Document:

Exhibit 4.1

 

FIFTH AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

 

This Fifth Amended and Restated Investors’ Rights Agreement dated as of August 26, 2015 (this “Agreement”), is made by and among: (i) Selecta Biosciences, Inc., a Delaware corporation (the “Company”); (ii) the holders of the Company’s Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”), the Company’s Series B Convertible Preferred Stock, par value $0.0001 per share (the “Series B Preferred Stock”), the Company’s Series C Convertible Preferred Stock, par value $0.0001 per share, (the “Series C Preferred Stock”), the Company’s Series D Convertible Preferred Stock, par value $0.0001 per share (the “Series D Preferred Stock”), the Company’s Series E Convertible Preferred Stock, par value $0.0001 per share, (the “Series E Preferred Stock” and, collectively with the Series A Preferred Stock, the Series B Preferred Stock and the Series C Preferred Stock and the Series D Preferred Stock, the “Senior Preferred Stock”), and the Company’s Series SRN Convertible Preferred Stock, par value $0.0001 per share (the “Series SRN Preferred Stock”) listed on the Schedule A attached hereto (collectively, the “Purchasers”); (iii) Omid Farokhzad, Ulrich von Andrian and Robert S. Langer, Jr. (each individually, a “Founder,” and collectively the “Founders”); and (iv) the persons and entities listed on Schedule B (each a “Licensor Shareholder” and collectively, the “Licensor Shareholders”, and collectively with the Founders, the “Initial Stockholders”).

 

WHEREAS, the Company, the holders of the Company’s Series A Preferred Stock, the holders of the Company’s Series B Preferred Stock, the holders of the Company’s Series C Preferred Stock, the holders of the Company’s Series D Preferred Stock, the holders of the Company’s Series SRN Preferred Stock, the Founders, the Licensor Shareholders and certain other parties named therein are parties to a Fourth Amended and Restated Investors’ Rights Agreement dated as of July 15, 2014 (the “Former Investors’ Rights Agreement”);

 

WHEREAS, the Company is a party to a Series E Preferred Stock Purchase Agreement dated as of the date hereof (the “Purchase Agreement”) pursuant to which the Company agreed to issue shares of Series E Preferred Stock to certain Purchasers (collectively, the “Series E Investors”); and

 

WHEREAS, the Series E Investors have made it a condition precedent to their purchase of shares of Series E Preferred Stock pursuant to the Purchase Agreement that the parties enter into this Agreement, which amends and restates the Former Investors’ Rights Agreement.

 

NOW, THEREFORE, in consideration of these mutual promises and covenants set forth herein, the parties hereto agree to the terms and conditions set forth below:

 

1.                                      Covenants of the Company. The Company covenants and agrees that so long as (i) at least 1,500,000 shares of Senior Preferred Stock (subject to equitable adjustment for stock splits, stock dividends and similar events) are outstanding or (ii) the Purchasers hold of record and beneficially not less than four percent (4%) of the Company’s common stock, $0.0001 par value per share (the “Common Stock”) (treating each share of Senior Preferred Stock on an as-converted to Common Stock basis), it will perform and observe the following covenants and provisions:

 

 

1.1.                            Financial Statements. The Company will maintain true and accurate books of account in accordance with generally accepted accounting principles applied on a consistent basis (except that the Company will not be required to record the annual valuation and adjustments for its share-based compensation expense under Statement of Financial Accounting Standards No. 123R, recording gains/losses on exchange rates, revenue and deferred revenue and other such valuation analysis tied to year-end until the time it delivers audited financial statements pursuant to Section 1.1(a) below), keep full and complete financial records, and furnish the following reports to (i) each Purchaser who holds at least 600,000 shares of Common Stock (including shares of Common Stock issued or issuable upon conversion of Senior Preferred Stock and subject to equitable adjustment for stock splits, stock dividends and similar events) (each a “Major Stockholder”) and (ii) The Brigham and Women’s Hospital (“Brigham”) for so long as it holds at least 10,000 shares of Common Stock (subject to equitable adjustment for stock splits, stock dividends and similar events):

 

(a)                                 as soon as practicable, but in any event within one hundred ninety (190) days after the end of each fiscal year of the Company, an income statement for such fiscal year, a balance sheet of the Company and statement of stockholders’ equity as of the end of such year, and a schedule as to the sources and applications of funds for such year, such year-end financial reports to be in reasonable detail, prepared in accordance with generally accepted accounting principles (“GAAP”) applied on a consistent basis, and audited and certified by such independent public accountants of nationally recognized standing selected by the Company and approved by the holders of shares representing a majority of the voting power of the Senior Preferred Stock held by the Purchasers;

 

(b)                                 as soon as practicable, but in any event within thirty (30) days after the end of each month other than the last month of any quarter, an unaudited profit and loss statement and a cash flow statement and the balance sheet as of the end of such month;

 

(c)                                  as soon as practicable, but in any event within forty-five (45) days after the end of each fiscal quarter, an unaudited profit and loss statement and a cash flow statement and the balance sheet as of the end of such fiscal quarter; and

 

(d)                                 such other financial information of the Company as any Major Stockholder or Brigham may reasonably request, including certificates of the principal financial officer of the Company concerning compliance with the covenants of the Company prescribed under this Section 1.

 

1.2.                            Operating Plan; Other Reporting. The Company will prepare and deliver to each Major Stockholder, on or before the first day of each fiscal year, an annual operating plan (that will include a budget) prepared on a monthly basis and, promptly after preparation, any revisions to such operating plan. In addition, the Company will promptly provide to each Major Stockholder other customary information and materials, including reports of adverse developments, management letters, communications with stockholders or directors, press releases, and registration statements.

 

1.3.                            Inspection. The Company shall, upon reasonable prior notice to the Company, permit authorized representatives of the Major Stockholders to visit and inspect any of the

 

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properties of the Company including its books of account (and to make copies thereof and take extracts therefrom), and to discuss the affairs, prospects, finances, and accounts of the Company with its officers, administrative employees, and independent accountants, all at the expense of the Major Stockholders and at such reasonable times and as often as may be reasonably requested. The Company shall, upon reasonable prior notice to the Company, permit authorized representatives of the Major Stockholders to visit and inspect any of the properties of SELECTA (RUS) LLC, a Russian limited liability company and subsidiary of the Company (the “Project Company”) including its books of account and any document or agreement to which the Project Company is a party (but not to make copies thereof), provided that the Project Company is permitted to disclose such document or agreement to such representatives during such visit, and to discuss the affairs, prospects, finances, and accounts of the Project Company with its general director, all at the expense of the Major Stockholders and at such reasonable times as may be reasonably requested; provided that such visits and inspections will be limited to (i) two (2) times per calendar year for a duration of no more than two (2) consecutive business days each and (ii) two (2) times per calendar year for a duration of no more than one-half (1/2) business day each. For the avoidance of doubt, the rights afforded to RUSNANO, an open joint stock company organized and existing under the laws of the Russian Federation (“RUSNANO”), under this Section 1.3 shall be in addition to, and not lieu of, any audit rights RUSNANO may have pursuant to Section 5.3.

 

1.4.                            Employee Agreements. The Company shall require all its employees and consultants to enter into the Company’s standard confidentiality and assignment agreement containing provisions governing, among other things, the protection of confidential information, assignment of intellectual property, competition with the Company and solicitation of the Company’s employees.

 

1.5.                            Reservation of Shares. The Company will at all times reserve and keep available, solely for issuance and delivery upon (a) the conversion of the Senior Preferred Stock and Series SRN Preferred Stock and (b) the exercise of those certain warrants to purchase Common Stock issued pursuant to (A) the Purchase Agreement and (B) that certain Securities Purchase Agreement by and among the Company and the other parties thereto, dated as of April 10, 2015, all Common Stock issuable from time to time upon such conversion or exercise, as applicable.

 

1.6.                            Board Meetings. The Company agrees to hold a meeting of its board of directors (“Board of Directors”) at least once every eight weeks, or such other schedule for board meetings as is agreed by the Board of Directors.

 

1.7.                            Approval. The Company shall not without the approval of at least a majority of disinterested members of the Board of Directors (if any) authorize or enter into any transactions with any director or officer, or any member of such director’s or officer’s immediate family, other than standard employment or consulting arrangements.

 

1.8.                            Committees of the Board. In the event that the Board of Directors constitutes any committee of the Board of Directors, or any subcommittee thereof, directors designated by the holders of Senior Preferred Stock (each, a “Preferred Director”) shall comprise a majority of the members of such committee or subcommittee thereof. The Board of Directors shall designate the Preferred Directors to be appointed to any such committee or subcommittee.

 

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1.9.                            Directors’ Liability and Indemnification. The Company’s Fourth Amended and Restated Certificate of Incorporation (as the same may be amended or amended and restated from time to time, the “Company Charter”), and the Company’s Bylaws, as in effect from time to time, shall provide (a) for elimination of the liability of directors to the maximum extent permitted by law and (b) for indemnification of directors for acts on behalf of the Company and its subsidiaries to the maximum extent permitted by law. In addition, the Company shall enter into and maintain usual and customary indemnification agreements with each of its directors to indemnify such directors to the maximum extent permissible under applicable law. The Company shall maintain in effect a usual and customary directors and officers insurance policy with coverage limits in amounts to be determined from time to time by the Board of Directors.

 

1.10.                     US Tax Filings. Within seventy-five (75) days of the establishment of the Project Company, if required by applicable law, the Company shall file a US IRS tax form 8832 on behalf of the Project Company.

 

1.11.                     Termination of Information Rights. The provisions of this Section 1 shall terminate at the earlier to occur of such time as the Company shall become subject to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended.

 

1.12.                     Project Company Reporting Requirements. The Company shall provide informational reports regarding the Project Company to RUSNANO, as set forth on Exhibit A hereto.

 

1.13.                     Notice of SRN Optional Conversion Event. The Company shall provide the SRN Majority Holders (as defined below), if any, with (i) written notice of an SRN Optional Conversion Event (as defined in the Company Charter) no later than thirty (30) days prior to the effectiveness of such SRN Optional Conversion Event and (ii) written notice of final approval of such SRN Optional Conversion Event no later than seven (7) business days after the occurrence of such event. The Company shall use commercially reasonable efforts to provide the SRN Majority Holders, if any, with written notice of any SRN Special Optional Conversion Event (as defined in the Company Charter) no later than ten (10) business days after the occurrence of such SRN Special Optional Conversion Event. The Company shall use commercially reasonable efforts to provide the SRN Majority Holders, if any, with notice of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation (including without limitation any Deemed Liquidation Event, as defined in the Company Charter) no later than sixty (60) days prior to the occurrence of such event (or, if neither the Board of Directors nor the Company’s Chief Executive Officer have knowledge of such event at that time, promptly at any time thereafter when the Board of Directors or the Company’s Chief Executive Officer has knowledge of such event); provided that under no circumstances shall the Company have any liability whatsoever for any failure to use such efforts or provide such notice. Notwithstanding anything to the contrary herein, each notice to the SRN Majority Holders to be provided hereunder shall be deemed effectively provided at the time each member of the Board of Directors designated by the SRN Majority Holders shall receive such notice.

 

1.14.                     Confidentiality. Each Purchaser agrees that such Purchaser will keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor such Purchaser’s investment in the Company) any confidential information obtained from the Company or the

 

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Project Company or any other affiliate of the Company or any representative of the Company, the Project Company or any affiliate of the Company (including notice of the Company’s intention to file a registration statement), unless such confidential information (a) is known or becomes known to the public in general (other than as a result of a breach of this Section 1.14 by such Purchaser), (b) is or has been independently developed or conceived by such Purchaser without use of the confidential information of the Company, the Project Company or any affiliate of the Company, or (c) is or has been made known or disclosed to such Purchaser by a third party without a breach of any obligation of confidentiality such third party may have to the Company, the Project Company or any affiliate of the Company; provided, however, that a Purchaser may disclose confidential information (i) to its attorneys, accountants, consultants, and other professionals to the extent necessary to obtain their services in connection with monitoring such Purchaser’s investment in the Company; (ii) to any prospective transferee of such Purchaser permitted under Section 4.1, if such prospective transferee agrees to be bound by the provisions of this Section 1.14; (iii) to any Affiliate (as defined in Section 4.1) in the ordinary course of business, provided that such Purchaser informs such Affiliate that such information is confidential and directs such Affiliate to maintain the confidentiality of such information; or (iv) as may otherwise be required by law, provided that the Purchaser promptly notifies the Company of such disclosure and takes reasonable steps to minimize the extent of any such required disclosure.

 

2.                                      Participation Rights.

 

2.1.                            Definitions. As used in this Section 2, the following terms shall have the following meanings:

 

(a)                                 “New Securities” means (i) any capital stock of the Company whether or not currently authorized, (ii) all rights, options, or warrants to purchase capital stock, and (iii) all securities of any type whatsoever that are, or may become, convertible into capital stock; provided, however, that the term “New Securities” shall not include (1) the Series E Preferred Stock issued or to be issued pursuant to the Purchase Agreement or the shares of Common Stock issuable upon the conversion of the Senior Preferred Stock or Series SRN Preferred Stock; (2) those certain warrants to purchase Common Stock issued pursuant to (A) the Purchase Agreement or (B) that certain Securities Purchase Agreement by and among the Company and the other parties thereto, dated as of April 10, 2015, if any, or shares of Common Stock issued pursuant to the exercise of any such warrants; (3) shares of Common Stock, or options to purchase such shares, that are issued or granted to directors, employees or consultants of the Company pursuant to a stock incentive plan approved by the Board of Directors, including a majority of the Preferred Directors; (4) securities issued as a result of any stock split, stock dividend, or reclassification by the Company, distributable on a pro rata basis to all holders of such class of securities; (5) securities reissued to employees or consultants of the Company following the Company’s acquisition of such securities pursuant to restricted stock arrangements with individuals who have terminated their relationship with the Company or shares subject to options which have been cancelled; (6) securities issued to the Massachusetts Institute of Technology or persons designated by the Massachusetts Institute of Technology pursuant to the MIT License Agreement (as defined in the Purchase Agreement); (7) securities issued to a financing institution in connection with a commercial credit arrangement, equipment financing or similar financing arrangement approved by a majority of the Board of Directors, including a

 

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majority of the Preferred Directors; (8) securities issued in connection with the bona fide acquisition of a business, product or technology by the Corporation approved by a majority of the Board of Directors, including a majority of the Preferred Directors; and (9) securities issued in connection with any bona fide sponsored research, collaboration, joint venture, technology license, development, OEM, marketing or other similar agreements or strategic partnerships approved by a majority of the Board of Directors, including a majority of the Preferred Directors.

 

(b)                                 “Purchaser” shall include, for the purposes of this Section 2 only, each Licensor Shareholder.

 

2.2.                            Participation Right. Each Purchaser shall be entitled to purchase, on a pro rata basis, all or any part of New Securities which the Company may, from time to time, propose to sell and issue, subject to the terms and conditions set forth below. Each Purchaser’s pro rata share shall equal a fraction of the New Securities being issued, the numerator of which is the number of shares of Common Stock held or Common Stock issuable upon conversion of the Senior Preferred Stock or other convertible securities (other than the Series SRN Preferred Stock and disregarding the special conversion ratios set forth in Section 3.3(a)(i)(1) or Section 3.3(b)(i)(2) of the Company Charter in effect on the date hereof) then held by such Purchaser, and the denominator of which is the total number of shares of Common Stock then outstanding plus the number of shares of Common Stock issuable upon conversion of then outstanding Senior Preferred Stock or other convertible securities then outstanding (other than the Series SRN Preferred Stock and disregarding the special conversion ratios set forth in Section 3.3(a)(i)(1) or Section 3.3(b)(i)(2) of the Company Charter in effect on the date hereof). For the purposes of this Section 2, a Purchaser may apportion its pro rata share among itself and any of its general partners, officers, and other affiliates in such proportions as it deems appropriate.

 

2.3.                            Exercise of Right. In the event the Company intends to issue New Securities, it shall give each Purchaser written notice of such intention, describing the type of New Securities to be issued, the price thereof, and the general terms upon which the Company proposes to effect such issuance (the “Sale Notice”). Each Purchaser shall have twenty (20) days from the date of the delivery of any Sale Notice to agree to purchase all or part of its pro rata share of such New Securities for the price and upon the general terms and conditions specified in the Sale Notice by giving written notice to the Company stating the quantity of New Securities to be so purchased (“Exercise Notice”); provided, however, that in the event that the transaction described in a Sale Notice involves in whole or in part the payment of non-cash consideration, or the payment of consideration over time, the Purchasers shall have the right to elect, upon exercise of their rights set forth in this Section 2, to pay to the Company in full consideration for the New Securities the present cash value of the consideration described in the Sale Notice as determined by the Board of Directors of the Company in good faith.

 

2.4.                            Overallotment. In the event any Purchaser fails to exercise its right to purchase its pro rata share of New Securities, each Purchaser who delivered an Exercise Notice for such Purchaser’s total pro rata share of New Securities (an “Overallotment Purchaser”) shall have a right to purchase such Overallotment Purchaser’s pro rata share of the New Securities with respect to which Purchasers have failed to exercise their rights hereunder (“Remaining New Securities”). In such case, within twenty five (25) days after the delivery of the Sale Notice, the Company shall provide written notice (“Overallotment Notice”) to each Overallotment

 

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Purchaser, which shall state the total amount of Remaining New Securities, and the pro rata portion of such Remaining New Securities which each Overallotment Purchaser is entitled to purchase. Each Overallotment Purchaser wishing to purchase any Remaining New Securities shall amend such Overallotment Purchaser’s Exercise Notice in writing within five (5) days from the date of delivery of the Overallotment Notice. For the purpose of this Section 2.4, an Overallotment Purchaser’s pro rata share of the Remaining New Securities shall be calculated as provided in Section 2.2, except that the denominator of the fraction shall be the total number of shares of Common Stock issued or issuable upon conversion of shares of Senior Preferred Stock held by all of the Overallotment Purchasers.

 

2.5.                            Closing. The closing of the purchase of New Securities by the Purchasers exercising their rights hereunder (“Participating Purchasers”) shall take place at such location, date and time as the parties purchasing such New Securities shall agree. At the closing, the Company shall deliver to the Participating Purchasers certificates representing all of the New Securities purchased and such other agreements executed by the Company which grant any rights or privileges to the Participating Purchasers as are being granted to the other purchasers in such issuance, and in any event, at the request of the Participating Purchasers, a duly executed certificate reasonably satisfactory to the Participating Purchasers containing a representation and warranty that, upon issuance or transfer of such securities to the Participating Purchasers, the Participating Purchasers will be the legal and beneficial owners of such securities with good title thereto, free and clear of all mortgages, liens, charges, security interests, adverse claims, pledges, encumbrances and demands whatsoever, and that the Company has the absolute right to issue or transfer such securities to the Participating Purchasers without the consent or approval of any other person. At the closing, the Participating Purchasers shall deliver to the Company payment for the New Securities and such agreements executed by the other purchasers in such issuance which include representations by such purchasers to the Company or restrict such purchaser’s rights with respect to the New Securities, and, at the request of the Company, a duly executed certificate reasonably satisfactory to the Company containing such representations and warranties of the Participating Purchasers with respect to federal and state securities laws. The certificates representing the equity securities may contain a legend stating that they are issued subject to the registration requirements of the Securities Act of 1933, as amended, and applicable state securities laws.

 

2.6.                            Failure to Exercise Right. In the event the Purchasers fail to fully exercise the foregoing participation right with respect to any New Securities within the periods specified by Sections 2.3 and 2.4 above, the Company may within one hundred twenty (120) days after the delivery of the Sale Notice sell any or all of such New Securities not agreed to be purchased by the Purchasers, at a price and upon general terms no more favorable to the purchasers thereof than specified in the Sale Notice. In the event the Company has not closed the sale of such New Securities within such 120-day period, the Company shall not thereafter issue or sell any New Securities without first offering such New Securities to the Purchasers in the manner provided in Section 2.3.

 

2.7.                            Waiver and Termination of Participation Rights. The participation rights established in this Section 2 may be waived with and only with the written consent of the Company and the Purchasers holding at least sixty-six and two-thirds percent (66 2/3 %) of the Registrable Securities (as defined below) held by all Purchasers (which waiver shall apply to all

 

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Purchasers holding Registrable Securities, it being agreed that a waiver of the provisions of this Section 2 with respect to a particular transaction shall be deemed to apply to all Purchasers if such waiver does so by its terms, notwithstanding the fact that certain Purchasers may nonetheless, by agreement with the Company, purchase securities in such transaction). The provisions of this Section 2 shall not apply to, and shall terminate immediately prior to the execution of, (i) a firm commitment underwritten public offering pursuant to an effective registration statement under the Act (as defined below) covering the offer and sale of the Company’s Common Stock to the public, for the account of the Company, and having an aggregate offering price to the public of not less than $30,000,000 (a “Qualified Public Offering”) and (ii) a transaction that qualifies as a liquidation, dissolution or winding up of the affairs of the Company under the Company Charter, as it may be amended from time to time.

 

3.                                      Registration Rights. The Company covenants and agrees as follows:

 

3.1.                            Definitions. As used in Section 2 and this Section 3, the following terms shall have the following meanings:

 

(a)                                 “1934 Act” shall mean the Securities Exchange Act of 1934, as amended.

 

(b)                                 “Act” means the Securities Act of 1933, as amended.

 

(c)                                  “Form S-1” means such form under the Act as in effect on the date hereof, or any registration form under the Act subsequently adopted by the SEC which permits the registration of securities under the Act for which no other form is authorized or prescribed.

 

(d)                                 “Form S-3” means such form under the Act as in effect on the date hereof or any registration form under the Act subsequently adopted by the SEC which permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.

 

(e)                                  “Preferred Stock Holder” means (i) a Purchaser and any persons or entities to whom the rights granted under this Section 3 are transferred by the Purchaser and (ii) their successors or assigns as permitted under Section 4 below.

 

(f)                                   “Holders” means any person owning or having the right to acquire Registrable Securities or any assignee thereof in accordance with Section 4 below.

 

(g)                                  “Permitted Transferee” means, with respect to the Founders (i) any member or members of such Founder’s immediate family to whom Registrable Securities are transferred; and (ii) any trust to which Registrable Securities are transferred (1) in respect of which such Founder serves as trustee, provided that the trust instrument governing such trust shall provide that such Founder, as trustee, shall retain sole and exclusive control over the voting and disposition of such Registrable Securities until the termination of this Agreement or (2) for the benefit solely of any member or members of such Founder’s immediate family; provided, that no person or entity shall be a Permitted Transferee unless such transferee delivers a written notice to the Company at the time of such transfer stating the name and address of the transferee and identifying the Registrable Securities with respect to which such rights are being assigned.

 

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(h)                                 The terms “register,” “registered,” and “registration” refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Act, and the declaration or ordering of effectiveness of such registration statement or document.

 

(i)                                     “Registrable Securities” means (i) the Common Stock held by the Founders and their Permitted Transferees, (ii) the Common Stock issuable or issued upon conversion of the Senior Preferred Stock, (iii) the Common Stock issuable or issued upon conversion of the Series SRN Preferred Stock, and (iv) any Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right, or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, the shares referenced in (i) through (iii) above, excluding in all cases, however, any Registrable Securities sold by a person in a transaction in which the rights under this Section 3 are not properly assigned.

 

(j)                                    “Outstanding Registrable Securities” means the number of shares of Common Stock outstanding that are, and the number of shares of Common Stock issuable pursuant to then exercisable or convertible securities which are, Registrable Securities.

 

(k)                                 “SEC” means the U.S. Securities and Exchange Commission.

 

3.2.                            Demand Registration.

 

(a)                                 If the Company shall receive at any time after the earlier to occur of (1) the date one hundred eighty (180) days after the initial registration of any series or class of the Company’s securities, and (2) the fourth anniversary of the date hereof, a written notice from Holders holding at least fifty percent (50%) of the Outstanding Registrable Securities then held by all Preferred Stock Holders, voting together as a single class on an as converted to Common Stock basis (determined, in the case of the Series E Preferred Stock, without regard to the special conversion ratios set forth in Section 3.3(a)(i)(1) or Section 3.3(b)(i)(2) of the Company Charter in effect on the date hereof), requesting that the Company effect a registration statement under the Act with respect to all or a part of the Registrable Securities held by such Preferred Stock Holders, then the Company shall:

 

(i)                                        within ten (10) days of the receipt thereof, give written notice of such request to all Preferred Stock Holders; and

 

(ii)                                     effect as soon as practicable, and in any event within ninety (90) days of the receipt of such request, the registration under the Act of all Registrable Securities which the Preferred Stock Holders request to be registered, by notice to the Company within thirty (30) days of the mailing of the notice sent by the Company in accordance with Section 3.2(a)(i), subject to the limitations of Section 3.2(b).

 

(b)                                 If the Preferred Stock Holders initiating the registration request hereunder (the “Initiating Holders”) intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made

 

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pursuant to Section 3.2(a) and the Company shall include such information in the written notice referred to in Section 3.2(a)(i). The underwriter will be selected by the Company and shall be reasonably acceptable to a majority in interest of the Initiating Holders. In such event, the right of any Preferred Stock Holder to include Registrable Securities in such registration shall be conditioned upon such Preferred Stock Holder’s participation in such underwriting and the inclusion of such Preferred Stock Holder’s Registrable Securities in the underwriting (unless otherwise mutually agreed by a majority in interest of the Initiating Holders and such Preferred Stock Holder) to the extent provided herein. All Preferred Stock Holders proposing to distribute their securities through such underwriting shall (together with the Company as provided in Section 3.5(e)) enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting. Notwithstanding any other provision of this Section 3.2, if the underwriter advises the Initiating Holders in writing that marketing factors require a limitation of the number of shares to be underwritten, then the Initiating Holders shall so advise all Preferred Stock Holders of Registrable Securities which would otherwise be underwritten pursuant hereto, and the number of shares of Registrable Securities that may be included in the underwriting shall be allocated among all Preferred Stock Holders thereof, including the Initiating Holders, in proportion (as nearly as practicable) to the amount of Registrable Securities of the Company owned by each Preferred Stock Holder; provided, however, that the number of shares of Registrable Securities to be included in such underwriting shall not be reduced unless all other securities are first entirely excluded from the underwriting.

 

(c)                                  Notwithstanding the foregoing, if the Company shall furnish to Preferred Stock Holders requesting registration pursuant to this Section 3.2 a certificate signed by the President of the Company stating that in the good faith judgment of the Board of Directors of the Company it would be seriously detrimental to the Company and its stockholders for a registration statement to be filed and it is therefore essential to defer the filing of such registration statement, then the Company shall have the right to defer taking action with respect to such filing for a period of not more than one hundred twenty (120) days, in the aggregate (after taking into account the period of any prior delays pursuant to this Section 3.2(c) during any twelve (12) month period), after receipt of the request of the Initiating Holders.

 

(d)                                 In addition, the Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to this Section 3.2 after the Company has effected two (2) registrations on Form S-1 pursuant to this Section 3.2 and such registration statements have been declared or ordered effective and the sales of Registrable Securities under such registration statements have closed.

 

(e)                                  No incidental right under this Section 3.2 shall be construed to limit any registration required under Section 3.3 or Section 3.4 herein.

 

3.3.                            “Piggy-Back” Registration.

 

(a)                                 If (but without any obligation to do so) the Company proposes to register (including for this purpose a registration effected by the Company for stockholders other than the Holders) any of its stock or other securities under the Act in connection with the public offering of such securities solely for cash, other than (i) the initial registration of any series or class of the Company’s securities, (ii) a registration relating solely to the sale of securities to participants in a

 

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stock plan, (iii) a registration on any form which does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities, or (iv) a registration on Form S-4 (or any successor form) relating solely to a transaction pursuant to the SEC’s Rule 145, the Company shall, at such time, promptly give each Holder written notice of such registration. Upon the written request by a Holder given to the Company within twenty (20) days after such notice by the Company provided in accordance with Section 6.4, the Company shall, subject to the provisions of Section 3.3(b), cause to be registered under the Act all of the Registrable Securities that each such Holder has requested to be registered.

 

(b)                                 In connection with any offering involving an underwriting of shares of the Company’s capital stock, the Company shall not be required under this Section 3.3 to include any of the Holders’ securities in such underwriting unless such Holders accept the terms of the underwriting as agreed upon between the Company and the underwriters selected by it (or by other persons entitled to select the underwriters), and then only in such quantity as the underwriters determine in their sole discretion will not jeopardize the success of the offering by the Company. If the total amount of securities, including Registrable Securities, requested by stockholders to be included in such offering exceeds the amount of securities to be sold (other than by the Company) that the underwriters determine in their sole discretion is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters determine in their sole discretion will not jeopardize the success of the offering; provided, however, there shall first be excluded from such registration statement all shares of Common Stock sought to be included therein by (i) any director, consultant, officer, or employee of the Company or any subsidiary other than the Founders and their Permitted Transferees and (ii) stockholders exercising any contractual or incidental registration rights subordinate and junior to the rights of the Preferred Stock Holders. If after such shares are excluded, the underwriters shall determine in their sole discretion that the number of securities which remain to be included in the offering exceeds the amount of securities to be sold that the underwriters determine is compatible with the success of the offering, then the Registrable Securities to be included, if any, shall be apportioned pro rata among the Holders providing notice of their desire to participate in the offering according to the total amount of securities entitled to be included therein owned by each selling Holder or in such other proportions as shall mutually be agreed to by such Holders. For purposes of the preceding sentence concerning apportionment, for any selling Holder which is a partnership or corporation, the partners, retired partners, and stockholders of such Holder, or the estates and family members of any such partners and retired partners and any trusts for the benefit of any of the foregoing persons shall be deemed to be a single “selling Holder,” and any pro-rata reduction with respect to such “selling Holder” shall be based upon the aggregate amount of shares carrying registration rights owned by all entities and individuals included in such “selling Holder,” as defined in this sentence.

 

(c)                                  No incidental right under this Section 3.3 shall be construed to limit any registration required under Section 3.2 or Section 3.4 herein.

 

3.4.                            Form S-3 Registration. In case the Company shall receive from Preferred Stock Holders a written request that the Company effect a registration on Form S-3, subject to the limitations and qualifications set forth in Section 3.4(b), and any related qualification or

 

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compliance with respect to all or a part of the Registrable Securities owned by such Preferred Stock Holder or Preferred Stock Holders, the Company agrees:

 

(a)                                 to promptly give written notice of the proposed registration, and any related qualification or compliance, to all other Holders; and

 

(b)                                 as soon as practicable after receiving such a request, to effect such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Preferred Stock Holders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Holders joining in such request as are specified in a written request given within fifteen (15) days after receipt of such written notice from the Company; provided, however, that the Company shall not be obligated to effect any such registration, qualification, or compliance pursuant to this Section 3.4 if (i) Form S-3 is not available for such offering by the Holders; (ii) the Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public of less than $2,000,000; (iii) the Company furnishes to the Holders a certificate signed by the President of the Company stating that in the good faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the Company and its stockholders for such Form S-3 registration to be effected at such time, in which event the Company shall have the right to defer the filing of the Form S-3 registration statement for a period of not more than sixty (60) days after receipt of the request of the Preferred Stock Holders under this Section 3.4, provided, however, that the Company shall not utilize this right more than once in any eighteen (18) month period; or (iv) the Company has effected two (2) registrations on Form S-3 (or its then equivalent) pursuant to this Section 3.4 during such calendar year and such registrations have been declared or ordered effective and the sales of Registrable Securities under such registration statement have closed.

 

(c)                                  Registrations effected pursuant to this Section 3.4 shall not be counted as demands for registration or registrations effected pursuant to Sections 3.2 or 3.3.

 

3.5.                            Obligations of the Company. Whenever required under this Section 3 to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible (but subject to providing counsel to the Holders with a reasonable opportunity to review and comment on all documents):

 

(a)                                 Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its best efforts to cause such registration statement to become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for a period of up to one hundred twenty (120) days or, if earlier, until the distribution contemplated in the Registration Statement has been completed; provided, however, that (i) such 120-day period shall be extended for a period of time equal to the period the Holder refrains from selling any securities included in such registration at the request of an underwriter of Common Stock (or other securities) of the Company and (ii) in the case of any registration of Registrable Securities on Form S-3 which are intended to be offered on a continuous or delayed basis, such 120-day period shall be extended,

 

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if necessary, to keep the registration statement effective until all such Registrable Securities are sold; provided, that SEC Rule 415, or any successor rule under the Act, permits an offering on a continuous or delayed basis; and provided further that applicable rules under the Act governing the obligation to file a post-effective amendment permit, in lieu of filing a post-effective amendment which (i) includes any prospectus required by Section 10(a)(3) of the Act or (ii) reflects facts or events representing a material or fundamental change in the information set forth in the registration statement, the incorporation by reference of information required to be included in (i) and (ii) above to be contained in periodic reports filed pursuant to Section 13 or 15(d) of the 1934 Act in the registration statement.

 

(b)                                 Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Act with respect to the disposition of all securities covered by such registration statement in accordance with each Holder’s intended method of disposition.

 

(c)                                  Furnish to the Holders such numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by the Holders.

 

(d)                                 Use its best efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders and any managing underwriter; provided, that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Act.

 

(e)                                  In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering. Each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement.

 

(f)                                   Promptly notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Act as a result of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing.

 

(g)                                  Cause all such Registrable Securities registered pursuant hereunder to be listed on each securities exchange on which similar securities issued by the Company are then listed.

 

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(h)                                 Provide a transfer agent and registrar for all Registrable Securities registered pursuant hereunder and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration.

 

(i)                                     Furnish, at the request of any Holder requesting registration of Registrable Securities pursuant to this Section 3, on the date that such Registrable Securities are delivered to the underwriters for sale in connection with a registration pursuant to this Section 3, if such securities are being sold through underwriters, copies of (i) the opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration given to the underwriters in such underwritten public offering, which opinion shall be in such form as is reasonably satisfactory to counsel to the underwriters, and (ii) the letter dated as of such date, from the independent certified public accountants of the Company, to the underwriters in such underwritten public offering, addressed to the underwriters, which letter shall be in such form as is reasonably satisfactory to counsel to the underwriters.

 

3.6.                            Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 3 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be required to effect the registration of such Holder’s Registrable Securities.

 

3.7.                            Expenses of Demand and S-3 Registrations. The Company shall pay all expenses other than underwriting discounts and commissions incurred in connection with registrations, filings, or qualifications pursuant to Sections 3.2 and 3.4, including (a) all registration, filing, and qualification fees (including filing fees with the SEC, fees due to the Financial Industry Regulatory Authority (“FINRA”) and fees due for listing on any stock exchange, including Nasdaq); (b) printers and accounting fees; (c) fees and disbursements of counsel for the Company; and (d) the reasonable fees and disbursements of one counsel for the selling Holders; provided, however, that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 3.2 or 3.4 if the registration request is subsequently withdrawn at the request of the holders of at least sixty-six and two-thirds percent (66 2/3%) of the Registrable Securities then held by Preferred Stock Holders to be registered (in which case all Preferred Stock Holders participating in the aborted registration shall bear such expenses), unless the holders of at least sixty-six and two-thirds percent (66 2/3%) of the Registrable Securities then held by Preferred Stock Holders agree to forfeit their rights to a registration under Section 3.2; provided further, however, that if at the time of such withdrawal, the Preferred Stock Holders have either (i) learned of a material adverse change in the condition, business, or prospects of the Company from that known to the Preferred Stock Holders at the time of their request or (ii) been informed by the underwriters of such registration that more than twenty percent (20%) of the Registrable Securities requested for registration shall not be includable therein due to market factors, and in either such case the Preferred Stock Holders have withdrawn the request with reasonable promptness following such disclosure, then the Preferred Stock Holders shall not be required to pay such expenses and shall retain their rights pursuant to Sections 3.2 and 3.4.

 

3.8.                            Expenses of “Piggy-Back” Registration. The Company shall pay all expenses incurred in connection with any registration, filing, or qualification of Registrable Securities with

 

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respect to the registrations pursuant to Section 3.3 for each Holder, including all registration, filing, and qualification fees, printers and accounting fees relating or apportionable thereto, and the fees and disbursements of one counsel for the selling Holders selected by them, but excluding stock transfer taxes, underwriting discounts and commissions relating to the Registrable Securities.

 

3.9.                            Delay of Registration. No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 3.

 

3.10.                     Indemnification. In the event any Registrable Securities are included in a registration statement under this Section 3:

 

(a)                                 To the extent permitted by law, the Company will indemnify and hold harmless each Holder, any underwriter (as defined in the Act) for such Holder, and each person (if any) who controls such Holder (a “Controlling Person”) or underwriter within the meaning of the Act or the 1934 Act, against any losses, claims, damages, or liabilities joint or several) to which they may become subject under the Act, the 1934 Act, or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions, or violations (collectively a “Violation”) (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Act, the 1934 Act, any state securities law, or any rule or regulation promulgated under the Act, the 1934 Act, or any state securities law; and the Company will pay to each such Holder, underwriter, or Controlling Person, as incurred, any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity agreement contained in this Section 3.10(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability, or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by any such Holder, underwriter, or Controlling Person.

 

(b)                                 To the extent permitted by law, each selling Holder severally and not jointly will indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, each person (if any) who controls the Company within the meaning of the Act, any underwriter, any other Holder selling securities in such registration statement, and any controlling person of any such underwriter or other Holder, against any losses, claims, damages, or liabilities (joint or several) to which any of the foregoing persons may become subject under the Act, the 1934 Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereto) arise out of or are based upon (i) any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for

 

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use in connection with such registration or (ii) any violation or alleged violation by such Holder of the Act, the 1934 Act, any state securities law, or any rule or regulation promulgated under the Act, the 1934 Act, or any state securities law; and each such Holder will pay, as incurred, any legal or other expenses reasonably incurred by any person intended to be indemnified pursuant to this Section 3.10(b), in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity agreement contained in this Section 3.10(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of such indemnifying Holder, which consent shall not be unreasonably withheld; and further provided that in no event shall any indemnity under this Section 3.10(b) exceed the net proceeds from the offering received by such indemnifying Holder.

 

(c)                                  Promptly after receipt by an indemnified party under this Section 3.10 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 3.10, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel and participate in the defense, with the fees and expenses to be paid by the indemnifying party if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 3.10, but the omission so to deliver written notice to the indemnifying party will not relieve the indemnifying party of any liability that it may have to any indemnified party otherwise than under this Section 3.10.

 

(d)                                 If the indemnification provided for in this Section 3.10 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage, or expense referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one hand, and of the indemnified party, on the other, in connection with the statements or omissions that resulted in such loss, liability, claim, damage, or expense as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission.

 

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(e)                                  Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

 

(f)                                   The obligations of the Company and Holders under this Section 3.10 shall survive the completion of any offering of Registrable Securities in a registration statement under this Section 3, and otherwise.

 

3.11.                     Reports Under Securities Exchange Act of 1934. With a view to making available to the Holders the benefits of SEC Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company agrees to use its best efforts:

 

(a)                                 to make and keep public information available, as those terms are understood and defined in SEC Rule 144, at all times from and after the ninetieth (90th) day following the effective date of the first registration statement filed by the Company for the offering of its securities to the general public;

 

(b)                                 to take such action, including the voluntary registration of its Common Stock under Section 12 of the 1934 Act, as is necessary to enable the Holders to utilize Form S-3 for the sale of their Registrable Securities, such action to be taken as soon as practicable after the end of the fiscal year in which the first registration statement filed by the Company for the offering of its securities to the general public is declared effective;

 

(c)                                  to file with the SEC in a timely manner all reports and other documents required of the Company under the Act and the 1934 Act; and

 

(d)                                 to furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) a written statement by the Company that it has complied with the reporting requirements of SEC Rule 144 (at any time on or after the ninetieth (90th) day following the effective date of the first registration statement filed by the Company), the Act and the 1934 Act (at any time after it has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC which permits the selling of any such securities without registration or pursuant to such form.

 

3.12.                     “Market Stand-Off” Agreement. Each Holder hereby agrees that, during the period of duration (not to exceed one hundred eighty (180) days, which period may be extended upon the request of the managing underwriter, to the extent required by any FINRA rules, for an additional period of up to fifteen (15) days if the Company issues or proposes to issue an earnings or other public release within fifteen (15) days of the expiration of the 180-day lockup period) specified by the Company and an underwriter of Common Stock or other securities of the Company, following the effective date of a registration statement of the Company filed under the Act, such Holder shall not, to the extent requested by the Company and such underwriter,

 

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directly or indirectly sell, offer to sell, contract to sell (including any short sale), grant any option to purchase, or otherwise transfer or dispose of (other than to donees who agree to be similarly bound) any securities of the Company held by it at any time during such period except Common Stock included in such registration; provided, however, that all officers and directors of the Company enter into similar agreements. The Company agrees that it shall not release any Holder (or any officer or director referred to hereinabove) from the obligations imposed pursuant to this Section 3.12 unless all Holders are so released on a proportionate basis relative to their ownership of Registrable Securities.

 

In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to the Registrable Securities of a Holder (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period.

 

Notwithstanding the foregoing, the obligations described in this Section 3.12 shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms which may be promulgated in the future, or a registration relating solely to a SEC Rule 145 transaction on Form S-4 or similar forms which may be promulgated in the future.

 

3.13.                     Termination of Registration Rights. No Holder shall be entitled to exercise any right provided for in this Section 3 after the earlier of (i) five (5) years following the consummation of the sale of securities pursuant to a registration statement filed by the Company under the Act in connection with the initial firm commitment underwritten offering of its securities to the general public, or (ii) when the Registrable Securities held by such Holder (together with any Affiliate of such Holder with whom such Holder must aggregate its sales under SEC Rule 144) could be sold without restriction under SEC Rule 144(b)(1) within a ninety (90) day period.

 

4.                                      Transfers of Certain Rights.

 

4.1.                            Permitted Transferees.

 

(a)                                 The rights granted to the Purchasers under this Agreement may be transferred to (i) any other Purchaser or any general or limited partner, affiliated fund or member thereof, officer or other affiliate of any Purchaser or any entity or person that controls, or is controlled by, or is under common control with such Purchaser (“Affiliates”) or (ii) any other person or entity that acquires at least 600,000 shares of Senior Preferred Stock or Common Stock; provided, however, that the Company is given written notice by the transferee at the time of such transfer stating the name and address of the transferee and identifying the securities with respect to which such rights are being assigned.

 

(b)                                 All, but not less than all, of the rights granted to RUSNANO under this Agreement may be transferred to an Affiliate of RUSNANO in connection with the transfer all of the shares of capital stock of the Company held by RUSNANO to such transferee; provided, however, that the Company is given written notice by the transferee at the time of such transfer stating the name and address of the transferee and identifying the securities with respect to which such rights are being assigned.

 

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(c)                                  Brigham shall be permitted to apportion its rights under this Agreement among itself and its Affiliates; provided, however, that such Affiliates agree in writing to become parties to this Agreement.

 

4.2.                            Subsequent Transfers. A transferee to whom rights are transferred pursuant to this Section 4 may not again transfer such rights to any other person or entity, other than as provided in Section 4.1(a) above.

 

4.3.                            Legends. Each certificate representing the shares of Senior Preferred Stock or Series SRN Preferred Stock shall bear a legend indicating that any holder of such stock shall be subject to this Agreement.

 

4.4.                            Aggregation of Stock. All shares held or acquired by Affiliates shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

 

5.                                      Negative Covenants of the Company.

 

5.1.                            Without limiting any other covenants and provisions hereof, the Company covenants and agrees that, until the closing of a Qualified Public Offering, it will not, without the vote or written consent of the Board of Directors, including, in all cases, the affirmative vote or consent of a majority of the Preferred Directors, and with respect to Section 5.1 (ii) below, the affirmative vote or consent of the director appointed by RUSNANO:

 

(i)                                                          incur any indebtedness for borrowed money, in a single or related series of transactions, in an amount in excess of $250,000;

 

(ii)                                                       create or authorize the creation of any debt security or incur any indebtedness for borrowed money with a final maturity date after the November 7, 2019, other than equipment leases or other trade credit incurred in the ordinary course of business;

 

(iii)                                                    create or authorize the creation of any debt security or incur any aggregate indebtedness in excess of $5,000,000 that is not already included in a budget approved by the Board of Directors, other than equipment leases, lines of credit, debt financing approved by the Board of Directors, or other trade credit incurred in the ordinary course of business;

 

(iv)                                                   incur or make, in any fiscal year, any capital expenditures in excess of $250,000 above the amount contained in the annual operating plan (referenced in Section 1.2) for such fiscal year; or

 

(v)                                                      enter into any transactions with directors, officers, employees, consultants or five percent (5%) stockholders of the Company or their affiliates other than employment and consulting agreements in the ordinary course of business.

 

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5.2.                            Negative Covenants of the Company Regarding the Project Company.

 

(a)                                 Without limiting any other covenants and provisions hereof, the Company covenants and agrees that, until the closing of a Qualified Public Offering, it will not, directly or indirectly, without the vote or written consent of the SRN Majority Holders, if any:

 

(i)                                                             amend or restate the charter or other applicable organizational document of the Project Company in effect from time to time (the “Project Company Charter”), or increase or decrease the amount of charter capital of the Project Company;

 

(ii)                                                          subject to Section 1.3 of that certain Fifth Amended and Restated Voting Agreement, dated as of the date hereof, by and among the Company and the other parties named therein (as may be amended from time to time), (x) terminate the powers of any member of the board of directors of the Project Company designated by RUSNANO or I2BF (as defined below) prior to the expiration of such member’s term or (y) make or authorize any changes in the scope of authority and decision-making and related procedures of the board of directors of the Project Company (including any increase or decrease in the size of the board of directors of the Project Company);

 

(iii)                                                       effect a restructuring, reorganization or similar change in the equity, debt or assets of the Project Company;

 

(iv)                                                      effect the reorganization, liquidation or bankruptcy of the Project Company (including (1) transactions aimed at prevention of bankruptcy after notification by the sole executive body of the Project Company to the Company pursuant to applicable law and (2) financial rehabilitation), except when bankruptcy is mandatorily required by Russian law to be initiated by the sole executive body of the Project Company;

 

(v)                                                         appoint a liquidating commission for the Project Company, or approve the liquidation balance sheets of the Project Company;

 

(vi)                                                      approve or enter into major transactions proposed by the Project Company concerning the purchase, disposal or possible disposal by the Project Company, directly or indirectly, of its assets with the value exceeding twenty-five percent (25%) of the total value of the assets of the Project Company determined based on its accounting statements prepared in accordance with Russian accounting principles and practices, as required under Russian law or regulation, as in effect from time to time and applied consistently throughout the periods involved for the last reporting period (month) preceding the date of the decision on approval of such transactions;

 

(vii)                                                   approve or enter into any transaction relating to directly or indirectly disposing or encumbering intellectual property assets of the Project Company, subject to Section 3.4 of that certain Intellectual Property License Agreement, dated as of November 7, 2011, by and between the Company and the Project Company (the “License Agreement”);

 

(viii)                                                cause or permit the Project Company to approve or enter into the termination or assignment of, or amendment to, the License Agreement; or

 

(ix)                                                      approve the cash valuation of any assets contributed as payment for participatory interests in the charter capital of the Project Company.

 

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(b)                                 Notwithstanding the foregoing, Section 5.2(a) shall not apply to any transactions regarding the assignment or licensing of intellectual property by and between the Company and the Project Company, subject to Sections 3.4 and 4.1 of the License Agreement.

 

(c)                                  The “SRN Majority Holders” shall mean each of (i) RUSNANO, and (ii) collectively, (A) VTB Capital I2BF Netherlands B.V., a private limited liability company, organized and existing under the laws of the Netherlands, and (B) Selecta RKFN Ltd., a limited liability company organized and existing under the laws of the Russian Federation (the entities named in (A) and (B) together, “I2BF”); provided however that if either such SRN Majority Holder ceases to hold, either directly or through one or more of its Affiliates, all of the shares of Series SRN Preferred Stock held by such SRN Majority Holder as of the date hereof, whether as a result of any transfer, sale, conversion, redemption or otherwise (other than a transfer to an Affiliate that is a permitted transferee pursuant to Section 4.1(b), such SRN Majority Holder shall no longer be deemed to be an SRN Majority Holder for any purpose.

 

(d)                                 Notwithstanding anything to the contrary herein, Section 5.2(a) shall terminate and be of no further force and effect on the earliest date on which each of RUSNANO and I2BF (or one or more of their respective Affiliates that are a permitted transferee pursuant to Section 4.1(b),) no longer holds and has sole beneficial ownership of all of the shares of Series SRN Preferred Stock respectively held by it as of the date hereof, whether as a result of any transfer, sale, conversion, redemption, or otherwise.

 

5.3.                            Affirmative Covenants of the Company Regarding the Project Company.

 

(a)                                 Each of the Company and the SRN Majority Holders covenant and agree until the closing of a Qualified Public Offering:

 

(i)                                                             Each of the SRN Majority Holders shall have the right to require one (1) independent audit of the financial statements of the Project Company per year (in addition to the annually scheduled audit of the Project Company), provided that such audit is conducted at such SRN Majority Holders’ sole expense and provided further that no more than a total of one (1) such independent audit shall be required in any twelve (12) month period.

 

(ii)                                                          In the event there is a Deadlock (as defined below) with respect to any resolution or decision to be made by the board of directors of the Project Company in accordance with the Project Company Charter which cannot be resolved within fifteen (15) business days of occurrence of any Deadlock Event (as defined below), the SRN Majority Holders or the Company may serve notice (a “First Level Notice”) in writing on the other party requiring the Deadlock to be referred to a representative of the SRN Majority Holders and the Company. Each of the SRN Majority Holders and the Company shall cause its respective representative to meet with the other representative within fifteen (15) business days of service of the First Level Notice for the purpose of resolving the Deadlock. If such representative s have not met or are unable to resolve the Deadlock within fifteen (15) business days of service of the First Level Notice, either party may serve notice in writing on the other party (a “Second Level Notice”) requiring that the Deadlock be referred to a panel of third party independent experts (the “Independent Expert Panel”). Each of the SRN Majority Holders and the Company agree that the Independent Expert Panel shall consist of one (1) nominee appointed by each party.

 

21

 

Each of the SRN Majority Holders and the Company shall use its best efforts to appoint a suitable nominee (being an experienced global pharmaceutical executive with qualifications consistent with those of other directors of the Company) and procure that the Independent Expert Panel considers the Deadlock and delivers its determination (the “Expert Solution”) of how to resolve the Deadlock within twenty (20) business days of service of the Second Level Notice. The SRN Majority Holders and the Company shall, acting in good faith, within ten (10) business days of receipt of the Expert Solution, consult with each other and use reasonable efforts to agree to a resolution to the Deadlock based in all material respects on the Expert Solution. In the event that the Company and the SRN Majority Holders agree on such a resolution, they shall use reasonable efforts to procure that such resolution is implemented as soon as reasonably practicable. For the purpose of this Section 5.3(a)(ii), a “Deadlock” shall be deemed to have occurred when (A) a resolution is proposed by the Company, in its capacity as a participant in the Project Company, in accordance with the Project Company Charter and in respect of any of the matters indicated in Section 5.2 or 5.3 hereof, and such resolution is not approved by the SRN Majority Holders, as a holder of Series SRN Preferred Stock during at least two (2) successive duly called meetings of the board of directors of the Project Company; (B) a resolution of the Board of Directors of the Project Company is proposed by a director nominated by the Company and is not adopted by a unanimous vote in accordance with the Project Company Charter with respect to the decisions requiring a unanimous vote pursuant to Section 22 of the Project Company Charter during at least two (2) successive duly called meetings of the board of directors of the Project Company; or (C) a quorum is not present at two (2) successive duly called board meetings of the Project Company for the purpose of considering any resolution referred to in subsection (B) hereof due to the absence of a nominated director from the relevant board meeting (each of the events set forth in (A) through (C) of this subsection 5.3(a)(ii), a “Deadlock Event”).

 

(b)                                 Notwithstanding anything to the contrary herein, Section 5.3(a) shall terminate and be of no further force and effect on the earliest date on which each of RUSNANO and I2BF (or one or more of their respective Affiliates that are a permitted transferee pursuant to Section 4.1(b),) no longer holds and has sole beneficial ownership of all of the shares of Series SRN Preferred Stock respectively held by it as of the date hereof, whether as a result of any transfer, sale, conversion, redemption, or otherwise.

 

5.4.                            Multi-Country Clinical Trials. The Company agrees and covenants that in any instance when any of the Company or the Project Company products reaches clinical trials in at least two (2) countries, the Company shall, or shall cause the Project Company to, as the case may be, include the Republic of Kazakhstan in such clinical trials of such products if permitted under the laws and regulations of the Republic of Kazakhstan.

 

6.                                      General.

 

6.1.                            Severability. The provisions of this Agreement are severable, so that the invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other term or provision of this Agreement, which shall remain in full force and effect.

 

22

 

6.2.                            Specific Performance. In addition to any and all other remedies that may be available at law in the event of any breach of this Agreement, each Holder shall be entitled to specific performance of the agreements and obligations of any other Holder hereunder and to such other injunctive or other equitable relief as may be granted by a court of competent jurisdiction.

 

6.3.                            Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with the internal laws of the State of New York without regard to conflict of law principles that would result in the application of any law other than the law of the State of New York.

 

6.4.                            Notices. All notices, requests, consents, and other communications under this Agreement shall be in writing and shall be deemed delivered (a) for notices sent by the Company to addressees within the United States, two (2) business days after being sent by registered or certified mail, return receipt requested, postage prepaid, (b) three (3) business days after being sent via a reputable international courier service with expedited delivery, in each case to the intended recipient as set forth below, or (c) immediately upon being sent by facsimile, provided that the sender receives electronic confirmation of delivery, or electronic mail:

 

(i)                                     If to the Company:

 

Selecta Biosciences, Inc.

480 Arsenal Street, Building One

Watertown, Massachusetts 02472

Attn: President

Fax: 617-924-3454

E-mail: wcautreels@selectabio.com

 

with a copy to:

 

Jeffrey L. Quillen, Esquire

Foley Hoag LLP

Seaport World Trade Center West

155 Seaport Boulevard

Boston, Massachusetts 02210

Fax: 617-832-7000

E-mail: jlq@foleyhoag.com

 

(ii)           If to a Purchaser, at its address set forth in Schedule A hereto, or at such other address as may have been furnished to the other parties hereto in writing by such Purchaser;

 

(iii)          If to a Licensor Shareholder, at its address set forth in Schedule B hereto, or at such other address as may have been furnished to the other parties hereto in writing by such Licensor Shareholder; and

 

23

 

(iv)                              If to a Founder, at the Company or at such other address or addresses as may have been furnished to the other parties hereto in writing by such Founder.

 

Any party may give any notice, request, consent or other communication under this Agreement using any other means (including, without limitation, personal delivery, messenger service, first class mail or electronic mail), but no such notice, request, consent or other communication shall be deemed to have been duly given unless and until it is actually received by the party for whom it is intended. Any party may change the address to which notices, requests, consents or other communications hereunder are to be delivered by giving the other parties notice in the manner set forth in this Section 6.4.

 

6.5.                            Complete Agreement; Amendments. This Agreement constitutes the entire agreement and understanding of the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings relating to such subject matter. No amendment, modification or termination of, or waiver under, any provision of this Agreement shall be valid unless in writing and signed by (i) the Company, (ii) the Founders holding a majority of the voting power of the shares of the Company’s capital stock then held by all of the Founders and (iii) the Purchasers holding at least 66 2/3% of the Registrable Securities then held by all of the Purchasers, and any such amendment, modification, termination or waiver shall be binding on all parties hereto; provided that any such waiver or amendment which materially adversely affects the rights, privileges, duties or obligations of a Purchaser in a manner materially different than those of all other Purchasers shall not be effective without the written consent of the affected Purchaser. Notwithstanding anything to the contrary herein, neither Section 5.2 nor Section 5.3 may be amended without the prior written consent of the SRN Majority Holders, if any. Notwithstanding anything to the contrary herein, this Agreement may be amended by the Company without the consent of any of the other parties hereto to add as a party hereto and include information regarding and otherwise accommodate an additional purchaser of shares of Series E Preferred Stock pursuant to the Purchase Agreement, as may be amended from time to time; provided that any such amendment does not materially and adversely affect the rights of any Purchaser under this Agreement (it being agreed that the issuance of additional shares of capital stock in accordance with the Purchase Agreement, as may be amended or modified from time to time in accordance with its terms, and the other Financing Agreements (as such term is defined in the Purchase Agreement), each as may be modified from time to time in accordance with its respective terms, shall not be deemed to affect the Purchasers under this Agreement).

 

6.6.                            Construction. A reference to a Section or Schedule shall mean a Section in or Schedule to this Agreement unless otherwise expressly stated. The titles and headings herein are for reference purposes only and shall not in any manner limit the construction of this Agreement which shall be considered as a whole. The words “include,” “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation.” Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of names and pronouns shall include the plural and vice-versa.

 

24

 

6.7.                            Counterparts; Facsimile Signatures. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

6.8.                            Amended and Restated Agreement. The Former Investors’ Rights Agreement is hereby amended in its entirety and restated herein. Such amendment and restatement is effective upon the execution of this Agreement by (i) the Company; (ii) the Founders holding a majority of the voting power of the shares held by all of the Founders; and (iii) the Purchasers (as such term is defined in the Former Investors’ Rights Agreement) holding at least 66 2/3% of the voting power of the Registrable Securities (as such term is defined in the Former Investors’ Rights Agreement) held by all such Purchasers as of the date of this Agreement. Upon such execution, all provisions of, rights granted and covenants made in the Former Investors’ Rights Agreement are hereby waived, released and superseded in their entirety and shall have no further force or effect, including, without limitation, all participation rights and any notice period associated therewith otherwise applicable to the transactions contemplated by the Purchase Agreement. Each of such Founders and Purchasers acknowledge and agree that the execution and delivery by the Company of this Agreement, the Purchase Agreement and the additional Financing Agreements and the performance by the Company of its obligations thereunder do not constitute a default under the provisions of the Former Investors’ Rights Agreement.

 

6.9.                            Dispute Resolution. Any dispute, controversy or claim arising out of or relating to this Agreement, including its existence, validity, interpretation, performance, non-performance, breach or termination (collectively, the “Dispute”) shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce (the “ICC Rules”), except as they may be modified herein or by mutual agreement of the parties. The Dispute shall be resolved by three (3) arbitrators appointed in the following manner: each party shall nominate an arbitrator for confirmation as provided in the ICC Rules and following their confirmation, the third arbitrator shall be appointed by the International Court of Arbitration of the International Chamber of Commerce; provided, however, that at least one (1) of such arbitrators shall have substantive expertise in the pharmaceutical industry. The place of arbitration shall be New York, New York. The language of the arbitration shall be English. The tribunal shall determine the proportion of the costs of the arbitration which each party shall bear. The award shall be final, conclusive and binding upon the parties hereto. Judgment upon the award may be entered by any court having jurisdiction thereof or having jurisdiction over the relevant party or its assets.

 

[Remainder of page intentionally left blank.]

 

25

 

IN WITNESS WHEREOF, the parties hereto have executed this Fifth Amended and Restated Investors’ Rights Agreement as an instrument under seal as of the date first above written.

 

 

	
 
    	
SELECTA BIOSCIENCES, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Werner Cautreels
    
	
 
    	
Name:
    	
Werner Cautreels
    
	
 
    	
Title:
    	
President and CEO
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
FOUNDERS:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Omid Farokhzad
    
	
 
    	
Omid Farokhzad
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Ulrich von Andrian
    
	
 
    	
Ulrich von Andrian
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Robert S. Langer, Jr.
    
	
 
    	
Robert S. Langer, Jr.
    

 

-Signature Page to Fifth  Amended and Restated Investors’ Rights Agreement-

 

 

	
PURCHASERS:
    	
POLARIS VENTURE   PARTNERS V, L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
POLARIS VENTURE   MANAGEMENT
    
	
 
    	
 
    	
CO. V, L.L.C.
    
	
 
    	
 
    	
its General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ William E. Bilodeau
    
	
 
    	
 
    	
 
    	
William E. Bilodeau
    
	
 
    	
 
    	
 
    	
Attorney-in-Fact
    
	
 
    	
 
    
	
 
    	
POLARIS VENTURE   PARTNERS
    
	
 
    	
ENTREPRENEURS’ FUND V,   L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
POLARIS VENTURE   MANAGEMENT
    
	
 
    	
 
    	
CO. V, L.L.C.
    
	
 
    	
 
    	
its General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ William E. Bilodeau
    
	
 
    	
 
    	
 
    	
William E. Bilodeau
    
	
 
    	
 
    	
 
    	
Attorney-in-fact
    
	
 
    	
 
    
	
 
    	
POLARIS VENTURE   PARTNERS
    
	
 
    	
FOUNDERS’ FUND V, L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
POLARIS VENTURE   MANAGEMENT
    
	
 
    	
 
    	
CO. V, L.L.C.
    
	
 
    	
 
    	
its General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ William E. Bilodeau
    
	
 
    	
 
    	
 
    	
William E. Bilodeau
    
	
 
    	
 
    	
 
    	
Attorney-in-fact
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
POLARIS VENTURE   PARTNERS
    
	
 
    	
SPECIAL FOUNDERS’ FUND   V, L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
POLARIS VENTURE   MANAGEMENT
    
	
 
    	
 
    	
CO. V, L.L.C.
    
	
 
    	
 
    	
its General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ William E. Bilodeau
    
	
 
    	
 
    	
 
    	
William E. Bilodeau
    
	
 
    	
 
    	
 
    	
Attorney-in-fact
    

 

-Signature Page to Fifth Amended and Restated Investors’ Rights Agreement-

 

 

	
PURCHASER:
    	
FLAGSHIP VENTURES FUND 2007, L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
Flagship Ventures 2007 General Partner LLC,
    
	
 
    	
 
    	
its General Partner
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Edwin M. Kania, Jr.
    
	
 
    	
 
    	
Edwin M. Kania, Jr.
    
	
 
    	
 
    	
Manager
    
				

 

-Signature Page to Fifth Amended and Restated Investors’ Rights Agreement-

 

 

	
PURCHASER:
    	
NANODIMENSION, L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
NanoDimension Management Limited, its
    
	
 
    	
 
    	
General Partner
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jonathan Nicholson
    
	
 
    	
 
    	
Jonathan Nicholson
    
	
 
    	
 
    	
Director
    
				

 

-Signature Page to Fifth Amended and Restated Investors’ Rights Agreement-

 

 

	
PURCHASERS:
    	
ORBIMED ASSOCIATES III,   LP
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
OrbiMed Advisors LLC,
    
	
 
    	
 
    	
its General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Carl Gordon
    
	
 
    	
 
    	
Carl Gordon
    
	
 
    	
 
    	
Member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
ORBIMED PRIVATE   INVESTMENTS III, LP
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
OrbiMed Capital GP III   LLC,
    
	
 
    	
 
    	
its General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
OrbiMed Advisors LLC,
    
	
 
    	
 
    	
its Managing Member
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Carl Gordon
    
	
 
    	
 
    	
Carl Gordon
    
	
 
    	
 
    	
Member
    

 

-Signature Page to Fifth Amended and Restated Investors’ Rights Agreement-

 

 

	
PURCHASER:
    	
EMINENT II VENTURE   CAPTIAL CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Ching-Chen Huang
    
	
 
    	
Name:
    	
Ching-Chen Huang
    
	
 
    	
Title:
    	
President
    

 

-Signature Page to Fifth Amended and Restated Investors’ Rights Agreement-

 

 

	
PURCHASERS:
    	
LEUKON INVESTMENTS, LP
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
LKST, Inc., its General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Timothy A. Springer
    
	
 
    	
 
    	
Timothy A. Springer
    
	
 
    	
 
    	
President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
TAS PARTNERS, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Timothy A. Springer
    
	
 
    	
 
    	
Timothy A. Springer
    
	
 
    	
 
    	
Manager
    

 

-Signature Page to Fifth Amended and Restated Investors’ Rights Agreement-

 

 

	
PURCHASER:
    	
RUSNANO
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Yuri Udaltsov
    
	
 
    	
Name:
    	
Yuri Udaltsov
    
	
 
    	
Title:
    	
Deputy Chairman of the   Management Board of Management Company RUSNANO LLC acting on the basis of a   power of attorney
    

 

-Signature Page to Fifth Amended and Restated Investors’ Rights Agreement-

 

 

	
PURCHASER:
    	
ALEXANDRIA EQUITIES,   LLC
    
	
 
    	
A Delaware limited   liability company
    
	
 
    	
 
    
	
 
    	
By: ALEXANDRIA REAL   ESTATE EQUITIES,
   INC., a Maryland corporation, managing member
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Eric S. Johnson
    
	
 
    	
Name:
    	
Eric S. Johnson
    
	
 
    	
Title:
    	
Senior Vice President
   RE Legal Affairs
    

 

-Signature Page to Fifth Amended and Restated Investors’ Rights Agreement-

 

 

	
PURCHASERS:
    	
BIODYNAMICS CORE, L.P.
    
	
 
    	
 
    
	
 
    	
By: BioDynamics, LLC,   its General Partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Omid Farokhzad, M.D.
    
	
 
    	
Name:
    	
Omid Farokhzad, M.D.
    
	
 
    	
Title:
    	
Member
    

 

-Signature Page to Fifth Amended and Restated Investors’ Rights Agreement-

 

 

	
PURCHASERS:
    	
OSAGE UNIVERSITY PARTNERS II,   L.P.
    
	
 
    	
 
    
	
 
    	
By: OSAGE UNIVERSITY GP II, LP,   its General Partner
    
	
 
    	
 
    
	
 
    	
By: OSAGE PARTNERS, LLC, its   General Partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Marc Singer
    
	
 
    	
Name:
    	
Marc Singer
    
	
 
    	
Title:
    	
Member
    

 

-Signature Page to Fifth Amended and Restated Investors’ Rights Agreement-

 

 

	
PURCHASERS:
    	
AVENTISUB LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Joseph M. Palladino
    
	
 
    	
Name: 
    	
Joe M. Palladino
    
	
 
    	
Title: 
    	
President
    

 

-Signature Page to Fifth Amended and Restated Investors’ Rights Agreement-

 

 

	
PURCHASERS:
    	
SPHERA GLOBAL   HEALTHCARE MASTER FUND
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Doron Breen
    
	
 
    	
Name:
    	
Doron Breen
    
	
 
    	
Title:
    	
Director
    

 

-Signature Page to Fifth Amended and Restated Investors’ Rights Agreement-

 

 

	
PURCHASERS:
    	
RIDGEBACK CAPITAL INVESTMENTS LP
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Christian Sheldon
    
	
 
    	
Name:
    	
Christian Sheldon
    
	
 
    	
Title:
    	
C.T.O
    

 

-Signature Page to Fifth Amended and Restated Investors’ Rights Agreement-

 

 

	
PURCHASERS:
    	
AJU LIFE SCIENCE OVERSEAS EXPANSION
    
	
 
    	
PLATFORM FUND C/O AJU IB INVESTMENT
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Ji-Won Kim
    
	
 
    	
Name:
    	
Ji-Won Kim
    
	
 
    	
Title:
    	
CEO
    

 

-Signature Page to Fifth Amended and Restated Investors’ Rights Agreement-

 

 

SCHEDULE A

 

Purchasers

 

VTB Capital I2BF Netherlands B.V.

Herikerbergweg 238, 1101 CM Amsterdam Zuidoost

Netherlands

 

Selecta RKFN Ltd.

123290, Russia, Moscow, 1-y

Magistralnyy tupik, 5A

 

RUSNANO

10A prospect 60-letiya Oktyabrya

Moscow, Russia 117036

 

Eminent II Venture Capital Corporation

Room A, 28th Floor, No. 7, Sec. 5

Xinyi Rd., Xinyi District

Taipei City 110, Taiwan

 

Flagship Ventures Fund 2007, L.P.

One Memorial Drive, 7th Floor

Cambridge, MA 02142

 

Polaris Venture Partners V, L.P.

1000 Winter Street, Suite 3350

Waltham, MA 02451

Attn: Amir H. Nashat

 

Polaris Venture Partners Entrepreneurs’ Fund V, L.P.

1000 Winter Street, Suite 3350

Waltham, MA 02451

Attn: Amir H. Nashat

 

Polaris Venture Partners Founders’ Fund V, L.P.

1000 Winter Street, Suite 3350

Waltham, MA 02451

Attn: Amir H. Nashat

 

Polaris Venture Partners Special Founders’ Fund V, L.P.

1000 Winter Street, Suite 3350

Waltham, MA 02451

Attn: Amir H. Nashat

 

 

NanoDimension L.P.

c/o NanoDimension Management Limited

Attention Jonathan Nicholson

Centennial Towers, Suite 306B

2454 West Bay Road

Grand Cayman, Cayman Islands

 

Leukon Investments, LP

36 Woodman Rd.

Newton, Massachusetts 02467

Attention: Dr. Timothy A. Springer

 

TAS Partners, LLC

36 Woodman Rd.

Newton, Massachusetts 02467

Attention: Dr. Timothy A. Springer

 

OrbiMed Private Investments III LP

767 Third Avenue, 30th Floor

New York NY 10017

Attn: Carl Gordon

 

OrbiMed Associates III, LP

767 Third Avenue, 30th Floor

New York NY 10017

Attn: Carl Gordon

 

Alexandria Equities, LLC

385 E. Colorado Blvd., Suite 299, Pasadena, CA 91101

Attn: Joel S. Marcus, CEO

 

Blakeley Ventures, LLC

60 State Street, Suite 3400

Boston, MA 02109

 

Jeffrey B. Larson

6 Arlington Street, Unit 5

Boston, MA 02116

 

Samiei & Morse Partnership

59 Farnham Street

Belmont, MA 02478

 

Megan Kelleher

444 Far Reach Road

Westwood, MA 02090

 

 

Dimitris Bertsimas

43 Lantern Rd.

Belmont, MA 02478

 

Peter W. Doelger

144 Beacon Street, Apt. 3

Boston, MA 02116

 

SILVER ROCK FINANCIAL LLC

1250 Fourth Street, Fifth Floor

Santa Monica, CA 90401

 

WELLWATER LLC

1250 Fourth Street, Fifth Floor

Santa Monica, CA 90401

 

BAYSIDE PARTNERS LLC

1250 Fourth Street, Fifth Floor

Santa Monica, CA 90401

 

NP1 LLC

1250 Fourth Street, Fifth Floor

Santa Monica, CA 90401

 

GENUNO LLC

1250 Fourth Street, Fifth Floor

Santa Monica, CA 90401

 

DNSMORE LLC

1250 Fourth Street, Fifth Floor

Santa Monica, CA 90401

 

GENTRACE LLC

1250 Fourth Street, Fifth Floor

Santa Monica, CA 90401

 

GENDOS LLC

1250 Fourth Street, Fifth Floor

Santa Monica, CA 90401

 

Mark Afrasiabi

711 El Medio Ave

Pacific Palisades CA 90272

 

Scott Cohen

405 Palisades Ave

Santa Monica CA 90402

 

 

Aventisub LLC

c/o Sanofi

54 rue La Boetie

75008 Paris :

Facsimile : +33 1 53 77 44 53

Attn : Vice President, Legal Operations

 

Sphera Fund

c/o Sphera Funds Management

21 Ha’Arbaah Street

Platinum House

Tel Aviv 64739

 

Osage University Partners II, L.P.

50 Monument Road

Suite 201

Bala Cynwyd, PA 19004

 

Biodynamics Core LP

c/o Biodynamics LLC

15 Laura Rd.

Waban, MA 02468

 

AJU Life Science Overseas Expansion Platform Fund

c/o AJU IB Investment Co. Ltd.

201 Teheran-ro, 5th floor

Gangnam-gu

Seoul, Korea 135-978

Attention: Mr. Ji-won Kim, CEO

 

Ridgeback Capital Investments LP

500 South Pointe, Suite 220

Miami Beach, FL 33139

 

WV Investment Trust B

Attn. Alan Rottenberg, Trustee

Goulston & Storrs

400 Atlantic Avenue

Boston, MA 02110

 

* * * * *

 

 

SCHEDULE B

 

Licensor Shareholders

 

Massachusetts Institute of Technology

Treasurer’s Office

238 Main Street

Cambridge, MA 02142

Attention: Philip Rotner

Fax: 617.258.6676

 

President and Fellows of Harvard College

Harvard University Office of Technology Development

Attn: Michal Preminger, Senior Director of Business Development

1350 Massachusetts Ave, Suite 727

Cambridge, Massachusetts

Tel: 617-432-3896

Fax: 617-432-2788

Email: michal_preminger@harvard.edu

 

The Brigham and Women’s Hospital, Inc.

Research and Licensing

101 Huntington Ave, 4th Floor

Boston, MA 02199

Attn: Arlene Parquette, Licensing Associate

phone: 617-954-9381

fax: 617-954-9361

 

Children’s Medical Center Corporation

Intellectual Property Office

Children’s Hospital Boston

300 Longwood Avenue

Boston, MA 02115

Attn: Nurjana Bachman, PhD

Ph: (617) 919-3028

Fax: (617) 919-3031

Nurjana.Bachman@Childrens.Harvard.edu

 

Immune Disease Institute, Inc.

Office of Technology Development

800 Huntington Avenue

Boston, MA 02115

Attn: Ryan M. Dietz, Director

Tel: 617.278.3463

Fax: 617.278.3395

email: dietz@idi.harvard.edu

 

 

EXHIBIT A

 

Project Company Reporting Requirements

 

	
Document
    	
 
    	
Deadline for submitting
    
	
Balance Sheet (Form No 1, approved by the   Order of the Ministry of Finance of the Russian Federation No 67n «On   the forms of accounting of organizations» (onward - «Order No 67n»))
    	
 
    	
Quarterly, no later than 30 (thirty) days after the   end of the reporting quarter
    
	
 
    	
 
    	
 
    
	
Income statement (Form No 2 approved by   Order No 67n)
    	
 
    	
Quarterly, no later than 30 (thirty) days after the   end of the reporting quarter
    
	
 
    	
 
    	
 
    
	
Statement of changes in the equity (form No 3,   approved by Order No 67n)
    	
 
    	
Annually, no later than 90 (ninety) days after the   end of the reporting year
    
	
 
    	
 
    	
 
    
	
Statement of cash flows (Form No 4,   approved by Order No 67n)
    	
 
    	
Annually, no later than 90 (ninety) days after the   end of the reporting year
    
	
 
    	
 
    	
 
    
	
Annex to the balance sheet (Form No 5,   approved by Order No 67n)
    	
 
    	
Annually, no later than 90 (ninety) days after the   end of the reporting year
    
	
 
    	
 
    	
 
    
	
Audit report
    	
 
    	
Annually, no later than 20 (twenty) business days   from the date of approval at the annual shareholders’ meeting of the Russian   Entity.
    
	
 
    	
 
    	
 
    
	
Tax returns for income tax, VAT and property tax
    	
 
    	
Annually, no later than 90 (ninety) days after the   end of the reporting year
    
	
 
    	
 
    	
 
    
	
Statistical reports (forms of The State Committee of   Statistics)
    	
 
    	
Annually, no later than 90 (ninety) days after the   end of the reporting year
    
	
 
    
	
- Information   about the presence and movement of fixed assets (funds) and other non-financial   assets 7/10/2009 No 132
    
	
 
    	
 
    
	
- The main   data of the activity of the organization 7/28/2009 No 153
    	
 
    
	
 
    	
 
    
	
- Information   about the shipment of goods, works and services related to nanotechnologies   2/8/2010 No 83
    	
 
    
	
 
    	
 
    
	
- Data on   production output by (Russian) National Classification of Products by   Economic Activities (NCPEA) 1/28/2010 No 76
    	
 
    
	
 
    	
 
    
	
- Information   about creation and use of advanced manufacturing technologies 10/30/2009   No 237
    	
 
    
	
 
    	
 
    
	
- Information   about the innovation activity of the organization 10/30/2009 No 237
    	
 
    

 

 

	
- Information   about commercial technology exchange with foreign countries (partners)   8/20/2008 No 199
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
- Information   about investments in non-financial assets 7/10/2009 No 132
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
- Information   about investment activity 8/14/2008 No 189
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
- Information   on the number and wages of workers 8/26/2009 No 184
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
- Information   about the financial status of the organization 7/16/2009 No 139
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
- Information   on financial investments 7/16/2009 No 139
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Appendix No4 to form number P-1 approved by the   Order of the (Russian) Federal State Statistics Service 2/8/2010 No83
    	
 
    	
Quarterly, no later than the 20th (twentieth) day of the   month following the reporting period
    
	
 
    	
 
    	
 
    
	
Statement of cash flows (using form mutually   agreeable to the Project Company and Rusnano)
    	
 
    	
Monthly, no later than 5th (fifth) business day of the month following   the reporting month
    
	
 
    	
 
    	
 
    
	
Income statement (using form mutually agreeable to   the Project Company and Rusnano)
    	
 
    	
Quarterly, within 5 (five) business days after the   date of submission of the Russian Entity’s financial statements for the   corresponding period
    
	
 
    	
 
    	
 
    
	
Balance sheet (using form mutually agreeable to the   Project Company and Rusnano)
    	
 
    	
Quarterly, within 5 (five) business days after the   date of submission of the Russian Entity’s financial statements for the   corresponding period
    
	
 
    	
 
    	
 
    
	
Certificate of Incorporation (original / certified   copy) on the last working day of the reporting period
    	
 
    	
Annually no later than 5 (five) business days after   the end of the reporting year and after applying the changes
    
	
 
    	
 
    	
 
    
	
Protocols of meetings of Russian Entity’s Board of   Directors and participant(s) with all exhibits
    	
 
    	
Within 5 (five) business days after conducting the   meeting
    
	
 
    	
 
    	
 
    
	
Statement of claim, court/arbitrage ruling   determining the action with respect to the Russian Entity bankruptcy   proceedings and/or the initiation of bankruptcy proceedings
    	
 
    	
Within 5 (five) business days after receipt of the   statement of claim or ruling by the Russian Entity
    
	
 
    	
 
    	
 
    
	
Statement of claim, charges against the Russian   Entity, settlement of which may materially affect the financial condition or   business activities of Russian Entity (a substantial impact is a claim on   more than 10% of Russian Entity’s current book value)
    	
 
    	
Within 5 (five) working days after receipt of the   statement of claim by the Russian Entity
    
	
 
    	
 
    	
 
    
	
Information on enterprises (organizations) engaged   in production activities in the field of nanoindustry
    	
 
    	
Within a month after the beginning of the   development of products, related to nanotechnologies.
    
	
 
    	
 
    	
 
    
	
List of the affiliated persons of the Russian   Entity, which shall include, as relevant: (1) any member of its board of
    	
 
    	
Annually, no later than 5 (five) business days after   the end of the
    

 

 

	
directors, advisory board or other similar board or   body; (2) any member of its executive body; (3) any person having   executive authority, acting singly, on behalf of the Russian Entity;   (4) persons in the same group of companies with the Russian Entity;   (5) person(s) having control over 20% of the participation   interests in the charter capital of the Russian Entity; and   (6) person(s) in which the Russian Entity controls over 20% of its   voting stock, other ownership interests or participation interests in its   charter capital.
    	
 
    	
reporting year, and after the application of changes
    
	
 
    	
 
    	
 
    
	
Annual report on the progress of the Project   (including performance against the Business Plan and R&D Plan) in the   form mutually agreeable to the Project Company and Rusnano
    	
 
    	
Annually, no later than 20 (twenty) business days   after the end of the reporting year
    
	
 
    	
 
    	
 
    
	
Accounting policies of the Russian Entity for the   purposes of accounting and taxation
    	
 
    	
Annually, no later than 90 (ninety) days after the   end of the reporting year
    
	
 
    	
 
    	
 
    
	
Is Quarterly report on the progress of the Project   (including performance against the Business Plan and R&D Plan) in the   form mutually agreeable to the Project Company and Rusnano
    	
 
    	
Quarterly no later than 30 (thirty) days after the   end of the reporting quarter
    

 

 

SELECTA BIOSCIENCES, INC.

 

JOINDER AGREEMENT TO FIFTH AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

 

The undersigned is executing and delivering this Joinder Agreement pursuant to the Fifth Amended and Restated Investors’ Rights Agreement, dated as of August 17, 2015 (as the same may hereafter be amended, the “Agreement”), by and among Selecta Biosciences, Inc., a Delaware corporation (the “Company”) and the other parties named therein.

 

By executing and delivering to the Company this Joinder Agreement, the undersigned hereby (a) agrees that it is a “Purchaser”, as defined in the Agreement; (b) agrees that it is a party to the Agreement for all purposes; and (c) adopts the Agreement with the same force and effect as if the undersigned were originally a party thereto. Any notice required or permitted by the Agreement shall be given to the undersigned at the address listed below its signature hereto.

 

Accordingly, the undersigned has executed and delivered this Joinder Agreement as of the 16 day of September, 2015.

 

	
 
    	
WV INVESTMENT   TRUST B
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Alan W.   Rottenberg
    
	
 
    	
Alan W.   Rottenberg, as trustee and
    
	
 
    	
not individually
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
Attn. Alan W.   Rottenberg, Trustee
    
	
 
    	
Goulston &   Storrs
    
	
 
    	
400 Atlantic   Avenue
    
	
 
    	
Boston, MA 02110
    

 

Accepted and agreed:

 

	
SELECTA   BIOSCIENCES, INC.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Werner   Cautreels
    	
 
    
	
Name: Werner   Cautreels
    	
 
    
	
Title: President   and CEO
    	
 
    
			

 

 

AMENDMENT NO. 1

TO

FIFTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

THIS AMENDMENT NO. 1 TO FIFTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT (this “Amendment”) is made and entered into as of June 7, 2016, by and among Selecta Biosciences, Inc., a Delaware corporation (the “Company”), and the undersigned parties to that certain Fifth Amended and Restated Investors’ Rights Agreement, dated as of August 26, 2015 (as amended, the “Agreement”);

 

WHEREAS, pursuant to Section 6.5 of the Agreement, the Agreement may be amended by written agreement of (i) the Company, (ii) the Founders holding a majority of the shares of capital stock then held by all of the Founders and (iii) Purchasers holding at least 66 2/3% of the Registrable Securities then held by all of the Purchasers (collectively, the “Requisite Parties”);

 

WHEREAS, the Company and the undersigned parties to the Agreement constitute the Requisite Parties; and

 

WHEREAS, the parties hereto desire to amend the Agreement as set forth herein.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby covenant and agree to be bound as follows:

 

Section 1.              Capitalized Terms.  Capitalized terms used herein and not otherwise defined herein shall have the respective meanings assigned to them in the Agreement.

 

Section 2.              Amendments.

 

(a)           Notwithstanding the terms of Section 1.11, Section 1.14 shall continue in full force and effect after the Company shall become subject to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended.

 

(b)           Section 3.1(i) of the Agreement is hereby amended and restated in its entirety to read as follows:

 

“(i)          “Registrable Securities” means (i) the Common Stock held by the Founders and their Permitted Transferees as of the effectiveness of the Company’s Registration Statement on Form S-1 (Reg. No. 333-211555) filed by the Company under the Act, (ii) the Common Stock issuable or issued upon conversion of the Senior Preferred Stock, (iii) the Common Stock issuable or issued upon conversion of the Series SRN Preferred Stock, and (iv) any Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right, or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, the shares referenced in (i) through (iii) above, excluding in all cases, however, any Registrable Securities sold by a person in a transaction in which the rights under this Section 3 are not properly assigned, and excluding any shares for which registration rights have terminated pursuant to Section 3.13 of this Agreement.”

 

(c)           Section 5.4 of the Agreement shall terminate upon the Closing of a Qualified Public Offering.

 

 

(d)           The second sentence of Section 6.5 of the Agreement is hereby amended and restated in its entirety to read as follows:

 

“No amendment, modification or termination of, or waiver under, any provision of this Agreement shall be valid unless in writing and signed by (i) the Company and (ii) the Purchasers and/or the Founders, voting together as a single class, holding a majority of the Outstanding Registrable Securities then held by a Purchaser or Founder (other than a Purchaser or Founder who could sell all Registrable Securities held by such Purchaser or Founder, together with any Affiliate thereof with whom such Purchaser or Founder must aggregate its sales under SEC Rule 144, without restriction under SEC Rule 144(b)(1) within a ninety (90) day period), and any such amendment, modification, termination or waiver shall be binding on all parties hereto; provided that any such waiver or amendment which materially adversely affects the rights, privileges, duties or obligations of a Purchaser in a manner materially different than those of all other Purchasers shall not be effective without the written consent of the affected Purchaser.”

 

Section 3.              No Other Amendments; Conflicts.  No term or provision of the Agreement shall be affected by this Amendment, unless specifically set forth herein and any term or provision not affected by this Amendment shall remain in full force and effect following the date hereof.  In the event of a conflict between the terms of the Agreement and the terms of this Amendment, the terms of this Amendment shall control.

 

Section 4.              Governing Law.   This Amendment shall be governed by, and construed and enforced in accordance with, the internal laws of the State of New York, without regard to conflict of law principles that would result in the application of any law other than the law of the State of New York.

 

Section 5.              Captions; Pronouns.  All articles and section headings or captions contained in this Amendment are inserted only as a matter of convenience and for reference and in no way define, limit, extend or describe the scope of this Amendment or the intent of any provision thereof.  References in the Agreement to the Agreement shall mean the Agreement, as amended by this Amendment.

 

Section 6.              Severability.    If any provision of this Amendment or application to any party or circumstance shall be determined by any court of competent jurisdiction to be invalid or unenforceable to any extent, the remainder of this Amendment or the application of such provision to any other party or circumstances shall not be affected thereby, and each provision shall be valid and shall be enforced to the fullest extent permitted by law.

 

Section 7.              Counterparts. This Amendment may be executed in multiple counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.  The exchange of copies of this Amendment and of signature pages by facsimile transmission or other electronic means shall constitute effective execution and delivery of this Amendment as to the parties and may be used in lieu of the original Amendment for all purposes.

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first written above.

 

 

SELECTA BIOSCIENCES, INC.

 

 

	
By:
    	
/s/ Werner Cautreels,   Ph.D.
    	
 
    
	
Name: Werner Cautreels,   Ph.D.
    	
 
    
	
Title: President and   Chief Executive Officer
    	
 
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights Agreement

 

 

	
FOUNDERS:
    	
/s/ Omid Farokhzad
    
	
 
    	
Omid Farokhzad
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Robert S.   Langer, Jr.
    
	
 
    	
Robert S.   Langer, Jr.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Ulrich von Andrian
    
	
 
    	
Ulrich von Andrian
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights Agreement

 

 

	
PURCHASERS:
    	
POLARIS   VENTURE PARTNERS V, L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
Polaris Venture Management Co. V, L.L.C., its   General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Mary Blair
    
	
 
    	
 
    	
Name:   Mary Blair
    
	
 
    	
 
    	
Title:   Attorney-In-Fact
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
POLARIS   VENTURE PARTNERS ENTREPRENEURS’ FUND V, L.P.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Polaris Venture Management Co. V, L.L.C., its   General Partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Mary Blair
    
	
 
    	
 
    	
Name:   Mary Blair
    
	
 
    	
 
    	
Title:   Attorney-In-Fact
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
POLARIS   VENTURE PARTNERS FOUNDERS’ FUND V, L.P.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Polaris Venture Management Co. V, L.L.C., its   General Partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Mary Blair
    
	
 
    	
 
    	
Name:   Mary Blair
    
	
 
    	
 
    	
Title:   Attorney-In-Fact
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
POLARIS   VENTURE PARTNERS SPECIAL FOUNDERS’ FUND V, L.P.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Polaris Venture Management Co. V, L.L.C., its   General Partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Mary Blair
    
	
 
    	
 
    	
Name:   Mary Blair
    
	
 
    	
 
    	
Title:   Attorney-In-Fact
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights Agreement

 

 

	
PURCHASER:
    	
FLAGSHIP VENTURES FUND 2007, L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
Flagship Ventures 2007 General Partner LLC, its   General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Edwin M. Kania, Jr.
    
	
 
    	
 
    	
Name:   Edwin M. Kania, Jr.
    
	
 
    	
 
    	
Title:   Managing Member
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights Agreement

 

 

	
PURCHASER:
    	
NANODIMENSION, L.P.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
NanoDimension Management Limited, its General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Jonathan Nicholson
    
	
 
    	
 
    	
Name:
    	
Jonathan   Nicholson
    
	
 
    	
 
    	
Title:
    	
Director
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights Agreement

 

 

	
PURCHASERS:
    	
ORBIMED   ASSOCIATES III, LP
    
	
 
    	
 
    
	
 
    	
By:
    	
OrbiMed Advisors LLC, its General Partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Carl Gordon
    
	
 
    	
 
    	
Name:
    	
Carl   Gordon
    
	
 
    	
 
    	
Title:
    	
Member
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
ORBIMED   PRIVATE INVESTMENTS III, LP
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
OrbiMed Capital GP III LLC, its General Partner
    
	
 
    	
By:
    	
OrbiMed Advisors LLC, its Managing Member
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Carl Gordon
    
	
 
    	
 
    	
Name:
    	
Carl   Gordon
    
	
 
    	
 
    	
Title:
    	
Member
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights Agreement

 

 

	
PURCHASERS:
    	
LEUKON   INVESTMENTS, LP
    
	
 
    	
 
    
	
 
    	
By:
    	
LKST, Inc., its General Partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Timothy Springer
    
	
 
    	
 
    	
Name:
    	
Timothy   Springer
    
	
 
    	
 
    	
Title:
    	
President
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
TAS   PARTNERS, LLC
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Timothy Springer
    
	
 
    	
Name:   
    	
Timothy   Springer
    
	
 
    	
Title:
    	
Manager
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights Agreement

 

 

	
PURCHASER:
    	
EMINENT   II VENTURE CAPITAL CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights Agreement

 

 

	
PURCHASER:
    	
RUSNANO
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Yuri Udaltsov
    
	
 
    	
Name:
    	
Yuri   Udaltsov
    
	
 
    	
Title:
    	
Deputy   Chairman of the Management Board of Management Company RUSNANO LLC acting on   the basis of a power of attorney
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights Agreement

 

 

	
PURCHASERS:
    	
VTB   CAPITAL I2BF NETHERLANDS B.V.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
and
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SELECTA   RKFN LTD.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights Agreement

 

 

	
PURCHASER:
    	
ALEXANDRIA   EQUITIES, LLC
    
	
 
    	
A Delaware limited libability company
    
	
 
    	
 
    
	
 
    	
By:
    	
ALEXANDRIA REAL ESTATE EQUITIES, INC., a   Maryland corporation, managing member
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Gary Dean
    
	
 
    	
 
    	
Name:
    	
Gary Dean
    
	
 
    	
 
    	
Title:
    	
Senior Vice President
   RE Legal Affairs
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights Agreement

 

 

	
PURCHASER:
    	
BIODYNAMICS   CORE, L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
BioDynamics, LLC, its General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Omid Farokhzad
    
	
 
    	
 
    	
Name:
    	
Omid Farokhzad
    
	
 
    	
 
    	
Title:
    	
Member
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights Agreement

 

 

 

	
PURCHASER:
    	
OSAGE   UNIVERSITY PARTNERS II, L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
OSAGE UNIVERSITY GP II, LP, its General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
OSAGE PARTNERS, LLC, its General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   William Harrington
    
	
 
    	
 
    	
Name:
    	
William   Harrington
    
	
 
    	
 
    	
Title:
    	
Member
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights Agreement

 

 

	
PURCHASER:
    	
AVENTISUB,   LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights Agreement

 

 

	
PURCHASER:
    	
RIDGEBACK   CAPITAL INVESTMENTS, LP
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights Agreement

 

 

	
PURCHASER:
    	
BLAKELEY   VENTURES, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights Agreement

 

 

	
PURCHASER:
    	
SAMIEI &   MORSE PARTNERSHIP
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights Agreement

 

 

	
PURCHASER:
    	
AJU   LIFE SCIENCE OVERSEAS EXPANSION PLATFORM FUND C/O AJU IB INVESTMENT
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Ji-Won Kim
    
	
 
    	
Name:   Ji-Won Kim
    
	
 
    	
Title:   Chief Executive Officer
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights Agreement

 

 

	
PURCHASER:
    	
SPHERA   GLOBAL HEALTHCARE MASTER FUND
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights Agreement

 

 

	
PURCHASER:
    	
WV   INVESTMENT TRUST B
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights Agreement

 

 

	
PURCHASERS:
    	
GENTRACE   LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
GENDOS   LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights Agreement

 

 

	
PURCHASER:
    	
BAYSIDE   PARTNERS LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights Agreement

 

 

	
PURCHASERS:
    	
SILVER   ROCK FINANCIAL LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
WELLWATER   LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
NP1   LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
GENUNO   LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
DNSMORE   LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights Agreement

 

 

	
PURCHASER:
    	
 
    
	
 
    	
Mark Afrasiabi
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights Agreement

 

 

	
PURCHASER:
    	
/s/ Scott Cohen
    
	
 
    	
Scott Cohen
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights Agreement

 

 

	
PURCHASER:
    	
/s/ Jeffrey B. Larson
    
	
 
    	
Jeffrey B. Larson
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights Agreement

 

 

	
PURCHASER:
    	
/s/ Megan Kelleher
    
	
 
    	
Megan Kelleher
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights Agreement

 

 

PURCHASER:

	
 
    	
 
    
	
 
    	
Dimitris Bertsimas
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights Agreement

 

 

PURCHASER:

	
 
    	
 
    
	
 
    	
Peter Doelger
    

 

Signature Page to Amendment No. 1 to Fifth Amended and Restated Investors’ Rights AgreementExhibit 10.2

 

SELECTA BIOSCIENCES, INC.
 2016 INCENTIVE AWARD PLAN

 

ARTICLE I.
 PURPOSE

 

The Plan’s purpose is to enhance the Company’s ability to attract, retain and motivate persons who make (or are expected to make) important contributions to the Company by providing these individuals with equity ownership opportunities.  Capitalized terms used in the Plan are defined in Article XI.

 

ARTICLE II.
 ELIGIBILITY

 

Service Providers are eligible to be granted Awards under the Plan, subject to the limitations described herein.

 

ARTICLE III.
 ADMINISTRATION AND DELEGATION

 

3.1          Administration.  The Plan is administered by the Administrator.  The Administrator has authority to determine which Service Providers receive Awards, grant Awards and set Award terms and conditions, subject to the conditions and limitations in the Plan.  The Administrator also has the authority to take all actions and make all determinations under the Plan, to interpret the Plan and Award Agreements and to adopt, amend and repeal Plan administrative rules, guidelines and practices as it deems advisable.  The Administrator may correct defects and ambiguities, supply omissions and reconcile inconsistencies in the Plan or any Award as it deems necessary or appropriate to administer the Plan and any Awards.  The Administrator’s determinations under the Plan are in its sole discretion and will be final and binding on all persons having or claiming any interest in the Plan or any Award.

 

3.2          Appointment of Committees.  To the extent Applicable Laws permit, the Board may delegate any or all of its powers under the Plan to one or more Committees or officers of the Company or any of its Subsidiaries.  The Board may abolish any Committee or re-vest in itself any previously delegated authority at any time.

 

ARTICLE IV.
 STOCK AVAILABLE FOR AWARDS

 

4.1          Number of Shares.  Subject to adjustment under Article VIII and the terms of this Article IV, Awards may be made under the Plan covering up to the Overall Share Limit.  As of the Plan’s effective date under Section 10.3, the Company will cease granting awards under the Prior Plans; however, Prior Plan Awards will remain subject to the terms of the applicable Prior Plan. Shares issued under the Plan may consist of authorized but unissued Shares, Shares purchased on the open market or treasury Shares.

 

4.2          Share Recycling.  If all or any part of an Award or Prior Plan Award expires, lapses or is terminated, exchanged for cash, surrendered, repurchased, canceled without having been fully exercised or forfeited, in any case, in a manner that results in the Company acquiring Shares covered by the Award or Prior Plan Award at a price not greater than the price (as adjusted to reflect any Equity Restructuring)

 

 

paid by the Participant for such Shares or not issuing any Shares covered by the Award or Prior Plan  Award, the unused Shares covered by the Award or Prior Plan Award will, as applicable, become or again be available for Award grants under the Plan.  Further, Shares delivered (either by actual delivery or attestation) to the Company by a Participant to satisfy the applicable exercise or purchase price of an Award or Prior Plan Award and/or to satisfy any applicable tax withholding obligation (including Shares retained by the Company from the Award or Prior Plan Award being exercised or purchased and/or creating the tax obligation) will, as applicable, become or again be available for Award grants under the Plan.  The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards or Prior Plan Awards shall not count against the Overall Share Limit.

 

4.3          Incentive Stock Option Limitations.  Notwithstanding anything to the contrary herein, no more than 8,133,333 Shares may be issued pursuant to the exercise of Incentive Stock Options.

 

4.4          Substitute Awards.  In connection with an entity’s merger or consolidation with the Company or the Company’s acquisition of an entity’s property or stock, the Administrator may grant Awards in substitution for any options or other stock or stock-based awards granted before such merger or consolidation by such entity or its affiliate.  Substitute Awards may be granted on such terms as the Administrator deems appropriate, notwithstanding limitations on Awards in the Plan.  Substitute Awards will not count against the Overall Share Limit (nor shall Shares subject to a Substitute Award be added to the Shares available for Awards under the Plan as provided above), except that Shares acquired by exercise of substitute Incentive Stock Options will count against the maximum number of Shares that may be issued pursuant to the exercise of Incentive Stock Options under the Plan. Additionally, in the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for grant under the Plan (and Shares subject to such Awards shall not be added to the Shares available for Awards under the Plan as provided above); provided that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not Employees or Directors prior to such acquisition or combination.

 

4.5          Non-Employee Director Compensation.  Notwithstanding any provision to the contrary in the Plan, the Administrator may establish compensation for non-employee Directors from time to time, subject to the limitations in the Plan.  The Administrator will from time to time determine the terms, conditions and amounts of all such non-employee Director compensation in its discretion and pursuant to the exercise of its business judgment, taking into account such factors, circumstances and considerations as it shall deem relevant from time to time, provided that the sum of any cash compensation, or other compensation, and the value (determined as of the grant date in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto) of Awards granted to a non-employee Director as compensation for services as a non-employee Director during any fiscal year of the Company may not exceed $1,000,000 in the fiscal year of a non-employee Director’s initial service as a non-employee Director or $750,000 in any subsequent fiscal year.  The Administrator may make exceptions to this limit for individual non-employee Directors in extraordinary circumstances, as the Administrator may determine in its discretion, provided that the non-employee Director receiving such additional compensation may not participate in the decision to award such compensation or in other contemporaneous compensation decisions involving non-employee Directors.

 

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ARTICLE V.
 STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

 

5.1          General.  The Administrator may grant Options or Stock Appreciation Rights to Service Providers subject to the limitations in the Plan, including any limitations in the Plan that apply to Incentive Stock Options.  The Administrator will determine the number of Shares covered by each Option and Stock Appreciation Right, the exercise price of each Option and Stock Appreciation Right and the conditions and limitations applicable to the exercise of each Option and Stock Appreciation Right.  A Stock Appreciation Right will entitle the Participant (or other person entitled to exercise the Stock Appreciation Right) to receive from the Company upon exercise of the exercisable portion of the Stock Appreciation Right an amount determined by multiplying the excess, if any, of the Fair Market Value of one Share on the date of exercise over the exercise price per Share of the Stock Appreciation Right by the number of Shares with respect to which the Stock Appreciation Right is exercised, subject to any limitations of the Plan or that the Administrator may impose and payable in cash, Shares valued at Fair Market Value or a combination of the two as the Administrator may determine or provide in the Award Agreement.

 

5.2          Exercise Price.  The Administrator will establish each Option’s and Stock Appreciation Right’s exercise price and specify the exercise price in the Award Agreement.  The exercise price will not be less than 100% of the Fair Market Value on the grant date of the Option or Stock Appreciation Right.

 

5.3          Duration.  Each Option or Stock Appreciation Right will be exercisable at such times and as specified in the Award Agreement, provided that the term of an Option or Stock Appreciation Right will not exceed ten years.  Notwithstanding the foregoing and unless determined otherwise by the Company, in the event that on the last business day of the term of an Option or Stock Appreciation Right (other than an Incentive Stock Option) (i) the exercise of the Option or Stock Appreciation Right is prohibited by Applicable Law, as determined by the Company, or (ii) Shares may not be purchased or sold by the applicable Participant due to any Company insider trading policy (including blackout periods) or a “lock-up” agreement undertaken in connection with an issuance of securities by the Company, the term of the Option or Stock Appreciation Right shall be extended until the date that is thirty (30) days after the end of the legal prohibition, black-out period or lock-up agreement, as determined by the Company; provided, however, in no event shall the extension last beyond the ten year term of the applicable Option or Stock Appreciation Right.  Notwithstanding the foregoing, if the Participant, prior to the end of the term of an Option or Stock Appreciation Right, violates the non-competition, non-solicitation, confidentiality or other similar restrictive covenant provisions of any employment contract, confidentiality and nondisclosure agreement or other agreement between the Participant and the Company or any of its Subsidiaries, the right of the Participant and the Participant’s transferees to exercise any Option or Stock Appreciation Right issued to the Participant shall terminate immediately upon such violation, unless the Company otherwise determines.  In addition, if, prior to the end of the term of an Option or Stock Appreciation Right, the Participant is given notice by the Company or any of its Subsidiaries of the Participant’s Termination of Service by the Company or any of its Subsidiaries for Cause, and the effective date of such Termination of Service is subsequent to the date of the delivery of such notice, the right of the Participant and the Participant’s transferees to exercise any Option or Stock Appreciation Right issued to the Participant shall be suspended from the time of the delivery of such notice until the earlier of (i) such time as it is determined or otherwise agreed that the Participant’s service as a Service Provider will not be terminated for Cause as provided in such notice or (ii) the effective date of the Participant’s Termination of Service by the Company or any of its Subsidiaries for Cause (in which case the right of the Participant and the Participant’s transferees to exercise any Option or Stock Appreciation Right issued to the Participant will terminate immediately upon the effective date of such Termination of Service).

 

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5.4          Exercise.  Options and Stock Appreciation Rights may be exercised by delivering to the Company a written notice of exercise, in a form the Administrator approves (which may be electronic), signed by the person authorized to exercise the Option or Stock Appreciation Right, together with, as applicable, payment in full (i) as specified in Section 5.5 for the number of Shares for which the Award is exercised and (ii) as specified in Section 9.5 for any applicable taxes.  Unless the Administrator otherwise determines, an Option or Stock Appreciation Right may not be exercised for a fraction of a Share.

 

5.5          Payment Upon Exercise.  Subject to Section 10.8, any Company insider trading policy (including blackout periods) and Applicable Laws, the exercise price of an Option must be paid by:

 

(a)           cash, wire transfer of immediately available funds or by check payable to the order of the Company, provided that the Company may limit the use of one of the foregoing payment forms if one or more of the payment forms below is permitted;

 

(b)           if there is a public market for Shares at the time of exercise, unless the Company otherwise determines, (A) delivery (including telephonically to the extent permitted by the Company) of an irrevocable and unconditional undertaking by a broker acceptable to the Company to deliver promptly to the Company sufficient funds to pay the exercise price, or (B) the Participant’s delivery to the Company of a copy of irrevocable and unconditional instructions to a broker acceptable to the Company to deliver promptly to the Company cash or a check sufficient to pay the exercise price; provided that such amount is paid to the Company at such time as may be required by the Administrator;

 

(c)           to the extent permitted by the Administrator, delivery (either by actual delivery or attestation) of Shares owned by the Participant valued at their Fair Market Value;

 

(d)           to the extent permitted by the Administrator, surrendering Shares then issuable upon the Option’s exercise valued at their Fair Market Value on the exercise date;

 

(e)           to the extent permitted by the Administrator, delivery of a promissory note or any other property that the Administrator determines is good and valuable consideration; or

 

(f)            to the extent permitted by the Company, any combination of the above payment forms approved by the Administrator.

 

ARTICLE VI.
 RESTRICTED STOCK; RESTRICTED STOCK UNITS

 

6.1          General.  The Administrator may grant Restricted Stock, or the right to purchase Restricted Stock, to any Service Provider, subject to the Company’s right to repurchase all or part of such shares at their issue price or other stated or formula price from the Participant (or to require forfeiture of such shares) if conditions the Administrator specifies in the Award Agreement are not satisfied before the end of the applicable restriction period or periods that the Administrator establishes for such Award.  In addition, the Administrator may grant to Service Providers Restricted Stock Units, which may be subject to vesting and forfeiture conditions during the applicable restriction period or periods, as set forth in an Award Agreement.  The Administrator will determine and set forth in the Award Agreement the terms and conditions for each Restricted Stock and Restricted Stock Unit Award, subject to the conditions and limitations contained in the Plan.

 

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6.2          Restricted Stock.

 

(a)           Dividends.  Participants holding shares of Restricted Stock will be entitled to all ordinary cash dividends paid with respect to such Shares, unless the Administrator provides otherwise in the Award Agreement.  In addition, unless the Administrator provides otherwise, if any dividends or distributions are paid in Shares, or consist of a dividend or distribution to holders of Common Stock of property other than an ordinary cash dividend, the Shares or other property will be subject to the same restrictions on transferability and forfeitability as the shares of Restricted Stock with respect to which they were paid.

 

(b)           Stock Certificates.  The Company may require that the Participant deposit in escrow with the Company (or its designee) any stock certificates issued in respect of shares of Restricted Stock, together with a stock power endorsed in blank.

 

6.3          Restricted Stock Units.

 

(a)           Settlement.  The Administrator may provide that settlement of Restricted Stock Units will occur upon or as soon as reasonably practicable after the Restricted Stock Units vest or will instead be deferred, on a mandatory basis or at the Participant’s election, in a manner intended to comply with Section 409A.

 

(b)           Stockholder Rights. A Participant will have no rights of a stockholder with respect to Shares subject to any Restricted Stock Unit unless and until the Shares are delivered in settlement of the Restricted Stock Unit.

 

(c)           Dividend Equivalents.  If the Administrator provides, a grant of Restricted Stock Units may provide a Participant with the right to receive Dividend Equivalents.  Dividend Equivalents may be paid currently or credited to an account for the Participant, settled in cash or Shares and subject to the same restrictions on transferability and forfeitability as the Restricted Stock Units with respect to which the Dividend Equivalents are granted and subject to other terms and conditions as set forth in the Award Agreement.

 

ARTICLE VII.
 OTHER STOCK OR CASH BASED AWARDS

 

Other Stock or Cash Based Awards may be granted to Participants, including Awards entitling Participants to receive Shares to be delivered in the future and including annual or other periodic or long-term cash bonus awards (whether based on specified Performance Criteria or otherwise), in each case subject to any conditions and limitations in the Plan. Such Other Stock or Cash Based Awards will also be available as a payment form in the settlement of other Awards, as standalone payments and as payment in lieu of compensation to which a Participant is otherwise entitled.  Other Stock or Cash Based Awards may be paid in Shares, cash or other property, as the Administrator determines.  Subject to the provisions of the Plan, the Administrator will determine the terms and conditions of each Other Stock or Cash Based Award, including any purchase price, performance goal (which may be based on the Performance Criteria), transfer restrictions, and vesting conditions, which will be set forth in the applicable Award Agreement.

 

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ARTICLE VIII.
 ADJUSTMENTS FOR CHANGES IN COMMON STOCK 
 AND CERTAIN OTHER EVENTS

 

8.1          Equity Restructuring(a)      .  In connection with any Equity Restructuring, notwithstanding anything to the contrary in this Article VIII, the Administrator will equitably adjust each outstanding Award as it deems appropriate to reflect the Equity Restructuring, which may include adjusting the number and type of securities subject to each outstanding Award and/or the Award’s exercise price or grant price (if applicable), granting new Awards to Participants, and making a cash payment to Participants.  The adjustments provided under this Section 8.1 will be nondiscretionary and final and binding on the affected Participant and the Company; provided that the Administrator will determine whether an adjustment is equitable.

 

8.2          Corporate Transactions.  In the event of any dividend or other distribution (whether in the form of cash, Common Stock, other securities, or other property), reorganization, merger, consolidation, combination, amalgamation, repurchase, recapitalization, liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially all of the assets of the Company, or sale or exchange of Common Stock or other securities of the Company, Change in Control, issuance of warrants or other rights to purchase Common Stock or other securities of the Company, other similar corporate transaction or event, other unusual or nonrecurring transaction or event affecting the Company or its financial statements or any change in any Applicable Laws or accounting principles, the Administrator, on such terms and conditions as it deems appropriate, either by the terms of the Award or by action taken prior to the occurrence of such transaction or event (except that action to give effect to a change in Applicable Law or accounting principles may be made within a reasonable period of time after such change) and either automatically or upon the Participant’s request, is hereby authorized to take any one or more of the following actions whenever the Administrator determines that such action is appropriate in order to (x) prevent dilution or enlargement of the benefits or potential benefits intended by the Company to be made available under the Plan or with respect to any Award granted or issued under the Plan, (y) to facilitate such transaction or event or (z) give effect to such changes in Applicable Laws or accounting principles:

 

(a)           To provide for the cancellation of any such Award in exchange for either an amount of cash or other property with a value equal to the amount that could have been obtained upon the exercise or settlement of the vested portion of such Award or realization of the Participant’s rights under the vested portion of such Award, as applicable; provided that, if the amount that could have been obtained upon the exercise or settlement of the vested portion of such Award or realization of the Participant’s rights, in any case, is equal to or less than zero, then the Award may be terminated without payment;

 

(b)           To provide that such Award shall vest and, to the extent applicable, be exercisable as to all shares covered thereby, notwithstanding anything to the contrary in the Plan or the provisions of such Award;

 

(c)           To provide that such Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and/or applicable exercise or purchase price, in all cases, as determined by the Administrator;

 

(d)           To make adjustments in the number and type of shares of Common Stock (or other securities or property) subject to outstanding Awards and/or with respect to which Awards may be granted under the Plan (including, but not limited to, adjustments of the limitations in Article IV

 

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hereof on the maximum number and kind of shares which may be issued) and/or in the terms and conditions of (including the grant or exercise price), and the criteria included in, outstanding Awards;

 

(e)           To replace such Award with other rights or property selected by the Administrator; and/or

 

(f)            To provide that the Award will terminate and cannot vest, be exercised or become payable after the applicable event.

 

8.3          Non-Assumption. Notwithstanding any other provision of the Plan to the contrary, if a Change in Control occurs and an outstanding Award that is not subject to performance-based vesting conditions is not continued, converted, assumed, or replaced with a substantially similar award by (i) the Company, or (ii) a successor entity or its parent or subsidiary (an “Assumption”), then, immediately prior to the Change in Control, such Award will become fully vested and exercisable and all forfeiture restrictions on such Award shall lapse.  The Administrator shall determine whether an Assumption of an Award has occurred in connection with a Change in Control.

 

8.4          Administrative Stand Still.  In the event of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other extraordinary transaction or change affecting the Shares or the share price of Common Stock, including any Equity Restructuring or any securities offering or other similar transaction, for administrative convenience, the Administrator may refuse to permit the exercise of any Award for up to sixty days before or after such transaction.

 

8.5          General.  Except as expressly provided in the Plan or the Administrator’s action under the Plan, no Participant will have any rights due to any subdivision or consolidation of Shares of any class, dividend payment, increase or decrease in the number of Shares of any class or dissolution, liquidation, merger, or consolidation of the Company or other corporation.  Except as expressly provided with respect to an Equity Restructuring under Section 8.1 above or the Administrator’s action under the Plan, no issuance by the Company of Shares of any class, or securities convertible into Shares of any class, will affect, and no adjustment will be made regarding, the number of Shares subject to an Award or the Award’s grant or exercise price.  The existence of the Plan, any Award Agreements and the Awards granted hereunder will not affect or restrict in any way the Company’s right or power to make or authorize (i) any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, (ii) any merger, consolidation dissolution or liquidation of the Company or sale of Company assets or (iii) any sale or issuance of securities, including securities with rights superior to those of the Shares or securities convertible into or exchangeable for Shares.  The Administrator may treat Participants and Awards (or portions thereof) differently under this Article VIII.

 

ARTICLE IX.
 GENERAL PROVISIONS APPLICABLE TO AWARDS

 

9.1          Transferability.  Except as the Administrator may determine or provide in an Award Agreement or otherwise for Awards other than Incentive Stock Options, Awards may not be sold, assigned, transferred, pledged or otherwise encumbered, either voluntarily or by operation of law, except by will or the laws of descent and distribution, or, subject to the Administrator’s consent, pursuant to a domestic relations order, and, during the life of the Participant, will be exercisable only by the Participant.  References to a Participant, to the extent relevant in the context, will include references to a Participant’s authorized transferee that the Administrator specifically approves.

 

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9.2          Documentation.  Each Award will be evidenced in an Award Agreement, which may be written or electronic, as the Administrator determines. Each Award may contain terms and conditions in addition to those set forth in the Plan.

 

9.3          Discretion.  Except as the Plan otherwise provides, each Award may be made alone or in addition or in relation to any other Award.  The terms of each Award to a Participant need not be identical, and the Administrator need not treat Participants or Awards (or portions thereof) uniformly.

 

9.4          Termination of Status.  The Administrator will determine how the disability, death, retirement, authorized leave of absence or any other change or purported change in a Participant’s Service Provider status affects an Award and the extent to which, and the period during which, the Participant, the Participant’s legal representative, conservator, guardian or Designated Beneficiary may exercise rights under the Award, if applicable.

 

9.5          Withholding.  Each Participant must pay the Company, or make provision satisfactory to the Administrator for payment of, any taxes required by law to be withheld in connection with such Participant’s Awards by the date of the event creating the tax liability.  The Company may deduct an amount sufficient to satisfy such tax obligations based on the minimum statutory withholding rates (or such other rate as may be determined by the Company after considering any accounting consequences or costs) from any payment of any kind otherwise due to a Participant.  Subject to Section 10.8 and any Company insider trading policy (including blackout periods), Participants may satisfy such tax obligations (i) in cash, by wire transfer of immediately available funds, by check made payable to the order of the Company, provided that the Company may limit the use of the foregoing payment forms if one or more of the payment forms below is permitted, (ii) to the extent permitted by the Administrator, in whole or in part by delivery of Shares, including Shares retained from the Award creating the tax obligation, valued at their Fair Market Value, (iii) if there is a public market for Shares at the time the tax obligations are satisfied, unless the Company otherwise determines, (A) delivery (including telephonically to the extent permitted by the Company) of an irrevocable and unconditional undertaking by a broker acceptable to the Company to deliver promptly to the Company sufficient funds to satisfy the tax obligations, or (B) delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions to a broker acceptable to the Company to deliver promptly to the Company cash or a check sufficient to satisfy the tax withholding, provided that such amount is paid to the Company at such time as may be required by the Administrator, or (iv) to the extent permitted by the Company, any combination of the foregoing payment forms approved by the Administrator.  If any tax withholding obligation will be satisfied under clause (ii) of the immediately preceding sentence by the Company’s retention of Shares from the Award creating the tax obligation and there is a public market for Shares at the time the tax obligation is satisfied, the Company may elect to instruct any brokerage firm determined acceptable to the Company for such purpose to sell on the applicable Participant’s behalf some or all of the Shares retained and to remit the proceeds of the sale to the Company or its designee, and each Participant’s acceptance of an Award under the Plan will constitute the Participant’s authorization to the Company and instruction and authorization to such brokerage firm to complete the transactions described in this sentence.

 

9.6          Amendment of Award; Repricing.  The Administrator may amend, modify or terminate any outstanding Award, including by substituting another Award of the same or a different type, changing the exercise or settlement date, and converting an Incentive Stock Option to a Non-Qualified Stock Option.  The Participant’s consent to such action will be required unless (i) the action, taking into account any related action, does not materially and adversely affect the Participant’s rights under the Award, or (ii) the change is permitted under Article VIII or pursuant to Section 10.6.  Notwithstanding the foregoing or anything in the Plan to the contrary, the Administrator may not, except pursuant to Article VIII,

 

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without the approval of the stockholders of the Company, reduce the exercise price per share of  outstanding Options or Stock Appreciation Rights or cancel outstanding Options or Stock Appreciation Rights in exchange for cash, other Awards or Options or Stock Appreciation Rights with an exercise price per share that is less than the exercise price per share of the original Options or Stock Appreciation Rights.

 

9.7          Conditions on Delivery of Stock.  The Company will not be obligated to deliver any Shares under the Plan or remove restrictions from Shares previously delivered under the Plan until (i) all Award conditions have been met or removed to the Company’s satisfaction, (ii) as determined by the Company, all other legal matters regarding the issuance and delivery of such Shares have been satisfied, including any applicable securities laws and stock exchange or stock market rules and regulations, and (iii) the Participant has executed and delivered to the Company such representations or agreements as the Administrator deems necessary or appropriate to satisfy any Applicable Laws.  The Company’s inability to obtain authority from any regulatory body having jurisdiction, which the Administrator determines is necessary to the lawful issuance and sale of any securities, will relieve the Company of any liability for failing to issue or sell such Shares as to which such requisite authority has not been obtained.

 

9.8          Acceleration.  The Administrator may at any time provide that any Award will become immediately vested and fully or partially exercisable, free of some or all restrictions or conditions, or otherwise fully or partially realizable.

 

9.9          Additional Terms of Incentive Stock Options.  The Administrator may grant Incentive Stock Options only to employees of the Company, any of its present or future parent or subsidiary corporations, as defined in Sections 424(e) or (f) of the Code, respectively, and any other entities the employees of which are eligible to receive Incentive Stock Options under the Code.  If an Incentive Stock Option is granted to a Greater Than 10% Stockholder, the exercise price will not be less than 110% of the Fair Market Value on the Option’s grant date, and the term of the Option will not exceed five years.  All Incentive Stock Options will be subject to and construed consistently with Section 422 of the Code.  By accepting an Incentive Stock Option, the Participant agrees to give prompt notice to the Company of dispositions or other transfers (other than in connection with a Change in Control) of Shares acquired under the Option made within (i) two years from the grant date of the Option or (ii) one year after the transfer of such Shares to the Participant, specifying the date of the disposition or other transfer and the amount the Participant realized, in cash, other property, assumption of indebtedness or other consideration, in such disposition or other transfer.  Neither the Company nor the Administrator will be liable to a Participant, or any other party, if an Incentive Stock Option fails or ceases to qualify as an “incentive stock option” under Section 422 of the Code.  Any Incentive Stock Option or portion thereof that fails to qualify as an “incentive stock option” under Section 422 of the Code for any reason, including becoming exercisable with respect to Shares having a fair market value exceeding the $100,000 limitation under Treasury Regulation Section 1.422-4, will be a Non-Qualified Stock Option.

 

ARTICLE X.
 MISCELLANEOUS

 

10.1        No Right to Employment or Other Status.  No person will have any claim or right to be granted an Award, and the grant of an Award will not be construed as giving a Participant the right to continued employment or any other relationship with the Company.  The Company expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan or any Award, except as expressly provided in an Award Agreement.

 

10.2        No Rights as Stockholder; Certificates.  Subject to the Award Agreement, no Participant or Designated Beneficiary will have any rights as a stockholder with respect to any Shares to be

 

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distributed under an Award until becoming the record holder of such Shares.  Notwithstanding any other  provision of the Plan, unless the Administrator otherwise determines or Applicable Laws require, the Company will not be required to deliver to any Participant certificates evidencing Shares issued in connection with any Award and instead such Shares may be recorded in the books of the Company (or, as applicable, its transfer agent or stock plan administrator).  The Company may place legends on stock certificates issued under the Plan that the Administrator deems necessary or appropriate to comply with Applicable Laws.

 

10.3        Effective Date and Term of Plan.  Unless earlier terminated by the Board, the Plan will become effective on the day prior to the Public Trading Date and will remain in effect until the tenth anniversary of the earlier of (i) the date the Board adopted the Plan or (ii) the date the Company’s stockholders approved the Plan, but Awards previously granted may extend beyond that date in accordance with the Plan.  If the Plan is not approved by the Company’s stockholders, the Plan will not become effective, no Awards will be granted under the Plan and the Prior Plans will continue in full force and effect in accordance with their terms.

 

10.4        Amendment of Plan.  The Administrator may amend, suspend or terminate the Plan at any time; provided that no amendment, other than an increase to the Overall Share Limit, may materially and adversely affect any Award outstanding at the time of such amendment without the affected Participant’s consent.  No Awards may be granted under the Plan during any suspension period or after Plan termination.  Awards outstanding at the time of any Plan suspension or termination will continue to be governed by the Plan and the Award Agreement, as in effect before such suspension or termination.  The Board will obtain stockholder approval of any Plan amendment to the extent necessary to comply with Applicable Laws.

 

10.5        Provisions for Foreign Participants.  The Administrator may modify Awards granted to Participants who are foreign nationals or employed outside the United States or establish subplans or procedures under the Plan to address differences in laws, rules, regulations or customs of such foreign jurisdictions with respect to tax, securities, currency, employee benefit or other matters.

 

10.6        Section 409A.

 

(a)           General.  The Company intends that all Awards be structured to comply with, or be exempt from, Section 409A, such that no adverse tax consequences, interest, or penalties under Section 409A apply.  Notwithstanding anything in the Plan or any Award Agreement to the contrary, the Administrator may, without a Participant’s consent, amend this Plan or Awards, adopt policies and procedures, or take any other actions (including amendments, policies, procedures and retroactive actions) as are necessary or appropriate to preserve the intended tax treatment of Awards, including any such actions intended to (A) exempt this Plan or any Award from Section 409A, or (B) comply with Section 409A, including regulations, guidance, compliance programs and other interpretative authority that may be issued after an Award’s grant date.  The Company makes no representations or warranties as to an Award’s tax treatment under Section 409A or otherwise.  The Company will have no obligation under this Section 10.6 or otherwise to avoid the taxes, penalties or interest under Section 409A with respect to any Award and will have no liability to any Participant or any other person if any Award, compensation or other benefits under the Plan are determined to constitute noncompliant “nonqualified deferred compensation” subject to taxes, penalties or interest under Section 409A.

 

(b)           Separation from Service.  If an Award constitutes “nonqualified deferred compensation” under Section 409A, any payment or settlement of such Award upon a termination of a Participant’s Service Provider relationship will, to the extent necessary to avoid taxes under

 

10

 

Section 409A, be made only upon the Participant’s “separation from service” (within the meaning of Section 409A), whether such “separation from service” occurs upon or after the termination of the Participant’s Service Provider relationship.  For purposes of this Plan or any Award Agreement relating to any such payments or benefits, references to a “termination,” “termination of employment” or like terms means a “separation from service.”

 

(c)           Payments to Specified Employees.  Notwithstanding any contrary provision in the Plan or any Award Agreement, any payment(s) of “nonqualified deferred compensation” required to be made under an Award to a “specified employee” (as defined under Section 409A and as the Administrator determines) due to his or her “separation from service” will, to the extent necessary to avoid taxes under Section 409A(a)(2)(B)(i) of the Code, be delayed for the six-month period immediately following such “separation from service” (or, if earlier, until the specified employee’s death) and will instead be paid (as set forth in the Award Agreement) on the day immediately following such six-month period or as soon as administratively practicable thereafter (without interest).  Any payments of “nonqualified deferred compensation” under such Award payable more than six months following the Participant’s “separation from service” will be paid at the time or times the payments are otherwise scheduled to be made.

 

10.7        Limitations on Liability.  Notwithstanding any other provisions of the Plan, no individual acting as a director, officer, other employee or agent of the Company or any Subsidiary will be liable to any Participant, former Participant, spouse, beneficiary, or any other person for any claim, loss, liability, or expense incurred in connection with the Plan or any Award, and such individual will not be personally liable with respect to the Plan because of any contract or other instrument executed in his or her capacity as an Administrator, director, officer, other employee or agent of the Company or any Subsidiary.  The Company will indemnify and hold harmless each director, officer, other employee and agent of the Company or any Subsidiary that has been or will be granted or delegated any duty or power relating to the Plan’s administration or interpretation, against any cost or expense (including attorneys’ fees) or liability (including any sum paid in settlement of a claim with the Administrator’s approval) arising from any act or omission concerning this Plan unless arising from such person’s own fraud or bad faith.

 

10.8        Lock-Up Period.  The Company may, at the request of any underwriter representative or otherwise, in connection with registering the offering of any Company securities under the Securities Act, prohibit Participants from, directly or indirectly, selling or otherwise transferring any Shares or other Company securities during a period of up to one hundred eighty days following the effective date of a Company registration statement filed under the Securities Act, or such longer period as determined by the underwriter.

 

10.9        Data Privacy.  As a condition for receiving any Award, each Participant explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of personal data as described in this section by and among the Company and its Subsidiaries and affiliates exclusively for implementing, administering and managing the Participant’s participation in the Plan.  The Company and its Subsidiaries and affiliates may hold certain personal information about a Participant, including the Participant’s name, address and telephone number; birthdate; social security, insurance number or other identification number; salary; nationality; job title(s); any Shares held in the Company or its Subsidiaries and affiliates; and Award details, to implement, manage and administer the Plan and Awards (the “Data”).  The Company and its Subsidiaries and affiliates may transfer the Data amongst themselves as necessary to implement, administer and manage a Participant’s participation in the Plan, and the Company and its Subsidiaries and affiliates may transfer the Data to third parties assisting the Company with Plan implementation, administration and management.  These recipients may be located in the Participant’s country, or elsewhere, and the Participant’s country may have different data privacy laws and protections than the recipients’ country.  By accepting an Award, each Participant authorizes such

 

11

 

recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, to implement, administer and manage the Participant’s participation in the Plan, including any required Data transfer to  a broker or other third party with whom the Company or the Participant may elect to deposit any Shares.  The Data related to a Participant will be held only as long as necessary to implement, administer, and manage the Participant’s participation in the Plan.  A Participant may, at any time, view the Data that the Company holds regarding such Participant, request additional information about the storage and processing of the Data regarding such Participant, recommend any necessary corrections to the Data regarding the Participant or refuse or withdraw the consents in this Section 10.9 in writing, without cost, by contacting the local human resources representative.  The Company may cancel Participant’s ability to participate in the Plan and, in the Administrator’s discretion, the Participant may forfeit any outstanding Awards if the Participant refuses or withdraws the consents in this Section 10.9.  For more information on the consequences of refusing or withdrawing consent, Participants may contact their local human resources representative.

 

10.10      Severability.  If any portion of the Plan or any action taken under it is held illegal or invalid for any reason, the illegality or invalidity will not affect the remaining parts of the Plan, and the Plan will be construed and enforced as if the illegal or invalid provisions had been excluded, and the illegal or invalid action will be null and void.

 

10.11      Governing Documents.  If any contradiction occurs between the Plan and any Award Agreement or other written agreement between a Participant and the Company (or any Subsidiary) that the Administrator has approved, the Plan will govern, unless it is expressly specified in such Award Agreement or other written document that a specific provision of the Plan will not apply.

 

10.12      Governing Law.  The Plan and all Awards will be governed by and interpreted in accordance with the laws of the State of Delaware, disregarding any state’s choice-of-law principles requiring the application of a jurisdiction’s laws other than the State of Delaware.

 

10.13      Claw-back Provisions.  All Awards (including any proceeds, gains or other economic benefit the Participant actually or constructively receives upon receipt or exercise of any Award or the receipt or resale of any Shares underlying the Award) will be subject to any Company claw-back policy, including any claw-back policy adopted to comply with Applicable Laws (including the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder) as set forth in such claw-back policy or the Award Agreement.

 

10.14      Titles and Headings.  The titles and headings in the Plan are for convenience of reference only and, if any conflict, the Plan’s text, rather than such titles or headings, will control.

 

10.15      Conformity to Securities Laws.  Participant acknowledges that the Plan is intended to conform to the extent necessary with Applicable Laws.  Notwithstanding anything herein to the contrary, the Plan and all Awards will be administered only in conformance with Applicable Laws.  To the extent Applicable Laws permit, the Plan and all Award Agreements will be deemed amended as necessary to conform to Applicable Laws.

 

10.16      Relationship to Other Benefits.  No payment under the Plan will be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Subsidiary except as expressly provided in writing in such other plan or an agreement thereunder.

 

10.17      Broker-Assisted Sales. In the event of a broker-assisted sale of Shares in connection with the payment of amounts owed by a Participant under or with respect to the Plan or Awards, including

 

12

 

amounts to be paid under the final sentence of Section 9.5: (a) any Shares to be sold through the broker-assisted sale will be sold on the day the payment first becomes due, or as soon thereafter as practicable;  (b) such Shares may be sold as part of a block trade with other Participants in the Plan in which all participants receive an average price; (c) the applicable Participant will be responsible for all broker’s fees and other costs of sale, and by accepting an Award, each Participant agrees to indemnify and hold the Company harmless from any losses, costs, damages, or expenses relating to any such sale; (d) to the extent the Company or its designee receives proceeds of such sale that exceed the amount owed, the Company will pay such excess in cash to the applicable Participant as soon as reasonably practicable; (e) the Company and its designees are under no obligation to arrange for such sale at any particular price; and (f) in the event the proceeds of such sale are insufficient to satisfy the Participant’s applicable obligation, the Participant may be required to pay immediately upon demand to the Company or its designee an amount in cash sufficient to satisfy any remaining portion of the Participant’s obligation.

 

ARTICLE XI.
 DEFINITIONS

 

As used in the Plan, the following words and phrases will have the following meanings:

 

11.1        “Administrator” means the Board or a Committee to the extent that the Board’s powers or authority under the Plan have been delegated to such Committee.

 

11.2        “Applicable Laws” means the requirements relating to the administration of equity incentive plans under U.S. federal and state securities, tax and other applicable laws, rules and regulations, the applicable rules of any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws and rules of any foreign country or other jurisdiction where Awards are granted.

 

11.3        “Award” means, individually or collectively, a grant under the Plan of Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units or Other Stock or Cash Based Awards.

 

11.4        “Award Agreement” means a written agreement evidencing an Award, which may be electronic, that contains such terms and conditions as the Administrator determines, consistent with and subject to the terms and conditions of the Plan.

 

11.5        “Board” means the Board of Directors of the Company.

 

11.6        “Cause” means (i) if a Participant is a party to a written employment or consulting agreement with the Company or any of its Subsidiaries or an Award Agreement in which the term “cause” is defined (a “Relevant Agreement”), “Cause” as defined in the Relevant Agreement, and (ii) if no Relevant Agreement exists, (A) the Administrator’s determination that the Participant failed to substantially perform the Participant’s duties (other than a failure resulting from the Participant’s Disability); (B) the Administrator’s determination that the Participant failed to carry out, or comply with any lawful and reasonable directive of the Board or the Participant’s immediate supervisor; (C) the occurrence of any act or omission by the Participant that could reasonably be expected to result in (or has resulted in) the Participant’s conviction, plea of no contest, plea of nolo contendere, or imposition of unadjudicated probation for any felony or indictable offense or crime involving moral turpitude; (D) the Participant’s unlawful use (including being under the influence) or possession of illegal drugs on the premises of the Company or any of its Subsidiaries or while performing the Participant’s duties and responsibilities for the Company or any of its Subsidiaries; or (E) the Participant’s commission of an act

 

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of fraud, embezzlement, misappropriation, misconduct, or breach of fiduciary duty against the Company or any of its Subsidiaries.

 

11.7        “Change in Control” means and includes each of the following:

 

(a)           A transaction or series of transactions (other than an offering of Common Stock to the general public through a registration statement filed with the Securities and Exchange Commission or a transaction or series of transactions that meets the requirements of clauses (i) and (ii) of subsection (c) below) whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its Subsidiaries, an employee benefit plan maintained by the Company or any of its Subsidiaries or a “person” that, prior to such transaction, directly or indirectly controls, is controlled by, or is under common control with, the Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than 50% of the total combined voting power of the Company’s securities outstanding immediately after such acquisition; or

 

(b)           During any period of two consecutive years, individuals who, at the beginning of such period, constitute the Board together with any new Director(s) (other than a Director designated by a person who shall have entered into an agreement with the Company to effect a transaction described in subsections (a) or (c)) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the Directors then still in office who either were Directors at the beginning of the two-year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or

 

(c)           The consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or other disposition of all or substantially all of the Company’s assets in any single transaction or series of related transactions or (z) the acquisition of assets or stock of another entity, in each case other than a transaction:

 

(i)            which results in the Company’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s assets or otherwise succeeds to the business of the Company (the Company or such person, the “Successor Entity”)) directly or indirectly, at least a majority of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction, and

 

(ii)           after which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this clause (ii) as beneficially owning 50% or more of the combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction.

 

Notwithstanding the foregoing, if a Change in Control constitutes a payment event with respect to any Award (or portion of any Award) that provides for the deferral of compensation that is subject to Section 409A, to the extent required to avoid the imposition of additional taxes under Section 409A, the transaction or event described in subsection (a), (b) or (c) with respect to such Award (or portion thereof) shall only constitute a Change in Control for purposes of the payment timing of such Award if such transaction also constitutes a “change in control event,” as defined in Treasury Regulation Section 1.409A-3(i)(5).

 

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The Administrator shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether a Change in Control has occurred pursuant to the above definition, the date of the occurrence of such Change in Control and any incidental matters relating thereto; provided that any exercise of authority in conjunction with a determination of whether a Change in Control is a  “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5) shall be consistent with such regulation.

 

11.8        “Code” means the Internal Revenue Code of 1986, as amended, and the regulations issued thereunder.

 

11.9        “Committee” means one or more committees or subcommittees of the Board, which may include one or more Company directors or executive officers, to the extent Applicable Laws permit.  To the extent required to comply with the provisions of Rule 16b-3, it is intended that each member of the Committee will be, at the time the Committee takes any action with respect to an Award that is subject to Rule 16b-3, a “non-employee director” within the meaning of Rule 16b-3; however, a Committee member’s failure to qualify as a “non-employee director” within the meaning of Rule 16b-3 will not invalidate any Award granted by the Committee that is otherwise validly granted under the Plan.

 

11.10      “Common Stock” means the common stock of the Company.

 

11.11      “Company” means Selecta Biosciences, Inc., a Delaware corporation, or any successor.

 

11.12      “Consultant” means any person, including any adviser, engaged by the Company or its parent or Subsidiary to render services to such entity if the consultant or adviser: (i) renders bona fide services to the Company; (ii) renders services not in connection with the offer or sale of securities in a capital-raising transaction and does not directly or indirectly promote or maintain a market for the Company’s securities; and (iii) is a natural person.

 

11.13      “Designated Beneficiary” means the beneficiary or beneficiaries the Participant designates, in a manner the Administrator determines, to receive amounts due or exercise the Participant’s rights if the Participant dies or becomes incapacitated.  Without a Participant’s effective designation, “Designated Beneficiary” will mean the Participant’s estate.

 

11.14      “Director” means a Board member.

 

11.15      “Disability” means a permanent and total disability under Section 22(e)(3) of the Code, as amended.

 

11.16      “Dividend Equivalents” means a right granted to a Participant under the Plan to receive the equivalent value (in cash or Shares) of dividends paid on Shares.

 

11.17      “Employee” means any employee of the Company or its Subsidiaries.

 

11.18      “Equity Restructuring” means a nonreciprocal transaction between the Company and its stockholders, such as a stock dividend, stock split, spin-off or recapitalization through a large, nonrecurring cash dividend, that affects the number or kind of Shares (or other Company securities) or the share price of Common Stock (or other Company securities) and causes a change in the per share value of the Common Stock underlying outstanding Awards.

 

11.19      “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

15

 

11.20      “Fair Market Value” means, as of any date, the value of Common Stock determined as follows: (i) if the Common Stock is listed on any established stock exchange, its Fair Market Value will be the closing sales price for such Common Stock as quoted on such exchange for such date, or if no sale occurred on such date, the last day preceding such date during which a sale occurred, as reported in The  Wall Street Journal or another source the Administrator deems reliable; (ii) if the Common Stock is not traded on a stock exchange but is quoted on a national market or other quotation system, the closing sales price on such date, or if no sales occurred on such date, then on the last date preceding such date during which a sale occurred, as reported in The Wall Street Journal or another source the Administrator deems reliable; or (iii) without an established market for the Common Stock, the Administrator will determine the Fair Market Value in its discretion.  Notwithstanding the foregoing, with respect to any Award granted on the pricing date of the Company’s initial public offering, the Fair Market Value shall mean the initial public offering price of a Share as set forth in the Company’s final prospectus relating to its initial public offering filed with the Securities and Exchange Commission.

 

11.21      “Greater Than 10% Stockholder” means an individual then owning (within the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or its parent or subsidiary corporation, as defined in Section 424(e) and (f) of the Code, respectively.

 

11.22      “Incentive Stock Option” means an Option intended to qualify as an “incentive stock option” as defined in Section 422 of the Code.

 

11.23      “Non-Qualified Stock Option” means an Option not intended or not qualifying as an Incentive Stock Option.

 

11.24      “Option” means an option to purchase Shares.

 

11.25      “Other Stock or Cash Based Awards” means cash awards, awards of Shares, and other awards valued wholly or partially by referring to, or are otherwise based on, Shares or other property.

 

11.26      “Overall Share Limit” means the sum of (i) 1,210,256 Shares; (ii) any shares of Common Stock which are subject to Prior Plan Awards which become available for issuance under the Plan pursuant to Article IV and (iii) an annual increase on the first day of each calendar year beginning January 1, 2017 and ending on and including January 1, 2026, equal to the lesser of (A) 4% of the aggregate number of shares of Common Stock outstanding on the final day of the immediately preceding calendar year and (B) such smaller number of Shares as is determined by the Board.

 

11.27      “Participant” means a Service Provider who has been granted an Award.

 

11.28      “Performance Criteria” mean the criteria (and adjustments) that the Administrator may select for an Award to establish performance goals for a performance period, which may include the following: net earnings or losses (either before or after one or more of interest, taxes, depreciation, amortization, and non-cash equity-based compensation expense); gross or net sales or revenue or sales or revenue growth; net income (either before or after taxes) or adjusted net income; profits (including but not limited to gross profits, net profits, profit growth, net operation profit or economic profit), profit return ratios or operating margin; budget or operating earnings (either before or after taxes or before or after allocation of corporate overhead and bonus); cash flow (including operating cash flow and free cash flow or cash flow return on capital); return on assets; return on capital or invested capital; cost of capital; return on stockholders’ equity; total stockholder return; return on sales; costs, reductions in costs and cost control measures; expenses; working capital; earnings or loss per

 

16

 

share; adjusted earnings or loss per share; price per share or dividends per share (or appreciation in or maintenance of such price or dividends); regulatory achievements or compliance; implementation, completion or attainment of objectives relating to research, development, regulatory, commercial, or strategic milestones or developments; market share; economic value or economic value added models; division, group or corporate financial goals; customer satisfaction/growth; customer service; employee satisfaction;  recruitment and maintenance of personnel; human resources management; supervision of litigation and other legal matters; strategic partnerships and transactions; financial ratios (including those measuring liquidity, activity, profitability or leverage); debt levels or reductions; sales-related goals; financing and other capital raising transactions; cash on hand; acquisition activity; investment sourcing activity; and marketing initiatives, any of which may be measured in absolute terms or as compared to any incremental increase or decrease. Such performance goals also may be based solely by reference to the Company’s performance or the performance of a Subsidiary, division, business segment or business unit of the Company or a Subsidiary, or based upon performance relative to performance of other companies or upon comparisons of any of the indicators of performance relative to performance of other companies.  The Committee may provide for exclusion of the impact of an event or occurrence which the Committee determines should appropriately be excluded, including (a) restructurings, discontinued operations, extraordinary items, and other unusual, infrequently occurring or non-recurring charges or events, (b) asset write-downs, (c) litigation or claim judgments or settlements, (d) acquisitions or divestitures, (e) reorganization or change in the corporate structure or capital structure of the Company, (f) an event either not directly related to the operations of the Company, Subsidiary, division, business segment or business unit or not within the reasonable control of management, (g) foreign exchange gains and losses, (h) a change in the fiscal year of the Company, (i) the refinancing or repurchase of bank loans or debt securities, (j) unbudgeted capital expenditures, (k) the issuance or repurchase of equity securities and other changes in the number of outstanding shares, (l) conversion of some or all of convertible securities to Common Stock, (m) any business interruption event (n) the cumulative effects of tax or accounting changes in accordance with U.S. generally accepted accounting principles, or (o) the effect of changes in other laws or regulatory rules affecting reported results.

 

11.29      “Plan” means this 2016 Incentive Award Plan.

 

11.30      “Prior Plans” means, collectively, the Selecta Biosciences, Inc. 2008 Equity Incentive Plan and any prior equity incentive plans of the Company or its predecessor.

 

11.31      “Prior Plan Award” means an award outstanding under the Prior Plans as of the Plan’s effective date in Section 10.3.

 

11.32      “Public Trading Date” means the first date upon which the Common Stock is listed (or approved for listing) upon notice of issuance on any securities exchange or designated (or approved for designation) upon notice of issuance as a national market security on an interdealer quotation system, or, if earlier, the date on which the Company becomes a “publicly held corporation” for purposes of Treasury Regulation Section 1.162-27(c)(1).

 

11.33      “Restricted Stock” means Shares awarded to a Participant under Article VI subject to certain vesting conditions and other restrictions.

 

11.34      “Restricted Stock Unit” means an unfunded, unsecured right to receive, on the applicable settlement date, one Share or an amount in cash or other consideration determined by the Administrator to be of equal value as of such settlement date, subject to certain vesting conditions and other restrictions.

 

11.35      “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act.

 

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11.36      “Section 409A” means Section 409A of the Code and all regulations, guidance, compliance programs and other interpretative authority thereunder.

 

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

 

11.38      “Service Provider” means an Employee, Consultant or Director.

 

11.39      “Shares” means shares of Common Stock.

 

11.40      “Stock Appreciation Right” means a stock appreciation right granted under Article V.

 

11.41      “Subsidiary” means any entity (other than the Company), whether domestic or foreign, in an unbroken chain of entities beginning with the Company if each of the entities other than the last entity in the unbroken chain beneficially owns, at the time of the determination, securities or interests representing at least 50% of the total combined voting power of all classes of securities or interests in one of the other entities in such chain.

 

11.42      “Substitute Awards” shall mean Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange for, awards previously granted, or the right or obligation to make future awards, in each case by a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines.

 

11.43      “Termination of Service” means the date the Participant ceases to be a Service Provider.

 

* * * * *

 

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SELECTA BIOSCIENCES, INC.
 2016 INCENTIVE AWARD PLAN

 

STOCK OPTION GRANT NOTICE

 

Capitalized terms not specifically defined in this Stock Option Grant Notice (the “Grant Notice”) have the meanings given to them in the 2016 Incentive Award Plan (as amended from time to time, the “Plan”) of Selecta Biosciences, Inc. (the “Company”).

 

The Company has granted to the participant listed below (“Participant”) the stock option described in this Grant Notice (the “Option”), subject to the terms and conditions of the Plan and the Stock Option Agreement attached as Exhibit A (the “Agreement”), both of which are incorporated into this Grant Notice by reference.

 

	
Participant:
    	
 
    
	
 
    	
 
    
	
Grant Date:
    	
 
    
	
 
    	
 
    
	
Exercise Price per Share:
    	
 
    
	
 
    	
 
    
	
Shares Subject to the Option:
    	
 
    
	
 
    	
 
    
	
Final Expiration Date:
    	
 
    
	
 
    	
 
    
	
Vesting Commencement Date:
    	
 
    
	
 
    	
 
    
	
Vesting Schedule:
    	
[To be specified in individual award agreements]
    
	
 
    	
 
    
	
Type of Option
    	
[Incentive Stock Option/Non-Qualified Stock Option]
    

 

By Participant’s signature below, Participant agrees to be bound by the terms of this Grant Notice, the Plan and the Agreement.  Participant has reviewed the Plan, this Grant Notice and the Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of the Plan, this Grant Notice and the Agreement.  Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, this Grant Notice or the Agreement.

 

 

	
SELECTA BIOSCIENCES, INC.
    	
 
    	
PARTICIPANT
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    	
[Participant Name]
    
	
Title:
    	
 
    	
 
    	
 
    

 

 

Exhibit A

 

STOCK OPTION AGREEMENT

 

Capitalized terms not specifically defined in this Agreement have the meanings specified in the Grant Notice or, if not defined in the Grant Notice, in the Plan.

 

ARTICLE I.
 GENERAL

 

1.1                               Grant of Option.  The Company has granted to Participant the Option effective as of the grant date set forth in the Grant Notice (the “Grant Date”).

 

1.2                               Incorporation of Terms of Plan.  The Option is subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference.  In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan will control.

 

ARTICLE II.
 PERIOD OF EXERCISABILITY

 

2.1                               Commencement of Exercisability.  The Option will vest and become exercisable according to the vesting schedule in the Grant Notice (the “Vesting Schedule”) except that any fraction of a Share as to which the Option would be vested or exercisable will be accumulated and will vest and become exercisable only when a whole Share has accumulated.  Notwithstanding anything in the Grant Notice, the Plan or this Agreement to the contrary, unless the Administrator otherwise determines, the Option will immediately expire and be forfeited as to any portion that is not vested and exercisable as of Participant’s Termination of Service for any reason.

 

2.2                               Duration of Exercisability.  The Vesting Schedule is cumulative.  Any portion of the Option which vests and becomes exercisable will remain vested and exercisable until the Option expires.  The Option will be forfeited immediately upon its expiration.

 

2.3                               Expiration of Option.  The Option may not be exercised to any extent by anyone after, and will expire on, the first of the following to occur:

 

(a)                                 The final expiration date in the Grant Notice;

 

(b)                                 Except as the Administrator may otherwise approve, the expiration of three (3) months from the date of Participant’s Termination of Service, unless Participant’s Termination of Service is for Cause or by reason of Participant’s death or Disability;

 

(c)                                  Except as the Administrator may otherwise approve, the expiration of one (1) year from the date of Participant’s Termination of Service by reason of Participant’s death or Disability; and

 

(d)                                 Except as the Administrator may otherwise approve, Participant’s Termination of Service for Cause.

 

 

ARTICLE III.
 EXERCISE OF OPTION

 

3.1                               Person Eligible to Exercise.  During Participant’s lifetime, only Participant may exercise the Option.  After Participant’s death, any exercisable portion of the Option may, prior to the time the Option expires, be exercised by Participant’s Designated Beneficiary as provided in the Plan.

 

3.2                               Partial Exercise.  Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised, in whole or in part, according to the procedures in the Plan at any time prior to the time the Option or portion thereof expires, except that the Option may only be exercised for whole Shares.

 

3.3                               Tax Withholding.

 

(a)                                 The Company has the right and option, but not the obligation, to treat Participant’s failure to provide timely payment in accordance with the Plan of any withholding tax arising in connection with the Option as Participant’s election to satisfy all or any portion of the withholding tax by requesting the Company retain Shares otherwise issuable under the Option.

 

(b)                                 Participant acknowledges that Participant is ultimately liable and responsible for all taxes owed in connection with the Option, regardless of any action the Company or any Subsidiary takes with respect to any tax withholding obligations that arise in connection with the Option.  Neither the Company nor any Subsidiary makes any representation or undertaking regarding the treatment of any tax withholding in connection with the awarding, vesting or exercise of the Option or the subsequent sale of Shares.  The Company and the Subsidiaries do not commit and are under no obligation to structure the Option to reduce or eliminate Participant’s tax liability.

 

ARTICLE IV.
 OTHER PROVISIONS

 

4.1                               Adjustments.  Participant acknowledges that the Option is subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan.

 

4.2                               Notices.  Any notice to be given under the terms of this Agreement to the Company must be in writing and addressed to the Company in care of the Company’s Secretary at the Company’s principal office or the Secretary’s then-current email address or facsimile number.  Any notice to be given under the terms of this Agreement to Participant must be in writing and addressed to Participant (or, if Participant is then deceased, to the person entitled to exercise the Option) at Participant’s last known mailing address, email address or facsimile number in the Company’s personnel files.  By a notice given pursuant to this Section, either party may designate a different address for notices to be given to that party.  Any notice will be deemed duly given when actually received, when sent by email, when sent by certified mail (return receipt requested) and deposited with postage prepaid in a post office or branch post office regularly maintained by the United States Postal Service, when delivered by a nationally recognized express shipping company or upon receipt of a facsimile transmission confirmation.

 

4.3                               Titles.  Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

 

4.4                               Conformity to Securities Laws.  Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws and, to the extent Applicable Laws permit, will be deemed amended as necessary to conform to Applicable Laws.

 

A-2

 

4.5                               Successors and Assigns.  The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement will inure to the benefit of the successors and assigns of the Company.  Subject to the restrictions on transfer set forth in the Plan, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

 

4.6                               Limitations Applicable to Section 16 Persons.  Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Grant Notice, this Agreement and the Option will be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such exemptive rule.  To the extent Applicable Laws permit, this Agreement will be deemed amended as necessary to conform to such applicable exemptive rule.

 

4.7                               Entire Agreement.  The Plan, the Grant Notice and this Agreement (including any exhibit hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof.

 

4.8                               Agreement Severable.  In the event that any provision of the Grant Notice or this Agreement is held illegal or invalid, the provision will be severable from, and the illegality or invalidity of the provision will not be construed to have any effect on, the remaining provisions of the Grant Notice or this Agreement.

 

4.9                               Limitation on Participant’s Rights.  Participation in the Plan confers no rights or interests other than as herein provided.  This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and may not be construed as creating a trust.  Neither the Plan nor any underlying program, in and of itself, has any assets.  Participant will have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the Option, and rights no greater than the right to receive the Shares as a general unsecured creditor with respect to the Option, as and when exercised pursuant to the terms hereof.

 

4.10                        Not a Contract of Employment.  Nothing in the Plan, the Grant Notice or this Agreement confers upon Participant any right to continue in the employ or service of the Company or any Subsidiary or interferes with or restricts in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without Cause, except to the extent expressly provided otherwise in a written agreement between the Company or a Subsidiary and Participant.

 

4.11                        Counterparts.  The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which will be deemed an original and all of which together will constitute one instrument.

 

4.12                        Incentive Stock Options.  If the Option is designated as an Incentive Stock Option:

 

(a)                                 Participant acknowledges that to the extent the aggregate fair market value of shares (determined as of the time the option with respect to the shares is granted) with respect to which stock options intended to qualify as “incentive stock options” under Section 422 of the Code, including the Option, are exercisable for the first time by Participant during any calendar year exceeds $100,000 or if for any other reason such stock options do not qualify or cease to qualify for treatment as “incentive stock options” under Section 422 of the Code, such stock options (including the Option) will be treated as non-qualified stock options.  Participant further acknowledges that the rule set forth in the preceding

 

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sentence will be applied by taking the Option and other stock options into account in the order in which they were granted, as determined under Section 422(d) of the Code.  Participant also acknowledges that if the Option is exercised more than three (3) months after Participant’s Termination of Service, other than by reason of death or disability, the Option will be taxed as a Non-Qualified Stock Option.

 

(b)                                 Participant will give prompt written notice to the Company of any disposition or other transfer of any Shares acquired under this Agreement if such disposition or other transfer is made (a) within two (2) years from the Grant Date or (b) within one (1) year after the transfer of such Shares to Participant.  Such notice will specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by Participant in such disposition or other transfer.

 

* * * * *

 

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SELECTA BIOSCIENCES, INC.
 2016 INCENTIVE AWARD PLAN

 

RESTRICTED STOCK UNIT GRANT NOTICE

 

Capitalized terms not specifically defined in this Restricted Stock Unit Grant Notice (the “Grant Notice”) have the meanings given to them in the 2016 Incentive Award Plan (as amended from time to time, the “Plan”) of Selecta Biosciences, Inc. (the “Company”).

 

The Company has granted to the participant listed below (“Participant”) the Restricted Stock Units described in this Grant Notice (the “RSUs”), subject to the terms and conditions of the Plan and the Restricted Stock Unit Agreement attached as Exhibit A (the “Agreement”), both of which are incorporated into this Grant Notice by reference.

 

	
Participant:
    	
 
    
	
 
    	
 
    
	
Grant Date:
    	
 
    
	
 
    	
 
    
	
Number of RSUs:
    	
 
    
	
 
    	
 
    
	
Vesting Commencement Date:
    	
 
    
	
 
    	
 
    
	
Vesting Schedule:
    	
[To be specified in   individual award agreements]
    

 

By Participant’s signature below, Participant agrees to be bound by the terms of this Grant Notice, the Plan and the Agreement.  Participant has reviewed the Plan, this Grant Notice and the Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of the Plan, this Grant Notice and the Agreement.  Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, this Grant Notice or the Agreement.

 

 

	
SELECTA   BIOSCIENCES, INC.
    	
 
    	
PARTICIPANT
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    	
[Participant Name]
    
	
Title:
    	
 
    	
 
    	
 
    

 

 

Exhibit A

 

RESTRICTED STOCK UNIT AGREEMENT

 

Capitalized terms not specifically defined in this Agreement have the meanings specified in the Grant Notice or, if not defined in the Grant Notice, in the Plan.

 

ARTICLE I.
 GENERAL

 

1.1          Award of RSUs and Dividend Equivalents.

 

(a)           The Company has granted the RSUs to Participant effective as of the grant date set forth in the Grant Notice (the “Grant Date”).  Each RSU represents the right to receive one Share or, at the option of the Company, an amount of cash, in either case, as set forth in this Agreement.  Participant will have no right to the distribution of any Shares or payment of any cash until the time (if ever) the RSUs have vested.

 

(b)           The Company hereby grants to Participant, with respect to each RSU, a Dividend Equivalent for ordinary cash dividends paid to substantially all holders of outstanding Shares with a record date after the Grant Date and prior to the date the applicable RSU is settled, forfeited or otherwise expires.  Each Dividend Equivalent entitles Participant to receive the equivalent value of any such ordinary cash dividends paid on a single Share.  The Company will establish a separate Dividend Equivalent bookkeeping account (a “Dividend Equivalent Account”) for each Dividend Equivalent and credit the Dividend Equivalent Account (without interest) on the applicable dividend payment date with the amount of any such cash paid.

 

1.2          Incorporation of Terms of Plan.  The RSUs are subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference.  In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan will control.

 

1.3          Unsecured Promise.  The RSUs and Dividend Equivalents will at all times prior to settlement represent an unsecured Company obligation payable only from the Company’s general assets.

 

ARTICLE II.
 VESTING; FORFEITURE AND SETTLEMENT

 

2.1          Vesting; Forfeiture.  The RSUs will vest according to the vesting schedule in the Grant Notice except that any fraction of an RSU that would otherwise be vested will be accumulated and will vest only when a whole RSU has accumulated.  In the event of Participant’s Termination of Service for any reason, all unvested RSUs will immediately and automatically be cancelled and forfeited, except as otherwise determined by the Administrator or provided in a binding written agreement between Participant and the Company.  Dividend Equivalents (including any Dividend Equivalent Account balance) will vest or be forfeited, as applicable, upon the vesting or forfeiture of the RSU with respect to which the Dividend Equivalent (including the Dividend Equivalent Account) relates.

 

2.2          Settlement.

 

(a)           RSUs and Dividend Equivalents (including any Dividend Equivalent Account balance) will be paid in Shares or cash at the Company’s option as soon as administratively practicable after the vesting of the applicable RSU, but in no event more than sixty (60) days after the RSU’s vesting date.  Notwithstanding the foregoing, the Company may delay any payment under this Agreement that the Company reasonably determines would violate Applicable Law until the earliest date the Company

 

 

reasonably determines the making of the payment will not cause such a violation (in accordance with Treasury Regulation Section 1.409A-2(b)(7)(ii)), provided the Company reasonably believes the delay will not result in the imposition of excise taxes under Section 409A.

 

(b)           If an RSU is paid in cash, the amount of cash paid with respect to the RSU will equal the Fair Market Value of a Share on the day immediately preceding the payment date.  If a Dividend Equivalent is paid in Shares, the number of Shares paid with respect to the Dividend Equivalent will equal the quotient, rounded down to the nearest whole Share, of the Dividend Equivalent Account balance divided by the Fair Market Value of a Share on the day immediately preceding the payment date.

 

ARTICLE III.
 TAXATION AND TAX WITHHOLDING

 

3.1          Representation.  Participant represents to the Company that Participant has reviewed with Participant’s own tax advisors the tax consequences of this Award and the transactions contemplated by the Grant Notice and this Agreement.  Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its agents.

 

3.2          Tax Withholding.

 

(a)           The Company has the right and option, but not the obligation, to treat Participant’s failure to provide timely payment in accordance with the Plan of any withholding tax arising in connection with the RSUs or Dividend Equivalents as Participant’s election to satisfy all or any portion of the withholding tax by requesting the Company retain Shares otherwise issuable under the Award.

 

(b)           Participant acknowledges that Participant is ultimately liable and responsible for all taxes owed in connection with the RSUs and the Dividend Equivalents, regardless of any action the Company or any Subsidiary takes with respect to any tax withholding obligations that arise in connection with the RSUs or Dividend Equivalents.  Neither the Company nor any Subsidiary makes any representation or undertaking regarding the treatment of any tax withholding in connection with the awarding, vesting or payment of the RSUs or the Dividend Equivalents or the subsequent sale of Shares.  The Company and the Subsidiaries do not commit and are under no obligation to structure the RSUs or Dividend Equivalents to reduce or eliminate Participant’s tax liability.

 

ARTICLE IV.
 OTHER PROVISIONS

 

4.1          Adjustments.  Participant acknowledges that the RSUs, the Shares subject to the RSUs and the Dividend Equivalents are subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan.

 

4.2          Notices.  Any notice to be given under the terms of this Agreement to the Company must be in writing and addressed to the Company in care of the Company’s Secretary at the Company’s principal office or the Secretary’s then-current email address or facsimile number.  Any notice to be given under the terms of this Agreement to Participant must be in writing and addressed to Participant at Participant’s last known mailing address, email address or facsimile number in the Company’s personnel files.  By a notice given pursuant to this Section, either party may designate a different address for notices to be given to that party.  Any notice will be deemed duly given when actually received, when sent by email, when sent by certified mail (return receipt requested) and deposited with postage prepaid in a post office or branch post office regularly maintained by the United States Postal Service, when delivered by a nationally recognized express shipping company or upon receipt of a facsimile transmission confirmation.

 

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4.3          Titles.  Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

 

4.4          Conformity to Securities Laws.  Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws and, to the extent Applicable Laws permit, will be deemed amended as necessary to conform to Applicable Laws.

 

4.5          Successors and Assigns.  The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement will inure to the benefit of the successors and assigns of the Company.  Subject to the restrictions on transfer set forth in the Plan, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

 

4.6          Limitations Applicable to Section 16 Persons.  Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Grant Notice, this Agreement, the RSUs and the Dividend Equivalents will be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such exemptive rule.  To the extent Applicable Laws permit, this Agreement will be deemed amended as necessary to conform to such applicable exemptive rule.

 

4.7          Entire Agreement.  The Plan, the Grant Notice and this Agreement (including any exhibit hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof.

 

4.8          Agreement Severable.  In the event that any provision of the Grant Notice or this Agreement is held illegal or invalid, the provision will be severable from, and the illegality or invalidity of the provision will not be construed to have any effect on, the remaining provisions of the Grant Notice or this Agreement.

 

4.9          Limitation on Participant’s Rights.  Participation in the Plan confers no rights or interests other than as herein provided.  This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and may not be construed as creating a trust.  Neither the Plan nor any underlying program, in and of itself, has any assets.  Participant will have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the RSUs and Dividend Equivalents, and rights no greater than the right to receive cash or the Shares as a general unsecured creditor with respect to the RSUs and Dividend Equivalents, as and when settled pursuant to the terms of this Agreement.

 

4.10        Not a Contract of Employment.  Nothing in the Plan, the Grant Notice or this Agreement confers upon Participant any right to continue in the employ or service of the Company or any Subsidiary or interferes with or restricts in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without Cause, except to the extent expressly provided otherwise in a written agreement between the Company or a Subsidiary and Participant.

 

4.11        Counterparts.  The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which will be deemed an original and all of which together will constitute one instrument.

 

* * * * *

 

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SELECTA BIOSCIENCES, INC.

2016 INCENTIVE AWARD PLAN

 

RESTRICTED STOCK GRANT NOTICE

 

Capitalized terms not specifically defined in this Restricted Stock Grant Notice (the “Grant Notice”) have the meanings given to them in the 2016 Incentive Award Plan (as amended from time to time, the “Plan”) of Selecta Biosciences, Inc. (the “Company”).

 

The Company has granted to the participant listed below (“Participant”) the shares of Restricted Stock described in this Grant Notice (the “Restricted Shares”), subject to the terms and conditions of the Plan and the Restricted Stock Agreement attached as Exhibit A (the “Agreement”), both of which are incorporated into this Grant Notice by reference.

 

	
Participant:
    	
 
    
	
 
    	
 
    
	
Grant Date:
    	
 
    
	
 
    	
 
    
	
Number of Restricted Shares:
    	
 
    
	
 
    	
 
    
	
Vesting Commencement Date:
    	
 
    
	
 
    	
 
    
	
Vesting Schedule:
    	
[To be specified in   individual award agreements]
    

 

By Participant’s signature below, Participant agrees to be bound by the terms of this Grant Notice, the Plan and the Agreement.  Participant has reviewed the Plan, this Grant Notice and the Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of the Plan, this Grant Notice and the Agreement.  Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, this Grant Notice or the Agreement.

 

 

	
SELECTA   BIOSCIENCES, INC.
    	
PARTICIPANT
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    	
[Participant Name]
    
	
Title:
    	
 
    	
 
    	
 
    

 

Exhibit A

 

RESTRICTED STOCK AGREEMENT

 

Capitalized terms not specifically defined in this Agreement have the meanings specified in the Grant Notice or, if not defined in the Grant Notice, in the Plan.

 

ARTICLE I.
 GENERAL

 

1.1          Issuance of Restricted Shares.  The Company will issue the Restricted Shares to the Participant effective as of the grant date set forth in the Grant Notice and will cause (a) a stock certificate or certificates representing the Restricted Shares to be registered in Participant’s name or (b) the Restricted Shares to be held in book-entry form.  If a stock certificate is issued, the certificate will be delivered to, and held in accordance with this Agreement by, the Company or its authorized representatives and will bear the restrictive legends required by this Agreement.  If the Restricted Shares are held in book-entry form, then the book-entry will indicate that the Restricted Shares are subject to the restrictions of this Agreement.

 

1.2          Incorporation of Terms of Plan.  The Restricted Shares are subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference.  In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan will control.

 

ARTICLE II.
 VESTING, FORFEITURE AND ESCROW

 

2.1          Vesting.  The Restricted Shares will become vested Shares (the “Vested Shares”) according to the vesting schedule in the Grant Notice except that any fraction of a Share that would otherwise become a Vested Share will be accumulated and will become a Vested Share only when a whole Vested Share has accumulated.

 

2.2          Forfeiture.  In the event of Participant’s Termination of Service for any reason, Participant will immediately and automatically forfeit to the Company any Shares that are not Vested Shares (the “Unvested Shares”) at the time of Participant’s Termination of Service, except as otherwise determined by the Administrator or provided in a binding written agreement between Participant and the Company.  Upon forfeiture of Unvested Shares, the Company will become the legal and beneficial owner of the Unvested Shares and all related interests and Participant will have no further rights with respect to the Unvested Shares.

 

2.3          Escrow.

 

(a)           Unvested Shares will be held by the Company or its authorized representatives until (i) they are forfeited, (ii) they become Vested Shares or (iii) this Agreement is no longer in effect.  By accepting this Award, Participant appoints the Company and its authorized representatives as Participant’s attorney(s)-in-fact to take all actions necessary to effect any transfer of forfeited Unvested Shares (and Retained Distributions (as defined below), if any, paid on such forfeited Unvested Shares) to the Company as may be required pursuant to the Plan or this Agreement and to execute such representations or other documents or assurances as the Company or such representatives deem necessary or advisable in connection with any such transfer.  The Company, or its authorized representative, will not be liable for any good faith act or omission with respect to the holding in escrow or transfer of the Restricted Shares.

 

(b)           All cash dividends and other distributions made or declared with respect to

 

 

Unvested Shares (“Retained Distributions”) will be held by the Company until the time (if ever) when the Unvested Shares to which such Retained Distributions relate become Vested Shares.  The Company will establish a separate Retained Distribution bookkeeping account (“Retained Distribution Account”) for each Unvested Share with respect to which Retained Distributions have been made or declared in cash and credit the Retained Distribution Account (without interest) on the date of payment with the amount of such cash made or declared with respect to the Unvested Share.  Retained Distributions (including any Retained Distribution Account balance) will immediately and automatically be forfeited upon forfeiture of the Unvested Share with respect to which the Retained Distributions were paid or declared.

 

(c)           As soon as reasonably practicable following the date on which an Unvested Share becomes a Vested Share, the Company will (i) cause the certificate (or a new certificate without the legend required by this Agreement, if Participant so requests) representing the Share to be delivered to Participant or, if the Share is held in book-entry form, cause the notations indicating the Share is subject to the restrictions of this Agreement to be removed and (ii) pay to Participant the Retained Distributions relating to the Share.

 

2.4          Rights as Stockholder.  Except as otherwise provided in this Agreement or the Plan, upon issuance of the Restricted Shares by the Company, Participant will have all the rights of a stockholder with respect to the Restricted Shares, including the right to vote the Restricted Shares and to receive dividends or other distributions paid or made with respect to the Restricted Shares.

 

ARTICLE III.
 TAXATION AND TAX WITHHOLDING

 

3.1          Representation.  Participant represents to the Company that Participant has reviewed with Participant’s own tax advisors the tax consequences of the Restricted Shares and the transactions contemplated by the Grant Notice and this Agreement.  Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its agents.

 

3.2          Section 83(b) Election.  If Participant makes an election under Section 83(b) of the Code with respect to the Restricted Shares, Participant will deliver a copy of the election to the Company promptly after filing the election with the Internal Revenue Service.

 

3.3          Tax Withholding.

 

(a)           The Company has the right and option, but not the obligation, to treat Participant’s failure to provide timely payment in accordance with the Plan of any withholding tax arising in connection with the Restricted Shares as Participant’s election to satisfy all or any portion of the withholding tax by requesting the Company retain Shares otherwise deliverable under the Award.

 

(b)           Participant acknowledges that Participant is ultimately liable and responsible for all taxes owed in connection with the Restricted Shares, regardless of any action the Company or any Subsidiary takes with respect to any tax withholding obligations that arise in connection with the Restricted Shares.  Neither the Company nor any Subsidiary makes any representation or undertaking regarding the treatment of any tax withholding in connection with the awarding, vesting or payment of the Restricted Shares or the subsequent sale of the Restricted Shares.  The Company and the Subsidiaries do not commit and are under no obligation to structure this Award to reduce or eliminate Participant’s tax liability.

 

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ARTICLE IV.
 RESTRICTIVE LEGENDS AND TRANSFERABILITY

 

4.1          Legends.  Any certificate representing a Restricted Share will bear the following legend until the Restricted Share becomes a Vested Share:

 

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO FORFEITURE IN FAVOR OF THE COMPANY AND MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A RESTRICTED STOCK AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

 

4.2          Transferability.  The Restricted Shares and any Retained Distributions are subject to the restrictions on transfer in the Plan and may not be sold, assigned or transferred in any manner unless and until they become Vested Shares.  Any attempted transfer or disposition of Unvested Shares or related Retained Distributions prior to the time the Unvested Shares become Vested Shares will be null and void.  The Company will not be required to (a) transfer on its books any Restricted Share that has been sold or otherwise transferred in violation of this Agreement or (b)  treat as owner of such Restricted Share or accord the right to vote or pay dividends to any purchaser or other transferee to whom such Restricted Share has been so transferred.  The Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, or make appropriate notations to the same effect in its records.

 

ARTICLE V.
 OTHER PROVISIONS

 

5.1          Adjustments.  Participant acknowledges that the Restricted Shares are subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan.

 

5.2          Notices.  Any notice to be given under the terms of this Agreement to the Company must be in writing and addressed to the Company in care of the Company’s Secretary at the Company’s principal office or the Secretary’s then-current email address or facsimile number.  Any notice to be given under the terms of this Agreement to Participant must be in writing and addressed to Participant at Participant’s last known mailing address, email address or facsimile number in the Company’s personnel files.  By a notice given pursuant to this Section, either party may designate a different address for notices to be given to that party.  Any notice will be deemed duly given when actually received, when sent by email, when sent by certified mail (return receipt requested) and deposited with postage prepaid in a post office or branch post office regularly maintained by the United States Postal Service, when delivered by a nationally recognized express shipping company or upon receipt of a facsimile transmission confirmation.

 

5.3          Titles.  Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

 

5.4          Conformity to Securities Laws.  Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws and, to the extent Applicable Laws permit, will be deemed amended as necessary to conform to Applicable Laws.

 

5.5          Successors and Assigns.  The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement will inure to the benefit of the successors and assigns of the Company.  Subject to the restrictions on transfer set forth in this Agreement or the

 

A-3

 

Plan, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

 

5.6          Limitations Applicable to Section 16 Persons.  Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Grant Notice, this Agreement and the Restricted Shares will be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such exemptive rule.  To the extent Applicable Laws permit, this Agreement will be deemed amended as necessary to conform to such applicable exemptive rule.

 

5.7          Entire Agreement.  The Plan, the Grant Notice and this Agreement (including any exhibit hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof.

 

5.8          Agreement Severable.  In the event that any provision of the Grant Notice or this Agreement is held illegal or invalid, the provision will be severable from, and the illegality or invalidity of the provision will not be construed to have any effect on, the remaining provisions of the Grant Notice or this Agreement.

 

5.9          Limitation on Participant’s Rights.  Participation in the Plan confers no rights or interests other than as herein provided.  This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and may not be construed as creating a trust.  Neither the Plan nor any underlying program, in and of itself, has any assets.  Participant will have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the Award.

 

5.10        Not a Contract of Employment.  Nothing in the Plan, the Grant Notice or this Agreement confers upon Participant any right to continue in the employ or service of the Company or any Subsidiary or interferes with or restricts in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company or a Subsidiary and Participant.

 

5.11        Counterparts.  The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which will be deemed an original and all of which together will constitute one instrument.

 

* * * * *

 

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