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ttoo-ex102_788.htm

EXHIBIT 10.2

T2 BIOSYSTEMS, INC.
2014 INCENTIVE AWARD PLAN

(as amended and restated effective June 17, 2016)

 

ARTICLE 1.

PURPOSE

The purpose of the T2 Biosystems, Inc. 2014 Incentive Award Plan (as it may be amended or restated from time to time, the “Plan”) is to promote the success and enhance the value of T2 Biosystems, Inc. (the “Company”) by linking the individual interests of the members of the Board, Employees, and Consultants to those of Company stockholders and by providing such individuals with an incentive for outstanding performance to generate superior returns to Company stockholders. The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of members of the Board, Employees, and Consultants upon whose judgment, interest, and special effort the successful conduct of the Company’s operation is largely dependent. This Plan constitutes an amendment and restatement of the T2 Biosystems, Inc. 2014 Incentive Award Plan (the “Original Plan”). 

ARTICLE 2.

DEFINITIONS AND CONSTRUCTION

Wherever the following terms are used in the Plan they shall have the meanings specified below, unless the context clearly indicates otherwise. The singular pronoun shall include the plural where the context so indicates.

2.1“Administrator” shall mean the entity that conducts the general administration of the Plan as provided in Article 12. With reference to the duties of the Committee under the Plan which have been delegated to one or more persons pursuant to Section 12.6, or as to which the Board has assumed, the term “Administrator” shall refer to such person(s) unless the Committee or the Board has revoked such delegation or the Board has terminated the assumption of such duties.

2.2“Applicable Accounting Standards” shall mean Generally Accepted Accounting Principles in the United States, International Financial Reporting Standards or such other accounting principles or standards as may apply to the Company’s financial statements under United States federal securities laws from time to time.

2.3“Applicable Law” shall mean any applicable law, including without limitation: (i) provisions of the Code, the Securities Act, the Exchange Act and any rules or regulations thereunder; (ii) corporate, securities, tax or other laws, statutes, rules, requirements or regulations, whether federal, state, local or foreign; and (iii) rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded. 

2.4“Automatic Exercise Date” shall mean, with respect to an Option or a Stock Appreciation Right, the last business day of the applicable Option Term or Stock Appreciation 

 

 

Right Term that was established by the Administrator for such Option or Stock Appreciation Right (e.g., the last business day prior to the tenth anniversary of the date of grant of such Option or Stock Appreciation Right if the Option or Stock Appreciation Right initially had a ten-year Option Term or Stock Appreciation Right Term, as applicable); provided that with respect to an Option or Stock Appreciation Right that has been amended pursuant to this Plan so as to alter the applicable Option Term or Stock Appreciation Right Term, “Automatic Exercise Date” shall mean the last business day of the applicable Option Term or Stock Appreciation Right Term that was established by the Administrator for such Option or Stock Appreciation Right as amended.

2.5“Award” shall mean an Option, a Restricted Stock award, a Restricted Stock Unit award, a Performance Award, a Dividend Equivalents award, a Stock Payment award or a Stock Appreciation Right, which may be awarded or granted under the Plan (collectively, “Awards”).

2.6“Award Agreement” shall mean any written notice, agreement, terms and conditions, contract or other instrument or document evidencing an Award, including through electronic medium, which shall contain such terms and conditions with respect to an Award as the Administrator shall determine consistent with the Plan.

2.7“Award Limit” shall mean with respect to Awards that shall be payable in Shares or in cash, as the case may be, the respective limit set forth in Section 3.4.

2.8“Board” shall mean the Board of Directors of the Company.

2.9“Change in Control” shall mean 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 clause (i) and (ii) of paragraph (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 Section 2.9(a) or Section 2.9(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

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(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 Section 2.9(c)(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.

In addition, if a Change in Control constitutes a payment event with respect to any portion of an Award that provides for the deferral of compensation and is subject to Section 409A of the Code, the transaction or event described in subsection (a), (b), (c) or (d) with respect to such Award (or portion thereof) must also constitute a “change in control event,” as defined in Treasury Regulation Section 1.409A-3(i)(5) to the extent required by Section 409A.

The Committee shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether a Change in Control of the Company has occurred pursuant to the above definition, and 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.

2.10“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, together with the regulations and official guidance promulgated thereunder.

2.11“Committee” shall mean the Compensation Committee of the Board, or another committee or subcommittee of the Board or the Compensation Committee, appointed as provided in Section 12.1.

2.12“Common Stock” shall mean the common stock of the Company, par value $0.001 per share.

2.13“Company” shall have the meaning set forth in Article 1.

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2.14“Consultant” shall mean any consultant or adviser engaged to provide services to the Company or any Subsidiary that qualifies as a consultant under the applicable rules of the Securities and Exchange Commission for registration of shares on a Form S-8 Registration Statement.

2.15“Covered Employee” shall mean any Employee who is, or could become, a “covered employee” within the meaning of Section 162(m) of the Code. 

2.16“Director” shall mean a member of the Board, as constituted from time to time.

2.17“Dividend Equivalent” shall mean a right to receive the equivalent value (in cash or Shares) of dividends paid on Shares, awarded under Section 9.2.

2.18“DRO” shall mean a domestic relations order as defined by the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended from time to time, or the rules thereunder. 

2.19“Effective Date” shall mean the day prior to the Public Trading Date.

2.20“Eligible Individual” shall mean any person who is an Employee, a Consultant or a Non-Employee Director, as determined by the Committee.

2.21“Employee” shall mean any officer or other employee (as determined in accordance with Section 3401(c) of the Code) of the Company or of any Subsidiary.

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

2.23“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

2.24“Expiration Date” shall have the meaning given to such term in Section 13.1.

2.25“Fair Market Value” shall mean, as of any given date, the value of a Share determined as follows:

(a)If the Common Stock is listed on any (i) established securities exchange (such as the New York Stock Exchange, the NASDAQ Global Market and the NASDAQ Global Select Market), (ii) national market system or (iii) automated quotation system, its Fair Market Value shall be the closing sales price for a Share as quoted on such exchange or system for such date or, if there is no closing sales price for a Share on the date in question, the closing sales price for a Share on the last preceding date for which such quotation exists, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

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(b)If the Common Stock is not listed on an established securities exchange, national market system or automated quotation system, but the Common Stock is regularly quoted by a recognized securities dealer, its Fair Market Value shall be the mean of the high bid and low asked prices for such date or, if there are no high bid and low asked prices for a Share on such date, the high bid and low asked prices for a Share on the last preceding date for which such information exists, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or

(c)If the Common Stock is neither listed on an established securities exchange, national market system or automated quotation system nor regularly quoted by a recognized securities dealer, its Fair Market Value shall be established by the Administrator in good faith.

Notwithstanding the foregoing, with respect to any Award granted after the effectiveness of the Company’s registration statement relating to its initial public offering and prior to the Public Trading Date, 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.

2.26“Greater Than 10% Stockholder” shall mean 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 any subsidiary corporation (as defined in Section 424(f) of the Code) or parent corporation thereof (as defined in Section 424(e) of the Code).

2.27“Holder” shall mean a person who has been granted an Award.

2.28“Incentive Stock Option” shall mean an Option that is intended to qualify as an incentive stock option and conforms to the applicable provisions of Section 422 of the Code.

2.29“Non-Employee Director” shall mean a Director of the Company who is not an Employee.

2.30“Non-Employee Director Equity Compensation Policy” shall have the meaning set forth in Section 4.5. 

2.31“Non-Qualified Stock Option” shall mean an Option that is not an Incentive Stock Option.

2.32“Option” shall mean a right to purchase Shares at a specified exercise price, granted under Article 6. An Option shall be either a Non-Qualified Stock Option or an Incentive Stock Option; provided, however, that Options granted to Non-Employee Directors and Consultants shall only be Non-Qualified Stock Options.

2.33“Option Term” shall have the meaning set forth in Section 6.6.

2.34“Parent” shall mean any entity (other than the Company), whether domestic or foreign, in an unbroken chain of entities ending with the Company if each of the entities other than the Company beneficially owns, at the time of the determination, securities or interests 

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representing at least fifty percent (50%) of the total combined voting power of all classes of securities or interests in one of the other entities in such chain.

2.35“Performance Award” shall mean a cash bonus award, stock bonus award, performance award or other incentive award that is paid in cash, Shares or a combination of both, awarded under Section 9.1.

2.36“Performance-Based Compensation” shall mean any compensation that is intended to qualify as “performance-based compensation” as described in Section 162(m)(4)(C) of the Code.

2.37“Performance Criteria” shall mean the criteria (and adjustments) that the Committee selects for an Award for purposes of establishing the Performance Goal or Performance Goals for a Performance Period, determined as follows:

(a)The Performance Criteria that shall be used to establish Performance Goals are limited to: (i) net earnings (either before or after one or more of (A) interest, (B) taxes, (C) depreciation, (D) amortization and (E) non-cash equity-based compensation expense); (ii) gross or net sales or revenue; (iii) net income (either before or after taxes); (iv) adjusted net income; (v) operating earnings or profit (either before or after taxes); (vi) cash flow (including, but not limited to, operating cash flow and free cash flow) and cash flow return on capital; (vii) return on assets; (viii) return on capital (or invested capital) and cost of capital); (ix) return on stockholders’ equity; (x) total stockholder return; (xi) return on sales; (xii) gross or net profit or operating margin; (xiii) costs, reductions in costs and cost control measures; (xiv) expenses; (xv) working capital; (xvi) earnings or loss per share; (xvii) adjusted earnings or loss per share; (xviii) price per share or dividends per share (or appreciation in and/or maintenance of such price or dividends); (xix) regulatory achievements or compliance (including, without limitation, regulatory body approval for commercialization of a product); (xx) implementation, completion or attainment of objectives relating to research, development, regulatory, commercial, or strategic milestones or developments of critical projects; (xxi) market share; (xxii) economic value; (xxiii) revenue; (xxiv) revenue growth; (xxv) productivity; (xxvi) operating efficiency; (xxvii) economic value-added; (xxviii) return on net assets; (xxix) funds from operations; (xxx) funds available for distributions; (xxxi) sales unit volume; (xxxii) licensing revenue; (xxxiii) brand recognition and acceptance; (xxxiv) inventory, inventory turns or cycle time; (xxxv) market penetration and geographic business expansion; (xxxvi) customer satisfaction/growth and customer service; (xxxvii) employee satisfaction, recruitment and maintenance of personnel, and human resources management; (xxxviii) supervision of litigation and other legal matters; (xxxix) strategic partnerships and transactions; (xxxx) financial ratios (including those measuring liquidity, activity, profitability or leverage); (xxxxi) supply chain achievements; (xxxxii) debt levels or reductions; (xxxxiii) sales-related goals; (xxxxiv) financing and other capital raising transactions; (xxxxv) year-end cash; (xxxxvi) acquisition activity; (xxxxvii) investment sourcing activity; and (xxxxiii) marketing initiatives, any of which may be measured either in absolute terms or as compared to any incremental increase or decrease or as compared to results of a peer group or to market performance indicators or indices.

(b)The Committee, in its discretion, may provide that one or more objectively determinable adjustments shall be made to one or more of the Performance Goals. Such 

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adjustments may include, but are not limited to, one or more of the following: (i) items related to a change in Applicable Accounting Standards; (ii) items relating to financing activities; (iii) expenses for restructuring or productivity initiatives; (iv) other non-operating items; (v) items related to acquisitions; (vi) items attributable to the business operations of any entity acquired by the Company during the Performance Period; (vii) items related to the sale or disposition of a business or segment of a business; (viii) items related to discontinued operations that do not qualify as a segment of a business under Applicable Accounting Standards; (ix) items attributable to any stock dividend, stock split, combination or exchange of stock occurring during the Performance Period; (x) any other items of significant income or expense which are determined to be appropriate adjustments; (xi) items relating to unusual or extraordinary corporate transactions, events or developments, (xii) items related to amortization of acquired intangible assets; (xiii) items that are outside the scope of the Company’s core, on-going business activities; (xiv) items related to acquired in-process research and development; (xv) items relating to changes in tax laws; (xvi) items relating to major licensing or partnership arrangements; (xvii) items relating to asset impairment charges; (xviii) items relating to gains or losses for litigation, arbitration and contractual settlements; (xix) items attributable to expenses incurred in connection with a reduction in force or early retirement initiative; (xx) items relating to foreign exchange or currency transactions and/or fluctuations; or (xxi) items relating to any other unusual or nonrecurring events or changes in Applicable Law, Applicable Accounting Standards or business conditions. For all Awards intended to qualify as Performance-Based Compensation, such determinations shall be made within the time prescribed by, and otherwise in compliance with, Section 162(m) of the Code.

2.38“Performance Goals” shall mean, for a Performance Period, one or more goals established in writing by the Administrator for the Performance Period based upon one or more Performance Criteria. Depending on the Performance Criteria used to establish Performance Goals, Performance Goals may be expressed in terms of overall Company performance or the performance of a Subsidiary, division, business unit, or an individual. The achievement of each Performance Goal shall be determined, to the extent applicable, with reference to Applicable Accounting Standards.

2.39“Performance Period” shall mean one or more periods of time, which may be of varying and overlapping durations, as the Administrator may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Holder’s right to, and the payment of, an Award.

2.40“Performance Stock Unit” shall mean a Performance Award awarded under Section 9.1 which is denominated in units of value including dollar value of Shares.

2.41“Permitted Transferee” shall mean, with respect to a Holder, any “family member” of the Holder, as defined in the instructions to use the Form S-8 Registration Statement under the Securities Act, or any other transferee specifically approved by the Administrator after taking into account Applicable Law.

2.42 “Plan” shall have the meaning set forth in Article 1.

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2.43“Prior Plan” shall mean the T2 Biosystems, Inc. Amended and Restated 2006 Employee, Director and Consultant Stock Plan, as such plan may be amended from time to time.

2.44“Public Trading Date” shall mean the first date upon which 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.

2.45“Restricted Stock” shall mean Common Stock awarded under Article 7 that is subject to certain restrictions and may be subject to risk of forfeiture or repurchase.

2.46“Restricted Stock Unit” shall mean the right to receive Shares awarded under Article 8.

2.47“Securities Act” shall mean the Securities Act of 1933, as amended.

2.48“Shares” shall mean shares of Common Stock.

2.49“Stock Appreciation Right” shall mean a stock appreciation right granted under Article 10.

2.50“Stock Appreciation Right Term” shall have the meaning set forth in Section 10.4.

2.51“Stock Payment” shall mean (a) a payment in the form of Shares, or (b) an option or other right to purchase Shares, as part of a bonus, deferred compensation or other arrangement, awarded under Section 9.3.

2.52“Subsidiary” shall mean 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.

2.53“Substitute Award” shall mean an Award granted under the Plan upon the assumption of, or in substitution for, outstanding equity awards granted by a company or other entity in connection with a corporate transaction, such as a merger, combination, consolidation or acquisition of property or stock; provided, however, that in no event shall the term “Substitute Award” be construed to refer to an award made in connection with the cancellation and repricing of an Option or Stock Appreciation Right.

2.54“Termination of Service” shall mean:

(a)As to a Consultant, the time when the engagement of a Holder as a Consultant to the Company or a Subsidiary is terminated for any reason, with or without cause, including, without limitation, by resignation, discharge, death, disability or retirement, but excluding terminations where the Consultant simultaneously commences or remains in employment or service with the Company or any Subsidiary. 

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(b)As to a Non-Employee Director, the time when a Holder who is a Non-Employee Director ceases to be a Director for any reason, including, without limitation, a termination by resignation, failure to be elected, death, disability or retirement, but excluding terminations where the Holder simultaneously commences or remains in employment or service with the Company or any Subsidiary.

(c)As to an Employee, the time when the employee-employer relationship between a Holder and the Company or any Subsidiary is terminated for any reason, including, without limitation, a termination by resignation, discharge, death, disability or retirement; but excluding terminations where the Holder simultaneously commences or remains in employment or service with the Company or any Subsidiary. 

The Administrator, in its discretion, shall determine the effect of all matters and questions relating to any Termination of Service, including, without limitation, the question of whether a Termination of Service resulted from a discharge for cause and all questions of whether particular leaves of absence constitute a Termination of Service; provided, however, that, with respect to Incentive Stock Options, unless the Administrator otherwise provides in the terms of the Award Agreement or otherwise, or as otherwise required by Applicable Law, a leave of absence, change in status from an employee to an independent contractor or other change in the employee-employer relationship shall constitute a Termination of Service only if, and to the extent that, such leave of absence, change in status or other change interrupts employment for the purposes of Section 422(a)(2) of the Code. For purposes of the Plan, a Holder’s employee-employer relationship or consultancy relations shall be deemed to be terminated in the event that the Subsidiary employing or contracting with such Holder ceases to remain a Subsidiary following any merger, sale of stock or other corporate transaction or event (including, without limitation, a spin-off).

ARTICLE 3.

SHARES SUBJECT TO THE PLAN

3.1Number of Shares.

(a)Subject to Sections 3.1(b) and 13.2, the aggregate number of Shares which may be issued or transferred pursuant to Awards under the Plan is the sum of: (i) 823,529 Shares, (ii) any Shares which as of the Effective Date are subject to awards granted under the Prior Plan which are forfeited, lapse unexercised or are settled in cash and which following the Effective Date are not issued under the Prior Plan; and (iii) an annual increase on the first day of each calendar year beginning January 1, 2015 and ending on and including January 1, 2026, equal to the lesser of (A) 4% of the Shares outstanding (on an as-converted basis) on the final day of the immediately preceding calendar year and (B) such smaller number of Shares as determined by the Board; provided, however, no more than 8,235,294 Shares may be issued upon the exercise of Incentive Stock Options.  From and after the Effective Date, no awards shall be granted under the Prior Plan.  Any award outstanding under the Prior Plan as of the Effective Date shall continue to be subject to the terms and conditions of the Prior Plan.  

(b)To the extent all or a portion of an Award is forfeited, expires, lapses for any reason, or is settled for cash without the delivery of Shares to the Holder, any Shares subject 

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to such Award or portion thereof shall, to the extent of such forfeiture, expiration, lapse or cash settlement, again be available for the grant of an Award under the Plan. Any Shares repurchased by or surrendered to the Company under Section 7.4 so that such Shares are returned to the Company shall again be available for the grant of an Award under the Plan. The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards shall not be counted against the Shares available for issuance under the Plan. Notwithstanding the provisions of this Section 3.1(b), no Shares may again be optioned, granted or awarded if such action would cause an Incentive Stock Option to fail to qualify as an incentive stock option under Section 422 of the Code.

(c)To the extent permitted by Applicable Law, Substitute Awards shall not reduce the Shares authorized for grant under the Plan.

3.2Stock Distributed. Any Shares distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Common Stock, treasury Common Stock or Common Stock purchased on the open market.

3.3Limitation on Awards to Non-Employee Directors. 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 $600,000, increased to $900,000 in the fiscal year of a Non-Employee Director’s initial service as a Non-Employee Director.  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. 

3.4Limitation on Number of Shares Subject to Awards. Notwithstanding any provision in the Plan to the contrary, and subject to Section 13.2, the maximum aggregate number of Shares that may be issued with respect to Awards granted to any one person during a given calendar year shall be 1,000,000 and the maximum aggregate amount of cash that may be paid with respect to Awards granted to any one person during a given calendar year shall be $2,000,000. To the extent required by Section 162(m) of the Code, Shares subject to Awards which are canceled shall continue to be counted against the Award Limit.

ARTICLE 4.

GRANTING OF AWARDs

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4.1Participation. The Administrator may, from time to time, select from among all Eligible Individuals, those to whom an Award shall be granted and shall determine the nature and amount of each Award, which shall not be inconsistent with the requirements of the Plan. Except as provided in Section 4.5 regarding the grant of Awards pursuant to the Non-Employee Director Equity Compensation Policy, no Eligible Individual shall have any right to be granted an Award pursuant to the Plan.

4.2Award Agreement. Each Award shall be evidenced by an Award Agreement that sets forth the terms, conditions and limitations for such Award, which may include the term of the Award, the provisions applicable in the event of the Holder’s Termination of Service, and the Company’s authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind an Award. Award Agreements evidencing Awards intended to qualify as Performance-Based Compensation shall contain such terms and conditions as may be necessary to meet the applicable provisions of Section 162(m) of the Code. Award Agreements evidencing Incentive Stock Options shall contain such terms and conditions as may be necessary to meet the applicable provisions of Section 422 of the Code.

4.3Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan, the Plan, and any Award granted or awarded to any individual who is then subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including Rule 16b‐3 of the Exchange Act and any amendments thereto) that are requirements for the application of such exemptive rule. To the extent permitted by Applicable Law, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

4.4At-Will Employment; Voluntary Participation. Nothing in the Plan or Award Agreement shall confer upon any Holder any right to continue in the employ of, or as a Director or Consultant for, the Company or any Subsidiary, or shall interfere with or restrict in any way the rights of the Company and any Subsidiary, which rights are hereby expressly reserved, to discharge any Holder at any time for any reason whatsoever, with or without cause, and with or without notice, or to terminate or change all other terms and conditions of employment or engagement, except to the extent expressly provided otherwise in a written agreement between the Holder and the Company or any Subsidiary. Participation by each Holder in the Plan shall be voluntary and nothing in the Plan shall be construed as mandating that any Eligible Individual shall participate in the Plan.

4.5Non-Employee Director Awards. The Administrator, in its discretion, may provide that Awards granted to Non-Employee Directors shall be granted pursuant to a written nondiscretionary formula established by the Administrator (the “Non-Employee Director Equity Compensation Policy”), subject to the limitations of the Plan. The Non-Employee Director Equity Compensation Policy shall set forth the type of Award(s) to be granted to Non-Employee Directors, the number of Shares to be subject to Non-Employee Director Awards, the conditions on which such Awards shall be granted, become exercisable and/or payable and expire, and such other terms and conditions as the Administrator shall determine in its discretion. The Non-Employee Director Equity Compensation Policy may be modified by the Administrator from time to time in its discretion.

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4.6Stand-Alone and Tandem Awards. Awards granted pursuant to the Plan may, in the discretion of the Administrator, be granted either alone, in addition to, or in tandem with, any other Award granted pursuant to the Plan. Awards granted in addition to or in tandem with other Awards may be granted either at the same time as or at a different time from the grant of such other Awards.

ARTICLE 5.

PROVISIONS APPLICABLE TO AWARDS INTENDED TO QUALIFY AS PERFORMANCE-BASED COMPENSATION

5.1Purpose. The Committee may, in its discretion, (a) determine whether an Award is intended to qualify as Performance-Based Compensation and (b) at any time after any such determination, alter such intent for any or no reason. If the Committee, in its discretion, decides to grant an Award that is intended to qualify as Performance-Based Compensation (other than an Option or Stock Appreciation Right), then the provisions of this Article 5 shall control over any contrary provision contained in the Plan; provided that, if after such decision the Committee alters such intention for any reason, the provisions of this Article 5 shall no longer control over any other provision contained in the Plan. The Committee, in its discretion, may (i) grant Awards to Eligible Individuals that are based on Performance Criteria or Performance Goals or any such other criteria and goals as the Committee shall establish, but that do not satisfy the requirements of this Article 5 and that are not intended to qualify as Performance-Based Compensation and (ii) subject any Awards intended to qualify as Performance-Based Compensation to additional conditions and restrictions unrelated to any Performance Criteria or Performance Goals (including, without limitation, continued employment or service requirements) to the extent such Awards otherwise satisfy the requirements of this Article 5 with respect to the Performance Criteria and Performance Goals applicable thereto.  Unless otherwise specified by the Committee at the time of grant, the Performance Criteria with respect to an Award intended to be Performance-Based Compensation payable to a Covered Employee shall be determined on the basis of Applicable Accounting Standards. 

5.2Procedures with Respect to Performance-Based Awards. To the extent necessary to comply with the requirements of Section 162(m)(4)(C) of the Code, with respect to any Award which is intended to qualify as Performance-Based Compensation, no later than 90 days following the commencement of any Performance Period or any designated fiscal period or period of service (or such earlier time as may be required under Section 162(m) of the Code), the Committee shall, in writing, (a) designate one or more Eligible Individuals, (b) select the Performance Criteria applicable to the Performance Period, (c) establish the Performance Goals, and amounts of such Awards, as applicable, which may be earned for such Performance Period based on the Performance Criteria, and (d) specify the relationship between Performance Criteria and the Performance Goals and the amounts of such Awards, as applicable, to be earned by each Covered Employee for such Performance Period. Following the completion of each Performance Period, the Committee shall certify in writing whether and the extent to which the applicable Performance Goals have been achieved for such Performance Period. In determining the amount earned under such Awards, the Committee (i) shall, unless otherwise provided in an Award Agreement, have the right to reduce or eliminate the amount payable at a given level of performance to take into account additional factors that the Committee may deem relevant, including the assessment of 

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individual or corporate performance for the Performance Period, but (ii) shall in no event have the right to increase the amount payable for any reason.

5.3Payment of Performance-Based Awards. Unless otherwise provided in the applicable Award Agreement and only to the extent otherwise permitted by Section 162(m) of the Code, as to an Award that is intended to qualify as Performance-Based Compensation, the Holder must be employed by the Company or a Subsidiary throughout the Performance Period. Unless otherwise provided in the applicable Award Agreement, a Holder shall be eligible to receive payment pursuant to such Awards for a Performance Period only if and to the extent the Performance Goals for such Performance Period are achieved.

5.4Additional Limitations. Notwithstanding any other provision of the Plan and except as otherwise determined by the Administrator, any Award which is granted to an Eligible Individual and is intended to qualify as Performance-Based Compensation shall be subject to any additional limitations set forth in Section 162(m) of the Code or any regulations or rulings issued thereunder that are requirements for qualification as Performance-Based Compensation, and the Plan and the applicable Award Agreement shall be deemed amended to the extent necessary to conform to such requirements.

ARTICLE 6.

OPTIONS

6.1Granting of Options to Eligible Individuals. The Administrator is authorized to grant Options to Eligible Individuals from time to time, in its discretion, on such terms and conditions as it may determine, which shall not be inconsistent with the Plan.

6.2Option Exercise Price. The exercise price per Share subject to each Option shall be set by the Administrator, but shall not be less than 100% of the Fair Market Value of a Share on the date the Option is granted (or, as to Incentive Stock Options, on the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code) unless otherwise determined by the Administrator. In addition, in the case of Incentive Stock Options granted to a Greater Than 10% Stockholder, such price shall not be less than 110% of the Fair Market Value of a Share on the date the Option is granted (or the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code).

6.3Option Vesting.

(a)The period during which the right to exercise, in whole or in part, an Option vests in the Holder shall be set by the Administrator and the Administrator may determine that an Option may not be exercised in whole or in part for a specified period after it is granted. Such vesting may be based on service with the Company or any Subsidiary or any other criteria selected by the Administrator, including Performance Goals or Performance Criteria. At any time after the grant of an Option, the Administrator, in its discretion and subject to whatever terms and conditions it selects, may accelerate the period during which an Option vests.

(b)No portion of an Option which is unexercisable at a Holder’s Termination of Service shall thereafter become exercisable, except as may be otherwise provided by the 

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Administrator either in the Award Agreement evidencing the grant of an Option or by action of the Administrator following the grant of the Option. Unless otherwise determined by the Administrator in the Award Agreement or by action of the Administrator following the grant of the Option, the portion of an Option that is unexercisable at a Holder’s Termination of Service shall automatically expire thirty (30) days following such Termination of Service.

6.4Manner of Exercise.  All or a portion of an exercisable Option shall be deemed exercised upon delivery of all of the following to the Secretary of the Company, the stock administrator of the Company or such other person or entity designated by the Administrator, or his, her or its office, as applicable:

(a)A written or electronic notice complying with the applicable rules established by the Administrator stating that the Option, or a portion thereof, is exercised. The notice shall be signed by the Holder or other person then entitled to exercise the Option or such portion of the Option.

(b)Such representations and documents as the Administrator, in its discretion, deems necessary or advisable to effect compliance with Applicable Law.  The Administrator may, in its discretion, also take whatever additional actions it deems appropriate to effect such compliance including, without limitation, placing legends on share certificates and issuing stop-transfer notices to agents and registrars.

(c)In the event that the Option shall be exercised by any person or persons other than the Holder, appropriate proof of the right of such person or persons to exercise the Option, as determined in the discretion of the Administrator.

(d)Full payment of the exercise price and applicable withholding taxes for the shares with respect to which the Option, or portion thereof, is exercised, in a manner permitted by Section 11.1 and Section 11.2.

6.5Partial Exercise. An exercisable Option may be exercised in whole or in part. However, an Option shall not be exercisable with respect to fractional Shares unless otherwise determined by the Administrator and the Administrator may require that, by the terms of the Option, a partial exercise must be with respect to a minimum number of shares.

6.6Option Term.  The term of each Option (the “Option Term”) shall be set by the Administrator in its discretion; provided, however, that the Option Term shall not be more than ten (10) years from the date the Option is granted, or five (5) years from the date an Incentive Stock Option is granted to a Greater Than 10% Stockholder.  The Administrator shall determine the time period, including the time period following a Termination of Service, during which the Holder has the right to exercise the vested Options, which time period may not extend beyond the last day of the Option Term.  Except as limited by the requirements of Section 409A of the Code or the first sentence of this Section 6.6, the Administrator may extend the Option Term of any outstanding Option, and may extend the time period during which vested Options may be exercised, in connection with any Termination of Service of the Holder, and may amend, subject to Section 13.1, any other term or condition of such Option relating to such a Termination of Service.

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6.7Expiration of Option Term: Automatic Exercise of In-The-Money Options. Unless otherwise determined by the Administrator (in an Award Agreement or otherwise) or as otherwise directed by an Option Holder in writing to the Company, each Option outstanding on the Automatic Exercise Date with an exercise price per share that is less than the Fair Market Value per share of Common Stock as of such date shall automatically and without further action by the Option Holder or the Company be exercised on the Automatic Exercise Date. In the discretion of the Administrator, payment of the exercise price of any such Option shall be made pursuant to Section 11.1(b) or Section 11.1(c) and the Company or any Subsidiary shall deduct or withhold an amount sufficient to satisfy all taxes associated with such exercise in accordance with Section 11.2. Unless otherwise determined by the Administrator, this Section 6.7 shall not apply to an Option if the Holder of such Option incurs a Termination of Service on or before the Automatic Exercise Date. For the avoidance of doubt, no Option with an exercise price per share that is equal to or greater than the Fair Market Value per share of Common Stock on the Automatic Exercise Date shall be exercised pursuant to this Section 6.7.

6.8Notification Regarding Disposition. The Holder shall give the Company prompt written or electronic notice of any disposition of Shares acquired by exercise of an Incentive Stock Option which occurs within (a) two years from the date of granting (including the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code) such Option to such Holder, or (b) one year after the transfer of such Shares to such Holder.

ARTICLE 7.

RESTRICTED STOCK

7.1Award of Restricted Stock.

(a)The Administrator is authorized to grant Restricted Stock to Eligible Individuals, and shall determine the terms and conditions, including the restrictions applicable to each award of Restricted Stock, which terms and conditions shall not be inconsistent with the Plan, and may impose such conditions on the issuance of such Restricted Stock as it deems appropriate.

(b)The Administrator shall establish the purchase price, if any, and form of payment for Restricted Stock; provided, however, that if a purchase price is charged, such purchase price shall be no less than the par value, if any, of the Shares to be purchased, unless otherwise permitted by Applicable Law. In all cases, legal consideration shall be required for each issuance of Restricted Stock.

7.2Rights as Stockholders. Subject to Section 7.4, upon issuance of Restricted Stock, the Holder shall have, unless otherwise provided by the Administrator, all the rights of a stockholder with respect to said Shares, subject to the restrictions in each individual Award Agreement, including the right to receive all dividends and other distributions paid or made with respect to the Shares; provided, however, that, in the discretion of the Administrator, any extraordinary distributions with respect to the Shares shall be subject to the restrictions set forth in Section 7.3.

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7.3Restrictions. All shares of Restricted Stock (including any shares received by Holders thereof with respect to shares of Restricted Stock as a result of stock dividends, stock splits or any other form of recapitalization) shall, in the terms of each individual Award Agreement, be subject to such restrictions and vesting requirements as the Administrator shall provide. Such restrictions may include, without limitation, restrictions concerning voting rights and transferability and such restrictions may lapse separately or in combination at such times and pursuant to such circumstances or based on such criteria as selected by the Administrator, including, without limitation, criteria based on the Holder’s duration of employment, directorship or consultancy with the Company, Performance Goals, Performance Criteria, Company performance, individual performance or other criteria selected by the Administrator. By action taken after the Restricted Stock is issued, the Administrator may, on such terms and conditions as it may determine to be appropriate, accelerate the vesting of such Restricted Stock by removing any or all of the restrictions imposed by the terms of the applicable Award Agreement. Unless otherwise determined by the Administrator, Restricted Stock may not be sold or encumbered until all restrictions are terminated or expire. 

7.4Repurchase or Forfeiture of Restricted Stock. Except as otherwise determined by the Administrator at the time of the grant of the Award or thereafter, (a) if no price was paid by the Holder for the Restricted Stock, upon a Termination of Service during the applicable restriction period, the Holder’s rights in unvested Restricted Stock then subject to restrictions shall lapse, and such Restricted Stock shall be surrendered to the Company and cancelled without consideration, and (b) if a price was paid by the Holder for the Restricted Stock, upon a Termination of Service during the applicable restriction period, the Company shall have the right to repurchase from the Holder the unvested Restricted Stock then subject to restrictions at a cash price per share equal to the price paid by the Holder for such Restricted Stock or such other amount as may be specified in the applicable Award Agreement.

7.5Certificates for Restricted Stock. Restricted Stock granted pursuant to the Plan may be evidenced in such manner as the Administrator shall determine. Certificates or book entries evidencing shares of Restricted Stock shall include an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock. The Company, in its discretion, may (a) retain physical possession of any stock certificate evidencing shares of Restricted Stock until the restrictions thereon shall have lapsed and/or (b) require that the stock certificates evidencing shares of Restricted Stock be held in custody by a designated escrow agent (which may but need not be the Company) until the restrictions thereon shall have lapsed and that the Holder deliver a stock power, endorsed in blank, relating to such Restricted Stock.

7.6Section 83(b) Election. If a Holder makes an election under Section 83(b) of the Code to be taxed with respect to the Restricted Stock as of the date of transfer of the Restricted Stock rather than as of the date or dates upon which the Holder would otherwise be taxable under Section 83(a) of the Code, the Holder shall be required to deliver a copy of such election to the Company promptly after filing such election with the Internal Revenue Service.

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ARTICLE 8.

restricted stock units

8.1Grant of Restricted Stock Units. The Administrator is authorized to grant Awards of Restricted Stock Units to any Eligible Individual selected by the Administrator in such amounts and subject to such terms and conditions as determined by the Administrator. 

8.2Purchase Price. The Administrator shall specify the purchase price, if any, to be paid by the Holder to the Company with respect to any Restricted Stock Unit award; provided, however, that value of the consideration shall not be less than the par value of a Share, unless otherwise permitted by Applicable Law.

8.3Vesting of Restricted Stock Units. At the time of grant, the Administrator shall specify the date or dates on which the Restricted Stock Units shall become fully vested and nonforfeitable, and may specify such conditions to vesting as it deems appropriate, including, without limitation, vesting based upon the Holder’s duration of service to the Company or any Subsidiary, Company performance, individual performance or other specific criteria, in each case on a specified date or dates or over any period or periods, as determined by the Administrator. 

8.4Maturity and Payment. At the time of grant, the Administrator shall specify the maturity date applicable to each grant of Restricted Stock Units, which shall be no earlier than the vesting date or dates of the Award and may be determined at the election of the Holder (if permitted by the applicable Award Agreement); provided that, except as otherwise set forth in an applicable Award Agreement, the maturity date relating to each Restricted Stock Unit shall not occur following the later of (a) the 15th day of the third month following the end of the calendar year in which the applicable portion of the Restricted Stock Unit vests; or (b) the 15th day of the third month following the end of the Company’s fiscal year in which the applicable portion of the Restricted Stock Unit vests. On the maturity date, the Company shall, subject to Section 11.4, transfer to the Holder one unrestricted, fully transferable Share for each Restricted Stock Unit scheduled to be paid out on such date and not previously forfeited, or in the discretion of the Administrator, an amount in cash equal to the Fair Market Value of such Shares on the maturity date or a combination of cash and Common Stock as determined by the Administrator. 

8.5No Rights as a Stockholder. Unless otherwise determined by the Administrator, a Holder of Restricted Stock Units shall possess no incidents of ownership with respect to the Shares represented by such Restricted Stock Units, unless and until such Shares are transferred to the Holder pursuant to the terms of this Plan and the Award Agreement. 

ARTICLE 9.

PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS, STOCK PAYMENTS

9.1Performance Awards. The Administrator is authorized to grant Performance Awards, including Awards of Performance Stock Units and other Awards determined in the Administrator’s discretion from time to time, to any Eligible Individual. The value of Performance Awards, including Performance Stock Units, may be linked to the attainment of the Performance Goals or other specific criteria, whether or not objective, determined by the 

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Administrator, in each case on a specified date or dates or over any period or periods and in such amounts as may be determined by the Administrator.

9.2Dividend Equivalents.

(a)Dividend Equivalents may be granted by the Administrator based on dividends declared on the Common Stock, to be credited as of dividend payment dates with respect to dividends with record dates that occur during the period between the date an Award is granted to a Holder and the date such Award vests, is exercised, is distributed or expires, as determined by the Administrator. Such Dividend Equivalents shall be converted to cash or additional Shares by such formula and at such time and subject to such restrictions and limitations as may be determined by the Administrator. 

9.3Stock Payments. The Administrator is authorized to make Stock Payments to any Eligible Individual. The number or value of Shares of any Stock Payment shall be determined by the Administrator and may be based upon one or more Performance Goals or any other specific criteria, including service to the Company or any Subsidiary, determined by the Administrator. Shares underlying a Stock Payment which is subject to a vesting schedule or other conditions or criteria set by the Administrator shall not be issued until those conditions have been satisfied. Unless otherwise provided by the Administrator, a Holder of a Stock Payment shall have no rights as a Company stockholder with respect to such Stock Payment until such time as the Stock Payment has vested and the Shares underlying the Award have been issued to the Holder. Stock Payments may, but are not required to, be made in lieu of base salary, bonus, fees or other cash compensation otherwise payable to such Eligible Individual.

9.4Purchase Price. The Administrator may establish the purchase price of a Performance Award or Shares distributed as a Stock Payment award; provided, however, that value of the consideration shall not be less than the par value of a Share, unless otherwise permitted by Applicable Law.

ARTICLE 10.

STOCK APPRECIATION RIGHTS

10.1Grant of Stock Appreciation Rights.

(a)The Administrator is authorized to grant Stock Appreciation Rights to Eligible Individuals from time to time, in its discretion, on such terms and conditions as it may determine, which shall not be inconsistent with the Plan.

(b)A Stock Appreciation Right shall entitle the Holder (or other person entitled to exercise the Stock Appreciation Right pursuant to the Plan) to exercise all or a specified portion of the Stock Appreciation Right (to the extent then exercisable pursuant to its terms) and to receive from the Company an amount determined by multiplying the difference obtained by subtracting the exercise price per share of the Stock Appreciation Right from the Fair Market Value on the date of exercise of the Stock Appreciation Right by the number of Shares with respect to which the Stock Appreciation Right shall have been exercised, subject to any limitations the Administrator may impose. Unless otherwise determined by the Administrator, the exercise price 

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per Share subject to each Stock Appreciation Right shall be set by the Administrator, but shall not be less than 100% of the Fair Market Value on the date the Stock Appreciation Right is granted.

10.2Stock Appreciation Right Vesting.

(a)The period during which the right to exercise, in whole or in part, a Stock Appreciation Right vests in the Holder shall be set by the Administrator, and the Administrator may determine that a Stock Appreciation Right may not be exercised in whole or in part for a specified period after it is granted. Such vesting may be based on service with the Company or any Subsidiary, Performance Criteria, Performance Goals or any other criteria selected by the Administrator. At any time after grant of a Stock Appreciation Right, the Administrator, in its discretion and subject to whatever terms and conditions it selects, may accelerate the period during which a Stock Appreciation Right vests.

(b)No portion of a Stock Appreciation Right which is unexercisable at a Holder’s Termination of Service shall thereafter become exercisable, except as may be otherwise provided by the Administrator in an Award Agreement or by action of the Administrator following the grant of the Stock Appreciation Right. Unless otherwise determined by the Administrator in the Award Agreement or by action of the Administrator following the grant of the Stock Appreciation Right, the portion of a Stock Appreciation Right which is unexercisable at a Holder’s Termination of Service shall automatically expire thirty (30) days following such Termination of Service.

10.3Manner of Exercise. All or a portion of an exercisable Stock Appreciation Right shall be deemed exercised upon delivery of all of the following to the Secretary of the Company, the stock administrator of the Company, or such other person or entity designated by the Administrator, or his, her or its office, as applicable:

(a)A written or electronic notice complying with the applicable rules established by the Administrator stating that the Stock Appreciation Right, or a portion thereof, is exercised. The notice shall be signed by the Holder or other person then entitled to exercise the Stock Appreciation Right or such portion of the Stock Appreciation Right.

(b)Such representations and documents as the Administrator, in its discretion, deems necessary or advisable to effect compliance with Applicable Law. The Administrator, in its discretion, may also take whatever additional actions it deems appropriate to effect such compliance, including, without limitation, placing legends on share certificates and issuing stop-transfer notices to agents and registrars.

(c)In the event that the Stock Appreciation Right shall be exercised by any person or persons other than the Holder, appropriate proof of the right of such person or persons to exercise the Stock Appreciation Right, as determined in the discretion of the Administrator.

(d)Full payment of the exercise price and applicable withholding taxes for the Shares with respect to which the Stock Appreciation Right, or portion thereof, is exercised, in a manner permitted by Section 11.1 and Section 11.2.

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10.4Stock Appreciation Right Term. The term of each Stock Appreciation Right (the “Stock Appreciation Right Term”) shall be set by the Administrator in its discretion; provided, however, that the Stock Appreciation Right Term shall not be more than ten (10) years from the date the Stock Appreciation Right is granted. The Administrator shall determine the time period, including the time period following a Termination of Service, during which the Holder has the right to exercise the vested Stock Appreciation Rights, which time period may not extend beyond the last day of the Stock Appreciation Right Term applicable to such Stock Appreciation Right. Except as limited by the requirements of Section 409A of the Code or the first sentence of this Section 10.4, the Administrator may extend the Stock Appreciation Right Term of any outstanding Stock Appreciation Right, and may extend the time period during which vested Stock Appreciation Rights may be exercised, in connection with any Termination of Service of the Holder, and may amend, subject to Section 14.1, any other term or condition of such Stock Appreciation Right relating to such a Termination of Service.

10.5Payment. Payment of the amounts payable with respect to Stock Appreciation Rights pursuant to this Article 10 shall be in cash, Shares (based on Fair Market Value as of the date the Stock Appreciation Right is exercised), or a combination of both, as determined by the Administrator.

10.6Expiration of Stock Appreciation Right Term: Automatic Exercise of In-The-Money Stock Appreciation Rights. Unless otherwise determined by the Administrator (in an Award Agreement or otherwise) or as otherwise directed by a Stock Appreciation Right Holder in writing to the Company, each Stock Appreciation Right outstanding on the Automatic Exercise Date with an exercise price per share that is less than the Fair Market Value per share of Common Stock as of such date shall automatically and without further action by the Stock Appreciation Right Holder or the Company be exercised on the Automatic Exercise Date. In the discretion of the Administrator, the Company or any Subsidiary shall deduct or withhold an amount sufficient to satisfy all taxes associated with such exercise in accordance with Section 11.2. Unless otherwise determined by the Administrator, this Section 10.6 shall not apply to a Stock Appreciation Right if the Holder of such Stock Appreciation Right incurs a Termination of Service on or before the Automatic Exercise Date. For the avoidance of doubt, no Stock Appreciation Right with an exercise price per share that is equal to or greater than the Fair Market Value per share of Common Stock on the Automatic Exercise Date shall be exercised pursuant to this Section 10.6.

ARTICLE 11.

ADditional terms of awards

11.1Payment. The Administrator shall determine the methods by which payments by any Holder with respect to any Awards granted under the Plan shall be made, including, without limitation: (a) cash or check, (b) Shares (including, in the case of payment of the exercise price of an Award, Shares issuable pursuant to the exercise of the Award) held for such period of time as may be required by the Administrator in order to avoid adverse accounting consequences, in each case, having a Fair Market Value on the date of delivery equal to the aggregate payments required, (c) delivery of a written or electronic notice that the Holder has placed a market sell order with a broker acceptable to the Company with respect to Shares then issuable upon exercise or vesting of an Award, and that the broker has been directed to pay a sufficient portion of the net proceeds of 

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the sale to the Company in satisfaction of the aggregate payments required; provided that payment of such proceeds is then made to the Company upon settlement of such sale, or (d) any other form of legal consideration acceptable to the Administrator in its discretion. The Administrator shall also determine the methods by which Shares shall be delivered or deemed to be delivered to Holders. Notwithstanding any other provision of the Plan to the contrary, no Holder who is a Director or an “executive officer” of the Company within the meaning of Section 13(k) of the Exchange Act shall be permitted to make payment with respect to any Awards granted under the Plan, or continue any extension of credit with respect to such payment, with a loan from the Company or a loan arranged by the Company in violation of Section 13(k) of the Exchange Act.

11.2Tax Withholding. The Company or any Subsidiary shall have the authority and the right to deduct or withhold, or require a Holder to remit to the Company, an amount sufficient to satisfy federal, state, local and foreign taxes (including the Holder’s FICA, employment tax or other social security contribution obligation) required by law to be withheld with respect to any taxable event concerning a Holder arising as a result of the Plan. The Administrator, in its discretion and in satisfaction of the foregoing requirement, may withhold, or allow a Holder to elect to have the Company withhold, Shares otherwise issuable under an Award (or allow the surrender of Shares). Unless otherwise determined by the Administrator, the number of Shares which may be so withheld or surrendered shall be limited to the number of Shares which have a Fair Market Value on the date of withholding or repurchase equal to the aggregate amount of such liabilities based on the minimum statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such supplemental taxable income. The Administrator shall determine the fair market value of the Shares, consistent with applicable provisions of the Code, for tax withholding obligations due in connection with a broker-assisted cashless Option or Stock Appreciation Right exercise involving the sale of Shares to pay the Option or Stock Appreciation Right exercise price or any tax withholding obligation.

11.3Transferability of Awards.

(a)Except as otherwise provided in Section 11.3(b):

(i)No Award under the Plan may be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution or, subject to the consent of the Administrator, pursuant to a DRO, unless and until such Award has been exercised, or the Shares underlying such Award have been issued, and all restrictions applicable to such Shares have lapsed;

(ii)No Award or interest or right therein shall be liable for the debts, contracts or engagements of the Holder or the Holder’s successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, hypothecation, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by Section 11.3(a)(i); and

(iii)During the lifetime of the Holder, only the Holder may exercise an Award (or any portion thereof) granted to such Holder under the Plan, unless it has been disposed 

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of pursuant to a DRO; after the death of the Holder, any exercisable portion of an Award may, prior to the time when such portion becomes unexercisable under the Plan or the Award Agreement, be exercised by the Holder’s personal representative or by any person empowered to do so under the deceased Holder’s will or under the then-applicable laws of descent and distribution.

(b)Notwithstanding Section 11.3(a), the Administrator, in its discretion, may determine to permit a Holder to transfer an Award other than an Incentive Stock Option to any one or more Permitted Transferees, subject to the following terms and conditions: (i) an Award transferred to a Permitted Transferee shall not be assignable or transferable by the Permitted Transferee other than by will or the laws of descent and distribution; (ii) an Award transferred to a Permitted Transferee shall continue to be subject to all the terms and conditions of the Award as applicable to the original Holder (other than the ability to further transfer the Award); and (iii) the Holder and the Permitted Transferee shall execute any and all documents requested by the Administrator, including, without limitation documents to (A) confirm the status of the transferee as a Permitted Transferee, (B) satisfy any requirements for an exemption for the transfer under Applicable Law and (C) evidence the transfer.

(c)Notwithstanding Section 11.3(a), a Holder may, in the manner determined by the Administrator, designate a beneficiary to exercise the rights of the Holder and to receive any distribution with respect to any Award upon the Holder’s death. A beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is subject to all terms and conditions of the Plan and any Award Agreement applicable to the Holder, except to the extent the Plan and Award Agreement otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Administrator. If the Holder is married or a domestic partner in a domestic partnership qualified under Applicable Law and resides in a community property state, a designation of a person other than the Holder’s spouse or domestic partner, as applicable, as the Holder’s beneficiary with respect to more than 50% of the Holder’s interest in the Award shall not be effective without the prior written or electronic consent of the Holder’s spouse or domestic partner. If no beneficiary has been designated or survives the Holder, payment shall be made to the person entitled thereto pursuant to the Holder’s will or the laws of descent and distribution. Subject to the foregoing, a beneficiary designation may be changed or revoked by a Holder at any time; provided that the change or revocation is filed with the Administrator prior to the Holder’s death.

11.4Conditions to Issuance of Shares.

(a)Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates or make any book entries evidencing Shares issuable pursuant to any Award, unless and until the Board or the Committee has determined, with advice of counsel, that the issuance of such Shares is in compliance with Applicable Law and the Shares are covered by an effective registration statement or applicable exemption from registration. In addition to the terms and conditions provided herein, the Board or the Committee may require that a Holder make such reasonable covenants, agreements and representations as the Board or the Committee, in its discretion, deems advisable in order to comply with Applicable Law.

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(b)All Share certificates delivered pursuant to the Plan and all Shares issued pursuant to book entry procedures are subject to any stop-transfer orders and other restrictions as the Administrator deems necessary or advisable to comply with Applicable Law. The Administrator may place legends on any Share certificate or book entry to reference restrictions applicable to the Shares.

(c)The Administrator shall have the right to require any Holder to comply with any timing or other restrictions with respect to the settlement, distribution or exercise of any Award, including a window-period limitation, as may be imposed in the discretion of the Administrator.

(d)No fractional Shares shall be issued and the Administrator, in its discretion, shall determine whether cash shall be given in lieu of fractional Shares or whether such fractional Shares shall be eliminated by rounding down.

(e)Notwithstanding any other provision of the Plan, unless otherwise determined by the Administrator or required by Applicable Law, the Company shall not deliver to any Holder certificates evidencing Shares issued in connection with any Award and instead such Shares shall be recorded in the books of the Company (or, as applicable, its transfer agent or stock plan administrator).

11.5Forfeiture and Claw-Back Provisions. Pursuant to its general authority to determine the terms and conditions applicable to Awards under the Plan, the Administrator shall have the right to provide, in an Award Agreement or otherwise, or to require a Holder to agree by separate written or electronic instrument, that: 

(a)(i) Any proceeds, gains or other economic benefit actually or constructively received by the Holder upon any receipt or exercise of the Award, or upon the receipt or resale of any Shares underlying the Award, shall be paid to the Company, and (ii) the Award shall terminate and any unexercised portion of the Award (whether or not vested) shall be forfeited, if (x) a Termination of Service occurs prior to a specified date, or within a specified time period following receipt or exercise of the Award, or (y) the Holder at any time, or during a specified time period, engages in any activity in competition with the Company, or which is inimical, contrary or harmful to the interests of the Company, as further defined by the Administrator or (z) the Holder incurs a Termination of Service for “cause” (as such term is defined in the discretion of the Administrator, or as set forth in a written agreement relating to such Award between the Company and the Holder); and

(b)All Awards (including any proceeds, gains or other economic benefit actually or constructively received by the Holder upon any receipt or exercise of any Award or upon the receipt or resale of any Shares underlying the Award) shall be subject to the provisions of any claw-back policy implemented by the Company, including, without limitation, any claw-back policy adopted to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder, to the extent set forth in such claw-back policy and/or in the applicable Award Agreement.

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11.6Repricing. Subject to Section 13.2, the Administrator shall have the authority, without the approval of the stockholders of the Company, to amend any outstanding Option or Stock Appreciation Right to reduce its price per share or cancel any Option or Stock Appreciation Right in exchange for cash or another Award when the Option or Stock Appreciation Right price per share exceeds the Fair Market Value of the underlying Shares.

ARTICLE 12.

ADMINISTRATION

12.1Administrator. The Committee (or another committee or a subcommittee of the Board assuming the functions of the Committee under the Plan) shall administer the Plan (except as otherwise permitted herein) and, unless otherwise determined by the Board, shall consist solely of two or more Non-Employee Directors, each of whom is intended to qualify as both a “non-employee director” as defined by Rule 16b-3 of the Exchange Act or any successor rule, an “outside director” for purposes of Section 162(m) of the Code and an “independent director” under the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded. Notwithstanding the foregoing, any action taken by the Committee shall be valid and effective, whether or not members of the Committee at the time of such action are later determined not to have satisfied the requirements for membership set forth in this Section 12.1 or otherwise provided in any charter of the Committee. Except as may otherwise be provided in any charter of the Committee, appointment of Committee members shall be effective upon acceptance of appointment. Committee members may resign at any time by delivering written or electronic notice to the Board. Vacancies in the Committee may only be filled by the Board. Notwithstanding the foregoing, (a) the full Board, acting by a majority of its members in office, shall conduct the general administration of the Plan with respect to Awards granted to Non-Employee Directors and, with respect to such Awards, the terms “Administrator” and “Committee” as used in the Plan shall be deemed to refer to the Board and (b) the Board or Committee may delegate its authority hereunder to the extent permitted by Section 12.6.

12.2Duties and Powers of Committee . It shall be the duty of the Committee to conduct the general administration of the Plan in accordance with its provisions. The Committee shall have the power to interpret the Plan and Award Agreements, and to adopt such rules for the administration, interpretation and application of the Plan as are not inconsistent therewith, to interpret, amend or revoke any such rules and to amend any Award Agreement; provided that the rights or obligations of the Holder of the Award that is the subject of any such Award Agreement are not affected adversely by such amendment, unless the consent of the Holder is obtained or such amendment is otherwise permitted under Section 11.5 or Section 13.10. Any such grant or award under the Plan need not be the same with respect to each Holder. Any such interpretations and rules with respect to Incentive Stock Options shall be consistent with the provisions of Section 422 of the Code. In its discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan except with respect to matters which under Rule 16b‐3 under the Exchange Act or any successor rule, or any regulations or rules issued thereunder, or the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded are required to be determined in the discretion of the Committee. 

24

 

 

12.3Action by the Committee. Unless otherwise established by the Board or in any charter of the Committee, a majority of the Committee shall constitute a quorum and the acts of a majority of the members present at any meeting at which a quorum is present, and acts approved in writing by all members of the Committee in lieu of a meeting, shall be deemed the acts of the Committee. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company or any Subsidiary, the Company’s independent certified public accountants, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan. 

12.4Authority of Administrator. Subject to the Company’s Bylaws, the Committee’s Charter and any specific designation in the Plan, the Administrator has the exclusive power, authority and sole discretion to:

(a)Designate Eligible Individuals to receive Awards;

(b)Determine the type or types of Awards to be granted to Eligible Individuals;

(c)Determine the number of Awards to be granted and the number of Shares to which an Award will relate;

(d)Determine the terms and conditions of any Award granted pursuant to the Plan, including, but not limited to, the exercise price, grant price, purchase price, any Performance Goals or Performance Criteria, any reload provision, any restrictions or limitations on the Award, any schedule for vesting, lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers thereof, and any provisions related to non-competition and recapture of gain on an Award, based in each case on such considerations as the Administrator in its sole discretion determines;

(e)Determine whether, to what extent, and pursuant to what circumstances an Award may be settled in, or the exercise price of an Award may be paid in cash, Shares, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered;

(f)Prescribe the form of each Award Agreement, which need not be identical for each Holder;

(g)Decide all other matters that must be determined in connection with an Award;

(h)Establish, adopt or revise any rules and regulations as it may deem necessary or advisable to administer the Plan;

(i)Interpret the terms of, and any matter arising pursuant to, the Plan or any Award Agreement; 

(j)Make all other decisions and determinations that may be required pursuant to the Plan or as the Administrator deems necessary or advisable to administer the Plan; and

25

 

 

(k)Accelerate wholly or partially the vesting or lapse of restrictions of any Award or portion thereof at any time after the grant of an Award, subject to whatever terms and conditions it selects.

12.5Decisions Binding. The Administrator’s interpretation of the Plan, any Awards granted pursuant to the Plan, and any Award Agreement and all decisions and determinations by the Administrator with respect to the Plan are final, binding and conclusive on all parties.

12.6Delegation of Authority. To the extent permitted by Applicable Law, the Board or Committee may from time to time delegate to a committee of one or more members of the Board or one or more officers of the Company the authority to grant or amend Awards or to take other administrative actions pursuant to this Article 12; provided, however, that in no event shall an officer of the Company be delegated the authority to grant awards to, or amend awards held by, the following individuals: (a) individuals who are subject to Section 16 of the Exchange Act, (b) Covered Employees with respect to Awards intended to constitute Performance-Based Compensation, or (c) officers of the Company (or Directors) to whom authority to grant or amend Awards has been delegated hereunder; provided, further, that any delegation of administrative authority shall only be permitted to the extent it is permissible under Applicable Law. Any delegation hereunder shall be subject to the restrictions and limits that the Board or Committee specifies at the time of such delegation, and the Board may at any time rescind the authority so delegated or appoint a new delegatee. At all times, the delegatee appointed under this Section 12.6 shall serve in such capacity at the pleasure of the Board and the Committee.

ARTICLE 13.

MISCELLANEOUS PROVISIONS

13.1Amendment, Suspension or Termination of the Plan. Except as otherwise provided in this Section 13.1, the Plan may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Board or the Committee. However, without approval of the Company’s stockholders given within twelve (12) months before or after the action by the Administrator, no action of the Administrator may, except as provided in Section 13.2, increase the limits imposed in Section 3.1 on the maximum number of Shares which may be issued under the Plan. Except as provided in Section 13.10, no amendment, suspension or termination of the Plan shall, without the consent of the Holder, impair any rights or obligations under any Award theretofore granted or awarded, unless the Award itself otherwise expressly so provides. No Awards may be granted or awarded during any period of suspension or after termination of the Plan, and in no event may any Award be granted under the Plan after April 28, 2026 (the “Expiration Date”). Any Awards that are outstanding on the Expiration Date shall remain in force according to the terms of the Plan and the applicable Award Agreement.

13.2Changes in Common Stock or Assets of the Company, Acquisition or Liquidation of the Company and Other Corporate Events.

(a)In connection with the occurrence of any Equity Restructuring, and notwithstanding anything to the contrary in this Section 13.2, the Administrator shall equitably adjust each outstanding Award, which adjustments may include adjustments to the number and 

26

 

 

type of securities subject to each outstanding Award and/or the exercise price or grant price thereof, if applicable, the grant of new Awards, and/or the making of a cash payment, as the Administrator deems appropriate to reflect such Equity Restructuring. The adjustments provided under this Section 13.2(a) shall be nondiscretionary and shall be final and binding on the affected Holder and the Company; provided that whether an adjustment is equitable shall be determined in the discretion of the Administrator.

(b)In the event that the Administrator determines that any dividend or other distribution (whether in the form of cash, Common Stock, other securities, or other property), Change in Control, reorganization, merger, amalgamation, consolidation, combination, 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, issuance of warrants or other rights to purchase Common Stock or other securities of the Company, or other similar corporate transaction or event, as determined by the Administrator, affects the Common Stock such that an adjustment is determined by the Administrator to be appropriate in order to 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, the Administrator may make equitable adjustments, if any, to reflect such change with respect to: (i) the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations in Sections 3.1, 3.3 and 3.3 on the maximum number and kind of shares which may be issued under the Plan); (ii) the number and kind of Shares (or other securities or property) subject to outstanding Awards; (iii) the number and kind of Shares (or other securities or property) for which automatic grants are subsequently to be made to new and continuing Non-Employee Directors pursuant to Section 4.5; (iv) the terms and conditions of any outstanding Awards (including, without limitation, any applicable performance targets or criteria with respect thereto); and (v) the grant or exercise price per share for any outstanding Awards under the Plan. Any adjustment affecting an Award intended as Performance-Based Compensation shall be made consistent with the requirements of Section 162(m) of the Code unless otherwise determined by the Administrator. 

(c)In the event of any transaction or event described in Section 13.2(b) or any unusual or nonrecurring transactions or events affecting the Company, any Subsidiary of the Company, or the financial statements of the Company or any Subsidiary, or of changes in Applicable Law or accounting principles, the Administrator, in its discretion, and 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 and either automatically or upon the Holder’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 prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to any Award under the Plan, to facilitate such transactions or events or to give effect to such changes in laws, regulations or principles:

(i)To provide for either (A) termination of any such Award in exchange for an amount of cash, if any, equal to the amount that would have been attained upon the exercise of such Award or realization of the Holder’s rights (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction or event described in this Section 13.2 the Administrator determines in good faith that no amount would have been attained upon the exercise 

27

 

 

of such Award or realization of the Holder’s rights, then such Award may be terminated by the Company without payment) or (B) the replacement of such Award with other rights or property selected by the Administrator, in its discretion, having an aggregate value not exceeding the amount that could have been attained upon the exercise of such Award or realization of the Holder’s rights had such Award been currently exercisable or payable or fully vested;

(ii)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 similar options, rights or 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 prices;

(iii)To make adjustments in the number and type of shares of the Company’s stock (or other securities or property) subject to outstanding Awards, and in the number and kind of outstanding Restricted Stock and/or in the terms and conditions of (including the grant or exercise price), and the criteria included in, outstanding Awards and Awards which may be granted in the future; 

(iv)To provide that such Award shall be exercisable or payable or fully vested with respect to all shares covered thereby, notwithstanding anything to the contrary in the Plan or the applicable Award Agreement; and

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

(d)The Administrator, in its discretion, may include such further provisions and limitations in any Award, agreement or certificate, as it may deem equitable and in the best interests of the Company that are not inconsistent with the provisions of the Plan.

(e)Unless otherwise determined by the Administrator, no adjustment or action described in this Section 13.2 or in any other provision of the Plan shall be authorized to the extent that such adjustment would (i) with respect to Awards granted to Covered Employees and intended to qualify as Performance-Based Compensation, cause such Award to fail to so qualify or (ii) cause the Plan to violate Section 422(b)(1) of the Code. Furthermore, no such adjustment or action shall be authorized to the extent such adjustment or action would result in short-swing profits liability under Section 16 of the Exchange Act or violate the exemptive conditions of Rule 16b-3 of the Exchange Act unless the Administrator determines that the Award is not to comply with such exemptive conditions. 

(f)The existence of the Plan, the Award Agreement and the Awards granted hereunder shall not affect or restrict in any way the right or power of the Company or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Common Stock or the rights thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

28

 

 

(g)No action shall be taken under this Section 13.2 which shall cause an Award to fail to comply with Section 409A of the Code, to the extent applicable.

(h)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 change affecting the Shares or the share price of the Common Stock including any Equity Restructuring, for reasons of administrative convenience, the Company, in its discretion, may refuse to permit the exercise of any Award during a period of up to thirty (30) days prior to the consummation of any such transaction.

13.3Approval of Plan by Stockholders. This amended and restated Plan shall be submitted for the approval of the Company’s stockholders within twelve (12) months after the date of the Board’s initial adoption hereof. Notwithstanding the foregoing, the Original Plan shall remain in effect on its existing terms unless and until this amended and restated Plan is approved by the Company’s stockholders. 

13.4No Stockholders Rights. Except as otherwise provided herein, a Holder shall have none of the rights of a stockholder with respect to Shares covered by any Award until the Holder becomes the record owner of such Shares.

13.5Paperless Administration. In the event that the Company establishes, for itself or using the services of a third party, an automated system for the documentation, granting or exercise of Awards, such as a system using an internet website or interactive voice response, then the paperless documentation, granting or exercise of Awards by a Holder may be permitted through the use of such an automated system.

13.6Effect of Plan upon Other Compensation Plans. The adoption of the Plan shall not affect any other compensation or incentive plans in effect for the Company or any Subsidiary. Nothing in the Plan shall be construed to limit the right of the Company or any Subsidiary: (a) to establish any other forms of incentives or compensation for Employees, Directors or Consultants of the Company or any Subsidiary, or (b) except as otherwise provided in the penultimate sentence of Section 3.1(a), to grant or assume options or other rights or awards otherwise than under the Plan in connection with any proper corporate purpose including without limitation, the grant or assumption of options in connection with the acquisition by purchase, lease, merger, consolidation or otherwise, of the business, stock or assets of any corporation, partnership, limited liability company, firm or association.

13.7Compliance with Laws. The Plan, the granting and vesting of Awards under the Plan and the issuance and delivery of Shares and the payment of money under the Plan or under Awards granted or awarded hereunder are subject to compliance with all Applicable Law (including but not limited to state, federal and foreign securities law and margin requirements), and to such approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Company, be necessary or advisable in connection therewith. Any securities delivered under the Plan shall be subject to such restrictions, and the person acquiring such securities shall, if requested by the Company, provide such assurances and representations to the Company as the Company may deem necessary or desirable to assure compliance with all Applicable Law. To the extent permitted by Applicable Law, the Plan and Awards granted or 

29

 

 

awarded hereunder shall be deemed amended to the extent necessary to conform to Applicable Law.

13.8Titles and Headings, References to Sections of the Code or Exchange Act. The titles and headings of the Sections in the Plan are for convenience of reference only and, in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control. References to sections of the Code or the Exchange Act shall include any amendment or successor thereto.

13.9Governing Law. The Plan and any agreements hereunder shall be administered, interpreted and enforced under the internal laws of the State of Delaware without regard to conflicts of laws thereof or of any other jurisdiction.

13.10Section 409A. To the extent that the Administrator determines that any Award granted under the Plan is subject to Section 409A of the Code, the Award Agreement evidencing such Award shall incorporate the terms and conditions required by Section 409A of the Code. To the extent applicable, the Plan and any Award Agreements shall be interpreted in accordance with Section 409A of the Code, including without limitation any such regulations or other guidance that may be issued after the Effective Date. Notwithstanding any provision of the Plan to the contrary, in the event that following the Effective Date the Administrator determines that any Award may be subject to Section 409A of the Code (including Department of Treasury guidance as may be issued after the Effective Date), the Administrator may adopt such amendments to the Plan and the applicable Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to (a) exempt the Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (b) comply with the requirements of Section 409A of the Code and thereby avoid the application of any penalty taxes under such Section. 

13.11No Rights to Awards. No Eligible Individual or other person shall have any claim to be granted any Award pursuant to the Plan, and neither the Company nor the Administrator is obligated to treat Eligible Individuals, Holders or any other persons or Awards (or portions thereof) uniformly.

13.12Unfunded Status of Awards. The Plan is intended to be an “unfunded” plan for incentive compensation. With respect to any payments not yet made to a Holder pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give the Holder any rights that are greater than those of a general creditor of the Company or any Subsidiary.

13.13Indemnification. To the extent allowable pursuant to Applicable Law, each member of the Committee or of the Board shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her; provided he or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she 

30

 

 

undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled pursuant to the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

13.14Relationship to other Benefits. No payment pursuant to the Plan shall 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 to the extent otherwise expressly provided in writing in such other plan or an agreement thereunder.

13.15Expenses. The expenses of administering the Plan shall be borne by the Company and its Subsidiaries.

* * * * *

 

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T2 BIOSYSTEMS, INC.
2014 INCENTIVE AWARD PLAN

STOCK OPTION GRANT NOTICE

T2 Biosystems, Inc., a Delaware corporation, (the “Company”), pursuant to its 2014 Incentive Award Plan, as amended from time to time (the “Plan”), hereby grants to the holder listed below (“Participant”), an option to purchase the number of shares of Common Stock (“Stock”) set forth below (the “Option”).  The Option is subject to the terms and conditions set forth in this Stock Option Grant Notice (the “Grant Notice”) and the Stock Option Agreement attached hereto as Exhibit A (the “Agreement”) and the Plan, which are incorporated herein by reference.  Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in the Grant Notice and the Agreement.

		
	
Participant:
	
 

	
Grant Date:
	
 

	
Exercise Price per Share:
	
$

	
Total Exercise Price:
	
$

	
Total Number of Shares Subject to the Option:
	
shares

	
Expiration Date:
	
 

	
Vesting Commencement Date
	
 

	
Vesting Schedule:
	
[To be specified in individual agreements.]

	
Type of Option:
	
☐   Incentive Stock Option      ☐   Non-Qualified Stock Option

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

				
	
T2 BIOSYSTEMS, Inc.Holder:
	
PARTICIPANT

 

	
By:
	
 
	
By:
	
 

	
Print Name: 
	
 
	
Print Name:  
	
 

	
Title:
	
 
	
  
	
 

 

 

 

EXHIBIT A

TO STOCK OPTION GRANT NOTICE

STOCK OPTION AGREEMENT

Pursuant to the Grant Notice to which this Agreement is attached, the Company has granted to Participant an Option under the Plan to purchase the number of shares of Stock set forth in the Grant Notice.

ARTICLE 1.
GENERAL

1.1Defined Terms.  Capitalized terms not specifically defined herein shall have the meanings specified in the Plan or the Grant Notice.

1.2Incorporation 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 shall control.

ARTICLE 2.
GRANT OF OPTION

2.1Grant of Option.  In consideration of Participant’s past and/or continued employment with or service to the Company or a Subsidiary and for other good and valuable consideration, effective as of the grant date set forth in the Grant Notice (the “Grant Date”), the Company has granted to Participant the Option to purchase any part or all of an aggregate of the number of shares of Stock set forth in the Grant Notice, upon the terms and conditions set forth in the Grant Notice, the Plan and this Agreement, subject to adjustments as provided in Section 12.2 of the Plan. 

2.2Exercise Price.  The exercise price per share of the shares of Stock subject to the Option (the “Exercise Price”) shall be as set forth in the Grant Notice.  

2.3Consideration to the Company.  In consideration of the grant of the Option by the Company, Participant agrees to render faithful and efficient services to the Company or any Subsidiary.  Nothing in the Plan, the Grant Notice or this Agreement shall confer upon Participant any right to continue in the employ or service of the Company or any Subsidiary or shall interfere with or restrict 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.

ARTICLE 3.
PERIOD OF EXERCISABILITY

3.1Commencement of Exercisability.

(a)Subject to Sections 3.2, 3.3, 5.9 and 5.14 hereof, the Option shall become vested 

 

and exercisable in such amounts and at such times as are set forth in the Grant Notice.

(b)Unless otherwise determined by the Administrator, any portion of the Option that has not become vested and exercisable on or prior to the date of the Participant’s Termination of Service shall be forfeited on the date of the Participant’s Termination of Service and shall not thereafter become vested or exercisable.

3.2Duration of Exercisability.  The installments provided for in the vesting schedule set forth in the Grant Notice are cumulative.  Each such installment which becomes vested and exercisable pursuant to the vesting schedule set forth in the Grant Notice shall remain vested and exercisable until it becomes unexercisable under Section 3.3 hereof. Once the Option becomes unexercisable, it shall be forfeited immediately.

3.3Expiration of Option.  The Option may not be exercised to any extent by anyone after the first to occur of the following events:

(a)The expiration date set forth in the Grant Notice; 

(b)Except as the Administrator may otherwise approve, in the event of Participant’s Termination of Service other than for Cause or by reason of Participant’s death or disability, the expiration of three (3) months from the date of Participant’s Termination of Service; 

(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; or

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

As used in this Agreement, “Cause” shall mean (a) the Board’s determination that Participant failed to substantially perform Participant’s duties (other than any such failure resulting from Participant’s disability); (b) the Board’s determination that Participant failed to carry out, or comply with any lawful and reasonable directive of the Board or Participant’s immediate supervisor; (c) Participant’s conviction, plea of no contest, plea of nolo contendere, or imposition of unadjudicated probation for any felony, indictable offense or crime involving moral turpitude; (d) 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 Participant’s duties and responsibilities; or (e) Participant’s commission of an act of fraud, embezzlement, misappropriation, misconduct, or breach of fiduciary duty against the Company of any of its Subsidiaries.  Notwithstanding the foregoing, if Participant is a party to a written employment or consulting agreement with the Company (or its Subsidiary) in which the term “cause” is defined, then “Cause” shall be as such term is defined in the applicable written employment or consulting agreement. 

3.4Tax Withholding.  Notwithstanding any other provision of this Agreement: 

(a)The Company and its Subsidiaries have the authority to deduct or withhold, or require Participant to remit to the Company or the applicable Subsidiary, an amount sufficient to satisfy applicable federal, state, local and foreign taxes (including the employee portion of any FICA obligation) required by law to be withheld with respect to any taxable event arising pursuant to this Agreement.  The Company and its Subsidiaries may withhold or Participant may make such payment in one or more of the forms specified below:

(i)by cash or check made payable to the Company or the Subsidiary with 

 

respect to which the withholding obligation arises; 

(ii)by the deduction of such amount from other compensation payable to Participant; 

(iii)with respect to any withholding taxes arising in connection with the exercise of the Option, with the consent of the Administrator, by requesting that the Company withhold a net number of shares of Stock issuable upon the exercise of the Option having a then current Fair Market Value not exceeding the amount necessary to satisfy the withholding obligation of the Company and its Subsidiaries based on the minimum applicable statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes;

(iv)with respect to any withholding taxes arising in connection with the exercise of the Option, with the consent of the Administrator, by tendering to the Company shares of Stock having a then current Fair Market Value not exceeding the amount necessary to satisfy the withholding obligation of the Company and its Subsidiaries based on the minimum applicable statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes; 

(v)with respect to any withholding taxes arising in connection with the exercise of the Option, through the delivery of a notice that Participant has placed a market sell order with a broker acceptable to the Company with respect to shares of Stock then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company or the Subsidiary with respect to which the withholding obligation arises in satisfaction of such withholding taxes; provided that payment of such proceeds is then made to the Company or the applicable Subsidiary at such time as may be required by the Administrator, but in any event not later than the settlement of such sale; or 

(vi)in any combination of the foregoing. 

(b)With respect to any withholding taxes arising in connection with the Option, in the event Participant fails to provide timely payment of all sums required pursuant to Section 3.4(a), the Company shall have the right and option, but not the obligation, to treat such failure as an election by Participant to satisfy all or any portion of Participant’s required payment obligation pursuant to Section 3.4(a)(ii) or Section 3.4(a)(iii) above, or any combination of the foregoing as the Company may determine to be appropriate.  The Company shall not be obligated to deliver any certificate representing shares of Stock issuable with respect to the exercise of the Option to Participant or his or her legal representative unless and until Participant or his or her legal representative shall have paid or otherwise satisfied in full the amount of all federal, state, local and foreign taxes applicable with respect to the taxable income of Participant resulting from the exercise of the Option or any other taxable event related to the Option.

(c)In the event any tax withholding obligation arising in connection with the Option will be satisfied under Section 3.4(a)(iii) above, then the Company may elect to instruct any brokerage firm determined acceptable to the Company for such purpose to sell on Participant’s behalf a whole number of shares from those shares of Stock that are issuable upon exercise of the Option as the Company determines to be appropriate to generate cash proceeds sufficient to satisfy the tax withholding obligation and to remit the proceeds of such sale to the Company or the Subsidiary with respect to which the withholding obligation arises.  Participant’s acceptance of this Award constitutes Participant’s instruction and authorization to the Company and such brokerage firm to complete the transactions described in this Section 3.4(c), including the transactions described in the previous sentence, as applicable.  The Company may refuse to issue any shares of Stock to Participant until the foregoing tax withholding obligations are 

 

satisfied. 

(d)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 Stock.  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 4.
EXERCISE OF OPTION

4.1Person Eligible to Exercise.  During the lifetime of Participant, only Participant may exercise the Option or any portion thereof.  After the death of Participant, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3 hereof, be exercised by Participant’s personal representative or by any person empowered to do so under the deceased Participant’s will or under the then applicable laws of descent and distribution.

4.2Partial Exercise.  Subject to Section 5.2, any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised in whole or in part at any time prior to the time when the Option or portion thereof becomes unexercisable under Section 3.3 hereof. 

4.3Manner of Exercise.  The Option, or any exercisable portion thereof, may be exercised solely by delivery to the Secretary of the Company (or any third party administrator or other person or entity designated by the Company), during regular business hours, of all of the following prior to the time when the Option or such portion thereof becomes unexercisable under Section 3.3 hereof.

(a)An exercise notice in a form specified by the Administrator, stating that the Option or portion thereof is thereby exercised, such notice complying with all applicable rules established by the Administrator; 

(b)The receipt by the Company of full payment for the shares of Stock with respect to which the Option or portion thereof is exercised, in such form of consideration permitted under Section 4.4 hereof that is acceptable to the Administrator; 

(c)The payment of any applicable withholding tax in accordance with Section 3.4;

(d)Any other written representations or documents as may be required in the Administrator’s sole discretion to effect compliance with Applicable Law; and

(e)In the event the Option or portion thereof shall be exercised pursuant to Section 4.1 hereof by any person or persons other than Participant, appropriate proof of the right of such person or persons to exercise the Option.

Notwithstanding any of the foregoing, the Administrator shall have the right to specify all conditions of the manner of exercise, which conditions may vary by country and which may be subject to change from time to time.

 

4.4Method of Payment.  Payment of the exercise price shall be by any of the following, or a combination thereof, at the election of Participant:

(a)Cash or check;

(b)With the consent of the Administrator, surrender of shares of Stock (including, without limitation, shares of Stock otherwise issuable upon exercise of the Option) held for such period of time as may be required by the Administrator in order to avoid adverse accounting consequences and having a Fair Market Value on the date of delivery equal to the aggregate exercise price of the Option or exercised portion thereof; 

(c)Through the delivery of a notice that Participant has placed a market sell order with a broker acceptable to the Company with respect to shares of Stock then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the Option exercise price; provided that payment of such proceeds is then made to the Company at such time as may be required by the Administrator, but in any event not later than the settlement of such sale; or

(d)Any other form of legal consideration acceptable to the Administrator.

4.5Conditions to Issuance of Stock.  The Company shall not be required to issue or deliver any shares of Stock purchased upon the exercise of the Option or portion thereof prior to fulfillment of all of the following conditions: (A) the admission of such shares of Stock to listing on all stock exchanges on which such Stock is then listed, (B) the completion of any registration or other qualification of such shares of Stock under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem necessary or advisable, (C) the obtaining of any approval or other clearance from any state or federal governmental agency which the Administrator shall, in its absolute discretion, determine to be necessary or advisable, (D) the receipt by the Company of full payment for such shares of Stock, which may be in one or more of the forms of consideration permitted under Section 4.4 hereof, and (E) the receipt of full payment of any applicable withholding tax in accordance with Section 3.4 by the Company or its Subsidiary with respect to which the applicable withholding obligation arises.

4.6Rights as Stockholder.  Neither Participant nor any person claiming under or through Participant will have any of the rights or privileges of a stockholder of the Company in respect of any shares of Stock purchasable upon the exercise of any part of the Option unless and until certificates representing such shares of Stock (which may be in book-entry form) will have been issued and recorded on the records of the Company or its transfer agents or registrars and delivered to Participant (including through electronic delivery to a brokerage account).  No adjustment will be made for a dividend or other right for which the record date is prior to the date of such issuance, recordation and delivery, except as provided in Section 12.2 of the Plan.  Except as otherwise provided herein, after such issuance, recordation and delivery, Participant will have all the rights of a stockholder of the Company with respect to such shares of Stock, including, without limitation, the right to receipt of dividends and distributions on such shares.    

ARTICLE 5.
OTHER PROVISIONS

5.1Administration.  The Administrator shall have the power to interpret the Plan, the Grant Notice and this Agreement and to adopt such rules for the administration, interpretation and application of 

 

the Plan, the Grant Notice and this Agreement as are consistent therewith and to interpret, amend or revoke any such rules.  All actions taken and all interpretations and determinations made by the Administrator will be final and binding upon Participant, the Company and all other interested persons.  To the extent allowable pursuant to Applicable Law, no member of the Committee or the Board will be personally liable for any action, determination or interpretation made with respect to the Plan, the Grant Notice or this Agreement. 

5.2Whole Shares.  The Option may only be exercised for whole shares of Stock. 

5.3Option Not Transferable.  Subject to Section 4.1 hereof, the Option may not be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution, unless and until the shares of Stock underlying the Option have been issued, and all restrictions applicable to such shares of Stock have lapsed.  Neither the Option nor any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of Participant or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence. 

5.4Adjustments.  The Administrator may accelerate the vesting of all or a portion of the Option in such circumstances as it, in its sole discretion, may determine.  In addition, upon the occurrence of certain events relating to the Stock contemplated by Section 12.2 of the Plan (including, without limitation, an extraordinary cash dividend on such Stock), the Administrator may make such adjustments as the Administrator deems appropriate in the number of shares of Stock subject to the Option, the exercise price of the Option and the kind of securities that may be issued upon exercise of the Option. Participant acknowledges that the Option is subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan, including Section 12.2 of the Plan.

5.5Notices.  Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Secretary of the Company at the Company’s principal office, and any notice to be given to Participant shall be addressed to Participant (or, if Participant is then deceased, to the person entitled to exercise the Option pursuant to Section 4.1) at Participant’s last address reflected on the Company’s records.  By a notice given pursuant to this Section 5.5, either party may hereafter designate a different address for notices to be given to that party.  Any notice shall be deemed duly given when sent via email (if to Participant) or 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.

5.6Titles.  Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

5.7Governing Law.  The laws of the State of Delaware shall govern the interpretation, validity, administration, enforcement and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws.

5.8Conformity 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, including, without limitation, the provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated thereunder by the Securities and Exchange Commission and state securities laws and regulations.  Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Option is granted and may be exercised, only in such a manner as to conform to Applicable Law.  To the 

 

extent permitted by Applicable Law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to Applicable Law.

5.9Amendment, Suspension and Termination.  To the extent permitted by the Plan, this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator or the Board, provided that, except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall adversely affect the Option in any material way without the prior written consent of Participant.    

5.10Successors and Assigns.  The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company.  Subject to the restrictions on transfer set forth in Section 5.3 and the Plan, this Agreement shall be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

5.11Limitations 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 Option, the Grant Notice and this Agreement shall 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 of the Exchange Act) that are requirements for the application of such exemptive rule.  To the extent permitted by Applicable Law, this Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

5.12Not a Contract of Employment.  Nothing in this Agreement or in the Plan shall confer upon Participant any right to continue to serve as an employee or other service provider of the Company or any Subsidiary or shall interfere with or restrict 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.

5.13Entire 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.  

5.14Section 409A.  This Award is not intended to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code (together with any Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the date hereof, “Section 409A”).  However, notwithstanding any other provision of the Plan, the Grant Notice or this Agreement, if at any time the Administrator determines that this Award (or any portion thereof) may be subject to Section 409A, the Administrator shall have the right in its sole discretion (without any obligation to do so or to indemnify Participant or any other person for failure to do so) to adopt such amendments to the Plan, the Grant Notice or this Agreement, or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Administrator determines are necessary or appropriate for this Award either to be exempt from the application of Section 409A or to comply with the requirements of Section 409A.   

5.15Agreement Severable.  In the event that any provision of the Grant Notice or this Agreement is held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of the Grant Notice or this Agreement.

 

5.16Limitation 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 shall not be construed as creating a trust.  Neither the Plan nor any underlying program, in and of itself, has any assets.  Participant shall 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 Stock as a general unsecured creditor with respect to options, as and when exercised pursuant to the terms hereof.

5.17Counterparts.  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 shall be deemed an original and all of which together shall constitute one instrument.

5.18Broker-Assisted Sales.  In the event of any broker-assisted sale of shares of Stock in connection with the payment of withholding taxes as provided in Section 3.4(a)(v) or Section 3.4(c) or the payment of the exercise price as provided in Section 4.4(c): (A) any shares of Stock to be sold through a broker-assisted sale will be sold on the day the tax withholding obligation or exercise of the Option, as applicable, occurs or arises, or as soon thereafter as practicable; (B) such shares of Stock may be sold as part of a block trade with other participants in the Plan in which all participants receive an average price; (C) Participant will be responsible for all broker’s fees and other costs of sale, and 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 proceeds of such sale exceed the applicable tax withholding obligation or exercise price, the Company agrees to pay such excess in cash to Participant as soon as reasonably practicable; (E) Participant acknowledges that the Company or its designee is under no obligation to arrange for such sale at any particular price, and that the proceeds of any such sale may not be sufficient to satisfy the applicable tax withholding obligation or exercise price; and (F) in the event the proceeds of such sale are insufficient to satisfy the applicable tax withholding obligation, Participant agrees to pay immediately upon demand to the Company or its Subsidiary with respect to which the withholding obligation arises, an amount sufficient to satisfy any remaining portion of the Company’s or the applicable Subsidiary’s withholding obligation.

5.19Incentive Stock Options.  Participant acknowledges that to the extent the aggregate Fair Market Value of shares of Stock (determined as of the time the option with respect to the shares is granted) with respect to which Incentive Stock Options, including this Option (if applicable), are exercisable for the first time by Participant during any calendar year exceeds $100,000 or if for any other reason such Incentive Stock Options do not qualify or cease to qualify for treatment as “incentive stock options” under Section 422 of the Code, such Incentive Stock Options shall be treated as Non-Qualified Stock Options.  Participant further acknowledges that the rule set forth in the preceding sentence shall 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 and the Treasury Regulations thereunder.  Participant also acknowledges that an Incentive Stock Option exercised more than three (3) months after Participant’s Termination of Service, other than by reason of death or disability, will be taxed as a Non-Qualified Stock Option.

5.20Notification of Disposition.  If this Option is designated as an Incentive Stock Option, Participant shall give prompt written notice to the Company of any disposition or other transfer of any shares of Stock acquired under this Agreement if such disposition or transfer is made (a) within two (2) years from the Grant Date or (b) within one (1) year after the transfer of such shares of Stock to Participant.  Such notice shall 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.  

* * * * *

 

 

T2 Biosystems, INC.
2014 INCENTIVE AWARD PLAN

 

RESTRICTED STOCK Unit Grant Notice

 

T2 Biosystems, Inc., a Delaware corporation (the “Company”), pursuant to its 2014 Incentive Award Plan, as amended from time to time (the “Plan”), hereby grants to the holder listed below (“Participant”) the number of Restricted Stock Units (the “RSUs”) set forth below.  The RSUs are subject to the terms and conditions set forth in this Restricted Stock Unit Grant Notice (the “Grant Notice”) and the Restricted Stock Unit Agreement attached hereto as Exhibit A (the “Agreement”) and the Plan, which are incorporated herein by reference.  Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in the Grant Notice and the Agreement.

		
	
Participant:
	
 

	
Grant Date:
	
 

	
Number of RSUs:
	
 

	
Type of Shares Issuable:
	
Common Stock

	
Vesting Schedule:
	
 

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

 

				
	
T2 BIOSYSTEMS, Inc.Holder:
	
PARTICIPANT

	
By:
	
 
	
By:
	
 

	
Print Name: 
	
 
	
Print Name:
	
 

	
Title:
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

 

 

 

 

US-DOCS\73598639.2

 

Exhibit A

TO RESTRICTED STOCK UNIT Grant Notice

RESTRICTED STOCK UNIT AGREEMENT

Pursuant to the Grant Notice to which this Agreement is attached, the Company has granted to Participant the number of RSUs set forth in the Grant Notice.  

ARTICLE 1.
general

1.1Defined Terms.  Capitalized terms not specifically defined herein shall have the meanings specified in the Plan or the Grant Notice.

1.2Incorporation of Terms of Plan.  The RSUs and the shares of Common Stock (“Stock”) issued to Participant hereunder (“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 shall control, except as provided in Section 2.3(c), 2.4(b) or 3.13.

ARTICLE 2.
award of restricted stock UNITS and DIVIDEND EQUIVALENTS

2.1Award of RSUs and Dividend Equivalents.  

(a)In consideration of Participant’s past and/or continued employment with or service to the Company or a Subsidiary and for other good and valuable consideration, effective as of the grant date set forth in the Grant Notice (the “Grant Date”), the Company has granted to Participant the number of RSUs set forth in the Grant Notice, upon the terms and conditions set forth in the Grant Notice, the Plan and this Agreement, subject to adjustment as provided in Section 12.2 of the Plan.  Each RSU represents the right to receive one Share or, at the option of the Company, an amount of cash as set forth in Section 2.3(b), in either case, at the times and subject to the conditions set forth herein.  However, unless and until the RSUs have vested, Participant will have no right to the payment of any Shares subject thereto.  Prior to the actual delivery of any Shares, the RSUs will represent an unsecured obligation of the Company, payable only from the general assets of the Company.  

(b)The Company hereby grants to Participant an Award of Dividend Equivalents with respect to each RSU granted pursuant to the Grant Notice for all ordinary cash dividends which are paid to all or substantially all holders of the outstanding shares of Stock between the Grant Date and the date when the applicable RSU is distributed or paid to Participant or is forfeited or expires.  The Dividend Equivalents for each RSU shall be equal to the amount of cash which is paid as a dividend on one share of Stock.  All such Dividend Equivalents shall be credited to Participant and retained by the Company (without interest) or, at the Company’s option, may be deemed to be reinvested in additional RSUs as of the date of payment of any such dividend based on the Fair Market Value of a share of Stock on such date.  Each Dividend Equivalent (including any additional RSU which results from the deemed reinvestment of Dividend Equivalents granted hereunder, if applicable) shall be subject to the same vesting, distribution or 

 

 

US-DOCS\73598639.2

 

payment, adjustment and other provisions which apply to the underlying RSU to which such Dividend Equivalent relates.

2.2Vesting of RSUs and Dividend Equivalents.  

(a)Subject to Participant’s continued employment with or service to the Company or a Subsidiary on each applicable vesting date and subject to the terms of this Agreement, the RSUs shall vest in such amounts and at such times as are set forth in the Grant Notice.  Each Dividend Equivalent (including any additional RSU which results from deemed reinvestments of Dividend Equivalents pursuant to Section 2.1(b) hereof, if applicable) shall vest whenever the underlying RSU to which such Dividend Equivalent relates vests.

(b)In the event Participant incurs a Termination of Service, except as may be otherwise provided by the Administrator or as set forth in a written agreement between Participant and the Company, Participant shall immediately forfeit any and all RSUs and Dividend Equivalents (including any additional RSU which results from deemed reinvestments of Dividend Equivalents pursuant to Section 2.1(b) hereof, if applicable) granted under this Agreement which have not vested or do not vest on or prior to the date on which such Termination of Service occurs, and Participant’s rights in any such RSUs and Dividend Equivalents which are not so vested shall lapse and expire. 

2.3Distribution or Payment of RSUs.  

(a)Participant’s vested RSUs and Dividend Equivalents will be distributed in Shares (either in book-entry form or otherwise) or, at the option of the Company, paid in an amount of cash as set forth in Section 2.3(b), in either case, on the earliest to occur of the following dates: 

(i)the date that is 14 months after the date upon which the applicable RSU or Dividend Equivalent vested under Section 2.2, provided that the Participant’s “separation from service” (within the meaning of Section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (the “Code”), and Treasury Regulation Section 1.409A-1(h)) from the Company (“Separation from Service”) has not occurred prior to such date;

(ii)the date of the occurrence of a Change in Control that constitutes a “change in control event,” as defined in Treasury Regulation Section 1.409A-3(i)(5), provided that the Participant’s Separation from Service has not occurred prior to such date; or 

(iii)in the seventh (7th) month following the date of Participant’s Separation from Service.

(b)In the event that the Company elects to make payment of Participant’s RSUs in cash, the amount of cash payable with respect to each RSU shall be equal to the Fair Market Value of a Share on the day immediately preceding the applicable distribution or payment date set forth in Section 2.3(a).  All distributions made in Shares shall be made by the Company in the form of whole Shares, and any fractional share shall be distributed in cash in an amount equal to the value of such fractional share determined based on the Fair Market Value as of the date immediately preceding the date of such distribution.

(c)Notwithstanding any provisions of this Agreement or the Plan to the contrary, the time of distribution of the RSUs under this Agreement may not be changed except as may be permitted by the Administrator in accordance with Section 409A of the Code and the applicable Treasury Regulations promulgated thereunder.

12

 

 

2.4Conditions to Issuance of Certificates.  

(a)The Company shall not be required to issue or deliver any certificate or certificates for any Shares prior to the fulfillment of all of the following conditions:  (A) the admission of the Shares to listing on all stock exchanges on which such Shares are then listed, (B) the completion of any registration or other qualification of the Shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem necessary or advisable, and (C) the obtaining of any approval or other clearance from any state or federal governmental agency that the Administrator shall, in its absolute discretion, determine to be necessary or advisable.  In the event that the Company delays a distribution or payment in settlement of RSUs because it determines that the issuance of shares of Stock in settlement of such RSUs will violate federal securities laws or any other Applicable Law, such distribution or payment shall be made at the earliest date at which the Company reasonably determines that the making of such distribution or payment will not cause such violation, as required by Treasury Regulation Section 1.409A-2(b)(7)(ii).

(b)Notwithstanding Section 2.4(a), no payment shall be delayed under this Section 2.4 if such delay would result in a violation of Section 409A of the Code.

2.5Tax Withholding.  Notwithstanding any other provision of this Agreement:

(a)The Company and its Subsidiaries have the authority to deduct or withhold, or require Participant to remit to the Company or the applicable Subsidiary, an amount sufficient to satisfy applicable federal, state, local and foreign taxes (including the employee portion of any FICA obligation) required by law to be withheld with respect to any taxable event arising pursuant to this Agreement.  The Company and its Subsidiaries may withhold or Participant may make such payment in one or more of the forms specified below:

(i)by cash or check made payable to the Company or the Subsidiary with respect to which the withholding obligation arises;

(ii)by the deduction of such amount from other compensation payable to Participant;

(iii)with respect to any withholding taxes arising in connection with the distribution of the RSUs, with the consent of the Administrator, by requesting that the Company and its Subsidiaries withhold a net number of vested shares of Stock otherwise issuable pursuant to the RSUs having a then current Fair Market Value not exceeding the amount necessary to satisfy the withholding obligation of the Company and its Subsidiaries based on the minimum applicable statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes;

(iv)with respect to any withholding taxes arising in connection with the distribution of the RSUs, with the consent of the Administrator, by tendering to the Company vested shares of Stock having a then current Fair Market Value not exceeding the amount necessary to satisfy the withholding obligation of the Company and its Subsidiaries based on the minimum applicable statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes; 

(v)with respect to any withholding taxes arising in connection with the distribution of the RSUs, through the delivery of a notice that Participant has placed a market sell order with a broker acceptable to the Company with respect to shares of Stock then issuable to Participant 

13

 

 

pursuant to the RSUs, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company or the Subsidiary with respect to which the withholding obligation arises in satisfaction of such withholding taxes; provided that payment of such proceeds is then made to the Company or the applicable Subsidiary at such time as may be required by the Administrator, but in any event not later than the settlement of such sale; or

(vi)in any combination of the foregoing.

(b)With respect to any withholding taxes arising in connection with the RSUs, in the event Participant fails to provide timely payment of all sums required pursuant to Section 2.5(a), the Company shall have the right and option, but not the obligation, to treat such failure as an election by Participant to satisfy all or any portion of Participant’s required payment obligation pursuant to Section 2.5(a)(ii) or Section 2.5(a)(iii) above, or any combination of the foregoing as the Company may determine to be appropriate. The Company shall not be obligated to deliver any certificate representing shares of Stock issuable with respect to the RSUs to Participant or his or her legal representative unless and until Participant or his or her legal representative shall have paid or otherwise satisfied in full the amount of all federal, state, local and foreign taxes applicable with respect to the taxable income of Participant resulting from the vesting or settlement of the RSUs or any other taxable event related to the RSUs.

(c)In the event any tax withholding obligation arising in connection with the RSUs will be satisfied under Section 2.5(a)(iii), then the Company may elect to instruct any brokerage firm determined acceptable to the Company for such purpose to sell on Participant’s behalf a whole number of shares from those shares of Stock then issuable to Participant pursuant to the RSUs as the Company determines to be appropriate to generate cash proceeds sufficient to satisfy the tax withholding obligation and to remit the proceeds of such sale to the Company or the Subsidiary with respect to which the withholding obligation arises.  Participant’s acceptance of this Award constitutes Participant’s instruction and authorization to the Company and such brokerage firm to complete the transactions described in this Section 2.5(c), including the transactions described in the previous sentence, as applicable.  The Company may refuse to issue any shares of Stock in settlement of the RSUs to Participant until the foregoing tax withholding obligations are satisfied, provided that no payment shall be delayed under this Section 2.5(c) if such delay will result in a violation of Section 409A of the Code.

(d)Participant is ultimately liable and responsible for all taxes owed in connection with the RSUs, regardless of any action the Company or any Subsidiary takes with respect to any tax withholding obligations that arise in connection with the RSUs.  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 subsequent sale of Shares.  The Company and the Subsidiaries do not commit and are under no obligation to structure the RSUs to reduce or eliminate Participant’s tax liability.

2.6Rights as Stockholder.  Neither Participant nor any person claiming under or through Participant will have any of the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares (which may be in book-entry form) will have been issued and recorded on the records of the Company or its transfer agents or registrars, and delivered to Participant (including through electronic delivery to a brokerage account).  Except as otherwise provided herein, after such issuance, recordation and delivery, Participant will have all the rights of a stockholder of the Company with respect to such Shares, including, without limitation, the right to receipt of dividends and distributions on such Shares.

14

 

 

ARTICLE 3.

other provisions

3.1Administration.  The Administrator shall have the power to interpret the Plan, the Grant Notice and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan, the Grant Notice and this Agreement as are consistent therewith and to interpret, amend or revoke any such rules.  All actions taken and all interpretations and determinations made by the Administrator will be final and binding upon Participant, the Company and all other interested persons.  To the extent allowable pursuant to Applicable Law, no member of the Committee or the Board will be personally liable for any action, determination or interpretation made with respect to the Plan, the Grant Notice or this Agreement.

3.2RSUs Not Transferable.  The RSUs may not be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution, unless and until the Shares underlying the RSUs have been issued, and all restrictions applicable to such Shares have lapsed.  No RSUs or any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of Participant or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence.

3.3Adjustments.  The Administrator may accelerate the vesting of all or a portion of the RSUs in such circumstances as it, in its sole discretion, may determine.  Participant acknowledges that the RSUs and the Shares subject to the RSUs are subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan, including Section 12.2 of the Plan.

3.4Notices.  Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Secretary of the Company at the Company’s principal office, and any notice to be given to Participant shall be addressed to Participant at Participant’s last address reflected on the Company’s records.  By a notice given pursuant to this Section 3.4, either party may hereafter designate a different address for notices to be given to that party.  Any notice shall be deemed duly given when sent via email or 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.

3.5Titles.  Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

3.6Governing Law.   The laws of the State of Delaware shall govern the interpretation, validity, administration, enforcement and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws.

3.7Conformity 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, including, without limitation, the provisions of the Securities Act and the Exchange Act, and any and all regulations and rules promulgated thereunder by the Securities and Exchange Commission, and state securities laws and regulations.  Notwithstanding anything herein to the contrary, the Plan shall be administered, and the RSUs are granted, only in such a manner as to conform to Applicable Law.  To the extent permitted by Applicable Law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform 

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to Applicable Law.

3.8Amendment, Suspension and Termination.  To the extent permitted by the Plan, this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator or the Board, provided that, except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall adversely affect the RSUs in any material way without the prior written consent of Participant.

3.9Successors and Assigns.  The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company.  Subject to the restrictions on transfer set forth in Section 3.2 and the Plan, this Agreement shall be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

3.10Limitations 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 RSUs, the Dividend Equivalents (including RSUs which result from deemed reinvestments of Dividend Equivalents pursuant to Section 2.1(b) hereof, if applicable), the Grant Notice and this Agreement shall 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 of the Exchange Act) that are requirements for the application of such exemptive rule.  To the extent permitted by Applicable Law, this Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

3.11Not a Contract of Employment.  Nothing in this Agreement or in the Plan shall confer upon Participant any right to continue to serve as an employee or other service provider of the Company or any Subsidiary or shall interfere with or restrict 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.

3.12Entire 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.

3.13Section 409A.  The intent of the parties is that the payments and benefits under the Grant Notice and this Agreement comply with Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance issued thereunder, and, accordingly, to the maximum extent permitted, the Grant Notice and this Agreement shall be interpreted to be in compliance therewith. 

3.14Agreement Severable.  In the event that any provision of the Grant Notice or this Agreement is held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of the Grant Notice or this Agreement.

3.15Limitation 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 shall not be construed as creating a trust.  Neither the Plan nor any underlying program, in and of itself, has any assets.  Participant shall 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.

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3.16Counterparts.  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 shall be deemed an original and all of which together shall constitute one instrument.

3.17Broker-Assisted Sales.  In the event of any broker-assisted sale of shares of Stock in connection with the payment of withholding taxes as provided in Section 2.5(a)(iii) or Section 2.5(a)(v): (A) any shares of Stock to be sold through a broker-assisted sale will be sold on the day the tax withholding obligation arises or as soon thereafter as practicable; (B) such shares of Stock may be sold as part of a block trade with other participants in the Plan in which all participants receive an average price; (C) Participant will be responsible for all broker’s fees and other costs of sale, and 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 proceeds of such sale exceed the applicable tax withholding obligation, the Company agrees to pay such excess in cash to Participant as soon as reasonably practicable; (E) Participant acknowledges that the Company or its designee is under no obligation to arrange for such sale at any particular price, and that the proceeds of any such sale may not be sufficient to satisfy the applicable tax withholding obligation; and (F) in the event the proceeds of such sale are insufficient to satisfy the applicable tax withholding obligation, Participant agrees to pay immediately upon demand to the Company or its Subsidiary with respect to which the withholding obligation arises an amount in cash sufficient to satisfy any remaining portion of the Company’s or the applicable Subsidiary’s withholding obligation.

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17ttoo-ex1021_16.htm

 

Exhibit 10.21

Confidential

CO-DEVELOPMENT, COLLABORATION AND CO-MARKETING AGREEMENT

This Co-Development, Collaboration and Co-Marketing Agreement   (the “ Agreement ”) is entered into on November 1,  2016 (the “ Effective Date ”) by and between T2 Biosystems, Inc. , a Delaware  corporation (“ T2 Bio ”), having its principal offices at 101 Hartwell Avenue, Lexington, Massachusetts 02421, and Allergan Sales, LLC ,   a   Delaware limited liability company (“ Allergan ”), having its principal offices at Morris Corporate Center III, 400 Interpace Parkway, Parsippany, NJ 07054.  T2 Bio and Allergan are each a “ Party ” and together the “ Parties ” to this Agreement.

RECITALS

WHEREAS ,  T2 Bio agrees to develop, in collaboration with Allergan,  (1) a direct detection diagnostic test panel of [***] directly in whole blood (the “ T2GNR Panel ” and together with the T2Bacteria II Panel, the “ Developed Products ”),  as further described below in this Agreement; and

WHEREAS ,  T2 Bio desires to give Allergan the right to co-market certain T2 Bio products and Allergan desires to co-market certain T2 Bio products.

NOW, THEREFORE , in consideration of the mutual promises contained herein, the Parties agree as follows:

1. DEFINITIONS

1.1 “Affiliate” means with respect to either Party, any person or entity controlling, controlled by, or under common control with such Party, where “control” means (a) the possession, directly or indirectly, of the power to direct the management or policies of a person or entity, whether through the ownership of voting securities, by contract, or otherwise, or (b) the ownership, directly or indirectly, of at least 50% of the voting securities or other ownership interest of a person or entity. 

1.2 “ Allergan Management Representative ” shall mean its Chief Commercial Officer or a designee thereof and any successor thereto.

1.3 “Background IP”  of a Party means any and all technology and Intellectual Property Rights that are owned, whether solely or jointly with others, or controlled by or licensed to such Party upon the Effective Date, or that are developed by, acquired by or licensed to such Party after the Effective Date independent of this Agreement.

1.4 “Developed Products” means collectively, (1) the T2Bacteria II Panel   and (2) the T2GNR Panel, each developed pursuant to the Project Plan. 

1.5 “ Improvements ” means any improvements, enhancements, modifications or derivative works, whether or not patentable.

1.6 “Intellectual Property Rights”  means (a) any rights with respect to inventions, discoveries, or improvements, including patents, patent applications, and certificates of invention; trade secrets, know-how, or similar rights, (b) any rights with respect to recognizable sign s, design s, or expression s which identify products or services of a particular source, including trademark, (c) the protection of works of authorship or expression, including copyrights and future copyright as it arises under this Agreement, and (d) similar rights under any laws or international 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portions.

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conventions throughout the world, including the right to apply for registrations, certificates, or renewals with respect thereto, the rights to prosecute, enforce, and obtain damages.

1.7 “Jointly Developed IP”  means the Inventions (as defined below) jointly conceived, developed, reduced to practice or otherwise created jointly by the personnel of (or Third Parties working on behalf of) both Parties under this Agreement (i.e., Inventions are Jointly Developed IP if at least one inventor from each Party is, or is required under U.S. patent law to be, identified on the applicable patent application), but in each case excluding Allergan Improvements, T2 Bio Improvements, Allergan Inventions and T2 Bio Inventions.

1.8 “ Net Sales ” means, with respect to any T2 Bio Co-Marketed Product, the gross amounts invoiced for sales or other dispositions of such products, less the following deductions as determined in accordance with U.S. GAAP:

(a) customary trade, cash and quantity discounts;

(b) amounts repaid or credits or allowances given or made for rejection, defect, recall or return of product or for retroactive price reductions and billing errors;

(c) price reductions, rebates and chargeback provisions granted to direct and indirect customers;  

(d) if included in the aggregate gross invoice price of such product, sales or excise taxes, duties or other similar governmental charges (including any tax such as a value added or similar tax, and excluding any taxes based on, or in lieu of, income) relating to the sale of such product, as adjusted for rebates and refunds;

(e) the portion of administrative fees paid during the relevant time period to group purchasing organizations or pharmaceutical benefit managers relating to such product;

(f) any invoiced amounts that are not collected by T2 Bio or its Affiliates or licensees, including bad debts (provided that any such amounts subsequently collected shall be included in Net Sales for the period in which collected);

(g) fees or other discounts to distributors and wholesalers; 

(h) one-half (1/2) of the amounts actually paid by T2 Bio for licenses to Intellectual Property Rights owned by Third Parties necessary to make, use or sell the T2 Bio Co-Marketed Product not to exceed a maximum deduction pursuant to this clause (h) of three percent (3%)   of the gross sale prices of the applicable T2 Bio Co-Marketed Product;   and 

(i) any other similar and customary deductions (including accrued provisions) that are consistent with U.S. GAAP, consistently applied.

In no event shall any particular amount identified above be deducted more than once in calculating Net Sales.  For purposes of determining Net Sales, a sale or other disposition shall not include sales, transfers or dispositions of products for research or clinical purposes or as samples.

1.9 “Project” means the development of the Developed Products to be performed in accordance with the Project Plan.

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1.10 “ T2 Bio Management Representative ” shall mean its Chief Commercial Officer or a designee thereof and any successor thereto.

1.11 “T2Bacteria Panel” means a direct detection diagnostic test panel of bacterial sepsis,  E .coli, K, pneumonia, P. aureginosa, S. aureus, E. faecium, and A. baumanii  directly in whole blood.  

1.12 “T2Candida Panel” means a direct detection diagnostic test panel of C. albicans, C. tropicalis, C. parapsilosis, C. krusei and C. glabrata directly in whole blood.  

1.13 “T2Dx Instrument” means a fully-automated, benchtop diagnostics system capable of running diagnostic tests directly from whole blood utilizing T2MR Technology. 

1.14 “T2MR Technology” means magnetic resonance-based diagnostic technology or any element thereof that enables the measurement of how water molecules react in the presence of magnetic fields and is capable of detecting a variety of targets.

1.15 “Third Party” means any entity other than T2 Bio or Allergan or an Affiliate of T2 Bio or Allergan.

2.  PROJECT PLAN

2.1 Project Plan. The Parties shall form a Joint Research & Development Committee  (the “ JRDC ”) promptly after the Effective Date to oversee and manage all activities under the Project Plan (the “ Project Plan ”),  excluding any dispute that may arise under this Agreement and intellectual property matters.  Each Party will use commercially reasonable efforts to perform the obligations assigned to such Party in the Project Plan.  The Project Plan shall at a minimum set forth:  (i) certain tasks to be performed under the Project, (ii) the Project schedule, and (iii) each Party’s obligations with respect to the Project.  Any changes to the Project Plan must follow the Joint Research & Development Committee process as outlined in Section 2.2(d) below.  The Project Plan is, and any changes thereto shall be, attached as Exhibit A and incorporated by reference into this Agreement.  No changes to the Project Plan shall become effective until executed by T2 Bio and Allergan. 

2.2 Joint Research & Development Committee.

(a) Joint Research & Development Committee. The JRDC shall initially be composed of three representatives from each of T2 Bio and Allergan, including each Party’s Project Lead (as defined below).  The number of representatives comprising the JRDC may be changed upon mutual agreement of the Parties.  The initial representatives of each Party on the JRDC will be specified in the Project Plan.  Either Party may, upon written notice to the other Party, change its representatives to the JRDC.

(b) Meetings of the JRDC. The JRDC shall hold meetings at least once every calendar quarter, unless mutually agreed by the Parties, at such times and places as mutually determined by the Parties, including by teleconference.  At least one representative from Allergan and T2 Bio shall attend each meeting.  The meetings may be by telephone, video conference or other mutually accepted means.  The meetings will focus on:  (i) the progress made during the period since the previous JRDC meeting, including with respect to development and regulatory approval of the Developed Products, (ii)  review and approval of the Project Plan for the following calendar quarter   (iii) newly set objectives and performance goals, (iv) issues requiring resolution and resolutions of previously reported issues, and (v) 

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Confidential

 

review of the Project Plan and review and approval of any amendments to the Project Plan proposed by either Party.    Each Party is responsible for its own costs in connection with preparing for and attending the meetings.

(c) Limitations. The JRDC shall have no power to amend, modify or grant any waivers under this Agreement; provided, however, the JRDC may make changes to the Project Plan, which is incorporated by reference into this Agreement.  Any amendment or modification of this Agreement or waiver granted hereunder must be made in accordance with Section 12.13 of this Agreement.

(d) Decisions of the JRDC. All decisions of the JRDC shall require a unanimous vote of each Party’s representatives in attendance at the applicable meeting.  In the event that any matter submitted to a vote of the representatives in attendance at a meeting does not receive unanimous approval, such matter shall be submitted to the T2 Bio Management Representative and the Allergan Management Representative promptly following the meeting.  The T2 Bio Management Representative and the Allergan Management Representative shall use reasonable efforts to reach agreement on the matter; provided, however, if after thirty (30) calendar days following the original meeting date they have not reached agreement on the matter, the matter shall be decided by T2 Bio, in its sole discretion, except for changes to the Project Plan, which can only be approved in writing by consensus of the members of the JRDC. 

(e) Project Leads. The JRDC shall appoint a principal point of contact for each Party to act as such Party’s project lead  (each, a “ Project Lead ”) and coordinate and act as a liaison with the other Party with respect to this Agreement.  The Project Leads’ responsibilities shall generally include overseeing and supervising its Party’s fulfillment of its obligations under the Project Plan, understanding the obligations of the other Party under the Project Plan,  and discussing the progress of the Project Plan and barriers to success, key issues and issues-resolution options with the other Party’s Project Lead and the JRDC.

2.3 Regulatory Approval and Commercialization. T2 Bio shall use commercially reasonable efforts to seek regulatory approval of the Developed Products from the United States Food and Drug Administration (FDA), the European Medicines Agency (EMA) and the applicable regulatory authority in all other jurisdictions identified in the Project Plan.   Upon receiving regulatory approval for a Developed Product, T2 Bio shall promptly notify Allergan in writing of such approval and use commercially reasonable efforts to commercialize such Developed Product in such jurisdictions where such approval has been obtained.    In connection with seeking regulatory approval of the Developed Products and upon T2 Bio’s reasonable request, Allergan shall provide T2 Bio reasonable access to data generated in Allergan-sponsored clinical trials in which a Developed Product has been used. 

3. COMPENSATION    

3.1 Initial Payment. Allergan shall pay T2 Bio  an up-front non-refundable payment in the amount of $2,000,000 within five (5) calendar days of the Effective Date. 

3.2 Milestone Payments. Upon the achievement of a  milestone described in clause (a) or (b) of this Section 3.2, T2 Bio shall provide to Allergan written notification of and supporting documentation for the achievement of the applicable milestone.  In addition, in connection with the delivery of a panel cartridge described in clause (c) or (d) of this Section 3.2, T2 Bio shall provide supporting documentation demonstrating that such panel cartridge meets the applicable specifications set forth in the Project Plan.    Allergan shall make the following non-refundable payments to T2 Bio within forty-five  (45)  calendar days   of receipt of notice of the achievement of the milestone described in clause (a) or (b) or receipt of the panel cartridges described in clauses (c) or (d); provided, however, that Allergan shall within twenty  (20)  calendar days of receiving such notice or panel cartridges, as applicable, and supporting 

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Confidential

 

documentation from T2 Bio   notify T2 Bio in writing in the event Allergan believes that such milestone has not been achieved, in which case the Parties shall discuss in good faith whether such milestone has been met and, if the Parties cannot reach agreement on such matter, the question of whether such milestone has been achieved shall be decided by a Third Party with relevant expertise selected by mutual agreement of the Parties, with the costs of such Third Party being borne by the Party against which the determination of such Third Party has been made.   

(a) $500,000 upon achievement of [***] ; 

(b) $500,000 upon achievement of [***] ;  

(c) $500,000 upon delivery to Allergan of [***]  in accordance with the Project Plan;  and

(d) $500,000 upon delivery to Allergan of [***]  in accordance with the Project Plan.

3.3 Purchase of Certain T2 Bio Products for Clinical Trials. 

(a) T2 Bio agrees to sell the T2Bacteria II Panel, the T2GNR Panel and the T2Dx Instrument to Allergan or to any contract research organization or clinical trial site designated by Allergan for an Allergan–sponsored clinical trial at which a Developed Product is to be used (a  “ Designee ”) at [***] % of T2 Bio’s fully burdened cost (but, in any event, less than the retail list price therefor) for use by Allergan or its Designee in Allergan-sponsored clinical trials.  Any such product sold to Allergan or its Designee under this Section 3.3 shall not be resold; provided, however, that Allergan may transfer or otherwise distribute any such product for use in clinical trials; provided, further, however, that Allergan shall provide commercially reasonable efforts to ensure that no Designee uses any such product outside of the applicable Allergan-sponsored clinical trial.    

(b) On the first business day of the first calendar quarter in which Allergan anticipates ordering a T2Dx Instrument and on each calendar quarter thereafter in which Allergan anticipates ordering a T2Dx Instrument, Allergan shall deliver to T2 Bio in writing a rolling, nonbinding forecast detailing Allergan’s anticipated requirement of T2Dx Instruments for the next three  (3) calendar months.  T2 Bio shall deliver, and in the case of a T2Dx Instrument install, any products purchased under this Section 3.3 to Allergan or its Designee within thirty (30) calendar days of T2 Bio’s receipt of a purchase order for such products; provided, however, if  ten (10) or more T2Dx Instruments are included in a  purchase order delivered by Allergan or its Designee to T2 Bio, T2 Bio shall have sixty (60) calendar days from T2 Bio’s receipt of such purchase order to deliver and install such T2Dx Instruments.   Only one (1) purchase order will be submitted per month, and no purchase order will exceed twenty (20) T2Dx Instruments.  For the avoidance of doubt, (x) in  the event of any conflict between this Agreement and such purchase order, this Agreement will control, and (y) no substantive term of such purchase order not set forth in this Agreement shall be binding on the Parties.  Allergan or its Designee shall pay T2 Bio on a time and materials basis for the installation, support and maintenance of any T2Dx Instrument purchased under this Section 3.3 initially at the standard rates customarily charged by T2 Bio to research customers substantially similar to Allergan and any Designee  as of the Effective Date, which initial rates are subject to annual increases based on T2 Bio’s then standard rates, provided that such rates may not be increased by more than 3% annually.    Allergan shall pay T2 Bio for such products and services within forty-five (45) calendar days of receiving the applicable invoice from T2 Bio. 

(c) T2 Bio shall assume all risk of loss, damage or destruction to any products sold to Allergan or its Designee under this Section 3.3 from initial shipment until delivery and installation of such products; provided, however, that Allergan, or its Designee, as applicable, shall reimburse T2 Bio for all shipping and freight costs related 

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Confidential

 

to such shipment and delivery of such products under this Section 3.3.  In the event T2 Bio delivers a T2Dx Instrument at a Designee’s facility but is not permitted by the Designee to install the T2Dx Instrument at the time of delivery,  Allergan will provide T2 Bio with instruction as to whether T2 Bio should (x) return the T2Dx Instrument to T2 Bio’s facility for future delivery, in which case T2 Bio shall assume all risk of loss, damage or destruction to the T2Dx Instrument until its future delivery and installation, or (y) deliver the T2Dx Instrument to the Designee’s facility for installation at a later date, in which case, as between the Parties, Allergan shall assume all risk of loss, damage or destruction to the T2Dx Instrument.  

3.4 Allergan Commission for Co-Marketing Sales. T2 Bio shall pay Allergan an amount equal to (A) [***]% of the Net Sales of T2 Bio Co-Marketed Products to Joint Accounts (as defined below) and (B) [***]% of the Net Sales of T2 Bio Co-Marketed Products to Open Accounts (as defined below), (the “ Commission ”).  Notwithstanding anything to the contrary contained herein, T2 Bio shall pay the Commission, if any, to Allergan within forty five (45) calendar days following the end of each calendar quarter.

3.5 T2 Bio Financial Obligations. T2 Bio shall be responsible for and shall pay all remaining development costs relating to the Developed Products, including costs related to regulatory approval and clearance of the Developed Products not otherwise made by Allergan in accordance with Sections 3.1 and 3.2 of this Agreement.  

3.6 Payments. 

(a) Mode of Payment. All payments are non-refundable and shall be made in U.S. Dollars, which payment shall be made by wire transfer of immediately available funds to a bank account designated in writing by the receiving Party or in such other manner as may be agreed by the Parties.    

(b) Currency Conversion. For the purpose of calculating Net Sales expressed in currencies other than U.S. Dollars, a Party shall convert any amount expressed in a foreign currency into U.S. Dollar equivalents using its, its Affiliate’s or sublicensee’s standard conversion methodology consistent with U.S. GAAP. 

(c) Interest on Late Payments. Any amount required to be paid by a Party under this Agreement which is not paid on the date due shall bear interest at an annual rate equal to two (2) percentage points above the U.S. prime interest rate, as reported by The Wall Street Journal (New York edition) for the first business day of such month.  Such interest shall be accrued daily.  

3.7 Taxes.

(a) Each Party is responsible for its own taxes, duties, levies, imposts, assessments, deductions, fees, withholdings or similar charges imposed on or measured by net income or overall gross income (including branch profits), gross receipts, capital, ability or right to do business, property, and franchise or similar taxes pursuant to applicable law. 

(b) The payments pursuant to this Agreement (each, a “ Payment ”) shall be paid free and clear of any and all taxes, except for the deduction or withholding of any and all taxes and other similar charges required by applicable law, other than VAT (as defined below) (“ Withholding Taxes ”).  Where Withholding Taxes are required by applicable law on any Payment, the Parties shall use their commercially reasonable efforts to do all such acts and things and to sign all such documents as will enable them to report, withhold and lawfully minimize such Withholding Taxes.  Where Withholding Taxes are required by applicable law on any Payment, the payor shall pay such 

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Withholding Taxes to the appropriate government authority, deduct the amount paid from the amount due to payee and remit to payee the net amount due after such deduction of withholding taxes, and secure and send to payee reasonable available evidence of such payment within a reasonable period of time, and such Withholding Taxes shall be treated for all purposes of this Agreement as having been paid to the payee hereunder.

(c) All Payments are exclusive of value added tax, ad valorem, goods and services or similar tax chargeable on the supply or deemed supply of goods or services, sales and use taxes, consumption taxes and other similar taxes required by applicable law, including interest, penalties or other additions thereto (“ VAT ”).  If any VAT is required in respect of any Payments under applicable law, the payor shall pay VAT at the applicable rate in respect of any such Payments following the receipt of a valid VAT invoice in the appropriate form issued by the payee in respect of those Payments, such VAT to be payable forty-five (45)  calendar days after the receipt by the payor of the applicable valid VAT invoice relating to that VAT payment.  The payor shall not be responsible for any penalties and interest resulting from the failure by the payee to collect (if not included on a valid VAT invoice) or remit any such VAT.  The Parties shall reasonably cooperate to eliminate or minimize the amount of any such VAT imposed on the transactions contemplated in this agreement. 

3.8 Costs and Expenses. Except as otherwise provided in the Project Plan or otherwise in this Agreement, neither Party shall be entitled to any payment, cost reimbursement, or other compensation from the other Party, and each Party will be responsible for its own costs and expenses incurred in rendering performance of its obligations under this Agreement. 

4. INTELLECTUAL PROPERTY RIGHTS AND LICENSES

4.1 Ownership of Intellectual Property. 

(a) Background IP. As between the Parties, each Party shall own and retain all right, title and interest in and to its Background IP.

(b) Inventions. For purposes of this Agreement, the term “ Inventions ” shall mean any works of authorship, inventions, methods, processes, materials, and other intellectual property, whether or not patentable, made by a Party in the course of performance under this Agreement.  Except as otherwise set forth in clauses (c) and (d) below, each Party shall own any Inventions created by such Party’s or its Affiliates’ employees or contractors as determined in accordance with U.S. patent law.  If any such Inventions are Jointly Developed IP, each Party shall have the right to use, license and exploit such Jointly Developed IP, subject to Section 5, without the consent of, or accounting to, the other Party.

(c) T2 Bio Inventions. T2 Bio shall own all right, title and interest in and to (x) all Improvements to T2 Bio’s technology, instruments, primers, probes, sequences, algorithms or reagents and (y) all Inventions that primarily relate to (A) diagnostic instruments, including T2MR Technology, primers, probes, sequences, algorithms or reagents or (B) the Developed Products, in each case including all Intellectual Property Rights therein, conceived, developed, reduced to practice or otherwise created pursuant to a Project Plan or otherwise in connection with this Agreement, regardless of the inventing or creating Party (collectively, the “T2 Bio Inventions” ).  Allergan hereby assigns to T2 Bio all of Allergan’s right, title and interest in and to the T2 Bio Inventions.  

(d) Allergan Inventions. Allergan shall own all right, title and interest in and to (x) all Improvements to Allergan’s therapeutics or therapeutic compounds and (y) all Inventions that primarily relate to therapeutics or 

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therapeutic compounds, in each case including all Intellectual Property Rights therein, conceived, developed, reduced to practice or otherwise created pursuant to a Project Plan or otherwise in connection with this Agreement, regardless of the inventing or creating Party  (collectively, the “ Allergan Inventions ”).  T2 Bio hereby assigns to Allergan all of T2 Bio’s right, title and interest in and to the Allergan Inventions.

(e) Trademarks. As between the Parties, each Party shall own and retain all right, title and interest in and to all trademarks and trademark applications covering such Party’s products.  For the avoidance of doubt, T2 Bio shall own all trademarks covering the Developed Products, and Allergan shall not apply for any trademarks covering the Developed Products.  Prior to submitting any trademark application for the Developed Products, T2 Bio shall provide the proposed trademarks and/or trade names for the Developed Products to Allergan, and Allergan shall have fifteen (15) calendar days to provide comments to T2 Bio concerning such proposed trademarks and trade names.

4.2 Licenses. 

(a) License to Allergan. Subject to the terms and conditions of this Agreement, T2 Bio hereby grants Allergan a  [***]  license, with right of sublicense with T2 Bio’s prior consent, not to be unreasonably withheld, to use T2 Bio’s Background IP, T2 Bio Inventions, and any other intellectual property developed by T2 Bio or its Affiliates under this Agreement (excluding trademarks which are addressed in Section 4.1(e) and Section 6) during the Term (as defined below) solely to the extent required for Allergan to (x) perform its obligations under this Agreement, including Section 6.3, and (y) to use the Developed Products to conduct internal research, develop, optimize and improve its anti-infective therapeutic compounds and anti-infective therapeutic products. 

(b) License to T2 Bio. Subject to the terms and conditions of this Agreement, Allergan hereby grants T2 Bio a non-exclusive, non-transferable (except as set forth in Section 12.2),  fully-paid, royalty-free license, without right of sublicense, to use Allergan’s Background IP, Allergan Inventions, and any other intellectual property developed by Allergan or its Affiliates under this Agreement    (excluding trademarks which are addressed in Section 4.1(e) and Section 6) during the Term solely to the extent required for T2 Bio to perform its obligations under this Agreement, including Section 6.3.  

4.3 License Restrictions. Neither Party may use the technology or intellectual property of the other Party except as specifically authorized under this Agreement.  Neither Party shall cause or permit the reverse engineering, disassembly, or decompilation of the other Party’s technology, nor undertake any analysis of the design or construction of such technology (including instruments, devices, algorithms and reagents); provided the foregoing shall not apply to the extent such a restriction is expressly prohibited by applicable law.    Other than the express licenses granted by this Agreement, neither Party grants any right or license to the other party, by implication, estoppel or otherwise, to any Party’s Intellectual Property Rights.   Allergan agrees that it shall not use any T2 Bio Inventions in connection with the development of a diagnostic instrument.  T2 Bio agrees that it shall not use any Allergan Inventions in connection with the development of a therapeutic or therapeutic compounds. 

4.4 Data Ownership. Notwithstanding anything to the contrary contained herein, any Party that conducts or sponsors a clinical trial or other activity involving the Developed Products that generates data shall own such data; provided, however, that (x) such Party hereby grants to the other Party hereto a perpetual, fully-paid, non-exclusive, worldwide license to such data for the purpose of seeking regulatory approval of the Developed Products, conducting internal research or optimizing and improving the Developed Products,  and (y) in the case of data generated by T2 Bio, T2 Bio hereby grants to Allergan a perpetual, fully-paid, non-exclusive, worldwide license to such data for the purpose of developing, optimizing or improving anti-infective therapeutic compounds and anti-infective products.   

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4.5 Assistance. Each Party (each, an “ Assisting Party ”) agrees to execute all papers, including patent applications, invention assignments and copyright assignments, and otherwise agrees to assist the other Party (the “ Owning Party ”) as reasonably required at the Owning Party’s reasonable expense to perfect in the Owning Party the right, title and other interest in the Inventions expressly granted to the Owning Party under this Agreement.  No Implied Rights.  Except for the licenses that are expressly granted by this Agreement, nothing in this Agreement or any course of dealing between the Parties will be deemed to create a license from either Party to the other of any Intellectual Property Right, whether by estoppel, implication, or otherwise.    

5. PROSECUTION AND ENFORCEMENT

5.1 Patent Prosecution for Jointly Developed IP. Unless otherwise agreed on a case-by-case basis, T2 Bio shall have the first right, but not the obligation, using outside legal counsel reasonably acceptable to Allergan, to conduct and control prosecution (including any opposition, re-examination or similar proceedings), maintenance, challenges against validity and unenforceability or patentability with respect to any patent applications and patents resulting from the Jointly Developed IP, and all costs, fees and expenses therefor shall be borne by T2 Bio.     T2 Bio shall reasonably consider all comments made by Allergan with respect to filing or prosecuting such patent applications and maintaining such patents.     In the event T2 Bio does not file an initial patent application on an Invention included in the Jointly Developed IP,  Allergan may proceed with filing and prosecution at its own expense.    Further, in the event T2 Bio elects not to pursue or elects to abandon the ongoing prosecution of any patent application resulting from the Jointly Developed IP, participate in the filing of any continuation or continuation in part or foreign counterpart to a patent application, or pay any annuity or other patent maintenance fee as it becomes due, T2 Bio shall give Allergan at least one  (1) month’s notice before any relevant deadline and Allergan shall have the right to pursue, at its expense, the ongoing prosecution and maintenance of such patent application.  In such event, T2 Bio shall not be entitled to any refund of prosecution fees previously paid.

5.2 Enforcement of IP. If either Party should become aware of any actual or threatened infringement or misappropriation by a Third Party of any Intellectual Property Rights in the Jointly Developed IP (a “ Joint IP Infringement ”), it shall promptly notify the other Party in writing, and provide any available information relating to such alleged Joint IP Infringement.  The Parties shall promptly discuss whether to bring an enforcement action relating to such Joint IP Infringement prior to either Party (or both Parties) bringing such action.  Unless otherwise agreed on a case-by-case basis, T2 Bio shall have the first right, but not the obligation, using outside legal counsel reasonably acceptable to Allergan, to bring an enforcement action relating to such Joint IP Infringement.   The costs of such enforcement shall be borne by T2 Bio and any recovery shall be apportioned as agreed by the Parties in advance on a case-by-case basis.  In the event that, after the Parties discuss whether to bring an enforcement action, T2 Bio decides not to bring such action, Allergan shall have the right to unilaterally bring an enforcement action with respect to such Joint IP Infringement,   in which case Allergan shall bear all of the costs related thereto and shall also receive any and all recovery related thereto.    Neither Party is obligated to enforce its Intellectual Property Rights in the event of Joint IP Infringement. 

6. MANUFACTURING, MARKETING AND DISTRIBUTION

6.1 Manufacturing. T2 Bio shall have the exclusive right and shall use commercially reasonable efforts during the Term to manufacture (x) the T2Dx Instrument and (y) each of the Developed Products upon a Developed Product receiving regulatory approval from the FDA, EMA, or other regulatory body.    

6.2 Distribution. T2 Bio shall have the exclusive right, subject to Section 6.3, and shall use commercially reasonable efforts during the Term, to sell and distribute the Developed Products worldwide, including through its 

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direct sales force or through Third Party distributors following receipt of regulatory approval from the FDA, EMA, or other regulatory body.    In the event a Joint Account or Allergan Account does not have a T2Dx Instrument and wishes to purchase a Developed Product, T2 Bio shall offer to sell and, if applicable, sell a T2Dx Instrument to such account on T2 Bio’s customary terms.    

6.3 Co-Marketing of the Developed Products and Certain T2 Bio Products.

(a) Notwithstanding the foregoing, and subject to the terms and conditions contained in this Section 6.3,  Allergan shall have the right  to market and sell (the “ Co-Marketing Right ”) the products set forth on Exhibit B  attached hereto (the “ T2 Bio Co-Marketed Products ”) to certain customers including, but not limited to, clinicians, hospitals, institutions and universities, as further described below.    Additional products may be added to Exhibit B upon the mutual agreement of the Parties in accordance with Section 12.13.         

(b) Within thirty (30) calendar days following (A) in the case of the Developed Products, the date that any of the Developed Products receives regulatory approval by the FDA, EMA, or other regulatory body, (B) in the case of the T2Candida Panel, the date Allergan delivers written notice to T2 Bio of Allergan’s intent to exercise the Co-Marketing Right for such product,  (C) in the case of the T2Bacteria Panel, the date Allergan delivers written notice to T2 Bio of Allergan’s intent to exercise the Co-Marketing Right for such product, which notice may only be delivered after the T2Bacteria Panel receives regulatory approval by the FDA, EMA or other regulatory body, or (D) in the case of any T2 Bio product other than the Developed Products, the T2Candida Panel, or the T2Bacteria Panel, the date that the Parties mutually agree to add a T2 Bio product to Exhibit B  (each such date, a  “ Co-Marketing Eligibility Date ”),  T2 Bio shall deliver to Allergan a list of customers and institutional accounts covered by T2 Bio for the applicable T2 Bio Co-Marketed Products in the United States as of the applicable Co-Marketing Eligibility Date (the “ T2 Bio Accounts ”) and will indicate on such list any accounts that T2 Bio proposes to be covered by both T2 Bio and Allergan (the “ Joint Accounts ”).  Allergan shall not market or sell any T2 Bio Co-Marketed Products to any T2 Bio Accounts that are not Joint Accounts.  Any accounts that are not listed as T2 Bio Accounts (such accounts, the “ Open Accounts ”) will be eligible as targets of Allergan marketing efforts for the T2 Bio Co-Marketed Products in accordance with a mutually agreed commercial strategy approved by the JCC (as defined below) pursuant to the terms below.  Promptly following the applicable Co-Marketing Eligibility Date, T2 Bio shall use good faith efforts to negotiate with its international distributors in the United Kingdom, France, Spain, Germany, Italy, and Japan the terms and conditions upon which they will agree to allow Allergan to market and sell the T2 Bio Co-Marketed Products in their respective territories. If T2 Bio is able, as a result of such negotiations, to allow Allergan to market and sell the T2 Bio Co-Marketed Products in any of such territories, then, within thirty (30) days following such negotiations with the applicable T2 Bio international distributor,  T2 Bio shall deliver to Allergan a list of customers and institutional accounts covered by T2 Bio for the applicable T2 Bio Co-Marketed Products in the relevant territory, which list shall be added to and included in the T2 Bio Accounts, and will indicate on such list any accounts that T2 Bio proposes to be covered by both T2 Bio and Allergan, which list shall be added to and included in the Joint Accounts.  

(c) Within forty-five  (45)  calendar days following the applicable Co-Marketing Eligibility Date, Allergan may exercise its Co-Marketing Right for the applicable T2 Bio Co-Marketed Products by delivery of written notification to T2 Bio that it is exercising such right. 

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(d) If Allergan elects to exercise its Co-Marketing Right, within seventy-five (75) calendar days following the applicable Co-Marketing Eligibility Date:  

(I) Allergan shall present T2 Bio with a list of accounts to which Allergan proposes to market and sell the applicable T2 Bio Co-Marketed Products (the “ Allergan Accounts ”) and Joint Accounts to which it proposes to market and sell such T2 Bio Co-Marketed Products, and

(II) the Parties shall establish a, or hold a meeting of the, Joint Commercialization Committee (the “ JCC ”) comprised of two representatives from each Party to coordinate the Parties’ co-marketing and sales efforts.  The JCC’s responsibilities shall include, but not be limited to: review, at the discretion of T2 Bio, of the T2 Bio pipeline and upcoming product launches; initial approval of the Allergan Accounts and review of any proposed changes to the T2 Bio Accounts, Allergan Accounts, or Joint Accounts; review of any proposed changes to the countries in which accounts are located; the creation of a commercial and branding strategy (including marketing materials) for the joint marketing of the T2 Bio Co-Marketed Products; review of Allergan’s sales and marketing plan for the T2 Bio Co-Marketed Products; review of the training plan for Allergan’s sales representatives; review of the co-marketing and sales responsibilities of the Parties; coordination of joint press releases, joint public statements, and joint presentations at trade shows; review of the presentation of the joint marketing of the T2 Bio Co-Marketed Products on the Parties’ respective websites.  The JCC shall hold meetings at least once every calendar quarter, unless mutually agreed by the Parties, at such times and places as mutually determined by the Parties, including by teleconference.  The Parties shall identify a primary representative to the JCC (each, a “ JCC Representative ”) to act as the point of contact for all matters, including the coordination of field sales activities during the period between JCC meetings and any other matters that arise between the quarterly meetings of the JCC.   

(e) All decisions to be made at meetings of the JCC shall be made by the unanimous vote of the members of the JCC.  In the event that any matter submitted to a vote of the JCC representatives in attendance at a meeting does not receive unanimous approval, such matter shall be submitted to the T2 Bio Management Representative and the Allergan Management Representative promptly following the meeting.  The T2 Bio Management Representative and the Allergan Management Representative shall use reasonable efforts to reach agreement on the matter; provided, however, if after thirty (30) calendar days following the original meeting date they have not reached agreement on the matter, the matter shall be decided by T2 Bio, in its sole discretion.

(f) In the event that Allergan desires to add additional Open Accounts to the Allergan Accounts, Allergan shall communicate the identity of the account and any applicable facts and details regarding such account to the T2 Bio JCC Representative who will promptly discuss the request with the Allergan JCC Representative, and the addition of such account to the Allergan Accounts shall be subject to the mutual agreement of the JCC Representatives.

(g) The JCC shall also establish, by mutual agreement of the Parties, quarterly and annual sales and productivity goals for Allergan with respect to the Allergan Accounts.  If, at any time after a Developed Product’s commercial launch date in the applicable jurisdiction, T2 Bio desires to convert an Allergan Account to a T2 Bio Account, T2 Bio shall provide written notice thereof to Allergan.  Such account will convert to a T2 Bio Account eighteen (18) months following the date T2 Bio delivers such notice; provided, however, that if Allergan has not (A) within six months of the applicable Developed Product’s  commercial launch date in the applicable jurisdiction,  conducted a sales presentation of the T2 Bio Co-Marketed Products in accordance with this Agreement to such Allergan Account or (B) within twelve (12) months of such commercial launch, generated a sale from such Allergan Account, such Allergan Account will convert to a T2 Bio Account forty-five (45) calendar days following the date that T2 Bio delivers notice of such conversion to Allergan.  On a product-by-product basis at any time during the 

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Term upon 30 calendar days’ prior written notice, Allergan may cease its marketing and sales efforts (I) to any Allergan Account or Joint Account, and/or (II) for any T2 Bio Co-Marketed Product.

(h) All sales agreements for the T2 Bio Co-Marketed Products will be entered into between T2 Bio and the applicable account (regardless of whether the account is an Allergan Account, T2 Bio Account, or Joint Account).  T2 Bio shall be solely responsible for the maintenance and service of all T2Dx Instruments located at any accounts. At mutually agreed times, T2 Bio shall provide sales and product training to Allergan employees on any T2 Bio Co-Marketed Products; provided, that each Party shall bear their respective expenses related to attending such training.  

(i) In the event Allergan exercises its Co-Marketing Right, during the Term Allergan shall, in good faith and at its own expense: 

(I) market, advertise, promote, and sell the applicable T2 Bio Co-Marketed Products to customers  consistent with Allergan’s Code of Conduct;

(II) observe all  reasonable directions and instructions given to it by T2 Bio in relation to the marketing, advertisement, and promotion of the applicable T2 Bio Co-Marketed Products, including T2 Bio’s sales, marketing, and merchandising policies as they exist at the time Allergan exercises its Co-Marketing Right or as they may thereafter be changed by T2 Bio to the extent that these marketing materials, advertisements or promotions refer to such T2 Bio Co-Marketed Products or otherwise use T2 Bio’s trademarks and are disclosed to Allergan; provided, however, that (x) Allergan is not required to observe any such directions or instructions that Allergan reasonably believes violates applicable law, and (y) T2 Bio shall be liable for any Third Party claims, actions or suits arising out of Allergan’s conformance with T2 Bio directions and instructions provided by T2 Bio to Allergan in writing;     and

(III) promptly notify T2 Bio of any complaint or adverse claim about any T2 Bio Co-Marketed Product or its use of which Allergan becomes aware  .

(j) T2 Bio Trademarks.

(I) T2 Bio hereby grants to Allergan a fully-paid, royalty-free, non-exclusive, non-transferable, and non-sublicensable license to use T2 Bio trademarks during the Term solely on or in connection with the promotion, advertising, and resale of the T2 Bio Co-Marketed Products in accordance with the terms and conditions of this Agreement. When requested by T2 Bio, Allergan will promptly discontinue the display or use of any trademark to change the manner in which a trademark is displayed or used with regard to the T2 Bio Co-Marketed Products.  

(II) During the Term, Allergan shall not:  (a)  register or apply for registrations, anywhere in the world, for T2 Bio’s trademarks or any other trademark that is confusingly similar to T2 Bio’s trademarks or that incorporates T2 Bio’s trademarks in whole or in confusingly similar part;  (b) use any trademark that is confusingly similar to T2 Bio’s trademarks;  or (c) engage in any action that dilutes or negatively affects, in any material respect, the value of the goodwill pertaining to the T2 Bio trademarks.  

7. ADDITIONAL ALLERGAN ACTIVITIES

7.1 Discussions. The Parties will discuss in good faith opportunities for Allergan and T2 Bio to collaborate in areas such as development of additional tests, and manufacturing and distribution of the Developed Products.  Notwithstanding the foregoing, Allergan acknowledges and agrees that T2 Bio is not obligated to collaborate with Allergan to develop 

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additional tests or have Allergan manufacture or distribute the Developed Products, and that these good faith discussions do not constitute a right of first refusal or a right of first negotiation with respect to any of the foregoing.

8. CONFIDENTIALITY

8.1 Confidential Information. Each Party (each, a “ Receiving Party ”) acknowledges that such Receiving Party may receive non-public information,  including technical, financial, operational and other business information of the other Party (the “ Disclosing Party ”) and related materials, items, and documents in connection with this Agreement whether disclosed verbally, in writing, in electronic form or by any other means (“ Confidential Information ”), but excluding information that: (a)  is approved in writing by the Disclosing Party for release by the Receiving Party without restrictions,  (b)  the Receiving Party can demonstrate by written records was previously known to the Receiving Party,  (c) is now public knowledge, or becomes public knowledge in the future, other than through acts or omissions of the Receiving Party,  (d) is lawfully obtained by the Receiving Party from sources independent of the Disclosing Party who have a lawful right to disclose such Confidential Information, as demonstrated by competent written records, or (e) is independently developed by the Receiving Party without use of, or reference to, the Disclosing Party’s Confidential Information, as demonstrated by competent written records prepared contemporaneously with such independent development.

8.2 General Restrictions on Use and Disclosure. The Receiving Party shall not use the Confidential Information of the Disclosing Party except for the purpose of performing its obligations or exercising its rights under this Agreement.  The Receiving Party shall take all reasonable measures to protect the secrecy of and avoid disclosure and unauthorized use of the Disclosing Party’s Confidential Information.  Without limiting the foregoing, the Receiving Party shall implement at least those protections for Confidential Information that the Receiving Party takes to protect its own confidential information of a similar nature, but in any case not less than reasonable protection.  The Receiving Party agrees not to distribute, disclose or disseminate in any way or form any Confidential Information to Third Parties or to employees of the Receiving Party, except that the Receiving Party may allow access to the Disclosing Party’s Confidential Information to those of its employees and subcontractors who are required to have the information to provide services under this Agreement; provided, however, that such employees and subcontractors have signed or are otherwise subject to an agreement imposing upon such person restrictions on use and disclosure of the Disclosing Party’s Confidential Information that are at least as restrictive as those in this Agreement, prior to any disclosure of the Disclosing Party’s Confidential Information to such employees or subcontractors.  Upon the request of the Disclosing Party, and upon any expiration or termination of this Agreement, the Receiving Party shall promptly return all copies and embodiments of the Disclosing Party’s Confidential Information in its possession or control, or destroy it, at the Disclosing Party’s option, and shall make reasonable efforts to insure that no further use thereof is made by such Receiving Party’s employees or subcontractors.

8.3 Legal Obligation to Disclose; Permitted Disclosure. Notwithstanding the foregoing, the Receiving Party may disclose the Disclosing Party’s Confidential Information to the extent required by an applicable court order or by applicable law; provided, however, that, if the Receiving Party is so required to disclose any of the Disclosing Party’s Confidential Information, it shall give the Disclosing Party reasonable advance notice of such disclosure and use reasonable efforts to secure confidential treatment of such Confidential Information (whether through protective order or otherwise).  The Receiving Party shall not reverse engineer, disassemble, decompile, or determine the composition of any formulations, prototypes, software or other tangible objects that embody any of the Disclosing Party’s Confidential Information and that are provided to the Receiving Party hereunder.  The Receiving Party shall reproduce the Disclosing Party’s proprietary rights notices on any copies of the Disclosing Party’s Confidential Information, in the same manner in which such notices were set forth in or on the original.  The Receiving Party shall immediately notify the Disclosing Party in the event it becomes aware of any unauthorized use or disclosure of the Disclosing Party’s Confidential Information.

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8.4 Confidentiality of Agreement and Project. The existence and the terms of this Agreement and the information concerning the Project shall be treated by the Parties as confidential and only disclosed in accordance with this section and Section 12.3 below.

9. LIMITATION OF LIABILITY

EXCEPT IN CONNECTION WITH CLAIMS RESULTING FROM (A) BREACH OF THE LICENSE RESTRICTIONS HEREUNDER, (B) BREACH OF THE CONFIDENTIALITY OBLIGATIONS HEREUNDER, (C) GROSS NEGLIGENCE OR WILLFUL MISCONDUCT BY T2 BIO, ALLERGAN OR THEIR AFFILIATES, OR (D) ANY AMOUNTS PAID TO THIRD PARTIES BY T2 BIO, ALLERGAN OR THEIR AFFILIATES IN CONNECTION WITH ANY THIRD PARTY CLAIM (OTHER THAN A CLAIM FOR LATE FEES (BUT NOT OTHER AMOUNTS) PAYABLE TO THIRD PARTIES WITH RESPECT TO LATE DELIVERY OF THE DEVELOPED PRODUCTS TO THE RELEVANT THIRD PARTY) ARISING OUT OF ANY BREACH OF THIS AGREEMENT BY THE OTHER PARTY  (WHICH AMOUNTS, FOR THE AVOIDANCE OF DOUBT, SHALL NOT BE DEEMED TO BE INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES NO MATTER HOW CHARACTERIZED IN ANY ACTION OR SUIT RESULTING FROM SUCH CLAIM): (X)  IN NO EVENT SHALL EITHER PARTY HAVE ANY LIABILITY TO THE OTHER, FOR ANY LOST PROFITS OR FOR ANY INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES OF ANY KIND IN ANY WAY ARISING OUT OF OR RELATED TO THIS AGREEMENT AND HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND (Y)  IN NO EVENT SHALL EITHER PARTY’S CUMULATIVE LIABILITY ARISING OUT OF THIS AGREEMENT EXCEED $[***].   

10. REPRESENTATIONS AND WARRANTIES

10.1 Representations and Warranties. Each Party represents and warrants that: (a) it is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder, (b) the performance of its obligations under this Agreement shall not conflict with any other agreements, obligations or duties of such Party, and (c) it shall perform its obligations specified in this Agreement in a professional and workmanlike manner consistent with industry standards and in compliance with all applicable laws.  T2 Bio represents that as of the Effective Date, (x) to T2 Bio’s knowledge after inquiring of its members of management and outside legal counsel, including intellectual property counsel  (a  “ Reasonable Inquiry ”), the use of T2 Bio Inventions in the development, manufacturing, marketing, and distribution of Developed Products or any T2 Bio Co-Marketed Products in the manner contemplated under this Agreement will not infringe or misappropriate the intellectual property rights of any Third Party, nor has T2 Bio received written notice from a Third Party alleging any such infringement or misappropriation,   and (y) to T2 Bio’s knowledge after Reasonable Inquiry, no Third Party is infringing or misappropriates T2 Bio Intellectual Property Rights or T2 Bio Inventions.  

10.2 Disclaimer. EXCEPT AS STATED IN SECTION 10.1, EACH PARTY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES IN CONNECTION WITH THIS AGREEMENT, INCLUDING ANY IMPLIED WARRANTIES OF TITLE, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES. 

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11. TERM AND TERMINATION

11.1 Term. This Agreement shall become effective on the Effective Date and, unless terminated earlier as permitted herein or as otherwise agreed by the Parties in writing, shall remain in effect until the fifth anniversary of the Effective Date (the “ Initial   Term ”) and shall automatically renew for additional one (1) year periods thereafter (each, a “ Renewal Term ” and together with the Initial Term, the “ Term ”); provided, that either Party shall have the right to terminate this Agreement (x) at the expiration of the Initial Term upon delivery of written notice of such termination at least sixty (60) calendar days prior to the end of the Initial Term, or (y) after the expiration of the Initial Term on any twelve (12) month anniversary of the Effective Date   upon delivery of written notice of such termination at least ninety (90) calendar days prior to any such anniversary.  In the event that notice of termination is not delivered in accordance with this section, this Agreement shall automatically renew.     

11.2 Termination for Cause. A Party may terminate this Agreement if the other Party materially breaches its obligations under this Agreement and does not cure such breach within thirty (30) calendar days after receipt of a written notice identifying such breach from non-breaching Party. 

11.3 Effect of Termination. Upon termination or expiration of this Agreement, except as otherwise expressly stated herein, all obligations of each Party hereunder to the other shall terminate.  The following articles and sections shall survive any expiration or termination of this Agreement: Sections 1, 4.1, 4.2(a)(y), 4.3, 4.4, 4.5, 4.6, 5, 6.1, 6.2, 8, 9,  10, 11.3, and 12.

12. MISCELLANEOUS

12.1 Relationship. The Parties agree that neither Party is the agent, representative or partner of the other and neither Party has the authority or power to bind or contract in the name of or to create any liability against the other Party in any way or for any purpose.  The Parties agree that each Party is an independent contractor and that the relationship between the two Parties shall not constitute a partnership, joint venture, or agency, including for all tax purposes.

12.2 Assignment. This Agreement shall not be assigned by either Party to any other entity without the prior written consent of the other Party.  Notwithstanding the foregoing, each Party may assign this Agreement to an Affiliate or to an acquirer or successor in interest upon a merger, reorganization, change of control, acquisition or sale of all or substantially all of the assets of such Party to which this Agreement relates and any such assignment shall not require the consent of the other Party.   This Agreement shall inure to the benefit of and be binding on the Parties’ successors and assigns.  Any attempted assignment in violation of this Section 12.2 shall be null and void from the beginning.

12.3 Publicity. Attached hereto as Exhibit C is a mutually agreed upon press release that may be issued by T2 Bio following the Effective Date.  Other than the press release attached hereto , neither Party shall issue any press release, nor any public disclosure or publication, except to the extent that a disclosure is required by law, concerning this Agreement or conduct of the Project, or except for any disclosure that does not contain any additional information beyond that contained in the attached press release.  Except as agreed by the Parties, any such required disclosure shall contain only the minimum disclosure required by such law.  Allergan acknowledges and agrees that T2 Bio may be required to issue a press release or otherwise disclose information related to this collaboration due to T2 Bio’s public company disclosure obligations.  In such event, Allergan shall review such press release or disclosure and be given an opportunity to comment in advance of any such disclosure and, except as otherwise agreed by the Parties, such press release shall contain only the minimum disclosure concerning this Agreement and the Project required by such obligations as agreed by the Parties, or, in the absence of agreement, as determined based on the reasonable opinion of 

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T2 Bio’s outside securities counsel. Otherwise, the Parties may issue individual press releases about the existence of this Agreement, if, and only if, mutually agreed by both Parties.    For the avoidance of doubt, but without limiting T2 Bio’s right to disclose information as required by law, T2 Bio shall not disclose any non-public information related to the Allergan Inventions and Allergan shall not disclose any non-public information related to the T2 Bio Inventions.  Notwithstanding the foregoing, Allergan and T2 Bio agree that, upon execution of this Agreement, they shall issue a mutually agreed press release announcing the existence and purpose of the Agreement. 

12.4 Waiver. Failure or neglect by either Party to enforce at any time any of the provisions hereof shall not be construed nor shall be deemed to be a waiver of such Party’s rights hereunder nor in any way affect the validity of the whole or any part of this Agreement nor prejudice such Party’s rights to take subsequent action. 

12.5 Notices. All notices required or permitted hereunder shall be given in writing, and shall be deemed to have been duly given when delivered by hand, posted by registered first class mail (airmail if international) or sent via recognized overnight couriers (e.g., Federal Express) or sent by email to the Party to which such notice is required to be given at the business address or email addresses stated in this Agreement or to such other address or email address as such Party may have specified to the other in writing.  Notices shall be deemed received on the earlier of the following: (a) notices sent by email shall be deemed received on the same day of such sending, (b) notices delivered by hand shall be deemed received the first business day following such delivery, and (c) notices which have been posted or sent via overnight courier shall be deemed received on the second business day following posting. 

If to T2 Bio, then addressed to:

T2 Biosystems, Inc.

101 Hartwell Ave. 

Lexington, MA 02421

Attn: Legal Department

Email:  mgibbs@t2biosystems.com and rdhanda@t2biosystems.com and
jmcdonough@t2biosystems.com

If to Allergan, then addressed to:

Allergan Sales, LLC

Morris Corporate Center III
400 Interpace Parkway

Parsippany, NJ 07054
Attn: Chief Legal Officer

Emails:  robert.bailey@allergan.com and david.nicholson@allergan.com

12.6 Severability. In the event that any clause, sub-clause or other provision contained in this Agreement shall be determined by any competent authority to be invalid, unlawful, or unenforceable to any extent, such clause, sub-clause or other provision shall to that extent be severed from the remaining clauses and provisions, or the remaining part of the clause in question, which shall continue to be valid and enforceable to the fullest extent permitted by law.  

12.7 Governing Law. The rights, obligations and remedies of the Parties under this Agreement shall be governed in all respects by   the laws of the State of  New York without regard to its conflicts of law principles.

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12.8 Dispute Resolution. The Parties shall use reasonable efforts to resolve in good faith any claims, controversies or disagreements between the Parties arising from or related to this Agreement (each, a “ Claim ”) as promptly as practicable after a Party notifies the other Party in writing of any such Claim (the “ Notice ”).  If the Parties are unable to resolve a Claim in accordance with this previous sentence within thirty (30) calendar days after the other Party’s receipt of the Notice,  the Parties agree that such Claim shall be referred to and finally resolved by binding arbitration under the rules of the International Chamber of Commerce (“ ICC ”), which are deemed incorporated into this Section 12.8 (the “ Rules ”) by three arbitrators, of which each Party shall appoint one (1), the arbitrators so appointed will select the third and final arbitrator.     The arbitrators shall have experience in pharmaceutical licensing disputes.  Such arbitration shall be conducted in New York, New York, in the English language.  The arbitration proceedings including any outcome shall be confidential.  Nothing in this Section 12.8 will preclude either Party from seeking equitable interim or provisional relief from a court of competent jurisdiction including a temporary restraining order, preliminary injunction or other interim equitable relief, concerning a Claim either prior to or during any arbitration if necessary to protect the interests of such Party or to preserve the status quo pending the arbitration proceeding.  This Section 12.8 shall not apply to disputes regarding the ownership or infringement of Intellectual Property Rights.

12.9 Headings; Construction. The headings to the clauses, sub-clauses, and parts of this Agreement are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement. Any ambiguity in this Agreement shall be interpreted equitably without regard to which Party drafted the Agreement or any provision thereof.  The terms “this Agreement,” “hereof,” “hereunder” and any similar expressions refer to this Agreement and not to any particular section or other portion hereof. As used in this Agreement, the words “include” and “including,” and variations thereof, will be deemed to be followed by the words “without limitation” and “discretion” means sole discretion.

12.10 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

12.11 Cumulative Remedies. No right or remedy herein conferred upon or reserved to a Party is exclusive of any other right or remedy, and each right and remedy shall be cumulative and in addition to any other right or remedy under this Agreement or under applicable law.

12.12 Force Majeure Events. Neither Party will be liable for any delays or failures in performance, except with respect to payment obligations, that are directly caused by acts of God, disease, war, terrorism, riots, civil unrest, extraordinary acts by governmental authorities, national or state emergencies, strikes, lockouts, work stoppages or other such labor difficulties (excluding any of the foregoing involving the hindered Party’s workforce), fire, or floods, which events were not caused by and could not have been prevented by the hindered Party using reasonable efforts (each, a “ Force Majeure Event ”) and provided that the hindered Party uses reasonable efforts to restore its performance as soon as reasonably practicable.

12.13 Entire Agreement. This Agreement supersedes any arrangements, understandings, promises or agreements made or existing between the Parties hereto prior to or simultaneously with this Agreement and constitutes the entire understanding between the Parties hereto.    Except as otherwise provided herein, no addition, amendment to or modification of this Agreement shall be effective unless it is in writing and signed by and on behalf of both Parties. For clarity, any terms on purchase orders, order acknowledgements, or other similar documents that are not signed by both Parties and incorporated by reference into this Agreement are hereby rejected and are of no force or effect.

[The next page is the signature page.] 

 

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the Effective Date by their duly authorized representatives.

 

	
T2 BIOSYSTEMS, INC.
	
    
	
ALLERGAN SALES, LLC

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
By:
	
/s/ John McDonough
	
 
	
By:
	
/s/ Sigurd Kirk

	
Name:
	
John McDonough
	
 
	
Name:
	
Sigurd Kirk

	
Title:
	
CEO and President
	
 
	
Title:
	
VP of Corporate Development

 

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EXHIBIT A

[***]

[***]

 

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Exhibit B

T2 Bio Co-Marketed Products

	
1.
	
The T2Bacteria II Panel

	
2.
	
The T2GNR Panel

	
3.
	
The T2Bacteria Panel

	
4.
	
The T2Candida Panel

 

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Exhibit C

T2 Biosystems Announce Collaboration with Allergan to Develop the First Blood-based Diagnostic Panel to Detect Antimicrobial Resistance

-- T2 Biosystems to develop new panel on T2Dx platform and commercialize worldwide while receiving milestone and other payments –

-- Panel to aid in rapid bacterial infection diagnosis, including sepsis; enable quicker treatment with life-saving medicines for millions of patients –

-- Allergan granted option to co-market suite of diagnostic products in targeted hospitals --

LEXINGTON, Mass. ,   November 1, 2016  –T2 Biosystems, Inc. (NASDAQ: TTOO), a company developing innovative diagnostic products to improve patient health, today announced a collaboration with Allergan to develop a novel diagnostic panel to detect Gram negative bacterial species and antibiotic resistance for patients with serious bacterial infections, including infections leading to sepsis. These products will expand T2 Biosystems’ sepsis pipeline and will include the first direct-from-blood diagnostic panel to detect antimicrobial resistance.

Antimicrobial resistance may develop when bacteria have repeated exposure to antibiotics, forcing the survival of only those strains that cannot be treated by typical antimicrobial drugs. One of the most dangerous trends is resistance to an entire class of antibiotics known as carbapenems, because these are often the therapy of last resort for serious Gram negative infections, according to the Centers for Disease Control (CDC). The T2 Biosystems’ resistance panel is being developed to specifically identify carbapenem resistance which the CDC considers a serious and urgent threat to public health.

“Our initial sepsis products, T2Candida Test Panel and T2Bacteria, are the first direct from blood sepsis diagnostics that provide species identification in 3 to 5 hours while also detecting 40% or more infections that are completely missed by blood culture which takes 2 to 6 or more days for results. By identifying resistant bacteria in the early hours of sepsis treatment, we can pick up another 10% or more of patients where providing the right antimicrobial drug to the patient may be further delayed – potentially saving more lives and significant costs to hospitals,” said John McDonough, chief executive officer of T2 Biosystems. “We are pleased to be collaborating with Allergan, a company with significant expertise and leadership in treating patients with serious bacterial infections. Together, we hope to not only diagnose sepsis more quickly, but also enable the delivery of life-saving medicines more rapidly to the millions of patients at high risk for bacterial infection.”

Under the terms of the agreement, Allergan will pay T2 Biosystems $4 million in milestone payments related to the development of the bacterial resistance panel and an expansion of the T2Bacteria Test Panel currently under development. T2 Biosystems retains exclusive worldwide distribution rights for all products developed through this partnership.  Allergan has the option to cooperatively market T2 Biosystems’ menu of sepsis diagnostics to targeted hospitals around the world through Allergan’s leading physician facing institutional sales force. 

“We have a strong commitment to developing innovative treatments for serious infections caused by antibiotic-resistant bacteria, including MRSA and multi-drug resistant Gram-negative bacteria.  Early identification of patients with antimicrobial resistance can lead to earlier intervention with effective therapy, improving outcomes,” said David Melnick, Vice President of Clinical Development and Anti-Infectives at Allergan.

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About T2 Biosystems

T2 Biosystems is focused on developing innovative diagnostic products to improve patient health. With two FDA-cleared products targeting sepsis and a range of additional products in development, T2 Biosystems is an emerging leader in the field of in vitro diagnostics. The Company is utilizing its proprietary T2 Magnetic Resonance platform, or T2MR, to develop a broad set of applications aimed at lowering mortality rates, improving patient outcomes and reducing the cost of healthcare by helping medical professionals make targeted treatment decisions earlier. T2MR enables the fast and sensitive detection of pathogens, biomarkers and other abnormalities in a variety of unpurified patient sample types, including whole blood, eliminating the time-consuming sample prep required in current methods. For more information, please visit www.t2biosystems.com .

Forward-Looking Statements for T2

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact, including, without limitation, the statements above under the heading "2016 Outlook"   should be considered forward-looking statements. These forward-looking statements are based on management's current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the performance of the Company's diagnostic products and the ability to bring such products to market. These and other important factors could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. For more information on risk factors for T2 Biosystems, Inc.’s business, please refer to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 9, 2016, under the heading “Risk Factors,” and other filings the Company makes with the Securities and Exchange Commission from time to time.  Any such forward-looking statements represent management's estimates as of the date of this press release. While the Company may elect to update such forward-looking statements at some point in the future, it disclaims any obligation to do so, even if subsequent events cause its views to change. These forward-looking statements should not be relied upon as representing the Company's views as of any date subsequent to the date of this press release.

###

T2 Media Contact:

Susan Heins

Pure Communications

864-346-8336

susan@purecommunicationsinc.com

T2 Investor Contact:

Matt Clawson

Pure Communications

matt@purecommunicationsinc.com

949-370-8500  

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