supplies or services from a Historically Underutilized Business (HUB). The Texas Procurement and Support Services website will assist in
finding HUB vendors (http://www.window.state.tx.us/procurement.) The RECIPIENT shall complete a HUB report with each annual report submitted to the INSTITUTE in accordance with Attachment E. 

Section 3.10 Limitation on Use of Grant Award Proceeds to Pay Indirect Costs. The RECIPIENT shall not spend more than five percent
of the Grant award proceeds for Indirect Costs. 
 Section 3.11 Carry Forward of Unspent Funds and No Cost Extension.
RECIPIENT may request to carry forward unspent funds into the budget for the next year. Carryover of unspent funds must be specifically approved by the INSTITUTE. The INSTITUTE may approve a no cost extension for the Contract for a period not to
exceed six (6) months after the Termination Date if additional time beyond the Termination date is required to ensure adequate completion of the approved project. The Contract must be in good fiscal and programmatic standing. All terms and
conditions of the Contract shall continue during any extension period and if such extension is approved, notwithstanding Section 2.03, all references to the “Termination Date” shall be deemed to mean the date of expiration of such
extension period. 
 Article IV 

AUDITS AND INSPECTIONS 

Section 4.01 Record Keeping. The RECIPIENT, each Collaborator and each Contractor whose costs are funded in all
or in part by the Grant shall maintain or cause to be maintained books, records, documents and other evidence (electronic or otherwise) pertaining in any way to its performance under and compliance with the terms and conditions of this Contract
(“Records”). The RECIPIENT, each Collaborator and each Contractor shall use, or shall cause the entity which is maintaining such Records to use generally accepted accounting principles in the maintenance of such Records, and
shall retain or require to be retained all of such Records for a period of four (4) years from the Termination Date of the Contract. 

Section 4.02 Audits. Upon request and with reasonable notice, the RECIPIENT, each Collaborator and each Contractor whose costs are
charged to the Project shall allow, or shall cause the entity which is maintaining such items to allow, the INSTITUTE, or auditors working on behalf of the INSTITUTE, including the State Auditor and/or the Comptroller of Public Accounts for the
State of Texas, to review, inspect, audit, copy or abstract all of its Records during regular working hours. Acceptance of funds 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
  
 10 

 
directly under the Contract or indirectly through a subcontract under the Contract constitutes acceptance of the authority of the INSTITUTE, or auditors working on behalf of the INSTITUTE,
including the State Auditor and/or the Comptroller of Public Accounts, to conduct an audit or investigation in connection with those funds for a period of four (4) years from the Termination Date of the Contract. 

Notwithstanding the foregoing, any RECIPIENT expending $500,000 or more in federal or state awards during its fiscal year shall obtain either an annual single
audit or a program specific audit. A RECIPIENT expending funds from only one federal program (as listed in the Catalog of Federal Domestic Assistance (CFDA) or one state program may elect to obtain a program specific audit in accordance with Office
of Management and Budget (OMB) Circular A-133 or with the State of Texas Uniform Grant Management Standards (UGMS). A single audit is required if funds from more than one federal or state program are spent by
the RECIPIENT. The audited time period is the RECIPIENT’s fiscal year, not the INSTITUTE funding period. 
 Section 4.03
Inspections. In addition to the audit rights specified in Section 4.02 “Audits”, the INSTITUTE shall have the right to conduct periodic onsite inspections within normal working hours and on a day and a time mutually agreed to by
the parties, to evaluate the Institute-Funded Activity. The RECIPIENT shall fully participate and cooperate in any such evaluation efforts. 

Section 4.04 On-going Obligation to Submit Requested Information. The RECIPIENT shall,
submit other information related to the Grant to the INSTITUTE as may be reasonably requested from time-to- time by the INSTITUTE, by the Legislature or by any other
funding or regulatory bodies covering the RECIPIENT’s activities under this Contract. 
 Section 4.05 Duty to Resolve
Deficiencies. If an audit and/or inspection under this Article IV finds there are deficiencies that should be remedied, then the RECIPIENT shall resolve and/or cure such deficiencies within a reasonable time frame specified by the INSTITUTE.
Failure to do so shall constitute an Event of Default pursuant to Section 8.03 “Event of Default.” Upon the RECIPIENT’S request, the parties agree to negotiate in good faith, specific extensions so that the RECIPIENT can cure
such deficiencies. 
 Section 4.06 Repayment of Grant Proceeds for Improper Use. In no event shall RECIPIENT retain Grant funds
that have not been used by the RECIPIENT for purposes for which the Grant was intended or in violation of the terms of this Contract. The RECIPIENT shall repay any portion of Grant proceeds used by the RECIPIENT for purposes for which the Grant was
not intended, as determined by the final results of an audit conducted pursuant to the provisions of this Contract. Unless otherwise expressly provided for in writing and appended to this Contract, the repayment shall be made to the INSTITUTE no
later than forty-five (45) days upon a written request by the INSTITUTE specifying the amount to be repaid and detailing the basis upon which such request is being made and the amount shall include interest calculated at an amount not to exceed
five percent (5%) annually. The RECIPIENT may request that the INSTITUTE waive the interest, subject in all cases to the INSTITUTE’S sole discretion. 

Section 4.07 Repayment of Grant Proceeds for Relocation Outside of Texas. The RECIPIENT shall repay the INSTITUTE all Grant proceeds
disbursed to RECIPIENT in the event that RECIPIENT relocates its principal place of business outside of the State during the Contract term or within 3 years after the final payment of the Grant funds is made by the INSTITUTE. 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
  
 11 

 Article V 

ASSURANCES AND CERTIFICATIONS 
 Adoption
of Attachment C. The INSTITUTE and the RECIPIENT hereby adopt the terms of Attachment C in their entirety, incorporate them as if fully set forth herein, and agree to perform and be bound by all such terms. 

Article VI 
 INTELLECTUAL
PROPERTY AND REVENUE SHARING 
 Adoption of Attachment D. The INSTITUTE and the RECIPIENT hereby adopt the terms of Attachment D in their
entirety, incorporate them as if fully set forth herein, and agree to perform and be bound by all such terms. 
 Article VII 

REPORTING 
 Adoption of Attachment E.
The INSTITUTE and the RECIPIENT hereby adopt the terms of Attachment E in their entirety, incorporate them as if fully set forth herein, and agree to perform and be bound by all such terms. 

Article VIII 
 EARLY
TERMINATION AND EVENT OF DEFAULT 
 Section 8.01 Early Termination of Contract. This Contract may be terminated prior to the
Termination Date specified in Section 2.03 “Contract Term” by: 
  

	 	(a)	Mutual written consent of all parties to this Contract; or 

  

	 	(b)	The INSTITUTE for an Event of Default (defined in Section 8.03) by the RECIPIENT; or 

  

	 	(c)	The INSTITUTE if allocated funds should become legally unavailable during the Contract period and the INSTITUTE is unable to obtain additional funds for such purposes; or 

 

	 	(d)	The RECIPIENT for convenience. 

 Section 8.02 Repayment of Grant Proceeds upon Early
Termination. The INSTITUTE may require the RECIPIENT to repay any unused portion of the disbursed Grant proceeds in the event of early termination under 8.01 (d) above or under Section 8.01(b) above, to the extent such Event of Default
resulted from Grant funds being expended in violation of this Contract. To the extent that the INSTITUTE exercises this option, the INSTITUTE shall provide written notice to the RECIPIENT stating the amount to be repaid, applicable interest
calculated not to exceed five percent (5%) annually, and the schedule for such repayment. The RECIPIENT may request that the INSTITUTE waive the interest, subject in all cases to the INSTITUTE’S sole discretion. In no event shall the RECIPIENT
retain Grant funds that have not been used by the RECIPIENT for purposes for which the Grant was intended. 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
  
 12 

 Section 8.03 Event of Default. The following events shall, unless expressly waived in
writing by the INSTITUTE or fully cured by the RECIPIENT pursuant to the provisions herein, constitute an event of default (each, an “Event of Default”): 

 

	 	(a)	The RECIPIENT’s failure, in any material respect, to conduct the Project in accordance with the approved Scope of Work and to demonstrate progress towards achieving the milestones set forth in Section 2.02;

  

	 	(b)	The RECIPIENT’s failure to conduct the Project within the State of Texas to the extent required under this Contract unless as otherwise specified in the application, Scope of Work or Approved Budget;

  

	 	(c)	The RECIPIENT’s failure to fully comply, in any material respect, with any provision, term, condition, covenant, representation, certification, or warranty contained in this Contract or any other document
incorporated herein by reference; 

  

	 	(d)	The RECIPIENT’s failure to comply with any applicable federal or state law, administrative rule, regulation or policy with regard to the conduct of the Project; 

 

	 	(e)	The RECIPIENT’s material misrepresentation or false covenant, representation, certification, or warranty made by the RECIPIENT herein, in the Grant application, or in any other document furnished by the RECIPIENT
pursuant to this Contract that was false or misleading at the time that it was made; or 

  

	 	(f)	The RECIPIENT ceases its business operations, has a receiver appointed for all or substantially all of its assets, makes a general assignment for the benefit of creditors, is declared insolvent by a court of competent
jurisdiction or becomes the subject, as a debtor, of a proceeding under the federal bankruptcy code, which such proceedings are not dismissed within ninety (90) days after filing. 

Section 8.04 Notice Required. If the RECIPIENT intends to terminate pursuant to Section 8.01(d) “Early Termination of
Contract”, it shall provide written notice to the INSTITUTE pursuant to the notice provisions of Section 9.21 “Notices” no later than thirty (30) days prior to the intended date of termination. 

If the INSTITUTE intends to terminate for an Event of Default under Section 8.01(b) by the RECIPIENT, as described in Section 8.03 “Event of
Default”, the INSTITUTE shall provide written notice to the RECIPIENT pursuant to Section 9.21 “Notices” and shall include a reasonable description of the Event of Default and, if applicable, the steps necessary to cure such
Event of Default. Upon receiving notice from the INSTITUTE, the RECIPIENT shall have thirty (30) days beginning on the day following the receipt of notice to cure the Event of Default. Upon request, the INSTITUTE may provide an extension of
time to cure the Event of Default(s) beyond the thirty (30) day period specified herein so long as the RECIPIENT is using reasonable efforts to cure and is making reasonable progress in curing such Event(s) of Default. The extension shall be in
writing and appended to the Contract. If the RECIPIENT is unable or fails to timely cure an Event of Default, unless expressly waived in writing by the INSTITUTE, this Contract shall immediately terminate as of the close of business on the final day
of the allotted cure period without any further notice or action by the INSTITUTE required. In addition, and notwithstanding the foregoing, the INSTITUTE and the RECIPIENT agree that certain events that cannot be cured shall, unless expressly
waived in writing by the INSTITUTE, constitute a final Event of Default under this Contract and this Contract shall terminate immediately upon the INSTITUTE giving the RECIPIENT written “Notice of Event of Default and FINAL
TERMINATION.” 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
  
 13 

 In the event that the INSTITUTE terminates the Contract under Section 8.01(c) above because allocated funds
become legally unavailable during the Contract period, the INSTITUTE shall immediately provide written notification to the RECIPIENT of such fact pursuant to Section 9.21 “Notices.” The Contract is terminated upon the RECIPIENT’s
receipt of that notification, subject to Section 9.09 “Survival of Terms.” 
 Section 8.05 Duty to Report Event of
Default. The RECIPIENT shall notify the INSTITUTE in writing pursuant to Section 9.21 “Notices”, promptly and in no event more than (30) days after it obtains knowledge of the occurrence of any Event of Default. The RECIPIENT
shall include a statement setting forth reasonable details of each Event of Default and the action which the RECIPIENT proposes to take with respect thereto. 

Section 8.06 Obligations/Liabilities Affected by Early Termination. The RECIPIENT shall not incur new
obligations that otherwise would have been paid for using Grant funds after the receipt of notice as provided by Section 8.04 “Notice Required”, unless expressly permitted by the INSTITUTE in writing, and shall cancel as many
outstanding obligations as possible. The INSTITUTE shall not owe any fee, penalty or other amount for exercising its right to terminate the Contract in accordance with Section 8.01. In no event shall the INSTITUTE be liable for any services
performed, or costs or expenses incurred, after the Termination Date of the Contract. Early termination by either party shall not nullify obligations already incurred, including the RECIPIENT’s revenue sharing obligations as set forth in
Attachment D, or the performance or failure to perform obligations prior to the Termination Date. 
 Section 8.07
Interim Remedies. Upon receipt by the RECIPIENT of a notice of Event of Default, and at any time thereafter until such Event of Default is cured to the satisfaction of the INSTITUTE or this Contract is terminated, the INSTITUTE may
enforce any or all of the following remedies (such rights and remedies being in addition to and not in lieu of any rights or remedies set forth herein): 
  

	 	(a)	The INSTITUTE may refrain from disbursing any amount of the Grant funds not previously disbursed; provided, however, the INSTITUTE may make such a disbursement after the occurrence of an Event of Default without thereby
waiving its rights and remedies hereunder; 

  

	 	(b)	The INSTITUTE may enforce any additional remedies it has in law or equity. 

 The rights and remedies herein
specified are cumulative and not exclusive of any rights or remedies that the INSTITUTE would otherwise possess. 
 Article IX 

MISCELLANEOUS 

Section 9.01 Uniform Grant Management Standards. Unless otherwise provided herein, the RECIPIENT agrees that the Uniform Grant
Management Standards (UGMS), developed by the Governor’s Budget and Planning Office as directed under the Uniform Grant Management Act of 1981, TEX. GOVT. CODE, Ch. 783, apply as additional terms and conditions of this Contract and that the
standards are adopted by reference in their entirety. If there is a conflict between the provisions of this Contract and UGMS, the provisions of this Contract will prevail unless expressly stated otherwise. 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
  
 14 

 Section 9.02 Management and Disposition of Equipment. During the term of this Contract,
the RECIPIENT may use Grant funds to purchase Equipment to be used for the authorized purpose of the Project, subject to the conditions set forth below. Unless otherwise provided herein, title to Equipment shall vest in the RECIPIENT upon
termination of the Contract. 
  

	 	(a)	The INSTITUTE must authorize the acquisition in advance and in writing but an acquisition is deemed authorized if included in the Approved Budget for the Project; 

 

	 	(b)	Equipment purchased with Grant funds must stay within the State of Texas; 

  

	 	(c)	Equipment purchased with Grant funds must be materially deployed to the uses and purposes related to the Project; 

  

	 	(d)	In the event the RECIPIENT is indemnified, reimbursed or otherwise compensated for any loss of, destruction of, or damage to the Equipment purchased using Grant funds, it shall use the proceeds to repair or replace said
Equipment; 

  

	 	(e)	Equipment may be exchanged (trade-in) or sold without the prior written approval of the INSTITUTE if the proceeds thereof shall be applied to the acquisition cost of replacement
Equipment; 

  

	 	(f)	The RECIPIENT may use its own property management standards and procedures provided that it observes the terms of UGMS, A-102, in all material respects; 

 

	 	(g)	The title or ownership of the Equipment shall not be encumbered for purposes other than the Project nor or transferred other than to a permitted assignee of this Contract without the prior written approval of the
INSTITUTE; 

  

	 	(h)	If the original or replacement Equipment is no longer needed for the originally authorized purpose or for other activities supported by the INSTITUTE, the RECIPIENT shall request disposition instructions from the
INSTITUTE and, upon receipt, shall fully comply therewith; and 

  

	 	(i)	If this Contract is terminated early pursuant to Section 8.01(b),(d), (e) or (f) above, the INSTITUTE shall determine the final disposition of Equipment purchased with Grant award money. 

Section 9.03 Supplies and Other Expendable Property. The RECIPIENT shall classify as materials, supplies and other
expendable property the allowable unit acquisition cost of such property under $5,000 necessary to carry out the Project. Title to supplies and other expendable property shall vest in the RECIPIENT upon acquisition. 

Section 9.04 Acknowledgement of Grant Funding and Publicity. The parties agree to the following terms and conditions
regarding acknowledging Grant funding and publicity: 
  

	 	(a)	The parties agree to fully cooperate and coordinate with each other in connection with all press releases and publications regarding the award of the Grant, the execution of the Contract and the Institute-Funded
Activities. 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
  
 15 

	 	(b)	The RECIPIENT shall notify the INSTITUTE’s Information Specialist or similar personnel at least three business days prior to any press releases, advertising, publicity, use of CPRIT logo, or other promotional
activities that pertain to the Project or any Institute-Funded Activity. In the event that the INSTITUTE wishes to participate in a joint press release, the RECIPIENT shall coordinate and cooperate with the INSTITUTE’s Information Specialist or
similar personnel to develop a mutually agreeable joint press release. 

  

	 	(c)	Consistent with the goal of encouraging development of scientific breakthroughs and dissemination of knowledge, publication or presentation of scholarly materials is expected and encouraged. The RECIPIENT may publish in
scholarly journals or other peer-reviewed journals (including graduate theses and dissertations) and may make presentations at scientific meetings without prior notice to or consent of the INSTITUTE, except as may otherwise be set forth in this
Contract. The RECIPIENT shall promptly notify the INSTITUTE when any scholarly presentations or publications have been accepted for public disclosure and shall provide the INSTITUTE with final copies of all such accepted presentations and
publications. The RECIPIENT shall acknowledge receipt of the INSTITUTE funding in all publications, presentations, press releases and other materials regarding the work associated with the Institute-Funded Activities. The RECIPIENT shall promptly
submit an electronic version of all published manuscripts to PubMed Central in accordance with Section 9.05 “Public Access to Research Results.” 

  

	 	(d)	When grant funds are used to prepare print or visual materials for educational or promotional purposes for the general public (e.g., patients), and excluding presentations and publications discussed above in subsection
(c), the RECIPIENT shall provide a copy of such materials to the INSTITUTE at least ten (10) days prior to printing. The RECIPIENT shall also acknowledge receipt of the INSTITUTE funding on all such materials including, but not limited to,
brochures, pamphlets, booklets, training fliers, project websites, videos and DVDs, manuals and reports, as well as on the labels and cases for audiovisual or videotape/DVD presentations. 

Section 9.05 Public Access to Results of Institute-Funded Activities. The RECIPIENT shall submit an electronic version of its final
peer-reviewed journal manuscripts that arise from Grant funds to the digital archive National Library of Medicine’s PubMed Central upon acceptance for publication. These papers must be accessible to the public on PubMed no later than 12 months
after publication. This policy is subject to the terms of Attachment D and does not supplant applicable copyright law. For clarity, this policy is not intended to require the RECIPIENT to make a disclosure at a time or in any manner that would cause
the RECIPIENT to abandon, waive or disclaim any intellectual property rights that it is obligated to protect pursuant to the terms of Attachment D. 

Section 9.06 Work to be Conducted in State. The RECIPIENT agrees that it will use reasonable efforts to direct that
any new or expanded preclinical testing, clinical trials, commercialization or manufacturing that is part of or relating to any Institute-Funded Activities take place in the State of Texas, including the establishment of facilities to meet this
purpose. If the RECIPIENT decides not to conduct such work in the State of Texas, the RECIPIENT shall provide a prior written explanation to the INSTITUTE detailing the RECIPIENT’s reasons for conducting the work outside of the State of Texas
and the RECIPIENT’s efforts made to conduct the work in the State of Texas 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
  
 16 

 Section 9.07 Duty to Notify. During the term of this Contract and for a period of five
(5) years thereafter, the RECIPIENT is under a continuing obligation to notify the INSTITUTE’s executive director at the same time it is required to notify any Federal or State entity of any unexpected adverse event or condition that
materially impacts the performance or general public perception of the conduct or results of the Project and the Institute-Funded Activities, including any impact to the Scope of Work included in the Contract and events or results that have a
serious adverse impact on human health, safety or welfare. By way of example only, if clinical testing of the results of the Institute-Funded Activities reveal an unexpected risk of developing serious health conditions or death, then the RECIPIENT
shall, at the same time it notifies any Federal or State entity, promptly so notify the INSTITUTE’s executive director even if such results are not available until after the term of this Contract. Notice required under this section shall be
made as promptly as reasonably possible and shall follow the procedures set forth in Section 9.21 “Notices.” 

Section 9.08 Severability. If any provision of this Contract is construed to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or enforceability shall not affect any other provisions hereof. The invalid, illegal or unenforceable provision shall be deemed stricken and deleted to the same extent and effect as if never incorporated herein. All other
provisions shall continue as provided in this Contract. 
 Section 9.09 Survival of Terms. Termination or expiration of this
Contract for any reason will not release either party from any liabilities or obligations set forth in this Contract that: (1) the Parties have expressly agreed shall survive any such termination or expiration; or (2) remain to be
performed or by their nature would be intended to be applicable following any such termination or expiration. Such surviving terms include, but are not limited to, Sections 2.13, 4.01, 4.02, 4.05, 4.06, 8.02, 8.06, 9.04, 9.05, 9.06, 9.07, 9.09,
9.14, 9.15, 9.16, 9.17, 9.18, and Attachment D. 
 Section 9.10 Binding Effect and Assignment or Modification. This Contract and
all terms, provisions and obligations set forth herein shall be binding upon and shall inure to the benefit of the parties and their successors and permitted assigns, including all other state agencies and any other agencies, departments, divisions,
governmental entities, public corporations or other entities which shall be successors to either of the parties or which shall succeed to or become obligated to perform or become bound by any of the covenants, agreements or obligations hereunder of
either of the parties hereto. Upon a permitted assignment of this Contract by RECIPIENT, all references to “the RECIPIENT” herein shall be deemed to refer to such permitted assignee. 

Section 9.11 No Waiver of Contract Terms. Neither the failure by the RECIPIENT or the INSTITUTE, in any one or more instances, to
insist upon the complete and total observance or performance of any term or provision hereof, nor the failure of the RECIPIENT or the INSTITUTE to exercise any right, privilege or remedy conferred hereunder or afforded by law, shall be construed as
waiving any breach of such term or provision or the right to exercise such right, privilege or remedy thereafter. In addition, no delay on the part of either the RECIPIENT or the INSTITUTE, in exercising any right or remedy hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any right or remedy preclude other or further exercise thereof or the exercise of any other right or remedy. 

Section 9.12 No Waiver of Sovereign Immunity. No provision of this Contract is in any way intended to constitute a
waiver by the INSTITUTE, the RECIPIENT (if applicable), or the State of Texas of any immunities from suit or from liability that the INSTITUTE, the RECIPIENT, or the State of Texas may have by operation of law. 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
  
 17 

 Section 9.13 Force Majeure. Neither the INSTITUTE nor the RECIPIENT will be liable for
any failure or delay in performing its obligations under the Contract if such failure or delay is due to any cause beyond the reasonable control of such party, including, but not limited to, unusually severe weather, strikes, natural disasters,
fire, civil disturbance, epidemic, war, court order or acts of God. The existence of such causes of delay or failure will extend the period of performance in the exercise of reasonable diligence until after the causes of delay or failure have been
removed. Each party must inform the other in accordance with Section 9.21 “Notices” within five (5) business days, or as soon as it is practical, of the existence of a force majeure event or otherwise waive this right as a
defense. 
 Section 9.14 Disclaimer of Damages. IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, SPECIAL, PUNITIVE,
EXEMPLARY, INCIDENTAL OR CONSEQUENTIAL DAMAGES. THIS LIMITATION WILL APPLY REGARDLESS OF WHETHER OR NOT THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 

Section 9.15 Indemnification and Hold Harmless. Except as provided herein, the RECIPIENT agrees to fully
indemnify and hold the INSTITUTE and the State of Texas harmless from and against any and all claims, demands, costs, expenses, liabilities, causes of action and damages of every kind and character (including reasonable attorneys fees) which may be
asserted by any third party in any way related or incident to, arising out of, or in connection with (1) the RECIPIENT’s negligent, intentional or wrongful performance or failure to perform under this Contract, (2) the
RECIPIENT’s receipt or use of Grant funds, or (3) any negligent, intentional or wrongful act or omission committed by the RECIPIENT as part of an Institute-Funded Activity or during the Project. In addition, the RECIPIENT agrees to fully
indemnify and hold the INSTITUTE and the State of Texas harmless from and against any and all costs and expenses of every kind and character (including reasonable attorneys fees, costs of court and expert fees) that are incurred by the INSTITUTE or
the State of Texas arising out of or related to a third party claim of the type specified in the preceding sentence. Notwithstanding the preceding, such indemnification shall not apply in the event of the sole or gross negligence of the INSTITUTE.
If the RECIPIENT is a State of Texas agency or institution of higher education, then this Section 9.15 is subject to the extent authorized by the Texas Constitution and the laws of the State of Texas. 

The RECIPIENT acknowledges and agrees that this indemnification shall apply to, but is not limited to, employment matters, taxes, personal injury, and
negligence. 
 It is understood and agreed that it is not the intent of the parties to expand or increase the liability of the State of Texas under this
Article. This provision is intended to prevent the RECIPIENT, the INSTITUTE and the State of Texas from attempting or appearing to assume liability it does not have the statutory or legal power to assume. 

Section 9.16 Alternative Dispute Resolution. If applicable, the dispute resolution process provided for in TEX.
GOVT. CODE, Ch. 2260 shall be used, as further described herein, to resolve any claim for breach of contract made against the INSTITUTE (excluding any uncured Event of Default). The submission, processing and resolution of a party’s claim are
governed by the published rules adopted by the Attorney General pursuant to TEX. GOVT. CODE, Ch. 2260, as currently effective, hereafter enacted or subsequently amended. 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
  
 18 

 Section 9.17 Applicable Law and Venue. This Contract shall be construed and all
disputes shall be considered in accordance with the laws of the State of Texas, without regard to its principles governing the conflict of laws. Provided that the RECIPIENT first complies with procedures set forth in Section 9.16
“Alternative Dispute Resolution,” exclusive venue and jurisdiction for the resolution of claims arising from or related to this Contract shall be in the federal and state courts in Travis County, Texas. 

Section 9.18 Attorneys’ Fees. In the event of any litigation, appeal or other legal action to enforce any
provision of the Contract, the RECIPIENT shall pay all expenses of such action, including attorneys’ fees and costs, if the INSTITUTE is the prevailing party. If the RECIPIENT is a State of Texas agency or institution of higher education, then
this Section 9.18 is subject to the extent authorized by the Texas Constitution and the laws of the State of Texas. 

Section 9.19 Counterparts. This Contract may be executed in any number of counterparts, each of which when so executed and delivered
shall be an original, but such counterparts shall together constitute one and the same instrument. 
 Section 9.20 Construction of
Terms. The headings used in this Contract are inserted only as a matter of convenience and for reference and shall not affect the construction or interpretation of this Contract. Where context so indicates, a word in the singular form shall
include the plural, a word in the masculine form the feminine, and vice-versa. The word “including” and similar constructions (such as “includes”, “included”, “for example”, “such as”, and
“e.g.”) shall mean “including, without limitation” throughout this Contract. The words “and” and “or” are not intended to convey exclusivity or nonexclusivity except where expressly indicated or where the
context so indicates in order to give effect to the intent of the parties. 
 Section 9.21 Notices. All notices,
requests, demands and other communications will be in writing and will be deemed given on the date received as demonstrated by (i) a courier’s receipt or registered or certified mail return receipt signed by the party to whom such notice
was sent, provided that such notice was sent to the address provided in the signature block of this Contract, or (ii) a fax confirmation page showing that such fax was successfully transmitted to the fax number provided in the signature block
of this Contract. Notices shall be sent to the parties at the addresses or fax numbers specified herein or as may be updated from time to time by the applicable party in a writing delivered to the other party pursuant to the terms of this Section.

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
  
 19 

 

 
 ATTACHMENT A 

Project Description Summary 
  

			
	 Key Gating

Milestone
	  	Use of Proceeds During Funding Period
		
	[***]	  	[***]
		
	[***]	  	[***]
		
	[***]	  	[***]

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 

 Project Goals and Timelines 

[***] 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 

					
		  		  	

		  	Application ID:	  	            CC121020
		  	Principal Investigator/Program Director :	  	Eric Poma

 ATTACHMENT B 

Detailed Budget Form 
  

													
							
	 [***]
	  	[***]	  	[***]	  	[***]	  	[***]	  	[***]	  	[***]
							
	 [***]
	  		  		  		  		  		  	[***]
							
	 [***]
	  		  		  		  		  		  	[***]
							
	 [***]
	  		  		  		  		  		  	[***]
							
	 [***]
	  		  		  		  		  		  	[***]
							
	 [***]
	  	[***]	  	[***]	  		  		  		  	[***]
							
	 [***]
	  	[***]	  	[***]	  	[***]	  		  		  	[***]
							
	 [***]
	  		  		  		  		  		  	[***]
							
	 [***]
	  	[***]	  	[***]	  	[***]	  	[***]	  	[***]	  	[***]
							
	 [***]
	  		  		  		  		  		  	[***]
							
	 [***]
	  	[***]	  	[***]	  	[***]	  	[***]	  	[***]	  	$10,600,000
						
	 [***]
	  	 [***]

[***]
 [***]

[***]
 [***]

[***]
 [***]
	  		  		  		  	
	 [***]
	  	  		  		  		  	
	 [***]
	  	  		  		  		  	
	 [***]
	  	  		  		  		  	
	 [***]
	  	  		  		  		  	
	 [***]
	  	  		  		  		  	
	 [***]
	  	  		  		  		  	

 For questions regarding this form, please contact Alfonso Royal at (512) 305-8488 or
aroyal@cprit.state.tx.us. 
 Rev 4/6/2011 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
  

 

 
 ATTACHMENT C 

ASSURANCES AND CERTIFICATIONS 
 This
Attachment C is hereby incorporated into and made a part of that certain CANCER RESEARCH GRANT CONTRACT (“Contract”) by and between the Cancer Prevention and Research Institute of Texas (“CPRIT”
or the “INSTITUTE”) and the RECIPIENT. A capitalized term used in this Attachment shall have the meaning given to term in the Contract or in the Attachments to the Contract, unless otherwise defined herein. In the event of a
conflict between the provisions of this Attachment and the provisions of the Contract, this Attachment shall control. Notwithstanding any other provision of this Attachment C, each reference to “compliance” in the foregoing certifications
and assurances shall mean “compliance in all material respects” and the RECIPENT shall be deemed to be in compliance with a law, regulation or policy identified in a particular certification or assurance specified in this Attachment C if
the RECIPIENT is in compliance in all materials respects with such law, regulation or policy, as applicable. 
 By signing this Contract, RECIPIENT
certifies compliance with the following assurances and certifications required by the INSTITUTE (listed below). RECIPIENT further acknowledges that its obligations pursuant to the following assurances and certifications are ongoing. 

Section C1.01 Demonstration of Matching Funds. Pursuant to TEX. HEALTH & SAFETY CODE § 102.255(d) and T.A.C. § 703.11, RECIPIENT has
an amount of funds equal to one-half of the amount of the Grant to be disbursed each fiscal year of the Contract term dedicated to the same area of cancer research that is the subject of the Grant as
demonstrated by the form incorporated herein to Attachment C. The RECIPIENT shall update the matching funds certification annually for each fiscal year that Grant funds are disbursed. The update must be on or before the anniversary of the Effective
Date. 
 Section C1.02 Payment of Taxes. RECIPIENT‘s payment of franchise taxes is current or, if the RECIPIENT is exempt from payment of
franchise taxes, that it is not subject to the State of Texas franchise tax. If franchise tax payments become delinquent during the Contract term, payments under this Contract may, upon delivery of written notice by the INSTITUTE to the RECIPIENT be
withheld until the RECIPIENT’s delinquent franchise tax is paid in full. The RECIPIENT also acknowledges that it is not otherwise exempt from state sales or occupancy tax as a result of this Contract. 

Section C1.03 Compliance with Confidentiality Guidelines Relating to Personal and Medical Information. RECIPIENT complies with all applicable
laws, rules and regulations relating to personal and medical information. Without in any way limiting the foregoing, RECIPIENT maintains and enforces, to the extent applicable to RECIPIENT, appropriate facility and information technology access
rules and procedures to protect against inappropriate disclosure of patient records and all other documents containing patient personal and medical information deemed confidential by law, which are maintained in connection with the Project and
Institute-Funded Activities, including provisions that comply with the requirements of the INSTITUTE’s rules, 25 T.A.C. Section 703.14. Upon request from the INSTITUTE, RECIPIENT will timely furnish a copy of the RECIPIENT’s facility
and information technology access rules and procedures, as well as any other applicable confidentiality guidelines. 
 If RECIPIENT, including any
Collaborators or Contractors, works directly with patients or otherwise has access to or maintains patient personal and medical information, RECIPIENT specifically addresses Health Insurance Portability and Accountability Act of 1996 regulations
concerning confidentiality of personal and medical information. Any disclosure of patient confidential information in any way related to the Project (including information that may be required by reports and inspections) must be in accordance with
all applicable laws. 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
 Page C1 

 Section C1.04 Conduct of Research or Service Provided. RECIPIENT understands that the
Project must be conducted with full consideration for the ethical and medical implications of the research performed or services delivered and comply with all applicable federal and state laws regarding the conduct of the research or service. 

Section C1.05 Regulatory Certificates, Licenses and Permits. All of the RECIPIENT’s personnel, facilities and equipment involved or to be involved
in the Project are certified, licensed, permitted, registered or approved by the appropriate regulating agency, where applicable. Any revocation, surrender, expiration, non-renewal, inactivation or suspension
of any such certification, license, permit, registration or approval shall constitute grounds for Contract termination if the same is not remedied (or alternative personnel, facilities and/or equipment identified, as applicable, for use in the
Project) within the applicable cure period specified in Section 8.04. 
 Section C1.06 Assurances and Certifications in Accordance
with the NIH Grants Policy Statement: 
  

	 	(a)	Civil Rights. Compliance with Title VI of the Civil Rights Act of 1964. 

  

	 	(b)	Handicapped Individuals. Compliance with Section 504 of the Rehabilitation Act of 1973 as amended. 

  

	 	(c)	Sex Discrimination. Compliance with Section 901 of Title IX of the Education Amendments of 1972 as amended. 

  

	 	(d)	Age Discrimination. Compliance with the Age Discrimination Act of 1975, as amended. 

  

	 	(e)	Patents, Licenses and Inventions. Compliance with the Standard Patent Rights clauses as specified in 37 CFR, Part 401 or 35 U.S.C. 203, if appropriate and applicable, in a manner that adequately protects the
INSTITUTE’S rights in the Project Results. 

  

	 	(f)	Human Subjects. Compliance with the requirements of federal policy concerning the safeguarding of the rights and welfare of human subjects who are involved in activities supported by federal funds. Before any
funding may be utilized for any portion of the Project involving human subjects, RECIPIENT must receive approval from RECIPIENT’s Institutional Review Board (IRB). Upon request, a copy of RECIPIENT’s IRB approval must be provided to the
INSTITUTE. 

  

	 	(g)	Human Biological/Anatomical Material. Compliance with the recommendations of the NIH Office of Human Subject Research Medical Administrative Series (MAS) #MO1-2 entitled
“Procurement and Use of Human Biological Materials for Research,” and any other applicable federal or state requirements pertaining to the procurement and use of human biological material for research. 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
 Page C2 

	 	(h)	Use of Animals. Compliance with applicable portions of the Animal Welfare Act (PL 89-544 as amended) and appropriate Public Health Service Policy on Humane Care and Use of
Laboratory Animals regulations. Before any funding may be utilized for any portion of the Project involving animal subjects, RECIPIENT must receive approval from RECIPIENT’s Institutional Animal Care and Use Committee (IACUC). Upon request, a
copy of RECIPIENT’s IACUC approval must be provided to the INSTITUTE. 

  

	 	(i)	Debarment and Suspension. RECIPIENT certifies that neither it nor the Principal Investigator/Project Director or any other Recipient Personnel or personnel of any Collaborator or Contractor assigned to work on
the Project are debarred, suspended, proposed for debarment, declared ineligible or otherwise excluded from participation in the Project by any federal or state department or agency. 

 

	 	(j)	Non-Delinquency on Federal or State Debt. RECIPIENT certifies that neither it, nor, to its knowledge, any person to be paid from funds under this Contract, is delinquent in
repaying any Federal debt as defined by OMB Circular A-129 or any debt to the State of Texas. 

  

	 	(k)	Eligibility to Receive Payments on State Contracts. RECIPIENT certifies that it and, to its knowledge, the Principal Investigator/Project Director are not ineligible to receive the Grant award under this Contract
pursuant to Tex. Fam. Code Ann. Section 231.006 and acknowledges that this Contract may be terminated and payment may be withheld if this certification is inaccurate. 

 

	 	(l)	Drug-Free Workplace. Compliance with the Drug-Free Workplace Act of 1988 (45 CFR 82). 

  

	 	(m)	Misconduct in Science. Compliance with 42 CFR Part 50, Subpart A, and Final Rule as published at 54 CFR 32446, August 8, 1989. 

 

	 	(n)	Objectivity of Research/Conflict of Interest. Compliance with the NIH requirement to maintain a written standard of conduct and comply with 42 CFR Part 50, Subpart F, Responsibility of Applicants for Promoting
Objectivity in Research. RECIPIENT must notify the INSTITUTE of any conflicting financial interests pertaining to the performance of the Project and assure that such conflict of interest has been appropriately managed, reduced or eliminated.

  

	 	(o)	Trafficking in Persons. Compliance with the NIH regulations on trafficking in persons as published at
http://grants.nih.gov/grants/guide/notice-files/NOT-OD-08-055.html. 

 

	 	(p)	Criminal Misconduct. RECIPIENT shall promptly report to the INSTITUTE issues involving potential civil or criminal fraud related in any way to the Project, the Institute-Funded Activity or this Contract, such as
false claims or misappropriation of federal or state funds. 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
 Page C3 

 

 
 ATTACHMENT C 

CPRIT Matching Requirement Certification Form 
  

					
	FOR:	  	Entity/Institution Name:	  	Molecular Templates, Inc. (Total CPRIT Awards shown represent 56.18% of the year 1 budget)
			
		  	Project Number(s):	  	CC121020

  

																																																													
	 	  	Award Year #1	 	  	Award Year #2	 	  	Award Year #3	 	  	Award Year #4	 	  	Award Year #5	 
	 For purposes of
the certification

use the following

research categories
to classify encumbered

funds that are
 dedicated to

cancer research:
	  	Total
CPRIT
Awards	 	 	Entity’s/
Institution’s
Dedicated
Funds	 	 	Actual
“Non
CPRIT”
Funds
Expended	 	  	Total
CPRIT
Awards	 	  	Entity’s/
Institution’s
Dedicated
Funds	 	  	Actual
“Non
CPRIT”
Funds
Expended	 	  	Total
CPRIT
Awards	 	  	Entity’s/
Institution’s
Dedicated
Funds	 	  	Actual
“Non
CPRIT”
Funds
Expended	 	  	Total
CPRIT
Awards	 	  	Entity’s/
Institution’s
Dedicated
Funds	 	  	Actual
“Non
CPRIT”
Funds
Expended	 	  	Total
CPRIT
Awards	 	  	Entity’s/
Institution’s
Dedicated
Funds	 	  	Actual
“Non
CPRIT”
Funds
Expended	 
	 (1) Cancer biology and genetics, including oncogenesis and collection and characterization of
tumors (genomics, proteomics, other “omics”);
	  				 				 				  				  				  				  				  				  				  				  				  				  				  				  			
	 (2) Cancer immunology, including vaccines;
	  				 				 				  				  				  				  				  				  				  				  				  				  				  				  			
	 (3) Cancer imaging and diagnostics;
	  				 				 				  				  				  				  				  				  				  				  				  				  				  				  			
	 (4) Cancer epidemiology and outcomes research; and
	  				 				 				  				  				  				  				  				  				  				  				  				  				  				  			
	 (5) Cancer treatment, including drug discovery and development and clinical trials.
	  	 	[	***] 	 	 	[	***] 	 				  				  				  				  				  				  				  				  				  				  				  				  			
	 Total
	  	 	[	***] 	 	 	[	***] 	 	$	0.00	 	  	$	0.00	 	  	$	0.00	 	  	$	0.00	 	  	$	0.00	 	  	$	0.00	 	  	$	0.00	 	  	$	0.00	 	  	$	0.00	 	  	$	0.00	 	  	$	0.00	 	  	$	0.00	 	  	$	0.00	 
	 Total non-state funds leveraged as a match
for award.
	  
	 				 				  				  				  				  				  	$		 	  				  				  	$		 	  				  				  	$		 	  			

 The information above is the entity/Institution’s demonstration of encumbered available funds
pursuant to its certification in Attachment C. 
 This certification is on an annual basis and can be made on an entity/institutional level or
project by project. The entity/institutional level requires the match to reflect all research grant awards received by the entity/institution, including any FY2010 CPRIT research awards. 

To clarify, encumbered funds may include but are not necessarily limited to: (1) Federal funds (including American Recovery and Reinvestment Act of 2009
funds, and the fair market value of drug development support provided to the recipient by the National Cancer Institute (NCI) or other similar programs); (2) State of Texas funds (Non-CPRIT); (3) Other
States’ funds; (4) Non-governmental funds (including private funds, foundation grants, gifts and donations); and (5) Unrecovered indirect costs not to exceed 10 percent of the grant award
amount, subject to the following conditions: (A) These costs are not otherwise charged against the grant as the five percent indirect funds (B) The Institution or recipient must have a documented federal indirect cost rate or an indirect
cost rate certified by an independent accounting firm; and (C) The allowance for unrecovered indirect costs must be specifically approved by the Executive Director. 

The following items do not qualify as encumbered funds: 

(1) In-kind costs; (2) Volunteer services furnished to the grant recipient; (3) Noncash
contributions; (4) Income earned not available at the time of award; (5) Pre-existing real estate including building, facilities and land; (6) Deferred giving such as a charitable remainder
annuity trust, a charitable remainder unitrust, or a pooled income fund; or (7) Other items as may be determined by the Oversight Committee. 

For questions regarding this form, please contact Alfonso Royal at (512) 305-8488 or by email at
aroyal@cprit.state.tx.us 
 Rev 5/17/2011 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 

 

 
 ATTACHMENT D 

INTELLECTUAL PROPERTY AND REVENUE SHARING 

This Attachment D is hereby incorporated into and made a part of that certain CANCER RESEARCH GRANT CONTRACT (“Contract”) by
and between the Cancer Prevention and Research Institute of Texas (“CPRIT” or the “INSTITUTE”) and the RECIPIENT. A capitalized term used in this Attachment shall have the meaning given the term in the
Contract or in the Attachments to the Contract, unless otherwise defined herein. In the event of a conflict between the provisions of this Attachment and the provisions of the Contract, this Attachment shall control. 

PART 1 
 OWNERSHIP AND
INTELLECTUAL PROPERTY PROTECTION 
 Section D1.01 Ownership of Project Results. RECIPIENT and its Collaborators shall retain ownership of the
Institute-Funded Technology and the Institute-Funded IPR, subject to the terms of the Contract. 
 Section D1.02 Transfer or Assignment of Rights to a
Third Party. RECIPIENT shall notify the INSTITUTE of any proposed transfer or assignment of rights in any Institute-Funded IPR to a third party. RECIPIENT shall ensure that, in any assignment or transfer of Institute-Funded IPR, the transferee
or assignee agrees in writing to (i) recognize that the Institute-Funded IPR is transferred or assigned subject to the licenses, interests and other rights in such Institute-Funded IPR provided to the INSTITUTE in the Contract and any
applicable law or regulation, and (ii) take all actions commercially reasonable to protect all such licenses, interests and other rights. 
 Section
D1.03 Protection of Institute-Funded IPR. Subject to Section D5.01RECIPIENT shall use commercially reasonable efforts to appropriately protect the Institute-Funded IPR, including without limitation, diligently seeking registration of patents and
copyrights covering the Institute-Funded Technology, as appropriate. If RECIPIENT elects to abandon Institute-Funded IPR (including any partial abandonment of Institute-Funded IPR in specific territories), RECIPIENT shall provide the INSTITUTE with
prior written notice of such election, with sufficient time (but no less than 30 days) for the INSTITUTE to exercise its rights in Section D5.01 in relation to the subject Institute-Funded IPR. 

Section D1.04 Cost of Protection. The INSTITUTE shall not be responsible for, and no Grant funds may be used to pay for, any costs or expenses
associated with RECIPIENT’s efforts to protect the Institute- Funded IPR. 
 Section D1.05 Inventions. 

 

	 	(a)	Disclosures. RECIPIENT shall notify INSTITUTE of each Institute-Funded Invention by delivering a copy of the invention disclosure form (or similar document) within thirty (30) days after RECIPIENT receives
the form from its Inventor. In the event that the invention disclosure form is revised or updated, RECIPIENT shall provide the INSTITUTE with the revised/updated invention disclosure form as part of the RECIPIENT’s annual written report.

  

	 	(b)	Patent Prosecution and Maintenance. For all Institute-Funded Inventions for which patent protection is pursued, RECIPIENT shall provide an annual written report to the INSTITUTE regarding the status of pending
applications and issued patents. 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
 Page D1 

 Section D1.06 Required Agreements with RECIPIENT Personnel and Contractors. The RECIPIENT shall have,
maintain and enforce written policies or agreements applicable to RECIPIENT Personnel and Contractors with terms sufficient to enable RECIPIENT to fully comply with all terms and conditions of this Contract. RECIPIENT shall promptly report to
INSTITUTE any material breach of such policies or agreements relating to or affecting any of the material provisions of this Contract. 
 Section D1.07
Agreements with Collaborators. All agreements between RECIPIENT and a Collaborator relating to or affecting joint ownership of any Project Result shall recognize the licenses, interests and other rights provided to the INSTITUTE in the Contract.
RECIPIENT shall provide to the INSTITUTE a copy of each such agreement affecting joint ownership of any Project Result. 
 PART 2 

NON-COMMERCIAL LICENSES 

Section D2.01 RECIPIENT License. In granting an Exclusive License to any Project Result, RECIPIENT shall retain the right to Exploit all Project
Results (including material embodiments thereof) for education, research and other non-commercial purposes, and the right to grant the licenses pursuant to Section D2.02 below. 

Section D2.02 INSTITUTE License. RECIPIENT agrees to grant, and does hereby grant, to the INSTITUTE a
non-exclusive, irrevocable, royalty-free, perpetual, worldwide license under the Institute-Funded IPR to Exploit all Project Results (including material embodiments thereof) for or on behalf of the INSTITUTE
and other governmental entities and agencies of the State of Texas for education, research and other non-commercial purposes only. RECIPIENT shall make the Institute-Funded Technology available by reasonable
means to the INSTITUTE in order for the INSTITUTE to exercise its rights under this Section. The INSTITUTE may not transfer or sublicense the licenses granted under this Section, except to the State of Texas or other Texas agency. Without the prior
written consent of RECIPIENT, INSTITUTE shall not publish or permit to be published any information which RECIPIENT reasonably deems to be RECIPIENT’s Confidential Information. When publishing, INSTITUTE shall appropriately acknowledge
RECIPIENT’s financial support of the Institute-Funded IPR. Furthermore, Institute agrees that any sublicense granted under this Section to other governmental entities or agencies of the State of Texas shall include a similar obligation with
respect to publication review. 
 Section D2.03 No Implied Licenses. No implied licenses are granted under this Agreement including any license to
any Intellectual Property Rights owned or controlled by RECIPIENT outside of the Institute- Funded IPR. Nothing in this Agreement shall be construed to impose an obligation on RECIPIENT to license or otherwise make available any of its Intellectual
Property Rights or other resources owned or controlled by it except as expressly provided in this Agreement with respect any Institute Funded IPR. 

PART 3  

COMMERCIALIZATION OF PROJECT RESULTS 

Section D3.01 Commercialization Strategy. RECIPIENT shall be under a continuing obligation throughout the term of this Contract to pursue and implement
the commercial development plan submitted with the Application and to provide an annual written report to the INSTITUTE regarding the RECIPIENT’s efforts to commercialize or otherwise bring to practical application Project Results. The
INSTITUTE may, at its option and at any time, provide RECIPIENT with comments regarding the RECIPIENT’s commercial development plan and strategy, in which case RECIPIENT shall consider in good faith the INSTITUTE’s input into such
commercial development plan and strategy. 
 Section D3.02 Commercialization Efforts. The RECIPIENT shall, whether through its own efforts or the
efforts of a licensee under a License Agreement allowed by the terms of this Attachment, use diligent and commercially reasonable efforts to commercialize or otherwise bring to practical application the Project Results in accordance with the
commercial development plan described in Section D3.01. 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
 Page D2 

 Section D3.03 Licensing of Project Results. Each License Agreement entered into by the RECIPIENT shall
include an acknowledgement by the licensee that (i) such License Agreement is subject to the INSTITUTE’s licenses, interests and other rights under this Contract, and (ii) to the extent that there is a conflict between the terms of
the License Agreement and the terms of this Contract, the terms of this Contract shall prevail. In addition, all License Agreements shall include terms obligating the licensee to report to the RECIPIENT such information as is required for the
RECIPIENT to fully comply with the terms of the Contract, including without limitation the reporting obligations set forth in Attachment E, and to allow RECIPIENT to make the grants specified in Sections D2.02. The RECIPIENT shall monitor the
performance of its licensees and such licensees’ compliance with the terms of the License Agreements and shall take commercially reasonable actions to enforce the terms of all License Agreements. The RECIPIENT shall promptly report to the
INSTITUTE any material breach of a License Agreement relating to or affecting any of the material provisions of this Contract. 
 Section D3.04 Cost of
Licensing Activities. The INSTITUTE shall not be responsible for, and no Grant funds may be used to pay for, any costs or expenses associated with the RECIPIENT’s Licensing Activities. 

Section D3.05 Survival. The licenses, rights and obligations set forth in this Attachment D shall survive any termination of this Contract, including
any termination for convenience by RECIPIENT, except in the event that RECIPIENT pays the Buyout Amount as set forth in Part 4, in which case the licenses, rights and obligations set forth in this Attachment D shall automatically terminate. 

Section D3.06 RECIPIENT Opt-Out. RECIPIENT may, after diligently attempting to comply with the terms of Section
D3.02, notify the INSTITUTE in writing that it is electing to cease its efforts, either directly or through a licensee, to commercialize or otherwise bring to practical application any particular Project Results. Such written notice must identify
the applicable Project Results, provide a reasonable explanation of the reasons for RECIPIENT’s election, including any feasibility studies, trial results, regulatory impediments, financial analyses or similar assessments, and must identify any
deadlines in relation to the applicable Project Results that then exist. Upon receipt of such notice, the INSTITUTE shall have the option, but not the obligation, to exercise its rights in Section 5.01 in relation to the subject Project Results
at the INSTITUTE’s expense. The INSTITUTE shall notify the RECIPIENT in writing within thirty (30) days of its receipt of the RECIPIENT’s notice if the INSTITUTE elects to exercise its rights in relation to the subject Project
Results. In the event that the INSTITUTE exercises its option under this section, the RECIPIENT shall fully cooperate with the INSTITUTE’s efforts, in commercializing or otherwise bringing to practical application the applicable Project
Results. 
 PART 4  

REVENUE SHARING 
 Section D4.01
Revenue Sharing; Buyout. 
  

	 	(a)	Royalties. RECIPIENT shall pay to INSTITUTE as follows: 

  

	 	(i)	A royalty at the rate of five percent (5%) of Net Sales of Product. The royalty rate shall remain unchanged until cumulative royalties, including any royalties for combination products as described herein under
subsection (ii) and Follow-On Products as described herein under subsection (iii), and sublicense, acquisition and other related fees received by INSTITUTE total 115% of the Net Grant Award Proceeds (such
amount hereinafter referred to as the “Preferenced Return”). Once the Preferenced Return is achieved, the royalty rate shall decline to three percent (3%) of Net Sales of Product (in jurisdictions with a Valid Patent Claim) and one and one
half percent (1.5%) of Net Sales in jurisdictions without a Valid Patent Claim. 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
 Page D3 

	 	(ii)	In the event that a Product is sold for a single price in combination with another therapeutically active ingredient(s), or other product(s) or service(s) for which no royalty would be due hereunder if sold separately,
Net Sales from such combination sales for purposes of calculating the royalty amounts payable by RECIPIENT to the INSTITUTE under this Section shall be calculated by multiplying the Net Sales of the combination product by the fraction A/(A + B),
where A is the average gross selling price during the previous calendar quarter of such Product sold separately and B is the gross selling price during the previous calendar quarter of the other therapeutically active ingredient(s), or other
product(s) or service(s). In the event that separate sales of such Product or such additional therapeutically active ingredient(s), or other product(s) or service(s) were not made during the previous calendar quarter, then the Net Sales shall be
reasonably allocated between such Product and such active ingredient(s), or other product(s) or service(s) based upon their relative values. 

  

	 	(iii)	RECIPIENT shall pay to the INSTITUTE a royalty at the rate of three percent (3%) on Net Sales of Follow-On Products. The royalty rate for
Follow-On Products specified herein does not change once the Preferenced Return is attained. 

  

	 	(b)	Sub-licensing, Acquisition and Other Related Fees. RECIPIENT shall pay to INSTITUTE [***] of sublicense fees and other fees related to any
Sub-license Income [***]. 

  

	 	(c)	Buyout Trigger Event. Notwithstanding anything to the contrary in this Section D4.01, upon RECIPIENT’s written notice of the Buyout Notice Trigger Event to INSTITUTE at any time after the Termination Date
(the “Buyout Notice”), RECIPIENT may, in lieu of paying any additional royalties to INSTITUTE pursuant to Section D4.01(a) and (b), pay to INSTITUTE the dollar amount set forth in the following table opposite the applicable
period in which such Buyout Notice is delivered (the applicable dollar amount being referred to as the “Buyout Amount”): 

  

			
	Period in Which Buyout Notice is Delivered	  	Buyout Amount
		
	On or prior to the fifth anniversary of the Contract Effective Date	  	125% of Net Grant Award Proceeds less the aggregate amount of all royalties paid to INSTITUTE pursuant to Section D4.01(a) as of the date of the Buyout Notice.
		
	After the fifth anniversary of the Contract Effective Date but on or prior to the tenth anniversary of the Termination Date	  	150% of Net Grant Award Proceeds less the aggregate amount of all royalties paid to INSTITUTE pursuant to Section D4.01(a) as of the date of the Buyout Notice.
		
	After the tenth anniversary of the Contract Effective Date	  	200% of Net Grant Award Proceeds less the aggregate amount of all royalties paid to INSTITUTE pursuant to Section D4.01(a) as of the date of the Buyout Notice.

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
 Page D4 

 After satisfaction of its obligations under this Section D4.01(b), RECIPIENT shall have no
further obligation under this Section D4.01. 
  

	 	(d)	“Net Grant Award Proceeds” means the aggregate amount of Grant award proceeds advanced to RECIPIENT, net of any Grant award proceeds repaid by RECIPIENT to INSTITUTE, including, without
limitation, pursuant to Section 4.07 of the Contract. 

 Section D4.02 Adjustments. If any funding sources other than the
INSTITUTE (but excluding RECIPIENT) contribute funds, directly or indirectly, to the research yielding any particular Project Result(s) and such funding sources are legally or contractually entitled to receive royalty based compensation with respect
to such Project Result(s) (hereinafter a “Participating Funding Source”), then the royalty percentages in Section D4.01(a) in effect at any time shall be reduced in proportion to the aggregate amount of funds provided by the
INSTITUTE under this Contract in comparison to the aggregate amount of funds provided by all Participating Funding Sources that contributed to the Project Result and by the INSTITUTE. For the sake of clarity, Participating Funding Sources do not
include equity or quasi-equity financing funding sources or debt arrangements. In calculating such reduced rate, funds from Participating Funding Sources used for Indirect Costs or for any costs of product development, manufacturing, marketing,
sales, regulatory approval or similar commercialization activities shall not be included. In addition, for clarity, the rate shall not be reduced as a result of any funds received from funding sources where such funding sources are not legally or
contractually entitled to receive a share of the Revenue with respect to such Project Result(s). 
 Section D4.03 Statements and Timing of Payments.
All payments owed pursuant to this Part 4 shall be made to the Cancer Prevention and Research Institute of Texas, and are payable on or before the thirtieth day following the end of the calendar quarter in which RECIPIENT receives the Revenue
or, in the case of Section D4.04, receives the monetary recovery. For each payment specified in Section D4.01, the payment shall be accompanied by a statement specifying: (i) the Grant to which the payment relates, (ii) the identities of
and amounts funded by all Participating Funding Sources, (iii) the License Agreements to which the payment relates, (iv) the quantity of all Sales of each Commercial Product and Commercial Service since the last payment, if Sales are
applicable to the current payment, (v) the gross consideration from all such License Agreements and Sales, if Sales are applicable to the current payment, and (vi) the amount of the payment to the Cancer Prevention and Research Institute
of Texas. 
 Section D4.04 Recoveries in Enforcement Actions. In the event that RECIPIENT receives any monetary recovery from its enforcement of
Institute-Funded IPR against infringement by a third party, then it shall pay to the State of Texas a share of such monetary recovery, including any punitive damages, less the documented fees and expenses that are directly associated with such
enforcement and are paid by RECIPIENT to third parties, at the same rate and in the same manner as it shares Revenue pursuant to Section D4.01 (including any adjustments allowed by Section D4.02). For clarity, if the enforcement action is resolved
by way of the execution of a License Agreement with the infringing third party, such License Agreement is consistent with the Section D4.01, then this Section D4.04 is not intended to apply to such License Agreement or the consideration specified
therein. 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
 Page D5 

 Section D4.05 Revenue-Related Records. In addition to satisfying the requirements of Article IV of the
Contract and Section E1.03 of Attachment E, the RECIPIENT shall keep complete and accurate Revenue- related Records until the fourth anniversary of the date of the payment of the last royalty payment owed hereunder, in sufficient detail to permit
the INSTITUTE to confirm the accuracy of the statements delivered to the INSTITUTE under Section D4.03 and the calculation of the royalties owed hereunder. 

Section D4.06 Audit of Revenue-Related Records. Upon at least 15 days’ advance written notice, the RECIPIENT shall permit the INSTITUTE or its
representatives or agents, at the INSTITUTE’s expense, to examine the Revenue-related Records of the RECIPIENT pursuant to Section D4.05. Any such examination shall be conducted during regular business hours of RECIPIENT for the purpose of and
to the extent reasonably necessary to verify the RECIPIENT’s compliance with this Part 4. The rights of the INSTITUTE under this Section D4.06 shall terminate on the fourth anniversary of the date of the payment of the last royalty payment owed
hereunder. In the event that any such examination reveals an underpayment to the INSTITUTE of greater than five percent (5%) of the amounts previously paid by the RECIPIENT to the INSTITUTE, then the RECIPIENT shall reimburse the INSTITUTE for the
cost of such examination. 
 PART 5 

OPT-OUT AND DEFAULT 

Section D5.01 RECIPIENT Opt-Out. Upon receipt of RECIPIENT’s notice of its election (i) under Section
D1.03 to abandon any Institute-Funded IPR or (ii) under Section 3.06 to cease its efforts to commercialize or otherwise bring to practical application any particular Project Results, the INSTITUTE shall have the option, but not the
obligation, to pursue protection of the applicable Institute-Funded IPR, including directing the filing, prosecution and maintenance of patents covering the applicable Institute-Funded Inventions and/or to commercialize or otherwise bring to
practical application the applicable Project Results, at its own cost, either directly or through one or more licensees. If the INSTITUTE elects to exercise such option, it shall notify RECIPIENT in writing within thirty (30) days of its
receipt of RECIPIENT’s notice and RECIPIENT shall thereafter comply with the terms of Section D5.03. 
 Section D5.02 RECIPIENT Default. In the
event that the INSTITUTE notifies RECIPIENT in writing of RECIPIENT’s failure to materially comply with its obligations under Sections D1.03 or D3.02 with respect to any particular Project Results, and RECIPIENT fails to cure such failure
within thirty (30) days of such notice, then the INSTITUTE shall have the option, but not the obligation, to direct the filing, prosecution and maintenance of patents covering the applicable Institute-Funded Inventions and/or to commercialize
or otherwise bring to practical application the applicable Project Results, at its own cost, either directly or through one or more licensees. If the INSTITUTE elects to exercise such option, it shall notify the RECIPIENT in writing of such election
and RECIPIENT shall thereafter comply with the terms of Section D5.03. 
 Section D5.03 RECIPIENT Cooperation upon
Opt-Out or Default. In the event that the INSTITUTE exercises its option under Section D5.01 or D5.02, the RECIPIENT shall: 
  

	 	(a)	transfer all of its right, title and interest in and to the applicable Project Results to the INSTITUTE or the INSTITUTE’s designee, to the maximum extent allowed by law, including where relevant and necessary to
facilitate the foregoing transfer, requesting and diligently attempting to obtain any approvals required by law or otherwise in relation to such transfer; 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
 Page D6 

	 	(b)	to the extent that RECIPIENT is unable to transfer all of its right, title and interest in and to the applicable Project Results to the INSTITUTE as specified in item (1), and subject to any existing third party rights,
RECIPIENT hereby grants to the INSTITUTE an exclusive, royalty- free, perpetual, fully transferable license under the applicable Institute-Funded IPR to Exploit the Project Results for the development, manufacture and sale of Commercial Products and
Commercial Services and for all other purposes reasonably related thereto, provided that the INSTITUTE may exercise the foregoing license rights only after exercising its option under Section D5.01 or D5.02; 

 

	 	(c)	fully cooperate with the INSTITUTE’s efforts, and at the INSTITUTE’s cost, in protecting applicable Institute-Funded Inventions and in commercializing or otherwise bringing to practical application the
applicable Project Results, including making relevant RECIPIENT Personnel (to the extent still then-employed by RECIPIENT), Contractors, Collaborators, records, papers, information, samples, specimens and other materials related to the applicable
Institute-Funded Technology reasonably available for such purposes and executing any documents and taking any further action necessary to fully effectuate the intent of this Section; and 

 

	 	(d)	not take any action that would materially impede the INSTITUTE’s ability to protect the applicable Institute-Funded Inventions. 

If the INSTITUTE exercises its option under Sections D5.01 or D5.02, RECIPIENT shall have no further claim or interest in or to the applicable Project Results
(except as set forth in Part 2 of this Attachment, if applicable) and shall not be entitled to any share of Revenue or any other compensation with respect to such Project Results, except to the minimum extent required by law, if any. To the extent
that the INSTITUTE has exercised its option under Section D5.01 or D5.02 and RECIPIENT is unable to transfer all of its right, title and interest in and to the applicable Project Results to the INSTITUTE as specified in item (1), then the
INSTITUTE’s license set forth in item (2) includes the right, but not the obligation, for the INSTITUTE at its cost to: (i) direct the filing, prosecution and maintenance of patents covering the applicable Project Results, and
(ii) enforce all applicable Institute-Funded IPR relevant to the Project Results against any infringement by a third party. Subject to the statutory duties of the Texas Attorney General, if any, RECIPIENT shall cooperate fully with the
INSTITUTE in any action brought by the INSTITUTE to enforce the Intellectual Property Rights in the applicable Project Results, at the INSTITUTE’s cost, including without limitation, joining the enforcement action in name as a party plaintiff
after all required approvals are obtained; provided that the INSTITUTE or its designee shall have full control over such enforcement action and shall receive and retain all monetary recoveries resulting from such enforcement actions, including any
punitive damages. 
 PART 6  

DEFINITIONS 
 The following terms
shall have the following meaning throughout this Attachment. Other terms may be defined elsewhere in this Attachment. 
 (1) Related Party
— with respect to RECIPIENT, any individual or entity that (a) directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control of the RECIPIENT and (b) possesses the
right to use or sub-license Product or Institute-Funded IPR in order to sell Products. For purposes of this definition only, the terms “controls,” “controlled,” and “control”
mean, with respect to a controlled entity, (i) the direct or indirect ability or power to direct or cause the direction of the management and policies of such entity or otherwise direct the affairs of such entity,

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
 Page D7 

 
whether through ownership of equity, voting securities, or beneficial interest, by contract, or otherwise, or (ii) the ownership, directly or indirectly, of at least 50% of the voting
securities (or other comparable ownership interest for an entity other than a corporation) of such entity. 
 (2) Authorized Seller –
RECIPIENT, its Collaborators, or their licensees or any other party authorized by RECIPIENT, its Collaborators or their licensees to make a Sale on their behalf. 

(3) Buyout Trigger Event – either (a) delivery by RECIPIENT of written notice to INSTITUTE that RECIPIENT desires to buyout the
obligations under the Contract pursuant to Section D.401(c) or (b) (i) the acquisition, by an independent third party (“the Party”), of substantially all of the assets of RECIPIENT or (ii) the license of all or substantially all
of the Institute-Funded IPR by the Party. 
 (4) Commercial Product – anything that incorporates, is based on, utilizes or is developed
from Project Results and is created by human or mechanical effort or by a natural process and that is capable of being sold, licensed, transferred or conveyed to another party or is capable of otherwise being Exploited or disposed of, whether in
exchange for consideration or not, including without limitation any drug, chemical or biological compound, gene, nucleic acid or nucleic acid sequence, gene therapy, plant, machine, mechanical device, hardware, tool or computer program. 

(5) Commercial Service – any service performed that incorporates, is based on, utilizes or is developed from Project Results. For clarity,
Commercial Service does not include research and development performed by RECIPIENT or its Collaborators. 
 (6) Exclusive License – a
License Agreement under which the specific rights granted to the licensee with respect to the Project Results, including without limitation scope of use and territorial rights, are granted on an exclusive basis. 

(7) Exploit – make, have made, use, sell, offer to sell, import, export or otherwise dispose of, practice, copy, distribute, create
derivative works of, publicly perform or publicly display. 
 (8) Follow-on Products – any other
Engineered Toxin Body (ETB) products that contain a SLT1A subunit of the Shiga-like toxin in combination with a targeted binding domain that binds to, and is directed against, CD20. 

(9) Institute-Funded IPR – any and all Intellectual Property Rights in and to Institute-Funded Technology. In no event shall
Institute-Funded IPR include any intellectual property rights and/or technology in existence and owned/controlled by the RECIPIENT prior to the receipt of funds from the INSTITUTE, the listing of such IPR and/or technology in existence and
owned/controlled by the RECIPIENT prior to the receipt of funds from the INSTITUTE is attached herein. 
 (10) Institute-Funded Invention
– an Invention conceived or first reduced to practice by RECIPIENT, RECIPIENT Personnel and/or Collaborator(s) in the performance of Institute-Funded Activity. 

(11) Institute-Funded Technology – any and all of the following resulting or arising from Institute- Funded Activity during the Contract
term: (a) proprietary and confidential information, including but not limited to data, trade secrets and know-how; (b) databases, compilations and collections of data; (c) tools, methods and
processes; and (d) works of authorship, excluding all scholarly works, but including, without limitation, computer programs, source code and executable code, whether embodied in software, firmware or otherwise, documentation, files, records,
data and mask works; and all instantiations of the foregoing in any form and embodied in any form, including but not limited to therapeutics, drugs, drug delivery systems, drug formulations, devices, diagnostics, biomarkers, reagents and research
tools. Institute-Funded Technology includes Institute-Funded Inventions. In no event shall Institute-Funded Technology include items that were conceived of, in existence, or owned/controlled by 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
 Page D8 

 RECIPIENT prior to receipt of funds from the INSTITUTE (a) proprietary and confidential information,
including but not limited to data, trade secrets and know-how; (b) databases, compilations and collections of data; (c) tools, methods and processes; and (d) works of authorship, excluding all
scholarly works, but including, without limitation, computer programs, source code and executable code, whether embodied in software, firmware or otherwise, documentation, files, records, data and mask works; and all instantiations of the foregoing
in any form and embodied in any form, including but not limited to therapeutics, drugs, drug delivery systems, drug formulations, devices, diagnostics, biomarkers, reagents and research tools. 

(12) Intellectual Property Rights – any and all of the following and all rights in, arising out of, or associated therewith: (a) all
United States and foreign patents and utility models and applications therefor, and all reissues, divisions, renewals, extensions, provisionals, and continuations and continuations-in part thereof, and
equivalent or similar rights anywhere in the world in inventions and discoveries; (b) all trade secrets and rights in know-how and proprietary information; (c) all copyrights, copyright registrations
and applications therefor, and all other rights corresponding thereto throughout the world; (d) all mask works, mask work registrations and applications therefor, and any equivalent or similar rights in semiconductor masks, layouts,
architectures or topology; and (e) any similar, corresponding or equivalent rights to any of the foregoing anywhere in the world. 
 (13)
Invention – a method, device, process or discovery that is conceived and/or reduced to practice, whether patentable or not. 
 (14)
License Agreement – an agreement by which an owner of a Project Result grants any right to Exploit such Project Result to another party in exchange for consideration. 

(15) Licensing Activities – the efforts of RECIPIENT or its Collaborator to negotiate, execute or enforce a License Agreement. 

(16) Necessary Additional IPR – any unencumbered Intellectual Property Rights (a) owned by RECIPIENT, and (b) identified by the
Institute and agreed to in writing by RECIPIENT, that are not Project Results but are necessary to Exploit the Project Results for the specific purposes set forth in the applicable Section of this Attachment D. 

(17) Net Sales – the gross amount invoiced for such Product by RECIPIENT, its Related Parties, and
sub- licensees to Third Parties, less deductions for: (i) trade, quantity and/or cash discounts, allowances and rebates (including, without limitation, promotional or similar allowances) actually allowed
or given; (ii) freight, postage, shipping, insurance and transportation expenses and similar charges (in each instance, if separately identified in such invoice); (iii) credits or refunds actually allowed for rejections, defects or recalls of
such Product, outdated or returned Product, or because of rebates or retroactive price reductions; and (iv) sales, value-added, excise taxes, tariffs and duties, and other taxes directly related to the sale, to the extent that such items are
included in the gross invoice price (but not including taxes assessed against the income derived from such sale). 
 (18) Non-Exclusive License – a License Agreement under which the rights granted to the licensee with respect to the Project Results are granted on a non-exclusive
basis. 
 (19) Product – Product is a pharmaceutical product containing MT-3724 or variant
thereof that binds to, and is directed against CD20 and/or a pharmaceutical product containing an Engineered Toxin Body (ETB) the development of which was directly funded by CPRIT grant identification number CC121020. 

(20) Project Results – any and all Institute-Funded Technology and Institute-Funded IPR. 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
 Page D9 

 (21) Revenue – the gross consideration, whether cash or
non-cash (e.g., securities, direct equity interest, indirect equity interest, etc.), received from Sales and License Agreements related to Project Results (including without limitation, any milestone fees,
license fees, sublicense fees, assignment fees, product royalties and similar fees and royalties), net of (a) trade or quantity discounts or rebates, credits, allowances or refunds given for rejected or returned Commercial Products or
Commercial Services, (b) any sales, value-added or other tax or governmental charge levied on the sale, transportation or delivery of a Commercial Product or Commercial Service (but excluding any income tax owed by the RECIPIENT), and
(c) any separately stated charges for freight, postage, shipping and insurance. 
 (22) Sale – means any sale, lease, transfer,
conveyance or other exploitation or disposition of a Commercial Product or Commercial Service for which consideration is received by an Authorized Seller. 

(23) Sub-license Income - means payments received by RECIPIENT or its Related Parties from sublicensees
who are not a Related Party in connection with sublicenses granted hereunder to sell Products excluding (a) payments made by a sublicensee to support or fund research and development activities to be undertaken by RECIPIENT or its Related
Parties, (b) payments made in consideration of the issuance of equity or debt securities of RECIPIENT or its Related Parties to the extent that the price paid for such equity or debt does not exceed the then fair market value thereof and
sublicensee to support or fund research and development activities to be undertaken by RECIPIENT or its Related Parties, and (c) royalties paid to RECIPIENT or its Related Parties by such sublicensee on net sales (or, in the case of a
profit-sharing agreement with a sublicensee, profit-sharing payments made to RECIPIENT by such sublicensee) pursuant to the applicable sublicense agreement. 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
 Page D10 

 

 
 ATTACHMENT E 

REPORTING REQUIREMENTS 
 This Attachment E
is hereby incorporated into and made a part of that certain CANCER RESEARCH GRANT CONTRACT (“Contract”) by and between the Cancer Prevention and Research Institute of Texas (“CPRIT” or the
“INSTITUTE”) and the RECIPIENT. A capitalized term used in this Attachment shall have the meaning given to term in the Contract or in the Attachments to the Contract, unless otherwise defined herein. In the event of a
conflict between the provisions of this Attachment and the provisions of the Contract, this Attachment shall control. 
 INSTITUTE and RECIPIENT agree as
follows: 
 ANNUAL REPORTING 

Section E1.01 Annual Reports. The RECIPIENT shall submit reports annually to the INSTITUTE within 60 days of the anniversary of the Effective Date of
this Contract or at such other time as may be specified herein. The reports shall be submitted by the means and in the form(s) required by the INSTITUTE and shall be signed by the Principal Investigator/Program Director and the RECIPIENT’s
Authorized Signing Official. To the extent possible, the reports shall only include information that may be shared publicly. However, if it is necessary to submit information in the reports that the RECIPIENT considers confidential in order to fully
comply with the terms of this Contract, then the RECIPIENT shall use reasonable efforts to mark such information as “confidential” and shall, to the extent practicable , to segregate such information within the reports to facilitate its
redaction should redaction ever be necessary or appropriate. 
 Section E1.02 Contents of Reports. Each report shall contain a signed verification
(electronic signature is acceptable) of RECIPIENT’s compliance with each of its obligations as set forth in the Contract and shall include the following for the period covered by such report, as may then be applicable: 

(a) Project Data. During the term of the Contract, RECIPIENT shall include in its annual report each of the following (except that the final
annual report due under this part (a) shall be due within ninety (90) days after the end of the term of the Contract): 
  

	 	(1)	A brief statement of the progress made to under the Scope of Work, including the progress to achieve the Project Goals and Timelines set forth in Attachment A. 

 

	 	(2)	A brief statement of the Project Goals for the twelve months following submission of the report. 

  

	 	(3)	New jobs created in the preceding twelve month period as a result of the Grant funds awarded to RECIPIENT. 

  

	 	(4)	An inventory of the Equipment purchased for the Project using Grant funds. 

  

	 	(5)	A HUB report in accordance with Section 3.08 “Historically Underutilized Businesses” of the Contract. 

(b) Commercialization Data. During the term of the Contract and continuing thereafter for so long as RECIPIENT has ongoing obligations to the
INSTITUTE with respect to protection, development, commercialization and licensing of Project Results pursuant to Attachment D, RECIPIENT shall provide information about commercialization activities in a format specified by the INSTITUTE. 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
 Page E1 

 c) Revenue Sharing Data. During the term of the Contract and continuing thereafter for so long as
RECIPIENT has ongoing obligations to the INSTITUTE with respect to revenue sharing pursuant to Attachment D: 
  

	 	(1)	A statement of the identities of the funding sources, amounts and dates of funding for all funding sources for the Project. 

  

	 	(3)	A brief statement of the RECIPIENT’s efforts to secure additional funds to support the Project. 

  

	 	(4)	All financial information necessary to verify the calculation of the revenue sharing amounts specified in Attachment D. 

(d) Additional Data. In addition to the foregoing, RECIPIENT shall use commercially reasonable efforts to also promptly report any other information
required by this Contract or otherwise reasonably requested by the INSTITUTE, the Legislature, or any other funding or regulatory bodies covering the RECIPIENT’s activities under this Contract. 

Section E1.03 Record Keeping and Audits. The provisions of Article IV of the Contract shall apply fully to all information reported to the INSTITUTE
pursuant to this Attachment, except that the right of the State of Texas to audit and the RECIPIENT’s obligation to maintain Records shall continue until four years after the date of each such report made by RECIPIENT hereunder. 

Section E1.04 Confidentiality of Documents and Information. The provisions of Section 2.13 “Confidentiality of Documents and
Information” of the Contract shall apply fully to all Confidential Information reported, delivered or submitted to the INSTITUTE pursuant to this Attachment E. 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 
 Page E2 

 IN WITNESS THEREOF, THE PARTIES HAVE SIGNED AND EXECUTED IN DUPLICATE COUNTERPARTS ON THE DATES INDICATED.

  

									
	 RECIPIENT
	 		 	 INSTITUTE

					
	By	 	/s/ Jason Kim	 		 	By:	 	/s/ William “Bill” Gimson, Executive Director
	(Signature of Person Authorized to Sign Contracts)	 		 		 	

									
	Name:	 	Jason Kim	 		 	Name:	 	William “Bill” Gimson, Executive Director
	Date:	 	November 7th, 2012	 		 	Date:	 	May 15, 2012

  

			
	RECIPIENT Mailing Address:	  	INSTITUTE Mailing Address:
	 111 W COOPERATIVE WAY, SUITE 201,
 GEORGETOWN TX
78626
	  	 Cancer Prevention and Research Institute of TX

Grant Compliance

		  	P.O. Box 12097
		  	Austin, TX 78711
		  	
		  	INSTITUTE Physical Address:
	Physical Address: (If different from above)	  	211 E. 7th Street, Suite 300
		  	Austin, TX 78701
		  	
		  	Phone: (512) 463-3190
		  	
	Phone: 512-961-8479	  	Fax: (512) 475-2563
	Fax: 512-233-2709	  	

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended. 

 

 
 Information Regarding Duplication of Effort and Project Overlap 

To avoid duplicate payments for the same work, please advise CPRIT by indicating below if you have received other grant funding for some or all of the
cancer research/prevention services that are the subject of this award subsequent to submitting the application to the Institute. 
  

	 	☐	I have received other grant funding for some/all (circle appropriate) not otherwise previously disclosed in my CPRIT grant application ID
                     to support some or all of the research/prevention services that are the subject of the CPRIT award. I have revised my
budget request accordingly to reflect the changes to award amount to avoid duplicate payments. 

  

	 	☒	I have not received other grant funding to support some or all of the research/prevention services that are the subject of the CPRIT award not otherwise disclosed in my CPRIT application ID CC121020. 

By uploading this document to CPRIT’s electronic grants management system and submitting it for CPRIT approval, the primary investigator/project director
for the project certifies that the information contained herein is correct and should be relied upon by CPRIT in executing the final award contract. 

  
 Portions of this
Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the 
 Secretary of the
Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to 
 Rule 24b-2 of the
Exchange Act of 1934, as amended.

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