Document:

Exhibit 10.4

 

Execution Copy

 

AMENDMENT NO. 4 TO SPONSORED
RESEARCH AGREEMENT

 

This Amendment
No. 4 to Sponsored research Agreement (this “Amendment”)
is entered into as of August 12, 2019 and is effective as of June 28, 2019 (the “Amendment Date”), by
and between Medgenics Medical Israel Ltd. (“Sponsor”),
a company organized under the laws of the State of Israel and wholly owned subsidiary of Aevi Genomic Medicine, Inc., a Delaware
corporation (“Aevi”), and The Children’s Hospital of
Philadelphia, a non-profit entity organized and existing under the laws of Pennsylvania (“CHOP”).
CHOP and Sponsor are sometimes referred to in this Amendment individually as a “Party” or, collectively,
as the “Parties.”

 

Whereas,
CHOP and Sponsor are parties to that certain Sponsored Research Agreement dated November 12, 2014, as amended by Amendment No.
1 to Sponsored Research Agreement effective on December 18, 2015, Amendment No. 2 to Sponsored Research Agreement effective on
February 16, 2017, and Amendment No. 3 to Sponsored Research Agreement effective on March 29, 2019, and as extended by letters
dated June 28, 2017 and June 26, 2018 (the “SRA”);

 

Whereas,
Aevi issued CHOP a Secured Convertible Promissory Note on March 29, 2019 (the “Note”) wherein the principal
amount of $3,166,666.64 is due and payable by Aevi to CHOP on September 30, 2019; and

 

Whereas,
Sponsor and CHOP now desire to amend the terms of Sponsor’s ability to extend the term of the SRA for 2019.

 

Now,
Therefore, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties mutually agree as follows:

 

		1.	Amendment of Section 3.1 (Term).

 

Effective as of the Amendment Date, Section
3.1 of the SRA is hereby amended and restated to read in its entirety as follows:

 

“Term.
The term of this AGREEMENT shall begin on the EFFECTIVE DATE and shall end on June 30, 2020.
At SPONSOR’s option upon written notice to CHOP, the term of this AGREEMENT shall automatically be extended (a) until June
30, 2021 if (i) SPONSOR provides such notice to CHOP on or prior to September 30, 2019 and (ii) Aevi pays to CHOP the
principal amount of the Note in full on or prior to September 30, 2019, and (b) until each subsequent June 30th anniversary
if SPONSOR provides such notice to CHOP at least one (1) year prior to the expiration of the then-applicable term. For clarity,
if Aevi does not pay to CHOP the principal amount of the Note in full on or prior to September 30, 2019, this Agreement will automatically
expire on June 30, 2020. For further clarity and by way of example, if the term of this AGREEMENT is extended by SPONSOR pursuant
to Section 3.1(a) until June 30, 2021, and SPONSOR gives written notice of further extension on or prior to June 30, 2020,
then the term of this AGREEMENT will be extended through June 30, 2022, and if SPONSOR does not give written notice of such extension
on or prior June 30, 2020, the AGREEMENT will expire on June 30, 2021.”

 

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		2.	Single Instrument.

 

This Amendment and
the SRA, as amended and modified by this Amendment, shall constitute and shall be construed as a single instrument. The provisions
of the SRA, as amended and modified by the provisions of this Amendment, are incorporated herein by this reference and are hereby
ratified and reaffirmed.

 

		3.	Counterparts.

 

This Amendment may
be executed in counterparts, each of which shall be deemed an original document, and all of which, together with this writing,
shall be deemed one instrument. This Amendment may be executed by electronic, facsimile or PDF signatures, which signatures shall
have the same force and effect as original signatures.

 

 

 

 

 

Signature Page to Follow

 

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In Witness Whereof,
the parties have executed and delivered this Amendment as of the Amendment Date. 

 

	
        THE CHILDREN’S HOSPITAL OF PHILADELPHIA

         

         

        By: /s/ Thomas Todorow                                   

         

        Name: Thomas Todorow                                   

         

        Title: EVP and Chief Financial Officer             

         

        

        
	
        MEDGENICS MEDICAL ISRAEL, LTD.

         

         

        By: /s/ Michael F. Cola                                       

         

        Name: Michael F. Cola                                        

         

        Title: Chief Executive Officer and President__

         

 

 

 

 

 

 

 

    	 	3Exhibit

AMENDED AND RESTATED SHARE REDEMPTION PROGRAM 
Effective as of September 12, 2019

General

While you should view your investment in our common stock as long term with limited liquidity, we have adopted a share redemption program, whereby on a quarterly basis, stockholders may request that we redeem all or any portion of their shares of our common stock. Due to the illiquid nature of investments in real estate, we may not have sufficient liquid resources to fund redemption requests. In addition, we have established limitations on the amount of funds we may use for redemptions during any calendar quarter. See "Redemption Limitations" below. Further, our board of directors has the right to modify or suspend the share redemption program upon 30 days’ notice at any time if it deems such action to be in our best interest. Any such modification or suspension will be communicated to stockholders through our filings with the SEC. You may request that we redeem shares of our common stock through your financial advisor or directly with our transfer agent. Under our share redemption program, we will only redeem shares as of the closing of the last business day of that quarter (a "Redemption Date"). To have your shares redeemed, your redemption request and required documentation must be received in good order by 4:00 p.m. (Eastern time) on the second to last business day of the applicable quarter. Redemption requests received and processed by our transfer agent will be effected at a redemption price equal to the NAV per share for the applicable class generally on the 13th of the month prior to quarter end (unless the 13th is not at least ten business days prior to the second to last business day of the applicable quarter, in which case the redemption price will be equal to the NAV per share on a date that is at least ten business days prior to the second to last business day of such quarter) (the "Redemption NAV"). If a redemption request is received after such time, the redemption order will be carried forward to the next quarter's Redemption Date at the NAV per share applicable to that quarter’s redemption, unless such request is withdrawn prior to that Redemption Date. Investors will have at least 20 business days (from the last business day of the previous quarter to the second to last business day of the current quarter) during which to decide whether to request a redemption of their shares as of the end of the current quarter. Investors may withdraw their redemption requests before they have been processed by notifying a customer service representative available on our toll-free information line by 4:00 p.m. Eastern time on the last business day of the applicable quarter. Settlements of share redemptions generally will be made within seven business days after the Redemption Date.

Minimum Account Redemptions

In the event that any stockholder fails to maintain the minimum balance of $2,500 of shares of our common stock, we may redeem all of the shares held by that stockholder at the redemption price in effect on the date we determine that the stockholder has failed to meet the minimum balance. Minimum account redemptions will apply even in the event that the failure to meet the minimum balance is caused solely by a decline in our NAV.

Sources of Funds for Redemptions

We may, after taking the interests of our company as a whole and the interests of our remaining stockholders into consideration, use proceeds from any available sources at our disposal to satisfy redemption requests, subject to the limitation on the amount of funds we may use described below under "—Redemption Limitations." Potential sources of funding redemptions include, but are not limited to, cash on hand, cash available from borrowings, cash from the sale of shares of our common stock and cash from liquidations of investments, to the extent that such funds are not otherwise dedicated to a particular 

use, such as working capital, cash distributions to stockholders, purchases of real property, or debt-related or other investments. Our board of directors has no obligation to use other sources to redeem shares of our common stock in any circumstances.

Redemption Limitations

Under our share redemption program, shares are not eligible for redemption for the first year after purchase except upon death or qualifying disability of a stockholder; provided, however, shares issued pursuant to our DRP are not subject to the one-year holding period. Only those stockholders who purchased their shares from us or received their shares from us (directly or indirectly) through one or more non-cash transactions may be able to participate in the share redemption program. In other words, once our shares are transferred for value by a stockholder, the transferee and all subsequent holders of the shares are not eligible to participate in the share redemption program. In addition, our share redemption program generally imposes a quarterly cap on aggregate redemptions of our shares equal to a value of up to 5% of the aggregate NAV of the outstanding shares as of the last business day of the previous quarter; provided, however, that every quarter each class of our common stock will be allocated capacity within such aggregate limit to allow stockholders in such class to redeem shares equal to at least 5% of the aggregate NAV of such share class as of the last calendar day of the previous quarter.

In the event that we determine to redeem some but not all of the shares submitted for redemption during any quarter, whether due to the quarterly cap or otherwise, shares submitted for redemption during such quarter will be redeemed on a pro rata basis. With respect to any pro rata treatment, redemption requests following the death or qualifying disability of a stockholder will be considered first, as a group, followed by requests where pro rata redemption would result in a stockholder owning less than the minimum balance of $2,500 of shares of our common stock, which will be redeemed in full to the extent there are available funds, with any remaining available funds allocated pro rata among all other redemption requests. All unsatisfied redemption requests (or portion thereof) will be treated as a request for redemption the following quarter, unless such request is withdrawn prior to such following quarter’s Redemption Date.

In order for a disability to be considered a "qualifying disability," (1) the stockholder must receive a determination of disability based upon a physical or mental condition or impairment arising after the date the stockholder acquired the shares to be redeemed, and (2) such determination of disability must be made by the governmental agency responsible for reviewing the disability retirement benefits that the stockholder could be eligible to receive.  The "applicable governmental agencies" are limited to the following: (1) the Social Security Administration; (2) the U.S. Office of Personnel Management; or (3) the Veteran's Benefits Administration.

Disability determinations by governmental agencies for purposes other than those listed above, including but not limited to worker’s compensation insurance, administration or enforcement of the Rehabilitation Act or Americans with Disabilities Act, or waiver of insurance premiums, will not entitle a stockholder to the special redemption terms applicable to stockholders with a “qualifying disability” unless otherwise permitted by us.  Redemption requests following an award by the applicable governmental agency of disability benefits must be accompanied by: (1) the investor’s initial application for disability benefits and (2) a Social Security Administration Notice of Award, a U.S. Office of Personnel Management determination of disability, a Veteran’s Benefits Administration record of disability-related discharge or such other documentation issued by the applicable governmental agency that we deem acceptable and demonstrates an award of the disability benefits.

The following disabilities do not entitle a worker to Social Security disability benefits:
	
		
	•
	disabilities occurring after the legal retirement age;

	
		
	•
	temporary disabilities; and

	
		
	•
	disabilities that do not render a worker incapable of performing substantial gainful activity.

Should redemption requests, in the business judgment of our board of directors, place an undue burden on our liquidity, adversely affect our operations or risk having an adverse impact on us as a whole, or should we otherwise determine that investing our liquid assets in real properties or other illiquid investments rather than redeeming our shares is in the best interests of us as a whole, we may choose to redeem fewer shares in any particular quarter than have been requested to be redeemed, or none at all. Further, our board of directors may modify, suspend or terminate our share redemption program if it deems such action to be in our best interest. Material modifications, including any amendment to the 5% quarterly limitation on redemptions, to and suspensions of the share redemption program will be promptly disclosed to stockholders in a prospectus supplement (or post-effective amendment if required by the Securities Act) or special or periodic report filed by us. In addition, we may determine to suspend the share redemption program due to regulatory changes, changes in law or if we become aware of undisclosed material information that we believe should be publicly disclosed before shares are redeemed. Once the share redemption program is suspended, our board of directors must affirmatively authorize the recommencement of the plan before stockholder requests will be considered again. 

IRS regulations require us to determine and disclose on Form 1099-B the adjusted cost basis for shares of our stock sold or redeemed. Although there are several available methods for determining the adjusted cost basis, unless you elect otherwise, which you may do by checking the appropriate box on the subscription agreement or calling our customer service number at 1-888-926-2688, we will utilize the first-in-first-out method.

The shares we redeem under our share redemption program will be canceled and return to the status of authorized but unissued shares. We do not intend to resell such shares to the public unless they are first registered with the SEC under the Securities Act and under appropriate state securities laws or otherwise sold in compliance with such laws.

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