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MIRNA THERAPEUTICS, INC. Index to Financial Statements

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As filed with the Securities and Exchange Commission on September 11, 2015.

Registration No. 333-206544


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



Amendment No. 1
to

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



Mirna Therapeutics, Inc.
(Exact name of Registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)
  2834
(Primary Standard Industrial
Classification Code Number)
  26-1824804
(I.R.S. Employer
Identification Number)

2150 Woodward Street, Suite 100
Austin, TX 78744
(512) 901-0900

(Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices)



Paul Lammers, M.D., M.Sc.
President & Chief Executive Officer
Mirna Therapeutics, Inc.
2150 Woodward Street, Suite 100
Austin, TX 78744
(512) 901-0900

(Name, address, including zip code, and telephone number, including area code, of agent for service)



Copies to:

Alan C. Mendelson, Esq.
Mark V. Roeder, Esq.
Latham & Watkins LLP
140 Scott Drive
Menlo Park, CA 94025
Telephone: (650) 328-4600
Facsimile: (650) 463-2600

 

Scott D. Elliott, Esq.
Patrick O'Brien, Esq.
Ropes & Gray LLP
3 Embarcadero Center
San Francisco, CA 94111
Telephone: (415) 315-6300
Facsimile: (415) 315-6350



Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.

         If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    o

         If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

         If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

         If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

         Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý
(Do not check if a
smaller reporting company)
  Smaller reporting company o



         The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

   


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The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to completion, dated                        , 2015

PRELIMINARY PROSPECTUS

            Shares



LOGO

Common Stock



        Mirna Therapeutics, Inc. is offering            shares of common stock. This is our initial public offering and no public market currently exists for our shares. We have applied to list our common stock on The NASDAQ Global Market under the symbol "MIRN." We expect that the initial public offering price will be between $            and $            per share.

        We are an "emerging growth company" as that term is defined under the federal securities laws and, as such, may elect to comply with certain reduced public company reporting requirements for this and future filings.

        Investing in our common stock involves a high degree of risk. Before buying any shares, you should read carefully the discussion of the material risks of investing in our common stock under the heading "Risk Factors" starting on page 12 of this prospectus.

       
 
 
  Per share
  Total
 

Public offering price

  $                   $                
 

Underwriting discounts(1)

  $                   $                
 

Proceeds, before expenses, to Mirna Therapeutics, Inc. 

  $                   $                

 

(1)
See "Underwriting" for additional information regarding total underwriting compensation.

        We have granted the underwriters the right to purchase up to            additional shares of common stock. The underwriters can exercise this right at any time within 30 days after the date of this prospectus.

        In connection with a research grant awarded to us, the Cancer Prevention and Research Institute of Texas has agreed to purchase from us concurrently with this offering in a private placement approximately $16.8 million of our common stock at a price per share equal to the initial public offering price. See "Concurrent Private Placement."

        Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

        The underwriters expect to deliver the shares of common stock to investors on or about                        , 2015.



Citigroup   Leerink Partners

Oppenheimer & Co.   Cantor Fitzgerald & Co.

The date of this prospectus is                        , 2015.


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  Page  

PROSPECTUS SUMMARY

    1  

RISK FACTORS

    12  

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

    65  

USE OF PROCEEDS

    67  

DIVIDEND POLICY

    69  

CAPITALIZATION

    70  

DILUTION

    73  

SELECTED FINANCIAL DATA

    75  

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

    77  

BUSINESS

    88  

MANAGEMENT

    132  

EXECUTIVE COMPENSATION

    143  

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

    157  

PRINCIPAL STOCKHOLDERS

    161  

DESCRIPTION OF CAPITAL STOCK

    164  

SHARES ELIGIBLE FOR FUTURE SALE

    170  

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS

    173  

UNDERWRITING

    177  

CONCURRENT PRIVATE PLACEMENT

    182  

LEGAL MATTERS

    182  

EXPERTS

    182  

WHERE YOU CAN FIND MORE INFORMATION

    183  

INDEX TO FINANCIAL STATEMENTS

    F-1  

        We are responsible for the information contained in this prospectus. Neither we nor the underwriters have authorized anyone to provide you with information that is different from that contained in this prospectus or in any free writing prospectus we may authorize to be delivered or made available to you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We and the underwriters are offering to sell shares of common stock and seeking offers to buy shares of common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date on the front of this prospectus, regardless of the time of delivery of this prospectus or any sale of shares of our common stock.

        Until                        , 2015 (the 25th day after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

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Market, Industry and Other Data

        This prospectus also contains estimates, projections and other information concerning our industry, our business and the markets for oncology therapeutics, including data regarding the estimated size of those markets, their projected growth rates and the incidence of certain medical conditions. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources. In some cases, we do not expressly refer to the sources from which this data are derived. In that regard, when we refer to one or more sources of this type of data in any paragraph, you should assume that other data of this type appearing in the same paragraph are derived from the same sources, unless otherwise expressly stated or the context otherwise requires.


Trademarks

        Our logo used in this prospectus is subject to a trademark that is owned by us. This prospectus also includes trademarks, tradenames and service marks that are the property of other organizations. Solely for convenience, trademarks and tradenames referred to in this prospectus may appear without the ® and ™ symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks and tradenames.

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Prospectus Summary

        This summary highlights information contained in other parts of this prospectus. Because it is only a summary, it does not contain all of the information that you should consider before investing in shares of our common stock and it is qualified in its entirety by, and should be read in conjunction with, the more detailed information appearing elsewhere in this prospectus. You should read the entire prospectus carefully, especially "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our financial statements and the notes related thereto, before deciding to buy shares of our common stock. Unless the context requires otherwise, references in this prospectus to "Mirna," "we," "us" and "our" refer to Mirna Therapeutics, Inc.

Overview

        We are a clinical-stage biopharmaceutical company developing a broad pipeline of microRNA-based oncology therapeutics. microRNAs are naturally occurring, short ribonucleic acid, or RNA, molecules, or oligonucleotides, that play a critical role in regulating key biological pathways. Misexpression of even a single microRNA can contribute to disease development and tumor suppressor microRNAs are commonly reduced in cancer. Our scientists and others at leading academic institutions have identified numerous tumor suppressor microRNAs that play key roles in preventing normal cells from becoming cancerous and facilitating proper cancer immunosurveillance. We are developing mimics of naturally occurring microRNAs that are designed to restore this tumor suppressor activity and aid appropriate tumor immune response. This approach is known as microRNA replacement therapy. Our lead product candidate, MRX34, a mimic of naturally occurring microRNA-34 (miR-34) encapsulated in a liposomal nanoparticle formulation, is the first microRNA mimic to enter clinical development and has shown preliminary clinical evidence of anti-tumor activity as a single agent in our ongoing Phase 1 clinical trial. miR-34 is one of the most widely published microRNAs and considered a key regulator of oncogenic pathways. We plan to develop MRX34 as a monotherapy and in combination with other therapeutic modalities, such as targeted therapies and immuno-oncology agents. We believe that microRNA mimics represent a new paradigm in cancer therapy and have the potential to create a new, important class of effective cancer drugs, that can potentially be used alone or in combination with other cancer therapeutics.

        We are developing a pipeline of tumor suppressor microRNA mimics, as shown in the following chart.

GRAPHIC

 

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        Each microRNA mimic in our pipeline is designed to replicate the activity of a single tumor suppressor miRNA and regulate the expression of multiple important oncogenes across key oncogenic pathways which can prevent proliferation and induce apoptosis in cancer cells. For example, we believe that the impressive anti-cancer activity of the miR-34 mimic in preclinical pharmacology studies is derived from its capacity to regulate more than 30 oncogenes, whereas many existing cancer therapies target only one or two oncogenes or pathways. The potential capacity to simultaneously affect multiple pathways and processes that are critical to cancer cell viability may make mimics of tumor suppressor microRNAs potent anti-cancer agents and less susceptible to drug resistance.

        MRX34 is a potential first in class, first in clinic microRNA mimic which is currently in an ongoing Phase 1 study. Dose escalation in the Phase 1 clinical trial is expected to be completed by the end of 2015 and we plan to complete enrollment of several expansion cohorts and have multiple study data read-outs in different tumor types by the end of 2016.

        In addition to evaluating the safety, tolerability and pharmacokinetic profile of MRX34, an important goal of our ongoing Phase 1 clinical trial is to establish proof of concept of microRNA replacement therapy in patients with primary liver cancer or advanced solid tumors. Our initial focus on hepatocellular carcinoma, or HCC, was based on the fact that liposomal nanoparticle formulations have a tendency to deliver their payload to the liver and the high unmet medical need in this tumor type. For example, sorafenib (Nexavar®), the only approved drug for unresectable primary liver cancer, has only shown a 2% objective response rate. Additionally, we have also demonstrated meaningful results with MRX34 in multiple mouse models of primary liver cancer, including a study in which MRX34 demonstrated improved survival over sorafenib. To date we have observed tumor shrinkage greater than 30% in two patients with Stage IV cancer: one patient with a confirmed partial response in primary liver cancer metastasized to the lung, and a confirmed partial response in a melanoma patient with disseminated disease.

        During the course of our Phase 1 clinical trial, the patient population was expanded to also include patients with hematological malignancies, based on the observation that specific lymphomas and leukemias are characterized by low levels of miR-34 and biodistribution data that support high delivery to bone marrow and malignant lymphocytes. During the trial, we have observed dose-dependent MRX34 delivery and activity in normal white blood cells of patients and we aim to demonstrate delivery to tumors when patient biopsies become available during our expansion cohorts.

        We are led by a management team with extensive experience in the biopharmaceutical industry. Members of our management team have played key roles at prior companies, including Bristol-Myers Squibb Company, Pfizer Inc., Ambit Biosciences Corporation, Reata Pharmaceuticals, Inc. and EMD Serono, Inc. Our principal investors are funds managed by Sofinnova Ventures, New Enterprise Associates, Pfizer Venture Investments, Eastern Capital, Baxalta, Santé Ventures, Morningside Ventures and Celgene. As of June 30, 2015, we had $41.6 million in cash and cash equivalents.

microRNAs: A Unique Class in the RNA Therapeutics Space

        The landscape of RNA-based therapeutic technologies has rapidly expanded over the past few years, mostly due to advances in the delivery of these molecules to their intended targets. These new delivery technologies have enabled the use of microRNA mimics, which we believe provide stronger therapeutic activity than other RNA-based approaches. Since tumor suppressor microRNAs are natural molecules expressed in normal tissues and cells, we also believe that undesired, or so-called "off-target," side effects are less likely to be associated with our microRNA mimic approach.

        While other companies in the field of microRNA have focused primarily on inhibiting overexpressed microRNAs by antagonists known as anti-miRs or AntagomiRs, we have focused on introducing microRNAs that are under-expressed in disease through the use of microRNA mimics. This is in part due to what we believe is stronger therapeutic activity of microRNA mimics compared to

 

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anti-miRs or AntagomiRs. Within the group of companies in the microRNA space, we are the first company to clinically employ microRNA mimics.

        microRNAs are misexpressed in a broad range of diseases including cancer, obesity, cardiovascular diseases, neurodegenerative diseases and viral infections. We believe that microRNA-based therapies have the potential to become a new class of drugs with broad therapeutic application due to their ability to modulate multiple disease pathways, target specificity which minimizes off-target effects, and their potential to work synergistically with other currently marketed drugs.

MRX34: Our Lead Product Candidate

        We are the first to establish clinical proof-of-concept for a microRNA-based replacement therapy for cancer. Our lead microRNA-mimic product candidate, MRX34, is the potential first in a new class of promising cancer drugs, and has shown evidence of anti-tumor activity in a patient with metastasized hepatocellular carcinoma and a patient with advanced melanoma in our ongoing Phase 1 clinical trial. Once the dose-escalation phase in the ongoing Phase 1 trial has been completed, we intend to enroll additional patients across various tumor-specific expansion cohorts, including primary liver cancer, melanoma, small cell and non-small cell lung cancer, lymphoma and multiple myeloma. We expect to complete these expansion cohorts and have multiple study data read-outs by the end of 2016. After consultation with the Food and Drug Administration, or FDA, on study results and the recommended clinical development program going forward, we intend to initiate a Phase 2 clinical trial program in early 2017.

        MRX34 is a double-stranded RNA mimic of the tumor suppressor microRNA, miR-34, encapsulated in a liposomal nanoparticle formulation called SMARTICLES®. miR-34 inhibits multiple oncogenic pathways as well as stimulates anti-tumor immune response to induce cancer cell death. We performed cell culture studies that revealed that introducing a mimic of miR-34 into cancer cell lines derived from patients with liver, lung, colon, pancreatic and breast cancers results in significant reductions in cell proliferation. In various preclinical studies, miR-34 also inhibited formation of cancer stem cells, which are believed to contribute to the development, metastasis and therapeutic resistance of tumors. Studies performed at other laboratories have indicated that increasing miR-34 levels also inhibits the proliferation of cancer cells derived from patients with malignant melanoma, B-cell lymphoma and multiple myeloma.

        MRX34 features an innovative liposomal formulation called SMARTICLES, which is used to deliver our miR-34 mimic to cancer cells. We selected SMARTICLES based on a number of identified efficacy and safety parameters during a comprehensive evaluation of more than 10 preclinical or clinical stage lipid- and polymer-based nanoparticle delivery technologies. Based on head-to-head preclinical comparisons and signs of clinical activity, we believe that the SMARTICLES technology currently offers the best combination of delivery and tolerability for our miRNA mimics.

        In April 2013, we initiated a multi-center, open label dose escalation Phase 1 clinical trial during which we evaluated two different dosing schedules for MRX34 as a single agent in multiple advanced solid tumors and various types of hematological malignancies. As of August 13, 2015, 101 patients have been enrolled in the ongoing MRX34 Phase 1 clinical trial at five clinical trial sites in the United States and three sites in Korea. Primary objectives of the Phase 1 clinical trial are to establish the maximum tolerated dose and an appropriate dose for expansion cohorts and future Phase 2 clinical trials. As of August 13, 2015:

    47 patients have been treated on a twice weekly, or BIW, schedule for three weeks in 28-day cycles until the maximum tolerated dose of MRX34 was found to be 110 mg/m2 among patients with advanced solid tumors with liver involvement.

 

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    The other 54 patients have been or are being treated daily for five days, or QD × 5, in 21-day cycles. We have not yet determined the maximum tolerated dose of MRX34 with this dosing schedule. Current dose levels are 70 mg/m2 for primary liver cancer patients, 93 mg/m2 for other solid tumors and 110 mg/m2 for hematological malignancies.

        Based on observations from the two dosing schedules, we believe the QD × 5 dosing schedule has certain advantages over the BIW schedule such as better safety and tolerability, which we believe may in turn lead to improved efficacy. Therefore, the QD × 5 dosing schedule has been selected for all new patients enrolling in the Phase 1 clinical trial.

        Secondary objectives of the clinical trial are to assess the safety, tolerability and pharmacokinetic profile of MRX34 after intravenous dosing as well as to assess any biological and clinical activity. Many of the most common adverse events associated with MRX34 are similar to those reported with marketed liposomal drug formulations and have been generally manageable or preventable with standard interventions or tests used by oncologists. Biological activity has been demonstrated by dose-dependent down-regulation of target oncogenes of miR-34 and up-regulation of p21, a tumor suppressor induced by miR-34 in normal white blood cells from patients treated with MRX34. Signs of clinical activity have been demonstrated by the observation of confirmed partial responses in one patient with primary metastasized liver cancer and one patient with advanced melanoma per independent radiology review using RECIST (Response Evaluation Criteria in Solid Tumors) criteria.

        Once the dose-escalation phase in the QD × 5 dose schedule cohort has been completed, and a recommended dose for the expansion cohorts has been determined, we intend to enroll approximately 100 additional patients across different tumor-specific expansion cohorts, including primary liver cancer, melanoma, small cell and non-small cell lung cancer, lymphoma and multiple myeloma. We expect to complete these expansion cohorts and have multiple study data read-outs by the end of 2016. After consultation with the FDA on study results and recommended clinical development program going forward, we intend to initiate a Phase 2 clinical trial program in early 2017.

        We have identified multiple tumor suppressor microRNAs that, like miR-34, have demonstrated the ability to inhibit cancer cell proliferation and tumor growth in preclinical studies. Each tumor suppressor miRNA regulates a unique set of genes and oncogenic pathways that we believe will enable the development of multiple therapeutic candidates either as monotherapies or as combination therapies. We plan to initiate a Phase 1 trial for our second therapeutic candidate in 2016.

        We intend to continue building on our technology platform, comprised of intellectual property, proprietary methods and know-how in the field of microRNA, and also to successfully expand and defend our position as a leader in the field of microRNA. We are pursuing or have been granted therapeutic use patent claims related to several tumor suppressor microRNAs, as well as composition of matter claims for multiple chemistries and structures that are or may be used in or contemplated for use with our therapeutic microRNA mimics, including miR-34. We have an exclusive license to the patent estate covering the SMARTICLES liposomal delivery technology for four of our product pipeline candidates, including miR-34, and one additional microRNA, which could be broadened to include certain other tumor suppressor microRNAs. We believe our strong intellectual property position can be used to support internal development as well as out-licensing opportunities.

Our Strategy

        Key elements of our strategy are as follows:

    Advance our lead product candidate, MRX34, through clinical development.

    Identify biomarkers to support therapeutic product candidates.

    Expand our clinical development program to additional microRNAs.

 

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    Expand our intellectual property position.

    Leverage partnership opportunities.

Risks Associated with Our Business

    We have incurred significant losses since inception. We anticipate that we will continue to incur significant losses for the foreseeable future, and if we are unable to achieve and sustain profitability, the market value of our common stock will likely decline. We will also need substantial additional funding. If we are unable to raise capital when needed, we could be forced to delay, reduce or terminate our product development, other operations or commercialization efforts.

    The approach we are taking to discover and develop novel therapeutics using microRNA is unproven and may never lead to marketable products.

    We are heavily dependent on the success of our lead product candidate, MRX34, which is in Phase 1 clinical development. If we are not successful in discovering, developing and commercializing additional product candidates, our ability to expand our business and achieve our strategic objectives would be impaired.

    Clinical drug development involves a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial results. Even if a product candidate does obtain regulatory approval, that product candidate may never achieve market acceptance or commercial success.

    We rely on third parties to conduct some of our nonclinical and all of our clinical trials as well as on single source third-party contract manufacturing organizations to manufacture and supply MRX34 and other product candidates for us. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may face delays in the development and commercialization of our product candidates.

    If we are unable to obtain and maintain sufficient patent protection for our product candidates, or if the scope of the patent protection is not sufficiently broad, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize our product candidates may be adversely affected.

    The patent rights of third parties may have an adverse effect on our business and may impact our ability to successfully commercialize one or more of our product candidates.

    We will need to increase the size of our organization, and we may experience difficulties in managing growth.

Concurrent Private Placement

        In connection with a research grant awarded to us, the Cancer Prevention and Research Institute of Texas has agreed to purchase from us concurrently with this offering in a private placement approximately $16.8 million of our common stock at a price per share equal to the initial public offering price. See "Concurrent Private Placement."

Our Corporate Information

        We were incorporated in late 2007 under the laws of Delaware and were maintained as a wholly-owned subsidiary of our former parent company, Asuragen, Inc., until the end of 2009 when we became an independent entity. Our principal executive offices are located at 2150 Woodward St., Austin, TX 78744 and our telephone number is (512) 901-0900. Our website address is www.mirnarx.com. The

 

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information contained on, or that can be accessed through, our website is not part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.

        We are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. We will remain an emerging growth company until the earlier of the last day of the fiscal year following the fifth anniversary of the completion of this offering, the last day of the fiscal year in which we have total annual gross revenue of at least $1.0 billion, the date on which we are deemed to be a large accelerated filer (this means the market value of our common stock that is held by non-affiliates exceeds $700 million at the end of the second quarter of that fiscal year), or the date on which we have issued more than $1.0 billion in nonconvertible debt securities during the prior three-year period. An emerging growth company may take advantage of specified reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies. As an emerging growth company,

    we will avail ourselves of the exemption from the requirement to obtain an attestation and report from our auditors on the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002;

    we will provide less extensive disclosure about our executive compensation arrangements; and

    we will not require shareholder non-binding advisory votes on executive compensation or golden parachute arrangements.

        However, we are choosing to "opt out" of the extended transition periods available under the JOBS Act for complying with new or revised accounting standards. The decision to opt out of the extended transition periods under the JOBS Act is irrevocable.

 

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The Offering

Issuer

  Mirna Therapeutics, Inc.

Common stock we are offering

 

                  shares

Common stock sold in the concurrent private placement

 

In connection with a research grant awarded to us, the Cancer Prevention and Research Institute of Texas, or CPRIT, has agreed to purchase from us concurrently with this offering in a private placement approximately $16.8 million of our common stock at a price per share equal to the initial public offering price, or                shares, assuming an initial public offering price of $                per share, the midpoint of the range set forth on the cover page of this prospectus. We will receive the full proceeds from the sale and will not pay any underwriting discounts or commissions with respect to the shares that are sold in the private placement. The sale of these shares to CPRIT will not be registered under the Securities Act of 1933, as amended, and these shares will be subject to a 180-day lock-up agreement with the underwriters in this offering. We refer to the private placement of these shares of common stock as the "concurrent private placement."

Common stock to be outstanding after the offering and the concurrent private placement

 

                  shares

Option to purchase additional shares

 

                  shares

 

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Use of proceeds

 

We estimate that the net proceeds from this offering, excluding the proceeds from the concurrent private placement, will be approximately $         million, or approximately $         million if the underwriters exercise their option to purchase additional shares in full, at an assumed initial public offering price of $         per share, the midpoint of the range set forth on the cover page of this prospectus, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. Our proceeds from the sale of common stock sold in the concurrent private placement will be approximately $16.8 million. At June 30, 2015, we had cash and cash equivalents of $41.6 million. We currently estimate that we will use the net proceeds from this offering, together with the net proceeds from the concurrent private placement as noted below and our existing cash and cash equivalents, as follows: approximately $66.0 to $76.0 million to fund clinical development expenses for our lead program, MRX34, which includes approximately $14.0 to $17.0 million to complete the Phase 1 clinical trial, including expansion cohorts on multiple indications and/or changes in protocol, approximately $19.0 to $22.0 million to initiate the Phase 2 clinical trial for an indication to be determined, and approximately $33.0 to $37.0 million, which will include the net proceeds from the concurrent private placement, to fund preclinical and clinical studies for the use of MRX34 in combination with standard of care drugs; and approximately $26.0 to $30.0 million to fund preclinical and clinical studies for a second product candidate using another to be determined mimic product. The remainder of the net proceeds from this offering, together with our existing cash and cash equivalents, will be used for preclinical studies, working capital and other general corporate purposes, which may include pursuit of our other research and discovery efforts, expenditures on intellectual property and the acquisition or in-license of other products, product candidates or technologies. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors, including the progress of our development, the status of and results from preclinical testing or clinical trials, as well as any collaborations that we may enter into with third parties for our product candidates, and any unforeseen cash needs. See "Use of Proceeds" on page 66 for a more complete description of the intended use of proceeds from this offering and the concurrent private placement.

Risk factors

 

See "Risk Factors" beginning on page 12 and other information included in this prospectus for a discussion of factors that you should consider carefully before deciding to invest in our common stock.

Symbol on The NASDAQ Global Market

 

"MIRN"

 

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        The number of shares of common stock to be outstanding after this offering and the concurrent private placement is based on 153,801,422 shares of common stock outstanding at June 30, 2015, and excludes the following:

    12,280,909 shares of common stock issuable upon the exercise of outstanding stock options at June 30, 2015 having a weighted-average exercise price of $0.37 per share;

    2,264,241 shares of common stock reserved for issuance pursuant to future awards under our 2008 Long Term Incentive Plan, as amended, at June 30, 2015, which will become available for issuance under our 2015 Equity Incentive Award Plan after consummation of this offering;

                      shares of common stock reserved for issuance pursuant to future awards under our 2015 Equity Incentive Award Plan, from which we will grant option awards exercisable for approximately                  shares of our common stock (based on the number of outstanding shares set forth in this prospectus) to certain of our executive officers, directors and other individuals in connection with this offering with an exercise price equal to the initial public offering price, as well as any automatic increases in the number of shares of our common stock reserved for future issuance under this plan, which will become effective immediately prior to the consummation of this offering; and

                    shares of our common stock reserved for future issuance under our Employee Stock Purchase Plan, as well as any automatic increases in the number of shares of our common stock reserved for future issuance under this plan, which will become effective immediately prior to the consummation of this offering.

        Unless otherwise indicated, the number of shares of our common stock described above gives effect to:

    a            -for-            reverse stock split of our capital stock to be effected prior to the effectiveness of the registration statement of which this prospectus is a part;

    the conversion of all 152,396,065 shares of our convertible preferred stock into an aggregate of 152,396,065 shares of common stock immediately prior to the consummation of this offering;

    the adoption of our amended and restated certificate of incorporation and amended and restated bylaws immediately prior to the consummation of this offering; and

                      shares of common stock issuable to the holders of Series C convertible preferred stock and Series D convertible preferred stock under the terms of our certificate of incorporation as a result of the accruing paid-in-kind dividend in connection with the conversion of all shares of Series C convertible preferred stock and Series D convertible preferred stock into shares of common stock immediately prior to the consummation of this offering based on an assumed initial public offering price of $            per share (the midpoint of the range set forth on the cover page of this prospectus) and a conversion date of                        , 2015;

    the issuance and sale by us in the concurrent private placement of                  shares of our common stock, assuming an initial public offering price of $            per share (the midpoint of the range set forth on the cover page of this prospectus); and

    except as otherwise indicated, the assumption there will be no exercise of the underwriters' over-allotment option.

        We refer to our Series A, Series B, Series B-1, Series C and Series D convertible preferred stock collectively as "convertible preferred stock" for financial reporting purposes and in the financial tables included in this prospectus, as more fully explained in Note 7 to our financial statements. In other parts of this prospectus, we refer to our Series A, Series B, Series B-1, Series C and Series D convertible preferred stock collectively as "preferred stock."

 

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Summary Financial Data

        The following tables set forth a summary of our historical financial data at, and for the period ended on, the dates indicated. The statement of operations data for the years ended December 31, 2012, 2013 and 2014 are derived from our audited financial statements included elsewhere in this prospectus. The statement of operations data for the six months ended June 30, 2014 and 2015 and balance sheet data as of June 30, 2015 have been derived from our unaudited financial statements included elsewhere in this prospectus. Our unaudited financial statements are prepared on the same basis as our audited financial statements. You should read these data together with our audited financial statements and related notes appearing elsewhere in this prospectus and the information under the captions "Selected Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." Our historical results are not necessarily indicative of our future results, and results for the six months ended June 30, 2015 are not necessarily indicative of results to be expected for the full year ending December 31, 2015.

 
  Year Ended December 31,   Six Months Ended
June 30,
 
 
  2012   2013   2014   2014   2015  
 
  (in thousands, except share
and per share data)

  (unaudited)
 

Statement of Operations Data:

                               

Operating expenses:

                               

Research and development

  $ 2,742   $ 4,391   $ 10,545   $ 4,256   $ 7,924  

General and administrative

    1,562     2,384     3,369     1,777     2,039  

Write-off of offering expenses

            1,920          

Total operating expenses

    4,304     6,775     15,834     6,033     9,963  

Other income (expense):

   
 
   
 
   
 
   
 
   
 
 

Change in fair value of option liability

        339              

Gain on extinguishment of note payable

    1,001                  

Interest expense

    (355 )                

Net loss

  $ (3,658 ) $ (6,436 ) $ (15,834 ) $ (6,033 ) $ (9,963 )

Less: Accretion and dividends on convertible preferred stock

    (6,142 )   (2,324 )   (2,824 )   (1,400 )   (2,662 )

Net loss attributable to common stockholders

  $ (9,800 ) $ (8,760 ) $ (18,658 ) $ (7,433 ) $ (12,625 )

Net loss per share attributable to common stockholders, basic and diluted

  $ (373.52 ) $ (293.92 ) $ (19.40 ) $ (11.09 ) $ (9.34 )

Common shares used to compute basic and diluted net loss per share attributable to common stockholders

    26,237     29,804     961,963     670,035     1,351,526  

Pro forma net loss per common share (unaudited)—basic and diluted

              $ (0.19 )       $ (0.08 )

Common shares used to compute pro forma net loss per share (unaudited)—basic and diluted

                84,962,729           118,952,196  

 

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        The table below presents our balance sheet data at June 30, 2015:

    on an actual basis;

    on a pro forma basis to give effect to:

    the conversion of all outstanding shares of our convertible preferred stock into an aggregate of 152,396,065 shares of common stock immediately prior to the consummation of this offering; and

    the filing and effectiveness of our amended and restated certificate of incorporation, which will occur immediately prior to the consummation of this offering; and

    on a pro forma as adjusted basis to give further effect to:

    the issuance and sale by us of            shares of our common stock in this offering at an assumed initial public offering price of $            per share (the midpoint of the range set forth on the cover page of this prospectus), after deducting the underwriting discounts and commissions and estimated offering expenses payable by us;

    the issuance and sale by us in the concurrent private placement of            shares of our common stock, assuming an initial public offering price of $            per share (the midpoint of the range set forth on the cover page of this prospectus); and

    the issuance of                shares of common stock issuable to the holders of Series C convertible preferred stock and Series D convertible preferred stock under the terms of our certificate of incorporation as a result of the accruing paid-in-kind dividend in connection with the conversion of all shares of Series C convertible preferred stock and Series D convertible preferred stock into shares of common stock immediately prior to the consummation of this offering based on an assumed initial public offering price of $            per share (the midpoint of the range set forth on the cover page of this prospectus) and a conversion date of                        , 2015.

 
  At June 30, 2015  
 
  Actual   Pro Forma   Pro Forma
As Adjusted(1)
 
 
  (in thousands)
 

Balance Sheet Data:

                   

Cash and cash equivalents

  $ 41,579   $ 41,579        

Total assets

    42,187     42,187        

Total liabilities

    3,096     3,096        

Convertible preferred stock

    99,281            

Common stock

    1     154        

Additional paid-in capital

        99,128        

Accumulated deficit

    (60,191 )   (60,191 )      

Total stockholders' (deficit) equity

    (60,190 )   39,091        

(1)
Each $1.00 increase (decrease) in the assumed initial public offering price of $        per share, the midpoint of the range set forth on the cover page of this prospectus, would increase (decrease) each of pro forma as adjusted additional paid-in capital and stockholders' equity by approximately $         million, assuming that the number of shares offered by us in this offering, as set forth on the cover page of this prospectus, remains the same. We may also increase or decrease the number of shares we are offering. An increase (decrease) of 1,000,000 in the number of shares we are offering in this offering would increase (decrease) each of pro forma as adjusted additional paid-in capital, stockholders' equity and total capitalization by approximately $         million, assuming the assumed initial public offering price per share, as set forth on the cover page of this prospectus, remains the same.

 

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Risk Factors

        Investing in our common stock involves a high degree of risk. You should carefully consider the risks described below, as well as the other information in this prospectus and any related free writing prospectus, including our financial statements and the related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations," before deciding whether to invest in our common stock. The occurrence of any of the events or developments described below could harm our business, financial condition, results of operations and prospects. In such an event, the market price of our common stock could decline, and you may lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations.


Risks Related to Our Limited Operating History, Financial Position and Capital Requirements

We have incurred significant losses since inception. We anticipate that we will continue to incur significant losses for the foreseeable future, and if we are unable to achieve and sustain profitability, the market value of our common stock will likely decline.

        We are a clinical-stage biopharmaceutical company with a limited operating history. Biopharmaceutical product development is a highly speculative undertaking and involves a substantial degree of risk. We have not generated any product revenues and we do not expect to generate any product revenues for the foreseeable future. We have incurred losses in each year since our founding in 2007 and we expect to continue to incur significant operating losses for the foreseeable future. The amount of future losses is uncertain. All of our product candidates are in development, and none has been approved for sale. We have devoted substantially all of our efforts to research and development, including our preclinical and nonclinical development activities, and expect that it will be many years, if ever, before we have a product candidate ready for commercialization. To date, we have derived all of our funding from our collaboration with our former parent company, Asuragen, Inc., or Asuragen, private placements of preferred stock and government grants for research and development. Our net losses for the years ended December 31, 2012, 2013 and 2014 were $3.7 million, $6.4 million and $15.8 million, respectively, and $10.0 million for the six months ended June 30, 2015. Since inception, we have incurred net losses leading to an accumulated deficit of approximately $60.2 million as of June 30, 2015.

        We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future as we continue our Phase 1 clinical trial of our lead product candidate, MRX34, pursue development of MRX34 for additional indications, conduct research and development of other product candidates and pursue marketing approval for MRX34 in the future. If we obtain marketing approval of MRX34, we also expect to incur significant sales, marketing, distribution and manufacturing expenses. Even after obtaining such marketing approval, our products may never gain sufficient market acceptance and adequate market share. If we fail to succeed in any of these activities or our product candidates fail to demonstrate safety and efficacy in clinical trials, do not gain regulatory approval or do not achieve significant market acceptance following regulatory approval and commercialization, we may never become profitable. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Our prior losses, combined with expected future losses, have had and will continue to have an adverse effect on our stockholders' equity and working capital. If we are unable to achieve and sustain profitability, the market value of our common stock will likely decline. Because of the numerous risks and uncertainties associated with developing biopharmaceutical products, we are unable to predict the extent of any future losses or whether we will become profitable.

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Our short operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability.

        We are a clinical-stage biopharmaceutical company that was founded in 2007 and did not exist as a standalone company until 2009. Our operations to date have been limited to organizing and staffing our company, business planning, raising capital, acquiring and developing our technology, identifying and evaluating potential product candidates and delivery technologies, undertaking nonclinical studies, filing an Investigational New Drug, or IND, application with the U.S. Food and Drug Administration, or FDA, and conducting the Phase 1 clinical trial of our most advanced product candidate, MRX34. Except for MRX34, all of our product candidates are still in preclinical development. We have not yet demonstrated our ability to initiate clinical trials for product candidates other than MRX34, or successfully complete any clinical trials, including large-scale, pivotal clinical trials, obtain marketing approvals, manufacture a commercial scale medicine, or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful commercialization. Typically, it takes several years to develop one new product candidate from the time it is discovered to when it is available for treating patients. Consequently, any predictions about our future success or viability, or any evaluation of our business or prospects, may not be as accurate as they could be if we had a longer operating history. In addition, as a new business, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown challenges. We will need to transition from a company with a research focus to a company capable of supporting commercial activities. We may not be successful in such a transition.

We will need substantial additional funding. If we are unable to raise capital when needed, we could be forced to delay, reduce or terminate our product development, other operations or commercialization efforts.

        Developing biopharmaceutical products, including conducting preclinical and nonclinical studies and clinical trials, is an expensive and highly uncertain process that takes years to complete. Our expenses will increase substantially as we continue our Phase 1 clinical trial of our lead product candidate, MRX34, pursue development of MRX34 for additional indications, and conduct research and development of our other product candidates. Additional clinical trials, including one or more late-stage pivotal trials, will be required to obtain potential marketing approval for MRX34, and the costs of any future trials may be more expensive and time consuming than our current trial. If we obtain marketing approval of MRX34, we also expect to incur significant sales, marketing, distribution and outsourced manufacturing expenses.

        As of June 30, 2015, we had working capital of $38.8 million and cash and cash equivalents of $41.6 million. Based on our current operating plan, we believe that our available cash and the proceeds from this offering and the concurrent private placement are sufficient to fund our anticipated levels of operation for at least the next 12 months. Our future capital requirements for the period for which we expect our existing resources to support our operations may vary significantly from what we expect. For example, our expenses could increase beyond expectations if we are required by the FDA or comparable foreign regulatory agencies to perform studies and trials in addition to those that we currently anticipate. Our funds following this offering and the concurrent private placement will not be sufficient to obtain marketing approval for MRX34. As a result, we will be required to obtain additional financing in the future, which we may obtain through public or private equity offerings, debt financings, a credit facility, government grants and contracts and/or strategic collaborations. If we are required to secure additional capital, such additional fundraising efforts may divert our management from our day-to-day activities, which may adversely affect our ability to develop and commercialize future product candidates. Additional financing may not be available to us when we need it or it may not be available to us on favorable terms, if at all. If we are unable to obtain adequate financing or form favorable collaborations, when needed, we may have to delay, reduce the scope of or eliminate

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one or more of our clinical trials, research and development programs or our commercialization efforts, including with respect to MRX34.

        Additionally, our future financing requirements will depend on many factors, some of which are beyond our control, including:

        Future capital requirements will also depend on the extent to which we acquire or invest in additional complementary businesses, products and technologies. We currently have no understandings, commitments or agreements relating to any of these types of transactions.

Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.

        Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through public or private equity offerings, debt financings, credit facilities, government grants and contracts and/or strategic collaborations.

        To raise capital, we may from time to time issue additional shares of common stock at a discount from the then-current trading price of our common stock. As a result, our common stockholders would experience immediate dilution upon the purchase of any shares of our common stock sold at such discount. In addition, as opportunities present themselves, we may enter into financing or similar arrangements in the future, including the issuance of debt securities, preferred stock or common stock. Whether or not we issue additional shares of common stock at a discount, any issuance of common stock will, and any issuance of other equity securities, securities convertible into equity securities or options, warrants or other rights to purchase common stock may, result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to decline. New investors could also gain rights, preferences and privileges senior to those of holders of our common stock, which could cause the price of our common stock to decline. Debt securities may also contain covenants that restrict our operational flexibility, impose liens or other restrictions on our assets, restrict our ability to incur additional debt, impose limitations on our ability to acquire, sell or license intellectual property or impose other operating restrictions that could adversely affect our business and could also cause the price of our common stock to decline.

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        Other than our collaboration with our former parent company, Asuragen, and private placements of preferred stock, the only external source of funds to date has been state and federal government grants for research and development. The grants have been, and any future government grants and contracts we may receive may be, subject to the risks and contingencies set forth below under the risk factor entitled "Reliance on government funding for our programs may add uncertainty to our research and commercialization efforts with respect to those programs that are tied to such funding and may impose requirements that limit our ability to take certain actions, increase the costs of commercialization and production of product candidates developed under those programs and subject us to potential financial penalties, which could materially and adversely affect our business, financial condition and results of operations." Although we apply for government and private contracts and grants, we cannot assure you that we will be successful in obtaining additional grants or contracts in the future for MRX34 or any other product candidates or programs.


Risks Related to Product Development and Commercialization

The approach we are taking to discover and develop novel therapeutics using microRNA is unproven and may never lead to marketable products.

        The scientific discoveries that form the basis for our efforts to discover and develop new drugs are relatively recent. To date, neither we nor any other company has received regulatory approval to market therapeutics utilizing microRNA. The scientific evidence to support the feasibility of developing drugs based on these discoveries is both preliminary and limited. Successful development of microRNA-based products by us will require solving a number of issues, including providing suitable methods of stabilizing the microRNA material and delivering it into target cells in the human body. In addition, any compounds that we develop may not demonstrate in patients the chemical and pharmacological properties ascribed to them in laboratory and nonclinical studies, and they may interact with human biological systems in unforeseen, ineffective or even harmful ways. If we do not successfully develop and commercialize product candidates based upon our technological approach, we may not become profitable and the value of our common stock may decline.

        Further, the FDA has relatively limited experience with microRNA-based therapeutics. No regulatory authority has granted approval to any person or entity, including us, to market and commercialize microRNA therapeutics, which may increase the complexity, uncertainty and length of the regulatory approval process for our product candidates. If our microRNA technologies prove to be ineffective, unsafe or commercially unviable, our entire pipeline would have little, if any, value, which would have a material adverse effect on our business, financial condition, results of operations and prospects.

        Further, our exclusive focus on microRNA technology for developing products as opposed to multiple, more proven technologies for drug development increases the risk associated with our business. If we are not successful in developing a product candidate using microRNA technology, we may not be able to identify and successfully implement an alternative product development strategy.

We are heavily dependent on the success of our lead product candidate, MRX34, which is in Phase 1 clinical development.

        We currently have no products approved for sale and have invested a significant portion of our efforts and financial resources in the development of MRX34. The clinical development of MRX34 began in April 2013 with a multi-center Phase 1 clinical trial that is currently enrolling patients with unresectable primary liver cancer or solid cancers. We have also expanded the Phase 1 clinical trial with a separate cohort of patients with hematological malignancies, which may include patients with non-Hodgkin's lymphoma, acute myelogenous leukemia, acute and chronic lymphocytic leukemia, chronic myelogenous leukemia in accelerated or blast phase, multiple myeloma and myelodysplastic

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syndrome. The primary objectives of the Phase 1 clinical trial, including the hematological malignancy cohort, are to establish the maximum tolerated dose and an appropriate dose for Phase 2 clinical trials. The secondary objectives of the Phase 1 clinical trial are to assess the safety, tolerability and pharmacokinetic profile of MRX34 after intravenous dosing as well as to assess any biological and clinical activity.

        Our prospects are substantially dependent on our ability to develop and commercialize MRX34. Our ability to timely develop and effectively commercialize MRX34 will depend on several factors, including the following:

        If we do not achieve one or more of these factors in a timely manner, or at all, we could experience significant delays or an inability to commercialize MRX34, which would materially and adversely affect our business, financial condition and results of operations.

        We have not previously submitted a new drug application, or NDA, to the FDA, or similar drug approval filings to comparable foreign authorities, for any product candidate, and we cannot be certain that any of our product candidates will be successful in clinical trials or receive regulatory approval. Further, our product candidates may not receive regulatory approval even if they are successful in clinical trials. If we do not receive regulatory approvals for our product candidates, we may not be able to continue our operations. Even if we successfully obtain regulatory approvals to market one or more of our product candidates, our revenues will be dependent upon the size of the markets in the territories for which we gain regulatory approval and have commercial rights. If the markets for patient subsets that we are targeting are not as significant as we estimate, we may not generate significant revenues from sales of such products, if approved. Successful development of MRX34 or other product candidates for additional indications will be subject to these same risks.

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If we are not successful in discovering, developing and commercializing additional product candidates, our ability to expand our business and achieve our strategic objectives would be impaired.

        Although a substantial amount of our efforts will focus on the Phase 1 clinical trial and potential approval of our lead product candidate, MRX34, a key element of our strategy is to discover, develop and potentially commercialize a portfolio of product candidates to treat cancer and other indications. We are seeking to do so through our internal research programs and are exploring, and intend to explore in the future, strategic partnerships for the development of new products. Other than MRX34, all of our other potential product candidates remain in the discovery and preclinical study stages. Research programs to identify product candidates require substantial technical, financial and human resources, whether or not any product candidates are ultimately identified. Our research programs may initially show promise in identifying potential product candidates, yet fail to yield product candidates for clinical development for many reasons, including the following:

        If we are unsuccessful in identifying and developing additional product candidates, our potential for growth may be impaired.

We may use our financial and human resources to pursue a particular research program or product candidate and fail to capitalize on programs or product candidates that may be more profitable or for which there is a greater likelihood of success.

        Because we have limited financial and human resources, we may forego or delay pursuit of opportunities with certain programs or product candidates or for other indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or more profitable market opportunities. Our spending on current and future research and development programs and future product candidates for specific indications may not yield any commercially viable products. We may also enter into strategic alliance agreements to develop and commercialize certain of our programs and potential product candidates in indications with potentially large commercial markets. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through strategic alliance, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate, or we may allocate internal resources to a product candidate in a therapeutic area in which it would have been more advantageous to enter into a partnering arrangement.

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The regulatory approval process is lengthy, expensive and uncertain, and we may be unable to obtain regulatory approval for our drug products under applicable regulatory requirements. The denial or delay of any such approval would delay commercialization of our drug products and adversely impact our ability to generate revenue, our business and our results of operations.

        The development, research, testing, manufacturing, labeling, approval, selling, import, export, marketing and distribution of drug products are subject to extensive and evolving regulation by federal, state and local governmental authorities in the United States, principally the FDA, and by foreign regulatory authorities, which regulations differ from country to country. Neither we nor any future collaborator is permitted to market MRX34 or any other product candidate in the United States until we receive regulatory approval of an NDA from the FDA.

        Obtaining regulatory approval of an NDA can be a lengthy, expensive and uncertain process. Prior to obtaining approval to commercialize a drug candidate in the United States or abroad, we or our collaborators must demonstrate with substantial evidence from well-controlled clinical trials, and to the satisfaction of the FDA or other foreign regulatory agencies, that such drug candidates are safe and effective for their intended uses. The number of nonclinical studies and clinical trials that will be required for FDA approval varies depending on the drug candidate, the disease or condition that the drug candidate is designed to address, and the regulations applicable to any particular drug candidate. Results from nonclinical studies and clinical trials can be interpreted in different ways. Even if we believe the nonclinical or clinical data for our drug candidates are promising, such data may not be sufficient to support approval by the FDA and other regulatory authorities. Administering drug candidates to humans may produce undesirable side effects, which could interrupt, delay or halt clinical trials and result in the FDA or other regulatory authorities denying approval of a drug candidate for any or all indications. The FDA may also require us to conduct additional studies or trials for our product candidates either prior to or post-approval, such as additional drug-drug interaction studies or safety or efficacy studies or trials, or it may object to elements of our clinical development program such as the number of subjects in our current clinical trials from the United States.

        We expect the Phase 1 clinical trial for our lead product candidate, MRX34, to be completed by the end of 2016, and our business currently depends substantially on the successful development, regulatory approval and commercialization of MRX34. We currently have no drug products approved for sale, and we may never obtain regulatory approval to commercialize MRX34.

        The FDA or any foreign regulatory bodies can delay, limit or deny approval of MRX34 or require us to conduct additional nonclinical or clinical testing or abandon a program for many reasons, including:

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        Of the large number of drugs in development, only a small percentage successfully complete the FDA or other regulatory approval processes and are commercialized. The lengthy approval process as well as the unpredictability of future clinical trial results may result in our failing to obtain regulatory approval to market MRX34, which would significantly harm our business, financial condition, results of operations and prospects.

        Even if we eventually complete clinical testing and receive approval of an NDA or foreign marketing application for MRX34, the FDA or the applicable foreign regulatory agency may grant approval contingent on the performance of costly additional clinical trials, including Phase 4 clinical trials, and/or the implementation of a Risk Evaluation and Mitigation Strategy, or REMS, which may be required to ensure safe use of the drug after approval. The FDA or the applicable foreign regulatory agency also may approve MRX34 for a more limited indication or a narrower patient population than we originally requested, and the FDA or applicable foreign regulatory agency may not approve the labeling that we believe is necessary or desirable for the successful commercialization of MRX34. Any delay in obtaining, or inability to obtain, applicable regulatory approval would delay or prevent commercialization of MRX34 and would materially adversely impact our business and prospects.

Clinical drug development involves a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial results.

        Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. Furthermore, we rely on contract research organizations, or CROs, and clinical trial sites to ensure the proper and timely conduct of our clinical trials. While we have agreements with our CROs governing their committed activities, and the ability to audit their performance, we have limited influence over their actual performance. Failure or delay can occur at any time during the clinical trial process. Success in nonclinical testing and early clinical trials does not ensure that later clinical trials will be successful, and the results of clinical trials by other parties may not be indicative of the results in trials we may conduct. A number of companies in the pharmaceutical industry, including biotechnology companies, have suffered significant setbacks in clinical trials, even after promising results in earlier nonclinical or clinical studies. These setbacks have been caused by, among other things, nonclinical findings made while clinical studies were underway and safety or efficacy observations made in clinical studies, including previously unreported adverse events. The results of preclinical, nonclinical and early clinical studies of our product candidates may not be predictive of the results of later-stage clinical trials. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through preclinical and initial clinical trials. Notwithstanding any potential promising results in earlier studies, we cannot be certain that we will not face similar setbacks. Even if our clinical trials are completed, the results may not be sufficient to obtain regulatory approval for our product candidates.

        Although we have an ongoing Phase 1 clinical trial for MRX34 and expect to complete the unresectable primary liver cancer, solid tumors and hematological malignancy cohort portions of the

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trial by the end of 2016, we may experience delays in our ongoing trial and we cannot be certain that the trial or any other future clinical trials for MRX34 or other product candidates will begin on time, need to be redesigned, enroll an adequate number of patients on time or be completed on schedule, if at all. Clinical trials can be delayed or aborted for a variety of reasons, including delay or failure related to:

        Patient enrollment is a significant factor in the timing of clinical trials and is affected by many factors, including the size and nature of the patient population, the proximity of patients to clinical sites, the eligibility criteria for the trial, the design of the clinical trial, competing clinical trials and clinicians' and patients' perceptions as to the potential advantages of the drug being studied in relation to other available therapies, including any new drugs or treatments that may be approved for the indications we are investigating.

        We could also encounter delays if a clinical trial is suspended or terminated by us, by the IRBs of the institutions in which such trials are being conducted, by the Data Safety Monitoring Board, or DSMB, for such trial or by the FDA or other regulatory authorities. Such authorities may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.

        Further, conducting clinical trials in foreign countries, as we currently do for MRX34, presents additional risks that may delay completion of our clinical trials. These risks include the failure of enrolled patients in foreign countries to adhere to clinical protocol as a result of differences in healthcare services or cultural customs, managing additional administrative burdens associated with foreign regulatory schemes, as well as political and economic risks relevant to such foreign countries.

        If we experience delays in the completion, or termination, of any clinical trial of our product candidates, the commercial prospects of our product candidates may be harmed, and our ability to generate product revenues from any of these product candidates will be delayed or not realized at all. In addition, any delays in completing our clinical trials will increase our costs, slow down our product

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candidate development and approval process and jeopardize our ability to commence product sales and generate revenues. Any of these occurrences may significantly harm our business, financial condition and prospects. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates.

If we are required to suspend or discontinue clinical trials due to side effects or other safety risks, or if we are required to conduct studies on the long-term effects associated with the use of MRX34 or other product candidates, our ability to commercialize our product candidates could be adversely affected.

        Our clinical trials, including our Phase 1 clinical trial for MRX34, or other trials our strategic partners or CROs may conduct, may be suspended or terminated at any time for a number of safety-related reasons. For example, we may voluntarily suspend or terminate our clinical trials if at any time we believe that our product candidates present an unacceptable safety risk to the clinical trial patients. In addition, IRBs or regulatory agencies may order the temporary discontinuation or termination of our clinical trials at any time if they believe that the clinical trials are not being conducted in accordance with applicable regulatory requirements, including if they present an unacceptable safety risk to patients. Administering any product candidate to humans may produce undesirable side effects. The existence of undesirable side effects resulting from our product candidates could cause us or regulatory authorities, such as the FDA, to interrupt, delay or halt clinical trials of our product candidates and could result in the FDA or other regulatory agencies denying further development or approval of our product candidates for any or all indications.

        We have not conducted complete studies on the long-term effects associated with the use of MRX34 or any other product candidate. Studies of these long-term effects may be required for regulatory approval and such requirement would delay our introduction of MRX34 or other product candidates into the market. These studies could also be required at any time after regulatory approval of a product candidate. Absence of long-term data may also limit the approved uses of a product, if any, to short-term use. MRX34 or any other product candidate may prove to be unsafe for human use, which would materially harm our business.

        Certain oligonucleotide therapeutics and liposomal drug delivery products have shown injection site reactions, infusion reactions and pro-inflammatory effects and may also lead to impairment of organ function, including kidney or liver function. There is a risk that our current and future product candidates may induce similar adverse events, or require pre- or co-administration of other drugs to minimize such effects, which pre- or co-administration might adversely affect the benefits of our product or add additional side effects to the treatment regimens. Results of our clinical trials could reveal a high and unacceptable severity and prevalence of these or other side effects. In such an event, our trials could be suspended or terminated and the FDA or comparable foreign regulatory authorities could order us to cease further development of or deny approval of our product candidates for any or all indications. Drug-related side effects could affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims. Any of these occurrences may significantly harm our business, financial condition, results of operations and prospects significantly.

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Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if any.

        As with many pharmaceutical products and product candidates under development, MRX34 or our other potential product candidates may produce undesirable side effects or adverse reactions or events. In the event we or others identify undesirable side effects caused by one of our product candidates, any of the following adverse events could occur:

        If MRX34 or our other potential product candidates receives marketing approval, and we or others later identify undesirable side effects caused by such products, a number of potentially significant negative consequences could result, including:

        Any of the foregoing events could prevent us from achieving or maintaining market acceptance of the particular product candidate, if approved, and result in the loss of significant revenues to us, which would materially and adversely affect our results of operations and business.

Our clinical drug development program may not uncover all possible adverse events that patients who take MRX34 or other product candidates may experience. The number of subjects exposed to MRX34 or other product candidates and the average exposure time in the clinical development program may be inadequate to detect rare adverse events, or chance findings, that may only be detected once the product is administered to more patients and for greater periods of time.

        Clinical trials by their nature utilize a sample of the potential patient population. However, with a limited number of subjects and limited duration of exposure, we cannot be fully assured that rare and severe side effects of MRX34 or other product candidates will be uncovered. Such rare and severe side effects may only be uncovered with a significantly larger number of patients exposed to the drug. If such safety problems occur or are identified after MRX34 or another product candidate reaches the

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market, the FDA may require that we amend the labeling of the product or recall the product, or may even withdraw approval for the product.

We face potential product liability, and, if successful claims are brought against us, we may incur substantial liability and costs. If the use or misuse of our product candidates harms patients, or is perceived to harm patients even when such harm is unrelated to our product candidates, our regulatory approvals could be revoked or otherwise negatively impacted and we could be subject to costly and damaging product liability claims. If we are unable to obtain adequate insurance or are required to pay for liabilities resulting from a claim excluded from, or beyond the limits of, our insurance coverage, a material liability claim could adversely affect our financial condition.

        The use or misuse of our product candidates in clinical trials and the sale of any products for which we obtain marketing approval exposes us to the risk of product liability claims. Product liability claims might be brought against us by consumers, healthcare providers, pharmaceutical companies or others selling or otherwise coming into contact with our products. There is a risk that our product candidates may induce adverse events. If we cannot successfully defend against product liability claims, we could incur substantial liability and costs. Certain oligonucleotide therapeutics and liposomal drug delivery products have shown injection site reactions, infusion reactions, and pro-inflammatory effects, and may also lead to organ dysfunction, including impairment of kidney or liver function. There is a risk that our future product candidates may induce similar adverse events. Patients with the diseases targeted by our product candidates are often already in severe and advanced stages of disease and have both known and unknown significant pre-existing and potentially life-threatening health risks. During the course of treatment, patients may suffer adverse events, including death, for reasons that may be related to our product candidates. Such events could subject us to costly litigation, require us to pay substantial amounts of money to injured patients, delay, negatively impact or end our opportunity to receive or maintain regulatory approval to market our products, or require us to suspend or abandon our commercialization efforts. Even in a circumstance in which we do not believe that an adverse event is related to our products, the investigation into the circumstance may be time-consuming or inconclusive. These investigations may interrupt our sales efforts, delay our regulatory approval process in other countries, or impact and limit the type of regulatory approvals our product candidates receive or maintain. As a result of these factors, a product liability claim, even if successfully defended, could have a material adverse effect on our business, financial condition or results of operations.

        Although we have product liability insurance that we feel is appropriate for our stage of development, which covers our clinical trials in the United States, for up to $1 million per occurrence, up to an aggregate limit of $5 million, our insurance may be insufficient to reimburse us for any expenses or losses we may suffer, and we will be required to increase our product liability insurance coverage for our advanced clinical trials that we plan to initiate. We have obtained an additional product liability insurance policy for our planned clinical trials in the Republic of Korea. If and when we obtain marketing approval for product candidates, we intend to expand our insurance coverage to include the sale of commercial products. We do not know whether we will be able to continue to obtain product liability coverage and obtain expanded coverage if we require it, in sufficient amounts to protect us against losses due to liability, on acceptable terms, or at all. We may not have sufficient resources to pay for any liabilities resulting from a claim excluded from, or beyond the limits of, our insurance coverage. Where we have provided indemnities in favor of third parties under our agreements with them, there is also a risk that these third parties could incur liability and bring a claim under such indemnities. An individual may bring a product liability claim against us alleging that one of our product candidates or products causes, or is claimed to have caused, an injury or is found to be unsuitable for consumer use. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict

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liability, and a breach of warranties. Claims could also be asserted under state consumer protection acts. Any product liability claim brought against us, with or without merit, could result in:

        Product liability claims may subject us to the foregoing and other risks, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

Currently, our product candidates are expensive to produce and are expensive relative to presently-marketed therapeutics targeting similar indications.

        To date, our proposed product candidates have only been manufactured at a scale that is adequate to supply our research activities and early-stage clinical trials. As with many companies conducting Phase 1 clinical trials or preclinical studies on product candidates, the current cost of each treatment is expensive relative to presently-marketed therapeutics targeting similar indications. We cannot assure you that we will be able to scale the manufacturing of our products during future clinical trials or commercialization in order to achieve a treatment price that would allow for commercial acceptance. In the event our product candidates cannot be manufactured in sufficient commercial quantities at a competitive price, our future prospects could be significantly impacted and our financial prospects would be materially harmed.

Even if a product candidate does obtain regulatory approval, that product candidate may never achieve market acceptance or commercial success.

        Even if we obtain FDA or other regulatory approvals, and are able to launch MRX34 or any other product candidate commercially, the product candidate may not achieve market acceptance among physicians, patients, patient advocacy groups and third-party payors and, ultimately, may not be commercially successful. Market acceptance of any product candidate for which we receive approval depends on a number of factors, including:

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        Any failure by MRX34 or any other product candidate that obtains regulatory approval to achieve market acceptance or commercial success would adversely affect our financial results.


Risks Related to Our Reliance on Third Parties

We rely on third parties to conduct some of our nonclinical and all of our clinical trials. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may be unable to obtain regulatory approval for or commercialize any of our product candidates.

        Although we conduct certain nonclinical studies, we currently do not have the ability to independently conduct nonclinical studies that comply with the regulatory requirements known as good laboratory practice, or GLP, requirements. We also do not currently have the ability to independently conduct any clinical trials. The FDA and regulatory authorities in other jurisdictions require us to comply with regulations and standards, commonly referred to as current good clinical practice, or GCP, requirements for conducting, monitoring, recording and reporting the results of clinical trials, in order to ensure that the data and results are scientifically credible and accurate and that the trial subjects are adequately informed of the potential risks of participating in clinical trials. We rely on medical institutions, clinical investigators, contract laboratories and other third parties, such as CROs, to conduct GLP-compliant nonclinical studies and GCP-compliant clinical trials on our product candidates properly and on time. While we will have agreements governing their activities, we control only certain aspects of their activities and have limited influence over their actual performance. The third parties with whom we contract for execution of our GLP nonclinical studies and our GCP clinical trials play a significant role in the conduct of these studies and trials and the subsequent collection and analysis of data. These third parties are not our employees and, except for restrictions imposed by our contracts with such third parties, we have limited ability to control the amount or timing of resources that they devote to our programs. Although we rely on these third parties to conduct our GLP-compliant preclinical and nonclinical studies and GCP-compliant clinical trials, we remain responsible for ensuring that each of our GLP preclinical and nonclinical studies and GCP clinical trials is conducted in accordance with its investigational plan and protocol and applicable laws and regulations, and our reliance on the CROs does not relieve us of our regulatory responsibilities.

        Many of the third parties with whom we contract may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials or other drug development activities that could harm our competitive position. If the third parties conducting our GLP preclinical or nonclinical studies or our clinical trials do not perform their contractual duties or obligations, experience work stoppages, do not meet expected deadlines, terminate

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their agreements with us or need to be replaced, or if the quality or accuracy of the clinical data they obtain is compromised due to their failure to adhere to our clinical trial protocols or to GCPs, or for any other reason, we may need to enter into new arrangements with alternative third parties. This could be difficult, costly or impossible, and our nonclinical studies or clinical trials may need to be extended, delayed, terminated or repeated. As a result we may not be able to obtain regulatory approval in a timely fashion, or at all, for the applicable product candidate, our financial results and the commercial prospects for our product candidates would be harmed, our costs could increase, and our ability to generate revenues could be delayed.

We rely on single source third-party contract manufacturing organizations to manufacture and supply MRX34 and other product candidates for us. If our supplier or manufacturer fails to perform adequately or fulfill our needs, or if these agreements are terminated by the third parties, we may be required to incur significant costs and devote significant efforts to find new suppliers or manufacturers. We may also face delays in the development and commercialization of our product candidates.

        We do not currently independently conduct manufacturing activities for our product candidates, including MRX34. We rely upon single source third-party contract manufacturing organizations to manufacture and supply our product candidates. We currently have a relationship with only one supplier, NITTO DENKO Avecia, or Avecia, located in Massachusetts, for clinical supply of the drug substance for our miR-34 mimic. We are actively evaluating and qualifying a second-source supplier of our miR-34 mimic. We expect to complete this process in the second half of 2015. Polymun Scientific Immunbiologische Forschung GmbH, or Polymun, located in Austria, is the exclusive manufacturer of our MRX34 drug product. Further, we rely on our contract manufacturers to manage the supply chain for the raw materials used in the manufacture of the drug substance and drug product.

        Any manufacturers of the drug substance and drug product for our product candidates must comply with current good manufacturing practice, or cGMP, requirements enforced by the FDA through its facilities inspection program. These requirements include, among other things, quality control, quality assurance and the maintenance of records and documentation. Manufacturers of our component materials may be unable to comply with these cGMP requirements and with other FDA, state and foreign regulatory requirements. We do not directly control the manufacturing process of, and are completely dependent on, our contract manufacturing partners for compliance with cGMPs. If our contract manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or foreign regulatory agencies, they will not be able to secure and/or maintain regulatory approval for their manufacturing facilities. In addition, we have no direct control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel. The FDA or similar foreign regulatory agencies at any time may also implement new standards, or change their interpretation and enforcement of existing standards for manufacture, packaging or testing of products. We have little control over a manufacturer's compliance with these regulations and standards. However, a failure to comply with these requirements may result in fines and civil penalties, suspension of production, suspension or delay in product approval, product seizure or recall, or withdrawal of product approval. If the safety of any product supplied is compromised due to our manufacturer's failure to adhere to applicable laws or for other reasons, we may not be able to obtain regulatory approval for or successfully commercialize our products, and we may be held liable for any injuries sustained as a result. In addition, if the FDA or a comparable foreign regulatory agency does not approve our contract manufacturer's facilities for the manufacture of our product candidates or if it withdraws its approval in the future, we may need to find alternative manufacturing facilities, which would negatively impact our ability to develop, obtain regulatory approval for, or market our product candidates, if approved. Any of these factors could cause a delay of clinical trials, regulatory submissions, approvals or commercialization of our product candidates or entail higher costs or impair our reputation.

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        The manufacture of pharmaceutical products in compliance with cGMP regulations requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls. Manufacturers of pharmaceutical products often encounter difficulties in production, including difficulties with production costs and yields, quality control, including stability of the product candidate and quality assurance testing, or shortages of qualified personnel. If our manufacturers were to encounter any of these difficulties or otherwise fail to comply with their obligations to us or under applicable regulations, our ability to provide study materials in our nonclinical studies and clinical trials would be jeopardized. Any delay or interruption in the supply of nonclinical study or clinical trial materials could delay the completion of our nonclinical studies and clinical trials, increase the costs associated with maintaining our nonclinical study and clinical trial programs and, depending upon the period of delay, require us to conduct nonclinical studies, commence new trials at significant additional expense or terminate the studies and trials completely.

        We currently believe that our third party suppliers have the necessary expertise to produce our MRX34 drug substance and drug product in sufficient quantity and of acceptable quality to support our development program through at least Phase 3 clinical trials and possibly through commercialization of MRX34. However, our current agreements with our suppliers do not provide for the entire supply of the drug necessary for additional clinical trials or for full-scale commercialization. In the event that we and our suppliers cannot agree to the terms and conditions for them to provide some or all of our clinical and commercial drug supply needs, or if our suppliers terminate their agreements with us in response to a breach by us or any other reason permitted under our agreements, we would not be able to manufacture the drug on a commercial scale until a qualified alternative supplier is identified, which could also delay the development of, and impair our ability to commercialize, our product candidates. Any supplier would be required to obtain regulatory approval of their manufacturing facilities, processes and quality systems before engaging in the commercial manufacture of a pharmaceutical product. Due to the complexity of the processes used to manufacture pharmaceutical products and product candidates, any potential third-party manufacturer may be unable to continue to pass or initially pass federal, state or international regulatory inspections in a cost-effective manner.

        Although we believe that appropriate alternative sources of supply exist for each of our current product candidates, the number of third-party suppliers with the necessary manufacturing and regulatory expertise and facilities is limited, and it could be expensive and take a significant amount of time to arrange for alternative suppliers, which could have a material adverse effect on our business. New suppliers of any drug would be required to qualify under applicable regulatory requirements and would need to have sufficient rights under applicable intellectual property laws to the method of manufacturing such ingredients. Obtaining the necessary FDA approvals or other qualifications under applicable regulatory requirements and ensuring non-infringement of third- party intellectual property rights could result in a significant interruption of supply and could require the new manufacturer to bear significant additional costs which may be passed on to us.

        The failure of third-party manufacturers or suppliers to perform adequately or the termination of our arrangements with any of them may negatively and adversely affect our business.

        Reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured the product candidates ourselves, including:

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        Any of these events could lead to clinical trial delays or failure to obtain regulatory approval, or impact our ability to successfully commercialize future products. Some of these events could be the basis for FDA action, including injunction, recall, seizure or total or partial suspension of production.

We may not be able to develop or identify a technology that can effectively deliver our miR-34 mimic or any other of our microRNA-based product candidates to the intended diseased cells or tissues, and any failure in such delivery technology could adversely affect and delay the development of MRX34 and our other product candidates.

        In connection with our Phase 1 clinical trial of MRX34, we have used a SMARTICLES liposomal formulation to facilitate delivery to tumors. SMARTICLES has demonstrated successful tumor delivery of our miR-34 mimic in multiple mouse models of liver cancer, but we cannot be certain that the SMARTICLES technology will be capable of delivering adequate levels of our miR-34 mimic to liver tumors in patients to produce a therapeutic response. While we believe SMARTICLES could be used to deliver mimics in additional indications, future clinical testing could reveal that the efficacy of SMARTICLES is limited to delivery to liver cancer cells. While we are continuing to evaluate the use of SMARTICLES in other indications, and additional delivery technologies that might enable us to target other cells with our product candidates, we cannot be certain whether we will be successful in developing such alternative delivery mechanisms. Our failure to effectively deliver any of our product candidates to the intended diseased cells or tissues could adversely affect and delay the development of our product candidates.

We currently have no sales and marketing staff or distribution organization. If we are unable to develop a sales and marketing and distribution capability on our own or through third parties, we will not be successful in commercializing our future products.

        We currently have no sales, marketing or distribution capabilities or experience. To achieve commercial success for any approved product candidate, we must either develop a sales, marketing and distribution organization or outsource these functions to third parties. If we rely on third parties for marketing and distributing our approved products, any revenue we receive will depend upon the efforts of third parties, which may not be successful and are only partially within our control and our product revenue may be lower than if we directly marketed or sold our products. If we are unable to enter into arrangements with third parties to sell, market and distribute product candidates for which we have received regulatory approval on acceptable terms or at all, we will need to market these products ourselves. This is likely to be expensive and logistically difficult, as it would require us to build our own sales, marketing and distribution capacity. We have no experience in this area, and if such efforts were necessary, we may not be able to successfully commercialize our future products. If we are not successful in commercializing our future products, either on our own or through third parties, any future product revenue will be materially and adversely affected.

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We may attempt to form collaborations in the future with respect to our product candidates, but we may not be able to do so, which may cause us to alter our development and commercialization plans.

        We may attempt to form strategic alliances, create joint ventures or collaborations or enter into licensing arrangements with third parties with respect to our programs that we believe will complement or augment our existing business. For example, we may attempt to find a strategic partner for the development and/or commercialization of MRX34. We may face significant competition in seeking appropriate strategic partners, and the negotiation process to secure appropriate terms is time-consuming and complex. We may not be successful in our efforts to establish such a strategic partnership for any product candidates and programs on terms that are acceptable to us, or at all. This may be because our product candidates and programs may be deemed to be at too early of a stage of development for collaborative effort, our research and development pipeline may be viewed as insufficient, the competitive or intellectual property landscape may be viewed as too intense or risky, and/or third parties may not view our product candidates and programs as having sufficient potential for commercialization, including the likelihood of an adequate safety and efficacy profile.

        Any delays in identifying suitable collaborators and entering into agreements to develop and/or commercialize our product candidates could delay the development or commercialization of our product candidates, which may reduce their competitiveness even if they reach the market. Absent a collaboration partner, we would need to undertake development and/or commercialization activities at our own expense. If we elect to fund and undertake development and/or commercialization activities on our own, we may need to obtain additional expertise and additional capital, which may not be available to us on acceptable terms or at all. If we are unable to do so, we may not be able to develop our product candidates or bring them to market and our business may be materially and adversely affected.

We may be unable to realize the potential benefits of any collaboration.

        Even if we are successful in entering into a collaboration with respect to the development and/or commercialization of one or more product candidates, there is no guarantee that the collaboration will be successful. Collaborations may pose a number of risks, including:

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        As a result, a collaboration may not result in the successful development or commercialization of our product candidates.

Reliance on government funding for our programs may add uncertainty to our research and commercialization efforts with respect to those programs that are tied to such funding and may impose requirements that limit our ability to take certain actions, increase the costs of commercialization and production of product candidates developed under those programs and subject us to potential financial penalties, which could materially and adversely affect our business, financial condition and results of operations.

        During the course of our development of our product candidates, we have been funded in significant part through federal and state grants, including but not limited to the substantial funding we have received from the Texas Emerging Technology Fund and the Cancer Prevention and Research Institute of Texas, or CPRIT. In addition to the funding we have received to date, we have applied and intend to continue to apply for federal and state grants to receive additional funding in the future. Contracts and grants funded by the U.S. government, state governments and their related agencies, including our contracts with the State of Texas pertaining to funds we have already received, include provisions that reflect the government's substantial rights and remedies, many of which are not typically found in commercial contracts, including powers of the government to:

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        In addition to those powers set forth above, the government funding we may receive could also impose requirements to make payments based upon sales of our products in the future. For example, under the terms of our 2010 award from CPRIT, we are required to pay CPRIT a portion of our revenues from sales of certain products by us, or received from our licensees or sublicensees, at a percentage in the low single digits until the aggregate amount of such payments equals a specified multiple of the grant amount, and thereafter at a rate of less than one percent, subject to our right, under certain circumstances, to make a one-time payment in a specified amount to CPRIT to buy out such payment obligations. See "Business—Strategic Partnerships and Collaborations" for a description of this CPRIT agreement, which includes a description of our obligations to make royalty payments.

        We may not have the right to prohibit the U.S. government from using certain technologies developed by us, and we may not be able to prohibit third-party companies, including our competitors, from using those technologies in providing products and services to the U.S. government. The U.S. government generally takes the position that it has the right to royalty-free use of technologies that are developed under U.S. government contracts. These and other provisions of government grants may also apply to intellectual property we license now or in the future.

        In addition, government contracts and grants normally contain additional requirements that may increase our costs of doing business, reduce our profits, and expose us to liability for failure to comply with these terms and conditions. These requirements include, for example:

        If we fail to maintain compliance with any such requirements that may apply to us now or in the future, we may be subject to potential liability and to termination of our contracts.

Our business involves the use of hazardous materials and we and our third- party manufacturers must comply with environmental laws and regulations, which may be expensive and restrict how we do business.

        Our third-party manufacturers' activities and our own activities involve the controlled storage, use and disposal of hazardous materials, including the components of our pharmaceutical product candidates, test samples and reagents, biological materials and other hazardous compounds. We and our manufacturers are subject to federal, state, local and foreign laws and regulations governing the use, generation, manufacture, storage, handling and disposal of these hazardous materials. We currently carry no insurance specifically covering environmental claims relating to the use of hazardous materials. Although we believe that our safety procedures for handling and disposing of these materials and waste products comply with the standards prescribed by these laws and regulations, we cannot eliminate the risk of accidental injury or contamination from the use, storage, handling or disposal of hazardous materials. In the event of an accident, state or federal or other applicable authorities may curtail our use of these materials and/or interrupt our business operations. In addition, if an accident or

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environmental discharge occurs, or if we discover contamination caused by prior operations, including by prior owners and operators of properties we acquire, we could be liable for cleanup obligations, damages and fines. If such unexpected costs are substantial, this could significantly harm our financial condition and results of operations.


Risks Related to Administrative, Organizational and Commercial Operations and Growth

We will need to increase the size of our organization, and we may experience difficulties in managing growth.

        As of June 30, 2015, we had 24 employees. We may need to expand our managerial, operational, financial and other resources in order to manage our operations and clinical trials, continue our development activities and commercialize MRX34 or other product candidates. Our management and personnel, systems and facilities currently in place are likely not adequate to support this future growth. Also, our management may need to divert a disproportionate amount of its attention away from our day-to-day activities and devote a substantial amount of time to managing these growth activities. We may not be able to effectively manage the expansion of our operations, which may result in weaknesses in our infrastructure and give rise to operational mistakes, loss of business opportunities, loss of employees and reduced productivity among remaining employees. Our expected growth could require significant capital expenditures and may divert financial resources from other projects, such as the development of additional product candidates. Our need to effectively execute our business strategy requires that we:

        If we are unable to expand our managerial, operational, financial and other resources to the extent required to manage our development and commercialization activities, our business will be materially adversely affected.

We face substantial competition and our competitors may discover, develop or commercialize products faster or more successfully than us.

        The development and commercialization of new drug products is highly competitive. We face competition from major pharmaceutical companies, specialty pharmaceutical companies, biotechnology companies, universities and other research institutions worldwide with respect to MRX34 and other product candidates that we may seek to develop or commercialize in the future. Our competitors may succeed in developing, acquiring or licensing technologies and drug products that are more effective or less costly than MRX34 or any other product candidates that we are currently developing or that we may develop, which could render our product candidates obsolete and noncompetitive.

        There are a number of pharmaceutical and biotechnology companies that currently market and sell products or are pursuing the development of product candidates for the treatment of the most prevalent form of liver cancer, hepatocellular carcinoma, or HCC. Companies working in this area include Alnylam Pharmaceuticals, Inc., Dicerna Pharmaceuticals, Inc., Isis Pharmaceuticals, Inc., Quark Pharmaceuticals, Inc., Regulus Therapeutics, Inc., Rosetta Genomics Ltd., Silence Therapeutics plc and Tekmira Pharmaceuticals Corporation, or Tekmira, as well as a number of the multinational

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pharmaceutical companies. Tekmira has announced an ongoing multicenter, single-arm, open-label dose escalation Phase 1/2 study for TKM-PLK1 in HCC. Notably, Bristol Myers Squibb recently presented positive data from an ongoing Phase 1 clinical trial of nivolumab (Opdivo), a PD-1 blocker, demonstrating a 19% response rate. In addition, there are a variety of available therapies marketed for the treatment of liver cancer with which we would expect to compete. Many of the available therapies are well-established and widely accepted by physicians, patients and third-party payors. For example, Nexavar, marketed by Amgen Inc. and Bayer AG, is currently in use for the treatment of HCC. There are also a number of pharmaceuticals and biologics that are marketed or in clinical development for the treatment of solid tumors. The most common treatments for solid tumors are various chemotherapeutic agents, radiation therapy and certain targeted therapies, including monoclonal antibodies such as Avastin®, Erbitux®, Herceptin® and Vectibix®. Small molecules, such as Nexavar, Sutent® and Tarceva®, are also indicated for the treatment of solid tumors.

        There are also a number of pharmaceutical and biotechnology companies that currently market and sell products or are pursuing the development of product candidates for the treatment of various hematological malignancies. Companies working in this area include Celgene Corporation, Gilead Sciences, Inc., Infinity Pharmaceuticals, Inc., Millennium Pharmaceuticals, Inc., Pharmacylics LLC and ProNAi Therapeutics, Inc., as well as a number of the multinational pharmaceutical companies. In addition, there are a variety of available therapies marketed for the treatment of various hematological malignancies with which we would expect to compete. Many of the available therapies are well-established and widely accepted by physicians, patients and third-party payors. For example, Rituxan®, marketed by F. Hoffmann-La Roche Ltd. and Genentech Inc., is currently in use for the treatment of chronic lymphocytic leukemia and non-Hodgkin's lymphoma, or NHL. In addition, ProNAi Therapeutics, Inc. has an ongoing Phase 2 clinical trial in patients with NHL on their lead therapeutic product, PNT2258. There are also a number of pharmaceuticals and biologics that are marketed or in clinical development for the treatment of various hematologic malignancies. The most common treatments for various hematological malignancies are chemotherapeutic agents, radiation therapy and certain targeted therapies, including monoclonal antibodies such as Gazyva®, Arzerra® and Campath®. Small molecules, such as Imbruvica®, Vizada®, Treanda®, Velcade® and Revlimid® are also indicated for the treatment of various hematological malignancies.

        In addition to the competition we face from alternative therapies for the diseases we intend to target with our product candidates, we are also aware of several companies that are also working specifically to develop microRNA therapeutics, including miRagen Therapeutics, Inc., Regulus Therapeutics, Inc. and Santaris Pharma A/S (now Roche). Many of our competitors have substantially greater financial, technical and other resources, such as larger research and development staff and experienced marketing and manufacturing organizations. Insurers and other third-party payors may also encourage the use of generic products. For example, if MRX34 is approved, it may be priced at a significant premium over other competitive products. This may make it difficult for MRX34 or any other future products to compete with these products.

        If our competitors obtain marketing approval from the FDA or comparable foreign regulatory authorities for their product candidates more rapidly than us, it could result in our competitors establishing a strong market position before we are able to enter the market.

        Many of our competitors have materially greater name recognition and financial, manufacturing, marketing, research and drug development resources than we do. Additional mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated in our competitors. Large pharmaceutical companies in particular have extensive expertise in preclinical, nonclinical and clinical testing and in obtaining regulatory approvals for drugs. In addition, academic institutions, government agencies, and other public and private organizations conducting research may seek patent protection with respect to potentially competitive products or technologies. These organizations may also establish exclusive collaborative or licensing relationships

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with our competitors. Failure of MRX34 or other product candidates to effectively compete against established treatment options or in the future with new products currently in development would harm our business, financial condition, results of operations and prospects.

We may engage in strategic transactions that could impact our liquidity, increase our expenses and present significant distractions to our management.

        From time to time, we may consider strategic transactions, such as acquisitions of companies, asset purchases, and out-licensing or in-licensing of products, product candidates or technologies. Additional potential transactions that we may consider include a variety of different business arrangements, including spin-offs, strategic partnerships, joint ventures, restructurings, divestitures, business combinations and investments. Any such transaction may require us to incur non-recurring or other charges, may increase our near- and long-term expenditures and may pose significant integration challenges or disrupt our management or business, which could adversely affect our operations and financial results. For example, these transactions may entail numerous operational and financial risks, including:

        Accordingly, although there can be no assurance that we will undertake or successfully complete any transactions of the nature described above, any transactions that we do complete may be subject to the foregoing or other risks, could have a material adverse effect on our business, financial condition, results of operations and prospects.

We are highly dependent on the services of our President and Chief Executive Officer, Paul Lammers, M.D., M.Sc., and our ability to attract and retain qualified personnel.

        We may not be able to attract or retain qualified management and scientific and clinical personnel in the future due to the intense competition for qualified personnel among biotechnology, pharmaceutical and other businesses. Our industry has experienced a high rate of turnover of management and scientific personnel in recent years. If we are not able to attract, retain and motivate necessary personnel to accomplish our business objectives, we may experience constraints that will significantly impede the achievement of our development objectives, our ability to raise additional capital and our ability to implement our business strategy.

        We are highly dependent on the principal members of our management and scientific staff. The loss of service of any of our management and key scientific staff could harm our business, particularly our President and Chief Executive Officer, Dr. Lammers. Due to our limited resources, we may not be

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able to effectively attract and recruit additional qualified personnel. If we are not able to retain our management, particularly our President and Chief Executive Officer, Dr. Lammers, and to attract, on acceptable terms, additional qualified personnel necessary for the continued development of our business, we may not be able to sustain our operations or grow. Although we have executed employment agreements with each member of our current executive management team, including Dr. Lammers, we may not be able to retain their services as expected.

        In addition, we have scientific and clinical advisors who assist us in formulating our product development and clinical strategies. These advisors are not our employees and may have commitments to, or consulting or advisory contracts with, other entities that may limit their availability to us, or may have arrangements with other companies to assist in the development of products that may compete with ours.

Our internal computer systems, or those of our CROs or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product development programs.

        Despite the implementation of security measures, our internal computer systems and those of our CROs and other contractors and consultants are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. While we have not experienced any such system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our programs. For example, the loss of clinical trial data from completed or ongoing clinical trials for any of our product candidates could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach results in a loss of or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, including the confidential medical information of clinical trial participants, we could incur liability and the further development of our product candidates could be delayed.

Our employees, independent contractors, principal investigators, CROs, consultants and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.

        We are exposed to the risk that employees, independent contractors, principal investigators, CROs, consultants and vendors may engage in fraudulent or other illegal activity. Misconduct by these parties could include intentional, reckless and/or negligent conduct or disclosure of unauthorized activities to us that violates: (i) FDA regulations, including those laws requiring the reporting of true, complete and accurate information to the FDA; (ii) manufacturing standards; (iii) federal and state healthcare fraud and abuse laws and regulations; or (iv) laws that require the true, complete and accurate information or data. Specifically, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Activities subject to these laws also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. It is not always possible to identify and deter misconduct by our employees and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, possible exclusion

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from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations.

Requirements associated with being a public company will increase our costs significantly, as well as divert significant company resources and management attention.

        Prior to this offering, we have not been subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or the other rules and regulations of the Securities and Exchange Commission, or SEC, or any securities exchange relating to public companies. We are working with our legal, independent accounting and financial advisors to identify those areas in which changes should be made to our financial and management control systems to manage our growth and our obligations as a public company. These areas include corporate governance, corporate control, disclosure controls and procedures and financial reporting and accounting systems. We have made, and will continue to make, changes in these and other areas. However, the expenses that will be required in order to adequately prepare for being a public company could be material, particularly after we cease to be an "emerging growth company." Compliance with the various reporting and other requirements applicable to public companies will also require considerable time and attention of management. In addition, the changes we make may not be sufficient to allow us to satisfy our obligations as a public company on a timely basis.

        However, for as long as we remain an "emerging growth company" as defined in the Jumpstart our Business Startups Act, or the JOBS Act, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies," including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We may take advantage of these reporting exemptions until we are no longer an "emerging growth company." Because the JOBS Act has only recently been enacted, it is not yet clear whether investors will accept the more limited disclosure requirements that we may be entitled to follow while we are an "emerging growth company." If they do not, we may end up electing to comply with disclosure requirements as if we were not an "emerging growth company," in which case we would incur the greater expenses associated with such disclosure requirements.

        We will remain an "emerging growth company" for up to five years after the completion of this offering, although if the market value of our common stock that is held by non-affiliates exceeds $700 million as of any June 30 before that time or if we have total annual gross revenues of $1 billion or more during any fiscal year before that time, we would cease to be an "emerging growth company" as of the end of that fiscal year, or if we issue more than $1 billion in non-convertible debt in a three-year period, we would cease to be an "emerging growth company" immediately.

        In addition, being a public company could make it more difficult or more costly for us to obtain certain types of insurance, including directors' and officers' liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. The impact of these events could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.

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If we are not able to implement the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 in a timely manner or with adequate compliance, we may be subject to sanctions by regulatory authorities.

        Section 404 of the Sarbanes-Oxley Act of 2002 requires that we evaluate and determine the effectiveness of our internal controls over financial reporting and, beginning with our annual report for fiscal year 2016, provide a management report on the internal control over financial reporting. If we have a material weakness in our internal control over financial reporting, we may not detect errors on a timely basis and our financial statements may be materially misstated. We will be evaluating our internal controls systems to allow management to report on, and eventually allow our independent auditors to attest to, our internal controls. We will be performing the system and process evaluation and testing (and any necessary remediation) required to comply with the management certification and eventual auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002. The aforementioned auditor attestation requirements will not apply to us until we are not an "emerging growth company."

        To date, we have never conducted a review of our internal controls for the purpose of providing the reports required by these rules. We cannot be certain as to the timing of completion of our evaluation, testing and remediation actions or the impact of the same on our operations. If we are not able to implement the requirements of Section 404 in a timely manner or with adequate compliance, we may be subject to sanctions or investigation by regulatory authorities, such as the SEC or The NASDAQ Stock Market LLC, or NASDAQ. Any such action could adversely affect our financial results or investors' confidence in us and could cause our stock price to fall. Moreover, if we are not able to comply with the requirements of Section 404 in a timely manner, or if we or our independent registered public accounting firm identifies deficiencies in our internal controls that are deemed to be material weaknesses, we could be subject to sanctions or investigations by the SEC, NASDAQ or other regulatory authorities, which would entail expenditure of additional financial and management resources and could materially adversely affect our stock price. Inferior internal controls could also cause us to fail to meet our reporting obligations or cause investors to lose confidence in our reported financial information, which could have a negative effect on our stock price.

Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited.

        We have incurred substantial losses during our history and do not expect to become profitable in 2015 and may never achieve profitability. To the extent that we continue to generate taxable losses, unused losses will carry forward to offset future taxable income, if any, until such unused losses expire. We may be unable to use these losses to offset income before such unused losses expire. Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, if a corporation undergoes an "ownership change," generally defined as a greater than 50 percentage point change (by value) in its equity ownership over a three-year period, the corporation's ability to use its pre-change net operating loss, or NOL, carryforwards and other pre-change tax attributes to offset its post-change income or taxes may be further limited. We believe that we have experienced at least one ownership change in the past. We may also experience additional ownership changes as a result of subsequent shifts in our stock ownership, including as a result of this offering. Accordingly, our ability to use our pre-change NOL carryforwards to offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us. For these reasons, we may not be able to utilize any or a material portion of our NOL carryforwards and other tax attributes.

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If we seek and obtain approval to commercialize MRX34 outside of the United States, a variety of risks associated with international operations could materially adversely affect our business.

        If MRX34 is approved for commercialization outside the United States, we will likely enter into agreements with third parties to market MRX34 outside the United States. We expect that we will be subject to additional risks related to entering into these international business relationships, including:

We or the third parties upon whom we depend may be adversely affected by natural disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.

        Natural disasters could severely disrupt our operations, and have a material adverse effect on our business, financial condition and results of operations. If a natural disaster, power outage or other event occurred that prevented us from using all or a significant portion of our headquarters, that damaged critical infrastructure, such as our enterprise financial systems or manufacturing resource planning and enterprise quality systems, or that otherwise disrupted operations, it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time. The disaster recovery and business continuity plans we have in place currently are limited and are unlikely to prove adequate in the event of a serious disaster or similar event. We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans, which could have a material adverse effect on our business.

        Furthermore, certain integral parties in our supply chain are geographically concentrated and operating from single sites, increasing their vulnerability to natural disasters or other sudden, unforeseen and severe adverse events. Although we believe there to be sufficient alternative suppliers

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in other geographic locations, if such an event were to affect such existing parties in our supply chain, it could have a material adverse effect on our business.


Risks Related to Intellectual Property

If we are unable to obtain and maintain sufficient patent protection for our technology and product candidates, or if the scope of the patent protection is not sufficiently broad, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize our product candidates may be adversely affected.

        We rely upon a combination of patents, trade secret protection and confidentiality agreements to protect the intellectual property related to our technologies.

        In particular, our success depends in large part on our ability to obtain and maintain patent protection in the United States and other countries with respect to our product candidates. If we do not adequately protect our intellectual property, competitors may be able to use our technologies and erode or negate any competitive advantage we may have, which could harm our business and ability to achieve profitability. To protect our proprietary position, we file patent applications in the United States and in limited jurisdictions abroad related to our product candidates and compounds in development that may become our product candidates. The patent application and approval process is expensive and time-consuming. We may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. We may also fail to identify patentable aspects of our research and development before it is too late to obtain patent protection.

        The strength of patents in the biotechnology and pharmaceutical field involves complex legal and scientific questions and can be uncertain. This uncertainty includes changes to the patent laws through either legislative action to change statutory patent law or court action that may reinterpret existing law in ways affecting the scope or validity of issued patents. The patent applications that we own or in-license may fail to result in issued patents in the United States or in foreign countries in which we pursue protection with claims that cover our product candidates. There is no assurance that all of the potentially relevant prior art relating to our patents and patent applications has been found, which can invalidate a patent or prevent a patent from issuing from a pending patent application. Even if patents have issued, or do successfully issue, from patent applications that we own or license, third parties may challenge the validity, enforceability or scope thereof, which may result in such patents being narrowed, invalidated or held unenforceable. For example, patents granted by the European Patent Office, or EPO, may be challenged, also known as opposed, by any person within nine months from the publication of their grant. In May 2015, two separate and unidentified parties filed submissions before the EPO opposing a granted European patent related to MRX34, EP2302055 (the '055 Patent), in-licensed to us from Asuragen. We are currently reviewing these submissions and plan to respond to the submissions before the November 2015 EPO response deadline. All of the claims of the '055 Patent remain valid and in force during the opposition proceedings. It is not possible to predict the outcome of the opposition proceedings, for example whether the patent will be maintained, limited in scope or whether the grant may be revoked. If the '055 Patent is ultimately narrowed in scope or revoked during the opposition proceedings, the patent protection afforded by the '055 Patent, and the extent of our exclusivity with respect to commercialization of MRX-34 in Europe could be materially impaired. Even if they are unchallenged, our patents may not adequately protect our product candidates, provide any competitive advantage or prevent others from designing around our claims. If the breadth or strength of protection provided by the patents and patent applications we hold, in-license or pursue with respect to our product candidates is threatened or insufficient, it could dissuade companies from collaborating with us to develop or undermine our ability to commercialize our product candidates and could have a material adverse effect on our business, financial condition, results of operations and prospects.

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        Currently, our patent portfolio includes over 10 issued U.S. patents and over 42 pending U.S. and ex-U.S. patent applications that we own, co-own, or have in-licensed from third parties, primarily focused on various aspects of microRNA therapeutics, including various microRNA mimics, and methods of use as microRNA related therapies. Within our patent portfolio, we are the sole owner of multiple U.S. and foreign patent applications related to microRNA therapies, including chemically modified versions of miR-34 not currently used in MRX34 (U.S. Patent No. 8,586,727) and other microRNAs mimics that are possible candidates for future product development as microRNA therapeutics. Further, our patent portfolio includes U.S. 7,960,359 and U.S. 8,563,708, both of which are related to miR-34 and are in-licensed from Asuragen. Specifically, U.S. 7,960,359 is related to use of a miR-34a mimic, for example MRX34, for reducing cell viability of human lung cancer cells, human cancerous T cells, human prostate cancer cells or human skin cancer cells. This patent is expected to expire in 2025. See "Business—Intellectual Property—Our Patent Portfolio" for a more detailed description of the patents we own or license covering our product candidates.

        If the patent applications we hold or have in-licensed with respect to our programs or product candidates fail to issue, if their breadth or strength of protection is threatened, if we abandon or allow owned or in-licensed patents or patent applications that we are responsible for prosecuting to lapse, or if our owned and in-licensed patents and patent applications fail to provide meaningful exclusivity for our product candidates, it could dissuade companies from collaborating with us to develop product candidates, and threaten our ability to commercialize future products. We have multiple pending patent applications relating to our product candidates. We cannot offer any assurances about which, if any, patents will issue, the breadth of the claims of any such patent, should it issue, or whether any issued patents will be found invalid and/or unenforceable, will be interpreted narrowly or will be threatened by third parties. Any successful opposition to these patents or any other patents owned by or licensed to us could deprive us of rights necessary for the successful commercialization of any product candidates that we may develop.

        Almost all of our patents and patent applications are entitled to effective filing dates prior to March 16, 2013. For U.S. patent applications in which patent claims are entitled to a priority date before March 16, 2013, an interference proceeding can be provoked by a third party, for example a competitor, or instituted by the U.S. Patent and Trademark Office, or the USPTO, to determine who was the first to invent any of the subject matter covered by those patent claims. An unfavorable outcome could require us to cease using the related technology or to attempt to license rights from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms. Our participation in an interference proceeding may fail and, even if successful, may result in substantial costs and distract our management.

        Further, if we encounter delays in our clinical trials or achieving regulatory approvals, the period of time during which we could market any of our product candidates under patent protection, if approved, would be reduced. Since patent applications in the United States and most other countries are confidential for a period of time after filing, and some remain so until issued, we cannot be certain that we were the first to file any patent application related to our product candidates. Furthermore, an interference proceeding can be provoked by a third party or instituted by the U.S. Patent and Trademark Office, or USPTO, to determine who was the first to invent any of the subject matter covered by the patent claims of our applications. In addition, patents have a limited lifespan. In the United States, the natural expiration of a patent is generally 20 years after it is filed. Various extensions may be available; however the life of a patent, and the protection it affords, is limited. Even if we obtain patents that cover the manufacture, use and/or sale of our product candidates and such patents are not successfully challenged by any third parties, once the patent life has expired for a product, we may be open to competition, including from generic medications.

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We may not be successful in obtaining or maintaining necessary rights to product components and processes for our development pipeline through acquisitions and in-licenses.

        Presently we have rights to certain intellectual property through licenses from third parties and under patents that we own or co-own, related to a subset of the known microRNA targets. Because our programs may involve a range of microRNA targets and specific formulations of microRNA mimics directed to such targets, including targets and formulations that may require the use of proprietary rights held by third parties, the growth of our business will likely depend in part on our ability to acquire, in-license or otherwise gain the right to use these proprietary rights. We may be unable to acquire or in-license any necessary or desirable third-party intellectual property rights on reasonable terms, or at all. The licensing and acquisition of third-party intellectual property rights is a competitive area, and a number of more established companies are also pursuing strategies to license or acquire third-party intellectual property rights that we may consider attractive now or in the future. These established companies may have a competitive advantage over us due to their size, cash resources and greater clinical development and commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. We also may be unable to license or acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment. If we are unable to successfully obtain rights to required third-party intellectual property rights, including rights related to our lead product candidate, our business, financial condition and prospects for growth could suffer.

If we are unable to protect the confidentiality of our trade secrets, the value of our technology could be materially adversely affected and our business would be harmed.

        In addition to the protection afforded by patents, we rely on trade secret protection and confidentiality agreements to protect proprietary know-how that may not be patentable or that we elect not to patent, processes for which patents may be difficult to obtain or enforce, and any other elements of our product candidates discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents. However, trade secrets can be difficult to protect. We seek to protect our proprietary data and processes, in part, by confidentiality agreements and invention assignment agreements with our employees, consultants, scientific advisors, contractors and collaborators, and any other third parties that have access to our proprietary know-how, information or technology, for example, third parties involved in our clinical trials. Although we expect all of our employees, consultants, advisors and any third parties who have access to our proprietary know-how, information or technology to enter into confidentiality agreements, we cannot provide any assurances that all such agreements have been duly executed, and we cannot be certain that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques. Misappropriation or unauthorized disclosure of our trade secrets could impair our competitive position and may have a material adverse effect on our business. Additionally, if the steps taken to maintain our trade secrets are deemed inadequate, we may have insufficient recourse against third parties for misappropriating the trade secret. In addition, others may independently discover our trade secrets and proprietary information. For example, the FDA, as part of its Transparency Initiative, is currently considering whether to make additional information publicly available on a routine basis, including information that we may consider to be trade secrets or other proprietary information, and it is not clear at the present time how the FDA's disclosure policies may change in the future, if at all.

        We also seek to preserve the integrity and confidentiality of our data, trade secrets and know-how by maintaining physical security of our premises and physical and electronic security of our information technology systems. While we have confidence in these individuals, organizations and systems, agreements or security measures may be breached, and we may not have adequate remedies for any breach. Moreover, if any of our trade secrets were to be lawfully obtained or independently developed

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by a competitor, we would have no right to prevent such competitor from using that technology or information to compete with us, which could harm our competitive position.

        Further, the laws of some foreign countries do not protect proprietary rights to the same extent or in the same manner as the laws of the United States. As a result, we may encounter significant problems in protecting and defending our intellectual property both in the United States and abroad. If we are unable to prevent material disclosure of the intellectual property related to our technologies to third parties, we will not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, financial condition and results of operations.

Issued patents covering our product candidates could be found invalid or unenforceable if challenged in court or the USPTO.

        If we or one of our licensing partners initiated legal proceedings against a third party to enforce a patent covering the manufacture, use or sale, or other aspects of one of our product candidates, the defendant could counterclaim that the patent covering our product candidate is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace, and there are numerous grounds upon which a third party can assert invalidity or unenforceability of a patent. Third parties may also raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation. Such mechanisms include ex parte re-examination, inter partes review, post grant review and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings). Such proceedings could result in revocation or amendment to our patents in such a way that they no longer cover our product candidates. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we, our patent counsel and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our product candidates. Similarly, the outcome following administrative review of a patent that we own or license, such as via a reexamination or opposition proceeding before the USPTO or a foreign body, is unpredictable. If a third party were to prevail, we could lose at least part, and perhaps all, of the patent protection on our product candidates. Such a loss of patent protection could have a material adverse impact on our business.

If we are sued for infringing the patent rights or misappropriating the trade secrets of third parties, such litigation could be costly and time consuming and could prevent or delay us from developing or commercializing our product candidates.

        Our commercial success depends, in part, on our ability to develop, manufacture, market and sell our product candidates and use our proprietary technology without infringing the patent rights of third parties. Numerous third-party U.S. and non-U.S. issued patents and pending applications exist in the area of microRNA. We are aware of certain U.S. and foreign patents and pending patent applications owned by our competitors or other third parties that cover certain miR-34 mimics and therapeutic uses thereof. We are currently monitoring these patents and patent applications. We have and we may in the future pursue available proceedings in the U.S. and foreign patent offices to challenge the validity of these patents and patent applications. In addition or alternatively, we may consider whether to seek to negotiate a license of rights to technology covered by one or more of such patents and patent applications. If any patents or patent applications cover our product candidates or technologies, we may not be free to manufacture or market our product candidates, including MRX34, as planned, absent such a license, which may not be available to us on commercially reasonable terms, or at all. For example, in 2013 we launched opposition proceedings against a granted European patent related to miR-34a. Following oral arguments, the EPO upheld the patent. We are currently evaluating all options as we believe the patent was issued erroneously.

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        It is also possible that we have failed to identify relevant third-party patents or applications. For example, applications filed before November 29, 2000 and certain applications filed after that date that will not be filed outside the United States remain confidential until patents issue. Moreover, it is difficult for industry participants, including us, to identify all third-party patent rights that may be relevant to our product candidates and technologies because patent searching is imperfect due to differences in terminology among patents, incomplete databases and the difficulty in assessing the meaning of patent claims. We may fail to identify relevant patents or patent applications or may identify pending patent applications of potential interest but incorrectly predict the likelihood that such patent applications may issue with claims of relevance to our technology. In addition, we may be unaware of one or more issued patents that would be infringed by the manufacture, sale or use of a current or future product candidate, or we may incorrectly conclude that a third-party patent is invalid, unenforceable or not infringed by our activities. Additionally, pending patent applications that have been published can, subject to certain limitations, be later amended in a manner that could cover our technologies, our products or the use of our products.

        There is a substantial amount of intellectual property litigation in the biotechnology and pharmaceutical industries, and we may become party to, or threatened with, litigation or other adversarial proceedings regarding patent rights with respect to our technology or products candidates, including interferences, oppositions and inter partes review proceedings before the USPTO and corresponding foreign patent offices. We also monitor patent prosecution activities and pending applications of competitors and potential competitors in our field in order to identify third party patent rights that could pose a potential threat to our freedom to operate in the market with respect to our product candidates, once commercialized. We are currently pursuing and may in the future pursue available administrative proceedings in the U.S. or foreign patent offices to challenge third party patent rights that could adversely impact our ability to commercialize one or more of our product candidates. As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our current or future product candidates may be subject to claims of infringement of the patent rights of third parties, who may assert infringement claims against us based on existing or future patent rights. Third parties may assert that we are employing their proprietary technology without authorization. There may be third-party patents or patent applications with claims to materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of our product candidates and third parties could allege that our technology infringes such claims. Further, because patent applications can take many years to issue, third parties may have currently pending patent applications which may later result in issued patents that our product candidates may infringe, or which such third parties claim are infringed by the use of our technologies. The outcome of patent litigation is subject to uncertainties that cannot be adequately quantified in advance. The pharmaceutical and biotechnology industries have produced a significant number of patents, and it may not always be clear to industry participants, including us, which patents cover various types of products or methods of use. The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform. If we are sued for patent infringement, we would need to demonstrate that our product candidates, products or methods either do not infringe the patent claims of the relevant patent or that the patent claims are invalid, and we may not be able to do this. Proving that a patent is invalid is difficult. For example, in the United States, proving invalidity requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents. Even if we are successful in these proceedings, we may incur substantial costs and the time and attention of our management and scientific personnel could be diverted in pursuing these proceedings, which could have a material adverse effect on us. In addition, we may not have sufficient resources to bring these actions to a successful conclusion.

        If we are found to infringe a third party's patent rights, including any patent rights related to miR-34, we could be forced, including by court order, to cease developing, manufacturing or commercializing the infringing product candidate or product. Alternatively, we may be required to

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obtain a license from such third party in order to use the infringing technology and continue developing, manufacturing or marketing the infringing product candidate. However, we may not be able to obtain any required license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. In addition, we could be found liable for monetary damages, including treble damages and attorneys' fees if we are found to have willfully infringed a patent. A finding of infringement could prevent us from commercializing our product candidates or force us to cease some of our business operations, which could materially harm our business. Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business.

        Parties making claims against us for infringement of their patent rights may obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize one or more of our product candidates. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business. In the event of a successful claim of infringement against us, we could be required to redesign our infringing products or obtain a license from such third party to continue developing and commercializing our products and technology. However, we may not be able to obtain any required license on commercially reasonable terms, or at all. Even if we are able to obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. It may be impossible to redesign our products and technology, or it may require substantial time and monetary expenditure, which could force us to cease commercialization of one or more of our product candidates, including MRX34, or some of our business operations, which could materially harm our business. In addition, in any such proceeding, we may be required to pay substantial damages, including treble damages and attorneys' fees in the event we are found liable for willful infringement.

We may be involved in lawsuits or administrative proceedings to protect or enforce our intellectual property rights, which could be expensive, time consuming and unsuccessful.

        Competitors may infringe or we may believe that they infringe patents that we own or license. To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time-consuming. In addition, in an infringement proceeding, a court may decide that a patent of ours is not valid or is unenforceable, or may refuse to stop the other party in such infringement proceeding from using the technology at issue on the grounds that our patents do not cover the technology in question. An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of being invalidated, held unenforceable or interpreted narrowly, and could put any of our patent applications at risk of not yielding an issued patent. Litigation is uncertain, and we cannot predict whether we would be successful in any such litigation.

        Interference proceedings provoked by third parties or brought by the USPTO or any foreign patent authority may be necessary to determine the priority of inventions with respect to our patents or patent applications. An unfavorable outcome could require us to cease using the related technology or to attempt to license rights to it from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms, if any license is offered at all. Litigation or interference proceedings may fail and, even if successful, may result in substantial costs and distract our management and other employees.

        We may not be able to prevent misappropriation of our trade secrets or confidential information, particularly in countries where the laws may not protect those rights as fully as in the United States. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors

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perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock.

        Legal actions to enforce patent rights or other intellectual property rights that we own or license can be expensive and may involve the diversion of significant management time. In addition, these legal actions could be unsuccessful and could also result in the invalidation of our patents or a finding that they are unenforceable. Moreover, third parties may be able to successfully design around our patents using pre-existing technology, by developing new technology or by using similar technology that is outside the scope of our patents. We may or may not choose to pursue litigation against those that have infringed on our patents, or used them without authorization, due to the associated expense and time commitment of monitoring these activities. If we fail to protect or to enforce our intellectual property rights successfully, our competitive position could suffer, which could harm our results of operations.

We may not be able to protect our intellectual property rights throughout the world.

        Filing, prosecuting and defending patents on all of our product candidates throughout the world would be prohibitively expensive, and our patent rights in some countries outside the United States can be less extensive than those in the United States. The requirements for patentability may differ in certain countries, particularly developing countries. For example, unlike other countries, China has a heightened requirement for patentability, and specifically requires a detailed description of medical uses of a claimed therapeutic. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions.

        As part of ordinary course prosecution and maintenance activities, we determine whether to seek patent protection outside the United States and in which countries. This also applies to patents we have acquired or in-licensed from third parties. In some cases this means that we, or our predecessors in interest or licensors of patents within our portfolio, have sought patent protection in a limited number of countries for patents covering our product candidates, including for patents providing coverage for MRX34. Competitors may use our technologies in jurisdictions where we have not pursued and obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection but where enforcement is not as strong as in the United States. These products may compete with our products in jurisdictions where we do not have any issued patents and, even in jurisdictions where we have or are able to obtain issued patents, our patent claims or other intellectual property rights may not be effective or sufficient to prevent them from so competing. Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, particularly those relating to biopharmaceuticals, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial cost and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. In addition, certain countries in Europe and certain developing countries, including India and China, have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In those countries, we may have limited remedies if our patents are infringed or if we are compelled to grant a license to our patents to a third party, which

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could materially diminish the value of those patents. This could limit our potential revenue opportunities.

        Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we own or license. Moreover, patent protection must ultimately be sought on a country-by-country basis, which is an expensive and time-consuming process with uncertain outcomes. Accordingly, we may choose not to seek patent protection in certain countries, and we will not have the benefit of patent protection in such countries.

The patent protection and patent prosecution for some of our product candidates may be dependent on our third party licensors.

        While we normally seek to obtain the right to control the filing, prosecution, maintenance, defense and enforcement of the patents and patent applications that we in-license relating to our product candidates, there may be times when such activities for patents that relate to our product candidates are controlled by our licensors. For example, we do not have the first right to prosecute, maintain, defend, or enforce the patent rights licensed to us relating to the SMARTICLES technology under our agreement with Marina Biotech, Inc., or Marina. Although we may retain the right to consult on such filing, prosecution, maintenance, defense, and enforcement activities, our overall ability to influence such activities is limited. Moreover, the patent rights we have in-licensed from Marina may be put at risk in litigation or administrative proceedings unrelated to our product candidates. Further, while we seek to have rights to take action to defend our in-licensed patents and patent applications from third-party challenges in the event that our licensors determine not to, we may not be aware of any such potential threats to the intellectual property rights we in-license, or we may be unsuccessful in protecting such intellectual property rights if we respond to any such challenges by third parties.

        If these licensors or any of our future licensors fail to appropriately file, prosecute, maintain, defend or enforce our in-licensed patents and patent applications covering any of our product candidates, our ability to develop and commercialize those product candidates may be adversely affected and we may not be able to prevent competitors from making, using and selling competing products.

If we breach any of the agreements under which we license patent rights to use, develop and commercialize our product candidates or our technologies from third parties or, in certain cases, we fail to meet certain development deadlines, we could lose license rights that are important to our business.

        We are a party to a number of license agreements under which we are granted rights to intellectual property that are important to our business and we expect that we may need to enter into additional license agreements in the future. These include our exclusive cross-license agreement with Asuragen, our exclusive licenses from Yale University, or Yale, Marina and the University of Zurich.

        Our existing license agreements, except our cross-license agreement with Asuragen, generally impose, and we expect that future license agreements will impose on us, various development, regulatory and/or commercial diligence obligations, and financial obligations, such as payment of milestones and/or royalties. If we fail to comply with our obligations under these agreements, or we are subject to a bankruptcy, the licensor may have the right to terminate the license, in which event we may not be able to market products covered by the license. Our business could suffer, for example, if any current or future licenses terminate, if the licensors fail to abide by the terms of the license, if the licensed patents or other rights are found to be invalid or unenforceable, or if we are unable to enter into necessary licenses on acceptable terms. See "Business—Strategic Partnerships and Collaborations" for a description of our license agreements, which sets forth the material terms and obligations,

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including a description of the termination provisions, under our agreements with Asuragen, Yale, Marina and the University of Zurich.

        We license the technology related to SMARTICLES from Marina. Our license with Marina imposes various development, regulatory, commercial diligence, financial and other obligations. If we fail to comply with our obligations under the agreement with Marina, or otherwise materially breach the agreement with Marina, and fail to remedy such failure or cure such breach, Marina may have the right to terminate the license. The loss of the license from Marina would affect a portion of the patent portfolio for MRX34, which would adversely affect our ability to proceed with any development or potential commercialization of MRX34, and could subject us to claims of patent infringement by Marina if MRX34 is covered by the affected patents.

        As we have done previously, we may need to obtain licenses from third parties to advance our research or allow commercialization of our product candidates, and we cannot provide any assurances that third-party patents do not exist that might be enforced against our current product candidates or future products in the absence of such a license. We may fail to obtain any of these licenses on commercially reasonable terms, if at all. Even if we are able to obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. In that event, we may be required to expend significant time and resources to develop or license replacement technology. If we are unable to do so, we may be unable to develop or commercialize the affected product candidates, which could materially harm our business and the third parties owning such intellectual property rights could seek either an injunction prohibiting our sales, or, with respect to our sales, an obligation on our part to pay royalties and/or other forms of compensation.

        Licensing of intellectual property is of critical importance to our business and involves complex legal, business and scientific issues. Disputes may arise between us and our licensors regarding intellectual property subject to a license agreement, including:

        If disputes over intellectual property that we have licensed arise, we would expect to exercise all rights and remedies available to us, including seeking to cure any breach by us, and otherwise seek to preserve our rights under the patents licensed to us. However, we may not be able to do so in a timely manner, at an acceptable cost or at all. Generally, the loss of any one of our current licenses, or any other license we may acquire in the future, could prevent or impair our ability to successfully develop and commercialize the affected product candidates and thus materially harm our business, prospects, financial condition and results of operations.

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Intellectual property rights do not necessarily address all potential threats to our competitive advantage.

        The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may not adequately protect our business, provide a barrier to entry against our competitors or potential competitors, or permit us to maintain our competitive advantage. Moreover, if a third party has intellectual property rights that cover the practice of our technology, we may not be able to fully exercise or extract value from our intellectual property rights. The following examples are illustrative:

        Should any of these events occur, they could significantly harm our business, results of operations and prospects.

We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.

        We were previously involved in discussions with Yale regarding the inventorship and ownership of certain patents and patent applications licensed to us by Asuragen. An independent third party expert was engaged to determine the inventorship and the ownership of patents and patent applications potentially subject to Yale and Asuragen co-ownership. This determination confirmed Asuragen's sole ownership of the patents and patent applications where co-ownership had been under consideration and resulted in a determination that Yale should be removed as a co-owner of one of the pending patent applications, an action we are currently undertaking.

        Although we seek to protect our ownership of our patents and other intellectual property by ensuring that our agreements with our employees and certain collaborators and other third parties with whom we do business include provisions requiring, for instance, such parties to assign rights in inventions to us, we may be subject to claims that former or current employees, collaborators or other third parties have an ownership interest in our patents, in-licensed patents or other intellectual property. In some situations, our confidentiality agreements may conflict with, or be subject to, the rights of third parties with whom our employees, consultants or advisors have previous employment or consulting relationships, and further, many of our consultants are currently retained by other biotechnology or pharmaceutical companies, including our competitors or potential competitors, and

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may be subject to conflicting obligations to these third parties. To the extent that our employees, consultants or contractors use any intellectual property owned by third parties in their work for us, disputes may arise as to the ownership of rights in any related or resulting know-how and inventions, arising, for example, from such conflicting obligations of consultants, employees or others who are involved in developing our product candidates. Litigation may be necessary to defend against these and other claims challenging inventorship or ownership. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

Obtaining and maintaining patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

        The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent prosecution process. Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on patents and/or patent applications will be due to be paid to the USPTO and various patent agencies outside of the United States in several stages over the lifetime of the patents and/or applications. We have systems in place to remind us to pay these fees, and we employ reputable law firms and other professionals and rely on such third parties to effect payment of these fees with respect to the USPTO and non-U.S. patent agencies with respect to the patents and patent applications we own, and we rely upon our licensors to effect payment of these fees with respect to the patents and patent applications that we in-license. Even if we do not control prosecution and maintenance of our in-licensed patents, we may be responsible for reimbursing our licensors for some or all of the costs associated with such activities. If we fail to make timely payment to our licensors for such fees, our licensors may have the right to terminate the affected license, in which event we would not be able to market products covered by the license. We also employ reputable law firms and other professionals to help us comply with the various documentary and other procedural requirements with respect to the patents and patent applications that we own. In some cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with the applicable rules. However, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, our competitors might be able to enter the market and this circumstance would have a material adverse effect on our business.

Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our products, and recent patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.

        As is the case with other biotechnology companies, our success is heavily dependent on patents. Obtaining and enforcing patents in the biotechnology industry involve both technological and legal complexity, and is therefore costly, time-consuming and inherently uncertain. In addition, the United States has recently enacted and is currently implementing wide-ranging patent reform legislation. Recent U.S. Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on decisions by the U.S. Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future. Some of our patent claims may be

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affected by the recent U.S. Supreme Court decision in Association for Molecular Pathology v. Myriad Genetics. In Myriad, the Supreme Court held that unmodified isolated fragments of genomic sequences, such as the DNA constituting the BRCA1 and BRCA2 genes, are not eligible for patent protection because they constitute a product of nature. The exact boundaries of the Supreme Court's decision remain unclear as the Supreme Court did not address other types of nucleic acids, such as isolated microRNAs. Nevertheless, our patent portfolio contains claims of various types and scope, including chemically modified mimics, such as in MRX34, as well as methods of medical treatment. In our view, the presence of varying claims in our patent portfolio significantly reduces, but does not eliminate, our exposure to potential validity challenges under Myriad or future judicial decisions. However, it is not yet clear what, if any, impact this recent Supreme Court decision or future decisions will have on the operation of our business.

        For our U.S. patent applications containing a claim not entitled to priority before March 16, 2013, there is a greater level of uncertainty in the patent law. On September 16, 2011, the Leahy-Smith America Invents Act, or the Leahy-Smith Act, was signed into law. The Leahy-Smith Act includes a number of significant changes to U.S. patent law. These include provisions that affect the way patent applications will be prosecuted and may also affect patent litigation. The USPTO has promulgated regulations and developed procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, and in particular, the first to file provisions, did not come into effect until March 16, 2013. Accordingly, it is not yet clear what, if any, impact the Leahy-Smith Act will have on the operation of our business. However, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business and financial condition.

        An important change introduced by the Leahy-Smith Act is that, as of March 16, 2013, the United States transitioned to a "first-to-file" system for deciding which party should be granted a patent when two or more patent applications are filed by different parties claiming the same invention. A third party that files a patent application in the USPTO after that date but before us could therefore be awarded a patent covering an invention of ours even if we had made the invention before it was made by the third party. This will require us to be cognizant going forward of the time from invention to filing of a patent application. Furthermore, our ability to obtain and maintain valid and enforceable patents depends on whether the differences between our technology and the prior art allow our technology to be patentable over the prior art. Since patent applications in the United States and most other countries are confidential for a period of time after filing, we cannot be certain that we were the first to either (i) file any patent application related to our product candidates or (ii) invent any of the inventions claimed in our patents or patent applications.

        Among some of the other changes introduced by the Leahy-Smith Act are changes that limit where a patentee may file a patent infringement suit and providing opportunities for third parties to challenge any issued patent in the USPTO. This applies to all of our U.S. patents, even those issued before March 16, 2013. Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in United States federal court necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action. Accordingly, a third party may attempt to use the USPTO procedures to invalidate our patent claims that would not have been invalidated if first challenged by the third party as a defendant in a district court action.

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We may be subject to claims that our employees or consultants or independent contractors have wrongfully used or disclosed confidential information or trade secrets of third parties or that our employees or consultants have wrongfully used or disclosed alleged trade secrets of former or other employers.

        Many of our employees, independent contractors and consultants, including our senior management, have been previously employed or retained by other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although we try to ensure that our employees, consultants and independent contractors do not use the proprietary information or know-how of third parties in their work for us, and do not perform work for us that is in conflict with their obligations to another employer or any other entity, we may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise improperly used or disclosed confidential information, including trade secrets or other proprietary information, of a former employer or other third parties. We may also be subject to claims that an employee, advisor, consultant, or independent contractor performed work for us that conflicts with that person's obligations to a third party, such as an employer, and thus, that the third party has an ownership interest in the intellectual property arising out of work performed for us. We are not aware of any threatened or pending claims related to these matters, but in the future litigation may be necessary to defend against such claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable personnel or intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.

Intellectual property disputes could cause us to spend substantial resources and distract our personnel from their normal responsibilities.

        Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses, and could distract our technical and/or management personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the market price of our common stock. Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution activities. We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace.

If we do not obtain patent term extension in the United States under the Hatch-Waxman Act and in foreign countries under similar legislation, thereby potentially extending the term of our marketing exclusivity for our product candidates, our business may be materially harmed.

        Depending upon the timing, duration and specifics of FDA marketing approval of our product candidates, if any, one of the U.S. patents covering each of such approved product(s) or the use thereof may be eligible for up to five years of patent term restoration under the Hatch-Waxman Act. The Hatch-Waxman Act allows a maximum of one patent to be extended per FDA approved product. Patent term extension also may be available in certain foreign countries upon regulatory approval of our product candidates. Nevertheless, we may not be granted patent term extension either in the United States or in any foreign country because of, for example, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements. Moreover, the term of extension, as well as the scope of patent protection

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during any such extension, afforded by the governmental authority could be less than we request. In addition, if a patent we wish to extend is owned by another party and licensed to us, we may need to obtain approval and cooperation from our licensor to request the extension.

        If we are unable to obtain patent term extension or restoration, or the term of any such extension is less than we request, the period during which we will have the right to exclusively market our product will be shortened and our competitors may obtain approval of competing products following our patent expiration, and our revenue could be reduced, possibly materially.


Risks Related to Government Regulation

Even if we receive regulatory approval for a product candidate, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense and subject us to penalties if we fail to comply with applicable regulatory requirements.

        Once regulatory approval has been granted, the approved product and its manufacturer are subject to continual review by the FDA and/or non-U.S. regulatory authorities. Any regulatory approval that we receive for our product candidates may be subject to limitations on the indicated uses for which the product may be marketed or contain requirements for potentially costly post- marketing follow-up studies to monitor the safety and efficacy of the product. In addition, if the FDA and/or non-U.S. regulatory authorities approve any of our product candidates, we will be subject to extensive and ongoing regulatory requirements by the FDA and other regulatory authorities with regard to the labeling, packaging, adverse event reporting, storage, sampling, advertising, promotion and recordkeeping for our products. Manufacturers of our products are required to comply with cGMP regulations, which include requirements related to quality control and quality assurance as well as the corresponding maintenance of records and documentation. Further, regulatory authorities must approve these manufacturing facilities before they can be used to manufacture our products, and these facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities for compliance with cGMP regulations. Accordingly, we and others with whom we work must continue to expend time, money, and effort in all areas of regulatory compliance, including manufacturing, production, and quality control. We will also be required to report certain adverse reactions and production problems, if any, to the FDA, and to comply with requirements concerning advertising and promotion for our products. Promotional communications with respect to prescription drugs are subject to a variety of legal and regulatory restrictions and must be consistent with the information in the product's approved label. As such, we may not promote our products for indications or uses for which they do not have FDA approval.

        If we, any current or future collaborator or a regulatory authority discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, a regulatory authority may impose restrictions on that product, such collaborator, the manufacturer or us, including requiring withdrawal of the product from the market or suspension of manufacturing. If we, our product candidates or the manufacturing facilities for our product candidates fail to comply with regulatory requirements of the FDA and/or other non-U.S. regulatory authorities, we could be subject to administrative or judicially imposed sanctions, including:

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        The regulatory requirements and policies may change and additional government regulations may be enacted for which we may also be required to comply. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or in other countries. Any new regulations or revisions or reinterpretations of existing regulations may impose additional costs or lengthen review times of our product candidates. In addition, if we or any current or future collaborator are not able to maintain regulatory compliance, we or such collaborator, as applicable, will not be permitted to market our future products and our business will suffer.

The availability of adequate third-party coverage and reimbursement for newly approved products is uncertain, and failure to obtain adequate coverage and reimbursement from third-party payors could impede our ability to market any future products we may develop and could limit our ability to generate revenue.

        There is significant uncertainty related to the third-party payor coverage and reimbursement of newly approved medical products. The commercial success of our future products in both domestic and international markets depends on whether such third-party coverage and reimbursement are available for our future products. Governmental payors, including Medicare and Medicaid, health maintenance organizations and other third-party payors are increasingly attempting to manage their healthcare expenditures and challenging the prices charged for medical products and services by limiting both coverage and the level of reimbursement of new drugs and biologics and, as a result, they may not cover or provide adequate reimbursement for our future products. These payors may not view our future products as cost-effective, and coverage and reimbursement may not be available to our customers, may be limited to certain indications or may not be sufficient to allow our future products to be marketed on a competitive basis. Third-party payors are exerting increasing influence on decisions regarding the use of, and coverage and reimbursement levels for, particular treatments. Cost-control initiatives could cause us to decrease the price we might establish for our products candidates, which could result in lower than anticipated product revenues. If we decrease the prices for our product candidates because of competitive pressures or if governmental and other third-party payors do not provide adequate coverage or reimbursement, our prospects for revenue and profitability will suffer.

If we fail to comply or are found to have failed to comply with FDA and other regulations related to the promotion of our products for unapproved uses, we could be subject to criminal penalties, substantial fines or other sanctions and damage awards.

        The regulations relating to the promotion of products for unapproved uses are complex and subject to substantial interpretation by the FDA and other government agencies. If we receive marketing approval for MRX34 or other product candidates, we will be restricted from promoting the products for uses outside of the approved labeling. However, physicians may nevertheless prescribe products to their patients in a manner that is inconsistent with the approved label. We intend to implement compliance and training programs designed to ensure that our sales and marketing practices comply with applicable regulations. Notwithstanding these programs, the FDA or other government agencies may allege or find that our practices constitute prohibited promotion of our products for unapproved uses. We also cannot be sure that our employees will comply with company policies and applicable regulations regarding the promotion of products for unapproved uses.

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        Over the past several years, a significant number of pharmaceutical and biotechnology companies have been the target of inquiries and investigations by various federal and state regulatory, investigative, prosecutorial and administrative entities in connection with the promotion of products for unapproved uses and other sales practices, including the Department of Justice and various U.S. Attorneys' Offices, the Office of Inspector General of the Department of Health and Human Services, the FDA, the Federal Trade Commission and various state Attorneys General offices. These investigations have included claims asserting alleged violations of various federal and state laws and regulations, including antitrust laws, the Food, Drug and Cosmetic Act, the False Claims Act, the Prescription Drug Marketing Act, anti-kickback laws, and other alleged violations in connection with the promotion of products for unapproved uses, pricing and reimbursement from government programs such as the Medicare and Medicaid programs. Many of these investigations originate as "qui tam" actions, commonly referred to as "whistleblower suits," under the False Claims Act, often brought by current or former employees. Under the False Claims Act, any individual can bring a claim on behalf of the government alleging that a person or entity has presented a false claim, or caused a false claim to be submitted, to the government for payment. In a qui tam suit, the government must decide whether to intervene and prosecute the case. If it declines, the individual may pursue the case alone. The person bringing a qui tam suit is entitled to a share of any recovery or settlement, up to a certain cap; the relator's share depends on the extent of the relator's involvement in the case and whether the government intervenes.

        If the FDA or any other governmental agency initiates an enforcement action against us or if we are the subject of a qui tam suit and it is determined that we violated prohibitions relating to the promotion of products for unapproved uses, we could be subject to substantial civil or criminal fines or damage awards and other sanctions such as consent decrees and corporate integrity agreements pursuant to which our activities would be subject to ongoing scrutiny and monitoring to ensure compliance with applicable laws and regulations. Any such fines, awards or other sanctions would have an adverse effect on our revenue, business, financial prospects and reputation.

If approved, MRX34 or any future products may cause or contribute to adverse medical events that we are required to report to regulatory agencies, and if we fail to do so we could be subject to sanctions that would materially harm our business.

        If we are successful in commercializing MRX34 or any other products, FDA and foreign regulatory agency regulations require that we report certain information about adverse medical events if those products may have caused or contributed to those adverse events. The timing of our obligation to report would be triggered by the date we become aware of the adverse event as well as the nature of the event. We may fail to report adverse events we become aware of within the prescribed timeframe. We may also fail to appreciate that we have become aware of a reportable adverse event, especially if it is not reported to us as an adverse event or if it is an adverse event that is unexpected or removed in time from the use of our products. If we fail to comply with our reporting obligations, the FDA or a foreign regulatory agency could take action, including criminal prosecution, the imposition of civil monetary penalties, seizure of our products or delay in approval of future products. Through the first 28 months of our Phase 1 clinical trial, most of the 101 patients treated with MRX34 experienced at least one adverse event, with fever, chills, back pain, abdominal pain, nausea, diarrhea, vomiting, dehydration, anorexia, dyspnea, fatigue, headache, cough, insomnia, dysgeusia, tachycardia, anemia, neutropenia, lymphopenia, leukopenia, thrombocytopenia, elevation of liver enzymes, hyperglycemia, and hyponatremia being the most commonly reported adverse events. One treatment related death occurred during the study. Among the 47 patients in the BIW dosing cohorts, the serious adverse events determined to be related to MRX34 treatment occurring in more than one patient were fever, fatigue, dehydration and elevation of liver enzymes, each of which occurred in two patients. For the 54 patients in the QD × 5 schedule, the serious adverse events determined to be related to MRX34 treatment occurring in more than one patient were fever, bleeding in silent or asymptomatic brain

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metastasis and elevation of liver enzymes in two patients each, and thrombocytopenia, which occurred in three patients. These adverse events associated with MRX34 are generally manageable or preventable with standard interventions or tests used by oncologists, such as administering other medications that prevent or reduce side effects, temporary slowing of infusions, delaying or stopping dosing, or using magnetic resonance imaging, or MRI, to detect silent brain metastases. Of the 32 patients with primary liver cancer treated with escalating doses of MRX34, one patient receiving a 70 mg/m2 dose in BIW schedule achieved confirmed partial response. This patient is one of the 12 patients with primary liver cancer enrolled from the Korean sites. Of the two melanoma patients enrolled in the study as of August 13, 2015, one patient enrolled in the 110 mg/m2 dose cohort on the QD × 5 schedule achieved a confirmed partial response after four cycles of MRX34 treatment. See "Business—MRX34: Our Lead Product Candidate" for a more detailed description of the adverse events experienced during the course of the MRX34 clinical development program.

Failure to obtain regulatory approvals in foreign jurisdictions will prevent us from marketing our product candidates internationally.

        We may seek a distribution and marketing collaborator for MRX34 or other product candidates. In order to market our product candidates in the European Economic Area, or EEA (which is comprised of the 28 Member States of the EU plus Norway, Iceland and Liechtenstein), and many other foreign jurisdictions, we or any such collaborator must obtain separate regulatory approvals. More concretely, in the EEA, medicinal products can only be commercialized after obtaining a Marketing Authorization, or MA. There are two types of marketing authorizations:

        Under these two procedures, before granting the MA, the EMA or the competent authorities of the Member States of the EEA make an assessment of the risk-benefit balance of the product on the basis of scientific criteria concerning its quality, safety and efficacy.

        We have had limited interactions with foreign regulatory authorities, and the approval procedures vary among countries and can involve additional clinical testing, and the time required to obtain approval may differ from that required to obtain FDA approval. Clinical trials conducted in one country may not be accepted by regulatory authorities in other countries. Approval by the FDA does not ensure approval by regulatory authorities in other countries, and approval by one or more foreign regulatory authorities does not ensure approval by regulatory authorities in other foreign countries or by the FDA. However, a failure or delay in obtaining regulatory approval in one country may have a negative effect on the regulatory process in others. The foreign regulatory approval process may include

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all of the risks associated with obtaining FDA approval. We or may not obtain foreign regulatory approvals on a timely basis, if at all. We may not be able to file for regulatory approvals and even if we file, we may not receive necessary approvals to commercialize our product candidates in any market.

Healthcare reform measures could hinder or prevent our product candidates' commercial success.

        In the United States, there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the healthcare system that could affect our future revenues and profitability and the future revenues and profitability of our potential customers. Federal and state lawmakers regularly propose and, at times, enact legislation that results in significant changes to the healthcare system, some of which are intended to contain or reduce the costs of medical products and services. For example, in March 2010, the President signed one of the most significant healthcare reform measures in decades, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively, the Affordable Care Act. It contains a number of provisions, including those governing enrollment in federal healthcare programs, reimbursement changes and fraud and abuse measures, all of which will impact existing government healthcare programs and will result in the development of new programs. The Affordable Care Act, among other things:

        Other legislative changes have been proposed and adopted since the Affordable Care Act was enacted. On August 2, 2011, the President signed into law the Budget Control Act of 2011, which, among other things, created the Joint Select Committee on Deficit Reduction to recommend proposals in spending reductions to Congress. The Joint Select Committee did not achieve its targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, triggering the legislation's automatic reductions to several government programs. These reductions include aggregate reductions to Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013 and, due to subsequent legislative amendments, will remain in effect through 2024 unless additional Congressional action is taken. On January 2, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, which, among other things, further reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

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        There likely will continue to be legislative and regulatory proposals at the federal and state levels directed at containing or lowering the cost of health care. We cannot predict the initiatives that may be adopted in the future or their full impact. The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of health care may adversely affect:

        In light of widely publicized events concerning the safety risk of certain drug products, regulatory authorities, members of Congress, the Governmental Accounting Office, medical professionals and the general public have raised concerns about potential drug safety issues. These events have resulted in the withdrawal of drug products, revisions to drug labeling that further limit use of the drug products and establishment of risk management programs that may, for instance, restrict distribution of drug products. The increased attention to drug safety issues may result in a more cautious approach by the FDA to clinical trials and the drug approval process. Data from clinical trials may receive greater scrutiny with respect to safety, which may make the FDA or other regulatory authorities more likely to terminate clinical trials before completion, or require longer or additional clinical trials that may result in substantial additional expense and a delay or failure in obtaining approval or approval for a more limited indication than originally sought. In, addition, because of the serious public health risks of high profile adverse safety events with certain products, the FDA may require, as a condition of approval, costly risk management programs which may include safety surveillance, restricted distribution and use, patient education, enhanced labeling, special packaging or labeling, expedited reporting of certain adverse events, preapproval of promotional materials and restrictions on direct-to-consumer advertising.

If we fail to comply with healthcare regulations, we could face substantial penalties and our business, results of operations and financial condition could be adversely affected.

        Even though we do not and will not control referrals of healthcare services or bill directly to Medicare, Medicaid or other third-party payors, certain federal and state healthcare laws and regulations pertaining to fraud and abuse and patients' rights are and will be applicable to our business. We could be subject to healthcare fraud and abuse and patient privacy regulation by both the federal government and the states in which we conduct our business. The regulations that may affect our ability to operate include, without limitation:

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        If our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines, exclusion from participation in government health care programs, such as Medicare and Medicaid, imprisonment, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our financial results. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management's attention from the operation of our business. Moreover, achieving and sustaining compliance with applicable federal and state privacy, security and fraud and abuse laws may prove costly.


Risks Related to Our Common Stock and This Offering

The price of our common stock may be volatile, and you may not be able to resell your shares at or above the initial public offering price.

        The initial public offering price for the shares of our common stock sold in this offering has been determined by negotiation between the underwriters and us. This price may not reflect the market price of our common stock following this offering. You may be unable to sell your shares of common stock at or above the initial public offering price due to fluctuations in the market price of our common stock. Factors that could cause volatility in the market price of our common stock include, but are not limited to:

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        In addition, the stock markets in general, and the markets for pharmaceutical, biopharmaceutical and biotechnology stocks in particular, have experienced extreme volatility that have been often unrelated to the operating performance of the issuer. These broad market fluctuations may adversely affect the trading price or liquidity of our common stock. In the past, when the market price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the issuer. If any of our stockholders were to bring such a lawsuit against us, we could incur substantial costs defending the lawsuit and the attention of our management would be diverted from the operation of our business.

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Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.

        Based on the beneficial ownership of our common stock as of June 30, 2015, after this offering and the concurrent private placement, our officers and directors, together with holders of 5% or more of our outstanding common stock before this offering and their respective affiliates, will beneficially own approximately         % of our common stock (assuming no exercise of the underwriters' option to purchase additional shares of common stock). Accordingly, these stockholders will continue to have significant influence over the outcome of corporate actions requiring stockholder approval, including the election of directors, any merger, consolidation or sale of all or substantially all of our assets or any other significant corporate transaction. The interests of these stockholders may not be the same as or may even conflict with your interests. For example, these stockholders could delay or prevent a change of control of our company, even if such a change of control would benefit our other stockholders, which could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our company or our assets and might affect the prevailing market price of our common stock. The significant concentration of stock ownership may adversely affect the trading price of our common stock due to investors' perception that conflicts of interest may exist or arise.

We are an "emerging growth company" and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

        We are an "emerging growth company," as defined in the JOBS Act, and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies" including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

        In addition, Section 102 of the JOBS Act also provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, or the Securities Act, for complying with new or revised accounting standards. An "emerging growth company" can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we are choosing to "opt out" of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

Future sales of our common stock or securities convertible or exchangeable for our common stock may depress our stock price.

        If our existing stockholders or holders of our options sell, or indicate an intention to sell, substantial amounts of our common stock in the public market after the lock-up and legal restrictions on resale discussed in this prospectus lapse, the trading price of our common stock could decline. The perception in the market that these sales may occur could also cause the trading price of our common stock to decline. Based on 153,801,422 shares of common stock outstanding as of June 30, 2015, upon the completion of this offering and the concurrent private placement, we will have outstanding a total of                shares of common stock, assuming no exercise of the underwriters' option to purchase additional shares of common stock. Of these shares, only the shares of common stock sold by us in this

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offering, plus any shares sold upon exercise of the underwriters' option to purchase additional shares of common stock, will be freely tradable without restriction, unless held by our affiliates, in the public market immediately following this offering.

        A total of                shares of common stock are not subject to lock-up agreement with the underwriters and therefore will be eligible for sale in the public market 90 days after the date of this prospectus. After the lock-up agreements expire,                shares of common stock will be eligible for sale in the public market, subject to volume limitations under Rule 144 under the Securities Act, with respect to shares held by directors, executive officers and other affiliates. The underwriters may, however, in their sole discretion, permit our officers, directors and other stockholders and the holders of our outstanding options who are subject to the lock-up agreements to sell shares prior to the expiration of the lock-up agreements. Sales of these shares, or perceptions that they will be sold, could cause the trading price of our common stock to decline.

        In addition, based on the number of shares subject to outstanding awards under our 2008 Long Term Incentive Plan, or 2008 Plan, or available for issuance thereunder, as of June 30, 2015, and including the initial reserves under our 2015 Equity Incentive Award Plan, or 2015 Plan,                shares of common stock that are either subject to outstanding options, outstanding but subject to vesting, or reserved for future issuance under the 2008 Plan or 2015 Plan will become eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules, the lock-up agreements and Rule 144 and Rule 701 under the Securities Act. We also plan to file a registration statement permitting certain shares of common stock issued in the future pursuant to the 2008 Plan and 2015 Plan to be freely resold by plan participants in the public market, subject to the lock-up agreements, applicable vesting schedules and, for shares held by directors, executive officers and other affiliates, volume limitations under Rule 144 under the Securities Act. The 2015 Plan also contains provisions for the annual increase of the number of shares reserved for issuance under such plans, as described elsewhere in this prospectus, which shares we also intend to register. If the shares we may issue from time to time under the 2008 Plan or 2015 Plan are sold, or if it is perceived that they will be sold, by the award recipient in the public market, the trading price of our common stock could decline.

        Certain holders of approximately 152.4 million shares of our common stock at June 30, 2015, as well as the shares issued in the concurrent private placement and pursuant to our accruing paid-in-kind dividend to certain holders of our convertible preferred stock, will be entitled to rights with respect to the registration of their shares under the Securities Act, subject to the lock-up agreements described above. See "Description of Capital Stock—Registration Rights." Registration of these shares under the Securities Act would result in the shares becoming freely tradable without restriction under the Securities Act, except for shares purchased by affiliates. Sales of such shares could also cause the trading price of our common stock to decline.

If there is no viable public market for our common stock, you may not be able to sell your shares at or above the initial public offering price.

        Prior to this offering, there has been no public market for our common stock, and there can be no assurance that a regular trading market will develop and continue after this offering or that the market price of our common stock will not decline below the initial public offering price. The initial public offering price was determined through negotiations between us and the underwriters and may not be indicative of the market price of our common stock following this offering. Among the factors considered in such negotiations were prevailing market conditions, certain of our financial information, market valuations of other companies that we and the underwriters believe to be comparable to us, estimates of our business potential, the present state of our development and other factors deemed relevant. See "Underwriting" for additional information.

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Investors in this offering will suffer immediate and substantial dilution of their investment.

        If you purchase common stock in this offering, you will pay more for your shares than our pro forma as adjusted net tangible book value per share. Based upon an assumed initial public offering price of $            per share, the midpoint of the range on the cover page of this prospectus, after giving effect to this offering and the concurrent private placement, you will incur immediate and substantial dilution of $            per share, representing the difference between our assumed initial public offering price and our pro forma as adjusted net tangible book value per share. Based upon the assumed initial public offering price of $            per share, after giving effect to this offering and the concurrent private placement, purchasers of common stock in this offering will have contributed approximately        % of the aggregate purchase price paid by all purchasers of our stock but will own only approximately        % of our common stock outstanding after this offering. For information on how the foregoing amounts were calculated, see "Dilution."

To the extent outstanding stock options are exercised, there will be further dilution to new investors.

        We issued options in the past to acquire common stock at prices significantly below the initial offering price. As of June 30, 2015, there were 12,280,909 shares of common stock subject to outstanding options with a weighted-average exercise price of $0.37 per share. To the extent that these outstanding options are ultimately exercised, you will incur further dilution, and our stock price may decline.

Our quarterly operating results may fluctuate significantly or may fall below the expectations of investors or securities analysts, each of which may cause our stock price to fluctuate or decline.

        We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors, including:

        If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially. Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our stock to fluctuate substantially. We believe that quarterly comparisons of our financial results are not necessarily meaningful and should not be relied upon as an indication of our future performance.

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We will have broad discretion in the use of the net proceeds of this offering and the concurrent private placement and may not use them effectively.

        We discuss our plan for the use of the net proceeds of this offering in the sections entitled "Use of Proceeds" and "Business." However, within the scope of our plan, and in light of the various risks to our business that are set forth in this section, our management will have broad discretion over the use of the net proceeds from this offering and the concurrent private placement. Because of the number and variability of factors that will determine our use of such proceeds, you may not agree with how we allocate or spend the proceeds from this offering and the concurrent private placement. We may pursue collaborations or clinical trials that do not result in an increase in the market value of our common shares and that may increase our losses. Our failure to allocate and spend the net proceeds from this offering effectively would have a material adverse effect on our business, financial condition and results of operations. Until the net proceeds are used, they may be placed in investments that do not produce significant investment returns or that may lose value.

Provisions of our charter documents or Delaware law could delay or prevent an acquisition of our company, even if the acquisition would be beneficial to our stockholders, and could make it more difficult for you to change management.

        Provisions in our amended and restated certificate of incorporation and our amended and restated bylaws that will become effective upon the closing of this offering may discourage, delay or prevent a merger, acquisition or other change in control that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares. In addition, these provisions may frustrate or prevent any attempt by our stockholders to replace or remove our current management by making it more difficult to replace or remove our board of directors. These provisions include:

        In addition, Delaware law prohibits a publicly held Delaware corporation from engaging in a business combination with an interested stockholder, generally a person who, together with its affiliates, owns or within the last three years has owned 15% or more of our voting stock, for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. Accordingly, Delaware law may discourage, delay or prevent a change in control of our company. Furthermore, our amended and restated certificate of incorporation will specify that the Court of Chancery of the State of Delaware will be the

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sole and exclusive forum for most legal actions involving actions brought against us by stockholders. We believe this provision benefits us by providing increased consistency in the application of Delaware law by chancellors particularly experienced in resolving corporate disputes, efficient administration of cases on a more expedited schedule relative to other forums and protection against the burdens of multi-forum litigation. However, the provision may have the effect of discouraging lawsuits against our directors and officers. The enforceability of similar choice of forum provisions in other companies' certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection with any applicable action brought against us, a court could find the choice of forum provisions contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in such action.

        Provisions in our charter and other provisions of Delaware law could limit the price that investors are willing to pay in the future for shares of our common stock.

Our employment agreements with our officers may require us to pay severance benefits to any of those persons who are terminated in connection with a change of control of us, which could harm our business, financial condition or results of operations.

        Our officers are parties to employment agreements providing for aggregate cash payments of up to approximately $0.8 million at June 30, 2015 for severance and other benefits in the event of a termination of employment in connection with a change of control of us. The payment of these severance benefits could harm our business, financial condition and results of operations. In addition, these potential severance payments may discourage or prevent third parties from seeking a business combination with us.

We do not anticipate paying any cash dividends on our common stock in the foreseeable future; therefore, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.

        We have never declared or paid cash dividends on our common stock. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. We currently intend to retain all available funds and any future earnings to fund the development and growth of our business. In addition, the terms of any future debt financing arrangement may contain terms prohibiting or limiting the amount of dividends that may be declared or paid on our common stock. As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.

If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, our stock price and trading volume could decline.

        The trading market for our common stock will depend, in part, on the research and reports that securities or industry analysts publish about us or our business. Securities and industry analysts do not currently, and may never, publish research on our company. If no securities or industry analysts commence coverage of our company, the trading price for our common stock would likely be negatively impacted. In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover us downgrade our common stock or publish inaccurate or unfavorable research about our business, our stock price would likely decline. In addition, if our operating results fail to meet the forecast of analysts, our stock price would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our common stock could decrease, which might cause our stock price and trading volume to decline.

Changes in, or interpretations of, accounting rules and regulations could result in unfavorable accounting charges or require us to change our compensation policies.

        Accounting methods and policies for biopharmaceutical companies, including policies governing revenue recognition, research and development and related expenses and accounting for stock-based compensation, are subject to further review, interpretation and guidance from relevant accounting authorities, including the SEC. Changes to, or interpretations of, accounting methods or policies may require us to reclassify, restate or otherwise change or revise our financial statements, including those contained in this prospectus.

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Special Note Regarding Forward-Looking Statements

        This prospectus contains forward-looking statements concerning our business, operations and financial performance and condition, as well as our plans, objectives and expectations for our business operations and financial performance and condition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "aim," "anticipate," "assume," "believe," "contemplate," "continue," "could," "due," "estimate," "expect," "goal," "intend," "may," "objective," "plan," "predict," "potential," "positioned," "seek," "should," "target," "will," "would" and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

        These forward-looking statements are based on management's current expectations, estimates, forecasts, and projections about our business and the industry in which we operate and management's beliefs and assumptions and are not guarantees of future performance or development and involve known and unknown risks, uncertainties, and other factors that are in some cases beyond our control. As a result, any or all of our forward-looking statements in this prospectus may turn out to be

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inaccurate. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under "Risk Factors" and elsewhere in this prospectus. Potential investors are urged to consider these factors carefully in evaluating the forward-looking statements. These forward-looking statements speak only as of the date of this prospectus. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future. You should, however, review the factors and risks we describe in the reports we will file from time to time with the SEC after the date of this prospectus. See "Where You Can Find More Information."

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Use of Proceeds

        We estimate that the net proceeds from the sale of            shares of common stock in this offering, excluding the proceeds from the concurrent private placement, will be approximately $             million at an assumed initial public offering price of $            per share, the midpoint of the range set forth on the cover page of this prospectus, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. If the underwriters exercise their over-allotment option in full, we estimate that net proceeds from this offering will be approximately $             million after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. Each $1.00 increase (decrease) in the assumed initial public offering price of $            per share (the midpoint of the price range set forth on the cover page of this prospectus) would increase (decrease) the net proceeds to us from this offering, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us, by approximately $             million, assuming that the number of shares offered by us in this offering, as set forth on the cover page of this prospectus, remains the same. We may also increase or decrease the number of shares we are offering. An increase (decrease) of 1,000,000 in the number of shares we are offering in this offering would increase (decrease) the net proceeds to us from this offering, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us, by approximately $             million, assuming the assumed initial public offering price stays the same. We do not expect that a change in the offering price or the number of shares by these amounts would have a material effect on our intended uses of the net proceeds from this offering or the concurrent private placement, although it may impact the amount of time prior to which we may need to seek additional capital.

        At June 30, 2015, we had cash and cash equivalents of $41.6 million. We currently estimate that we will use the net proceeds from this offering, together with the net proceeds from the concurrent private placement as noted below and our existing cash and cash equivalents, as follows:

        In connection with a research grant awarded to us, the Cancer Prevention and Research Institute of Texas has agreed to purchase from us concurrently with this offering in a private placement approximately $16.8 million of our common stock at a price per share equal to the initial public offering price. Our proceeds from the sale of the common stock sold in the concurrent private placement will be approximately $16.8 million.

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        This expected use of net proceeds from this offering, the concurrent private placement and our existing cash and cash equivalents represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors, including the progress of our development, the status of and results from preclinical testing or clinical trials, as well as any collaborations that we may enter into with third parties for our product candidates, and any unforeseen cash needs. As a result, our management will retain broad discretion over the allocation of the net proceeds from this offering. Due to the many variables inherent to the development of our product candidates, we cannot currently predict the stage of development we expect the net proceeds of this offering to enable us to achieve for our clinical studies and product candidates. We have no current agreements, commitments or understandings for any material acquisitions or licenses of any products, businesses or technologies.

        Based on our planned use of the net proceeds from this offering, the concurrent private placement and our existing cash and cash equivalents described above, we estimate that such funds will be sufficient to fund operations at least over the next 12 months.

        Pending our use of the net proceeds from this offering and the concurrent private placement, we intend to invest the net proceeds in a variety of capital preservation investments, including short-term, investment-grade, interest-bearing instruments and U.S. government securities.

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Dividend Policy

        We have never declared or paid cash dividends on our capital stock. However, we expect to issue shares of common stock to the holders of Series C convertible preferred stock and Series D convertible preferred stock under the terms of our certificate of incorporation as a result of the accruing paid-in-kind dividend in connection with the conversion of all shares of Series C convertible preferred stock and Series D convertible preferred stock into shares of common stock immediately prior to the consummation of this offering.

        We intend to retain all available funds and any future earnings, if any, to fund the development and expansion of our business and we do not anticipate paying any cash dividends in the foreseeable future. Any future determination related to dividend policy will be made at the discretion of our board of directors and will depend upon, among other factors, our results of operations, financial condition, capital requirements, contractual restrictions, business prospects and other factors our board of directors may deem relevant.

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Capitalization

        The following table sets forth our capitalization at June 30, 2015:

        You should read this information together with our audited financial statements and related notes appearing elsewhere in this prospectus and the information set forth under the headings "Selected

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Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

 
  At June 30, 2015  
 
  Actual   Pro Forma   Pro Forma
As Adjusted
 
 
  (unaudited; in thousands, except share
and per share data)

 

Series A convertible preferred stock, $0.001 par value per share, 3,192,083 shares designated, 3,192,083 shares issued and outstanding, actual; no shares designated, no shares issued and outstanding, pro forma and pro forma as adjusted

  $ 6,384   $        

Series B convertible preferred stock, $0.001 par value per share, 540,341 shares designated, 540,341 shares issued and outstanding, actual; no shares designated, no shares issued and outstanding, pro forma and pro forma as adjusted

    1,500            

Series B-1 convertible preferred stock, $0.001 par value per share, 10,914,647 shares designated, 10,914,647 shares issued and outstanding, actual; no shares designated, no shares issued and outstanding, pro forma and pro forma as adjusted

    7,498            

Series C convertible preferred stock, $0.001 par value per share, 69,353,712 shares designated, 69,353,695 shares issued and outstanding, actual; no shares designated, no shares issued and outstanding, pro forma and pro forma as adjusted

    41,295            

Series D convertible preferred stock, $0.001 par value per share, 73,649,755 shares designated, 68,395,299 shares issued and outstanding, actual; no shares designated, no shares issued and outstanding, pro forma and pro forma as adjusted

    42,604            

Stockholders' equity (deficit):

                   

Preferred stock, $0.001 par value per share; no shares designated, issued and outstanding, actual; shares designated, no shares issued and outstanding, pro forma and pro forma as adjusted          

               

Common stock, $0.001 par value per share; 175,100,000 shares authorized; 1,405,357 shares issued and outstanding, actual; 175,100,000 shares authorized, 153,801,422 shares issued and outstanding, pro forma; shares authorized, shares issued and outstanding, pro forma as adjusted

    1     154        

Additional paid-in capital

        99,128        

Accumulated deficit

    (60,191 )   (60,191 )      

Total stockholders' (deficit) equity

    (60,190 )   39,091        

Total capitalization

  $ 39,091   $ 39,091        

        Each $1.00 increase (decrease) in the assumed initial public offering price of $            per share, the midpoint of the range set forth on the cover page of this prospectus, would increase (decrease) each of pro forma as adjusted additional paid-in capital, stockholders' equity and total capitalization by approximately $             million, assuming that the number of shares offered by us in this offering, as set forth on the cover page of this prospectus, remains the same. We may also increase or decrease the number of shares we are offering. An increase (decrease) of 1,000,000 in the number of shares we are offering in this offering would increase (decrease) each of pro forma as adjusted additional paid-in capital, stockholders' equity and total capitalization by approximately $             million, assuming the assumed initial public offering price per share, as set forth on the cover page of this prospectus,

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remains the same. The pro forma as adjusted information is illustrative only, and we will adjust this information based on the actual initial public offering price and other terms of this offering determined at pricing.

        The outstanding share information in the table above excludes the following:

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Dilution

        If you invest in our common stock, your interest will be diluted to the extent of the difference between the initial public offering price per share of our common stock in this offering and the net tangible book value per share of our common stock after this offering. At June 30, 2015, we had a historical net tangible book value (deficit) of $(60.2) million, or $(42.84) per share of common stock. Our net tangible book value represents total tangible assets less total liabilities and convertible preferred stock, all divided by the number of shares of common stock outstanding on June 30, 2015. Our pro forma net tangible book value at June 30, 2015, before giving effect to this offering and the concurrent private placement, was $39.1 million, or $0.25 per share of our common stock. Pro forma net tangible book value, before the issuance and sale of shares in this offering and the concurrent private placement, gives effect to:

        After giving effect to the sale of shares of common stock in this offering and the concurrent private placement at an assumed initial public offering price of $            per share (the midpoint of the price range set forth on the cover page of this prospectus) and after deducting the underwriting discounts and commissions and estimated offering expenses, our pro forma as adjusted net tangible book value at June 30, 2015 would have been approximately $             million, or $            per share. This represents an immediate increase in pro forma as adjusted net tangible book value of $            per share to existing stockholders and an immediate dilution of $            per share to new investors participating in this offering. The following table illustrates this per share dilution:

Assumed initial public offering price per share

        $           

Historical net tangible book value per share at June 30, 2015

  $ (42.84 )      

Pro forma increase in net tangible book value per share

    43.09        

Pro forma net tangible book value per share at June 30, 2015

    0.25        

Increase in pro forma net tangible book value per share attributable to new investors

             

Pro forma as adjusted net tangible book value per share after this offering and the concurrent private placement

             

Dilution per share to new investors participating in this offering

        $           

        A $1.00 increase (decrease) in the assumed initial public offering price of $            per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) our pro forma as adjusted net tangible book value at June 30, 2015 after this offering by approximately $             million, or approximately $            per share, and would decrease (increase) dilution to investors in this offering by approximately $            per share, assuming that the number of shares offered by us in this offering, as set forth on the cover page of this prospectus, remains the same, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering. An increase (decrease) of 1,000,000 in the number of shares we are offering would increase (decrease) our pro forma as adjusted net tangible book value at June 30, 2015 after this offering by approximately $             million, or approximately $            per share, and would decrease (increase) dilution to investors in this offering by approximately $            per share, assuming the assumed initial public offering price per share remains the same, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. The pro forma as adjusted information is illustrative only, and we will adjust this

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information based on the actual initial public offering price and other terms of this offering determined at pricing.

        If the underwriters fully exercise their over-allotment option, pro forma as adjusted net tangible book value after this offering would increase to approximately $            per share, and there would be an immediate dilution of approximately $            per share to new investors.

        To the extent that outstanding options with an exercise price per share that is less than the pro forma as adjusted net tangible book value per share, before giving effect to the issuance and sale of shares in this offering, are exercised, new investors will experience further dilution.

        In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our stockholders.

        The following table shows, at June 30, 2015, on a pro forma as adjusted basis, after giving effect to the pro forma adjustments described above, the number of shares of common stock purchased from us, the total consideration paid to us and the average price paid per share by existing stockholders and by new investors purchasing common stock in this offering and the concurrent private placement at an assumed initial public offering price of $            per share, before deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

 
   
   
  Total
Consideration
   
 
 
  Shares Purchased    
 
 
  Average
Price Per
Share
 
 
  Number   Percent   Amount   Percent  

Existing stockholders

                   % $                % $           

Concurrent private placement investor

                                             

Investors participating in this offering

                                             

Total

                 100 % $              100 %      

        The number of shares of common stock to be outstanding after this offering is based on the number of shares outstanding at June 30, 2015 and excludes the following:

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Selected Financial Data

        The following selected statement of operations data for the years ended December 31, 2012, 2013 and 2014, and the selected balance sheet data at December 31, 2013 and 2014 have been derived from our audited financial statements included elsewhere in this prospectus. The balance sheet data at December 31, 2012 have been derived from our audited financial statements not included in this prospectus. The statement of operations data for the six months ended June 30, 2014 and 2015 and balance sheet data at June 30, 2015 have been derived from our unaudited financial statements included elsewhere in this prospectus. Our unaudited financial statements are prepared on the same basis as our audited financial statements. Our historical results for any prior period are not necessarily indicative of results to be expected in any future period, and results for the six months ended June 30, 2015 are not necessarily indicative of results to be expected for the full year ending December 31, 2015.

        The information set forth below should be read in conjunction with the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of this prospectus and with our financial statements and notes thereto included elsewhere in this prospectus.

 
  Year Ended December 31,   Six Months Ended
June 30,
 
 
  2012   2013   2014   2014   2015  
 
  (in thousands, except share and per share data)
   
   
 

Statement of Operations Data:

                               

Operating expenses:

                               

Research and development

  $ 2,742   $ 4,391   $ 10,545   $ 4,256   $ 7,924  

General and administrative

    1,562     2,384     3,369     1,777     2,039  

Write-off of offering expenses

            1,920          

Total operating expenses

    4,304     6,775     15,834     6,033     9,963  

Other income (expense):

                               

Change in fair value of option liability

        339              

Gain on extinguishment of note payable

    1,001                  

Interest expense

    (355 )                

Net loss

  $ (3,658 ) $ (6,436 ) $ (15,834 ) $ (6,033 ) $ (9,963 )

Less: Accretion and dividends on convertible preferred stock

    (6,142 )   (2,324 )   (2,824 )   (1,400 )   (2,662 )

Net loss attributable to common stockholders

  $ (9,800 ) $ (8,760 ) $ (18,658 ) $ (7,433 ) $ (12,625 )

Net loss per share attributable to common stockholders, basic and diluted

  $ (373.52 ) $ (293.92 ) $ (19.40 ) $ (11.09 ) $ (9.34 )

Common shares used to compute basic and diluted net loss per share attributable to common stockholders

    26,237     29,804     961,963     670,035     1,351,526  

Pro forma net loss per common share (unaudited)—basic and diluted

              $ (0.19 )       $ (0.08 )

Common shares used to compute pro forma net loss per share (unaudited)—basic and diluted

                84,962,729           118,952,196  

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  At December 31,    
 
 
  At
June 30,
2015
 
 
  2012   2013   2014  
 
  (in thousands)
 

Balance Sheet Data:

                         

Cash and cash equivalents

  $ 13,266   $ 23,182   $ 9,319   $ 41,579  

Total assets

    13,706     23,684     9,825     42,187  

Total liabilities

    4,364     1,145     2,499     3,096  

Convertible preferred stock

    33,710     52,453     55,277     99,281  

Common stock

            1     1  

Additional paid-in capital

        890          

Accumulated deficit

    (24,368 )   (30,804 )   (47,952 )   (60,191 )

Total stockholders' (deficit) equity

    (24,368 )   (29,914 )   (47,951 )   (60,190 )

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Management's Discussion and Analysis of Financial Condition and
Results of Operations

        You should read the following discussion and analysis of financial condition and results of operations together with the section entitled "Selected Financial Data" and our financial statements and related notes included elsewhere in this prospectus. This discussion and other parts of this prospectus contain forward-looking statements that involve risk and uncertainties, such as statements of our plans, objectives, expectations and intentions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the "Risk Factors" section.

Overview

        We are a clinical-stage biopharmaceutical company developing a broad pipeline of microRNA-based oncology therapeutics. microRNAs are naturally occurring, short ribonucleic acid, or RNA, molecules, or oligonucleotides, that play a critical role in regulating key biological pathways. Misexpression of even a single microRNA can contribute to disease development and tumor suppressor microRNAs are commonly reduced in cancer. Our scientists and others at leading academic institutions have identified numerous tumor suppressor microRNAs that play key roles in preventing normal cells from becoming cancerous and facilitating proper cancer immunosurveillance. We are developing mimics of naturally occurring microRNAs that are designed to restore this tumor suppressor activity and aid appropriate tumor immune response. This approach is known as microRNA replacement therapy. Our lead product candidate, MRX34, a mimic of naturally occurring microRNA-34 (miR-34) encapsulated in a liposomal nanoparticle formulation, is the first microRNA mimic to enter clinical development and has shown preliminary clinical evidence of anti-tumor activity as a single agent in our ongoing Phase 1 clinical trial. We believe that microRNA mimics represent a new paradigm in cancer therapy and have the potential to create a new, important class of effective cancer drugs, that can potentially be used alone or in combination with other cancer therapeutics. We plan to develop MRX34 as a monotherapy and in combination with other therapeutic modalities, such as targeted therapies and immuno-oncology agents.

        We are developing a pipeline of tumor suppressor microRNA mimics. We believe that these mimics have the potential to become promising new oncology therapeutics due to their capacity to regulate many different oncogenes across multiple oncogenic pathways. We believe our technology is supported by a strong intellectual property position, which we continue to expand and strengthen. Our scientists have also discovered functions of microRNAs in numerous diseases other than cancer, which may provide us an opportunity to expand this novel technology into other therapeutic areas of unmet medical need. We believe these microRNAs represent future partnering or diversification opportunities.

        We were incorporated in 2007 under the laws of Delaware and were maintained as a wholly-owned subsidiary of our former parent company, Asuragen, Inc., or Asuragen, until the end of 2009, when we became an independent entity.

        Our operations have focused on developing our understanding of and capabilities in microRNA biology, identifying potential product candidates, undertaking preclinical studies, initiating and conducting a clinical trial, protecting and enhancing our intellectual property estate and providing general and administrative support for these activities. We have not generated any revenue from product sales and, to date, have funded our operations primarily through the private placement of convertible preferred stock, federal and state government grants and support from our former parent company, Asuragen. From our inception through June 30, 2015, we have raised an aggregate of approximately $101.6 million to fund our operations, of which approximately $89.9 million was from the issuance of preferred stock for cash and assets and approximately $11.7 million was from federal and state grants.

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        Since our inception, we have incurred significant operating losses. Our net losses were $3.7 million, $6.4 million and $15.8 million for the years ended December 31, 2012, 2013 and 2014, respectively, and $10.0 million for the six months ended June 30, 2015. At June 30, 2015, we had an accumulated deficit of $60.2 million. We expect to continue to incur significant expenses and operating losses over the next several years. Our net losses may fluctuate significantly from quarter to quarter and from year to year. We anticipate that our expenses will increase significantly as we conduct clinical trials for MRX34 and other product candidates; manufacture clinical trial materials; continue to discover, validate and develop additional novel product candidates; expand and protect our intellectual property portfolio; and hire additional development and scientific personnel. In addition, upon the consummation of this offering, we expect to incur additional costs associated with operating as a public company.

Financial Operations Overview

Revenue

        We have not generated any revenue from product sales or from collaborations. In the future, we may generate revenue from collaborations and licenses. Revenue may fluctuate from period to period, and the timing and extent of any future revenue will depend on our ability to advance our product candidates through the clinical trial process and to obtain regulatory approval and our ability, or our future partners' ability, to commercialize our product candidates.

Research and Development Expenses

        Research and development expenses consist primarily of costs incurred for our research activities, including our drug discovery efforts, and the development of our product candidates, which include the following:

        Research and development costs are expensed as incurred. In certain circumstances, we will make nonrefundable advance payments to purchase goods and services for future use pursuant to contractual arrangements. In those instances, we defer and recognize an expense in the period that we receive or consume the goods or services.

        Our research and development expenses have been offset by proceeds derived from federal and state grants. These government grants, which have supplemented our research efforts on specific projects, generally provide for reimbursement of approved costs, as defined in the terms of the grant awards. The proceeds from these reimbursement grants are treated as a reduction to the associated expenses as the allowable expenses are incurred.

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        In August 2010, we received a $10.3 million commercialization award from the State of Texas through the Cancer Prevention and Research Institute of Texas, or CPRIT. The CPRIT grant was a three-year award that was funded annually, and funding of the grant was completed in January 2014. At June 30, 2015, all proceeds from this grant had been recognized. We accounted for advances received for the award as deferred grant reimbursement. Under the terms of the award, we are required to pay to CPRIT a portion of our revenues from sales of certain products by us, or received from our licensees or sublicensees, at a percentage in the low single digits until the aggregate amount of such payments equals a specified multiple of the grant amount, and thereafter at a rate of less than one percent, subject to our right, under certain circumstances, to make a one-time payment in a specified amount to CPRIT to buy out such payment obligations. In addition, in September 2015, we entered into a new grant contract with CPRIT in connection with an award of approximately $16.8 million in the form of a concurrent private placement of shares of our common stock at a price per share equal to the initial public offering price.

        At June 30, 2015, we had three National Institutes of Health, or NIH, grants ongoing with approximately $288,000 incurred and approximately $536,000 still to be incurred on those grants. Two of the grants, with approximately $327,000 still to be incurred, expire on August 31, 2015.

        At any point in time, we typically have various early stage research and drug discovery projects ongoing. Our internal resources, employees and infrastructure are not directly tied to any one research or drug discovery project and are typically deployed across multiple projects. As such, we do not maintain information regarding the costs incurred for these early stage research and drug discovery programs on a project-specific basis. However, we have spent and are currently spending the vast majority of our research and development resources on our lead product candidate, MRX34.

        Most of our product development programs are at an early stage, and successful development of future product candidates from these programs is highly uncertain and may not result in approved products. The process of conducting preclinical studies and clinical trials necessary to obtain regulatory approval is costly and time consuming, and we expect our research and development expenses to increase for the foreseeable future as we advance our research programs toward the clinic and initiate and continue clinical trials. The probability of success for each product candidate may be affected by numerous factors, including preclinical data, clinical data, competition, manufacturing capability and commercial viability. We anticipate we will make determinations as to which programs to pursue and how much funding to direct to each program on an ongoing basis in response to the scientific and clinical success of each future product candidate, as well as ongoing assessments as to each future product candidate's commercial potential. Completion dates and completion costs can vary significantly for each future product candidate and are difficult to predict. We will need to raise additional capital and may seek strategic alliances in the future in order to advance the various products in the pipeline and other products that may be developed.

General and Administrative Expenses

        General and administrative expenses consist primarily of salaries and related benefits, including stock-based compensation, related to our executive, finance and support functions. Other general and administrative expenses include allocated facility-related costs not otherwise included in research and development expenses, travel expenses and professional fees for auditing, tax and legal services. We expect that general and administrative expenses will increase in the future as we expand our operating activities and incur additional costs associated with being a publicly-traded company. These increases will likely include legal fees, accounting fees, directors' and officers' liability insurance premiums and fees associated with investor relations.

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Critical Accounting Policies and Estimates

        This management's discussion and analysis of financial condition and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the revenue and expenses incurred during the reported periods. On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses, revenue recognition and stock-based compensation. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not apparent from other sources. Changes in estimates are reflected in reported results for the period in which they become known. Actual results may differ from these estimates under different assumptions or conditions.

        While our significant accounting policies are described in the notes to our financial statements appearing in this prospectus, we believe that the following critical accounting policies are most important to understanding and evaluating our reported financial results.

Stock-Based Compensation

        We estimate the fair value of our stock-based awards to employees using the Black-Scholes option-pricing model, which requires the input of highly subjective assumptions, including: (1) the expected volatility of our stock; (2) the expected term of the award; (3) the risk-free interest rate; and (4) expected dividends. Due to the lack of a public market for the trading of our common stock and a lack of company-specific historical and implied volatility data, we have based our estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. For these analyses, we have selected companies with comparable characteristics to ours, including enterprise value, risk profiles, position within the industry and historical share price information, sufficient to meet the expected life of the stock-based awards. We compute the historical volatility data using the daily closing prices for the selected companies' shares during the equivalent period of the calculated expected term of our stock-based awards. We will continue to apply this process until a sufficient amount of historical information regarding the volatility of our own stock price becomes available. We have estimated the expected life of our employee stock options using the "simplified" method, whereby the expected life equals the average of the vesting term and the original contractual term of the option. The risk-free interest rates for periods within the expected life of the option are based on the U.S. Treasury yield curve in effect during the period the options were granted.

        We are also required to estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from estimates. We use historical data to estimate pre-vesting option forfeitures and record stock-based compensation expense only for those awards that are expected to vest. Stock-based compensation expense recognized in the financial statements is based on awards that are ultimately expected to vest.

        We have computed the fair value of employee stock options at the date of grant using the following assumptions:

 
  Year Ended December 31,    
 
  Six Months
Ended June 30,
2015
 
  2012   2013   2014

Expected term (years). 

  4.3 - 6.1   5.6 - 6.1   5.8 - 6.1   5.6 - 6.7

Risk-free interest rate

  0.5% - 1.0%   0.9% - 2.0%   1.8% - 2.8%   1.6% - 2.0%

Expected volatility. 

  80.3% - 85.5%   74.7% - 76.2%   75.3% - 85.4%   79.3% - 84.7%

Expected dividend rate

  0.0%   0.0%   0.0%   0.0%

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        Stock-based compensation expense was allocated as outlined below:

 
  Year Ended
December 31,
   
 
 
  Six Months
Ended
June 30,
2015
 
 
  2012   2013   2014  
 
  (in thousands)
   
 

Research and development

  $ 6   $ 55   $ 110   $ 81  

General administrative

    18     108     298     270  

Total

  $ 24   $ 163   $ 408   $ 351  

        At June 30, 2015, we had $2.2 million of total unrecognized compensation expense, net of related forfeiture estimates. We expect the impact of our stock-based compensation expense for stock options to grow in future periods due to the potential increases in headcount and the value of our common stock.

JOBS Act

        Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other companies.

Results of Operations

Comparison of Six Months Ended June 30, 2014 and 2015:

 
  Six Months
Ended June 30,
   
   
 
 
  Dollar
Change
   
 
 
  2014   2015   % Change  
 
  (in thousands)
   
 

Statement of operations data:

                         

Operating expenses:

                         

Research and development, before grant reimbursement

  $ 4,293   $ 8,112   $ 3,819     89.0 %

Less grant reimbursement

    (37 )   (188 )   (151 )   408.1 %

Research and development

    4,256     7,924     3,668     86.2 %

General and administrative

    1,777     2,039     262     14.7 %

Net loss

  $ (6,033 ) $ (9,963 ) $ (3,930 )   65.1 %

Research and Development Expenses

        Research and development expenses were $7.9 million for the six months ended June 30, 2015, which was an increase of $3.7 million, or 86%, compared to research and development expenses of approximately $4.3 million for the six months ended June 30, 2014.

        Research and development spending, prior to the offset of grant reimbursements, was $8.1 million for the six months ended June 30, 2015, which was an increase of approximately $3.8 million, or 89%, compared to research and development spending, prior to the offset of grant reimbursements, of $4.3 million for the six months ended June 30, 2014. The increase in the first quarter of 2015 was primarily due to increased clinical trial costs related to our Phase 1 clinical trial, including a higher number of

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patients, additional investigator sites and additional drug costs related to the increased trial activity, and increased intellectual property and licensing costs.

        Research and development spending was partially offset by approximately $188,000 of grant reimbursements for the six months ended June 30, 2015, compared to reimbursement of approximately $37,000 for the same period in 2014. The increase was due to a higher volume of work being performed on the research funded by the federal grants.

General and Administrative Expenses

        General and administrative expenses were approximately $2.0 million for the six months ended June 30, 2015, which was an increase of approximately $262,000, or 15%, compared to the same period in 2014. The overall expenses remained consistent from quarter to quarter, with an increase in salary and benefits being the primary difference.

Comparison of Years Ended December 31, 2013 and 2014

 
  Year Ended
December 31,
   
   
 
 
  Dollar
Change
   
 
 
  2013   2014   % Change  
 
  (in thousands)
   
 

Statement of operations data:

                         

Operating expenses:

                         

Research and development, before grant reimbursement

  $ 8,241   $ 10,626   $ 2,385     28.9 %

Less grant reimbursement

    (3,850 )   (81 )   3,769     (97.9 )%

Research and development

    4,391     10,545     6,154     140.2 %

General and administrative

    2,384     3,369     985     41.3 %

Write-off of offering expenses

        1,920     1,920     NM *

Total operating expenses

    6,775     15,834     9,059     133.7 %

Other income (expense):

                         

Change in fair value of option liability

    339         (339 )   (100.0 )%

Net loss

  $ (6,436 ) $ (15,834 ) $ (9,398 )   146.0 %

*
Not Meaningful

Research and Development Expenses

        Research and development expenses were $10.5 million for the year ended December 31, 2014, which was an increase of $6.2 million, or 140%, compared to research and development expenses of $4.4 million for the year ended December 31, 2013. The net change was due to an increase in overall research and development spending and a significant reduction in grant reimbursement from the prior year.

        Research and development spending, prior to offset by grant reimbursement, was $10.6 million for the year ended December 31, 2014, which was an increase of $2.4 million, or 29%, compared to research and development spending of $8.2 million for the year ended December 31, 2013. The increase in research and development spending in 2014 was primarily due to the increased costs for clinical trials. The initiation of our Phase 1 clinical trial was in April 2013. In 2014, the clinical trial costs increased as a result of a full year of clinical trial costs and expansion of testing for additional indications, additional investigator sites, expansion of the trial to overseas locations and a related increase in clinical trial drug costs. The increase was also due to an increase in intellectual property

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spending. The increases in overall research and development spending were partially offset by lower licensing costs in 2014.

        We offset research and development expenses by approximately $81,000 for the year ended December 31, 2014. This was a decrease from the $3.85 million of grant proceeds received for the year ended December 31, 2013 of approximately $3.77 million, or 98%. The reduction in grant reimbursements was due to the completion of the allowable expense provided for by the grant by the Cancer Prevention and Research Institute of Texas, or CPRIT, during the fourth quarter of 2013.

General and Administrative Expenses

        General and administrative expenses were $3.4 million for the year ended December 31, 2014, which was an increase of approximately $1.0 million, or 41%, compared to general and administrative expenses of $2.4 million for the year ended December 31, 2013. The increase year over year was due to increases in headcount and the related salaries and benefits, increases in legal and other professional fees, and general overall spending related to increase activities.

Write-off of Offering Expenses

        In August 2014, a proposed offering was delayed and the deferred offering costs for that offering, which consisted of direct incremental legal and professional accounting fees related to that offering, in the amount of $1.92 million were expensed.

Change in Fair Value of Option Liability

        In October 2012, we completed an initial closing of an offering of Series C convertible preferred stock. The purchasers of the convertible preferred stock in the initial closing received an option to participate in the second closing for the same number of shares and at the same price as the initial closing. At the time of the initial closing, the fair value of this option to participate in the second closing was calculated using an option pricing model, and the effect of this non-cash accounting adjustment was to record an option liability on the balance sheet for the fair value that was calculated. The option liability is marked to fair value at each reporting period and any changes in fair value are recorded in the statement of operations.

        When the second closing of the Series C convertible preferred stock was completed in December 2013, we had a one-time non-cash gain on the change in the fair value of the option and the balance of the option liability was reclassified to additional paid-in capital.

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Comparison of Years Ended December 31, 2012 and 2013

 
  Year Ended
December 31,
   
   
 
 
  Dollar
Change
   
 
 
  2012   2013   % Change  
 
  (in thousands)
   
 

Statement of operations data:

                         

Operating expenses:

                         

Research and development, before grant reimbursement

  $ 6,380   $ 8,241   $ 1,861     29.2 %

Less grant reimbursement

    (3,638 )   (3,850 )   (212 )   5.8 %

Research and development

    2,742     4,391     1,649     60.1 %

General and administrative

    1,562     2,384     822     52.6 %

Total operating expenses

    4,304     6,775     2,471     57.4 %

Other income (expense):

                         

Change in fair value of option liability

        339     339     100.0 %

Gain on extinguishment of note payable

    1,001         (1,001 )   (100.0 )%

Interest expense

    (355 )       355     (100.0 )%

Net loss

  $ (3,658 ) $ (6,436 ) $ (2,778 )   75.9 %

Research and Development Expenses

        Research and development expenses were $4.4 million for the year ended December 31, 2013, which was an increase of $1.6 million, or 60%, compared to research and development expenses of $2.7 million for the year ended December 31, 2012. The net change was due to an increase in overall research and development spending.

        Research and development spending, prior to offset by grant reimbursement, was $8.2 million for the year ended December 31, 2013, which was an increase of $1.9 million, or 29%, compared to research and development spending of $6.4 million for the year ended December 31, 2012. The increase in research and development spending in 2013 was primarily due to the initiation of our Phase 1 clinical trial in April 2013, including the costs of conducting the trial and adding headcount for clinical operations, and additional spending on intellectual property, including a payment of $1.0 million to Marina Biotech, Inc., or Marina. This increase was partially offset by a decrease in spending for clinical trial drug costs and outsourced preclinical studies that had been conducted in 2012 in anticipation of the submission of the Investigational New Drug, or IND, for MRX34 to the Federal Drug Administration, or FDA, in 2013.

        We offset research and development expenses by $3.85 million of grant proceeds for the year ended December 31, 2013 and $3.64 million for the same period in 2012, an increase of approximately $212,000, or 6%. In both 2013 and 2012, over 95% of the total grant proceeds recognized by us related to the CPRIT grant. The increase in grant and research proceeds in 2013 was primarily due to the timing of the expenses being incurred that are reimbursed by state and federal grants.

General and Administrative Expenses

        General and administrative expenses were $2.4 million for the year ended December 31, 2013, which was an increase of approximately $0.8 million, or 53%, compared to general and administrative expenses of $1.6 million for the year ended December 31, 2012. Prior to 2013, a number of administrative functions had been provided by our former parent company, Asuragen, including accounting and finance, legal, human resources and purchasing, and the costs for these administrative functions were covered by a shared services agreement between us and Asuragen. Beginning in 2013, these administrative functions were transitioned to us, and the additional costs were incurred related to

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these functions, including additional headcount, new systems, professional fees, outside consultants and transition costs. There were also increases in the costs of audit and tax, legal and stock-based compensation from 2012 to 2013.

Change in Fair Value of Option Liability

        In October 2012, we completed an initial closing of an offering of Series C convertible preferred stock. The purchasers of the convertible preferred stock in the initial closing received an option to participate in the second closing for the same number of shares and at the same price as the initial closing. At the time of the initial closing, the fair value of this option to participate in the second closing was calculated using an option pricing model, and the effect of this non-cash accounting adjustment was to record an option liability on the balance sheet for the fair value that was calculated. The option liability is marked to fair value at each reporting period and any changes in fair value are recorded in the statement of operations.

        When the second closing of the Series C convertible preferred stock was completed in December 2013, we had a one-time non-cash gain on the change in the fair value of the option and the balance of the option liability was reclassified to additional paid-in capital.

Gain on Extinguishment of Note Payable

        In conjunction with a unit investment in 2009 from the Texas Emerging Technology Fund, or the TETF, an economic development affiliate of the State of Texas, we issued a note payable and a warrant to purchase our capital stock. The note payable was initially recorded net of the computed debt discount resulting from the warrant value. In October 2012, the arrangement with the TETF was amended. As part of the amendment, our note with the TETF was deemed satisfied in full and canceled and we were released of all repayment obligations. In conjunction with this release, we recognized a gain on the extinguishment of the note payable and related accrued interest of $1.0 million in 2012.

Interest Expense

        Interest expense decreased from $355,000 for the year ended December 31, 2012 to zero for the year ended December 31, 2013 due to the extinguishment of the note payable related to the TETF in October 2012. We did not have any debt obligations outstanding during 2013.

Liquidity and Capital Resources

Liquidity and Capital Expenditures

        Since inception, at June 30, 2015, our operations have been financed primarily by net proceeds of $89.9 million from the sales of shares of our convertible preferred stock for cash and assets and $11.7 million from federal and state grants. At June 30, 2015, we had $41.6 million of cash and cash equivalents.

        Our primary uses of cash are to fund operating expenses, primarily research and development expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

        In connection with a research grant awarded to us in September 2015, CPRIT agreed to purchase from us concurrently with this offering in a private placement approximately $16.8 million of our common stock at a price per share equal to the initial public offering price.

        We believe that our existing cash and cash equivalents as of June 30, 2015, along with the estimated net proceeds from this offering and the concurrent private placement, will be sufficient to

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meet our anticipated cash requirements for at least the next 12 months. However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially.

        Our future capital requirements are difficult to forecast and will depend on many factors, including:

        The following table shows a summary of our cash flows for the years ended December 31, 2012, 2013 and 2014 and the six months ended June 30, 2014 and 2015.

 
  Year Ended December 31,   Six Months
Ended June 30,
 
 
  2012   2013   2014   2014   2015  
 
  (in thousands)
  (unaudited; in thousands)
 

Net cash provided by (used in):

                               

Operating activities

  $ (4,520 ) $ (6,496 ) $ (13,970 ) $ (7,411 ) $ (9,199 )

Investing activities. 

        (7 )   (102 )   (21 )   (58 )

Financing activities

    16,847     16,419     209     208     41,517  

Net increase (decrease)

  $ 12,327   $ 9,916   $ (13,863 ) $ (7,224 ) $ 32,260  

Operating Activities

        Net cash used in operating activities was $7.4 million and $9.2 million for the six months ended June 30, 2014 and 2015, respectively. The increase in cash used for operating activities of approximately $1.8 million was primarily due to increased salaries, increased spending for clinical trials and intellectual property related expenses, and higher license fees.

        Net cash used in operating activities was $14.0 million for the year ended December 31, 2014, compared to net cash used in operations of $6.5 million for the same period in 2013. The increase in 2014 in overall spending in the prior year was primarily due to increased clinical trials related costs, including the higher number of patients, additional sites and related increase in costs of the drug product, and increased spending on intellectual property. The increase was also caused by the lower grant payment from CPRIT, with an annual payment made in 2013.

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Investing Activities

        The net cash used in investing activities for the periods presented relates entirely to the purchases of property and equipment, primarily computer and lab equipment. For the six months ended June 30, 2014 and 2015, total amounts spent on the purchase of fixed assets were approximately $21,000 and $58,000, respectively. The amount spent in the years ended December 31, 2013 and 2014 was approximately $7,000 and $102,000, respectively. There were no investing activities in 2012.

Financing Activities

        Net cash provided by financing activities was approximately $41.5 million for the six months ended June 30, 2015, which was primarily due to the offering of the our Series D convertible preferred stock. For the six months ended June 30, 2014, approximately $208,000 of net cash provided by financing activities was due to the exercise of stock options.

        Net cash provided by financing activities was approximately $209,000 for the year ended December 31, 2014, which was due to the exercise of stock options. For both years ended December 31, 2013 and 2012, the net cash provided by financing activities of $16.4 million and $16.8 million, respectively, was primarily due to the net proceeds from the sale of our Series C convertible preferred stock. The initial funding of the Series C convertible preferred stock was in October 2012 and the second funding was in December 2013.

Contractual Obligations and Commitments

        In October 2014, we entered into a sublease agreement and amended an agreement with Asuragen under which we share space with Asuragen and Asuragen provides certain services to us. These services currently include facilities-related services, warehouse services, shipping and receiving and other services. The term of the services agreement expires in August 2016, with commitment for payments remaining under the two agreements totaling approximately $824,000 as of December 31, 2014.

 
  Payment due by period  
 
  Total   Less than
1 year
  1 - 3 years   3 - 5 years   More than
5 years
 
 
  (in thousands)
 

Contractual Obligations:

                               

Sublease Agreement with Asuragen

  $ 148   $ 89   $ 59   $   $  

Services Agreement with Asuragen. 

    676     389     287          

Total

  $ 824   $ 478   $ 346   $   $  

Off-balance Sheet Arrangements

        We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the Securities and Exchange Commission.

Quantitative and Qualitative Disclosures about Market Risk

        The market risk inherent in our financial instruments and in our financial position represents the potential loss arising from adverse changes in interest rates. At June 30, 2015, we had cash and cash equivalents of $41.6 million, consisting of interest-bearing money market accounts and prime money market funds. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates. Due to the short-term maturities of our cash equivalents and the low risk profile of our investments, we do not believe a change in interest rates would have a material effect on the fair market value of our cash equivalents.

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Business

Overview

        We are a clinical-stage biopharmaceutical company developing a broad pipeline of microRNA-based oncology therapeutics. microRNAs are naturally occurring, short ribonucleic acid, or RNA, molecules, or oligonucleotides, that play a critical role in regulating key biological pathways. Misexpression of even a single microRNA can contribute to disease development and tumor suppressor microRNAs are commonly reduced in cancer. Our scientists and others at leading academic institutions have identified numerous tumor suppressor microRNAs that play key roles in preventing normal cells from becoming cancerous and facilitating proper cancer immunosurveillance. We are developing mimics of naturally occurring microRNAs that are designed to restore this tumor suppressor activity and aid appropriate tumor immune response. This approach is known as microRNA replacement therapy. Our lead product candidate, MRX34, a mimic of naturally occurring microRNA-34 (miR-34) encapsulated in a liposomal nanoparticle formulation, is the first microRNA mimic to enter clinical development and has shown preliminary clinical evidence of anti-tumor activity as a single agent in our ongoing Phase 1 clinical trial. We believe that microRNA mimics represent a new paradigm in cancer therapy and have the potential to create a new, important class of effective cancer drugs that can potentially be used alone or in combination with other cancer therapeutics. We plan to develop MRX34 as a monotherapy and in combination with other therapeutic modalities, such as targeted therapies and immuno-oncology agents.

        We are developing a pipeline of tumor suppressor microRNA mimics. Each microRNA mimic in our pipeline is designed to replicate the activity of a single tumor suppressor miRNA and regulate the expression of multiple important oncogenes across key oncogenic pathways which can prevent proliferation and induce apoptosis in cancer cells. The potential capacity to simultaneously affect multiple pathways and processes that are critical to cancer cell viability may make mimics of tumor suppressor microRNAs potent anti-cancer agents and less susceptible to drug resistance. We are pursuing or have been granted therapeutic use patent claims related to several tumor suppressor microRNAs as well as composition of matter claims for multiple chemistries and structures that are, or may be used in or are contemplated for use with, our therapeutic microRNA mimics, including miR-34. The following chart provides summary information on the most advanced microRNA mimics in our pipeline:

GRAPHIC

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        Our lead product candidate, MRX34, is a miR-34 mimic encapsulated in a liposomal nanoparticle formulation. Our mimic of miR-34 has shown evidence of the potential ability to:

        In April 2013, we initiated a multi-center, open label dose escalation Phase 1 clinical trial during which we are evaluating two different dosing schedules for MRX34 as a single agent in multiple advanced solid tumors and various types of hematological malignancies.

        As of August 13, 2015, 101 patients have been enrolled in the ongoing MRX34 Phase 1 clinical trial at five clinical trial sites in the United States and three sites in Korea. Primary objectives of the Phase 1 clinical trial are to establish the maximum tolerated dose and an appropriate dose for expansion cohorts and future Phase 2 clinical trials. As of August 13, 2015:

        Based on observations from the two dosing schedules, we believe the QD × 5 dosing schedule has certain advantages over the BIW schedule such as better safety and tolerability, which we believe may in turn lead to improved efficacy. Therefore, the QD × 5 dosing schedule has been selected for all new patients enrolling in the Phase 1 clinical trial.

        Secondary objectives of the clinical trial are to assess the safety, tolerability and pharmacokinetic profile of MRX34 after intravenous dosing as well as to assess any biological and clinical activity. Observations on these secondary objectives include the following:

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        Once the dose-escalation phase in the QD × 5 dose schedule cohort has been completed, and a recommended dose for the expansion cohorts has been determined, we intend to enroll approximately 100 additional patients across different tumor-specific expansion cohorts, including primary liver cancer, melanoma, small cell and non-small cell lung cancer, lymphoma and multiple myeloma. We expect to complete these expansion cohorts and have multiple study data read-outs by the end of 2016. After consultation with the FDA on study results and the recommended clinical development program going forward, we intend to initiate a Phase 2 clinical trial program in early 2017.

        Our pipeline contains multiple tumor suppressor microRNAs that, like miR-34, have demonstrated the ability to inhibit cancer cell proliferation and tumor growth in preclinical studies by co-regulating the expression of multiple oncogenes. The specific set of genes regulated by each tumor suppressor microRNA as well as the ability to deliver these mimics to the target tissue may determine their potential in treating specific types of cancer, and thus the specific clinical development program for each of our pipeline therapeutic product candidates.

Our microRNA Platform

        We pioneered the development of therapeutic miRNA mimics that feature two complementary RNA strands that are hybridized to produce a double-stranded RNA. The active strand has a sequence that is identical to a microRNA normally expressed in a cell, while the second, passenger strand is modified to facilitate proper loading of the active strand onto the cytoplasmic protein complex necessary for microRNA function inside the cells. While similar in structure, microRNA mimics are clearly differentiated from small interfering RNAs (siRNAs) through their biological heritage and activity. In contrast to the man-made sequences of siRNAs that target a single gene, microRNA mimics function like naturally occurring microRNAs to orchestrate the expression of many different genes to enable normal cell development and function. Because microRNA mimics have the same functions as the miRNAs that are naturally produced in cells, we believe that they will be unlikely to suffer from the undesired, or so-called "off-target," side effects that are common with siRNAs and other oligonucleotide-based therapies.

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        We have benefited from the recent expansion of oligonucleotide therapeutic development programs which have produced improved systemic oligonucleotide delivery technologies. We employed a comprehensive evaluation of more than 10 of the most compelling preclinical or clinical stage lipid- and polymer-based nanoparticle delivery technologies to select an innovative liposomal technology called SMARTICLES to enable the systemic delivery of our microRNA mimics to cancer cells in patients.

        Our early research and discovery work originated in 2002 at Ambion, Inc. and formed the initial basis for our patent portfolio, and later continued at our former parent company, Asuragen, Inc. This pioneering work allowed us to develop deep know-how and expertise in the science underlying microRNAs and to develop a strong intellectual property position, which we continue to expand and strengthen. While our primary focus has been on the discovery and development of microRNA-based therapies for cancer, our scientists have also discovered functions of microRNAs in numerous diseases other than cancer, which may provide us an opportunity to expand this novel technology into other therapeutic areas of unmet medical need. We believe these microRNAs represent future partnering or diversification opportunities.

microRNAs: A Unique Class in the RNA Therapeutics Space

        The landscape of RNA-based therapeutic technologies has rapidly expanded over the past few years, mostly due to advances in the delivery of these molecules to their intended targets. We are aware of several companies that are working specifically to develop RNA therapeutics, which we believe generally fall into the following categories:

GRAPHIC

        While other companies in the field of microRNA have focused primarily on inhibiting overexpressed microRNAs by antagonists known as anti-miRs or AntagomiRs, we have focused on introducing microRNAs that are under-expressed in disease through the use of microRNA mimics. This is in part due to what we believe is stronger therapeutic activity of microRNA mimics compared to anti-miRs or AntagomiRs. Within the group of companies in the microRNA space, we are the first

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company to clinically employ microRNA mimics. The approach, technological and therapeutic focus and status of lead programs for these microRNA companies are as follows:

Company
  microRNA
Approach
  Technology Focus   Therapeutic Focus   Status of Lead Program
Mirna Therapeutics   microRNA mimics   Replacement of tumor suppressor microRNAs   Cancer   MRX34(miR-34 mimic): 1st microRNA mimic in Phase 1

EnGeneIC

 

microRNA mimics

 

Replacement of tumor suppressor microRNAs

 

Cancer

 

MesomiR-1 (miR-16 mimic) in Phase 1 for mesothelioma

miRagen Therapeutics

 

anti-miRs

 

Inhibition of microRNAs

 

Cancer, amyotrophic lateral sclerosis (ALS), fibrosis, cardiovascular disease

 

Preclinical

Regulus Therapeutics

 

anti-miRs

 

Inhibition of microRNAs

 

HCV: kidney fibrosis

 

RG-101 (anti-miR-122) in Phase 1; RG-012 (anti-miR-21) in Phase 1

Roche (Santaris)

 

anti-miRs

 

Inhibition of microRNAs

 

HCV

 

Miramersen (anti-miR-122) in Phase 2

        We believe that microRNA-based therapies have the potential to become a new class of drugs with broad therapeutic application based on the following:

The Current Challenges in Cancer and Cancer Therapies

        Over the past two decades, cancer drug development has moved from systemic cytotoxic chemotherapy to more targeted therapies, with approximately 1,000 targets discovered and close to 800 drugs in development aimed at specific targets. First-generation targeted therapies have generally produced lower levels of toxicity than systemic cytotoxic therapies with variable efficacy outcomes. Efforts at improving the efficacy of cancer drug targeting have focused on defining subgroups of

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patients who are most likely to benefit from targeted therapies with the aid of modern molecular diagnostics, on combinations of targeted therapies with complementary mechanisms of action and on combinations of targeted therapies with chemotherapy or biological agents. Harnessing the patients' own immune system to attack cancer has had a long history of disappointments in the past, even though a small percentage of patients have apparently received long-term benefit in tumor control and overall survival. The recent discoveries of checkpoint inhibitors and other immuno-oncology products have resulted in marked improvements in efficacy, especially in long-term tumor control and overall survival. Several immuno-oncology products have been approved for marketing, including ipilimumab (Yervoy®), pembrolizumab (Keytruda®) and nivolumab (Opdivo®). However, only a subset of patients achieve responses to these products when used as a single agent and the development of combinations of these agents has been limited by toxicities.

        For the next wave of targeted cancer therapies to produce a measurable improvement over current approaches, we believe it will need to yield drugs that can disrupt multiple oncogenic as well as immuno-oncology pathways. We believe the field of microRNA represents a highly promising area for the development of new cancer agents that can appropriately modulate combinations of oncogenic targets within cancer cells and stimulate patients' own immune system to attack cancer.

        By replacing under-expressed tumor suppressor microRNAs to sufficient levels predictably and tolerably, we believe we have the potential to transform the current disease treatment paradigm across a wide variety of cancers provided that the delivery of microRNAs is achieved at sufficient levels. We also believe our microRNA mimics have the mechanistic flexibility to be used as:

Our Strategy

        Our corporate strategy includes the following:

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Our Approach

microRNA Biology

        RNA plays an essential role in the process used by cells to encode and translate genetic information from DNA to proteins. RNA is comprised of subunits called nucleotides and is synthesized from a DNA template by a process known as transcription. Transcription generates different types of RNA, including messenger RNAs that carry the information for proteins in the sequence of their nucleotides. In contrast, microRNAs are short RNAs, or oligonucleotides, that do not code for proteins, but rather ensure that the over 20,000 human protein-encoding genes are produced in the proper cells and at the proper levels by coordinating the production of proteins from messenger RNAs that are produced in each cell. microRNA-encoding genes emerged several hundred million years ago and their presence is believed to be a driving factor in the emergence and diversity of vertebrates in

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the ecosystem. Without microRNAs, cells and tissues within humans and other vertebrates would not be able to develop or function properly or respond to changes in the internal or external environments.

        In humans, each microRNA binds to and regulates the translation of up to several hundred target messenger RNAs. Coordinating the translation of multiple, related genes allows a microRNA to regulate gene networks involved in key biological pathways. Given the importance of microRNAs in coordinating gene expression, it is not surprising that the altered expression of even a single microRNA appears to contribute to a variety of human diseases, including cancer. More than 10 years ago, while working at Ambion, our scientists discovered through extensive microRNA expression and functional assay work that microRNAs are differently expressed in cancer tissue compared to normal adjacent tissue and that several naturally occurring microRNAs function as tumor suppressors by regulating the expression of key oncogenes and preventing the development, progression and dissemination of cancer.

        To enable therapeutic application of these tumor suppressor microRNAs, we pioneered technologies for creating RNA molecules that function as natural microRNAs when they enter human cells. These RNA molecules, which we call microRNA mimics, may be used to replace those tumor suppressor microRNAs that are lost, or under-expressed, in cancer cells. We have designed a proprietary, double-stranded microRNA mimic construct for our therapeutic product candidates. The structure of the microRNA mimics we use features two complementary RNA molecules that form a small double-stranded RNA molecule with no overhangs. One strand, the active strand, is an exact copy of the naturally occurring microRNA sequence. The passenger strand is a complement to the active strand with modifications that prevent it from being active in the cytoplasm of the cancer cell, where microRNAs exhibit their cellular function. We have issued patents and pending patent applications on this design, regardless of therapeutic indications, as well as other intellectual property on multiple specific chemistries and structures that may be used in therapeutic microRNA mimics.

Delivery of microRNA Mimics to Target Tissues

        Systemic delivery of oligonucleotides, including microRNAs, has been a major challenge, principally due to the fact that these molecules have to overcome multiple barriers after intravenous administration before reaching their ultimate place of action, which is the RNA-induced silencing complex (RISC) in the cytoplasm of cancer cells. Significant hurdles must be overcome at each step:

        Encapsulation of these oligonucleotides inside delivery nanoparticles overcomes several of these hurdles, and we believe there has been significant progress over the past decade in the design and implementation of novel delivery technologies. Due to the importance of delivery to the success of our product candidates, we have closely monitored progress over the last several years, and will continue to do so going forward. As a result, our team is very focused on, and has become very efficient in, assessing and evaluating new and existing technologies for delivery of our microRNA mimics.

        We carried out systematic evaluations of these different proprietary delivery systems under material transfer agreements in conjunction with our microRNA mimics, thereby providing us with formulations of our microRNA compounds for in vivo and ex vivo testing.

        We determined that the SMARTICLES formulation technology, owned by Marina Biotech, Inc., or Marina, had a favorable combination of efficient systemic delivery of miR-34 mimics to solid tumors in mice, a high therapeutic activity of formulated miR-34 in mouse models of cancer, low or no toxicity, and low or no cytokine stimulation in both animal models and an ex vivo human whole blood assay.

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        The SMARTICLES formulation demonstrated key benefits in preclinical studies, including the ability to deliver very high numbers of microRNA mimics to tumors, as shown below.

GRAPHIC

        We observed dramatic efficacy using the SMARTICLES formulation in multiple orthotopic tumor models of liver cancer, including Hep3B, HuH-7, C3A, BN118, and BN124 with full regression in the majority of established liver tumors at different dose levels and with different treatment schedules (see results of mice studies in figure below).

GRAPHIC

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        In addition, the SMARTICLES formulation offers a promising biodistribution pattern after intravenous administration in mice and non-human primates, with delivery of high copy numbers not only to the liver and spleen generally, which is to be expected with liposomal formulations, but also to other highly vascularized tissues, such as lung, adrenal gland, stomach and kidney, and also to bone marrow in non-human primates. As shown in the following figures, the SMARTICLES formulation was found to deliver to both healthy and cancerous cells, with a high number of copies of the miR-34 mimic delivered to tumors located in the liver, lymph nodes (melanoma metastases), lung and colon, as well as to highly vascularized tissues, including adrenal gland and kidney.

GRAPHIC

        This pattern of biodistribution upon intravenous administration is also well documented for other liposomal formulations, with highest levels of delivery to the liver and spleen.

        The SMARTICLES formulation includes negatively charged liposomes, which we believe might limit the toxicities that have plagued positively charged liposomal formulations that have been used for other oligonucleotide-based therapies. There have been no statistically significant elevations in the cytokine levels of mice and non-human primates dosed with SMARTICLES-formulated microRNA mimics, or in a human whole blood assay of key human cytokines, indicative of a potentially induced immune response. No significant changes in the serum levels of cytokines, such as interferon-a, TNF-a, IL-1 and IL-12 have been observed. Variable dose-related increases in IL-6 were seen, but these increases were not statistically significant as compared to the control group and were not of a magnitude that we believe would cause clinical concern.

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        In December 2011, we obtained an exclusive license from Marina under its rights to the SMARTICLES technology. Our license from Marina grants us exclusive rights (including the right to sublicense) under the SMARTICLES technology to develop, manufacture and commercialize products containing miR-34, and, pursuant to a December 2013 amendment, four other promising tumor suppressor microRNA targets selected by us. Although we remain confident in our selection of SMARTICLES for our lead therapeutic candidate, we are continuing to evaluate different delivery technologies for potential use in conjunction with miR-34 and the other microRNA mimics in our pipeline for the purposes of optimizing delivery of our drug candidates to a broader group of tissues and organs.

Selection of miR-34 as Lead Therapeutic Target

        miR-34 is one of the most widely published tumor suppressor microRNAs. Studies have revealed that the levels of miR-34 are reduced in the tumors of patients with a wide variety of cancers, as exemplified in the graph below.

GRAPHIC

        The under-expression of miR-34 in cancers appears to be due to the fact that miR-34 expression is affected by p53, a well-known tumor suppressor that is often mutated and less active in tumors. Published data suggest that miR-34 functions akin to the tumor suppressor function of p53, controlling many genes and pathways that are also associated with p53. Reduced expression of miR-34 in cancers also commonly occurs as a result of methylation of the miR-34 gene.

        Based on published reports from microRNA scientists at numerous research institutions, miR-34 plays a key role in controlling the expression of more than 30 oncogenes as well as genes involved in

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tumor immune evasion, as shown in the figure below. This includes targets that are the focus of currently-marketed and investigational cancer drugs.

GRAPHIC

        The considerable reduction of miR-34 levels observed in cancer stem cells suggests that the microRNA might play a functional role in preventing normal cells from acquiring stem-like properties, like cell self-renewal, which can contribute to the development of cancer. In partnership with an academic collaborator, we successfully demonstrated that introducing miR-34 into prostate cancer stem cell populations can significantly reduce their stem-like properties and limit their capacity to form tumors. Similar results have been obtained from studies using pancreatic and gastric cancer stem cells. We believe the ability of miR-34 to inhibit cancer stem cells has significant implications for cancer therapy since the cancer stem cells present in tumors are thought to be the primary drivers of tumor growth, metastasis and resistance to therapy.

        Recent data generated with an academic collaborator showed that miR-34 directly represses the checkpoint signaling molecule PD-L1. PD-L1 protein present on tumor and immune cells can silence anti-tumor immune responses and has become a promising drug target in immuno-oncology therapies. The introduction of miR-34 mimics into cultured lung cancer cells led to a remarkable decline of PD-L1 protein expression. In a syngeneic mouse model of lung cancer, we successfully demonstrated that MRX34 treatment led to repression of the PD-L1 protein in tumor tissue and an increase in active tumor-infiltrating immune cells (CD8+) and a decrease in so-called exhausted tumor-infiltrating immune cells (CD8+PD1+). We believe the ability of miR-34 to block PD-L1 signaling may broaden the therapeutic application of MRX34 as a monotherapy as well as in combination with other immune-oncology therapies.

MRX34: Our Lead Product Candidate

        MRX34 is a double-stranded RNA mimic of the tumor suppressor microRNA, miR-34, encapsulated in a liposomal nanoparticle formulation called SMARTICLES. miR-34 inhibits multiple oncogenic pathways and stimulates anti-tumor immune response to induce cancer cell death. We performed cell culture studies that revealed that introducing a mimic of miR-34 into cancer cell lines derived from patients with liver, lung, colon, pancreatic and breast cancers results in significant reductions in cell proliferation. In various preclinical studies, miR-34 also inhibited formation of cancer stem cells, which are believed to contribute to the development, metastasis and therapeutic resistance of tumors. Studies performed at other laboratories have indicated that increasing miR-34 levels also inhibit the proliferation of cancer cells derived from patients with malignant melanoma, B-cell lymphoma and multiple myeloma.

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MRX34 Clinical Development Program

        In addition to evaluating the safety, tolerability and pharmacokinetic profile of MRX34, an important goal of our ongoing Phase 1 clinical trial is to establish proof of concept of microRNA replacement therapy in patients with primary liver cancer or advanced solid tumors. Our focus on hepatocellular carcinoma, or HCC, is based on the fact that liposomal nanoparticle formulations have a tendency to deliver their payload to the liver, and the high unmet medical need in this tumor type. For example, sorafenib (Nexavar), the only approved drug for unresectable primary liver cancer, has only shown a 2% objective response rate. Additionally, we have also demonstrated meaningful results with MRX34 in multiple mouse models of primary liver cancer, including a study in which MRX34 demonstrated improved survival over sorafenib. To date we have observed tumor shrinkage greater than 30% in two patients with Stage IV cancer: one patient with a confirmed partial response in primary liver cancer metastasized to the lung; and a confirmed partial response in a melanoma patient with disseminated disease.

        The Investigational New Drug application was initially filed with the FDA on February 27, 2013 and we received the notification from the FDA to proceed with the Phase 1 clinical trial on March 29, 2013. During the course of our Phase 1 clinical trial, the protocol was amended and the patient population was expanded to also include patients with hematological malignancies, based on the observation that specific lymphomas and leukemias are characterized by low levels of miR-34 and biodistribution data that support high delivery to bone marrow and malignant lymphocytes. During the trial, we have observed dose-dependent MRX34 delivery and activity in normal white blood cells of patients and we aim to demonstrate delivery to tumors when patient biopsies become available during our expansion cohorts.

        The primary objectives of the multicenter Phase 1 clinical trial of MRX34, including the hematological malignancy cohort, are to establish the maximum tolerated dose and an appropriate dose for Phase 2 clinical trials. The secondary objectives of the Phase 1 clinical trial are to assess the safety, tolerability and pharmacokinetic profile of MRX34 after intravenous dosing as well as to assess any biological and clinical activity. This Phase 1 clinical trial is not designed to show statistical significance of the study endpoints.

        According to the original protocol, MRX34 was administered as a single agent intravenously twice a week, or BIW, for three weeks with one week off, in 28-day cycles, until disease progression or intolerance. This dosing schedule was selected based on preclinical toxicity and efficacy studies. In total, 47 patients have been treated on BIW dosing schedule and a Maximum Tolerated Dose (MTD) was established at 110 mg/m2 for this dosing schedule. Based on our experience with this dosing schedule and another company's experience with a SMARTICLES-based liposomal formulation, the protocol was subsequently amended to introduce a second dosing schedule in mid-2014, which involves daily MRX34 administration for five days, or QD × 5, with two weeks off, in three week cycles. As of August 13, 2015, 54 patients have been treated on the QD × 5 dosing schedule, and recruitment is continuing. In the 47 patients treated on the BIW dosing schedule, 38 patients were evaluable for response, based on availability of baseline and follow-up scans or disease progression as determined by the study investigator. In those 38 patients, six patients showed stable disease varying between two and eight cycles in length, and at different dose levels. Of the 54 patients enrolled as of August 13, 2015 on the QD × 5 dosing schedule, 44 are evaluable for response. Eleven of the 44 patients have shown stable disease of varying duration, between two and 16 cycles of treatment, and at various dose levels.

        The Phase 1 clinical trial consists of an initial dose-escalation phase, followed by an expansion phase after a maximum tolerated dose and recommended Phase 2 doses are identified. In the expansion phase, patients being treated at the recommended Phase 2 dose may undergo tumor biopsies to identify potential biomarkers for assessing delivery and activity of miR-34, and/or predicting response to MRX34.

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        Through the first 28 months of our Phase 1 clinical trial, 101 patients have been treated with escalating doses of MRX34 in either BIW or QD × 5 schedules, starting at the 10 mg/m2 BIW dose level. Nearly all patients experienced at least one adverse event, with fever, chills, back pain, abdominal pain, nausea, diarrhea, vomiting, dehydration, anorexia, dyspnea, fatigue, headache, cough, insomnia, dysgeusia, tachycardia, anemia, neutropenia, lymphopenia, leukopenia, thrombocytopenia, elevation of liver enzymes, hyperglycemia and hyponatremia being the most commonly reported adverse events.

        During the study, one treatment-related death occurred in a 77-year old patient with kidney cancer metastasized to the lungs, whose cancer had worsened during previous sequential treatments with sunitinib, everolimus, axitinib, bevacizumab and AMG172. After the second dose of MRX34 on the QD × 5 schedule, the patient developed hypoxemia, a deficiency in oxygen saturation in the blood. Computed tomography scanning showed worsening of the cancer in lungs as well as possible colitis, an inflammation of the colon. The patient and family elected Do Not Resuscitate status, and the patient died two days later. We believe that the patient experienced immune-mediated pneumonitis and colitis, which have been observed with other immuno-oncology drugs and are included in FDA-approved drug labels.

        The treatment-related serious adverse events occurring in more than one patient were as follows:

        Many of the most common adverse events associated with MRX34 are similar to those reported with other liposomal drug formulations, including amongst others, fever, chills, back pain, abdominal pain, nausea, diarrhea, vomiting, dehydration, anorexia, dyspnea and fatigue and are generally manageable or preventable with standard interventions or tests used by oncologists, such as administering other medications that prevent or reduce side effects, temporary slowing of infusions, delaying or stopping dosing, or using magnetic resonance imaging, or MRI, to detect silent brain metastases.

        Of the 32 patients with primary liver cancer treated with escalating doses of MRX34 as of August 13, 2015, one advanced HCC patient from Korea, with underlying HBV etiology and metastases to the lungs after initial liver tumor resection, enrolled in the 70 mg/m2 dose cohort on the BIW dosing schedule achieved a confirmed partial response. After initiating MRX34, the monitored tumors showed overall shrinkage of approximately 30% after six cycles of treatment, continuing in subsequent cycles, and as shown in the growth curve below. The patient is currently in treatment cycle 12. The figure below shows the overall tumor growth curve, which reflects an increase in overall tumor size before MRX34 treatment and a decrease in overall tumor size after MRX34 treatment. Also included below are CT scans showing changes in the sizes of tumors in the right and left lungs of the patient before and after MRX34 treatment.

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        One of the two melanoma patients enrolled in the study as of August 13, 2015, who had progressed on previous treatments, including ipilimumab (Yervoy) and pembrolizumab (Keytruda), received 110 mg/m2 of MRX34 on the QD × 5 dosing schedule. The patient achieved a confirmed partial response based on an approximately 39% overall tumor size reduction, per independent radiology review using RECIST criteria, after four cycles of MRX34 treatment. The response continued after treatment cycle 6 with an approximately 54% overall reduction in tumor size. The patient has completed seven cycles of treatment. Below is the result of the independent radiology review, including the overall tumor growth curve after MRX34 treatment, and CT scans showing the decreases in the overall size of tumors in the skin, retroperitoneum and mesentery of the patient after MRX34 treatment.

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        In the 47 patients treated on the BIW dosing schedule, 38 patients were evaluable for response, based on availability of baseline and follow-up scans or disease progression as determined by the study investigator. In those 38 patients, six patients showed stable disease varying between two and eight cycles in length, and at different dose levels. Of the 54 patients enrolled as of August 13, 2015 on the QD X 5 dosing schedule, 44 are evaluable for response. Eleven of the 44 patients have shown stable disease of varying duration, between two and 16 cycles of treatment, and at various dose levels.

        Following the determination of the maximum tolerated dose and an appropriate dose for Phase 2 clinical trials with QD × 5 schedule, we plan to enroll approximately 100 patients into the Phase 1b expansion cohorts. The expansion cohorts are expected to enroll patients with HCC, melanoma, SCLC,

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NSCLC or hematological malignancies, with enrollment expected to be completed by end of 2016. Based on the safety and efficacy data from the expansion cohorts, we plan to meet with FDA to discuss the next phase of the MRX34 clinical development.

Pharmacokinetics and Pharmacodynamics

        Both maximum blood concentrations (Cmax) of, and drug exposure (area under the curve, or AUC) to, miR-34 showed a non-linear, non-dose proportional increase with increasing doses in both the BIW and QD × 5 schedules. In the BIW schedule, the AUC after the sixth dose (cycle day 18) was generally similar compared to the AUC after the first dose (cycle day 1). With the QD × 5 schedule, the AUC was increased approximately 10-fold on fifth day of dosing (cycle day 5) as compared after the first dose (cycle day 1). The increased drug levels on cycle day 5 may provide higher exposure of different tissues, including tumor cells, to MRX34. We believe that the higher exposure with 5 days of consecutive daily dosing is a benefit of the QD × 5 schedule as compared to the BIW schedule.

        To address whether the miR-34 mimic administered as MRX34 can engage its molecular targets in patients, we have collected and continue to collect various human tissues for molecular analysis. To date, we have biomarker data from human white blood cells (hWBCs) from patients treated with MRX34 in our ongoing Phase 1 clinical trial, and intend to collect data from patient tumor biopsy material during the dose expansion phase of the trial. We have collected hWBCs during cycle 1 just before initiation of treatment (pre-dose) and at multiple time points thereafter.

        White blood cell samples from 21 patients on the QD × 5 dosing schedule at dose levels ranging from 33 to 110 mg/m2 were analyzed by gene-specific qPCR analysis. Dose-dependent reductions were observed in the levels of numerous oncogenes that have previously been identified as direct miR-34 targets, including FOXP1, BCL2, HDAC1 and CTNNB1. In addition, a dose-dependent increase in the levels of p21-CIP1/WAF1, a tumor suppressor gene specifically induced by miR-34, was observed in the patient samples. These data are shown in the below figures.

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        To extend this analysis to a broader set of miR-34 target genes, samples from 10 patients on the QD × 5 dosing schedule at dose levels ranging from 33 to 93 mg/m2 were analyzed via whole transcriptome Next Generation Sequencing (NGS). Consistent with the qPCR data, the NGS data indicated an increasingly greater number of miR-34 target genes to be repressed at the higher MRX34

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dose levels. Among these genes were those previously evaluated by qPCR as well as several other key oncogenes regulated by miR-34.

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        Based on these data, we believe that the systemic administration of MRX34 to patients with different cancer types increased the levels of active miR-34 in white blood cells and reduced the levels of biological targets of the miRNA. During the expansion phase of the Phase 1 trial, we intend to collect tumor specimens for use in similar pharmacodynamics assessments, and correlate those with clinical responses in patients treated with MRX34.

MRX34 Preclinical Development Program

        We utilized two different models of liver cancer in mice to develop and characterize MRX34. These preclinical studies revealed that intravenous injections of MRX34 caused a greater than 100-fold increase in miR-34 levels in liver tumor cells and a corresponding reduction in the expression of oncogenes that are targets for the natural miR-34. Efficacy studies have revealed that intravenous injections of MRX34 three times per week at doses as low as 0.1 mg/kg and dosing as infrequent as once per week at 3.0 mg/kg can cause mature human primary liver tumors in mice to regress.

        We compared the therapeutic activity of MRX34 to sorafenib (Nexavar), which is the current standard of care for patients with HCC, in a 16-week orthotopic human liver cancer mouse model. After the human liver tumors were developed in livers of mice over the first four weeks of the study, the mice were dosed for six weeks followed by an additional six weeks of off-treatment monitoring for health and liver tumor growth. We dosed the mice by tail vein injection every other day with MRX34 at a rate of 0.3 mg/kg or by oral daily dosing with sorafenib at a rate of 30 mg/kg. As control groups for our study, we used a phosphate buffered saline buffer (PBS) as well as a scrambled microRNA sequence formulated in the SMARTICLES delivery formulation, or miR-NC. Each of the two control groups were dosed by the same route and on the same dosing schedule as MRX34. During the six-week dosing period, as well as during the six-week period after the final dose, we measured the weights of the mice biweekly and conducted health checks twice daily. As shown in the following graph, due to the aggressive nature of these tumors, none of the mice in either of the control groups survived the full duration of the study, as we observed large tumors in each of the mice. By comparison, two of the mice from the sorafenib group did not survive the full duration of the study, while all of the mice from the MRX34 group survived. Following the study, tumors were detected in three of the mice from

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the sorafenib group, while no tumors were detected in any of the eight mice comprising the MRX34 dosing group. We concluded from the study that the systemic delivery of MRX34 not only led to full regression in the majority of established liver tumors, but also had eliminated the potentially remaining viable liver cancer cells in the mice, with no tumor recurrence during the off-treatment follow-up period.

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        We believe that the potency exhibited by MRX34 in the liver cancer efficacy studies is derived from the ability of the small microRNA to regulate multiple genes and pathways that are important for HCC development and growth.

        In collaboration with Yale, we evaluated the therapeutic effects of MRX34 in the KRASLSL-G12D/TP53fl/fl genetically engineered mouse model of NSCLC. Orthotopic lung tumors were initiated by the intratracheal delivery of adenovirus carrying cre recombinase, leading to activation of the KRAS mutant and a concomitant loss of p53. Both genetic alterations are common in human lung cancers. Lung lesions typically show an aggressive growth behavior and frequently cause death. Continuous dosing of MRX34 demonstrated a statistically significant prolongation of survival of the tumor-bearing mice relative to mice that were dosed with a SMARTICLES-formulated negative control microRNA

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(miR-NC). The results of this study suggest that systemic delivery of MRX34 had a therapeutic effect in orthotopic lung tumors.

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        Since most cancer therapeutics are used in combination to increase efficacy while minimizing toxicity, we have initiated a program to evaluate MRX34 in combination with various standard of care and investigational cancer drugs, and in September 2015 we entered into a grant contract with CPRIT pursuant to which we agreed to conduct preclinical and clinical testing of certain combination therapies. We chose tumor models and chemotherapeutic agents based on the predicted patient profile in our future expanded clinical development program for MRX34. These included patients with primary liver cancer or advanced lung and pancreatic cancers that have metastasized to the liver.

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        Using a panel of four human liver cancer cell lines, our in vitro studies have shown that our miR-34 mimic, which is the drug substance of MRX34, cooperates synergistically with sorafenib (Nexavar), which is the standard of care for use in patients with HCC, to inhibit cancer cell proliferation. When used in combination, both the miR-34 mimic and sorafenib were more effective at lower doses both across cell lines and at various drug ratios. Data in Hep3B cells showed that the dose requirement for sorafenib to induce 50% cancer cell inhibition could be reduced by eight- and 19-fold

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in the presence of 1 nM and 1.6 nM miR-34 mimics, respectively. The dose requirement for the miR-34 mimic to induce 50% cancer cell inhibition could be reduced by up to seven-fold in the presence of sorafenib. The superior inhibitory activity of the combination demonstrated in these in vitro studies was confirmed in an animal study during which mice were treated with the combination or with each of the single agents alone for approximately two weeks. Our data showed that liver tumors from animals treated with the combination were significantly smaller than tumors from animals that received either miR-34 mimic or sorafenib alone.

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        In clinical practice, a combination of MRX34 and sorafenib could potentially be more effective by increasing the potency and/or reducing the toxicity of each individual drug, and thus ultimately, once approved and marketed, potentially increase the lifespan of liver cancer patients and significantly expand the market opportunity for both drugs.

        Cell culture models of human non-small cell lung cancer have been used to show that combining our miR-34 mimic with erlotinib (Tarceva®), a small molecule inhibiting EGFR (epidermal growth factor receptor) creates a synergistic effect, and thus yields a potent therapy for non-small cell lung cancer in human cell lines that are resistant to erlotinib alone. Synergy was observed in cancer cells with primary erlotinib resistance, such as those that are EGFR wild-type but encode mutated KRAS, as well as cancer cells with acquired (secondary) resistance. The latter involved cancer cells that are EGFR-mutated but overexpress MET and AXL, both of which are oncogenes known to induce erlotinib resistance. In combination with the miR-34 mimic, erlotinib concentrations required to induce 50% cancer cell inhibition could be reduced from 25 µM to 0.09 nM which reflects a concentration required to induce 50% cancer cell inhibition in the parental, erlotinib-sensitive cell line. This application could significantly increase the number of lung cancer patients who could be treated with erlotinib and also further expand the market potential for MRX34. The miR-34 mimic also cooperated

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synergistically with 2nd (afatinib) and 3rd (rociletinib) generation EGFR small molecule inhibitors in lung cancer cells, particularly those that harbor an EGFR mutation but are erlotinib-refractory.

          Primary Resistance
          (KRAS-mutated)
  Acquired (Secondary) Resistance
(Erlotinib-resistant cells; EGFR-mutated, MET & AXL overexpression)


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        Additionally, synergistic activity was demonstrated with pemetrexed (Alimta®) in lung cancer cells, erlotinib and tivantinib in liver cancer cells, gemcitabine in pancreatic cancer and lapatinib (Tykerb®) in breast cancer cells. Additional in vivo testing is in process. Given our recent preclinical data suggesting that MRX34 may also inhibit PD-L1 and tumor immune evasion, we intend to also explore the utility of miR-34 mimics in combination with other immune-oncology therapies.

        Because individual tumor suppressor miRNAs modulate the expression of different sets of genes, it is possible to use combinations of miRNAs to extend the number of oncogenes that are being affected. Using a liver cancer model, we observed that co-injecting half-doses of MRX34 and a SMARTICLES-formulated mimic of miR-7 provided greater tumor regression and longer survival than did full dose injections of either MRX34 or SMARTICLES-miR-7 alone. Similar results were produced in collaboration with Dr. Frank Slack while at Yale University, as we showed that combining the tumor suppressor microRNAs miR-34 and let-7 in the same SMARTICLES liposomal delivery formulation leads to superior therapeutic activity in a genetically engineered mouse model of lung cancer. The miR-34 and let-7 combination showed higher level of tumor growth inhibition than either liposomal miR-34 or let-7 alone in this very aggressive lung cancer model. These data suggest that combining tumor suppressor miRNAs might yield a more potent therapeutic candidate, and could represent another product development and commercial opportunity

MRX34 Market Opportunities

        According to the World Health Organization, or WHO, liver cancer is the third leading cause of cancer deaths worldwide. HCC is the most prevalent form of liver cancer and is the most common cancer in some parts of the world, with more than one million new cases diagnosed each year worldwide according to the National Cancer Institute. According to recent reports from the Centers for Disease Control, HCC rates in the United States are increasing with common risk factors including alcohol consumption, metabolic syndrome, chronic hepatitis B or C infection and Type 2 diabetes. Patients diagnosed with HCC have a poor prognosis, with a very low five-year survival rate of less than

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10%. Treatment options include surgical resection, liver transplantation, radiofrequency ablation and chemoembolization, or delivery of a drug mixed with particles through an arterial catheter directly into the tumor's blood supply. The only systemic drug therapy approved for the treatment of unresectable HCC is the drug sorafenib (Nexavar), which provides a 2.8 months median overall survival benefit based on a median overall survival of 10.7 months compared to 7.9 months for a placebo. Nivolumab (Opdivo), a PD-1 (programmed death 1) blocker, has recently shown promising results in HCC with a 19% objective response rate reported in a Phase 1 clinical trial.

        An aggressive type of skin cancer, melanoma, can occur anywhere on the body, but is most common in skin that is often exposed to sunlight, such as chest and back in men, legs in women, as well as face, neck, hands and arms. Melanoma is a disease in which pigmented cells in the skin, called melanocytes, turn into cancer cells. The WHO states that the incidence of melanoma skin cancers has been increasing over the past decades and has reached 132,000 globally each year. Approximately 73,000 cases of melanoma are expected to be diagnosed and 10,000 deaths will occur in the United States alone in 2015, according to the American Cancer Society. The five-year survival rate is currently about 15% to 20% in patients with metastatic melanoma. Approved treatment options for melanoma include surgery, chemotherapy, radiation therapy, biologic therapy and targeted therapies. In recent years, significant advances have been achieved in the treatment of melanoma by targeting PD-1, a protein expressed on the cellular surface of immune cells called T cells that normally function to keep these cells from attacking other cells in the body. The PD-1 signal is induced by PD-L1, which is expressed by a variety of normal cells. PD-L1 can also be expressed by various tumor cells, including melanoma, and consequently leads to tumor immune evasion. Drugs that block PD-1 boost the immune response against melanoma cells, which can often lead to tumor shrinkage and increased patient survival. Pembrolizumab (Keytruda) and nivolumab (Opdivo) are FDA-approved drugs that target PD-1. Ipilimumab (Yervoy) also boosts immune response but blocks CTLA-4, another T cell protein. Clinical trials have recently shown these drugs to be highly effective, but package inserts indicate that these drugs are effective against less than approximately 25% of patients. Recent preclinical data have shown that miR-34 also activates the immune system by repressing PD-L1. Our development plan includes continuing to study MRX34 as a monotherapy in melanoma and in combination with approved checkpoint inhibitors to determine whether MRX34 may be able to increase the numbers of patients who respond to these therapies or minimize or reverse resistance and eventual disease progression.

        According to the WHO, lung cancer is the most common cancer in the world and it has retained this position for decades. There were an estimated 1.8 million new cases in 2012, 58% of which occurred in less developed regions of the world. Lung cancer is also the most common cause of death from cancer worldwide, estimated to be responsible for nearly one in five (19.4% of the total). Small cell lung cancer (SCLC), also called oat cell cancer, accounts for about 10%-15% of lung cancers. SCLC is particularly aggressive and often spreads quickly. Five-year survival rates range from approximately 30% in patients with "limited stage" disease to approximately 2% for patients with "extensive stage." Treatment options for people with SCLC include chemotherapy, radiation therapy and surgery. Non-small cell lung cancer (NSCLC) is the most common type of lung cancer, accounting for approximately 85% of lung cancers. Types of NSCLC include squamous cell carcinoma, adenocarcinoma and large cell carcinoma. The five-year survival rate for patients with NSCLC can be as high as 50% for patients diagnosed in the early stages of the disease. However for patients with metastases, the five-year survival is typically less than 5%. Treatment options for NSCLC also include surgery, chemotherapy and radiation. However, more recently approved targeted therapies and immunotherapies have become the standard of care. Targeted therapies include drugs that target tumor blood vessel growth (angiogenesis inhibitors), drugs that target growth factor receptors on the surface

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of tumor cells (e.g., EGFR inhibitors) and drugs that target certain genes which have been found to have mutations which produce proteins that cause cancers to grow and spread (e.g., ALK inhibitors). In March 2015, nivolumab (Opdivo®), a PD-1 blocker, was the first immunotherapy to be approved by the FDA for lung cancer. The approval was based on a study demonstrating that patients with advanced squamous cell non-small cell lung cancer lived an average of 3.2 months longer than those who received chemotherapy, with approximately 15% of patients treated with Opdivo experiencing tumor shrinkage or complete disappearance. Our development plans include the study of MRX34 as a single agent in both small cell and non-small cell lung cancers, as well as in combination with targeted therapies or immunotherapy agents.

Our Product Pipeline

        We have identified multiple tumor suppressor microRNAs that each regulate a unique set of genes and oncogenic pathways. We have developed mimics for these microRNAs and found that their anti-proliferative activities vary between different cancer cell lines likely as a result of the different oncogenes that the microRNAs regulate. Liposome encapsulation and systemic delivery of the most potent microRNA mimics have produced tumor regression in mouse models of liver cancer. Based on our in vitro and in vivo studies, we have selected our miR-34 mimic for clinical development and mimics of miR-101, miR-215, let-7 and miR-16 as candidates for future development either as monotherapies or as combination therapies. Brief overviews of each of the tumor suppressor microRNAs in our pipeline are provided below.

        Reduced expression of miR-101 has been observed in the tumors of patients with bladder, breast, colon, gastric, liver, lung, ovarian, pancreatic, prostate and thyroid cancers. Reduced expression of miR-101 in the tumors of bladder, liver and non-small cell lung cancers is associated with poor prognosis. We believe that the tumor suppressor function of miR-101 derives from its capacity to regulate genes associated with angiogenesis, apoptosis, cancer stem cell development, cell cycle progression, epithelial-to-mesenchymal transition, metastasis and cell senescence. Published studies describe the therapeutic activity of miR-101 in mouse models of liver cancer, consistent with our in vivo studies.

        The expression of miR-215 is regulated by the p53 tumor suppressor and has been observed to be lower in the tumors of patients with breast, colon, esophageal, kidney and liver cancer as well as in multiple myeloma patients. Breast, colon and kidney cancer patients with lower miR-215 tumor levels had shorter survival times, while liver cancer patients with lower miR-215 levels in their tumors were more likely to have metastatic disease. Pre-clinical studies show that introducing the tumor suppressor microRNA into cancer cells induces apoptosis and cell cycle arrest and inhibits proliferation and cell invasion/migration. In addition, miR-215 inhibits the capacity of cancer stem cells to form colonies in soft agar. Multiple published pre-clinical studies indicate that the anti-cancer activities of the miR-215 mimic are greater in cancer cells with an intact p53 gene than in cancer cells where the p53 gene is absent.

        The expression levels of various members of the let-7 family of microRNAs have been observed to be reduced in the tumors of patients with melanoma, breast, kidney, lung, ovarian, pancreatic, prostate and other cancers. Reduced expression of members of the let-7 family of microRNAs in the tumors of breast, kidney, lung and prostate cancers is associated with poor prognosis. The let-7 microRNA family has been implicated in the regulation of cell cycle progression, epithelial-to-mesenchymal transition, migration/invasion and transformation. Reduced let-7 expression appears to play a role in the development of stem-like properties in highly tumorigenic cancer cells.

        Reduced levels of miR-16 are common in chronic lymphocytic leukemia, multiple myeloma and lymphomas as well as in breast, colon, gastric, lung and prostate tumors. Reduced miR-16 expression is associated with poor prognosis in patients with colon cancer and T-cell lymphoblastic leukemia. The

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tumor suppressor function of miR-16 derives from its ability to regulate genes associated with angiogenesis, apoptosis, cell cycle progression, metastasis and migration. A third party has reported promising results in one of the six patients with malignant pleural mesothelioma being treated with its miR-16-based mimic.

        We plan to complete preclinical in vitro and in vivo studies in 2015 that will enable the selection of a second microRNA from our pipeline for therapeutic development. We expect to complete IND-enabling toxicology studies, submit an IND application and initiate a Phase 1 trial for our second candidate in 2016.

        Because each microRNA regulates a unique set of genes, we believe that the selection of microRNA-based therapies will be based upon the molecular characteristics of the tumors from the cancer patients. We believe that it is also likely that our microRNA-based therapies might be used in combination with one another to further maximize potency and drug development opportunities.

Scientific Advisors

        We seek advice from our scientific advisory board, which consists of a number of leading scientists and physicians, on scientific and medical matters. Our scientific advisory board meets periodically to assess:

        The current members of our scientific advisory board are as follows.

        Corey Goodman, Ph.D. (Chair).    Dr. Corey Goodman is a Managing Partner of venBio, a private equity firm specializing in life sciences and an Adjunct Professor at UC Berkeley. Dr. Goodman serves as Chairman of the board of directors of Second Genome, Oligasis, Solstice Biologics, Heart Metabolics and Alexo Therapeutics, and is a member of the board of directors of Checkmate Pharmaceuticals. Previously, Dr. Goodman co-founded each of Alexo, Labrys Biologics, Second Genome, Solstice, Exelixis and Renovis, and served as CEO of Renovis. Dr. Goodman was the President of the Pfizer, Biotherapeutics and Bioinnovation Center. Dr. Goodman is an elected member of the U.S. National Academy of Sciences, the American Academy of Arts and Sciences and the American Philosophical Society. Dr. Goodman is Chair of the California Council on Science and Technology, and previously served as the Chair of the National Research Council's Board on Life Sciences.

        David H. Johnson, MD, MACP, FASCO.    Dr. David H. Johnson is the Chairman of the Department of Internal Medicine at the University of Texas Southwestern Medical School in Dallas, Texas, and the Donald W. Seldin Distinguished Chair in Internal Medicine. Dr. Johnson served on the board of directors of the American Society of Clinical Oncology (ASCO), the American Board of Internal Medicine and the National Comprehensive Cancer Network (NCCN). Dr. Johnson also served on the Oncology Drug Advisory Committee (ODAC) at the FDA. Dr. Johnson is a recognized specialist in the area of non-small cell lung cancer.

        Art Krieg, MD.    Dr. Art Krieg serves as Founder and CEO at Checkmate Pharmaceuticals, and has worked in the oligonucleotide field since the 1980s. He co-founded Coley Pharmaceutical Group and served as the Chief Scientific Officer of Pfizer's Oligonucleotide Therapeutics Unit. Dr. Krieg subsequently co-founded RaNA Therapeutics, and served as Chief Scientific Officer at Sarepta

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Therapeutics. He co-founded the first antisense journal, Nucleic Acid Therapeutics, and the Oligonucleotide Therapeutic Society, for which he is currently President-elect.

        Frank J. Slack, PhD.    Dr. Frank J. Slack is the Director of the Institute for RNA Medicine in the Department of Pathology at BIDMC Cancer Center/Harvard Medical School. The Slack laboratory studies the roles of microRNAs and their targets in cancer, development and aging. He started work on microRNAs as a postdoctoral fellow in Dr. Gary Ruvkun's laboratory at Harvard Medical School, where he co-discovered let-7, the first known human microRNA.

        Alan P. Venook, M.D.    Dr. Alan Venook is the Madden Family Distinguished Professor of Medical Oncology and Translational Research at the University of California San Francisco, where he leads the Gastrointestinal Oncology clinical program. Dr. Venook was the founding Chair of the National Cancer Institute's (NCI) Hepatobiliary Task Force. He served as Chair of the Gastrointestinal Committee of the Alliance for Clinical Trials in Oncology. An internationally recognized expert in colorectal and liver cancers, Dr. Venook is currently an Associate Editor of the Journal of Clinical Oncology. He was Chair of the Scientific Program for ASCO 2015.

        Daniel D. Von Hoff, M.D., F.A.C.P.    Dr. Daniel D. Von Hoff, a medical oncologist, is currently Physician in Chief, Distinguished Professor at the Translational Genomic Research Institute (TGen), Professor of Medicine, Mayo Clinic and Chief Scientific Officer for US Oncology and for Honor Health's Clinical Research Institute. He was appointed to President Bush's National Cancer Advisory Board. Dr. Von Hoff is also the past President of the American Association for Cancer Research (AACR), was on the AACR and the American Society of Clinical Oncology's Board of Directors and is a fellow of the American College of Physicians.

        Steve Weitman, M.D., Ph.D.    Dr. Steve Weitman is a Professor at the Institute for Drug Development at the Cancer Therapy and Research Center in San Antonio, Texas. Dr. Weitman was the Chief Medical Officer and member of the Executive Committee at ILEX Oncology and led development and FDA approval of clofarabine. He was an Associate Editor of Investigational New Drugs.

Manufacturing

        We contract with third parties to manufacture our compounds for nonclinical and clinical testing purposes and intend to do so in the future. We also expect to rely upon third parties to produce materials required for the commercial production of our product candidates if we succeed in obtaining the necessary regulatory approvals. We do not currently own or operate facilities for product manufacturing, storage and distribution or testing. We have personnel with the technical, manufacturing, analytical, quality and project management experience to oversee contract manufacturing and testing activities and to compile manufacturing and quality information for our regulatory submissions.

        Manufacturing is subject to extensive regulations that impose various procedural and documentation requirements, which govern recordkeeping, manufacturing processes and controls, personnel, quality control and quality assurance. Our systems and contractors are required to be in compliance with these regulations, and we assess such compliance regularly through performance monitoring as well as a formal audit program.

        We continue to take steps to reduce our costs by working to improve yield in the manufacturing of the microRNA mimic, the drug substance, the liposomal formulation and the drug product, and we have and will continue to manage our vendor and supplier costs and evaluate alternative manufacturers and suppliers for MRX34 and our other pipeline candidates. As we move further through clinical development towards commercialization of MRX34 and our other pipeline microRNA mimics, we will need to work with our third party manufacturers to scale up the manufacturing processes for such

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products, and we expect we will be able to realize additional efficiencies resulting from increased scale of production, which we believe will result in lower costs and better operating margins.

Drug Substance

        We currently use NITTO DENKO Avecia, or Avecia, to manufacture our MRX34 drug substance. We entered into a long term clinical supply agreement with Avecia in March 2012, and we believe that Avecia has the technical, analytical, quality and regulatory expertise to reliably produce our miR-34 mimic in sufficient quantity and of acceptable quality to support our development program through at least Phase 3 clinical studies, and to scale up such manufacturing process to support commercial production of MRX34. To ensure adequate supply and supply continuity, we are currently evaluating a backup supplier for our MRX34 drug substance, which will be completed in the second half of 2015. We are evaluating other U.S. and overseas companies for the manufacture of drug substance for our pipeline microRNA mimics.

        The process for manufacturing our miR-34 mimic drug substance utilizes well-established solid phase synthesis chemistry. The raw materials used in the process are readily available from a number of qualified suppliers. We currently rely on our contract manufacturers to manage the supply chain for the raw materials used in the process.

Drug Product

        Our drug product for both MRX34 and our other microRNA mimics consists of the drug substance formulated in the SMARTICLES liposomal delivery system. The drug product is provided as a concentrated, frozen aqueous solution that is defrosted, thawed and diluted for infusion in the clinic.

        Polymun Scientific Immunbiologische Forschung GmbH, or Polymun, located in Vienna, Austria, is currently the exclusive manufacturer of drug product for our lead therapeutic candidate, MRX34. In November 2012, we entered into a manufacturing and supply agreement with Polymun for the formulation, manufacture and packaging of MRX34 final drug product. Manufacture of the drug product for our microRNA mimics in conjunction with the SMARTICLES delivery system requires a high level of technical expertise, and Polymun is one of a limited number of contract manufacturers with the know-how to manufacture drug product for our drug candidate in sufficient quantity and of sufficient quality to meet our projected clinical and commercial needs. We believe that Polymun currently has the capability to provide a sufficient quantity of drug product through at least Phase 3 clinical studies of MRX34, and although Polymun does not currently have the capability to scale up their manufacturing process to support commercialization of MRX34, we believe that Polymun will have sufficiently expanded its operations before we reach potential commercialization of MRX34 such that it should be able to provide a sufficient quantity of drug product to support such commercialization of MRX34. In the meantime, we intend to continue to work with Polymun in relation to both our clinical supply and increasing production capacity for our projected commercial needs, but also to evaluate other potential manufacturers of drug product for our microRNA mimics. See "Business—Strategic Partnerships and Collaborations" for a detailed description of our manufacturing and supply agreement with Polymun, including material terms relating to circumstances permitting termination of this agreement.

        The liposomal formulation manufactured by Polymun is a combination of readily available excipients, plus two specialty lipid excipients which are currently manufactured by two qualified suppliers.

        The product is shipped and stored under frozen conditions. Based on current stability studies, we expect that the drug product will be stable over the time period anticipated for currently-planned clinical studies.

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Research and Development

        We are conducting clinical trials and other development activities to support the development of MRX34 and our other product candidates. In the years ended December 31, 2012, 2013 and 2014 and the six months ended June 30, 2015, we incurred $2.7 million, $4.4 million, $10.5 million and $7.9 million, respectively, of research and development expense.

        Our research programs are directed towards the following:

Intellectual Property

        We strive to protect and enhance the proprietary technologies that we believe are important to our business, including seeking and maintaining patents intended to cover our products and compositions, their methods of use and any other inventions that are important to the development of our business. We also rely on trade secrets to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection.

        Our success will depend in part on our ability to obtain and maintain patent and other proprietary protection for commercially important technology, inventions and know-how related to our business, defend and enforce our patents, maintain our licenses, preserve our trade secrets and operate without infringing valid and enforceable patents and other proprietary rights of third parties. We also rely on continuing technological innovation and in-licensing opportunities to develop, strengthen and maintain our proprietary position in the field of microRNA therapeutics. Our objective is to continue to expand our intellectual property portfolio to protect and bolster our position as a leader in the field of microRNA therapeutics.

Our Patent Portfolio

        We own or in-license a portfolio of patents and patent applications that protects various aspects of our business. The patents and patent applications that make up our patent portfolio are primarily focused on various aspects of microRNA therapeutics, including various microRNA mimics, such as our lead product candidate MRX34, and therapeutic methods of use of microRNAs, including MRX34. As of July 1, 2015, we own or in-license over 10 issued U.S. patents and over 42 pending U.S. and ex-U.S. patent applications. The expiration dates of the currently issued patents range from 2025 to 2032. We also have multiple pending patent applications that, if they issue, will expire between 2025 and 2035.

        We are the sole owner of multiple U.S. and foreign patents and patent applications that relate to various aspects of microRNA therapies, including mir-34 therapies. Some of these patents and patent applications relate to chemically modified versions of miR-34 not currently used in MRX34 and other proprietary compounds that are possible candidates for future product development as microRNA therapeutics. For example, one of our owned patents (U.S. Patent No. 8,586,727) claims miR-34 mimics with certain nucleotide modifications. This patent is projected to expire in 2032.

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        We in-license a significant portion of our patent portfolio from our founding company, Asuragen, under a fully paid-up, royalty-free, fully sublicensable and irrevocable license granting us exclusive rights to these patents and patent applications in the field of therapeutics. Asuragen retains exclusive rights in these patents in fields outside therapeutics, including diagnostics. To date, the license from Asuragen has resulted in at least seven issued U.S. patents, and there are multiple applications pending within the United States and outside the United States, including Europe, Canada, Australia and Japan. These patents include U.S. Patent 7,960,359, which is related to the use of miR-34a for reducing the cell viability of lung cancer cells, cancerous T cells, prostate cancer cells, or skin cancer cells and is projected to expire in 2025. They also include U.S. Patent 8,563,708, which claims multiple chemistries and structures used in therapeutic microRNA mimics and is projected to expire in 2025. The patents and patent applications licensed from Asuragen are also included within the patents licensed under our agreement with Yale, and are therefore subject to the terms of the February 2014 amended and restated agreement as described below in "Strategic Partnerships and Collaborations—Yale University."

        We are the exclusive licensee under a patent family owned by the University of Zurich relating to treatment of certain types of B-cell lymphoma with certain microRNA mimics, including miR-34. The patent family includes one granted U.S. patent related to use of a miR-34 microRNA for the treatment of diffuse large B-cell lymphoma, one pending U.S. patent application and one pending European patent application. This patent and any patents that issue from the pending patent applications are expected to expire in 2031. We are also the exclusive licensee of two U.S. patents owned by Yale relating to uses of let-7 microRNAs. These patents are expected to expire in 2025.

Patent Term

        The term of individual patents and patent applications in our portfolio will depend upon the legal term of the patents in the countries in which they are obtained. In most countries, the patent term is 20 years from the date of filing of the patent application (or parent application, if applicable). For example, if an international Patent Cooperation Treaty, or PCT, application is filed, any patent issuing from the PCT application in a specific country expires 20 years from the filing date of the PCT application. In the United States, however, if a patent was in force on June 8, 1995, or issued on an application that was filed before June 8, 1995, that patent will generally have a term that is the greater of twenty years from the filing date or 17 years from the date of issue.

        Under the Hatch-Waxman Act, the term of a patent that covers an FDA-approved drug or biological product may also be eligible for patent term extension, or PTE. PTE permits restoration of a portion of the patent term of a U.S. patent as compensation for the patent term lost during product development and the FDA regulatory review process if approval of the application for the product is the first permitted commercial marketing of a drug or biological product containing the active ingredient. The patent term restoration period is generally one-half the time between the effective date of an IND and the submission date of a new drug application, or NDA, plus the time between the submission date of an NDA and the approval of that application. The Hatch-Waxman Act permits the owner of a patent to apply for a PTE for only one patent applicable to an approved drug, and the maximum period of restoration is five years beyond the expiration of the patent. A PTE cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, and a patent can only be extended once, and thus, even if a single patent is applicable to multiple products, it can only be extended based on one product. Similar provisions may be available in Europe and certain other foreign jurisdictions to extend the term of a patent that covers an approved drug. When possible, depending upon the length of clinical trials and other factors involved in the filing of an NDA, we expect to apply for PTEs for patents covering our product candidates and their methods of use, or to work with our licensors, as owners of such patents, to obtain such extensions, if available.

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Competition

        The biotechnology and pharmaceutical industries are characterized by intense and rapidly changing competition to develop new technologies and proprietary products. While we believe that our intellectual property portfolio, scientific expertise and leading clinical position in the microRNA field provide us with competitive advantages, we face potential competition from many different sources, including larger and better-funded pharmaceutical and biotechnology companies. We may compete with other companies that are focused on microRNA therapeutics in disease or indications in which we develop our products, including both (i) replacement therapy approaches that involve the delivery of mimics, and (ii) inhibition approaches that involve the use of AntagomiRs, or anti-miRs. Any products that we may commercialize will have to compete with existing therapies and new therapies that may become available in the future.

        We are aware of several companies that are working specifically to develop microRNA therapeutics. miRagen Therapeutics, Inc., or miRagen, a privately held company based in Boulder, Colorado, uses anti-miRs with an initial focus in cardiovascular, metabolic diseases, and hematological cancers. miRagen is in preclinical development, has entered into a partnership with Laboratoires Servier to focus on three different targets in the cardiovascular and metabolic space and has also expressed interest in pursuing microRNA mimic development, which they call "pro-miRs." Regulus Therapeutics, Inc., or Regulus, is a publicly traded company based in Carlsbad, California, which primarily focuses on anti-miRs technology, or the inhibition of overexpressed microRNAs. Regulus has focused on a number of indications, including hepatitis C, kidney fibrosis and cancer. They initiated their first clinical trial for RG-101, their lead anti-miR therapeutic program, against miR-122 for hepatitis C in March 2014, and initiated a Phase 1 clinical trial evaluating RG-012 in healthy volunteers for the treatment of Alport syndrome in June 2015, while other programs are still in preclinical development. Regulus has numerous research and development collaborations with large pharmaceutical and biotechnology companies, including AstraZeneca plc, Biogen Idec, Inc., GlaxoSmithKline plc and Sanofi S.A. Santaris Pharma A/S, or Santaris, was a publicly traded company based in Denmark using RNA-targeted antagonist therapy for diseases including metabolic disorders, infectious and inflammatory diseases, cancer and rare genetic disorders. In August 2014, Roche announced the acquisition to Santaris Pharma. Santaris (now Roche) has drug candidates in Phase 1 and Phase 2 clinical trials, and their lead therapeutic product, an antagonist to miR-122, has reached late Phase 2 clinical testing for hepatitis C. EnGenIC is a privately held Australian company developing a nanocell platform for delivery of cancer therapeutics and other therapeutic molecules. In November 2014, EnGenIC announced initiation of a Phase 1 clinical trial of its delivery system packaged with a miR-16-based microRNA for the treatment of malignant pleural mesothelioma. A patient case study from this study was recently published in the American Journal of Respiratory and Critical Care Medicine.

        These competitors also compete with us in recruiting human capital and securing licenses to complementary technologies or specific microRNAs that may be critical to the success of our business. They also compete with us for potential funding from the pharmaceutical industry.

Government Regulation

        The FDA and comparable regulatory authorities in state and local jurisdictions and in other countries impose substantial and burdensome requirements upon companies involved in the clinical development, manufacture, marketing and distribution of drugs, such as those we are developing. These agencies and other federal, state and local entities regulate, among other things, the research and development, testing, manufacture, quality control, safety, effectiveness, labeling, storage, record keeping, approval, advertising and promotion, distribution, post-approval monitoring and reporting, sampling and export and import of our product candidates.

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        In the United States, the FDA regulates drug products under the Federal Food, Drug and Cosmetic Act, or FFDCA, and the FDA's implementing regulations. Drugs are also subject to other federal, state and local statutes and regulations. If we fail to comply with applicable FDA or other requirements at any time during the drug development process, clinical testing, the approval process or after approval, we may become subject to administrative or judicial sanctions. These sanctions could include, among other things, the FDA's refusal to approve pending applications, license suspension or revocation, withdrawal of an approval, warning letters, product recalls, clinical holds, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties or criminal prosecution. Any FDA enforcement action could have a material adverse effect on us.

        FDA approval is required before any new unapproved drug or dosage form, including a new use of a previously approved drug, can be marketed in the United States. The process required by the FDA before a drug may be marketed in the United States generally involves:

        The nonclinical and clinical testing and approval process requires substantial time, effort and financial resources, and we cannot be certain that any approvals for our product candidates will be granted on a timely basis, if at all. Nonclinical tests include laboratory evaluation of product chemistry, formulation, stability and toxicity, as well as animal studies to assess the characteristics and potential safety and efficacy of the product. The results of nonclinical tests, together with manufacturing information, analytical data and a proposed clinical trial protocol and other information, are submitted as part of an IND to the FDA. Some nonclinical testing may continue even after the IND is submitted. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, raises concerns or questions relating to one or more proposed clinical trials and places the clinical trial on a clinical hold, including concerns that human research subjects will be exposed to unreasonable health risks. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. As a result, a submission of an IND may not result in FDA authorization to commence a clinical trial. A separate submission to an existing IND must also be made for each successive clinical trial conducted during product development.

        Clinical trials involve the administration of the investigational drug to human subjects under the supervision of qualified investigators. Clinical trials are conducted under protocols detailing, among other things, the objectives of the clinical trial, the parameters to be used in monitoring safety and the

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effectiveness criteria to be used. Each protocol must be submitted to the FDA as part of the IND. An IRB for each medical center proposing to conduct a clinical trial must also review and approve a plan for any clinical trial before it can begin at that center and the IRB must monitor the clinical trial until it is completed. The FDA, the IRB, or the sponsor may suspend or discontinue a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk. Clinical testing also must satisfy cGCP requirements, including the requirement to obtain effective informed consent from study subjects.

        All clinical research performed in the United States in support of an NDA must be authorized in advance by the FDA under the IND regulations and procedures described above. However, a sponsor who wishes to conduct a clinical trial outside the United States may, but need not, obtain FDA authorization to conduct the clinical trial under an IND. If a foreign clinical trial is not conducted under an IND, the sponsor may submit data from the clinical trial to the FDA in support of an NDA so long as the clinical trial is conducted in compliance with an international guideline for the ethical conduct of clinical research known as the Declaration of Helsinki and/or the laws and regulations of the country or countries in which the clinical trial is performed, whichever provides the greater protection to the participants in the clinical trial.

Clinical Trials

        For purposes of NDA submission and approval, clinical trials are typically conducted in three or four sequential phases, which may overlap or be combined.

        The FDA, the IRB or the clinical trial sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects are being exposed to an unacceptable health risk. Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board or committee. This group provides authorization for whether or not a trial may move forward at designated check points based on access to certain data from the study. We may also voluntarily suspend or terminate a clinical trial based on evolving business objectives and/or competitive climate.

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        Concurrent with clinical trials, companies usually complete additional animal trials and must also develop additional information about the chemistry and physical characteristics of the drug and finalize a process for manufacturing the drug in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the drug candidate and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final drug product. Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the drug candidate does not undergo unacceptable deterioration over its shelf life.

New Drug Applications

        The results of nonclinical studies and of the clinical trials, including negative or ambiguous results as well as positive findings, together with other detailed information, including extensive manufacturing information and information on the composition of the drug, are submitted to the FDA in the form of an NDA requesting approval to market the drug for one or more specified indications. The FDA reviews an NDA to determine, among other things, whether a drug is safe and effective for its intended use.

        Once an NDA has been accepted for filing, by law the FDA has 180 days to review the application and respond to the applicant. However, the review process is often significantly extended by FDA requests for additional information or clarification. Under the Prescription Drug User Fee Act, the FDA has a goal of responding to NDAs within 10 months of the filing date for standard review, but this timeframe is also often extended. The FDA may refer the application to an advisory committee for review, evaluation and recommendation as to whether the application should be approved. The FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendations. Before approving an application, the FDA will inspect the facility or the facilities at which the finished drug product, and sometimes the active drug ingredient, is manufactured, and will not approve the drug unless cGMP compliance is satisfactory. The FDA may also inspect the sites at which the clinical trials were conducted to assess their compliance, and will not approve the drug unless compliance with cGCP requirements is satisfactory.

        After the FDA evaluates the NDA and conducts its inspections, it may issue an approval letter or a Complete Response Letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications. A Complete Response Letter indicates that the review cycle of the application is complete and the application is not ready for approval. A Complete Response Letter may require additional clinical data and/or an additional pivotal Phase 3 clinical trial(s), and/or other significant, expensive and time-consuming requirements related to clinical trials, nonclinical studies or manufacturing. Even if such data are submitted, the FDA may ultimately decide that the NDA does not satisfy the criteria for approval. Data from clinical trials are not always conclusive and the FDA may interpret data differently than we interpret data. The FDA could also approve the NDA with a Risk Evaluation and Mitigation Strategy, or REMS, plan to mitigate risks, which could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. The FDA also may condition approval on, among other things, changes to proposed labeling, development of adequate controls and specifications, or a commitment to conduct one or more post-market studies or clinical trials. Such post-market testing may include Phase 4 clinical trials and surveillance to further assess and monitor the product's safety and effectiveness after commercialization. Regulatory approval of oncology products often requires that patients in clinical trials be followed for long periods after approval to determine the overall survival benefit of the drug. The FDA has the authority to prevent or limit further marketing of a drug based on the results of these post-marketing programs.

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        Drugs may be marketed only for the FDA approved indications and in accordance with the provisions of the approved labeling. Further, if there are any modifications to the drug, including changes in indications, labeling, or manufacturing processes or facilities, the applicant may be required to submit and obtain FDA approval of a new NDA or NDA supplement, which may require us to develop additional data or conduct additional nonclinical studies and clinical trials. Depending on the nature of the change proposed, an NDA supplement must be filed and approved before the change may be implemented. For many proposed post-approval changes to an NDA, the FDA has up to 180 days to review the application. As with new NDAs, the review process is often significantly extended by the FDA requests for additional information or clarification.

        The testing and approval processes require substantial time, effort and financial resources, and each may take several years to complete. The FDA may not grant approval on a timely basis, or at all. Even if we believe a clinical trial has demonstrated safety and efficacy of one of our drug candidates for the treatment of a disease, the results may not be satisfactory to the FDA. Nonclinical and clinical data may be interpreted by the FDA in different ways, which could delay, limit or prevent regulatory approval. We may encounter difficulties or unanticipated costs in our efforts to secure necessary governmental approvals, which could delay or preclude us from marketing drugs. The FDA may limit the indications for use or place other conditions on any approvals that could restrict the commercial application of the drugs.

Other Regulatory Requirements

        Any drugs manufactured or distributed by us or our collaborators pursuant to FDA approvals would be subject to continuing regulation by the FDA, including recordkeeping requirements and reporting of adverse experiences associated with the drug. Drug manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with ongoing regulatory requirements, including cGMPs, which impose certain procedural and documentation requirements upon us and our third party manufacturers. Failure to comply with the statutory and regulatory requirements can subject a manufacturer to possible legal or regulatory action, such as warning letters, suspension of manufacturing, seizure of product, injunctive action or possible civil penalties. We cannot be certain that we or our present or future third-party manufacturers or suppliers will be able to comply with the cGMP regulations and other ongoing FDA regulatory requirements. If we or our present or future third-party manufacturers or suppliers are not able to comply with these requirements, the FDA may halt our clinical trials, require us to recall a drug from distribution or withdraw approval of the NDA for that drug.

        The FDA closely regulates the post-approval marketing and promotion of drugs, including standards and regulations for direct-to-consumer advertising, off-label promotion, industry-sponsored scientific and educational activities and promotional activities involving the internet. A company can make only those claims relating to safety and efficacy that are approved by the FDA. Failure to comply with these requirements can result in adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties. Physicians may prescribe legally available drugs for uses that are not described in the product's labeling and that differ from those tested by us and approved by the FDA. Such off-label uses are common across medical specialties. Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances. The FDA does not regulate the behavior of physicians in their choice of treatments. The FDA does, however, impose stringent restrictions on manufacturers' communications regarding off-label use.

Expedited Review and Accelerated Approval Programs

        A sponsor may seek approval of its product candidate under programs designed to accelerate FDA's review and approval of NDAs. For example, Fast Track Designation may be granted to a drug

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intended for treatment of a serious or life-threatening disease or condition that has potential to address unmet medical needs for the disease or condition. The key benefits of fast track designation are potential eligibility for priority review, rolling review (submission of portions of an application before the complete marketing application is submitted), and accelerated approval, if relevant criteria are met. Based on results of clinical studies submitted in an NDA, upon the request of an applicant, the FDA may grant the NDA a priority review designation, which sets the target date for FDA action on the application at six months after the FDA accepts the application for filing. Priority review is granted where there is evidence that the proposed product would be a significant improvement in the safety or effectiveness of the treatment, diagnosis, or prevention of a serious condition. If criteria are not met for priority review, the application is subject to the standard FDA review period of 10 months after FDA accepts the application for filing. Priority review designation does not change the scientific/medical standard for approval or the quality of evidence necessary to support approval.

        Under the accelerated approval program, the FDA may approve an NDA on the basis of either a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. Post-marketing studies or completion of ongoing studies after marketing approval are generally required to verify the drug's clinical benefit in relationship to the surrogate endpoint or ultimate outcome in relationship to the clinical benefit. In addition, the Food and Drug Administration Safety and Innovation Act, or FDASIA, which was enacted and signed into law in 2012, established the new Breakthrough Therapy designation. A sponsor may seek FDA designation of its product candidate as a breakthrough therapy if the drug is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. We may consider seeking Breakthrough Therapy designation of MRX34 in the future.

Orphan Drug Designation and Exclusivity

        Under the Orphan Drug Act, the FDA may grant orphan drug designation to drugs intended to treat a rare disease or condition, which is generally defined as a disease or condition that affects fewer than 200,000 individuals in the United States. Orphan drug designation must be requested before submitting an NDA. In the United States, orphan drug designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers. After the FDA grants orphan drug designation, the generic identity of the drug and its potential orphan use are disclosed publicly by the FDA. Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process. The first NDA applicant to receive FDA approval for a particular active ingredient to treat a particular disease with FDA orphan drug designation is entitled to a seven-year exclusive marketing period in the United States for that product, for that indication. During the seven-year exclusivity period, the FDA may not approve any other applications to market the same drug for the same orphan indication, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity or if FDA finds that the holder of the orphan drug exclusivity has not shown that it can assure the availability of sufficient quantities of the orphan drug to meet the needs of patients with the disease or condition for which the drug was designated. However, the FDA can still approve other drugs that have a different active ingredient for use in treating the same indication or disease. While we have not sought or obtained orphan drug designation for MRX34, we plan to seek such designation in the future for HCC, certain hematological malignancies or other potential future indications.

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Other Healthcare Laws

        Although we currently do not have any products on the market, if our drug candidates are approved and we begin commercialization, we may be subject to additional healthcare regulation and enforcement by the federal government and by authorities in the states and foreign jurisdictions in which we conduct our business. Such laws include, without limitation, state and federal anti-kickback, fraud and abuse, false claims, privacy and security, price reporting and physician sunshine laws and regulations.

        The Anti-Kickback Statute makes it illegal for any person, including a prescription drug manufacturer (or a party acting on its behalf) to knowingly and willfully solicit, receive, offer, or pay any remuneration that is intended to induce the referral of business, including the purchase, order, or prescription of a particular drug, for which payment may be made under a federal healthcare program, such as Medicare or Medicaid. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation. Violations of this law are punishable by up to five years in prison, and can also result in criminal fines, administrative civil money penalties and exclusion from participation in federal healthcare programs. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act. Many states have also adopted laws similar to the Anti-Kickback Statute. Some of these state prohibitions apply to the referral of patients for healthcare services reimbursed by any insurer, not just federal healthcare programs such as Medicare and Medicaid. Due to the breadth of these federal and state anti-kickback laws, the absence of guidance in the form of regulations or court decisions, and the potential for additional legal or regulatory change in this area, it is possible that our future sales and marketing practices and/or our future relationships with physicians might be challenged under these laws, which could harm us.

        The federal False Claims Act prohibits anyone from knowingly presenting, or causing to be presented, for payment to federal programs (including Medicare and Medicaid) claims for items or services, including drugs, that are false or fraudulent, claims for items or services not provided as claimed, or claims for medically unnecessary items or services. Although we would not submit claims directly to payors, manufacturers can be held liable under these laws if they are deemed to "cause" the submission of false or fraudulent claims by, for example, providing inaccurate billing or coding information to customers or promoting a product off-label. In addition, our future activities relating to the reporting of wholesaler or estimated retail prices for our products, the reporting of prices used to calculate Medicaid rebate information and other information affecting federal, state and third-party reimbursement for our products, and the sale and marketing of our products, are subject to scrutiny under this law. For example, pharmaceutical companies have been prosecuted under the federal False Claims Act in connection with their off-label promotion of drugs. Penalties for False Claims Act violations include three times the actual damages sustained by the government, plus mandatory civil penalties of between $5,500 and $11,000 for each separate false claim, the potential for exclusion from participation in federal healthcare programs, and, although the federal False Claims Act is a civil statute, False Claims Act violations may also implicate various federal criminal statutes. If the government were to allege that we were, or convict us of, violating these false claims laws, we could be subject to a substantial fine and may suffer a decline in our stock price. In addition, private individuals have the ability to bring actions under the federal False Claims Act and certain states have enacted laws modeled after the federal False Claims Act.

        The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, also created new federal criminal statutes that prohibit among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying,

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concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

        In addition, there has been a recent trend of increased federal and state regulation of payments made to physicians. The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively, the Affordable Care Act, imposed new reporting requirements on drug manufacturers for payments made by them, and, in some case, their distributors, to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members. Failure to submit required information may result in civil monetary penalties of up to an aggregate of $150,000 per year (and up to an aggregate of $1 million per year for "knowing failures"), for all payments, transfers of value or ownership or investment interests not reported in an annual submission. Manufacturers must submit reports by the 90th day of each calendar year.

        There are also an increasing number of state laws that require manufacturers to implement compliance programs, impose restrictions on drug manufacturer marketing practices and require the tracking and reporting of gifts, compensation and other remuneration to physicians and other health care providers. These laws may affect our sales, marketing and other promotional activities by imposing administrative and compliance burdens on us. In addition, given the lack of clarity with respect to these laws and their implementation, our reporting actions could be subject to the penalty provisions of the pertinent state and federal authorities.

        We may also be subject to data privacy and security regulation by both the federal government and the states in which we conduct our business. HIPAA, as amended by the Health Information Technology and Clinical Health Act, or HITECH, and their respective implementing regulations, including the final omnibus rule published on January 25, 2013, imposes specified requirements relating to the privacy, security and transmission of individually identifiable health information. Among other things, HITECH makes HIPAA's privacy and security standards directly applicable to "business associates," defined as independent contractors or agents of covered entities that create, receive, maintain or transmit protected health information in connection with providing a service for or on behalf of a covered entity. HITECH also increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney's fees and costs associated with pursuing federal civil actions. In addition, state laws govern the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways, thus complicating compliance efforts.

        Because we intend to commercialize products that could be reimbursed under a federal healthcare program and other governmental healthcare programs, we will have to develop a comprehensive compliance program that establishes internal controls to facilitate adherence to the rules and program requirements to which we will or may become subject. Although compliance programs can mitigate the risk of investigation and prosecution for violations of these laws, the risks cannot be entirely eliminated. If our operations are found to be in violation of any of such laws or any other governmental regulations that apply to us, we may be subject to penalties, including, without limitation, civil and criminal penalties, damages, fines, the curtailment or restructuring of our operations, exclusion from participation in federal and state healthcare programs and imprisonment, any of which could adversely affect our ability to operate our business and our financial results.

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Coverage and Reimbursement

        Sales of our products, if approved, will depend, in part, on the extent to which our products will be covered by third-party payors, such as government health care programs, commercial insurance and managed healthcare organizations. These third-party payors are increasingly reducing reimbursements for certain medical products and services. In addition, the U.S. government, state legislatures and foreign governments have continued implementing cost containment programs, including price controls and restrictions on reimbursement. and requirements for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit our net revenue and results. Decreases in third-party reimbursement for our products once approved or a decision by a third-party payor to not cover our products could reduce or eliminate utilization of our products and have a material adverse effect on our sales, results of operations and financial condition. In addition, state and federal healthcare reform measures have been and will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our products once approved or additional pricing pressures.

Health Care Reform

        In March 2010, the Affordable Care Act, was enacted, which includes measures that have or will significantly change the way health care is financed by both governmental and private insurers. Among the provisions of Affordable Care Act of greatest importance to the pharmaceutical industry are the following:

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        Many of the details regarding the implementation of Affordable Care Act are yet to be determined, and, at this time, it remains unclear the full effect that Affordable Care Act would have on our business.

        Other legislative changes have also been proposed and adopted in the United States since the Affordable Care Act was enacted. On August 2, 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress. A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation's automatic reduction to several government programs. This includes aggregate reductions to Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013 and, due to subsequent legislative amendments, will remain in effect through 2024 unless additional Congressional action is taken. On January 2, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, or the ATRA, which, among other things, further reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. These new laws may result in additional reductions in Medicare and other health care funding, which could have a material adverse effect on our future customers and accordingly, our financial operations.

International Regulation

        In addition to regulations in the United States, we, or our collaborators, will be subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of our future drugs. Whether or not we obtain FDA approval for a drug, we or our collaborators must obtain approval of the drug by the comparable regulatory authorities of foreign countries before commencing clinical trials or marketing of the drug in those countries. The approval process varies from country to country and the time may be longer or shorter than that required for FDA approval. The requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly from country to country.

        Under European Union regulatory systems, marketing authorizations may be submitted either under a centralized, decentralized or mutual recognition procedure. The centralized procedure provides for the grant of a single marking authorization that is valid for all European Union member states. The decentralized procedure includes selecting one "reference member state," or RMS, and submitting to more than one member state at the same time. The RMS National Competing Authority conducts a detailed review and prepares an assessment report, to which concerned member states provide comment. The mutual recognition procedure provides for mutual recognition of national approval decisions. Under this procedure, the holder of a national marking authorization may submit an application to the remaining member states post-initial approval. Within 90 days of receiving the applications and assessment report, each member state must decide whether to recognize approval.

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        In addition to regulations in Europe and the United States, we, or our collaborators, will be subject to a variety of foreign regulations governing clinical trials and commercial distribution of our future drugs.

Environmental Regulation

        We are subject to numerous foreign, federal, state and local environmental, health and safety laws and regulations relating to, among other matters, safe working conditions, product stewardship and end-of-life handling or disposition of products, and environmental protection, including those governing the generation, storage, handling, use, transportation and disposal of hazardous or potentially hazardous materials. Some of these laws and regulations require us to obtain licenses or permits to conduct our operations. Environmental laws and regulations are complex, change frequently and have tended to become more stringent over time. Although the costs to comply with applicable laws and regulations, including requirements in the European Union relating to the restriction of use of hazardous substances in products, have not been material, we cannot predict the impact on our business of new or amended laws or regulations or any changes in the way existing and future laws and regulations are interpreted or enforced, nor can we ensure we will be able to obtain or maintain any required licenses or permits.

Employees

        As of June 30, 2015, we had 24 full-time employees, of whom two have medical degrees and three have Ph.D. degrees. Of these full-time employees, 19 employees are engaged in research and development activities and five employees are engaged in business development, finance, human resources and general management. We have no collective bargaining agreements with our employees and we have not experienced any work stoppages. We consider our relations with our employees to be good.

Facilities and Services Agreement with Asuragen

        Our corporate headquarters is located in Austin, Texas. In October 2014, we entered into a sublease agreement with Asuragen and amended an existing service agreement under which we share space with Asuragen and Asuragen provides certain services to us. These services include facilities-related services, warehouse services, shipping and receiving and other services. The facility we occupy as a part of this agreement encompasses approximately 10,280 square feet of office and laboratory space, the laboratory space of which we share with Asuragen. The term for the agreement expires in August 2016, but may be terminated earlier by either party with six months' notice. We believe that our facility is currently sufficient to meet our needs and that suitable additional or alternative space would be available to us when needed.

Strategic Partnerships and Collaborations

Asuragen, Inc.

        In 2009, we in-licensed or acquired certain patents and applications relating to certain aspects of microRNA compounds, targets for microRNAs and methods of use of such compounds from our founding company, Asuragen, and entered into a cross license with Asuragen, under which Asuragen granted us an exclusive, fully sublicensable, fully paid-up, royalty-free, perpetual and irrevocable license in the field of therapeutics, under patents and applications retained by it relating to microRNAs and their uses. Asuragen retains all rights in the fields outside therapeutics under the patents and applications that it retained and licensed to us, and we have granted to Asuragen an exclusive (even as to us), fully sublicensable, royalty-free, perpetual and irrevocable license in the field of diagnostics under the patents and applications relating to microRNA that we solely own as a result of the

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acquisition, while we retain all rights in therapeutics and all other fields outside diagnostics. Under our cross license agreement with Asuragen, as amended in 2012, we have the right to control the prosecution and maintenance of our owned patent families as well as certain patent families owned by Asuragen. Each party retains the right to enforce the patents that it owns against third parties, with the exception of certain foundational patents that are owned by Asuragen. Additionally, certain of these Asuragen patents are included within the patents licensed under our agreement with Yale, and are therefore subject to the terms of the February 2014 amended and restated agreement as described below in "Strategic Partnerships and Collaborations—Yale University."

Marina Biotech, Inc.

        In December 2011, we entered into a license agreement with Marina Biotech, Inc., or Marina, pursuant to which Marina granted us an exclusive license under its proprietary liposomal delivery technology, NOV340, known under the brand name "SMARTICLES," to develop and commercialize drug products incorporating SMARTICLES in combination with our lead therapeutic product, MRX34, for the prevention and treatment of cancer and any other disease in humans and animals, with the exception of DNA interference human therapeutic use. Our license agreement with Marina has been amended twice. In December 2013, the license agreement was amended to modify certain payment obligations with respect to MRX34, and to include within the scope of our exclusive license three additional specific microRNAs selected by us, and in May 2015 we amended the license agreement to reduce the amount of a specific milestone payment and to provide for the prepayment of such milestone payment. In August 2015, we also entered into a side letter to the license agreement, under which we exercised our right to select an additional specific microRNA, in exchange for the payment of a specified selection fee payment. We are required to use commercially reasonable efforts to commercialize licensed products in specified major markets, and in other markets where we consider it is commercially reasonable to do so. We are responsible, at our cost, for all development of manufacturing processes and scale-up for the licensed technology in connection with our licensed products.

        We have paid Marina approximately $2.2 million in the aggregate to date in up-front and milestone payments (including the milestone prepayment under the May 2015 amendment) and as consideration for the inclusion within the license of the four additional compounds. As we progress development and commercialization of products covered by the license, we will be required to make payments to Marina based upon the achievement of certain development and regulatory milestones, totaling up to $6 million in the aggregate for each licensed product. We are also required to pay up to an additional $4 million per licensed product upon the achievement of certain regulatory milestones for a specified number of additional indications, leading to a maximum cap on all milestone payments of $10 million per product. The exception to this is for our lead therapeutic product, MRX34, where the aggregate of all remaining development and regulatory milestone payments due to Marina, including for all additional indications, is $3.7 million. In addition to milestone payments, we will be required to pay low single digit royalties on net sales of licensed products other than MRX34, subject to customary reductions and offsets. As a result of our 2013 amendment to our agreement with Marina, we are no longer required to pay a royalty to Marina with respect to sales of our lead therapeutic product, MRX34. For licensed products other than MRX34, our obligation to pay royalties to Marina will expire on a country-by-country and licensed product-by-licensed product basis upon the later of the expiration of all patents covering such licensed product in such country, or 10 years from the first commercial sale of such product in such country. If we sublicense the rights granted to us under the Marina license for each optioned microRNA compound covered by such sublicense, we are required to pay a specific lump-sum payment representing the remainder of the selection fee for the inclusion of such microRNA compound within the scope of the license agreement, as well as a portion of any revenue we receive from such sublicensees at a tiered percentage between the very low single digits and the mid-teens, depending on the circumstances in which the sublicense is entered into.

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        We may terminate our agreement with Marina for any reason by giving 60 days' notice to Marina. Either party may terminate the agreement upon the insolvency of the other party or upon 90 days' notice to the other party for the uncured material breach of the agreement, with the exception of non-payment which permits Marina to terminate the agreement upon 30 days' notice to us. Absent earlier termination, our agreement with Marina will remain in force on a licensed product-by-licensed product and country-by-country basis until the earlier of the expiration of our obligation to pay royalties with respect to such licensed product in such country, or the end of the calendar quarter in which sales of a generic version of such licensed product exceed a specified proportion of the aggregate sales of such licensed product in such country.

Yale University

        In 2006, Asuragen entered into an exclusive license agreement with Yale that granted to Asuragen an exclusive, worldwide, fully sublicenseable license for all human therapeutic and diagnostic uses under certain patent rights relating to microRNAs arising from the laboratory of Dr. Frank Slack at Yale. This agreement was assigned to us by Asuragen in connection with our acquisition of certain assets, including patent rights, in 2009. In addition, some of the patent filings in our intellectual property portfolio that are licensed to us by Asuragen are also included in the patents licensed under the Yale agreement as a result of previous discussions between the parties about possible co-ownership with Yale of these patents. The patents that are subject to both the Yale and Asuragen licenses cover certain aspects relating to the composition and method of use of specified microRNA mimics, including MRX34 and let-7, while those patent families that are solely subject to our license from Yale cover certain uses of let-7. In February 2014, we amended and restated our agreement with Yale to modify, among other things, the procedure for determining the inventorship of such patents and applications. Following this amendment, an independent third party expert was engaged to determine the inventorship, and hence the ownership, of the patents and applications potentially subject to Yale and Asuragen co-ownership. This determination confirmed each party's sole ownership of each patent where co-ownership had been under consideration, and resulted in a correction to one pending application to remove Dr. Slack as a co-inventor. Notwithstanding the expert's determination of inventorship, in accordance with the terms of our license agreement with Yale, these patents and applications will remain licensed patents under the agreement, and subject to all the terms of our license agreement with Yale. Upon commercialization of any products covered by the licensed patents, our financial obligations to Yale, if any, will depend on the particular product and Yale's ownership rights in any patents covering such product.

        We are required to use reasonable commercial efforts with respect to development and commercialization of products covered by our license agreement with Yale and to fulfill certain specified development and regulatory diligence criteria, or achieve specified development milestones by specified dates, in some cases subject to an extension upon payment of certain fees, for products covered by the agreement.

        We will be required to pay royalties to Yale on net sales of licensed products that contain specified microRNAs, including MRX34 and products containing let-7, at a percentage ranging from the very low to the low single digits, subject to customary reductions and offsets. Our obligation to pay royalties to Yale will expire on a licensed product-by-licensed product and country-by-country basis upon the earlier of the expiration of the last valid claim of a licensed patent covering such licensed product or the launch of a generic version of such product in such country that has been approved by the applicable regulatory authority in such country. We will also be required to pay to Yale a portion of specified gross revenue that we receive from our sublicensees at percentages ranging from the mid-single digits up to the very low twenties, depending on the particular product and Yale's ownership rights, if any, in the patents covering such product.

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        We will also be required to make payments for achievement of certain development and regulatory milestones by products containing one specified microRNA and covered by the licensed patents of up to $600,000 in the aggregate for each such product, subject to reduction in certain circumstances. In addition, we are required to pay an annual license maintenance fee and minimum annual royalties under certain circumstances.

        We have the right to terminate our agreement with Yale for any reason upon three months' written notice to Yale, and either party may terminate the agreement on 60 days' notice for the uncured material breach of the other party. Yale may terminate our agreement, on a licensed product miRNA category-by-licensed product miRNA category basis, if we fail to meet specified diligence obligations within specified time periods, subject to our right to extend such periods with respect to one such product by making specified extension payments and to renegotiate such time periods under certain circumstances with respect to the other two products. Yale may also terminate our agreement in its entirety immediately upon notice to us if we fail to maintain adequate insurance or become insolvent. In the event that our license agreement with Yale is terminated, we would lose our rights under any licensed patents that are solely owned by Yale. Absent earlier termination, our agreement with Yale will remain in force on a country-by-country basis until the expiration of the last valid claim of the licensed patents, whether owned by us or by Yale.

University of Zurich

        In March 2013, we entered into an exclusive, worldwide, royalty-bearing license, with the right to grant sublicenses, with the University of Zurich under certain patent rights relating to the treatment of certain types of B-cell lymphoma with microRNA mimics, in the fields of therapeutics and diagnostics. We are required to pay an annual license maintenance fee, and upon commercialization of any products covered by the licensed patent rights, we will be required to pay the University of Zurich a royalty on net sales of products covered by the licensed patents by us, our affiliates or sublicensees in the very low single digits, and a portion of other fees received from any sublicensees at a percentage in the mid-teens. We are required to use commercially reasonable efforts to develop, manufacture, sell and market licensed products. If we fail to comply with our diligence obligations, then under certain circumstances, the University of Zurich may terminate our agreement immediately upon notice to us.

        We have the right to terminate our agreement with the University of Zurich for any reason upon six months' prior notice. The University of Zurich may terminate our agreement immediately upon notice to us in certain circumstances if we fail to meet our diligence obligations. The University of Zurich may also terminate the agreement upon 60 days' written notice to us in the event of our uncured material breach of the agreement, or immediately upon notice to us in the event of our insolvency or if we challenge or assist any third party to challenge the validity of the licensed patents.

CPRIT

        In August 2010, we entered into a grant contract with the Cancer Prevention and Research Institute of Texas, or CPRIT, under which we received a $10.3 million commercialization award from the State of Texas through CPRIT. CPRIT was established to expedite innovation and commercialization in the area of cancer research and to enhance access to evidence-based prevention programs and services throughout the State of Texas. The award was a three-year award that was funded annually, and the contract terminated on January 31, 2014, subject to our obligations to make certain payments that survive termination. Under the terms of the award, we will be required to pay to CPRIT a portion of our revenues from sales of certain products by us, including sales of MRX34, or received from our licensees or sublicensees, at a percentage in the low single digits until the aggregate amount of such payments equals a specified multiple of the grant amount, and thereafter at a rate of less than one percent, subject to our right, under certain circumstances, to make a one-time payment in a specified amount to CPRIT to buy out such payment obligations. We will also be required to repay

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CPRIT the total amount of the grant proceeds under certain circumstances of relocation of our principal place of business outside Texas during a specified period following the final payment of grant funding to us.

        On September 1, 2015, we entered into a new grant contract with CPRIT in connection with an award of approximately $16.8 million. This 2015 award has a three-year term, subject to extension by mutual agreement by us and CPRIT. However, in contrast to our 2010 award, this 2015 award does not include any royalty obligation upon commercialization of our product candidates, nor are we required to repay the grant proceeds under specified circumstances. Instead, the 2015 award is in the form of an agreement by CPRIT to purchase $16.8 million of shares of our common stock in a private placement concurrent with an initial public offering, occurring prior to December 31, 2016, at the initial public offering price. See "Concurrent Private Placement." Pursuant to the grant contract, we will conduct preclinical and clinical development of certain combination therapy approaches for lung or liver cancer involving our lead product candidate, MRX34. CPRIT may terminate the grant contract and its obligation to purchase the $16.8 million of shares of our common stock under certain circumstances, such as if we determine that a "Project Failure" (as defined in the grant contract) has occurred. If, at any time during the term of the grant contract and following the consummation of our initial public offering, we determine that the project provided for by the grant contract is no longer commercially feasible for us, then we and CPRIT are required to consult in order to reallocate the remaining unspent budget for the project to another oncology project in our product candidate pipeline.

Polymun Scientific Immunbiologische Forschung GmbH

        In November 2012, we entered into a supply agreement with Polymun for the formulation, manufacture and supply of a liposomal formulation of finished drug product for our lead product candidate, MRX34, utilizing the NOV340 SMARTICLES technology licensed to us by Marina in conjunction with Polymun's proprietary technology relating to the production of liposomal formulations, for use by us in our clinical trials for MRX34. The agreement contains terms and conditions generally consistent with an agreement for manufacture and supply of a pharmaceutical product for clinical purposes, including with respect to supply of product in accordance with specifications and quality assurance and quality control activities. We have also entered into a separate quality agreement with Polymun governing all supply of product under the agreement. Under our agreement with Polymun, we retain all intellectual property rights arising as a result of the activities under the agreement, subject to certain limited exceptions relating to Polymun's proprietary technology. The agreement remains in force until completion of the activities set forth under any statements of work executed under the agreement, unless earlier terminated by either party. Either we or Polymun may terminate the agreement on 30 days' written notice in the event of the other party's uncured material breach or insolvency.

Legal Proceedings

        From time to time, we are subject to various legal proceedings, claims and administrative proceedings that arise in the ordinary course of our business activities. Although the results of litigation and claims cannot be predicted with certainty, as of the date of this prospectus, we do not believe we are party to any claim, proceeding or litigation the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our business. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

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Management

Executive Officers and Directors

        The following table sets forth information regarding our executive officers and directors, as of September 8, 2015:

Name
  Age   Position(s)

Executive Officers

         

Paul Lammers, M.D., M.Sc. 

    58   Director, President and Chief Executive Officer

Alan Fuhrman

    58   Chief Financial Officer

Jon Irvin

    57   Vice President of Finance

Sinil Kim, M.D. 

    59   Chief Medical Officer and Vice President of Oncology

Casi DeYoung

    44   Chief Business Officer

Non-Employee Directors

         

Michael Powell, Ph.D.(2)

    60   Chairman of the Board

Elaine V. Jones, Ph.D.(1)

    60   Director

Edward Mathers(2)(3)

    55   Director

Matthew Winkler, Ph.D.

    63   Director

Lawrence M. Alleva(1)(3)

    65   Director

Clay B. Siegall, Ph.D.(1)(2)(3)

    54   Director

(1)
Member of the audit committee.

(2)
Member of the compensation committee.

(3)
Member of the nominating and corporate governance committee.

Executive Officers

        Paul Lammers, M.D., M.Sc.    Dr. Paul Lammers has served as a member of our board of directors and as our President and Chief Executive Officer since November 2009. Previously, Dr. Lammers was the President of Repros Therapeutics Inc., or Repros Therapeutics, a biopharmaceutical company, from February 2009 until October 2009. From August 2002 until September 2008, Dr. Lammers served as the Chief Medical Officer for EMD Serono, Inc., a biopharmaceutical division of Merck KGaA, a global pharmaceutical and chemical group. Previously, Dr. Lammers served as the Senior Vice President of clinical and regulatory affairs at Zonagen, Inc., which later became Repros Therapeutics. Dr. Lammers began his career with Organon International, a pharmaceutical company, spending eight years in the commercial and clinical operations in Europe and the United States. Dr. Lammers received a M.Sc. and M.D. from the Catholic University (Radboud University) in Nijmegen, The Netherlands. Dr. Lammers has been chosen to serve on our board of directors due to his management experience in multiple pharmaceutical and biopharmaceutical companies and drug development.

        Alan Fuhrman.    Alan Fuhrman has served as our Chief Financial Officer since September 8, 2015. Mr. Fuhrman previously served as the Chief Financial Officer of Ambit Biosciences Corporation, a biopharmaceutical company, from October 2010 through the company's initial public offering in 2013 and until its sale to Daiichi Sankyo for up to $410 million. Prior to this role, Mr. Fuhrman served as Chief Financial Officer of Naviscan, Inc., a privately-held medical imaging company, from November 2008 until September 2010, and as Chief Financial Officer of Sonus Pharmaceuticals, Inc., a pharmaceutical company, from September 2004 until August 2008. Mr. Fuhrman is a member of the board of directors of Loxo Oncology, Inc. Earlier in Mr. Fuhrman's career he practiced as a CPA with Coopers and Lybrand. Mr. Fuhrman received a B.S. in both Business Administration and Agricultural Economics from Montana State University.

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        Jon Irvin.    Mr. Jon Irvin has served at our company since November 2012, first as a Chief Financial Officer Consultant with Bridgepoint Consulting, LLC, or Bridgepoint, a consulting firm providing financial consulting assistance to various organizations, and then as our employee beginning in April 2013. Mr. Irvin currently serves as our Vice President of Finance. From December 2010 to March 2012, Mr. Irvin was an independent consultant in Austin, Texas. From September 2005 to December 2010, Mr. Irvin served as the Chief Executive Officer and Vice President of Finance for Voxpath Networks, Inc., a telecommunications and intellectual property company. Previously, Mr. Irvin held various finance positions at Reddwerks Corporation, a software company, Esoterix, Inc., a medical labs company, Topaz Technologies, a pharmaceutical software company, and BioNumerik Pharmaceuticals, Inc., a pharmaceutical company. Mr. Irvin was previously an accountant with Price Waterhouse and Ernst & Young. Mr. Irvin received a B.S. in Accounting from the University of Illinois.

        Sinil Kim, M.D.    Dr. Sinil Kim has served as our Chief Medical Officer and Vice President of Oncology since May 2013. Previously, Dr. Kim served as a Senior Director and Global Clinical Leader at Pfizer, Inc., a global pharmaceutical company, from May 2005 until May 2013. Dr. Kim served as a Director of Clinical Oncology with Bristol-Myers Squibb, a global pharmaceutical company, from September 2002 to May 2005. Dr. Kim co-founded DepoTech Corp, a pharmaceutical company, in 1989. Dr. Kim received a B.S. in Chemistry and M.D. from the University of Washington and completed his post-doctoral fellowship in hematology and oncology at the University of California, San Diego.

        Casi DeYoung.    Ms. Casi DeYoung has served as our Chief Business Officer since March 2014. From May 2008 to December 2013, Ms. DeYoung served as the Vice President of Business Development for Reata Pharmaceuticals, Inc., a biopharmaceutical company. Previously, Ms. DeYoung served as the Vice President of Business Development for ODC Therapy, Inc., an immunotherapy company. From 2000 to 2005, Ms. DeYoung served in various roles, including the Director of Global Oncology Operations, for EMD Pharmaceuticals, Inc., the U.S. affiliate of Merk KGaA, a global healthcare company. Ms. DeYoung received a B.S. in Chemistry from Southwestern University and an M.B.A. from the University of Texas at Austin.

Board Composition

        Michael Powell, Ph.D.    Dr. Michael Powell has served as Chairman of our board of directors since October 2012. Since 1997, Dr. Powell has been a General Partner of Sofinnova Ventures, a venture capital firm. Previously, Dr. Powell has held positions at Genentech, Inc., a biotechnology company, Cytel Inc., a research and development company, and Syntex Research Group, a pharmaceutical company. Dr. Powell is currently a director of Dauntless Pharmaceuticals, Inc., a biopharmaceutical company, Alvine Pharmaceuticals, Inc., a biopharmaceutical company, Ascenta Therapeutics, Inc., a biopharmaceutical company, Catalyst Biosciences, Inc., a biopharmaceutical company, and Ocera Therapeutics, Inc., a publicly traded biopharmaceutical company. Dr. Powell is an Adjunct Professor at the University of Kansas. Dr. Powell is the Board President of the AIDS Vaccine Advocacy Coalition and serves on the advisory board of the Institute for the Advancement of Medical Innovation at the University of Kansas. Dr. Powell received a B.S. in Chemistry from Scarborough College, a Ph.D. in Physical Chemistry from the University of Toronto and completed his post-doctorate work in Bioorganic Chemistry at the University of California. Dr. Powell has been chosen to serve on our board of directors due to his experience with the life sciences and pharmaceutical industries and the venture capital industry.

        Elaine V. Jones, Ph.D.    Dr. Elaine V. Jones has served as a member of our board of directors since October 2012. Since December 2008, Dr. Jones has served as Executive Director, Venture Capital of Pfizer Venture Investments, the venture capital arm of Pfizer, Inc., a global pharmaceutical company. Dr. Jones served as a director of Aquinox Pharmaceuticals, Inc., a publicly-traded pharmaceutical

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company, from June 2010 to February 2015, and also served as the chair of the audit committee. Dr. Jones also served as a director of Flexion Therapeutics, Inc., a pharmaceutical company from September 2009 to June 2014. Dr. Jones is currently a director of Autifony Therapeutics Ltd., a biotechnology company, and Mission Therapeutics Ltd., a biopharmaceutical company. From 2003 to November 2008, Dr. Jones served as a general partner of Euclid SR Partners, a venture capital firm. From 1999 to 2003, Dr. Jones held various positions at S.R. One, the venture fund of GlaxoSmithKline plc, a global pharmaceutical company. Dr. Jones received a B.S. in Biology from Juniata College and a Ph.D. in Microbiology from the University of Pittsburgh. Dr. Jones has been chosen to serve on our board of directors due to her experience with the life sciences and pharmaceutical industries, pharmaceutical science and the venture capital industry.

        Edward Mathers.    Mr. Edward Mathers has served as a member of our board of directors since October 2012. Since August 2008, Mr. Mathers has been a Partner at New Enterprise Associates, Inc., or NEA, a private venture capital firm focusing on technology and healthcare investments. Mr. Mathers serves on the board of directors of Envisia Therapeutics, Inc., a biopharmaceutical company, Liquidia Technologies, a biotechnology company, Ra Pharmaceuticals, Inc., a pharmaceutical company, Rhythm Pharmaceuticals, a pharmaceutical company, and Lumos Pharma, a biotechnology company. From 2002 to 2008, Mr. Mathers served as Executive Vice President, Corporate Development and Venture at MedImmune, Inc., or MedImmune, and led its venture capital subsidiary, MedImmune Ventures, Inc. Before joining MedImmune in 2002, he was Vice President, Marketing and Corporate Licensing and Acquisitions at Inhale Therapeutic Systems. Previously, Mr. Mathers spent 15 years at Glaxo Wellcome, Inc. where he held various sales and marketing positions. Mr. Mathers received a B.S. in Chemistry from North Carolina State University. Mr. Mathers has been chosen to serve on our board of directors due to his experience with the healthcare and pharmaceutical industries and his broad management experience.

        Matthew Winkler, Ph.D.    Dr. Matthew Winkler has served as a member of our board of directors since December 2007. Since January 2013, Dr. Winkler has been the Chairman of the board of directors and the Chief Scientific Officer of Asuragen, Inc., or Asuragen, a molecular diagnostic and pharmacogenomics service company, where he also served as the Chief Executive Officer from March 2006 to December 2012. Prior to Asuragen, Dr. Winkler was the founder and Chief Executive Officer of Ambion, Inc., a privately held company that developed and sold research reagents for RNA analysis. Since June 2010, Dr. Winkler has served on the board of Second Genome, a biotherapeutics company. Dr. Winkler received a B.S. in Genetics and a Ph.D. in Zoology from the University of California at Berkeley. Dr. Winkler has been chosen to serve on our board of directors due to his management experience in the life sciences and pharmaceutical industries.

        Lawrence M. Alleva.    Mr. Lawrence M. Alleva joined our board in July 2014. Prior to his retirement in June 2010, Mr. Alleva worked with PricewaterhouseCoopers LLP, or PwC, for 39 years, 28 of which as a partner with the firm. Mr. Alleva served clients primarily in the technology sector, including numerous pharmaceutical and biotechnology companies. Additionally, he served PwC in a variety of office, regional and national practice leadership roles, most recently as the U.S. Ethics and Compliance Leader (Assurance) for PwC from 2006 until his retirement. Mr. Alleva is a Certified Public Accountant (inactive). Mr. Alleva received a Bachelor of Science degree from Ithaca College (magna cum laude) and attended Columbia University's Executive MBA program. Mr. Alleva also serves as a director for public companies Tesaro Inc. and Bright Horizons Family Solutions, and previously served on the board of GlobalLogic Inc. Mr. Alleva has been chosen to serve on our board of directors due to his financial and accounting experience as a director and a public accounting partner serving multiple healthcare, pharmaceutical and biopharmaceutical companies.

        Clay B. Siegall, Ph.D.    Dr. Clay B. Siegall has served a member of our board of directors since January 2013. Dr. Siegall founded Seattle Genetics, Inc., or Seattle Genetics, a biotechnology company,

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in 1997, where he has served as the Chief Executive Officer since November 2002, as the President since June 2000 and as the Chairman of the board of directors since March 2004. Dr. Siegall also served as the Chief Scientific Officer of Seattle Genetics from December 1997 until November 2002. Dr. Siegall currently serves on the board of directors of Alder BioPharmaceuticals, Inc., a biopharmaceutical company, and Ultragenyx Pharmaceutical, a pharmaceutical company. Prior to co-founding Seattle Genetics, Dr. Siegall was with the Bristol-Myers Squibb Pharmaceutical Research Institute from 1991 to 1997, most recently as a Principal Scientist. From 1988 to 1991, Dr. Siegall was a Staff Fellow/Biotechnology Fellow at the National Cancer Institute, National Institutes of Health. Dr. Siegall received a B.S. in Zoology from the University of Maryland and a Ph.D. in Genetics from George Washington University. Dr. Siegall has been chosen to serve on our board of directors due to his experience as a director and executive of multiple healthcare and biopharmaceutical companies.

Director Independence

        Our board of directors currently consists of seven members. Our board of directors has determined that all of our directors, other than Dr. Paul Lammers, qualify as "independent" directors in accordance with the NASDAQ listing requirements. Dr. Lammers is not considered independent because he is an employee of Mirna. The NASDAQ independence definition includes a series of objective tests, such as that the director is not, and has not been for at least three years, one of our employees and that neither the director nor any of his family members has engaged in various types of business dealings with us. In addition, as required by NASDAQ rules, our board of directors has made a subjective determination as to each independent director that no relationships exist, which, in the opinion of our board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, our board of directors reviewed and discussed information provided by the directors and us with regard to each director's business and personal activities and relationships as they may relate to us and our management. There are no family relationships among any of our directors or executive officers.

Classified Board of Directors

        In accordance with our amended and restated certificate of incorporation to be in effect immediately prior to the consummation of this offering, our board of directors will be divided into three classes with staggered, three-year terms. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. Effective upon the consummation of this offering, our directors will be divided among the three classes as follows:

        Our amended and restated certificate of incorporation will provide that the authorized number of directors may be changed only by resolution of the board of directors. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. The division of our board of directors into three classes with staggered three- year terms may delay or prevent a change of our management or a change in control of our company.

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Voting Arrangements

        Pursuant to an amended and restated voting agreement, as amended, that we entered into with certain holders of our common stock and certain holders of our convertible preferred stock:

        The holders of our common stock and convertible preferred stock who are parties to the amended and restated voting agreement, as amended, are obligated to vote for such designees. The provisions of this voting agreement will terminate upon the consummation of this offering and there will be no further contractual obligations regarding the election of our directors. Our directors hold office until their successors have been elected and qualified or appointed, or the earlier of their death, resignation or removal.

Leadership Structure of the Board

        Our board of directors has separated the positions of Chairman of the board and Chief Executive Officer. Separating these positions allows our Chief Executive Officer to focus on our day-to-day business, while allowing the Chairman of the board to lead the board in its fundamental role of providing advice to and independent oversight of management. The board recognizes the time, effort and energy that the Chief Executive Officer is required to devote to his position in the current business environment, as well as the commitment required to serve as Chairman of the board, particularly as the board's oversight responsibilities continue to grow. While our bylaws and corporate governance guidelines do not require that our Chairman and Chief Executive Officer positions be separate, the board believes that having separate positions and having an independent outside director serve as Chairman is the appropriate leadership structure for us and demonstrates our commitment to good corporate governance. However, our board of directors will continue to periodically review our leadership structure and may make such changes in the future as it deems appropriate.

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Role of Board in Risk Oversight Process

        Risk assessment and oversight are an integral part of our governance and management processes. Our board of directors encourages management to promote a culture that incorporates risk management into our corporate strategy and day-to-day business operations. Management discusses strategic and operational risks at regular management meetings, and conducts specific strategic planning and review sessions during the year that include a focused discussion and analysis of the risks facing us. Throughout the year, senior management reviews these risks with the board of directors at regular board meetings as part of management presentations that focus on particular business functions, operations or strategies, and presents the steps taken by management to mitigate or eliminate such risks.

        Our board of directors does not have a standing risk management committee, but rather administers this oversight function directly through our board of directors as a whole, as well as through various standing committees of our board of directors that address risks inherent in their respective areas of oversight. In particular, our board of directors is responsible for monitoring and assessing strategic risk exposure, our audit committee is responsible for overseeing our major financial risk exposures and the steps our management has taken to monitor and control these exposures. The audit committee also monitors compliance with legal and regulatory requirements. Our nominating and governance committee monitors the effectiveness of our corporate governance guidelines and considers and approves or disapproves any related-persons transactions. Our compensation committee assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking.

Board Committees

Audit Committee

        Our audit committee oversees our corporate accounting and financial reporting process. Among other matters, the audit committee:

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        The current members of our audit committee are Mr. Alleva, Dr. Jones, and Dr. Siegall. Mr. Alleva serves as the chairperson of the committee. All members of our audit committee meet the requirements for financial literacy under the applicable rules and regulations of the SEC and NASDAQ. Our board of directors has determined that Mr. Alleva is an audit committee financial expert as defined under the applicable rules of the SEC and has the requisite financial sophistication as defined under the applicable rules and regulations of NASDAQ. Under the rules of the SEC, members of the audit committee must also meet heightened independence standards. However, a minority of the members of the audit committee may be exempt from the heightened audit committee independence standards for one year from the date of effectiveness of the registration statement of which this prospectus forms a part. Our board of directors has determined that each of the members of our audit committee is independent under the applicable rules of NASDAQ. The audit committee operates under a written charter that satisfies the applicable standards of the SEC and NASDAQ.

Compensation Committee

        Our compensation committee reviews and recommends policies relating to compensation and benefits of our officers and employees. The compensation committee reviews and recommends corporate goals and objectives relevant to compensation of our Chief Executive Officer and other executive officers, evaluates the performance of these officers in light of those goals and objectives and recommends to our board of directors the compensation of these officers based on such evaluations. The compensation committee also recommends to our board of directors the issuance of stock options and other awards under our stock plans. The compensation committee will review and evaluate, at least annually, the performance of the compensation committee and its members, including compliance by the compensation committee with its charter. The current members of our compensation committee are Dr. Powell, Dr. Siegall and Mr. Mathers. Dr. Powell serves as the chairperson of the committee. Each of the members of our compensation committee is independent under the applicable rules and regulations of NASDAQ, is a "non-employee director" as defined in Rule 16b-3 promulgated under the Exchange Act and is an "outside director" as that term is defined in Section 162(m) of the U.S. Internal Revenue Code of 1986, as amended, or Section 162(m). The compensation committee operates under a written charter.

Nominating and Corporate Governance Committee

        The nominating and corporate governance committee is responsible for making recommendations to our board of directors regarding candidates for directorships and the size and composition of our board of directors. In addition, the nominating and corporate governance committee is responsible for overseeing our corporate governance policies and reporting and making recommendations to our board of directors concerning governance matters. The current members of our nominating and corporate governance committee are Mr. Mathers, Dr. Siegall and Mr. Alleva. Mr. Mathers serves as the chairman of the committee. Each of the members of our nominating and corporate governance committee is an independent director under the applicable rules and regulations of NASDAQ relating to nominating and corporate governance committee independence. The nominating and corporate governance committee operates under a written charter.

Compensation Committee Interlocks and Insider Participation

        During 2014, each of Michael Powell, Ph.D., Edward Mathers, and Clay Siegall, Ph.D. served as members of our compensation committee. During 2014, none of the members of our compensation committee has at any time been one of our officers or employees. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers on our board of directors or compensation committee.

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Board Diversity

        Upon consummation of this offering, our nominating and corporate governance committee will be responsible for reviewing with the board of directors, on an annual basis, the appropriate characteristics, skills and experience required for the board of directors as a whole and its individual members. In evaluating the suitability of individual candidates (both new candidates and current members), the nominating and corporate governance committee, in recommending candidates for election, and the board of directors, in approving (and, in the case of vacancies, appointing) such candidates, will take into account many factors, including the following:

        Currently, our board of directors evaluates, and following the consummation of this offering will continue to evaluate, each individual in the context of the board of directors as a whole, with the objective of assembling a group that can best maximize the success of the business and represent stockholder interests through the exercise of sound judgment using its diversity of experience in these various areas.

Code of Business Conduct and Ethics

        We have adopted a code of business conduct and ethics that applies to all of our employees, officers and directors, including those officers responsible for financial reporting. Following the consummation of this offering, the code of business conduct and ethics will be available on our website at www.mirnarx.com. We expect that any amendments to the code, or any waivers of its requirements, will be disclosed on our website. The reference to our web address does not constitute incorporation by reference of the information contained at or available through our website.

Limitation on Liability and Indemnification Matters

        Our amended and restated certificate of incorporation, which will become effective immediately prior to the consummation of this offering, or our amended and restated certificate of incorporation, contains provisions that limit the liability of our directors for monetary damages to the fullest extent permitted by Delaware law. Consequently, our directors will not be personally liable to us or our stockholders for monetary damages for any breach of fiduciary duties as directors, except liability for:

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        Our amended and restated certificate of incorporation and amended and restated bylaws, which will become effective immediately prior to the consummation of this offering, or our amended and restated bylaws, provide that we are required to indemnify our directors and officers, in each case to the fullest extent permitted by Delaware law. Our amended and restated bylaws also provide that we are obligated to advance expenses incurred by a director or officer in advance of the final disposition of any action or proceeding, and permit us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in that capacity regardless of whether we would otherwise be permitted to indemnify him or her under Delaware law.

        In addition to the indemnification required in our amended and restated certificate of incorporation and amended and restated bylaws, we have entered or intend to enter into indemnification agreements with each of our directors, officers and certain employees before the completion of this offering. These agreements will provide for the indemnification of our directors, officers and certain employees for all reasonable expenses and liabilities incurred in connection with any action or proceeding brought against them by reason of the fact that they are or were our agents. We believe that these provisions in our amended and restated certificate of incorporation and amended and restated bylaws and indemnification agreements are necessary to attract and retain qualified persons as directors and officers. This description of the limitation of liability and indemnification provisions of our amended and restated certificate of incorporation, of our amended and restated bylaws and of our indemnification agreements is qualified in its entirety by reference to these documents, each of which is attached as an exhibit to this registration statement, of which this prospectus is a part.

        The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against directors and officers, even though an action, if successful, might benefit us and our stockholders. A stockholder's investment may be harmed to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. There is no pending litigation or proceeding naming any of our directors or officers as to which indemnification is being sought, nor are we aware of any pending or threatened litigation that may result in claims for indemnification by any director or officer.

Director Compensation

        While we did not maintain a formal policy, during fiscal year 2014, our independent directors, who we considered to be those non-employee directors not associated with a principal investor in our company, received an annual cash retainer of $25,000 for service as a director, pro-rated for partial years of service, and an additional cash retainer of $3,000 per meeting of the board or a committee of the board attended in person and $2,000 per meeting of the board or committee of the board attended telephonically. In addition, during fiscal year 2014, our board of directors granted options to purchase shares of our common stock to each independent director. In March 2014, Dr. Siegall was granted options to purchase an aggregate of 173,314 shares of our common stock and Dr. Goodman was granted options to purchase an aggregate of 153,504 shares of our common stock. In November 2014, Mr. Alleva was granted an option to purchase 200,000 shares of our common stock. Each option grant made to our independent directors was immediately vested and exercisable with respect to 20% of the shares underlying the option and the remaining shares vest and become exercisable in substantially equal installments every six months over four years, subject to continued service. In the event of a

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change of control (as defined in our 2008 Long term Incentive Plan, as amended, or the 2008 Stock Plan) while an independent director is still providing services to us, the options held by the independent director will become fully vested and exercisable immediately prior to such change in control.

        We reimburse all of our non-employee directors for all reasonable and customary business expenses incurred providing services to us in accordance with Company policy.

        In connection with this offering, we approved a compensation policy for our non-employee directors, or the Director Compensation Program. Pursuant to the Director Compensation Program, our non-employee directors will be entitled to receive cash compensation, paid quarterly in arrears, as follows:

        Under the Director Compensation Program, upon a director's initial appointment or election to our board of directors, such non-employee director will receive an option (the Initial Grant) to purchase 180,000 shares of our common stock (subject to adjustment as provided in the applicable equity plan). In addition, each non-employee director who has been serving as a director for at least three months prior to any annual stockholder meeting following the date of this offering and will continue to serve as a director immediately following such annual stockholder meeting will be automatically granted, on the date of such annual stockholder meeting, an option (the Annual Grant) to purchase 90,000 shares of our common stock (subject to adjustment as provided in the applicable equity plan). The Initial Grant will vest in substantially equal installments on each of the first three anniversaries of the applicable grant date, subject to continued service through each applicable vesting date, and the Annual Grant will vest in full on the earlier of the first anniversary of the applicable grant date or immediately prior to the next annual stockholder meeting after the applicable grant date, subject to continued service through such vesting date. In addition, pursuant to the terms of the Director Compensation Program, all equity awards outstanding and held by a non-employee director will vest in full immediately prior to the occurrence of a change in control.

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        Contingent upon the pricing of this offering, each of Drs. Powell, Jones and Winkler and Mr. Mathers has been granted an option to purchase 108,000 shares of our common stock, Mr. Alleva was granted an option to purchase 158,000 shares of our common stock and Dr. Siegall was granted an option to purchase 180,000 shares of our common stock, each having an exercise price per share equal to price per share offered to the public in this offering, as set forth on the cover of the final prospectus. The options vest and become exercisable in substantially equal installments on each of the first three anniversaries of the applicable grant date, subject to continued service through each applicable vesting date.

2014 Director Compensation Table

        The following table sets forth information for the year ended December 31, 2014 regarding the compensation awarded to, earned by or paid to our non-employee directors:

Name(1)
  Fees Earned
or Paid in
Cash ($)
  Option
Awards ($)(1)(2)
  All Other
Compensation ($)
  Total($)  

Michael Powell, Ph.D. 

  $   $   $   $  

Elaine V. Jones, Ph.D. 

                 

Edward Mathers

                 

Matthew Winkler, Ph.D. 

                 

Lawrence M. Alleva(3)

    15,417     69,553           84,970  

Clay B. Siegall, Ph.D. 

    46,000     61,810         107,810  

Corey Goodman, Ph.D.(4)

    47,000     54,754         101,754  

(1)
The amounts reported in the Option Awards column represent the grant date fair value of the stock options granted to the non-employee members of our board of directors during 2014 as computed in accordance with ASC Topic 718, excluding the impact of estimated forfeitures related to service-based vesting provisions. The assumptions used in calculating the grant date fair value of the stock options reported in the Option Awards column are set forth in Note 2 to the audited financial statements included in this prospectus. Note that the amounts reported in this column reflect the accounting cost for these stock options, and do not correspond to the actual economic value that may be received by the non-employee members of our board of directors from the options.

(2)
As of December 31, 2014, Mr. Alleva held an option to purchase an aggregate of 200,000 shares of our common stock, and Dr. Siegall held options to purchase an aggregate of 423,314 shares of our common stock; no other non-employee director held outstanding options to purchase our common stock as of December 31, 2014.

(3)
Mr. Alleva joined our board of directors in July 2014.

(4)
Dr. Goodman resigned from our board of directors effective July 10, 2015.

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Executive Compensation

        The following is a discussion and analysis of compensation arrangements of our named executive officers, or NEOs. This discussion contains forward looking statements that are based on our current plans, considerations, expectations and determinations regarding future compensation programs. Actual compensation programs that we adopt may differ materially from currently planned programs as summarized in this discussion. As an "emerging growth company" as defined in the JOBS Act, we are not required to include a Compensation Discussion and Analysis section and have elected to comply with the scaled disclosure requirements applicable to emerging growth companies.

        We seek to ensure that the total compensation paid to our executive officers is reasonable and competitive. Compensation of our executives is structured around the achievement of individual performance and near-term corporate targets as well as long-term business objectives.

        Our NEOs for fiscal year 2014 were as follows:

2014 Summary Compensation Table

        The following table shows information regarding the compensation of our named executive officers for services performed in the year ended December 31, 2014.

Name and Principal
Position
  Year   Salary
($)
  Bonus
($)(1)
  Option
Awards
($)(2)
  All Other
Compensation
($)(3)
  Total
($)
 

Paul Lammers, M.D., M.Sc. 

    2014   $ 375,829   $ 0   $ 390,780   $ 11,275   $ 777,884  

President and Chief Executive Officer

                                     

Casi DeYoung (4)

    2014     224,712     25,000     266,353     3,288     519,353  

Chief Business Officer

                                     

Sinil Kim, M.D. 

    2014     315,829     0     78,791     10,214     404,834  

Chief Medical Officer and Vice President of Oncology

                                     

(1)
The amount reported in the Bonus column represents the sign on bonus Ms. DeYoung received pursuant to her employment agreement in connection with commencing employment with us in March 2014. Please see the description of Ms. DeYoung's employment agreement with us in "Narrative to 2014 Summary Compensation Table and Outstanding Equity Awards at 2014 Fiscal Year End—Terms and Conditions of Employee Arrangements with our NEOs" below.

(2)
For the option awards column, amounts shown represents the grant date fair value of stock options granted during fiscal year 2014 as calculated in accordance with ASC Topic 718, excluding the impact of estimated forfeitures related to service-based vesting provisions. See Note 2 to our audited financial statements included in this registration statement for the assumptions used in calculating this amount.

(3)
The amounts reported in the All Other Compensation column represent 401(k) Plan matching contributions.

(4)
Ms. DeYoung commenced employment with us in March 2014.

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Outstanding Equity Awards at 2014 Fiscal Year End

        The following table sets forth all outstanding equity awards held by each of the named executive officers as of December 31, 2014.

 
   
  Option Awards  
 
   
  Number of
Securities
Underlying
Unexercised
Options
(#)
  Number of
Securities
Underlying
Unexercised
Options
(#)
   
   
 
 
  Vesting
Commencement
Date(1)
  Option
Exercise
Price ($)
  Option
Expiration
Date
 
Name
  Exercisable   Unexercisable  

Paul Lammers, M.D., M.Sc. 

    11/4/2009     158,484     0   $ 0.50     12/31/2019  

    1/10/2013 (2)   1,194,744     548,438     0.11     1/22/2023  

    3/6/2014     0     1,083,700     0.54     3/9/2024  

Casi DeYoung

    3/6/2014     0     738,644     0.54     3/9/2024  

Sinil Kim, M.D. 

    6/6/2013     28,125     140,625     0.11     6/5/2023  

    6/6/2013     28,125     140,625     0.29     12/30/2023  

    3/6/2014     0     218,500     0.54     3/9/2024  

(1)
Except as otherwise noted, the shares subject to the options shall vest and become exercisable as to 1/4th of the shares subject to the option on the first anniversary of the vesting commencement date, and thereafter as to 1/48th of the shares subject to such option on each monthly anniversary of the vesting commencement date, such that all shares subject to the option will be vested on the fourth anniversary of the vesting commencement date, subject to the holder continuing to provide services to us through such vesting date.

(2)
The shares subject to the option shall vest and become exercisable as to 1/4th of the shares subject to the option on the vesting commencement date, and thereafter as to 1/48th of the shares subject to such option on each monthly anniversary of the vesting commencement date, such that all shares subject to the option will be vested on the third anniversary of the vesting commencement date, subject to the holder continuing to provide services to us through such vesting date.

Narrative to 2014 Summary Compensation Table and Outstanding Equity Awards at 2014 Fiscal Year End

Terms and Conditions of Employee Arrangements with our NEOs

        We have entered into agreements with each of the NEOs in connection with his or her employment with us. These agreements set forth the terms and conditions of employment of each named executive officer, including base salary, initial stock option grants, and standard employee benefit plan participation. Our board of directors or the compensation committee reviews each NEO's base salary from time to time to ensure compensation adequately reflects the NEO's qualifications, experience, role and responsibilities. For fiscal year 2014, Dr. Lammers' annual base salary was $376,335, Ms. DeYoung's base salary was $285,000 and Dr. Kim's annual base salary was $316,200. In addition, pursuant to her employment agreement, Ms. DeYoung was awarded a signing bonus of $25,000 in connection with her commencement of employment with us in March 2014. In addition, under her employment agreement, if Ms. DeYoung relocates her primary residence from the Dallas, Texas area to the Austin, Texas area during her employment with us, we will reimburse her for the reasonable and necessary documented moving expenses (up to a maximum of $15,000), including up to two house-hunting trips and the moving of her household from the Dallas, Texas area to the Austin, Texas area.

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        In connection with this offering, we are entering into Change in Control Severance Agreements with each of our NEOs that will supersede the severance and change in control benefits, if any, included in the NEOs' employment agreements. Pursuant to the terms of the change in control severance agreements, in the event an NEO's employment is terminated by us other than for "cause" or the executive experiences a "constructive termination" (each as defined below), then the NEO will receive as severance nine months (or 12 months in the case of Dr. Lammers) of base salary in a single cash lump sum payment and up to nine months (or 12 months in the case of Dr. Lammers) of healthcare continuation coverage preimium reimbursement; provided, that if the termination or resignation occurs within the period commencing on a "change in control" (as defined below) and ending 12 months after a change in control, the severance will consist of 12 months (or 18 months in the case of Dr. Lammers) of base salary paid in a single cash lump sum, 100% (or 150% in the case of Dr. Lammers) of the executive's target bonus paid in a single cash lump sum, up to 12 months (or 18 months in the case of Dr. Lammers) of healthcare continuation coverage premium reimbursement and full vesting acceleration for each stock option and other equity award held by the NEO. The NEO must timely deliver an effective release of claims to us in order to be eligible for the foregoing severance benefits.

        For purposes of the change in control severance agreements, "cause" means (i) the conviction of the NEO by a court of competent jurisdiction of a crime involving moral turpitude; (ii) the commission, or attempted commission, by the NEO of an act of fraud on us; (iii) the misappropriation, or attempted misappropriation, by the NEO of any of our funds or property; (iv) the failure by the NEO to perform in any material respect his or her obligations under the terms of his or her agreement, which such failure has gone unremedied within 10 days after we provide the NEO with written notice of such failure; (v) the knowing engagement by the NEO, without the written approval of our board of directors, in any direct, material conflict of interest with us without compliance with our conflict of interest policy; (vi) the knowing engagement by the NEO, without written approval of our board of directors, in any activity which competes with our business or which would result in a material injury to us or which otherwise violates any provision of his or her agreement, employment agreement or any confidentiality agreement; or (vii) the knowing engagement by the NEO in any activity that would constitute a material violation of the provisions of our business ethics policy, employee handbook or similar policies, if any, then in effect.

        For purposes of the change in control severance agreements, "constructive termination" means the NEO's resignation from all positions he or she then holds with us if: (i) without the NEO's prior written consent, (a) there is a material diminution in his or her duties and responsibilities with us; provided, however, that a change in title or reporting relationship will not be a constructive termination; (b) there is a material reduction of the NEO's then-existing base salary; provided, however, that a material reduction in his or her base salary pursuant to a salary reduction program affecting all or substantially all of our employees and that does not adversely affect the NEO to a greater extent than other similarly situated employees will not be a constructive termination; or (c) the NEO is required to relocate his or her primary work location to a facility or location that would increase his or her one-way commute distance by more than 50 miles from his or her primary work location as of immediately prior to such change, (ii) the NEO provides written notice outlining such conditions, acts or omissions to us within 30 days immediately following such material change or reduction, (iii) such material change or reduction is not remedied by us within 30 days following our receipt of such written notice and (iv) the NEO's resignation is effective not later than 30 days after the expiration of such 30 day cure period.

        For purposes of the change in control severance agreements, "change in control" generally means (i) the transfer or exchange in a single transaction or series of related transactions by our stockholders of more than 50% of our voting stock to a person or group; (ii) a change in the composition of our board of directors over a two-year period such that 50% or more of the members of the board of

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directors were elected through one or more contested elections; (iii) a merger, consolidation, reorganization or business combination in which we are involved, directly or indirectly, other than a merger, consolidation, reorganization or business combination which results in our outstanding voting securities immediately before the transaction continuing to represent a majority of the voting power of the acquiring company's outstanding voting securities and after which no person or group beneficially owns 50% or more of the outstanding voting securities of the surviving entity immediately after the transaction; or (iv) the sale, exchange, or transfer of all or substantially all of our assets.

Terms and Conditions of Equity Award Grants

        Each of our NEOs received an option to purchase our common stock in fiscal year 2014. The table above entitled "Outstanding Equity Awards at 2014 Fiscal Year End" describes the material terms of other option awards made in past fiscal years to our NEOs.

        In March 2014, our board of directors granted an option to purchase 1,083,700, 738,644 and 218,500 shares of our common stock to Dr. Lammers, Ms. DeYoung and Dr. Kim, respectively, with an exercise price of $0.54 per share, which the board determined was the fair market value on the date of grant. Each of the options vest and become exercisable as to 1/4th of the shares subject to the option on March 6, 2015, and as to 1/48th of the shares subject to the option on each monthly anniversary thereafter, such that 100% of the shares subject to the option will be vested and exercisable on March 6, 2018, subject to these NEOs continuing to provide services to us through such vesting date.

        In connection with this offering, each of Dr. Lammers, Ms. DeYoung and Dr. Kim were granted an option to purchase 1,150,000, 400,000 and 375,000 shares of our common stock, respectively, having an exercise price per share equal to price per share offered to the public in this offering, as set forth on the cover of the final prospectus. The options vest and become exercisable as to 25% of the shares subject to the option on the first anniversary of the pricing of this offering, and as to 1/48th of the shares subject to the option on each monthly anniversary thereafter, such that 100% of the shares subject to the option will be vested and exercisable on the fourth anniversary of the pricing of this offering, subject to these NEOs continuing to provide services to us through such vesting date.

Terms and Conditions of 401(k) Plan

        Our U.S. eligible employees, including our NEOs, participate in our 401(k) Plan. Enrollment in the 401(k) Plan is automatic for employees who meet eligibility requirements unless they decline participation. The 401(k) plan is intended to qualify under Section 401(k) of the Internal Revenue Service Code of 1986, as amended, so that contributions to the 401(k) plan by employees or by us, and the investment earnings thereon, are not taxable to the employees until withdrawn from the 401(k) plan, and so that contributions by us, if any, will be deductible by us when made. Under the 401(k) plan, employees may elect to reduce their current compensation by up to the statutorily prescribed annual limit and to have the amount of such reduction contributed to the 401(k) plan. Under the 401(k), for fiscal year 2014, we provide matching contributions of $0.50 per dollar up to 8% of an employee's compensation.

Equity Compensation Plans

2015 Equity Incentive Award Plan

        We have adopted the 2015 Equity Incentive Award Plan, or 2015 Plan, which will be effective on the pricing of this offering. The principal purpose of the 2015 Plan is to attract, retain and motivate selected employees, consultants and directors through the granting of stock-based compensation awards and cash-based performance bonus awards. The material terms of the 2015 Plan are summarized below.

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        Share Reserve.    Under the 2015 Plan, 18,111,000 shares of our common stock will be initially reserved for issuance pursuant to a variety of stock-based compensation awards, including stock options, stock appreciation rights, or SARs, restricted stock awards, restricted stock unit awards, deferred stock awards, dividend equivalent awards, stock payment awards, performance awards and other stock-based awards, plus the number of shares remaining available for future awards under the 2008 Long Term Incentive Plan, as amended, or 2008 Stock Plan, as of the consummation of this offering. The number of shares initially reserved for issuance or transfer pursuant to awards under the 2015 Plan will be increased by (i) the number of shares represented by awards outstanding under our 2008 Stock Plan that are forfeited or lapse unexercised and which following the effective date are not issued under our 2008 Stock Plan and (ii) an annual increase on the first day of each fiscal year beginning in 2016 and ending in 2025, equal to the least of (A) five percent (5%) of the shares of stock outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year and (B) such smaller number of shares of stock as determined by our board of directors; provided, however, that no more than 125,000,000 shares of stock may be issued upon the exercise of incentive stock options.

        The following counting provisions will be in effect for the share reserve under the 2015 Plan:

        Administration.    The compensation committee of our board of directors is expected to administer the 2015 Plan unless our board of directors assumes authority for administration. The compensation committee must consist of at least three members of our board of directors, each of whom is intended to qualify as an "outside director," within the meaning of Section 162(m) of the Code, a "non-employee director" for purposes of Rule 16b-3 under the Exchange Act and an "independent director" within the meaning of the rules of the applicable stock exchange, or other principal securities market on which shares of our common stock are traded. The 2015 Plan provides that the board or compensation committee may delegate its authority to grant awards to employees other than executive officers and certain senior executives of the company to a committee consisting of one or more members of our board of directors or one or more of our officers, other than awards made to our non-employee directors, which must be approved by our full board of directors.

        Subject to the terms and conditions of the 2015 Plan, the administrator has the authority to select the persons to whom awards are to be made, to determine the number of shares to be subject to awards and the terms and conditions of awards, and to make all other determinations and to take all other actions necessary or advisable for the administration of the 2015 Plan. The administrator is also authorized to adopt, amend or rescind rules relating to administration of the 2015 Plan. Our board of directors may at any time remove the compensation committee as the administrator and revest in itself

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the authority to administer the 2015 Plan. The full board of directors will administer the 2015 Plan with respect to awards to non-employee directors.

        Eligibility.    Options, SARs, restricted stock and all other stock-based and cash-based awards under the 2015 Plan may be granted to individuals who are then our officers, employees or consultants or are the officers, employees or consultants of certain of our subsidiaries. Such awards also may be granted to our directors. Only employees of our company or certain of our subsidiaries may be granted incentive stock options, or ISOs.

        Awards.    The 2015 Plan provides that the administrator may grant or issue stock options, SARs, restricted stock, restricted stock units, deferred stock, dividend equivalents, performance awards, stock payments and other stock-based and cash-based awards, or any combination thereof. Each award will be set forth in a separate agreement with the person receiving the award and will indicate the type, terms and conditions of the award.

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        Change in Control.    In the event of a change in control where the acquiror does not assume or replace awards granted, prior to the consummation of such transaction, awards issued under the 2015 Plan will be subject to accelerated vesting such that 100% of such awards will become vested and exercisable or payable, as applicable. Performance awards will vest in accordance with the terms and conditions of the applicable award agreement. In the event that, within the 12 month period immediately following a change in control, a participant's services with us are terminated by us other than for cause (as defined in the 2015 Plan) or by such participant for good reason (as defined in the 2015 Plan), then the vesting and, if applicable, exercisability of 100% of the then-unvested shares subject to the outstanding equity awards held by such participant under the 2015 Plan will accelerate effective as of the date of such termination. The administrator may also make appropriate adjustments to awards under the 2015 Plan and is authorized to provide for the acceleration, cash-out, termination, assumption, substitution or conversion of such awards in the event of a change in control or certain other unusual or nonrecurring events or transactions. Under the 2015 Plan, a change in control is generally defined as:

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        Adjustments of Awards.    In the event of any stock dividend, stock split, spin-off, recapitalization, distribution of our assets to stockholders (other than normal cash dividends) or any other corporate event affecting the number of outstanding shares of our common stock or the share price of our common stock other than an "equity restructuring" (as defined below), the administrator may make appropriate, proportionate adjustments to reflect the event giving rise to the need for such adjustments, with respect to:

        In the event of one of the adjustments described above or other corporate transactions, in order to prevent dilution or enlargement of the potential benefits intended to be made available under the 2015 Plan, the administrator has the discretion to make such equitable adjustments and may also:

        In the event of an equity restructuring, the administrator will make appropriate, proportionate adjustments to the number and type of securities subject to each outstanding award and the exercise price or grant price thereof, if applicable. In addition, the administrator will make equitable adjustments, as the administrator in its discretion may deem appropriate to reflect such equity restructuring, with respect to the aggregate number and type of shares subject to the 2015 Plan. The adjustments upon an equity restructuring are nondiscretionary and will be final and binding on the affected holders and us.

        For purposes of the 2015 Plan, "equity restructuring" means a nonreciprocal transaction between us and our 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) or the share price of our common stock (or other securities) and causes a change in the per

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share value of the common stock underlying outstanding stock-based awards granted under the 2015 Plan.

        Amendment and Termination.    Our board of directors or the compensation committee (with board approval) may terminate, amend or modify the 2015 Plan at any time and from time to time. However, we must generally obtain stockholder approval:

        Termination.    The board of directors may terminate the 2015 Plan at any time. No incentive stock options may be granted pursuant to the 2015 Plan after the tenth anniversary of the effective date of the 2015 Plan, and no additional annual share increases to the 2015 Plan's aggregate share limit will occur from and after such anniversary. Any award that is outstanding on the termination date of the 2015 Plan will remain in force according to the terms of the 2015 Plan and the applicable award agreement.

        We intend to file with the SEC a registration statement on Form S-8 covering the shares of our common stock issuable under the 2015 Plan.

2008 Long Term Incentive Plan

        Our board of directors adopted, and our stockholders approved, the 2008 Stock Plan effective as of May 15, 2008, which was subsequently amended on November 3, 2009, October 22, 2012 and March 10, 2014 to increase the number of shares issuable under the 2008 Stock Plan. The 2008 Stock Plan provided for the grant of ISOs, NSOs, SARs, restricted stock, restricted stock units, bonus stock awards, dividend equivalents, performance awards and other stock-based awards. As of June 30, 2015, options to purchase 12,280,909 shares of our common stock at a weighted-average exercise price per share of $0.37 remained outstanding under the 2008 Stock Plan. No other equity awards have been granted under the 2008 Stock Plan. As of June 30, 2015, 2,264,241 shares of our common stock were available for future issuance pursuant to awards granted under the 2008 Stock Plan. Following this offering and in connection with the effectiveness of our 2015 Plan, the 2008 Stock Plan will terminate and no further awards will be granted under the 2008 Stock Plan. However, all outstanding awards will continue to be governed by their existing terms.

        Administration.    Our board of directors, or a committee thereof appointed by our board of directors, has the authority to administer the 2008 Stock Plan and the awards granted under it. In addition, the administrator may delegate to our officers or managers or committees thereof the authority to grant awards to persons who are not subject to Section 16 of the Exchange Act and to such extent that awards that are intended to qualify as "performance-based compensation" under Section 162(m) of the Code would not fail to so qualify. The administrator has the authority to select the employees to whom awards will be granted under the 2008 Stock Plan, the number of shares to be subject to those awards under the 2008 Stock Plan, and the terms and conditions of the awards granted. In addition, the administrator has the authority to construe and interpret the 2008 Stock Plan and to adopt rules for the administration, interpretation and application of the 2008 Stock Plan that are consistent with the terms of the 2008 Stock Plan.

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        Awards.    The 2008 Stock Plan provides that the administrator may grant or issue options, including ISOs and NSOs, SARs, restricted stock, restricted stock units, bonus stock awards, dividend equivalents, performance awards and other stock-based awards to employees, consultants and directors; provided that only employees may be granted incentive stock options. Each award will be set forth in a separate agreement with the person receiving the award and will indicate the type, terms and conditions of the award, including any performance conditions that may be specified by the administrator. In addition, under the 2008 Stock Plan each award and any stock issued under such awards will be subject to a right of first refusal in favor of us, which will terminate upon the consummation of this offering.

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        Detrimental Activity.    If at any time prior to the third anniversary of the most recent termination of an employee's service with us, the administrator determines that such employee, at any time during his or her most recent service with us, or within the three-year period after termination of such service, engaged in any detrimental activity, then such employee shall (i) immediately forfeit the right to exercise any and all options granted to him or her under the 2008 Stock Plan, irrespective of whether the vested or unvested; and (ii) upon demand by the administrator, promptly return to us any or all shares of our common stock acquired pursuant to awards granted to employee under the 2008 Stock Plan and all associated dividends. The purchase price per share of common stock returned to us will be an amount equal to employee's purchase price per share as reflected in each such award.

        Subdivision or Consolidation of Shares.    In the event of certain corporate adjustments, the administrator of the 2008 Stock Plan will adjust the class and maximum number of shares of common stock that may be delivered under the 2008 Stock Plan, the class and maximum number of shares of common stock that may be issued pursuant to the exercise of ISOs and/or the number, class and price of shares of common stock covered by each outstanding award.

        Corporate Recapitalization.    In the event we recapitalize, reclassify our capital stock or other change our capital structure, the number and class of shares covered by an option or an SAR will be proportionately adjusted. In the event of changes in the outstanding shares by reason of recapitalization, reorganizations, mergers, consolidations, combinations, exchanges or other relevant changes in capitalization occurring after the date of the grant of any award and not otherwise provided in the 2008 Stock Plan, any outstanding awards and any agreements evidencing such awards shall be subject to adjustment by the administrator at its discretion as to the number and price of shares or other consideration subject to such Awards.

        Change in Control.    Upon a change in control, the administrator, acting without the consent or approval of any holder, will take one or more of the following alternatives, which may vary among individual holders and which may vary among options or SARs held by any individual: (i) accelerate the time at which awards then outstanding may be exercised so that such awards may be exercised in full for a limited period of time on or before a specified date fixed by the administrator, after which specified date all unexercised awards will terminate; (ii) require the mandatory surrender to us by selected holders of some or all of the outstanding awards held by such holders specified by the administrator, in which event the administrator will cancel such awards and pay to each holder an

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amount of cash per share equal to the excess, if any, of the spread value for such shares; or (iii) make such adjustments to awards then outstanding as the administrator deems appropriate.

        Amendment; Termination.    Our board of directors may amend or terminate the 2008 Stock Plan or any portion thereof at any time, but no amendment will impair the rights of a holder of an outstanding award without the holder's consent. An amendment of the 2008 Stock Plan shall be subject to the approval of our stockholders, where such approval by our stockholders of an amendment is required by applicable law. Following this offering and in connection with the effectiveness of our 2015 Plan, the 2008 Stock Plan will terminate and no further awards will be granted under the 2008 Stock Plan.

        We intend to file with the SEC a registration statement on Form S-8 covering our shares of common stock issuable under the 2008 Stock Plan.

2015 Employee Stock Purchase Plan

        We have adopted the 2015 Employee Stock Purchase Plan, which we refer to as our ESPP, which will be effective on the pricing of this offering. The ESPP is designed to allow our eligible employees to purchase shares of our common stock, at semi-annual intervals, with their accumulated payroll deductions. The ESPP is intended to qualify under Section 423 of the Code.

        Plan Administration.    Subject to the terms and conditions of the ESPP, our compensation committee will administer the ESPP. Our compensation committee can delegate administrative tasks under the ESPP to the services of an agent and/or employees to assist in the administration of the ESPP. The administrator will have the discretionary authority to administer and interpret the ESPP. Interpretations and constructions of the administrator of any provision of the ESPP or of any rights thereunder will be conclusive and binding on all persons. We will bear all expenses and liabilities incurred by the ESPP administrator.

        Shares Available Under ESPP.    The maximum number of our shares of our common stock which will be authorized for sale under the ESPP is equal to the sum of (a) 1,811,000 shares of common stock and (b) an annual increase on the first day of each year beginning in 2016 and ending in 2025, equal to the lesser of (i) 1% of the shares of common stock outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year and (ii) such number of shares of common stock as determined by our board of directors; provided, however, no more than 21,000,000 shares of our common stock may be issued under the ESPP. The shares made available for sale under the ESPP may be authorized but unissued shares or reacquired shares reserved for issuance under the ESPP.

        Eligible Employees.    Employees eligible to participate in the ESPP for a given offering period generally include employees who are employed by us or one of our designated subsidiaries on the first day of the offering period, or the enrollment date. Our employees and any employees of our subsidiaries who customarily work less than five months in a calendar year or are customarily scheduled to work less than 20 hours per week will not be eligible to participate in the ESPP. Finally, an employee who owns (or is deemed to own through attribution) 5% or more of the combined voting power or value of all our classes of stock or of one of our subsidiaries will not be allowed to participate in the ESPP.

        Participation.    Employees will enroll under the ESPP by completing a payroll deduction form permitting the deduction from their compensation of at least 1% of their compensation but not more than the lesser of 15% of their compensation and $30,000 per offering period. Such payroll deductions are expressed as a whole number percentage and the accumulated deductions will be applied to the purchase of shares on each semi-annual purchase date. However, a participant may not purchase more than 50,000 shares in each offering period, and may not subscribe for more than $25,000 in fair market value of shares our common stock (determined at the time the option is granted) per calendar year

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falling in the offering period. The ESPP administrator has the authority to change these limitations for any subsequent offering period.

        Offering.    Under the ESPP, participants are offered the option to purchase shares of our common stock at a discount during a series of successive offering periods. The offering periods will commence and end on dates as determined by the ESPP administrator. However, in no event may an offering period be longer than 27 months in length.

        The option purchase price will be the lower of 85% of the closing trading price per share of our common stock on the first trading date of an offering period in which a participant is enrolled or 85% of the closing trading price per share on the semi-annual purchase date, which will occur on the last trading day of each offering period.

        Unless a participant has previously canceled his or her participation in the ESPP before the purchase date, the participant will be deemed to have exercised his or her option in full as of each purchase date. Upon exercise, the participant will purchase the number of whole shares that his or her accumulated payroll deductions will buy at the option purchase price, subject to the participation limitations listed above.

        A participant may cancel his or her payroll deduction authorization at any time prior to the end of the offering period. Upon cancellation, the participant will have the option to either (a) receive a refund of the participant's account balance in cash without interest or (b) exercise the participant's option for the current offering period for the maximum number of shares of common stock on the applicable purchase date, with the remaining account balance refunded in cash without interest. Following at least one payroll deduction, a participant may also decrease (but not increase) his or her payroll deduction authorization once during any offering period. If a participant wants to increase or decrease the rate of payroll withholding, he or she may do so effective for the next offering period by submitting a new form before the offering period for which such change is to be effective.

        A participant may not assign, transfer, pledge or otherwise dispose of (other than by will or the laws of descent and distribution) payroll deductions credited to a participant's account or any rights to exercise an option or to receive shares of our common stock under the ESPP, and during a participant's lifetime, options in the ESPP shall be exercisable only by such participant. Any such attempt at assignment, transfer, pledge or other disposition will not be given effect.

        Adjustments upon Changes in Recapitalization, Dissolution, Liquidation, Merger or Asset Sale.    In the event of any increase or decrease in the number of issued shares of our common stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the common stock, or any other increase or decrease in the number of shares of common stock effected without receipt of consideration by us, we will proportionately adjust the aggregate number of shares of our common stock offered under the ESPP, the number and price of shares which any participant has elected to purchase pursuant under the ESPP and the maximum number of shares which a participant may elect to purchase in any single offering period.

        If there is a proposal to dissolve or liquidate us, then the ESPP will terminate immediately prior to the consummation of such proposed dissolution or liquidation, and any offering period then in progress will be shortened by setting a new purchase date to take place before the date of our dissolution or liquidation. We will notify each participant of such change in writing at least 10 business days prior to the new exercise date. If we undergo a merger with or into another corporation or sale of all or substantially all of our assets, each outstanding option will be assumed or an equivalent option substituted by the successor corporation or the parent or subsidiary of the successor corporation. If the successor corporation refuses to assume the outstanding options or substitute equivalent options, then any offering period then in progress will be shortened by setting a new purchase date to take place

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before the date of our proposed sale or merger. We will notify each participant of such change in writing at least 10 business days prior to the new exercise date.

        Amendment and Termination.    Our board of directors may amend, suspend or terminate the ESPP at any time. However, the board of directors may not amend the ESPP without obtaining stockholder approval within 12 months before or after such amendment to the extent required by applicable laws. The ESPP will terminate on the tenth anniversary of the date of its initial approval of our stockholders, unless earlier terminated.

        We intend to file with the SEC a registration statement on Form S-8 covering our shares of common stock issuable under the ESPP.

Rule 10b5-1 Sales Plans

        Our directors and executive officers may adopt written plans, known as Rule 10b5-1 plans, in which they will contract with a broker to buy or sell shares of our common stock on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades pursuant to parameters established by the director or officer when entering into the plan, without further direction from the director or officer. The director or officer may amend or terminate the plan in limited circumstances. Our directors and executive officers may also buy or sell additional shares of our common stock outside of a Rule 10b5-1 plan when they are not in possession of material, nonpublic information.

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Certain Relationships and Related Party Transactions

        The following is a description of transactions since January 1, 2012 to which we have been a party, in which the amount involved exceeds $120,000, and in which any of our directors, executive officers or holders of more than 5% of our capital stock, or an affiliate or immediate family member thereof, had or will have a direct or indirect material interest.

Sales and Purchases of Securities

Winkler Convertible Promissory Note

        In June 2011, we issued a convertible promissory note to Matthew Winkler, Ph.D., that allowed us to draw amounts from time to time up to the aggregate maximum principal sum of $1.0 million. In January 2012 and June 2012, we amended and restated the convertible promissory note with Dr. Winkler, raising the aggregate maximum principal sum to $1.5 million and extending the maturity date. During the period the promissory note, as amended, was outstanding, we borrowed an aggregate principal amount of $750,000. In October 2012, Dr. Winkler contributed the entire principal amount of, and accrued interest on, the promissory note, as amended, to us in exchange for shares of Series C convertible preferred stock, which was distributed in a dividend to the holders of Series A convertible preferred stock and Series B convertible preferred stock. Dr. Winkler, who is a member of our board of directors and holder of our capital stock, currently serves as the Chairman and Chief Scientific Officer, and is a founder and holder of capital stock, of Asuragen, Inc., or Asuragen.

Asuragen Convertible Promissory Note

        In June 2012, we issued a convertible promissory note to Asuragen that allowed us to draw amounts from time to time up to the aggregate maximum principal sum of $500,000. In October 2012, we repaid the full amount of all principal drawn on the promissory note, and accrued and unpaid interest thereon, of $122,866 in cash. Dr. Winkler, who is a member of our board of directors and holder of our capital stock, currently serves as the Chairman and Chief Scientific Officer, and is a founder and holder of capital stock, of Asuragen.

Series C Convertible Preferred Stock Financing

        In October 2012 and December 2013, we issued an aggregate of 67,779,942 shares of our Series C convertible preferred stock at a price per share of $0.509 for aggregate gross consideration of approximately $34.5 million to 18 accredited investors. The table below sets forth the number of shares of Series C convertible preferred stock sold to our directors, executive officers or holders of more than 5% of our capital stock, or an affiliate or immediate family member thereof:

Name
  Number of
Shares of
Series C
Preferred Stock
  Aggregate
Purchase
Price
 

Sofinnova Venture Partners VIII, L.P.(1)

    18,664,046   $ 9,499,999.42  

New Enterprise Associates 14 L.P.(2)

    18,624,754     9,479,999.79  

NEA Ventures 2012, Limited Partnership(2)

    39,292     19,999.63  

Pfizer Inc.(3)

    15,717,092     7,999,999.82  

Osage University Partners I, L.P. 

    4,911,590     2,499,999.32  

Matthew Winkler, Ph.D.(4)

    4,273,082     2,174,998.78  

(1)
Michael Powell, Ph.D., who is a member of our board of directors, is a General Partner of Sofinnova Venture Partners VIII, L.P.

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(2)
Edward Mathers, who is a member of our board of directors, is a Partner of New Enterprise Associates 14 L.P. and NEA Ventures 2012, Limited Partnership. NEA Ventures 2012, Limited Partnership, is an affiliated fund of New Enterprise Associates 14 L.P.

(3)
Elaine V. Jones, Ph.D., who is a member of our board of directors, is the Executive Director, Venture Capital-Worldwide Business Development of Pfizer Inc.

(4)
Includes an aggregate of 1,768,170 shares of Series C convertible preferred stock purchased by certain trusts for the benefit of members of Dr. Winkler's family. Dr. Winkler disclaims beneficial ownership of all such shares, as he does not have voting or investment power with respect to such shares.

Series D Convertible Preferred Stock Financing

        In March and April 2015, we issued an aggregate of 68,395,299 shares of our Series D convertible preferred stock at a price per share of $0.611 for aggregate gross consideration of approximately $41.8 million to 24 accredited investors. The table below sets forth the number of shares of Series D convertible preferred stock sold to our directors, executive officers or holders of more than 5% of our capital stock, or an affiliate or immediate family member thereof:

Name
  Number of
Shares of
Series D
Preferred Stock
  Aggregate
Purchase
Price
 

Eastern Capital Limited

    9,819,968   $ 6,000,000.45  

Sofinnova Venture Partners VIII, L.P.(1)

    8,753,393     5,348,323.12  

New Enterprise Associates 14 L.P.(2)

    8,753,393     5,348,323.12  

Baxter Healthcare Corporation

    8,183,307     5,000,000.58  

Pfizer Inc.(3)

    7,371,278     4,503,850.86  

Matthew Winkler, Ph.D.(4)

    2,809,165     1,716,399.82  

Osage University Partners I, L.P. 

    2,526,390     1,543,624.29  

Lawrence M. Alleva Profit Sharing Plan(5)

    57,284     35,000.52  

(1)
Michael Powell, Ph.D., who is a member of our board of directors, is a General Partner of Sofinnova Venture Partners VIII, L.P.

(2)
Edward Mathers, who is a member of our board of directors, is a Partner of New Enterprise Associates 14 L.P. and NEA Ventures 2012, Limited Partnership. NEA Ventures 2012, Limited Partnership, is an affiliated fund of New Enterprise Associates 14 L.P.

(3)
Elaine V. Jones, Ph.D., who is a member of our board of directors, is the Executive Director, Venture Capital-Worldwide Business Development of Pfizer Inc.

(4)
Includes an aggregate of 1,768,170 shares of Series D convertible preferred stock purchased by certain trusts for the benefit of members of Dr. Winkler's family. Dr. Winkler disclaims beneficial ownership of all such shares, as he does not have voting or investment power with respect to such shares.

(5)
Lawrence M. Alleva, who is a member of our board of directors, is a participant and beneficiary of the Lawrence M. Alleva Profit Sharing Plan.

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Texas Emerging Technology Fund

        In November 2009, we received a $5.0 million investment from the Texas Emerging Technology Fund, or the TETF. In exchange for the investment, the TETF received a promissory note for a principal amount of $5.0 million as well as a warrant to acquire our capital stock, with the number of shares and type of capital determined based on our subsequent financing activity. In August 2011, we completed a Series B convertible preferred stock financing for aggregate gross consideration of approximately $1.5 million, which allowed the TETF to exercise its rights under the warrant to acquire, by cashless exercise, 2,243,330 shares, which gives effect to the 10-for-1 reverse stock split in October 2012, of our Series B convertible preferred stock. In October 2012, in conjunction with the initial sale of our Series C convertible preferred stock, we and the TETF amended the investment documentation to provide for the exchange of all outstanding shares of our Series B convertible preferred stock held by the TETF for 10,914,647 shares of a newly-established Series B-1 convertible preferred stock. As a part of the amendments, the promissory note with the TETF was deemed satisfied in full and canceled.

Cancer Prevention and Research Institute of Texas

        In connection with a research grant awarded to us, in September 2015 the Cancer Prevention and Research Institute of Texas, or CPRIT, agreed to purchase from us concurrently with this offering in a private placement approximately $16.8 million of our common stock at a price per share equal to the initial public offering price. Upon the consummation of this private placement, we have agreed to grant certain rights with respect to the registration of the shares issued therein under the Securities Act. For a more detailed description of the related grant contract, see "Business—Strategic Partnerships and Collaborations—CPRIT." For a more detailed description of the private placement, see "Concurrent Private Placement." For a more detailed description of the registration rights, see "Description of Capital Stock—Registration Rights."

Relationship with Asuragen

        In November 2009, in connection with our spin-off from Asuragen, we entered into an asset contribution agreement, cross-license agreement, supply agreement and services agreement with Asuragen. In October 2010, October 2011 and January 2013, we entered into new services agreements with Asuragen. In October 2014, we entered into a sublease agreement with Asuragen. See "Business—Facilities and Services Agreement with Asuragen" Pursuant to these agreements, we paid Asuragen rent and a fee for certain services, including general accounting, payroll, shipping and receiving, information technology services and the use of facilities, in the aggregate amount of $813,145, $527,363 and $520,356 in the fiscal years ended December 31, 2012, 2013 and 2014, respectively, and $239,250 in the six months ended June 30, 2015. These amounts do not include services that we used as a customer of Asuragen during this time frame. Dr. Winkler, who is a member of our board of directors and holder of our capital stock, currently serves as the Chairman and Chief Scientific Officer, and is a founder and holder of capital stock, of Asuragen.

Indemnification Agreements and Directors' and Officers' Liability Insurance

        We have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us to indemnify each director and executive officer to the fullest extent permitted by Delaware law, including indemnification of expenses such as attorneys' fees, judgments, fines and settlement amounts incurred by the director or executive officer in any action or proceeding, including any action or proceeding by or in right of us, arising out of the person's services as a director or executive officer.

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Investor Rights Agreement

        We have entered into an amended and restated investor rights agreement with the purchasers of our outstanding preferred stock and certain holders of common stock, including entities with which certain of our directors are affiliated. As of June 30, 2015, the holders of approximately 152,416,065 shares of our common stock, including the shares of common stock issuable upon the conversion of our preferred stock, are entitled to rights with respect to the registration of their shares under the Securities Act. For a more detailed description of these registration rights, see "Description of Capital Stock—Registration Rights." The investor rights agreement also provides for a right of first refusal in favor of certain holders of preferred stock with regard to certain issuances of our capital stock. The rights of first refusal will not apply to, and will terminate upon consummation of, this offering.

Voting Agreement

        We have entered into an amended and restated voting agreement with certain holders of our common stock and holders of our convertible preferred stock. Upon the closing of this offering, the amended and restated voting agreement will terminate. For a description of the amended and restated voting agreement, see the section titled "Management—Board Composition—Voting Arrangements."

Right of First Refusal and Co-Sale Agreement

        We have entered into an amended and restated right of first refusal and co-sale agreement with certain holders of our common stock and holders of our preferred stock. This agreement provides for rights of first refusal and co-sale relating to the shares of our common stock and common stock issuable upon conversion of the shares of preferred stock held by the parties thereto. Upon the closing of this offering, the amended and restated right of first refusal and co-sale agreement will terminate.

Other Business Relationships

        Denise Powell is the sister of Michael Powell, a member of our board of directors, and is a former employee and current consultant of ODA-WG, Inc., d/b/a BrewLife, or BrewLife, our former investor relations firm. Our engagement with BrewLife was negotiated at arm's length. As of June 30, 2015, we have paid BrewLife a total of approximately $130,000 during this engagement. Although Ms. Powell has provided services to us in her capacity with BrewLife from time to time, Ms. Powell's compensation is not dependent on or affected by the services provided to us by BrewLife or by any payments we make to BrewLife in exchange for such services.

Policies and Procedures for Related Party Transactions

        Our board of directors has adopted a written related person transaction policy, to be effective upon the consummation of this offering, setting forth the policies and procedures for the review and approval or ratification of related person transactions. This policy will cover, with certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which we were or are to be a participant, where the amount involved exceeds $120,000 and a related person had or will have a direct or indirect material interest, including, without limitation, purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person. In reviewing and approving any such transactions, our audit committee is tasked to consider all relevant facts and circumstances, including, but not limited to, whether the transaction is on terms comparable to those that could be obtained in an arm's length transaction and the extent of the related person's interest in the transaction. All of the transactions described in this section occurred prior to the adoption of this policy.

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Principal Stockholders

        The following table sets forth information relating to the beneficial ownership of our common stock as of August 31, 2015, by:

        The number of shares beneficially owned by each entity, person, director or executive officer is determined in accordance with the rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares over which the individual has sole or shared voting power or investment power as well as any shares that the individual has the right to acquire within 60 days of August 31, 2015 through the exercise of any stock option, warrants or other rights. Except as otherwise indicated, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of common stock held by that person.

        The percentage of shares beneficially owned is computed on the basis of 153,804,113 shares of our common stock outstanding as of August 31, 2015, which reflects the assumed conversion of all of our outstanding shares of preferred stock into an aggregate of 152,396,065 shares of common stock. Percentage ownership of our common stock after the offering assumes the sale of an aggregate of            shares by us in this offering and the concurrent private placement, as well as the accruing paid-in-kind dividend in connection with this offering. Shares of our common stock that a person has the right to acquire within 60 days of August 31, 2015 are deemed outstanding for purposes of computing the percentage ownership of the person holding such rights, but are not deemed outstanding for purposes of computing the percentage ownership of any other person, except with respect to the percentage ownership of all directors and executive officers as a group. Unless otherwise indicated

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below, the address for each beneficial owner listed is c/o Mirna Therapeutics, Inc., at 2150 Woodward Street, Suite 100, Austin, Texas 78744.

 
  Beneficial Ownership Prior to this Offering and the Concurrent Private Placement    
   
 
 
  Beneficial Ownership
After this Offering and the Concurrent Private Placement
 
 
  Number of
Outstanding
Shares
Beneficially
Owned
   
   
   
 
Name and Address of Beneficial Owner
  Number of
Shares
Exercisable
Within 60 Days
  Number of
Shares
Beneficially
Owned
  Percentage of
Beneficial
Ownership
  Number of
Shares
Beneficially
Owned
  Percentage of
Beneficial
Ownership
 

5% and Greater Stockholders

                                     

Sofinnova Venture Partners VIII, L.P.(1)

    27,417,439         27,417,439     17.8 %            

Entities Associated with New Enterprise Associates(2)

    27,417,439         27,417,439     17.8 %            

Pfizer Inc.(3)

    23,088,370         23,088,370     15.0 %            

State of Texas(4)

    10,914,647         10,914,647     7.1 %            

Eastern Capital Limited(5)

    9,819,968         9,819,968     6.4 %            

Baxalta US Inc.(6)

    8,183,307         8,183,307     5.3 %            

Cancer Prevention and Research Institute of Texas(7)

                *              

Named Executive Officers and Directors(8)

                                     

Paul Lammers, M.D., M.Sc.(9)

    11,196,465     2,409,796     13,606,261     8.7 %            

Alan Fuhrman

                *              

Jon Irvin

        336,840     336,840     *              

Casi DeYoung

        307,348     307,348     *              

Sinil Kim, M.D. 

    178,124     185,834     363,958     *              

Michael Powell, Ph.D.(1)

    27,417,439     20,000     27,437,439     17.8 %            

Elaine V. Jones, Ph.D. 

        12,000     12,000     *              

Edward Mathers

        12,000     12,000     *              

Matthew Winkler, Ph.D.(10)

    10,717,131     12,000     10,729,131     7.0 %            

Lawrence M. Alleva(11)

    57,284     116,000     173,284     *              

Clay B. Siegall Ph.D. 

        289,657     289,657     *              

All directors and executive officers as a group (10 persons)(12)

    49,566,443     3,364,635     52,931,078     33.7 %            

*
Indicates beneficial ownership of less than 1% of the total outstanding common stock.

(1)
Consists of 27,417,439 shares held by Sofinnova Ventures Partners VIII, L.P., or SVP VIII, prior to this offering. Sofinnova Management VIII, L.L.C., or SM VIII, is the general partner of SVP VIII. The individual Managers, or the Managing Members, of SVP VIII are Michael Powell, James Healy, Srinivas Akkaraju and Anand Mehra. The Managers share voting and dispositive power with regard to the shares held directly by SVP VIII. The address of SVP VIII is 3000 Sand Hill Road, Bldg. 4, Suite 250, Menlo Park, CA 94025. Also includes           shares (based on the assumed initial public offering price of $          per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, and a conversion date of                    , 2015) pursuant to the accruing paid-in-kind dividend in connection with this offering.

(2)
Consists of: (i) 27,378,147 shares held prior to this offering by New Enterprise Associates 14, L.P., or NEA 14, and (ii) 39,292 shares held prior to this offering by NEA Ventures 2012 Limited Partnership, or Ven 2012. The shares directly held by NEA 14 are indirectly held by NEA Partners 14, L.P., or NEA Partners 14, the sole general partner of NEA 14. NEA 14 GP, LTD, or NEA 14 LTD, is the sole general partner of NEA Partners 14. The individual Managers, or the Managers, of NEA 14 LTD are M. James Barrett, Peter J. Barris, Forest Baskett, Ryan D. Drant, Anthony A. Florence, Jr., Patrick J. Kerins, Krishna Kolluri, David M. Mott, Scott D. Sandell, Peter Sonsini, Ravi Viswanathan and Harry R. Weller. The Managers share voting and dispositive power with regard to shares held directly by NEA 14. The shares directly held by Ven 2012 are indirectly held by Karen P. Welsh, the sole general partner of Ven 2012. Karin P. Welsh holds voting and dispositive power over the shares held by Ven 2012. The address of NEA 14 and Ven 2012 is 1954 Greenspring Drive, Suite 600, Timonium, MD 21903. Also includes            shares (based on the assumed initial public offering price of $          per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, and a conversion date of                    , 2015) pursuant to the accruing paid-in-kind dividend in connection with this offering.

(3)
The address for this entity is 235 E. 42nd Street, New York, NY 10017. Also includes            shares (based on the assumed initial public offering price of $          per share, the midpoint of the estimated price range set

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    forth on the cover page of this prospectus, and a conversion date of                    , 2015) pursuant to the accruing paid-in-kind dividend in connection with this offering.

(4)
The State of Texas has granted Dr. Lammers, through his position as our Chief Executive Officer, a revocable proxy of all of its voting rights. The address of the holding entity is the Texas Treasury Safekeeping Trust Company, 208 E. 10th Street, 4th Floor, Austin, Texas 78701.

(5)
Eastern Capital Limited is a Cayman Islands corporation. Portfolio Services Ltd., a Cayman Islands corporation, owns all of the outstanding stock of Eastern Capital Limited. Kenneth B. Dart is the beneficial owner of all of the outstanding stock of Portfolio Services Ltd. Kenneth B. Dart and Mark R. VanDevelde are directors of both Eastern Capital Limited and Portfolio Services Ltd. The address for these entities is 10 Market Street #773, Camana Bay, Grand Cayman, KY1-9006, Cayman Islands. Also includes             shares (based on the assumed initial public offering price of $          per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, and a conversion date of                    , 2015) pursuant to the accruing paid-in-kind dividend in connection with this offering.

(6)
Consists of shares held by Baxalta US Inc., a wholly owned subsidiary of Baxalta Incorporated. Baxalta Incorporated, as the ultimate parent of Baxalta US Inc., may be deemed to indirectly beneficially own such shares. The address of Baxalta Incorporated and Baxalta US Inc. is One Baxter Parkway, Deerfield, Illinois 60015. Also includes            shares (based on the assumed initial public offering price of $          per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, and a conversion date of                    , 2015) pursuant to the accruing paid-in-kind dividend in connection with this offering.

(7)
Consists of approximately $16.8 million of our common stock to be issued in the concurrent private placement at a price per share equal to the initial public offering price, or            shares at an assumed initial public offering price of $          per share, the midpoint of the range set forth on the cover page of this prospectus

(8)
Effective as of July 10, 2015, Corey Goodman resigned from our board of directors.

(9)
Consists of: (i) 2,409,796 shares that may be acquired pursuant to the exercise of stock options within 60 days of August 31, 2015 by Dr. Lammers, (ii) 281,818 shares of common stock and (iii) 10,914,647 shares of our convertible preferred stock held by the State of Texas. The State of Texas has granted Dr. Lammers, through his position as our Chief Executive Officer, a revocable proxy of all of its voting rights.

(10)
Includes an aggregate of 1,918,227 shares of preferred stock held by certain trusts for the benefit of members of Dr. Winkler's family. Dr. Winkler does not have voting or investment power with respect to such shares.

(11)
Consists of: (i) 96,000 shares that may be acquired pursuant to the exercise of stock options within 60 days of August 31, 2015 by Mr. Alleva and (ii) 57,284 shares held by the Lawrence M. Alleva Profit Sharing Plan.

(12)
Consists of 49,566,443 shares of common stock and convertible preferred stock and 3,364,635 shares that may be acquired pursuant to the exercise of stock options within 60 days of August 31, 2015. Also includes            shares (based on the assumed initial public offering price of $          per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, and a conversion date of                    , 2015) pursuant to the accruing paid-in-kind dividend in connection with this offering. The information in this table excludes approximately                shares underlying option awards to be granted to our executive officers and directors in connection with this offering, none of which will be exercisable within 60 days of August 31, 2015. See "Management—Director Compensation" and "Executive Compensation" for information regarding these awards.

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Description of Capital Stock

        The following summary describes our capital stock and the material provisions of our amended and restated certificate of incorporation and our amended and restated bylaws, which will become effective immediately prior to the consummation of this offering, the investor rights agreement to which we and certain of our stockholders are parties and of the Delaware General Corporation Law. Because the following is only a summary, it does not contain all of the information that may be important to you. For a complete description, you should refer to our amended and restated certificate of incorporation, amended and restated bylaws and investor rights agreement, copies of which have been filed as exhibits to the registration statement of which this prospectus is part.

General

        Immediately prior to the consummation of this offering, we will file our amended and restated certificate of incorporation that authorizes 250,000,000 shares of common stock, $0.001 par value per share, and 5,000,000 shares of preferred stock, $0.001 par value per share. The following information reflects the         -for-    reverse stock split of our capital stock we have effected, the filing of our amended and restated certificate of incorporation and the conversion of all outstanding shares of our preferred stock into shares of common stock immediately prior to the completion of this offering. As of June 30, 2015, there were outstanding:

Common Stock

Voting Rights

        Each holder of our common stock is entitled to one vote for each share on all matters submitted to a vote of the stockholders, including the election of directors. Our stockholders do not have cumulative voting rights in the election of directors. Accordingly, holders of a majority of the voting shares are able to elect all of the directors.

Dividends

        Subject to preferences that may be applicable to any then outstanding preferred stock, holders of our common stock are entitled to receive dividends, if any, as may be declared from time to time by our board of directors out of legally available funds.

Liquidation

        In the event of our liquidation, dissolution or winding up, holders of our common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of our debts and other liabilities and the satisfaction of any liquidation preference granted to the holders of any then outstanding shares of preferred stock.

Rights and Preferences

        Holders of our common stock have no preemptive, conversion, subscription or other rights, and there are no redemption or sinking fund provisions applicable to our common stock. The rights, preferences and privileges of the holders of our common stock are subject to and may be adversely affected by the rights of the holders of shares of any series of our preferred stock that we may designate in the future.

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Fully Paid and Nonassessable.

        All of our outstanding shares of common stock are, and the shares of common stock to be issued in this offering will be, fully paid and nonassessable.

Preferred Stock

        Immediately prior to the consummation of this offering, all outstanding shares of our preferred stock will be converted into shares of our common stock. See Note 7 to our audited financial statements for a description of our currently outstanding preferred stock. Immediately prior to the consummation of this offering, our amended and restated certificate of incorporation will be amended and restated to delete all references to such shares of preferred stock. Upon the consummation of this offering, our board of directors will have the authority, without further action by our stockholders, to issue up to 5,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions thereof. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting, or the designation of, such series, any or all of which may be greater than the rights of common stock. The issuance of our preferred stock could adversely affect the voting power of holders of common stock and the likelihood that such holders will receive dividend payments and payments upon our liquidation. In addition, the issuance of preferred stock could have the effect of delaying, deferring or preventing a change in control of our company or other corporate action. Immediately after consummation of this offering, no shares of preferred stock will be outstanding, and we have no present plan to issue any shares of preferred stock.

Registration Rights

        Under our amended and restated investor rights agreement, and a registration rights agreement to be entered into with CPRIT at the consummation of the concurrent private placement, based on the number of shares outstanding as of June 30, 2015, following the closing of this offering and the concurrent private placement, the holders of approximately 152.4 million shares of common stock or their transferees, plus an aggregate of            shares to be sold in the concurrent private placement and issuable pursuant to the accruing paid-in-kind dividend, based on an assumed initial public offering price of $          per share (the midpoint of the range set forth on the cover page of this prospectus) and a conversion date of                    , 2015, have the right to require us to register their shares under the Securities Act so that those shares may be publicly resold, or to include their shares in any registration statement we file, in each case as described below.

Demand Registration Rights

        Based on the number of shares outstanding as of June 30, 2015, after the consummation of this offering and the concurrent private placement, the holders of approximately 152.4 million shares of our common stock issuable upon the conversion of our outstanding preferred stock, plus an aggregate of             shares issuable pursuant to the accruing paid-in-kind dividend, based on an assumed initial public offering price of $          per share (the midpoint of the range set forth on the cover page of this prospectus) and a conversion date of                    , 2015, or their transferees, will be entitled to certain demand registration rights. Beginning after the earlier of October 22, 2015 or 180 days following the effectiveness of the registration statement of which this prospectus is a part, the holders of at least a majority of these shares can, on not more than two occasions, request that we register all or a portion of their shares. Such request for registration must cover at least 20% of these shares. Additionally, we will not be required to effect a demand registration during the period beginning 90 days prior to the filing of a company-initiated registration statement relating to a public offering of our securities, provided that we have complied with certain notice requirements to the holders of these shares.

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Form S-3 Registration Rights

        Based on the number of shares outstanding as of June 30, 2015, after the consummation of this offering and the concurrent private placement, the holders of approximately 152.4 million shares of our common stock, plus an aggregate of            shares to be sold in the concurrent private placement and issuable pursuant to the accruing paid-in-kind dividend, based on an assumed initial public offering price of $          per share (the midpoint of the range set forth on the cover page of this prospectus) and a conversion date of                    , 2015, or their transferees, will be entitled to certain Form S-3 registration rights. The holders of these shares can make a written request that we register their shares on Form S-3 if we are eligible to file a registration statement on Form S-3 and if the aggregate price to the public of the shares offered is at least $1.0 million. These stockholders may make an unlimited number of requests for registration on Form S-3, but in no event shall we be required to file more than two registrations on Form S-3 in any 12 month period. Additionally, we will not be required to effect a Form S-3 registration during the period beginning 90 days prior to the filing of a company-initiated registration statement relating to a public offering of our securities, provided that we have complied with certain notice requirements to the holders of these shares.

Piggyback Registration Rights

        Based on the number of shares outstanding as of June 30, 2015, after the consummation of this offering and the concurrent private placement, in the event that we determine to register any of our securities under the Securities Act (subject to certain exceptions), either for our own account or for the account of other security holders, the holders of approximately 152.4 million shares of our common stock, plus an aggregate of            shares to be sold in the concurrent private placement and issuable pursuant to the accruing paid-in-kind dividend, based on an assumed initial public offering price of $          per share (the midpoint of the range set forth on the cover page of this prospectus) and a conversion date of                    , 2015, or their transferees, will be entitled to certain "piggyback" registration rights allowing the holders to include their shares in such registration, subject to certain marketing and other limitations. As a result, whenever we propose to file a registration statement under the Securities Act, other than with respect to a registration related to employee benefit plans, the offer and sale of debt securities, or corporate reorganizations or certain other transactions, the holders of these shares are entitled to notice of the registration and have the right, subject to limitations that the underwriters may impose on the number of shares included in the registration, to include their shares in the registration. In an underwritten offering, the managing underwriter, if any, has the right, subject to specified conditions, to limit the number of shares such holders may include.

Expenses of Registration

        We will pay the registration expenses of the holders of the shares registered pursuant to the demand, piggyback and Form S-3 registration rights described above, including the expenses of one counsel for the selling holders.

Expiration of Registration Rights.

        The demand, piggyback and Form S-3 registration rights described above will expire, with respect to any particular stockholder, upon the earlier of three years after the consummation of this offering or when that stockholder can sell all of its shares during any 90-day period under Rule 144 of the Securities Act.

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Anti-Takeover Effects of Provisions of our Amended and Restated Certificate of Incorporation, our Amended and Restated Bylaws and Delaware Law

        Some provisions of Delaware law and our amended and restated certificate of incorporation and our amended and restated bylaws that will be in effect immediately prior to the consummation of this offering contain provisions that could make the following transactions more difficult: acquisition of us by means of a tender offer; acquisition of us by means of a proxy contest or otherwise; or removal of our incumbent officers and directors. It is possible that these provisions could make it more difficult to accomplish or could deter transactions that stockholders may otherwise consider to be in their best interest or in our best interests, including transactions that might result in a premium over the market price for our shares.

        These provisions, summarized below, are expected to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with our board of directors. We believe that the benefits of increased protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging these proposals because negotiation of these proposals could result in an improvement of their terms.

Delaware Anti-Takeover Statute

        We are subject to Section 203 of the Delaware General Corporation Law, which prohibits persons deemed "interested stockholders" from engaging in a "business combination" with a publicly-held Delaware corporation for three years following the date these persons become interested stockholders unless the business combination is, or the transaction in which the person became an interested stockholder was, approved in a prescribed manner or another prescribed exception applies. Generally, an "interested stockholder" is a person who, together with affiliates and associates, owns, or within three years prior to the determination of interested stockholder status did own, 15% or more of a corporation's voting stock. Generally, a "business combination" includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. The existence of this provision may have an anti-takeover effect with respect to transactions not approved in advance by the board of directors, such as discouraging takeover attempts that might result in a premium over the market price of our common stock.

Undesignated Preferred Stock

        The ability to authorize undesignated preferred stock makes it possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to change control of us. These and other provisions may have the effect of deterring hostile takeovers or delaying changes in control or management of our company.

Special Stockholder Meetings

        Our amended and restated bylaws provide that a special meeting of stockholders may be called only by a resolution adopted by a majority of our board of directors.

Requirements for Advance Notification of Stockholder Nominations and Proposals

        Our amended and restated bylaws establish advance notice procedures with respect to stockholder proposals and the nomination of candidates for election as directors, other than nominations made by or at the direction of the board of directors or a committee of the board of directors.

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Elimination of Stockholder Action by Written Consent

        Our amended and restated certificate of incorporation eliminates the right of stockholders to act by written consent without a meeting.

Classified Board; Election and Removal of Directors

        Our board of directors is divided into three classes. The directors in each class will serve for a three-year term, one class being elected each year by our stockholders, with staggered three-year terms. Only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year terms. Because our stockholders do not have cumulative voting rights, our stockholders holding a majority of the shares of common stock outstanding will be able to elect all of our directors. For more information on the classified board, see "Management—Board Composition." This system of electing and removing directors may tend to discourage a third party from making a tender offer or otherwise attempting to obtain control of us, because it generally makes it more difficult for stockholders to replace a majority of the directors.

Choice of Forum

        Our amended and restated certificate of incorporation will provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the exclusive forum for any derivative action or proceeding brought on our behalf; any action asserting a breach of fiduciary duty owed by any director, officer, other employee or stockholder to us or our stockholders; any action asserting a claim against us arising pursuant to the Delaware General Corporation Law or as to which the Delaware General Corporation Law confers jurisdiction on the Court of Chancery of the State of Delaware; or any action asserting a claim against us that is governed by the internal affairs doctrine.

Amendment of Charter Provisions

        The amendment of any of the above provisions, except for the provision making it possible for our board of directors to issue preferred stock, would require approval by holders of at least 662/3% of the voting power of our then outstanding voting stock.

        The provisions of the Delaware General Corporation Law, our amended and restated certificate of incorporation and our amended and restated bylaws could have the effect of discouraging others from attempting hostile takeovers and, as a consequence, they may also inhibit temporary fluctuations in the market price of our common stock that often result from actual or rumored hostile takeover attempts. These provisions may also have the effect of preventing changes in our management. It is possible that these provisions could make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests.

Limitations of Liability and Indemnification Matters

        For a discussion of liability and indemnification, please see "Management—Limitation on Liability and Indemnification Matters."

The NASDAQ Global Market Listing

        We have applied to list our common stock on The NASDAQ Global Market under the symbol "MIRN."

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Transfer Agent and Registrar

        Upon the completion of this offering, the transfer agent and registrar for our common stock will be American Stock Transfer & Trust, LLC. The transfer agent and registrar's address is 620 15th Avenue, Brooklyn, New York 11219.

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Shares Eligible for Future Sale

        Prior to this offering, there has been no public market for our common stock. Future sales of our common stock, including shares issued upon the exercise of outstanding options, in the public market after this offering, or the perception that those sales may occur, could cause the prevailing market price for our common stock to fall or impair our ability to raise equity capital in the future. As described below, only a limited number of shares of our common stock will be available for sale in the public market for a period of several months after consummation of this offering due to contractual and legal restrictions on resale described below. Future sales of our common stock in the public market either before (to the extent permitted) or after restrictions lapse, or the perception that those sales may occur, could adversely affect the prevailing market price of our common stock at such time and our ability to raise equity capital at a time and price we deem appropriate.

Sale of Restricted Shares

        Based on the number of shares of our common stock outstanding as of June 30, 2015, upon the closing of this offering and the concurrent private placement and assuming (1) the conversion of our outstanding preferred stock into common stock, assuming an initial public offering price of        per share (the midpoint of the price range set forth on the cover page of this prospectus); (2) the issuance of                shares of common stock as a result of the accruing paid-in-kind dividend in connection with this offering, based on an assumed initial public offering price of $            per share (the midpoint of the range set forth on the cover page of this prospectus) and a conversion date of                        , 2015; (3) no exercise of the underwriters' option to purchase additional shares of common stock to cover over-allotments; and (4) no exercise of outstanding options, we will have outstanding an aggregate of approximately                shares of common stock. Of these shares, all of the                shares of common stock to be sold in this offering, and any shares sold upon exercise of the underwriters' option to purchase additional shares to cover over-allotments, will be freely tradable in the public market without restriction or further registration under the Securities Act, unless the shares are held by any of our "affiliates" as such term is defined in Rule 144 of the Securities Act. All remaining shares of common stock held by existing stockholders immediately prior to the consummation of this offering will be "restricted securities" as such term is defined in Rule 144. These restricted securities were issued and sold by us, or will be issued and sold by us, in private transactions and are eligible for public sale only if registered under the Securities Act or if they qualify for an exemption from registration under the Securities Act, including the exemptions provided by Rule 144 or Rule 701, which rules are summarized below.

        As a result of the lock-up agreements referred to below and the provisions of Rule 144 and Rule 701 under the Securities Act, based on the number of shares of our common stock outstanding as of June 30, 2015, the shares of our common stock (excluding the shares sold in this offering) that will be available for sale in the public market are as follows:

Approximate Number of Shares
  First Date Available for Sale into Public Market
                  shares   180 days after the date of this prospectus, or longer if the lock-up period is extended, upon expiration of the lock-up agreements referred to below, subject in some cases to applicable volume limitations under Rule 144

Lock-Up Agreements

        In connection with this offering, we, our directors, our executive officers and substantially all of our other stockholders and option holders have agreed, subject to certain exceptions, with the underwriters not to dispose of or hedge any shares of our common stock or securities convertible into or exchangeable for shares of common stock during the period from the date of the lock-up agreement

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continuing through the date 180 days after the date of this prospectus, except with the prior written consent of Citigroup Global Markets Inc. and Leerink Partners LLC. Additionally, in connection with the concurrent private placement, CPRIT has entered into a 180-day lock-up agreement in favor of the underwriters of this offering.

        Following the lock-up periods set forth in the agreements described above, and assuming that the representatives of the underwriters do not release any parties from these agreements and that there is no extension of the lock-up period, all of the shares of our common stock that are restricted securities or are held by our affiliates as of the date of this prospectus will be eligible for sale in the public market in compliance with Rule 144 under the Securities Act.

Rule 144

        In general, under Rule 144, as currently in effect, once we have been subject to the public company reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, for at least 90 days, a person (or persons whose shares are required to be aggregated) who is not deemed to have been one of our "affiliates" for purposes of Rule 144 at any time during the three months preceding a sale, and who has beneficially owned restricted securities within the meaning of Rule 144 for at least six months, including the holding period of any prior owner other than one of our "affiliates," is entitled to sell those shares in the public market (subject to the lock-up agreement referred to above, if applicable) without complying with the manner of sale, volume limitations or notice provisions of Rule 144, but subject to compliance with the public information requirements of Rule 144. If such a person has beneficially owned the shares proposed to be sold for at least one year, including the holding period of any prior owner other than "affiliates," then such person is entitled to sell such shares in the public market without complying with any of the requirements of Rule 144 (subject to the lock- up agreement referred to above, if applicable). In general, under Rule 144, as currently in effect, once we have been subject to the public company reporting requirements of the Exchange Act for at least 90 days, our "affiliates," as defined in Rule 144, who have beneficially owned the shares proposed to be sold for at least six months are entitled to sell in the public market, upon expiration of any applicable lock-up agreements and within any three-month period, a number of those shares of our common stock that does not exceed the greater of:

        Such sales under Rule 144 by our "affiliates" or persons selling shares on behalf of our "affiliates" are also subject to certain manner of sale provisions, notice requirements and to the availability of current public information about us. Notwithstanding the availability of Rule 144, the holders of substantially all of our restricted securities have entered into lock-up agreements as referenced above and their restricted securities will become eligible for sale (subject to the above limitations under Rule 144) upon the expiration of the restrictions set forth in those agreements.

Rule 701

        In general, under Rule 701 as currently in effect, any of our employees, directors, officers, consultants or advisors who acquired common stock from us in connection with a written compensatory stock or option plan or other written agreement in compliance with Rule 701 under the Securities Act before the effective date of the registration statement of which this prospectus is a part (to the extent

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such common stock is not subject to a lock-up agreement) is entitled to rely on Rule 701 to resell such shares beginning 90 days after we become subject to the public company reporting requirements of the Exchange Act in reliance on Rule 144, but without compliance with the holding period requirements contained in Rule 144. Accordingly, subject to any applicable lock-up agreements, beginning 90 days after we become subject to the public company reporting requirements of the Exchange Act, under Rule 701 persons who are not our "affiliates," as defined in Rule 144, may resell those shares without complying with the minimum holding period or public information requirements of Rule 144, and persons who are our "affiliates" may resell those shares without compliance with Rule 144's minimum holding period requirements (subject to the terms of the lock-up agreement referred to below, if applicable).

Registration Rights

        Based on the number of shares outstanding as of June 30, 2015, after the consummation of this offering and the concurrent private placement, the holders of approximately 152.4 million shares of our common stock, plus an aggregate of                shares to be sold in the concurrent private placement and issuable pursuant to the accruing paid-in-kind dividend, based on an assumed initial public offering price of $            per share (the midpoint of the range set forth on the cover page of this prospectus) and a conversion date of                        , 2015, or their transferees, will, subject to any lock-up agreements they have entered into, be entitled to certain rights with respect to the registration of the offer and sale of those shares under the Securities Act. For a description of these registration rights, please see the section titled "Description of Capital Stock—Registration Rights." If the offer and sale of these shares are registered, they will be freely tradable without restriction under the Securities Act.

Stock Plans

        We intend to file with the SEC a registration statement under the Securities Act covering the shares of common stock that we may issue upon exercise of certain outstanding options reserved for issuance under our 2008 Long Term Incentive Plan, as amended, our 2015 Equity Incentive Award Plan and our 2015 Employee Stock Purchase Plan. Such registration statement is expected to be filed and become effective as soon as practicable after the consummation of this offering. Accordingly, shares registered under such registration statement will be available for sale in the open market following its effective date, subject to Rule 144 volume limitations and the lock-up agreements described above, if applicable.

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Material U.S. Federal Income Tax Consequences
to Non-U.S. Holders

        The following discussion is a summary of the material U.S. federal income tax consequences to Non-U.S. Holders (as defined below) of the purchase, ownership and disposition of our common stock issued pursuant to this offering, but does not purport to be a complete analysis of all potential tax effects. The effects of other U.S. federal tax laws, such as estate and gift tax laws, and any applicable state, local or non-U.S. tax laws are not discussed. This discussion is based on the U.S. Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations promulgated thereunder, judicial decisions, and published rulings and administrative pronouncements of the U.S. Internal Revenue Service (the "IRS"), in each case in effect as of the date hereof. These authorities may change or be subject to differing interpretations. Any such change or differing interpretation may be applied retroactively in a manner that could adversely affect a Non-U.S. Holder. We have not sought and will not seek any rulings from the IRS regarding the matters discussed below. There can be no assurance the IRS or a court will not take a contrary position to that discussed below regarding the tax consequences of the purchase, ownership and disposition of our common stock.

        This discussion is limited to Non-U.S. Holders that hold our common stock as a "capital asset" within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address all U.S. federal income tax consequences relevant to a Non-U.S. Holder's particular circumstances, including the impact of the Medicare contribution tax on net investment income. In addition, it does not address consequences relevant to Non-U.S. Holders subject to special rules, including, without limitation:

        If an entity treated as a partnership for U.S. federal income tax purposes holds our common stock, the tax treatment of a partner in the partnership will depend on the status of the partner, the activities of the partnership and certain determinations made at the partner level. Accordingly, partnerships holding our common stock and the partners in such partnerships should consult their tax advisors regarding the U.S. federal income tax consequences to them.

        INVESTORS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR

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SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF OUR COMMON STOCK ARISING UNDER THE U.S. FEDERAL ESTATE OR GIFT TAX LAWS OR UNDER THE LAWS OF ANY STATE, LOCAL OR NON-U.S. TAXING JURISDICTION OR UNDER ANY APPLICABLE INCOME TAX TREATY.

Definition of a Non-U.S. Holder

        For purposes of this discussion, a "Non-U.S. Holder" is any beneficial owner of our common stock that is neither a "U.S. person" nor an entity treated as a partnership for U.S. federal income tax purposes. A U.S. person is any person that, for U.S. federal income tax purposes, is or is treated as any of the following:

Distributions

        As described in the section entitled "Dividend Policy," we do not anticipate paying any cash dividends in the foreseeable future. However, if we do make distributions of cash or property on our common stock, such distributions will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Amounts not treated as dividends for U.S. federal income tax purposes will constitute a return of capital and first be applied against and reduce a Non-U.S. Holder's adjusted tax basis in its common stock, but not below zero. Any excess will be treated as capital gain and will be treated as described below under "—Sale or Other Taxable Disposition."

        Subject to the discussion below on effectively connected income, dividends paid to a Non-U.S. Holder will be subject to U.S. federal withholding tax at a rate of 30% of the gross amount of the dividends (or such lower rate specified by an applicable income tax treaty, provided the Non-U.S. Holder furnishes a valid IRS Form W-8BEN or W-8BEN-E (or other applicable documentation) certifying qualification for the lower treaty rate). A Non-U.S. Holder that does not timely furnish the required documentation, but that qualifies for a reduced treaty rate, may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS. Non-U.S. Holders should consult their tax advisors regarding their entitlement to benefits under any applicable income tax treaty.

        If dividends paid to a Non-U.S. Holder are effectively connected with the Non-U.S. Holder's conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment in the United States to which such dividends are attributable), the Non-U.S. Holder will be exempt from the U.S. federal withholding tax described above. To claim the exemption, the Non-U.S. Holder must furnish to the applicable withholding agent a valid IRS Form W-8ECI, certifying that the dividends are effectively connected with the Non-U.S. Holder's conduct of a trade or business within the United States.

        Any such effectively connected dividends will be subject to U.S. federal income tax on a net income basis at the regular graduated rates. A Non-U.S. Holder that is a corporation also may be

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subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected dividends, as adjusted for certain items. Non-U.S. Holders should consult their tax advisors regarding any applicable tax treaties that may provide for different rules.

Sale or Other Taxable Disposition

        A Non-U.S. Holder will not be subject to U.S. federal income tax on any gain realized upon the sale or other taxable disposition of our common stock unless:

        Gain described in the first bullet point above generally will be subject to U.S. federal income tax on a net income basis at the regular graduated rates. A Non-U.S. Holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected gain, as adjusted for certain items.

        Gain described in the second bullet point above will be subject to U.S. federal income tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty), which may be offset by certain U.S. source capital losses of the Non-U.S. Holder (even though the individual is not considered a resident of the United States), provided the Non-U.S. Holder has timely filed U.S. federal income tax returns with respect to such losses.

        With respect to the third bullet point above, we believe we currently are not, and do not anticipate becoming, a USRPHC. Because the determination of whether we are a USRPHC depends, however, on the fair market value of our USRPIs relative to the fair market value of our non-U.S. real property interests and our other business assets, there can be no assurance we currently are not a USRPHC or will not become one in the future. Even if we are or were to become a USRPHC, gain arising from the sale or other taxable disposition by a Non-U.S. Holder of our common stock will not be subject to U.S. federal income tax if our common stock is "regularly traded," as defined by applicable Treasury Regulations, on an established securities market, and such Non-U.S. Holder owned, actually and constructively, 5% or less of our common stock throughout the shorter of the five-year period ending on the date of the sale or other taxable disposition or the Non-U.S. Holder's holding period.

        Non-U.S. Holders should consult their tax advisors regarding any applicable tax treaties that may provide for different rules.

Information Reporting and Backup Withholding

        Payments of dividends on our common stock will not be subject to backup withholding, provided the applicable withholding agent does not have actual knowledge or reason to know the holder is a United States person and the holder either certifies its non-U.S. status, such as by furnishing a valid IRS Form W-8BEN, W-8BEN-E or W-8ECI, or otherwise establishes an exemption. However, information returns are required to be filed with the IRS in connection with any dividends on our common stock paid to the Non-U.S. Holder, regardless of whether any tax was actually withheld. In addition, proceeds of the sale or other taxable disposition of our common stock within the United

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States or conducted through certain U.S.-related brokers generally will not be subject to backup withholding or information reporting, if the applicable withholding agent receives the certification described above and does not have actual knowledge or reason to know that such holder is a United States person, or the holder otherwise establishes an exemption. Proceeds of a disposition of our common stock conducted through a non-U.S. office of a non-U.S. broker that does not have certain enumerated relationships with the United States generally will not be subject to backup withholding or information reporting.

        Copies of information returns that are filed with the IRS may also be made available under the provisions of an applicable treaty or agreement to the tax authorities of the country in which the Non-U.S. Holder resides or is established.

        Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a Non-U.S. Holder's U.S. federal income tax liability, provided the required information is timely furnished to the IRS.

Additional Withholding Tax on Payments Made to Foreign Accounts

        Withholding taxes may be imposed under Sections 1471 to 1474 of the Code (such Sections commonly referred to as the Foreign Account Tax Compliance Act, or "FATCA") on certain types of payments made to non-U.S. financial institutions and certain other non-U.S. entities. Specifically, a 30% withholding tax will be imposed on dividends on, or gross proceeds from the sale or other disposition after December 31, 2016 of, our common stock paid to a "foreign financial institution" or a "non-financial foreign entity" (each as defined in the Code), unless (1) the foreign financial institution undertakes certain diligence and reporting obligations, (2) the non-financial foreign entity either certifies it does not have any "substantial United States owners" (as defined in the Code) or furnishes identifying information regarding each substantial United States owner, or (3) the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption from these rules. If the payee is a foreign financial institution and is subject to the diligence and reporting requirements in (1) above, it must enter into an agreement with the U.S. Department of the Treasury requiring, among other things, that it undertake to identify accounts held by certain "specified United States persons" or "United States-owned foreign entities" (each as defined in the Code), annually report certain information about such accounts, and withhold 30% on certain payments to non-compliant foreign financial institutions and certain other account holders. Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules.

        Prospective investors should consult their tax advisors regarding the potential application of withholding under FATCA to their investment in our common stock.

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Underwriting

        Citigroup Global Markets Inc. and Leerink Partners LLC are acting as representatives of each of the underwriters named below. Subject to the terms and conditions set forth in an underwriting agreement among us and the underwriters, we have agreed to sell to the underwriters, and each of the underwriters has agreed, severally and not jointly, to purchase from us, the number of shares of common stock set forth opposite its name below.

Underwriter
  Number of
Shares
 

Citigroup Global Markets Inc. 

       

Leerink Partners LLC

       

Oppenheimer & Co. Inc. 

       

Cantor Fitzgerald & Co. 

       

Total

       

        Subject to the terms and conditions set forth in the underwriting agreement, the underwriters have agreed, severally and not jointly, to purchase all of the shares sold under the underwriting agreement if any of these shares are purchased. If an underwriter defaults, the underwriting agreement provides that the purchase commitments of the non-defaulting underwriters may be increased or the underwriting agreement may be terminated.

        We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make in respect of those liabilities.

        The underwriters are offering the shares, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel, including the validity of the shares, and other conditions contained in the underwriting agreement, such as the receipt by the underwriters of officers' certificates and legal opinions. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.

Commissions and Discounts

        The representatives have advised us that the underwriters propose initially to offer the shares to the public at the public offering price set forth on the cover of this prospectus and to dealers at that price less a concession not in excess of $            per share. After the initial offering, the public offering price, concession or any other term of the offering may be changed.

        The following table shows the public offering price, underwriting discount and proceeds before expenses to us. The information assumes either no exercise or full exercise by the underwriters of their option to purchase additional shares of our common stock.

 
  Per
Share
  Without
Option
  With
Option
 

Public offering price

  $                $                $               

Underwriting discount

  $                $                $               

Proceeds, before expenses, to us

  $                $                $               

        The expenses of the offering, not including the underwriting discount, are estimated at $             million and are payable by us. We have agreed to reimburse the underwriters for expenses relating to the clearing of this offering with the Financial Regulatory Authority and the qualification of our common stock under state securities laws (in an amount not to exceed $35,000 in the aggregate).

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Option to Purchase Additional Shares

        We have granted an option to the underwriters, exercisable for 30 days after the date of this prospectus, to purchase up to                     additional shares at the public offering price, less the underwriting discount. If the underwriters exercise this option, each will be obligated, subject to conditions contained in the underwriting agreement, to purchase a number of additional shares proportionate to that underwriter's initial amount reflected in the above table.

No Sales of Similar Securities

        We, our executive officers and directors and substantially all of our other existing security holders have agreed not to sell or transfer any common stock or securities convertible into or exchangeable or exercisable for common stock, for 180 days after the date of this prospectus without first obtaining the written consent of Citigroup Global Markets Inc. and Leerink Partners LLC. Specifically, we and these other persons have agreed, with certain limited exceptions, not to directly or indirectly:

        This lock-up provision applies to common stock and to securities convertible into or exchangeable or exercisable for common stock. It also applies to common stock owned now or acquired later by the person executing the agreement or for which the person executing the agreement later acquires the power of disposition.

NASDAQ Global Market Listing

        We have applied to list our common stock on The NASDAQ Global Market under the symbol "MIRN."

        Before this offering, there has been no public market for our common stock. The initial public offering price will be determined through negotiations between us and the representatives. In addition to prevailing market conditions, the factors to be considered in determining the initial public offering price are:

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        An active trading market for the shares may not develop. It is also possible that after the offering the shares will not trade in the public market at or above the initial public offering price.

        The underwriters do not expect to sell more than 5% of the shares in the aggregate to accounts over which they exercise discretionary authority.

Price Stabilization, Short Positions and Penalty Bids

        Until the distribution of the shares is completed, SEC rules may limit underwriters and selling group members from bidding for and purchasing our common stock. However, the representatives may engage in transactions that stabilize the price of the common stock, such as bids or purchases to peg, fix or maintain that price.

        In connection with the offering, the underwriters may purchase and sell our common stock in the open market. These transactions may include short sales, purchases on the open market to cover positions created by short sales and stabilizing transactions. Short sales involve the sale by the underwriters of a greater number of shares than they are required to purchase in the offering. "Covered" short sales are sales made in an amount not greater than the underwriters' option described above. The underwriters may close out any covered short position by either exercising their option or purchasing shares in the open market. In determining the source of shares to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the option granted to them. "Naked" short sales are sales in excess of such option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of our common stock in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of shares of common stock made by the underwriters in the open market prior to the completion of the offering.

        The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions.

        Similar to other purchase transactions, the underwriters' purchases to cover the syndicate short sales may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the market price of our common stock. As a result, the price of our common stock may be higher than the price that might otherwise exist in the open market. The underwriters may conduct these transactions on The NASDAQ Global Market, in the over-the-counter market or otherwise.

        Neither we nor any of the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of our common stock. In addition, neither we nor any of the underwriters make any representation that the representatives will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.

Electronic Distribution

        In connection with the offering, certain of the underwriters or securities dealers may distribute prospectuses by electronic means, such as e-mail.

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Other Relationships

        Some of the underwriters and their affiliates may in the future engage in investment banking and other commercial dealings in the ordinary course of business with us or our affiliates. They may in the future receive customary fees and commissions for these transactions.

        In addition, in the ordinary course of their business activities, the underwriters and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.

Notice to Prospective Investors in the European Economic Area

        In relation to each Member State of the European Economic Area (each, a "Relevant Member State"), no offer of shares may be made to the public in that Relevant Member State other than:

        Each person in a Relevant Member State who initially acquires any shares or to whom any offer is made will be deemed to have represented, acknowledged and agreed that it is a "qualified investor" within the meaning of the law in that Relevant Member State implementing Article 2(1)(e) of the Prospectus Directive. In the case of any shares being offered to a financial intermediary as that term is used in Article 3(2) of the Prospectus Directive, each such financial intermediary will be deemed to have represented, acknowledged and agreed that the shares acquired by it in the offer have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of any shares to the public other than their offer or resale in a Relevant Member State to qualified investors as so defined or in circumstances in which the prior consent of the representatives has been obtained to each such proposed offer or resale.

        The Company, the representatives and their affiliates will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements.

        This prospectus has been prepared on the basis that any offer of shares in any Relevant Member State will be made pursuant to an exemption under the Prospectus Directive from the requirement to publish a prospectus for offers of shares. Accordingly any person making or intending to make an offer in that Relevant Member State of shares which are the subject of the offering contemplated in this prospectus may only do so in circumstances in which no obligation arises for the Company or any of the underwriters to publish a prospectus pursuant to Article 3 of the Prospectus Directive in relation to such offer. Neither the Company nor the underwriters have authorized, nor do they authorize, the

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making of any offer of shares in circumstances in which an obligation arises for the Company or the underwriters to publish a prospectus for such offer.

        For the purpose of the above provisions, the expression "an offer to the public" in relation to any shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the shares to be offered so as to enable an investor to decide to purchase or subscribe the shares, as the same may be varied in the Relevant Member State by any measure implementing the Prospectus Directive in the Relevant Member State and the expression "Prospectus Directive" means Directive 2003/71/EC (including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member States) and includes any relevant implementing measure in the Relevant Member State and the expression "2010 PD Amending Directive" means Directive 2010/73/EU.

Notice to Prospective Investors in the United Kingdom

        In addition, in the United Kingdom, this document is being distributed only to, and is directed only at, and any offer subsequently made may only be directed at persons who are "qualified investors" (as defined in the Prospectus Directive) (i) who have professional experience in matters relating to investments falling within Article 19 (5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended, or the Order, and/or (ii) who are high net worth companies (or persons to whom it may otherwise be lawfully communicated) falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). This document must not be acted on or relied on in the United Kingdom by persons who are not relevant persons. In the United Kingdom, any investment or investment activity to which this document relates is only available to, and will be engaged in with, relevant persons.

Notice to Prospective Investors in Switzerland

        The shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange, or SIX, or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering or marketing material relating to the shares or the offering may be publicly distributed or otherwise made publicly available in Switzerland.

        Neither this document nor any other offering or marketing material relating to the offering, the Company or the shares have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of shares will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA (FINMA), and the offer of shares has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes, or CISA. The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of shares.

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Concurrent Private Placement

        In connection with a research grant awarded to us, the Cancer Prevention and Research Institute of Texas, or CPRIT, has agreed to purchase from us concurrently with this offering in a private placement approximately $16.8 million of our common stock at a price per share equal to the initial public offering price. The sale of these shares will not be registered under the Securities Act. The concurrent private placement is subject to certain closing conditions. The closing of our initial public offering is not conditioned upon the closing of the concurrent private placement. CPRIT will also enter into a registration rights agreement with us at the closing of the concurrent private placement. In addition, CPRIT has entered into a 180-day lock-up agreement in favor of the underwriters in this offering.


Legal Matters

        The validity of the issuance of our common stock offered in this prospectus will be passed upon for us by Latham & Watkins LLP, Menlo Park, California. Certain legal matters in connection with this offering will be passed upon for the underwriters by Ropes & Gray LLP, San Francisco, California.


Experts

        Ernst & Young LLP, independent registered public accounting firm, has audited our financial statements as of December 31, 2013 and 2014 and for each of the three years in the period ended December 31, 2014, as set forth in their report. We have included our financial statements in the prospectus and elsewhere in the registration statement in reliance on the reports of Ernst & Young LLP, an independent registered public accounting firm, given on their authority as experts in accounting and auditing.

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Where You Can Find More Information

        We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares of common stock offered hereby. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement or the exhibits and schedules filed therewith. For further information with respect to Mirna Therapeutics, Inc. and the common stock offered hereby, reference is made to the registration statement and the exhibits and schedules filed therewith. Statements contained in this prospectus regarding the contents of any contract or any other document that is filed as an exhibit to the registration statement are not necessarily complete, and each such statement is qualified in all respects by reference to the full text of such contract or other document filed as an exhibit to the registration statement. A copy of the registration statement and the exhibits and schedules filed therewith may be inspected without charge at the public reference room maintained by the SEC, located at 100 F Street N.E., Room 1580, Washington, D.C. 20549, and copies of all or any part of the registration statement may be obtained from such offices upon the payment of the fees prescribed by the SEC. Please call the SEC at 1-800-SEC-0330 for further information about the public reference room. The SEC also maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address is www.sec.gov.

        Upon consummation of this offering, we will become subject to the information and periodic reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and, in accordance therewith, will file periodic reports, proxy statements and other information with the SEC. Such periodic reports, proxy statements and other information will be available for inspection and copying at the public reference room and website of the SEC referred to above. We maintain a website at www.mirnarx.com. Upon consummation of this offering, you may access our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act with the SEC free of charge at our website as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. The reference to our website address does not constitute incorporation by reference of the information contained on our website, and you should not consider the contents of our website in making an investment decision with respect to our common stock.

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MIRNA THERAPEUTICS, INC.

Index to Financial Statements

 
  Page  

Report of Independent Registered Public Accounting Firm

    F-2  

Balance Sheets

    F-3  

Statements of Operations

    F-4  

Statements of Stockholders' Deficit

    F-5  

Statements of Cash Flows

    F-6  

Notes to Financial Statements

    F-7  

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Table of Contents

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
Mirna Therapeutics, Inc.

        We have audited the accompanying balance sheets of Mirna Therapeutics, Inc. (the "Company") as of December 31, 2014 and 2013, and the related statements of operations, stockholders' deficit and cash flows for each of the three years in the period ended December 31, 2014. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

        We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Mirna Therapeutics, Inc. at December 31, 2014 and 2013, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2014 in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP

Austin, Texas
July 15, 2015

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MIRNA THERAPEUTICS, INC.

Balance Sheets

(in thousands, except share and per share data)

 
   
   
   
  Pro Forma
Stockholders'
Equity
June 30,
2015
 
 
  December 31,    
 
 
  June 30,
2015
 
 
  2013   2014  
 
   
   
  (unaudited)
  (unaudited)
 

Assets

                         

Current Assets:

                         

Cash and cash equivalents

  $ 23,182   $ 9,319   $ 41,579        

Grant reimbursement and other receivables

    195     155     26        

Prepaid expenses and other current assets

    44     143     300        

Total current assets

    23,421     9,617     41,905        

Property and equipment, net

    49     116     149        

Deferred offering costs

    197     92     133        

Other noncurrent assets

    17                

Total assets

  $ 23,684   $ 9,825   $ 42,187        

Liabilities, Convertible Preferred Stock and Stockholders' Deficit

                         

Current Liabilities:

                         

Accounts payable

  $ 682   $ 871   $ 1,466        

Accrued expenses

    463     1,628     1,630        

Total liabilities

    1,145     2,499     3,096        

Commitments and contingencies (Note 14)

                         

Convertible preferred stock, $0.001 par value; 84,000,783 shares authorized at December 31, 2014; 157,650,538 shares authorized at June 30, 2015 (unaudited):

                         

Series A: 3,192,083 shares designated; 3,192,083 shares issued and outstanding at December 31, 2013 and 2014 and June 30, 2015 (unaudited); no shares issued and outstanding pro forma as of June 30, 2015 (unaudited); aggregate liquidation preference of $6.4 million at December 31, 2014 and June 30, 2015 (unaudited)

    6,384     6,384     6,384   $  

Series B: 540,341 shares designated; 540,341 shares issued and outstanding at December 31, 2013 and 2014 and June 30, 2015 (unaudited); no shares issued and outstanding pro forma as of June 30, 2015 (unaudited); aggregate liquidation preference of $1.5 million at December 31, 2014 and June 30, 2015 (unaudited)

    1,500     1,500     1,500      

Series B-1: 10,914,647 shares designated; 10,914,647 shares issued and outstanding at December 31, 2013 and 2014 and June 30, 2015 (unaudited); no shares issued and outstanding pro forma as of June 30, 2015 (unaudited); aggregate liquidation preference of $7.5 million at December 31, 2014 and June 30, 2015 (unaudited)

    7,498     7,498     7,498      

Series C: 69,353,712 shares designated; 69,353,695 shares issued and outstanding at December 31, 2013 and 2014, and June 30, 2015 (unaudited); no shares issued and outstanding pro forma as of June 30, 2015 (unaudited); aggregate liquidation preference of $39.9 million at December 31, 2014 and $41.3 million at June 30, 2015 (unaudited)

    37,071     39,895     41,295      

Series D: 733,649,755 shares designated (unaudited); No shares issued and outstanding at December 31, 2013 and 2014, 68,395,299 shares issued and outstanding at June 30, 2015 (unaudited); no shares issued and outstanding pro forma as of June 30, 2015 (unaudited); aggregate liquidation preference of $42.6 million at June 30, 2015 (unaudited)

            42,604      

Stockholders' Deficit:

                         

Common stock, $0.001 par value; 95,000,000 shares authorized at December 31, 2014; 175,100,000 shares authorized at June 30, 2015 (unaudited); 30,999 and 1,250,291 shares issued and outstanding at December 31, 2013 and 2014, respectively, 1,405,357 shares issued and outstanding at June 30, 2015 (unaudited); 153,801,422 shares issued and outstanding pro forma as of June 30, 2015 (unaudited)

        1     1     154  

Additional paid-in capital

    890             99,128  

Accumulated deficit

    (30,804 )   (47,952 )   (60,191 )   (60,191 )

Total stockholders' (deficit) equity

    (29,914 )   (47,951 )   (60,190 ) $ 39,091  

Total liabilities, convertible preferred stock and stockholders' deficit

  $ 23,684   $ 9,825   $ 42,187        

   

See accompanying notes.

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MIRNA THERAPEUTICS, INC.

Statements of Operations

(in thousands, except share and per share data)

 
  Year Ended December 31,   Six Months Ended
June 30,
 
 
  2012   2013   2014   2014   2015  
 
   
   
   
  (unaudited)
 

Operating expenses:

                               

Research and development

  $ 2,742   $ 4,391   $ 10,545   $ 4,256   $ 7,924  

General and administrative

    1,562     2,384     3,369     1,777     2,039  

Write-off of offering costs

            1,920          

Total operating expenses

    4,304     6,775     15,834     6,033     9,963  

Other income (expense):

                               

Change in fair value of option liability

        339              

Gain on extinguishment of note payable

    1,001                  

Interest expense

    (355 )                

Total other income (expense)

    646     339              

Net loss

  $ (3,658 ) $ (6,436 ) $ (15,834 ) $ (6,033 ) $ (9,963 )

Less: Accretion and dividends on convertible preferred stock

    (6,142 )   (2,324 )   (2,824 )   (1,400 )   (2,662 )

Net loss attributable to common stockholders

  $ (9,800 ) $ (8,760 ) $ (18,658 ) $ (7,433 ) $ (12,625 )

Net loss per share attributable to common stockholders—basic and diluted

  $ (373.52 ) $ (293.92 ) $ (19.40 ) $ (11.09 ) $ (9.34 )

Common shares used to compute basic and diluted net loss per share attributable to common stockholders

    26,237     29,804     961,963     670,035     1,351,526  

Pro forma net loss per common share (unaudited)—basic and diluted

              $ (0.19 )       $ (0.08 )

Common shares used to compute pro forma net loss per share (unaudited)—basic and diluted

                84,962,729           118,952,196  

   

See accompanying notes.

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MIRNA THERAPEUTICS, INC.

Statements of Stockholders' Deficit

(in thousands, except share amounts)

 
  Common Stock    
   
   
 
 
  Additional Paid-in
Capital
  Accumulated
Deficit
  Total
Stockholders'
Deficit
 
 
  Shares   Amount  

Balance at January 1, 2012

    25,306   $   $   $ (14,595 ) $ (14,595 )

Exercise of stock options

    2,276         1         1  

Stock-based compensation

            24         24  

Accretion of convertible preferred stock

            (25 )   (5,838 )   (5,863 )

Series C dividends

                (277 )   (277 )

Net loss

                (3,658 )   (3,658 )

Balance at December 31, 2012

    27,582             (24,368 )   (24,368 )

Exercise of stock options

    3,417         1         1  

Stock-based compensation

            163         163  

Reclassification of option liability

            3,050         3,050  

Accretion of convertible preferred stock (unaudited)

            (831 )       (831 )

Series C dividends

            (1,493 )       (1,493 )

Net loss

                (6,436 )   (6,436 )

Balance at December 31, 2013

    30,999         890     (30,804 )   (29,914 )

Exercise of stock options

    1,212,570     1     208         209  

Issuance of common stock

    6,722         4         4  

Stock-based compensation

            408         408  

Series C dividends

            (1,510 )   (1,314 )   (2,824 )

Net loss

                (15,834 )   (15,834 )

Balance at December 31, 2014

    1,250,291     1         (47,952 )   (47,951 )

Exercise of stock options (unaudited)

    155,066         35         35  

Stock-based compensation (unaudited)

            351         351  

Accretion of convertible preferred stock (unaudited)

            (181 )   (267 )   (448 )

Series C and Series D dividends (unaudited)

            (205 )   (2,009 )   (2,214 )

Net loss (unaudited)

                (9,963 )   (9,963 )

Balance at June 30, 2015 (unaudited)

    1,405,357   $ 1   $   $ (60,191 ) $ (60,190 )

   

See accompanying notes.

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MIRNA THERAPEUTICS, INC.

Statements of Cash Flows

(in thousands)

 
  Year Ended December 31,   Six Months
Ended June 30,
 
 
  2012   2013   2014   2014   2015  
 
   
   
   
  (unaudited)
 

Operating activities

                               

Net loss

  $ (3,658 ) $ (6,436 ) $ (15,834 ) $ (6,033 ) $ (9,963 )

Adjustment to reconcile net loss to net cash used in operating activities:

                               

Depreciation and amortization

    37     36     35     17     25  

Stock-based compensation

    24     163     408     186     351  

Issuance of stock for services

            4     4      

Gain on extinguishment of note payable

    (1,001 )                

Change in fair value of option liability

        (339 )            

Changes in operating assets and liabilities:           

                               

Grant reimbursement and other receivables

    (315 )   121     40     13     129  

Prepaid expenses and other current assets           

    (25 )   2     (99 )   (112 )   (69 )

Deferred offering costs

        (197 )   105     (1,770 )    

Other noncurrent assets

        (17 )   17          

Accounts payable

    721     (132 )   189     (240 )   326  

Accrued expenses

    48     303     1,165     524     2  

Deferred grant reimbursement

    (351 )                

Net cash used in operating activities

    (4,520 )   (6,496 )   (13,970 )   (7,411 )   (9,199 )

Investing activities

   
 
   
 
   
 
   
 
   
 
 

Purchase of property and equipment

        (7 )   (102 )   (21 )   (58 )

Net cash used in investing activities

        (7 )   (102 )   (21 )   (58 )

Financing activities

   
 
   
 
   
 
   
 
   
 
 

Proceeds from issuance of convertible preferred stock and option to purchase convertible preferred stock

    16,096     16,418             41,482  

Proceeds from exercise of stock options

    1     1     209     208     35  

Net proceeds from bridge notes from related parties

    750                  

Cash provided by financing activities

    16,847     16,419     209     208     41,517  

Net increase (decrease) in cash and cash equivalents

    12,327     9,916     (13,863 )   (7,224 )   32,260  

Cash and cash equivalents at beginning of year

    939     13,266     23,182     23,182     9,319  

Cash and cash equivalents at end of year

  $ 13,266   $ 23,182   $ 9,319   $ 15,958   $ 41,579  

Supplemental disclosure of non-cash investing activities

   
 
   
 
   
 
   
 
   
 
 

Conversion of note payable to convertible preferred stock

  $ 750   $   $   $   $  

   

See accompanying notes.

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MIRNA THERAPEUTICS, INC.

Notes to Financial Statements

1. Nature of Business and Basis of Presentation

Nature of business

        Mirna Therapeutics, Inc. ("Mirna" or "the Company") is a clinical stage biopharmaceutical company developing a broad pipeline of microRNA-based oncology therapeutics. The Company was incorporated in Delaware in December 2007 as a wholly-owned subsidiary of Asuragen, Inc. ("Asuragen") and was spun out to existing Asuragen stockholders in December 2009. The Company is located in Austin, Texas.

Basis of presentation

        The Company continues to be subject to a number of risks common to companies in similar stages of development. Principal among these risks are the uncertainties of technological innovations, dependence on key individuals, development of the same or similar technological innovations by the Company's competitors and protection of proprietary technology. The Company's ability to fund its planned clinical operations, including completion of its planned trials, is expected to depend on the amount and timing of cash receipts from future collaboration or product sales and/or financing transactions. The Company believes that its cash and cash equivalents of $9.3 million at December 31, 2014, plus the proceeds from a subsequent offering of the Company's Series D preferred stock completed in April 2015 (see Note 17), will enable the Company to maintain its current and planned operations for the foreseeable future.

Recent accounting pronouncements

        In June 2014, the Financial Accounting Standards Board, or FASB, issued ASU 2014-10, Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810 Consolidation. These updates remove the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. This standard is effective for annual reporting periods beginning after December 15, 2014. We have early adopted this standard in the presentation of our 2014 financial statements.

2. Summary of Significant Accounting Policies

Unaudited pro forma financial information

        On March 10, 2014, the Company's board of directors authorized management of the Company to submit on a confidential basis a registration statement with the Securities and Exchange Commission ("SEC") for the Company to sell shares of its common stock to the public. Upon the closing of a qualified initial public offering, all of the Company's outstanding convertible preferred stock will automatically convert into common stock. The unaudited pro forma stockholders' equity as of June 30, 2015 assumes the conversion of all outstanding convertible preferred stock into shares of common stock upon the completion of this proposed offering. The unaudited pro forma stockholders' equity excludes

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MIRNA THERAPEUTICS, INC.

Notes to Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

shares of common stock issuable to holders of Series C and Series D convertible preferred stock as a result of the accrued paid in-kind dividends in connection with the conversion of all shares of Series C and Series D convertible preferred stock.

        Unaudited pro forma net loss per share attributable to common stockholders is computed using the weighted-average number of common shares outstanding after giving effect to the conversion of all convertible preferred stock into shares of common stock as if such conversion had occurred at the beginning of the period presented, or the date of original issuance, if later. Accordingly, the pro forma basic and diluted net loss per share attributable to common stockholders excludes the accretion to redemption value and accretion of cumulative convertible preferred stock dividends. The pro forma basic and diluted net loss per share attributable to common stockholders excludes the effect of shares of common stock issuable to holders of Series C and Series D convertible preferred stock as a result of the accrued paid in-kind dividends in connection with the conversion of all shares of Series C and Series D convertible preferred stock.

Use of estimates

        The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires the Company's management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

        The Company utilizes significant estimates and assumptions in determining the fair value of its common stock. The board of directors determined the estimated fair value of the Company's common stock based on a number of objective and subjective factors, including external market conditions affecting the biotechnology industry sector and the prices at which the Company sold shares of convertible preferred stock, the superior rights and preferences of securities senior to its common stock at the time and the likelihood of achieving a liquidity event, such as an initial public offering or sale of the Company.

        The Company utilized various valuation methodologies in accordance with the framework of the American Institute of Certified Public Accountants, or AICPA, Audit and Accounting Practice Aid Series: Valuation of Privately Held Company Equity Securities Issued as Compensation, or the AICPA Practice Aid, to estimate the fair value of its common stock. The methodologies included the Option Pricing Method utilizing the Backsolve Method (a form of the market approach defined in the AICPA Practice Aid) and the Probability-Weighted Expected Return Method based upon the probability of occurrence of certain future liquidity events such as an initial public offering or sale of the Company. Each valuation methodology includes estimates and assumptions that require the Company's judgment. Significant changes to the key assumptions used in the valuations could result in different fair values of common stock at each valuation date.

Research and development costs

        Research and development costs are expensed as incurred. Research and development costs include salaries and personnel-related costs, consulting fees, fees paid for contract research services, the costs of laboratory equipment and facilities, license fees and other external costs. The Company accounts for government grants as a reduction of research and development expenses. Government grants are recorded at the time the related research and development costs have been paid by the

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MIRNA THERAPEUTICS, INC.

Notes to Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

Company and, accordingly, become eligible for reimbursement. The Company accrues for government grants that have been earned but not yet received.

        Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are deferred and capitalized. The capitalized amounts are expensed as the related goods are delivered or the services are performed.

Stock-based compensation

        The Company accounts for its stock-based compensation awards in accordance with ASC Topic 718, Compensation—Stock Compensation ("ASC 718"). ASC 718 requires all stock-based payments to employees, including grants of employee stock options, to be recognized in the statements of operations based on their grant date fair values. For stock options granted to employees and to members of the board of directors for their services on the board of directors, the Company estimates the grant date fair value of each option award using the Black-Scholes option-pricing model. The use of the Black-Scholes option-pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the common stock. For awards subject to service-based vesting conditions, the Company recognizes stock-based compensation expense, net of estimated forfeitures, equal to the grant date fair value of stock options on a straight-line basis over the requisite service period.

        During the years ended December 31, 2012, 2013 and 2014 and the six months ended June 30, 2015 (unaudited), the Company recorded stock-based compensation expense for employee stock options, which was allocated as follows in the statements of operations (in thousands):

 
  Year Ended
December 31,
   
 
 
  Six Months
Ended
June 30, 2015
 
 
  2012   2013   2014  
 
   
   
   
  (unaudited)
 

Research and development expense

  $ 6   $ 55   $ 110   $ 81  

General and administrative expense

    18     108     298     270  

  $ 24   $ 163   $ 408   $ 351  

        The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option-pricing model that uses the assumptions noted in the table below. Expected volatility for the Company's common stock was determined based on an average of the historical volatility of a peer group of similar companies. The Company has limited stock option exercise information. Accordingly, the expected term of stock options granted was calculated using the simplified method, which represents the average of the contractual term of the stock option and the weighted-average vesting period of the stock option. The assumed dividend yield is based upon the Company's expectation of not paying dividends in the foreseeable future. The risk-free rate for periods within the expected life of the stock option is based upon the U.S. Treasury yield curve in effect at the time of grant.

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MIRNA THERAPEUTICS, INC.

Notes to Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

        The assumptions used in the Black-Scholes option-pricing model for stock option grants during the years ended December 31, 2012, 2013 and 2014 and the six months ended June 30, 2015 (unaudited) are as follows:

 
  Year Ended December 31,    
 
  Six Months
Ended
June 30, 2015
 
  2012   2013   2014
 
   
   
   
  (unaudited)

Expected life (in years)

  4.3 - 6.1   5.6 - 6.1   5.8 - 6.1   5.6 - 6.7

Risk-free interest rate

  0.5% - 1.0%   0.9% - 2.0%   1.8% - 2.8%   1.6% - 2.0%

Expected volatility

  80.3% - 85.5%   74.7% - 76.2%   75.3% - 85.4%   79.3% - 84.7%

Expected dividend yield

       

Weighted-average grant date fair value per share

  $0.35   $0.13   $0.36   $0.30

        No related tax benefits were recognized for the years ended December 31, 2012, 2013 or 2014 and the six months ended June 30, 2015 (unaudited).

Income Taxes

        Income taxes are recorded in accordance with ASC 740, Accounting for Income Taxes ("ASC 740"), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. The Company determines its deferred tax assets and liabilities based on differences between financial reporting and tax bases of assets and liabilities, which are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

        The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. As of December 31, 2012, 2013 and 2014 and June 30, 2015 (unaudited), the Company does not have any significant uncertain tax positions.

Comprehensive loss

        Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions, and other events and circumstances from non-owner sources. The Company had no items of other comprehensive loss for the years ended December 31, 2012, 2013 and 2014 and the six months ended June 30, 2015 (unaudited).

Cash and cash equivalents

        The Company considers highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash equivalents, which consist primarily of money market funds, are stated at fair value.

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MIRNA THERAPEUTICS, INC.

Notes to Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

Concentrations of credit risk

        Financial instruments that potentially subject the Company to credit risk consist primarily of cash and cash equivalents. The Company holds these investments in highly-rated financial institutions, and limits the amounts of credit exposure to any one financial institution. These amounts at times may exceed federally insured limits. The Company has not experienced any credit losses in such accounts and does not believe it is exposed to any significant credit risk on these funds. The Company has no off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts or other hedging arrangements.

Fair value measurements

        The Company records money market funds at fair value. ASC Topic 820, Fair Value Measurements and Disclosures, establishes a fair value hierarchy for those instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company's own assumptions (unobservable inputs). The hierarchy consists of three levels:

        The following table summarizes the money market funds measured at fair value on a recurring basis as of June 30, 2015 (unaudited; in thousands):

 
  Level 1   Level 2   Level 3   Total  

Money market funds

  $ 41,579   $   $   $ 41,579  

Total

  $ 41,579   $   $   $ 41,579  

        The following table summarizes the money market funds measured at fair value on a recurring basis as of December 31, 2014 (in thousands):

 
  Level 1   Level 2   Level 3   Total  

Money market funds

  $ 9,319   $   $   $ 9,139  

Total

  $ 9,319   $   $   $ 9,139  

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MIRNA THERAPEUTICS, INC.

Notes to Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

        The following table summarizes the money market funds measured at fair value on a recurring basis as of December 31, 2013 (in thousands):

 
  Level 1   Level 2   Level 3   Total  

Money market funds

  $ 23,182   $   $   $ 23,182  

Total

  $ 23,182   $   $   $ 23,182  

        The carrying amounts reflected in the balance sheets for cash, prepaid expenses and other current assets, accounts payable, and accrued expenses approximate their fair values at December 31, 2013 and 2014, due to their short-term nature.

        There have been no changes to the valuation methods during the years ended December 31, 2013 and 2014, and the six months ended June 30, 2015 (unaudited). The Company evaluates transfers between levels at the end of each reporting period. There were no transfers of assets or liabilities between Level 1, Level 2 or Level 3 during the years ended December 31, 2012, 2013 or 2014, and the six months ended June 30, 2015 (unaudited).

Property and equipment

        Property and equipment consist of laboratory equipment, computer equipment and software, leasehold improvements, furniture and fixtures and office equipment. Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the respective assets:

Laboratory equipment

  5-7 years

Computer equipment and software

 

3 years

Leasehold improvements

 

shorter of asset's useful life or remaining term of lease

Furniture and fixtures

 

5 years

Office equipment

 

5 years

        Costs of major additions and betterments are capitalized; maintenance and repairs, which do not improve or extend the life of the respective assets, are charged to expense as incurred. Upon retirement or sale, the cost of the disposed asset and the related accumulated depreciation are removed from the accounts and the resulting gain or loss is recognized.

Impairment of long-lived assets

        The Company periodically evaluates its long-lived assets for potential impairment in accordance with ASC Topic 360, Property, Plant and Equipment. Potential impairment is assessed when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered. Recoverability of these assets is assessed based on undiscounted expected future cash flows from the assets, considering a number of factors, including past operating results, budgets and economic projections, market trends and product development cycles. If impairments are identified,

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MIRNA THERAPEUTICS, INC.

Notes to Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

assets are written down to their estimated fair value. The Company has not recognized any impairment charges through December 31, 2014.

Deferred offering costs

        Deferred offering costs, which consist of direct incremental legal and professional accounting fees relating to preferred stock and initial public offerings, are capitalized. The deferred offering costs are offset against the proceeds from the offering upon the consummation of the offering. In 2014, the Company's initial public offering was delayed and the deferred offering costs for that offering in the amount of $1,920,000 were expensed.

Segment and geographic information

        Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision making group, in making decisions on how to allocate resources and assess performance. The Company's chief operating decision maker is the chief executive officer. The Company and the chief operating decision maker view the Company's operations and manage its business as one operating segment. The Company operates in only one geographic segment.

Subsequent events

        The Company considered events or transactions occurring after the balance sheet date but prior to the date the consolidated financial statements are available to be issued for potential recognition or disclosure in its consolidated financial statements. Subsequent events have been evaluated through the date the financial statements were available to be issued. (See Note 17)

Convertible preferred stock

        The Company initially records convertible preferred stock that may be redeemed at the option of the holder or based upon the occurrence of events not under the Company's control outside of stockholders' deficit at the value of the proceeds received, net of issuance costs. Subsequently, the Company adjusts the carrying value to the redemption value at each reporting period. In the absence of retained earnings, these accretion charges are recorded against additional paid-in capital, if any, and then to accumulated deficit.

Net loss per share attributable to common stockholders

        The Company uses the two-class method to compute net loss per common share attributable to common stockholders because the Company has issued securities, other than common stock, that contractually entitle the holders to participate in dividends and earnings of the Company. The two-class method requires earnings for the period to be allocated between common stock and participating securities based upon their respective rights to receive distributed and undistributed earnings. Holders of the Company's Series A, Series B, Series B-1, Series C and Series D convertible preferred stock are entitled, on a pari passu basis, to receive dividends when, as and if declared by the board of directors, prior and in preference to any declaration or payment of any dividend on the common stock until such time as the total dividends paid on each share of Series C and Series D convertible preferred stock is equal to its cumulative dividends. The Series A, Series B and Series B-1 convertible preferred stock would also be entitled to the dividend amount paid to common stockholders on an as-if-converted-to-common stock basis. As a result, all series of the Company's convertible preferred stock are considered participating securities.

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MIRNA THERAPEUTICS, INC.

Notes to Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

        Under the two-class method, for periods with net income, basic net income per common share is computed by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Net income attributable to common stockholders is computed by subtracting from net income the portion of current year earnings that the participating securities would have been entitled to receive pursuant to their dividend rights had all of the year's earnings been distributed. No such adjustment to earnings is made during periods with a net loss, as the holders of the participating securities have no obligation to fund losses. Diluted net loss per common share is computed by using the weighted-average number of shares of common stock outstanding. Due to net losses for the years ended December 31, 2012, 2013 and 2014 and the six months ended June 30, 2014 and 2015 (unaudited), basic and diluted net loss per share attributable to common stockholders were the same, as the effect of all potentially dilutive securities would have been anti-dilutive.

Reverse stock split

        In October 2012, the stockholders approved a reverse stock split of the outstanding shares of the Company's common stock, Series A convertible preferred stock, and Series B convertible preferred stock in which every 10 shares were converted into one share of the related stock. No fractional shares were issued as a result of the reverse stock split. The par value for each class of stock remained at $0.001 per share. The effect of the reverse stock split has been recognized retroactively to inception, in all share and price per share data presented in the financial statements and the notes to the financial statements.

3. Cancer Prevention and Research Institute of Texas Grant and Other Grants

        In August 2010, the Company received a $10.3 million commercialization award from the State of Texas through the Cancer Prevention and Research Institute of Texas ("CPRIT"). CPRIT was established to expedite innovation and commercialization in the area of cancer research and to enhance access to evidence-based prevention programs and services throughout the state. The commercialization award is a reimbursement grant. For the years ended December 31, 2012 and 2013, the Company recognized approximately $3,767,000 and $3,672,000, respectively, of grant proceeds from CPRIT as a reduction of research and development expense. There were no grant proceeds from CPRIT for the year ended December 31, 2014. The award was a three-year award that was funded annually, and the contract terminated on January 31, 2014. Additionally, the Company is obligated to make certain payments to CPRIT that survive termination. The Company accounted for advances received from the award as deferred grant reimbursement revenue and recorded a reduction of research and development expenses as qualifying research and development expenditures were incurred. Under the terms of the award, the Company is required to pay to CPRIT a portion of its revenues from sales of certain products by the Company, or received from the Company's licensees or sublicensees, at a percentage in the low single digits until the aggregate amount of such payments equals a specified multiple of the grant amount, and thereafter at a rate of less than one percent, subject to the Company's right, under certain circumstances, to make a one-time payment in a specified amount to CPRIT to buy out such payment obligations. At such time when the Company records revenues that are subject to royalties owed to CPRIT, the Company will record such royalties as cost of revenues in the period in which the related revenue is recorded. If the Company exercises its right to make a one-time payment to CPRIT

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MIRNA THERAPEUTICS, INC.

Notes to Financial Statements (Continued)

3. Cancer Prevention and Research Institute of Texas Grant and Other Grants (Continued)

to buy out the royalty payment obligations, the Company will record the entire one-time payment as cost of revenues in the period in which it exercises such right.

        Total government grants recognized as a reduction of research and development expenses during the years ended December 31, 2012, 2013 and 2014 were $3,931,000, $3,850,000 and $81,000, respectively. Total government grants recognized as a reduction of research and development expenses during the six months ended June 30, 2014 and 2015 were $37,000 (unaudited) and $188,000 (unaudited), respectively.

4. Texas Emerging Technology Fund Award

        In November 2009, the Texas Emerging Technology Fund ("TETF"), an economic development affiliate of the State of Texas, agreed to invest $5.0 million in the Company, with $2.5 million invested in 2009 and an additional $2.5 million invested in 2010. In exchange for the investment, the Company issued to the TETF a $5.0 million note payable with interest accrued at 8% per annum and a warrant to acquire the Company's capital stock (the "TETF Warrant"), with the number of shares and type of capital stock to be determined based on the Company's subsequent financing activity. The TETF Warrant was exercisable for $0.001 per share, the par value of the Company's capital stock.

        The note payable and the related interest expense was to become payable only if an event of default occurred prior to November 11, 2019. If no events of default occurred prior to such time then the note payable and all related accrued interest were to be extinguished. The events of default included requirements for the Company to remain in business, continue microRNA development activities and remain in the State of Texas.

        The number of shares of capital stock for which the TETF Warrant was to be exercised was based on the terms of the first financing transaction that met certain criteria (a "Qualifying Financing Transaction"). In August 2011, the Company completed a $1.5 million Series B convertible preferred stock financing, which qualified as a Qualifying Financing Transaction. The TETF exercised its rights under the TETF Warrant and acquired 2,243,330 shares of Series B convertible preferred stock.

        At the time of issuance, the Company allocated all of the $5.0 million of proceeds received to the fair value of the warrant, which resulted in a 100% debt discount recorded on the note payable. The Company accreted the debt discount using the interest method over the 10-year life of the note.

        In October 2012, in conjunction with an offering of Series C convertible preferred stock, the TETF amended its agreement with the Company in which the TETF agreed to exchange the 2,243,330 shares of Series B convertible preferred stock it held for 10,914,647 shares of the Company's Series B-1 convertible preferred stock. Also, as part of the amendment, the Company's note with the TETF was deemed satisfied in full and canceled, and the Company was released from of all repayment obligations. The Company recorded a gain on extinguishment of the TETF note payable and related accrued interest in the amount of $1.0 million.

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MIRNA THERAPEUTICS, INC.

Notes to Financial Statements (Continued)

5. Property and Equipment

        Property and equipment consisted of the following (in thousands):

 
  December 31   June 30,  
 
  2013   2014   2015  
 
   
   
  (unaudited)
 

Machinery, computers and equipment

  $ 271   $ 373   $ 431  

Leasehold improvements

    18     18     18  

Accumulated depreciation

    (240 )   (275 )   (300 )

  $ 49   $ 116   $ 149  

        Depreciation expense was $37,000, $36,000 and $35,000 in 2012, 2013 and 2014, respectively. Depreciation expense was approximately $17,000 (unaudited) and $25,000 (unaudited) for the six months ended June 30, 2014 and 2015, respectively.

6. Accrued expenses

        Accrued expenses consist of the following (in thousands):

 
  December 31,   June 30,  
 
  2013   2014   2015  
 
   
   
  (unaudited)
 

Accrued compensation and related items

  $ 208   $ 243   $ 508  

Accrued professional fees

    65     210     303  

Accrued clinical trial costs

    152     551     798  

Accrued drug product costs

        525      

Accrued other

    38     99     21  

  $ 463   $ 1,628   $ 1,630  

7. Convertible Preferred Stock

        During 2009, in connection with the spin-out of the Company from Asuragen, the Company issued 3,192,083 shares of Series A convertible preferred stock ("Series A") in exchange for $1,073,000 of intellectual property assets and in exchange for satisfaction of a note payable and accrued but unpaid interest of $5,311,000.

        In August 2011, the Company issued 540,341 shares of Series B convertible preferred stock ("Series B") for gross proceeds of $1,500,000.

        In 2011, the Company issued 2,243,330 shares of Series B convertible preferred stock upon the exercise of the TETF Warrant.

        In October 2012, as described in Note 4, the Company exchanged 2,243,330 shares of Series B convertible preferred stock for 10,914,647 shares of Series B-1 convertible preferred stock ("Series B-1").

        In October 2012, at the initial funding of an offering of the Company's Series C convertible preferred stock ("Series C"), the Company issued 35,463,724 shares with net proceeds totaling

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MIRNA THERAPEUTICS, INC.

Notes to Financial Statements (Continued)

7. Convertible Preferred Stock (Continued)

$16.8 million and an option to purchase 33,889,971 additional shares of Series C at $0.509 per share, or $17.3 million. In December 2013, the option was exercised, the second funding occurred and the Company issued 33,889,971 shares of Series C with net proceeds of $16.4 million. The option to purchase Series C was recorded as a liability with an initial fair value of $3.3 million. The fair value of the option of $3.0 million at the date of exercise was reclassed to additional paid-in capital.

        With closing dates in March 2015 and April 2015, the Company issued 68,395,299 (unaudited) shares of the Company's Series D convertible preferred stock ("Series D") with gross proceeds of $41.8 million (unaudited). (See Note 17)

        The convertible preferred stock has the following characteristics:

Conversion

        The Series A, Series B, Series B-1, Series C and Series D are convertible into common stock at any time at the option of the holders. The conversion price is initially set at the original issue price per share of the convertible preferred stock and is adjusted to prevent dilution for stock splits, combinations and dividends.

        The Company's convertible preferred stock shall automatically convert into shares of common stock at the then-applicable conversion price for each such series, immediately upon the closing of a firm underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering the offer and sale of common stock at a per share price of at least $1.527 and in which the gross proceeds of the Company are at least $40,000,000, before underwriting discounts, commissions and fees. At June 30, 2015, the minimum share price in an initial public offering to cause an automatic conversion was increased to $1.833 per share (unaudited). The Company's convertible preferred stock shall also automatically convert upon an affirmative vote of at least a majority of the convertible preferred stockholders voting together as a single class on an as-if converted basis.

Voting

        Holders of the Company's convertible preferred stock are entitled to voting rights equal to holders of common stock. Holders of the Company's convertible preferred stock are also entitled to vote on certain matters with all shares of convertible preferred stock voting as a single class. Holders of the Company's Series D convertible preferred stock are also entitled to vote on certain matters with all Series D shares voting as a single class.

Dividends

        Subject to certain circumstances, holders of shares of Series C are entitled to receive cumulative dividends at a rate per annum of 8%, payable in cash or in kind at the option of the holder of the stock, prior and in preference to any payment of dividends on shares of Series A, Series B, Series B-1 and common stock. Such dividends are payable in cash or in-kind in the event of a liquidation, redemption or conversion. In the event of a conversion of the Series C shares in connection with an initial public offering the cumulative dividends are only payable in-kind. Prior to the Series D issuance the number of Series C preferred shares payable in-kind for Series C dividends were calculated using

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MIRNA THERAPEUTICS, INC.

Notes to Financial Statements (Continued)

7. Convertible Preferred Stock (Continued)

the Series C issue price, subsequent to the Series D issuance the Series C preferred shares payable in-kind are calculated using the Series D issue price.

        Subject to certain circumstances, holders of shares of Series D are entitled to receive cumulative dividends at a rate per annum of 8%, payable in cash or in kind at the option of the holder of the stock, prior and in preference to any payment of dividends on shares of any other class or series of stock. Such dividends are payable in cash or in-kind in the event of a liquidation, redemption or conversion. In the event of a conversion of the Series D shares in connection with an initial public offering, the cumulative dividends are only payable in-kind.

        Series C and D cumulative dividends paid in-kind in common shares in connection with an initial public offering will use the fair value of the common shares as reflected on the cover of the final prospectus.

        Holders of the Series A, Series B and Series B-1 are entitled to receive noncumulative dividends when and as declared by the board of directors of the Company. In the event dividends are declared, dividends related to Series B-1 must be satisfied prior to payment of any dividends on the Series A and Series B, which must be satisfied prior to payment of any dividends on the common stock.

Liquidation

        In the event of any liquidation, dissolution or winding up of the affairs of the Company, merger or sale resulting in a change of control, or sale or license of all assets, the holders of the then-outstanding shares shall receive an amount per share equal to the sum of $0.611, $0.509, $0.687, $2.106 and $1.33 per share of Series D, Series C, Series B-1, Series B and Series A, respectively, plus all accrued and/or declared but unpaid dividends, payable in preference and priority to any payments made to the holders of the then-outstanding preferred or common stock. In the event that the Series B-1 has been deemed converted to common stock prior to the liquidation amounts being paid to Series A or Series B holders, the amount per share to be received by the holders of the Series B and Series A would be adjusted to $2.776 and $2.00 per share, respectively. If upon the occurrence of such an event that the assets and funds of the Company are insufficient to pay the holders of the convertible preferred stock, then the entire assets and funds of the Company legally available for distribution shall be distributed ratably to the holders of the convertible preferred stock in order of preference. Series D and Series C has preference and priority to any liquidation payments to Series B-1 holders, Series C has preference and priority to any liquidation payments made to Series B-1 holders, which, in turn, has preference and priority to any liquidation payments to Series A and Series B shareholders, which are treated as equal in preference.

        After the distributions have been made to the holders of the Series D, Series C, Series B-1, Series B and Series A, the remaining available assets of the Company will be distributed ratably to the holders of shares of common stock, and holders of shares of Series B, Series C and Series D on the number of as-converted shares of common stock held.

Redemption

        At any time after March 27, 2019, with a written request from at least sixty percent of the holders of the then-outstanding Series D, the Company will redeem the requested shares of the Series D at an

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MIRNA THERAPEUTICS, INC.

Notes to Financial Statements (Continued)

7. Convertible Preferred Stock (Continued)

amount equal to the original issue price, plus any accrued and/or declared but unpaid dividends, where the original purchase price is $0.611. The redemption amount is payable in three annual installments.

        At any time after October 22, 2017, with a written request from the majority holders of the then-outstanding Series C, the Company will redeem the requested shares of the Series C at an amount equal to the original issue price, plus any accrued and/or declared but unpaid dividends, where the original purchase price is $0.509. The redemption amount is payable in three annual installments.

        In the event of a default, as defined, prior to the earliest to occur of November 11, 2019, the TETF no longer owning the Series B-1 convertible preferred stock or a deemed liquidation event, the Company shall redeem all shares of Series B-1 convertible preferred stock owned by the TETF at the greater of $2.06 per share or three times fair market value, as defined.

        The Series A and Series B are not entitled to any redemption rights. However, because a majority of the Company's outstanding stock is in the control of the convertible preferred stockholders who also control the Company's board of directors, a hostile takeover or other sale could occur outside the Company's control and thereby trigger a "deemed liquidation" and payment of liquidation preferences. Accordingly, the Company has classified convertible preferred stock outside of stockholders' deficit for all periods presented.

        The Company adjusts the carrying value of the convertible preferred stock to the liquidation preferences of such shares at each reporting period end. The change in carrying value of the convertible preferred stock is recorded as a charge to additional paid-capital, if any, and then to accumulated deficit.

        The Company has evaluated each of its series of convertible preferred stock and determined that each series should be considered an "equity host" and not a "debt host" as defined by ASC 815, Derivatives and Hedging. This evaluation is necessary in order to determine if any embedded features require bifurcation and, therefore, separate accounting as a derivative liability. The Company's analysis followed the "whole instrument approach," which compares an individual feature against the entire convertible preferred stock instrument which includes that feature. The Company's analysis was based on a consideration of the convertible preferred stock's economic characteristics and risks and more specifically evaluated all the stated and implied substantive terms and features including (i) whether the convertible preferred stock included redemption features, (ii) how and when any redemption features could be exercised, (iii) whether the holders of convertible preferred stock were entitled to dividends, (iv) the voting rights of the convertible preferred stock and (v) the existence and nature of any conversion rights. As a result of the Company's conclusion that the convertible preferred stock represents an equity host, the conversion feature of all series of convertible preferred stock is considered to be clearly and closely related to the associated convertible preferred stock host instrument. Accordingly, the conversion feature of all series of convertible preferred stock is not considered an embedded derivative that requires bifurcation.

        The Company accounts for potentially beneficial conversion features under ASC 740-20, Debt with Conversion and Other Options. At the time of each of the issuances of convertible preferred stock, the Company's common stock into which each series of the Company's preferred stock is convertible had an estimated fair value less than the effective conversion prices of the convertible preferred stock. Therefore, there was no intrinsic value on the respective commitment dates.

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MIRNA THERAPEUTICS, INC.

Notes to Financial Statements (Continued)

8. Common Stock

        The voting, dividend and liquidation rights of holders of shares of common stock are subject to and qualified by the rights, powers and preferences of the holders of shares of convertible preferred stock. The Company's common stock has the following characteristics:

Voting

        The holders of shares of common stock are entitled to one vote for each share of common stock held at all meetings of stockholders and written actions in lieu of meetings.

Dividends

        The holders of shares of common stock are entitled to receive dividends, if and when declared by the Company's board of directors. Cash dividends may not be declared or paid to holders of common stock until paid on each series of outstanding convertible preferred stock in accordance with their respective terms. As of December 31, 2014 and June 30, 2015 (unaudited), no cash dividends have been declared or paid since the Company's inception.

Reserved for future issuance

        The Company has reserved for future issuance the following number of shares of common stock as of December 31, 2013 and 2014 and June 30, 2015 (unaudited):

 
  December 31    
 
 
  June 30,
2015
 
 
  2013   2014  
 
   
   
  (unaudited)
 

Conversion of Series A convertible preferred stock

    3,192,083     3,192,083     3,192,083  

Conversion of Series B convertible preferred stock

    540,341     540,341     540,341  

Conversion of Series B-1 convertible preferred stock

    10,914,647     10,914,647     10,914,647  

Conversion of Series C convertible preferred stock

    69,353,695     69,353,695     69,353,695  

Conversion of Series D convertible preferred stock

            68,395,299  

Options to purchase common stock

    8,310,741     8,825,459     14,545,150  

    92,311,507     92,826,225     166,941,215  

9. Stock Option Plans

        During 2008, the Company adopted the 2008 Long Term Incentive Plan, which allows for incentive stock options for its employees and nonqualified stock options (inclusive of restricted stock units and stock appreciation rights) (collectively, the "2008 Plan") for employees and nonemployees under which an aggregate of 4,958,740 stock options and stock purchase rights may be granted. In December 2013, the total amount available for grant under the 2008 Plan was increased by 3,363,000 to 8,321,740. In March 2014, the Company's board of directors approved an increase of 1,727,288 shares available for

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MIRNA THERAPEUTICS, INC.

Notes to Financial Statements (Continued)

9. Stock Option Plans (Continued)

grant pursuant to the 2008 Plan to 10,049,028. In March 2015, the total amount of available to grant under the 2008 Plan was increased in conjunction with the Company's offering of Series D preferred stock by 5,874,757 shares to 15,923,785 (unaudited). Options under the 2008 Plan have a maximum life of 10 years. Options vest at various intervals, as determined by the Company's board of directors at the date of grant.

        The Company's stock option activity for the years ended December 31, 2012, 2013 and 2014 and the six months ended June 30, 2015 was as follows:

 
  Number
of Shares
(in thousands)
  Weighted-
Average
Exercise
Price
  Weighted-Average
Contractual
Life (years)
 

Outstanding at January 1, 2012

    477,593   $ 0.50     6.73  

Granted

    14,579     0.50        

Exercised

    (2,276 )   0.50        

Forfeited/canceled

    (13,460 )   0.50        

Outstanding at December 31, 2012

    476,436     0.50     5.84  

Granted

    4,940,007     0.13        

Exercised

    (3,417 )   0.16        

Forfeited/canceled

    (89,708 )   0.23        

Outstanding at December 31, 2013

    5,323,318     0.16     8.80  

Granted

    3,516,862     0.54        

Exercised

    (1,212,570 )   0.16        

Forfeited/canceled

    (113,143 )   0.31        

Outstanding at December 31, 2014

    7,514,467     0.33     8.52  

Granted (unaudited)

    4,921,750     0.43        

Exercised (unaudited)

    (155,066 )   0.23        

Forfeited/canceled (unaudited)

    (242 )   0.50        

Outstanding at June 30, 2015 (unaudited)

    12,280,909   $ 0.37     8.77  

Options exercisable at December 31, 2014

    2,435,154   $ 0.19     7.75  

Options exercisable at June 30, 2015 (unaudited)

    4,097,263   $ 0.28     7.85  

        Options with an intrinsic value of $18,000, $440,000, $383,000 and $362,000 (unaudited) became vested during the years ended December 31, 2012, 2013 and 2014 and the six months ended June 30, 2015, respectively. The total intrinsic value of options exercised was zero during each of the years ended December 31, 2012, and 2013, $383,000 for the year ended December 31, 2014 and approximately $31,000 (unaudited) for the six months ended June 30, 2015. The intrinsic value of options exercisable and total options outstanding at December 31, 2014 was $584,000 and $1.1 million, respectively, and approximately $1.3 million (unaudited) and $2.7 million (unaudited), respectively, at June 30, 2015. The total fair value of options vested during the years ended December 31, 2012, 2013 and 2014 was $18,000, $132,000 and $198,000, respectively. The total fair value of options vested during the six months ended June 30, 2015 was approximately $489,000 (unaudited).

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MIRNA THERAPEUTICS, INC.

Notes to Financial Statements (Continued)

9. Stock Option Plans (Continued)

        As of December 31, 2014, there was approximately $1,140,000 of unrecognized compensation cost related to the stock options granted under the 2008 Plan, which is expected to be amortized over the next 3.7 years. At June 30, 2015, there was $2.2 million (unaudited) of unrecognized compensation cost related to stock options. There were no restricted stock units or stock appreciation rights granted under the 2008 Plan in 2012, 2013 or 2014, or the six months ended June 30, 2015 (unaudited).

10. Income Taxes

        The Company recorded no provision for income taxes for the years ended December 31, 2012, 2013 and 2014 and the six months ended June 30, 2015 (unaudited) due to reported net losses in each year.

        A reconciliation of the expected income tax benefit (expense) computed using the federal statutory income tax rate to the Company's effective income tax rate is as follows for the years ended December 31, 2012, 2013 and 2014 (in thousands):

 
  2012   2013   2014  

Income tax benefit computed at federal statutory tax rate

  $ (1,241 ) $ (2,188 ) $ (5,383 )

Change in valuation allowance

    1,455     2,264     5,675  

General business credits

        (32 )   (386 )

TETF interest expense

    104          

Gain on extinguishment of note payable

    (340 )        

Change in fair value of option liability

        (115 )    

Other

    22     71     94  

Total

  $   $   $  

        During the years ended December 31, 2012, 2013 and 2014, the Company had no interest and penalties related to income taxes.

        Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company has established a valuation allowance due to uncertainties regarding the realization of deferred tax assets based upon the Company's lack of earnings history. During the year ended December 31, 2014, the valuation allowance increased by $5.7 million. Significant components of

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MIRNA THERAPEUTICS, INC.

Notes to Financial Statements (Continued)

10. Income Taxes (Continued)

the Company's deferred tax assets and liabilities as of December 31, 2013 and 2014 are as follows (in thousands):

 
  2013   2014  

Net operating loss carryforwards

  $ 7,128   $ 12,414  

Depreciation and amortization

    533     507  

Stock-based compensation

    17     71  

Credit carryforwards

    78     444  

Prepaid expenses

    (49 )   (49 )

Accrued liabilities

    35     30  

Total deferred tax assets

    7,742     13,417  

Valuation allowance

    (7,742 )   (13,417 )

Net deferred tax asset

  $   $  

        As of December 31, 2013 and 2014, the Company had net operating loss ("NOL") carryforwards for federal income tax purposes of approximately $21.0 million and $36.5 million, respectively. The Company also had available research and development tax credits for federal income tax purposes of approximately $78,000 and $405,000, respectively. If not utilized, these carryforwards expire at various dates beginning in 2028. As of December 31, 2014, the Company had state research and development tax credit carryforwards of approximately $58,000, which will expire in 2024 if not utilized.

        Utilization of the NOL carryforwards and tax credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that have occurred previously or that could occur in the future, as provided by Section 382 of the Internal Revenue Code of 1986 ("Section 382"), as well as similar state provisions. Ownership changes may limit the amount of NOL carryforwards and tax credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382, results from transactions that increase the ownership of 5% shareholders in the stock of a corporation by more than 50 percentage points in the aggregate over a three-year period. The Company has not performed a study to determine whether any ownership change has occurred since the Company's formation through December 31, 2014. However, the Company believes that it has experienced at least one ownership change in the past and that it may experience additional ownership changes as a result of subsequent shifts in its stock ownership. Should there be an ownership change that has occurred or will occur, the Company's ability to utilize existing carryforwards could be substantially restricted.

        The Company applies the accounting guidance in ASC 740 related to accounting for uncertainty in income taxes. The Company's reserves related to taxes are based on a determination of whether, and how much of, a tax benefit taken by the Company in its tax filings or positions is more likely than not to be realized following resolution of any potential contingencies present related to the tax benefit. As of December 31, 2013 and 2014, the Company had no unrecognized tax benefits.

        The Company files income tax returns in the U.S. federal and Texas jurisdictions. The statute of limitations for assessment by the Internal Revenue Service ("IRS") is open for tax years ending December 31, 2014, 2013, 2012 and 2010, although carryforward attributes that were generated for tax years prior to 2011 may still be adjusted upon examination by the IRS if they either have been, or will

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MIRNA THERAPEUTICS, INC.

Notes to Financial Statements (Continued)

10. Income Taxes (Continued)

be, used in a future period. The 2010 and subsequent tax years remain open and subject to examination by the State of Texas. There are currently no federal or state income tax audits in progress.

11. Shared Services Agreement with Asuragen

        On November 3, 2009, the Company entered into an agreement with Asuragen under which Asuragen shares space with and provides services to the Company in support of the Company's business. Such services has included human resources, finance and accounting, information technology, purchasing, shipping and receiving, equipment use, and various facility expenses. The Company pays Asuragen a monthly service fee for the services provided by Asuragen to the Company, which does not include direct charges incurred by Asuragen on behalf of the Company. The Company paid Asuragen approximately $813,000, $908,000 and $506,000 for the years ended December 31, 2012, 2013 and 2014, respectively, and approximately $195,000 (unaudited) for the six months ended June 30, 2015 for shared services.

        On October 31, 2014, the Company entered into a sublease agreement with Asuragen for use of office, laboratory and shared space. In 2014, total rent expense was approximately $15,000 and was approximately $44,000 (unaudited) for the first six months of 2015. Both the lease and the shared service agreements expire on August 31, 2016, with the ability by either party to terminate with six months' notice.

12. Retirement Plan

        The Company sponsors a defined contribution plan that provides all eligible employees an opportunity to accumulate funds for retirement. Employees who have completed 90 days of service and are at least 21 years of age may contribute to this plan, and these contributions are matched by the employer on a basis that is determined annually by the Company's board of directors. The Company may also make profit sharing contributions to the plan. Employer contributions for 2012, 2013 and 2014 were approximately $42,000, $64,000 and $91,000, respectively, and approximately $62,000 (unaudited) for the six months ended June 30, 2015

13. License agreements

Marina Biotech, Inc.

        In December 2011, the Company entered into a licensing agreement with Marina, pursuant to which Marina granted to the Company a license to liposomal delivery technology, NOV340, known under the brand name "SMARTICLES," to develop and commercialize drug products incorporating Marina's delivery system exclusively in combination with the Company's lead therapeutic product, MRX34. In December 2013, the license agreement was amended to include three additional specific mimics selected by the Company to use with SMARTICLES on an exclusive basis, and in May 2015, the license agreement was further amended to reduce the amount of a specific milestone payment and to provide for the prepayment of such milestone payment. In August 2015, the Company also entered into a side letter to the license agreement, under which it exercised its right to select an additional specific microRNA, in exchange for the payment of a specified selection fee payment.

        The Company has paid Marina approximately $1.7 million December 31, 2014 in up-front and milestone payments and as consideration for the inclusion within the license of three additional

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MIRNA THERAPEUTICS, INC.

Notes to Financial Statements (Continued)

13. License agreements (Continued)

microRNA compounds. As the Company progresses with respect to development and commercialization of its products, the Company will be required to make payments to Marina based upon the achievement of certain development and regulatory milestones, totaling up to $6 million in the aggregate for each licensed product. The Company has agreed to pay up to an additional $4 million per licensed product upon the achievement of certain regulatory milestones for a specified number of additional indications, leading to a maximum cap on all milestone payments of $10 million per product. The exception to this is for the Company's lead therapeutic product, MRX34, where the aggregate of all remaining development and regulatory milestone payments due to Marina, including for all additional indications, is $4.1 million.

        In addition to milestone payments, the Company will be required to pay low single digit royalties on net sales of licensed products other than MRX34, subject to customary reductions and offsets. As a result of the Company's 2013 amendment to the agreement with Marina, the Company is no longer required to pay a royalty to Marina with respect to sales of the Company's lead therapeutic product, MRX34. If the Company sublicenses its rights under the license from Marina, for each optioned microRNA compound covered by such sublicense the Company is required to pay a specified lump-sum payment representing the remainder of the selection fee for the inclusion of such microRNA compound within the scope of the license agreement, as well as a portion of any revenue the Company receives from such sublicensees at a tiered percentage between the very low single digits and the mid-teens, depending on the circumstances in which the sublicense is entered into.

Yale University

        In 2006, Asuragen entered into an exclusive license agreement with Yale University ("Yale") under certain patent rights relating to microRNAs arising from the laboratory of Dr. Frank Slack. This agreement was assigned to the Company by Asuragen in connection with the Company's acquisition of certain assets, including patent rights, in 2009. In February 2014, the Company as successor-in-interest to Asuragen, amended and restated the exclusive license agreement. Some of the patent filings in the Company's intellectual property portfolio that are licensed to the Company by Asuragen are also included in the patents licensed under the agreement with Yale. The Company will be required to pay royalties to Yale on net sales of licensed products that contain specified microRNAs, at a percentage ranging from the very low to the low single digits, subject to customary reductions and offsets. The Company will also be required to pay to Yale a portion of specified gross revenue that the Company receives from the Company's sublicensees at a percentage in the mid-single digits.

        The Company will be required to make payments for achievement of certain development and regulatory milestones by products containing one specified microRNA and covered by the licensed patents, of up to $600,000 in the aggregate for each such product, subject to reduction in certain circumstances. In addition, the Company is required to pay an annual license maintenance fee and minimum annual royalties under certain circumstances.

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MIRNA THERAPEUTICS, INC.

Notes to Financial Statements (Continued)

14. Commitments and Contingencies

Shared Services Agreement

        Pursuant to a shared services agreement and sublease with Asuragen (see Note 11), the Company has remaining commitments for payments as follows (in thousands):

 
  2015   2016   Total  

Shared Services Agreement

  $ 389   $ 287   $ 676  

Sublease Agreement

    89     59     148  

Shared Services Agreement

  $ 478   $ 346   $ 824  

Legal Contingencies

        The Company does not currently have any contingencies related to ongoing legal matters.

15. Net Loss Per Share Attributable to Common Stockholders

        The following table summarizes the computation of basic and diluted net loss per share attributable to common stockholders of the Company (in thousands, except share and per share data):

 
  Year Ended December 31,   Six Months Ended
June 30,
 
 
  2012   2013   2014   2014   2015  
 
   
   
   
  (unaudited)
 

Net loss

  $ (3,658 ) $ (6,436 ) $ (15,834 ) $ (6,033 ) $ (9,963 )

Accretion of convertible preferred stock to redemption value

    (5,865 )   (831 )           (448 )

Accrued dividends on convertible preferred stock

    (277 )   (1,493 )   (2,824 )   (1,400 )   (2,214 )

Net loss attributable to common stockholders—basic and diluted

    (9,800 )   (8,760 )   (18,658 )   (7,433 )   (12,625 )

Weighted-average number of common shares—basic and diluted

    26,237     29,804     961,963     670,035     1,351,526  

Net loss per share attributable to common stockholders—basic and diluted

  $ (373.52 ) $ (293.92 ) $ (19.40 ) $ (11.09 ) $ (9.34 )

        The following potentially dilutive securities outstanding, prior to the use of the treasury stock method or if-converted method, have been excluded from the computation of diluted weighted-average common shares outstanding, because including them would have had an anti-dilutive effect due to the losses reported.

 
  December 31,   June 30,  
 
  2012   2013   2014   2014   2015  
 
   
   
   
  (unaudited)
 

Convertible preferred stock

    50,110,795     84,000,766     84,000,766     84,000,766     152,396,065  

Stock options

    476,436     5,323,318     7,514,467     7,691,552     12,280,909  

    50,587,231     89,324,084     91,515,233     91,692,318     164,676,974  

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MIRNA THERAPEUTICS, INC.

Notes to Financial Statements (Continued)

15. Net Loss Per Share Attributable to Common Stockholders (Continued)

        The unaudited pro forma basic and diluted loss per share attributable to common stockholders for the year ended December 31, 2014 and the six months ended June 30, 2015 give effect to the automatic conversion of all shares of convertible preferred stock upon an initial public offering by treating all shares of convertible preferred stock as if they had been converted to common stock in all periods in which such shares were outstanding. Accordingly, the pro forma basic and diluted loss per share attributable to common stockholders do not include the effects of the accretion of convertible preferred stock to redemption value and accretion of dividends. Shares to be sold in the offering are excluded from the unaudited pro forma basic and diluted loss per share attributable to common stockholders computations.

        As the Company incurred a net loss for the year ended December 31, 2014 and the six months ended June 30, 2015, there is no income allocation required under the two-class method or dilution attributed to pro forma weighted-average shares outstanding in the computation of pro forma diluted loss per share attributable to common stockholders.

        Unaudited pro forma basic and diluted loss per share attributable to common stockholders are computed as follows (in thousands, except share and per share data):

 
  Year Ended
December 31,
2014
  Six Months
Ended
June 30, 2015
 

Numerator:

             

Net loss attributable to common stockholders—basic and diluted

  $ (18,658 ) $ (12,625 )

Add: accretion of convertible preferred stock to redemption value

        448  

Add: accrued dividends on convertible preferred stock

    2,824     2,214  

Net loss

    (15,834 )   (9,963 )

Denominator:

             

Weighted-average number of shares outstanding—basic and diluted

    961,963     1,351,526  

Add: adjustment to reflect assumed effect of conversion of convertible preferred stock

    84,000,766     117,600,670  

Pro forma weighted-average number of shares outstanding—basic and diluted

    84,962,729     118,952,196  

Pro forma net loss per share—basic and diluted

  $ (0.19 ) $ (0.08 )

16. Bridge Notes

Winkler Convertible Promissory Note

        In June 2011, the Company issued a convertible promissory note to Matthew Winkler, Ph.D., that allowed the Company to draw amounts from time to time up to the aggregate maximum principal sum of $1.0 million. In January 2012 and June 2012, the Company amended and restated the convertible promissory note with Dr. Winkler, raising the aggregate maximum principal sum to $1.5 million and extending the maturity date. During the period the promissory note, as amended, was outstanding, the Company borrowed an aggregate principal amount of $750,000. In October 2012, Dr. Winkler contributed the entire principal amount of the promissory note, as amended, to the Company in exchange for shares of Series C convertible preferred stock, which was distributed in a dividend to the

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MIRNA THERAPEUTICS, INC.

Notes to Financial Statements (Continued)

16. Bridge Notes (Continued)

holders of Series A convertible preferred stock and Series B convertible preferred stock. Dr. Winkler is a member of the Company's board of directors and a holder of the Company's capital stock.

Asuragen Convertible Promissory Note

        In June 2012, the Company issued a convertible promissory note to Asuragen that allowed the Company to draw amounts from time to time up to the aggregate maximum principal sum of $500,000. In October 2012, the Company repaid the full amount of all principal drawn on the promissory note, and accrued and unpaid interest thereon, of approximately $123,000 in cash. Dr. Winkler, who is a member of the Company's board of directors and a holder of the Company's capital stock, currently serves as the Chairman and Chief Scientific Officer, and is a founder and holder of capital stock, of Asuragen.

17. Subsequent Events

Offering of Series D Preferred Stock

        On various dates between March 31, 2015 and April 20, 2015, the Company completed two closings of an offering of the Company's Series D convertible preferred stock ("Series D"). The Company issued 68,395,299 shares with gross proceeds totaling approximately $41.8 million.

        The Series D has similar preference terms as the Series C, with the holders of the Company's Series D stock also being entitled to vote on certain matters as a single class. For all dividends accrued subsequent to March 31, 2015 by Series C and Series D preferred stock and paid in kind as common stock, the number of shares of common stock paid in kind will be calculated by dividing the dividends earned by the offering price per share of the Series D preferred stock.

Private Placement Agreement with CPRIT (unaudited)

        In September 2015, the Company entered into a new grant contract with CPRIT in connection with an award of approximately $16.8 million. This 2015 award has a three-year term, subject to extension by mutual agreement by the Company and CPRIT. However, in contrast to the Company's 2010 award, this 2015 award does not include any royalty obligation upon commercialization of the Company's product candidates, nor is the Company required to repay the grant proceeds under specified circumstances. Instead, the 2015 award is in the form of an agreement by CPRIT to purchase $16.8 million of shares of common stock of the Company in a private placement concurrent with an initial public offering, subject to certain conditions, occurring prior to December 31, 2016, at the public offering price. Pursuant to the grant contract, the Company will conduct preclinical and clinical development of certain combination therapy approaches for lung or liver cancer involving the Company's lead product candidate, MRX34. CPRIT may terminate the grant contract and its obligation to purchase the $16.8 million of shares of the Company's common stock under certain circumstances, such as if the Company determines that a "Project Failure" (as defined in the grant contract) has occurred. If, at any time during the term of the grant contract and following the consummation of our initial public offering, the Company determines that the project provided for by the grant contract is no longer commercially feasible for it, then the Company and CPRIT are required to consult in order to reallocate the remaining unspent budget for the project to another oncology project in our product candidate pipeline.

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                  Shares

LOGO

Common Stock

Prospectus

Citigroup   Leerink Partners

Oppenheimer & Co.   Cantor Fitzgerald & Co.

              , 2015


Table of Contents


PART II

Information Not Required in Prospectus

Item 13.    Other Expenses of Issuance and Distribution.

        The following table sets forth the costs and expenses, other than the underwriting discounts and commissions, payable by the registrant in connection with the sale of Common Stock being registered. All amounts are estimates except for the Securities and Exchange Commission, or SEC, registration fee, the FINRA filing fee and The NASDAQ Global Market listing fee.

Item
  Amount to
be paid
 

SEC registration fee

  $   *

FINRA filing fee

      *

The NASDAQ Global Market listing fee

      *

Printing and engraving expenses

      *

Legal fees and expenses

      *

Accounting fees and expenses

      *

Blue Sky, qualification fees and expenses

      *

Transfer Agent fees and expenses

      *

Miscellaneous expenses

      *

Total

  $   *

*
To be completed by amendment

Item 14.    Indemnification of Directors and Officers.

        As permitted by Section 102 of the Delaware General Corporation Law, we have adopted provisions in our amended and restated certificate of incorporation and bylaws that limit or eliminate the personal liability of our directors for a breach of their fiduciary duty of care as a director. The duty of care generally requires that, when acting on behalf of the corporation, directors exercise an informed business judgment based on all material information reasonably available to them. Consequently, a director will not be personally liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director, except for liability for:

        These limitations of liability do not affect the availability of equitable remedies such as injunctive relief or rescission. Our amended and restated certificate of incorporation also authorizes us to indemnify our officers, directors and other agents to the fullest extent permitted under Delaware law.

        As permitted by Section 145 of the Delaware General Corporation Law, our amended and restated bylaws provide that:

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        Our amended and restated certificate of incorporation, to be attached as Exhibit 3.3 hereto, and our amended and restated bylaws, to be attached as Exhibit 3.5 hereto, provide for the indemnification provisions described above and elsewhere herein. We intend to enter into separate indemnification agreements with our directors and officers which may be broader than the specific indemnification provisions contained in the Delaware General Corporation Law. These indemnification agreements generally require us, among other things, to indemnify our officers and directors against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct. These indemnification agreements also generally require us to advance any expenses incurred by the directors or officers as a result of any proceeding against them as to which they could be indemnified. In addition, we have purchased a policy of directors' and officers' liability insurance that insures our directors and officers against the cost of defense, settlement or payment of a judgment in some circumstances. These indemnification provisions and the indemnification agreements may be sufficiently broad to permit indemnification of our officers and directors for liabilities, including reimbursement of expenses incurred, arising under the Securities Act of 1933, as amended, or the Securities Act.

        The form of Underwriting Agreement, to be attached as Exhibit 1.1 hereto, provides for indemnification by the underwriters of us and our officers who sign this Registration Statement and directors for specified liabilities, including matters arising under the Securities Act.

Item 15.    Recent Sales of Unregistered Securities.

        The following list sets forth information as to all securities we have sold since January 1, 2012, which were not registered under the Securities Act.

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        We claimed exemption from registration under the Securities Act for the sale and issuance of securities in the transactions described in paragraphs (1) through (6) above by virtue of Section 4(2) and/or Regulation D promulgated thereunder as transactions not involving any public offering. All of the purchasers of unregistered securities for which we relied on Section 4(2) and/or Regulation D represented that they were accredited investors as defined under the Securities Act. We claimed such exemption on the basis that (a) the purchasers in each case represented that they intended to acquire the securities for investment only and not with a view to the distribution thereof and that they either received adequate information about the registrant or had access, through employment or other relationships, to such information and (b) appropriate legends were affixed to the stock certificates issued in such transactions.

        We claimed exemption from registration under the Securities Act for the sales and issuances of securities in the transactions described in paragraphs (7) and (8) above under Section 4(2) of the Securities Act, in that such sales and issuances did not involve a public offering, or under Rule 701 promulgated under the Securities Act, in that they were offered and sold either pursuant to written compensatory plans or pursuant to a written contract relating to compensation, as provided by Rule 701.

Item 16.    Exhibits and Financial Statement Schedules.

Item 17.    Undertakings.

        Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer, or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

        The undersigned Registrant hereby undertakes that:

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        The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

        The undersigned Registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

II-4



Signatures

        Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Amendment No. 1 to Registration Statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in Austin, Texas, on September 11, 2015.

    MIRNA THERAPEUTICS, INC.

 

 

By:

 

/s/ PAUL LAMMERS

Paul Lammers, M.D., M.Sc.
President and Chief Executive Officer

        Pursuant to the requirements of the Securities Act, this Amendment to Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature
 
Title
 
Date

 

 

 

 

 

 

 
/s/ PAUL LAMMERS

Paul Lammers, M.D., M.Sc.
  Director, President and Chief Executive Officer
(Principal Executive Officer)
  September 11, 2015

/s/ ALAN FUHRMAN

Alan Fuhrman

 

Chief Financial Officer
(Principal Financial Officer)

 

September 11, 2015

/s/ JON IRVIN

Jon Irvin

 

Vice President of Finance
(Principal Accounting Officer)

 

September 11, 2015

*

Michael Powell, Ph.D.

 

Chairman of the Board

 

September 11, 2015

*

Lawrence M. Alleva

 

Director

 

September 11, 2015

*

Elaine V. Jones, Ph.D.

 

Director

 

September 11, 2015

*

Ed Mathers

 

Director

 

September 11, 2015

II-5


Signature
 
Title
 
Date

 

 

 

 

 

 

 
*

Clay Siegall, Ph.D.
  Director   September 11, 2015

*

Matthew Winkler, Ph.D.

 

Director

 

September 11, 2015

*By:

 

/s/ PAUL LAMMERS

Paul Lammers, M.D., M.Sc.
Attorney-in-fact

 

 

 

September 11, 2015

II-6


Table of Contents


Exhibit Index

Exhibit Number   Description
  1.1 * Form of Underwriting Agreement.
        
  3.1 + Sixth Amended and Restated Certificate of Incorporation, currently in effect.
        
  3.2 * Form of Seventh Amended and Restated Certificate of Incorporation, effecting a reverse stock split, to be in effect prior to the consummation of this offering.
        
  3.3   Form of Amended and Restated Certificate of Incorporation, to be in effect immediately prior to the consummation of this offering.
        
  3.4 + Bylaws, currently in effect.
        
  3.5   Form of Amended and Restated Bylaws, to be in effect immediately prior to the consummation of this offering.
        
  4.1   Reference is made to Exhibits 3.1 through 3.5.
        
  4.2 * Form of Common Stock Certificate.
        
  4.3   Third Amended and Restated Investor Rights Agreement, dated as of March 31, 2015, by and among Mirna Therapeutics, Inc. and certain of its stockholders.
        
  4.4   Form of Registration Rights Agreement, to be entered into by and between Mirna Therapeutics, Inc. and the Cancer Prevention and Research Institute of Texas prior to the consummation of this offering.
        
  5.1 * Opinion of Latham & Watkins LLP.
        
  10.1(A) + Services Agreement, dated January 1, 2013, by and between Mirna Therapeutics, Inc. and Asuragen, Inc.
        
  10.1(B) + Amendment No. 1 to the Services Agreement, dated October 31, 2014, by and between Mirna Therapeutics, Inc. and Asuragen, Inc.
        
  10.2(A) †+ Cross License Agreement, dated November 3, 2009, by and between Mirna Therapeutics, Inc. and Asuragen, Inc.
        
  10.2(B) †+ First Amendment to the Cross License Agreement, dated September 28, 2012, by and between Mirna Therapeutics, Inc. and Asuragen, Inc.
        
  10.3(A) License Agreement, dated December 22, 2011, by and between Mirna Therapeutics, Inc. and Marina Biotech, Inc.
        
  10.3(B) †+ Side Letter to License Agreement, dated December 22, 2011, by and between Mirna Therapeutics, Inc. and Marina Biotech, Inc.
        
  10.3(C) †+ Side Letter to License Agreement, dated November 16, 2012, by and between Mirna Therapeutics, Inc. and Marina Biotech, Inc.
        
  10.3(D) Amendment No. 1 to License Agreement, dated December 27, 2013, by and between Mirna Therapeutics, Inc. and Marina Biotech, Inc.
        
  10.3(E) Side Letter to License Agreement, dated January 9, 2014, by and between Mirna Therapeutics, Inc. and Marina Biotech, Inc.
        
  10.3(F) Amendment No. 2 to License Agreement, dated May 11, 2015, by and between Mirna Therapeutics, Inc. and Marina Biotech, Inc.
        
  10.3(G) Side Letter to License Agreement, dated August 24, 2015, by and between Mirna Therapeutics, Inc. and Marina Biotech, Inc.
 
   

Table of Contents

Exhibit Number   Description
  10.4 Amended and Restated Agreement, dated February 6, 2014, by and between Mirna Therapeutics, Inc. and Yale University.
        
  10.5 License Agreement, dated March 10, 2013, by and between Mirna Therapeutics, Inc. and University of Zurich.
        
  10.6 †+ Cancer Research Grant Contract, dated August 31, 2010, by and between Mirna Therapeutics, Inc. and the Cancer Prevention and Research Institute of Texas.
        
  10.7 †+ Supply Agreement for a Liposomal Formulation, dated November 18, 2012, by and between Mirna Therapeutics, Inc. and Polymun Scientific Immunbiologische Forschung GmbH.
        
  10.8(A) #+ 2008 Long Term Incentive Plan, as amended.
        
  10.8(B) #+ Form of Notice of Stock Option Grant under 2008 Long Term Incentive Plan.
        
  10.8(C) #+ Form of Stock Option Agreement under 2008 Long Term Incentive Plan.
        
  10.9(A) # 2015 Equity Incentive Award Plan.
        
  10.9(B) # Form of Stock Option Grant Notice and Stock Option Agreement under the 2015 Equity Incentive Award Plan.
        
  10.9(C) # Form of Restricted Stock Award Agreement and Restricted Stock Unit Award Grant Notice under the 2015 Equity Incentive Award Plan.
        
  10.10 # 2015 Employee Stock Purchase Plan.
        
  10.11 # Non-Employee Director Compensation Program.
        
  10.12 # Form of Change in Control Severance Agreement.
        
  10.13 # Form of Indemnification Agreement.
        
  10.14 + Sublease, dated October 31, 2014, by and between Mirna Therapeutics, Inc. and Asuragen, Inc.
        
  10.15   Stock Purchase Agreement, dated September 1, 2015, by and between Mirna Therapeutics, Inc. and the Cancer Prevention and Research Institute of Texas.
        
  10.16(A) # Employment Agreement, dated November 4, 2009, by and between Mirna Therapeutics, Inc. and Paul Lammers, M.D., M.Sc.
        
  10.16(B) # First Amendment to Employment Agreement, dated January 5, 2011, by and between Mirna Therapeutics, Inc. and Paul Lammers, M.D., M.Sc.
        
  10.17(A) # Offer Letter, dated April 29, 2013, by and between Mirna Therapeutics, Inc. and Sinil Kim, M.D.
        
  10.17(B) # Employment Agreement, dated May 22, 2013, by and between Mirna Therapeutics, Inc. and Sinil Kim, M.D.
        
  10.18 # Employment Agreement, dated March 1, 2014, by and between Mirna Therapeutics, Inc. and Casi DeYoung.
        
  10.19   Cancer Research Grant Contract, dated September 1, 2015, by and between Mirna Therapeutics, Inc. and the Cancer Prevention and Research Institute of Texas.
        
  23.1   Consent of independent registered public accounting firm.
        
  23.2   Consent of Latham & Watkins LLP (included in Exhibit 5.1).
 
   

Table of Contents

Exhibit Number   Description
  24.1 + Power of Attorney.

*
To be filed by amendment.

Portions of this exhibit (indicated by asterisks) have been omitted pursuant to a request for confidential treatment and this exhibit has been filed separately with the SEC.

#
Indicates management contract or compensatory plan.

+
Previously filed.



Exhibit 3.3

 

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

MIRNA THERAPEUTICS, INC.

 

Mirna Therapeutics, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the “Delaware General Corporation Law”), hereby certifies as follows:

 

ONE:                                        The name of this corporation is Mirna Therapeutics, Inc., and the original certificate of incorporation of this corporation was filed with the Secretary of State of the State of Delaware on December 20, 2007.

 

TWO:                                    This Amended and Restated Certificate of Incorporation, which restates and further amends the provisions of this corporation’s certificate of incorporation, has been duly adopted in accordance with the provisions of Sections 242, 245 and 228 of the Delaware General Corporation Law.

 

THREE:                      The certificate of incorporation of this corporation is hereby amended and restated in its entirety as follows:

 

ARTICLE I

 

The name of the corporation is Mirna Therapeutics, Inc. (the “Corporation”).

 

ARTICLE II

 

The address of the Corporation’s registered office in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle, 19801.  The name of its registered agent at such address is The Corporation Trust Company.

 

ARTICLE III

 

The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the Delaware General Corporation Law.  The Corporation is to have a perpetual existence.

 

ARTICLE IV

 

A.                                    This Corporation is authorized to issue two classes of capital stock which shall be designated, respectively, “Common Stock” and “Preferred Stock.”  The total number of shares that the Corporation is authorized to issue is Two Hundred Fifty Five Million (255,000,000), of which Two Hundred Fifty Million (250,000,000) shares shall be Common Stock and Five Million (5,000,000) shares shall be Preferred Stock.  The Common Stock shall have a par value of $0.001 per share and the Preferred Stock shall have a par value of $0.001 per share.  Subject to the rights of

 



 

the holders of any series of Preferred Stock, the number of authorized shares of any of the Common Stock or Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority in voting power of the stock of the Corporation with the power to vote thereon irrespective of the provisions of Section 242(b)(2) of the Delaware General Corporation Law or any successor provision thereof, and no vote of the holders of any of the Common Stock or Preferred Stock voting separately as a class shall be required therefor.

 

B.                                    Shares of Preferred Stock may be issued from time to time in one or more series.  The Board of Directors of the Corporation (the “Board of Directors”) is hereby authorized to provide from time to time by resolution or resolutions for the creation and issuance, out of the authorized and unissued shares of Preferred Stock, of one or more series of Preferred Stock by filing a certificate (a “Certificate of Designation”) pursuant to the Delaware General Corporation Law, setting forth such resolution and, with respect to each such series, establishing the designation of such series and the number of shares to be included in such series and fixing the voting powers (full or limited, or no voting power), preferences and relative, participating, optional or other special rights, and the qualifications, limitations and restrictions thereof, of the shares of each such series.  Without limiting the generality of the foregoing, the resolution or resolutions providing for the establishment of any series of Preferred Stock may, to the extent permitted by law, provide that such series shall be superior to, rank equally with or be junior to the Preferred Stock of any other series.  The powers, preferences and relative, participating, optional and other special rights of each series of Preferred Stock, and the qualifications, limitations or restrictions thereof, if any, may be different from those of any and all other series at any time outstanding. Except as otherwise expressly provided in the resolution or resolutions providing for the establishment of any series of Preferred Stock, no vote of the holders of shares of Preferred Stock or Common Stock shall be a prerequisite to the issuance of any shares of any series of the Preferred Stock so authorized in accordance with this Amended and Restated Certificate of Incorporation. Unless otherwise provided in the Certificate of Designation establishing a series of Preferred Stock, the Board of Directors may, by resolution or resolutions, increase or decrease (but not below the number of shares of such series then outstanding) the number of shares of such series and, if the number of shares of such series shall be so decreased, the shares constituting such decrease shall resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of such series.

 

ARTICLE V

 

For the management of the business and for the conduct of the affairs of the Corporation it is further provided that:

 

A.                                    (1)                                 The management of the business and the conduct of the affairs of the Corporation shall be vested in the Board of Directors.  The number of directors which shall constitute the whole Board of Directors shall be fixed exclusively by one or more resolutions adopted from time to time by the Board of Directors.  Except as otherwise expressly delegated by resolution of the Board of Directors, the Board of Directors shall have the exclusive power and authority to appoint and remove officers of the Corporation.

 

2



 

(2)                                 Other than any directors elected by the separate vote of the holders of one or more series of Preferred Stock, the Board of Directors shall be and is divided into three classes, designated as Class I, Class II and Class III, as nearly equal in number as possible.  Directors shall be assigned to each class in accordance with a resolution or resolutions adopted by the Board of Directors.  At the first annual meeting of stockholders following the effectiveness of this Amended and Restated Certificate of Incorporation (the “Qualifying Record Date”), the term of office of the Class I directors shall expire and Class I directors shall be elected for a full term of three years.  At the second annual meeting of stockholders following the Qualifying Record Date, the term of office of the Class II directors shall expire and Class II directors shall be elected for a full term of three years.  At the third annual meeting of stockholders following the Qualifying Record Date, the term of office of the Class III directors shall expire and Class III directors shall be elected for a full term of three years. Subject to the special rights of the holders of one or more series of Preferred Stock to elect directors, at each succeeding annual meeting of stockholders, directors shall be elected for a full term of three years to succeed the directors of the class whose terms expire at such annual meeting.

 

Notwithstanding the foregoing provisions of this Article V(A), each director shall serve until his or her successor is duly elected and qualified or until his or her earlier death, resignation, disqualification, retirement or removal.  No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.

 

(3)                                 Subject to the special rights of the holders of one or more series of Preferred Stock to elect directors, the Board of Directors or any individual director may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of sixty-six and two-thirds percent (66-2/3%) of the voting power of all the then outstanding shares of voting stock of the Corporation with the power to vote at an election of directors (the “Voting Stock”).

 

(4)                                 Subject to the special rights of the holders of one or more series of Preferred Stock to elect directors, any vacancies on the Board of Directors resulting from death, resignation, disqualification, retirement, removal or other causes and any newly created directorships resulting from any increase in the number of directors shall, unless the Board of Directors determines by resolution that any such vacancies or newly created directorships shall be filled by the stockholders, and except as otherwise provided by law, be filled only by the affirmative vote of a majority of the directors then in office, even though less than a quorum, or by a sole remaining director, and shall not be filled by the stockholders.  Any director appointed in accordance with the preceding sentence shall hold office for a term that shall coincide with the remaining term of the class to which the director shall have been appointed and until such director’s successor shall have been elected and qualified or until his or her earlier death, resignation, disqualification, retirement or removal.

 

B.                                    (1)                                 In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, alter or repeal Bylaws of the Corporation.  In addition to any vote of the holders of any class or series of stock of the Corporation required by applicable law or by this Amended and Restated Certificate of Incorporation (including any Certificate of Designation in respect of one or more series of Preferred Stock), the adoption, amendment or repeal of the Bylaws of the Corporation by the stockholders of the Corporation shall require the affirmative vote of the holders of at least sixty-six and two-thirds percent (66-2/3%) of

 

3



 

the voting power of all the then-outstanding shares of the Voting Stock, voting together as a single class.

 

(2)                                 The directors of the Corporation need not be elected by written ballot unless the Bylaws so provide.

 

ARTICLE VI

 

A.                                    Subject to the special rights of the holders of one or more series of Preferred Stock, any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of the stockholders of the Corporation, and the taking of any action by written consent of the stockholders in lieu of a meeting of the stockholders is specifically denied.

 

B.                                    Subject to the special rights of the holders of one or more series of Preferred Stock, special meetings of the stockholders of the Corporation may be called, for any purpose or purposes, at any time by the Board of Directors, but such special meetings may not be called by stockholders or any other person or persons.

 

C.                                    Advance notice of stockholder nominations for the election of directors and of other business proposed to be brought by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in the Bylaws of the Corporation.

 

ARTICLE VII

 

A.                                    To the fullest extent permitted by the Delaware General Corporation Law, as the same exists or as may hereafter be amended, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director.  If the Delaware General Corporation Law is amended after approval by the stockholders of this Article VII to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law as so amended, automatically and without further action, upon the date of such amendment.

 

B.                                    The Corporation, to the fullest extent permitted by law, shall indemnify and advance expenses to any person made or threatened to be made a party to an action, suit or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he or she, or his or her testator or intestate, is or was a director or officer of the Corporation or any predecessor of the Corporation, or serves or served at any other enterprise as a director or officer at the request of the Corporation or any predecessor to the Corporation.

 

C.                                    The Corporation, to the fullest extent permitted by law, may indemnify and advance expenses to any person made or threatened to be made a party to an action, suit or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he or she, or his or her testator or intestate, is or was an employee or agent of the Corporation or any predecessor of the Corporation, or serves or served at any other enterprise as an employee or agent at the request of the Corporation or any predecessor to the Corporation.

 

4



 

C.                                    Neither any amendment nor repeal of this Article VII, nor the adoption by amendment of this certificate of incorporation of any provision inconsistent with this Article VII, shall eliminate or reduce the effect of this Article VII in respect of any matter occurring, or any action or proceeding accruing or arising (or that, but for this Article VII, would accrue or arise) prior to such amendment or repeal or adoption of an inconsistent provision.

 

ARTICLE VIII

 

Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, other employee or stockholder of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law or as to which the Delaware General Corporation Law confers jurisdiction on the Court of Chancery of the State of Delaware, or (iv) any action asserting a claim governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article VIII.

 

ARTICLE IX

 

Notwithstanding any other provisions of this Amended and Restated Certificate of Incorporation or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of the Voting Stock required by law or by this Amended and Restated Certificate of Incorporation (including any Certificate of Designation in respect of one or more series of Preferred Stock), the affirmative vote of the holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the then-outstanding shares of the Voting Stock, voting together as a single class, shall be required to alter, amend or repeal Articles V, VI, VII, VIII and this Article IX.

 

* * * *

 

FOUR:        This Amended and Restated Certificate of Incorporation shall be effective as of [8:00 a.m.] Eastern Time on [ · ], 2015.

 

5



 

IN WITNESS WHEREOF, the undersigned has caused this Amended and Restated Certificate of Incorporation to be executed by its duly authorized officer on this      day of                , 2015.

 

 

Mirna Therapeutics, Inc.

 

 

 

By:

 

 

 

Paul Lammers, M.D., M.Sc.

 

 

President and Chief Executive Officer

 




Exhibit 3.5

 

AMENDED AND RESTATED BYLAWS OF

 

MIRNA THERAPEUTICS, INC.

 

(a Delaware corporation)

 



 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE I - CORPORATE OFFICES

1

 

 

 

1.1

REGISTERED OFFICE

1

1.2

OTHER OFFICES

1

 

 

 

ARTICLE II - MEETINGS OF STOCKHOLDERS

1

 

 

 

2.1

PLACE OF MEETINGS

1

2.2

ANNUAL MEETING

1

2.3

SPECIAL MEETING

1

2.4

ADVANCE NOTICE PROCEDURES FOR BUSINESS BROUGHT BEFORE A MEETING

2

2.5

ADVANCE NOTICE PROCEDURES FOR NOMINATIONS OF DIRECTORS

5

2.6

NOTICE OF STOCKHOLDERS’ MEETINGS

8

2.7

MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE

8

2.8

QUORUM

9

2.9

ADJOURNED MEETING; NOTICE

9

2.10

CONDUCT OF BUSINESS

9

2.11

VOTING

9

2.12

NO STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING

10

2.13

RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS

10

2.14

PROXIES

10

2.15

LIST OF STOCKHOLDERS ENTITLED TO VOTE

11

2.16

INSPECTORS OF ELECTION

11

 

 

 

ARTICLE III - DIRECTORS

12

 

 

 

3.1

POWERS

12

3.2

NUMBER OF DIRECTORS

12

3.3

ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS

12

3.4

RESIGNATION AND VACANCIES

12

3.5

PLACE OF MEETINGS; MEETINGS BY TELEPHONE

13

3.6

REGULAR MEETINGS

13

3.7

SPECIAL MEETINGS; NOTICE

13

3.8

QUORUM

14

3.9

BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING

14

3.10

FEES AND COMPENSATION OF DIRECTORS

14

3.11

REMOVAL OF DIRECTORS

14

 

 

 

ARTICLE IV - COMMITTEES

14

 

 

 

4.1

COMMITTEES OF DIRECTORS

14

4.2

COMMITTEE MINUTES

15

4.3

MEETINGS AND ACTION OF COMMITTEES

15

 

i



 

TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

 

ARTICLE V - OFFICERS

16

 

 

 

5.1

OFFICERS

16

5.2

APPOINTMENT OF OFFICERS

16

5.3

SUBORDINATE OFFICERS

16

5.4

REMOVAL AND RESIGNATION OF OFFICERS

16

5.5

VACANCIES IN OFFICES

16

5.6

REPRESENTATION OF SHARES OF OTHER CORPORATIONS

16

5.7

AUTHORITY AND DUTIES OF OFFICERS

17

 

 

 

ARTICLE VI - RECORDS AND REPORTS

17

 

 

 

6.1

MAINTENANCE AND INSPECTION OF RECORDS

17

6.2

INSPECTION BY DIRECTORS

17

 

 

 

ARTICLE VII - GENERAL MATTERS

17

 

 

 

7.1

EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS

17

7.2

STOCK CERTIFICATES; PARTLY PAID SHARES

18

7.3

SPECIAL DESIGNATION ON CERTIFICATES

18

7.4

LOST CERTIFICATES

18

7.5

CONSTRUCTION; DEFINITIONS

19

7.6

DIVIDENDS

19

7.7

FISCAL YEAR

19

7.8

SEAL

19

7.9

TRANSFER OF STOCK

19

7.10

STOCK TRANSFER AGREEMENTS

19

7.11

REGISTERED STOCKHOLDERS

20

7.12

WAIVER OF NOTICE

20

 

 

 

ARTICLE VIII - NOTICE BY ELECTRONIC TRANSMISSION

20

 

 

 

8.1

NOTICE BY ELECTRONIC TRANSMISSION

20

8.2

DEFINITION OF ELECTRONIC TRANSMISSION

21

 

 

 

ARTICLE IX - INDEMNIFICATION

21

 

 

 

9.1

INDEMNIFICATION OF DIRECTORS AND OFFICERS

21

9.2

INDEMNIFICATION OF OTHERS

21

9.3

PREPAYMENT OF EXPENSES

22

9.4

DETERMINATION; CLAIM

22

9.5

NON-EXCLUSIVITY OF RIGHTS

22

9.6

INSURANCE

22

9.7

OTHER INDEMNIFICATION

22

9.8

CONTINUATION OF INDEMNIFICATION

23

 

 

ARTICLE X - AMENDMENTS

23

 

ii



 

AMENDED AND RESTATED
BYLAWS OF

MIRNA THERAPEUTICS, INC.

 


 

ARTICLE I - CORPORATE OFFICES

 

1.1                               REGISTERED OFFICE.

 

The registered office of Mirna Therapeutics, Inc. (the “Corporation”) shall be fixed in the Corporation’s certificate of incorporation, as the same may be amended from time to time (the “certificate of incorporation”).

 

1.2                               OTHER OFFICES.

 

The Corporation’s board of directors (the “Board”) may at any time establish other offices at any place or places where the Corporation is qualified to do business.

 

ARTICLE II - MEETINGS OF STOCKHOLDERS

 

2.1                               PLACE OF MEETINGS.

 

Meetings of stockholders shall be held at any place, within or outside the State of Delaware, designated by the Board.  The Board may, in its sole discretion, determine that a meeting of stockholders shall not be held at any place, but may instead be held solely by means of remote communication as authorized by Section 211(a)(2) of the General Corporation Law of the State of Delaware (the “DGCL”).  In the absence of any such designation or determination, stockholders’ meetings shall be held at the Corporation’s principal executive office.

 

2.2                               ANNUAL MEETING.

 

The Board shall designate the date and time of the annual meeting.  At the annual meeting, directors shall be elected and other proper business properly brought before the meeting in accordance with Section 2.4 may be transacted.

 

2.3                               SPECIAL MEETING.

 

Except as otherwise provided by the certificate of incorporation, a special meeting of the stockholders may be called at any time by the Board, but such special meetings may not be called by stockholders or any other person or persons.

 

No business may be transacted at such special meeting other than the business specified in such notice to stockholders.  Nothing contained in this paragraph of this Section 2.3 shall be construed as limiting, fixing, or affecting the time when a meeting of stockholders called by action of the Board may be held.

 



 

2.4                               ADVANCE NOTICE PROCEDURES FOR BUSINESS BROUGHT BEFORE A MEETING.

 

(i)                                     At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be (a) specified in a notice of meeting given by or at the direction of the Board, (b) if not specified in a notice of meeting, otherwise brought before the meeting by or at the direction of the Board or the chairperson of the Board, or (c) otherwise properly brought before the meeting by a stockholder present in person who (A)(1) was a beneficial owner of shares of the Corporation both at the time of giving the notice provided for in this Section 2.4 and at the time of the meeting, (2) is entitled to vote at the meeting and (3) has complied with this Section 2.4 in all applicable respects, or (B) properly made such proposal in accordance with Rule 14a-8 under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (as so amended and inclusive of such rules and regulations, the “Exchange Act”). The foregoing clause (c) shall be the exclusive means for a stockholder to propose business to be brought before an annual meeting of the stockholders.  The only matters that may be brought before a special meeting are the matters specified in the notice of meeting given by or at the direction of the person calling the meeting pursuant to Section 2.3 of these bylaws, and stockholders shall not be permitted to propose business to be brought before a special meeting of the stockholders.  For purposes of this Section 2.4, “present in person” shall mean that the stockholder proposing that the business be brought before the annual meeting of the Corporation, or, if the proposing stockholder is not an individual, a qualified representative of such proposing stockholder, appear at such annual meeting.  A “qualified representative” of such proposing stockholder shall be, if such proposing stockholder is (x) a general or limited partnership, any general partner or person who functions as a general partner of the general or limited partnership or who controls the general or limited partnership, (y) a corporation or a limited liability company, any officer or person who functions as an officer of the corporation or limited liability company or any officer, director, general partner or person who functions as an officer, director or general partner of any entity ultimately in control of the corporation or limited liability company or (z) a trust, any trustee of such trust.  Stockholders seeking to nominate persons for election to the Board must comply with Section 2.5 of these bylaws, and this Section 2.4 shall not be applicable to nominations except as expressly provided in Section 2.5 of these bylaws.

 

(ii)                                  Without qualification, for business to be properly brought before an annual meeting by a stockholder, the stockholder must (a) provide Timely Notice (as defined below) thereof in writing and in proper form to the Secretary of the Corporation and (b) provide any updates or supplements to such notice at the times and in the forms required by this Section 2.4. To be timely, a stockholder’s notice must be delivered to, or mailed and received at, the principal executive offices of the Corporation not less than ninety (90) days nor more than one hundred twenty (120) days prior to the one-year anniversary of the preceding year’s annual meeting; provided, however, that if the date of the annual meeting is more than thirty (30) days before or more than sixty (60) days after such anniversary date, notice by the stockholder to be timely must be so delivered, or mailed and received, not later than the ninetieth (90th) day prior to such annual meeting or, if later, the tenth (10th) day following the day on which public disclosure of the date of such annual meeting was first made (such notice within such time periods, “Timely Notice”).  In no event shall any adjournment or postponement of an annual meeting or the announcement thereof commence a new time period for the giving of Timely Notice as described above.

 

(iii)                               To be in proper form for purposes of this Section 2.4, a stockholder’s notice to the Secretary shall set forth:

 

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(a)         As to each Proposing Person (as defined below), (A) the name and address of such Proposing Person (including, if applicable, the name and address that appear on the Corporation’s books and records); and (B) the class or series and number of shares of the Corporation that are, directly or indirectly, owned of record or beneficially owned (within the meaning of Rule 13d-3 under the Exchange Act) by such Proposing Person, except that such Proposing Person shall in all events be deemed to beneficially own any shares of any class or series of the Corporation as to which such Proposing Person has a right to acquire beneficial ownership at any time in the future (the disclosures to be made pursuant to the foregoing clauses (A) and (B) are referred to as “Stockholder Information”);

 

(b)         As to each Proposing Person, (A) the full notional amount of any securities that, directly or indirectly, underlie any “derivative security” (as such term is defined in Rule 16a-1(c) under the Exchange Act) that constitutes a “call equivalent position” (as such term is defined in Rule 16a-1(b) under the Exchange Act) (“Synthetic Equity Position”) and that is, directly or indirectly, held or maintained by such Proposing Person with respect to any shares of any class or series of shares of the Corporation; provided that, for the purposes of the definition of “Synthetic Equity Position,” the term “derivative security” shall also include any security or instrument that would not otherwise constitute a “derivative security” as a result of any feature that would make any conversion, exercise or similar right or privilege of such security or instrument becoming determinable only at some future date or upon the happening of a future occurrence, in which case the determination of the amount of securities into which such security or instrument would be convertible or exercisable shall be made assuming that such security or instrument is immediately convertible or exercisable at the time of such determination; and, provided, further, that any Proposing Person satisfying the requirements of Rule 13d-1(b)(1) under the Exchange Act (other than a Proposing Person that so satisfies Rule 13d-1(b)(1) under the Exchange Act solely by reason of Rule 13d-1(b)(1)(ii)(E)) shall not be deemed to hold or maintain the notional amount of any securities that underlie a Synthetic Equity Position held by such Proposing Person as a hedge with respect to a bona fide derivatives trade or position of such Proposing Person arising in the ordinary course of such Proposing Person’s business as a derivatives dealer, (B) any rights to dividends on the shares of any class or series of shares of the Corporation owned beneficially by such Proposing Person that are separated or separable from the underlying shares of the Corporation, (C)(x) if such Proposing Person is (i) a general or limited partnership, syndicate or other group, the identity of each general partner and each person who functions as a general partner of the general or limited partnership, each member of the syndicate or group and each person controlling the general partner or member, (ii) a corporation or a limited liability company, the identity of each officer and each person who functions as an officer of the corporation or limited liability company, each person controlling the corporation or limited liability company and each officer, director, general partner and person who functions as an officer, director or general partner of any entity ultimately in control of the corporation or limited liability company or (iii) a trust, any trustee of such trust (each such person or persons set forth in the preceding clauses (i), (ii) and (iii), a “Responsible Person”), any fiduciary duties owed by such Responsible Person to the equity holders or other beneficiaries of such Proposing Person and any material interests or relationships of such Responsible Person that are not shared generally by other record or beneficial holders of the shares of any class or series of the Corporation and that reasonably could have influenced the decision of such Proposing Person to propose such business to be brought before the meeting, and (y) if such Proposing Person is a natural person, any material interests or relationships of such

 

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natural person that are not shared generally by other record or beneficial holders of the shares of any class or series of the Corporation and that reasonably could have influenced the decision of such Proposing Person to propose such business to be brought before the meeting, (D) any material shares or any Synthetic Equity Position in any principal competitor of the Corporation in any principal industry of the Corporation held by such Proposing Persons, (E) a summary of any material discussions regarding the business proposed to be brought before the meeting (x) between or among any of the Proposing Persons or (y) between or among any Proposing Person and any other record or beneficial holder of the shares of any class or series of the Corporation (including their names), (F) any material pending or threatened legal proceeding in which such Proposing Person is a party or material participant involving the Corporation or any of its officers or directors, or any affiliate of the Corporation, (G) any other material relationship between such Proposing Person, on the one hand, and the Corporation, any affiliate of the Corporation or any principal competitor of the Corporation, on the other hand, (H) any direct or indirect material interest in any material contract or agreement of such Proposing Person with the Corporation, any affiliate of the Corporation or any principal competitor of the Corporation (including, in any such case, any employment agreement, collective bargaining agreement or consulting agreement) and (I) any other information relating to such Proposing Person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies or consents by such Proposing Person in support of the business proposed to be brought before the meeting pursuant to Section 14(a) of the Exchange Act (the disclosures to be made pursuant to the foregoing clauses (A) through (I) are referred to as “Disclosable Interests”); provided, however, that Disclosable Interests shall not include any such disclosures with respect to the ordinary course business activities of any broker, dealer, commercial bank, trust company or other nominee who is a Proposing Person solely as a result of being the stockholder directed to prepare and submit the notice required by these bylaws on behalf of a beneficial owner; and

 

(c)          As to each item of business that the stockholder proposes to bring before the annual meeting, (A) a brief description of the business desired to be brought before the annual meeting, the reasons for conducting such business at the annual meeting and any material interest in such business of each Proposing Person, (B) the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the bylaws of the Corporation, the language of the proposed amendment), (C) a reasonably detailed description of all agreements, arrangements and understandings between or among any of the Proposing Persons or between or among any Proposing Person and any other person or entity (including their names) in connection with the proposal of such business by such stockholder and (D) any other information relating to such item of business that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies in support of the business proposed to be brought before the meeting pursuant to Section 14(a) of the Exchange Act; provided, however, that the disclosures required by this Section 2.4(iii) shall not include any disclosures with respect to any broker, dealer, commercial bank, trust company or other nominee who is a Proposing Person solely as a result of being the stockholder directed to prepare and submit the notice required by these bylaws on behalf of a beneficial owner.

 

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(iv)                              For purposes of this Section 2.4, the term “Proposing Person” shall mean (a) the stockholder providing the notice of business proposed to be brought before an annual meeting, (b) the beneficial owner or beneficial owners, if different, on whose behalf the notice of the business proposed to be brought before the annual meeting is made and (c) any participant (as defined in paragraphs (a)(ii)-(vi) of Instruction 3 to Item 4 of Schedule 14A) with such stockholder in such solicitation or associate (within the meaning of Rule 12b-2 under the Exchange Act for the purposes of these bylaws) of such stockholder or beneficial owner.

 

(v)                                 A Proposing Person shall update and supplement its notice to the Corporation of its intent to propose business at an annual meeting, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 2.4 shall be true and correct as of the record date for notice of the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for notice of the meeting (in the case of the update and supplement required to be made as of such record date), and not later than eight (8) business days prior to the date for the meeting or, if practicable, any adjournment or postponement thereof (and, if not practicable, on the first practicable date prior to the date to which the meeting has been adjourned or postponed) (in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof).

 

(vi)                              Notwithstanding anything in these bylaws to the contrary, no business shall be conducted at an annual meeting that is not properly brought before the meeting in accordance with this Section 2.4.  The presiding officer of the meeting shall, if the facts warrant, determine that the business was not properly brought before the meeting in accordance with this Section 2.4, and if he or she should so determine, he or she shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.

 

(vii)                           This Section 2.4 is expressly intended to apply to any business proposed to be brought before an annual meeting of stockholders, other than any proposal made in accordance with Rule 14a-8 under the Exchange Act and included in the Corporation’s proxy statement.  In addition to the requirements of this Section 2.4 with respect to any business proposed to be brought before an annual meeting, each Proposing Person shall comply with all applicable requirements of the Exchange Act with respect to any such business. Nothing in this Section 2.4 shall be deemed to affect the rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act.

 

(viii)                        For purposes of these bylaws, “public disclosure” shall mean disclosure in a press release reported by a national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act.

 

2.5       ADVANCE NOTICE PROCEDURES FOR NOMINATIONS OF DIRECTORS.

 

(i)                                     Nominations of any person for election to the Board at an annual meeting or at a special meeting (but only if the election of directors is a matter specified in the notice of meeting given by or at the direction of the person calling such special meeting) may be made at such meeting only (a) by or at the direction of the Board, including by any committee or persons authorized to do so by the Board or these bylaws, or (b) by a stockholder present in person (A) who was a beneficial owner of shares of the Corporation both at the time of giving the notice provided for in this Section 2.5 and at the time of the meeting, (B) is entitled to vote at the meeting and (C) has complied with this Section 2.5 as to such notice and nomination. 

 

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The foregoing clause (b) shall be the exclusive means for a stockholder to make any nomination of a person or persons for election to the Board at an annual meeting or special meeting.  For purposes of this Section 2.5, “present in person” shall mean that the stockholder proposing that the business be brought before the meeting of the Corporation, or, if the proposing stockholder is not an individual, a qualified representative of such stockholder, appear at such meeting.  A “qualified representative” of such proposing stockholder shall be, if such proposing stockholder is (x) a general or limited partnership, any general partner or person who functions as a general partner of the general or limited partnership or who controls the general or limited partnership, (y) a corporation or a limited liability company, any officer or person who functions as an officer of the corporation or limited liability company or any officer, director, general partner or person who functions as an officer, director or general partner of any entity ultimately in control of the corporation or limited liability company or (z) a trust, any trustee of such trust.

 

(ii)                                  Without qualification, for a stockholder to make any nomination of a person or persons for election to the Board at an annual meeting, the stockholder must (a) provide Timely Notice (as defined in Section 2.4(ii) of these bylaws) thereof in writing and in proper form to the Secretary of the Corporation, (b) provide the information with respect to such stockholder and its proposed nominee as required by this Section 2.5, and (c) provide any updates or supplements to such notice at the times and in the forms required by this Section 2.5.  Without qualification, if the election of directors is a matter specified in the notice of meeting given by or at the direction of the person calling such special meeting, then for a stockholder to make any nomination of a person or persons for election to the Board at a special meeting, the stockholder must (a) provide timely notice thereof in writing and in proper form to the Secretary of the Corporation at the principal executive offices of the Corporation, (b) provide the information with respect to such stockholder and its proposed nominee as required by this Section 2.5, and (c) provide any updates or supplements to such notice at the times and in the forms required by this Section 2.5.  To be timely, a stockholder’s notice for nominations to be made at a special meeting must be delivered to, or mailed and received at, the principal executive offices of the Corporation not earlier than the one hundred twentieth (120th) day prior to such special meeting and not later than the ninetieth (90th) day prior to such special meeting or, if later, the tenth (10th) day following the day on which public disclosure (as defined in Section 2.4(ix) of these bylaws) of the date of such special meeting was first made.  In no event shall any adjournment or postponement of an annual meeting or special meeting or the announcement thereof commence a new time period for the giving of a stockholder’s notice as described above.

 

(iii)                               To be in proper form for purposes of this Section 2.5, a stockholder’s notice to the Secretary shall set forth:

 

(a)         As to each Nominating Person (as defined below), the Stockholder Information (as defined in Section 2.4(iii)(a) of these bylaws) except that for purposes of this Section 2.5, the term “Nominating Person” shall be substituted for the term “Proposing Person” in all places it appears in Section 2.4(iii)(a);

 

(b)         As to each Nominating Person, any Disclosable Interests (as defined in Section 2.4(iii)(b), except that for purposes of this Section 2.5 the term “Nominating Person” shall be substituted for the term “Proposing Person” in all places it appears in Section 2.4(iii)(b) and the disclosure with respect to the business to be brought before the meeting in Section 2.4(iii)(b) shall be made with respect to the election of directors at the meeting);

 

(c)          As to each person whom a Nominating Person proposes to nominate for election as a director, (A) all information with respect to such proposed nominee that would be

 

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required to be set forth in a stockholder’s notice pursuant to this Section 2.5 if such proposed nominee were a Nominating Person, (B) all information relating to such proposed nominee that is required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14(a) under the Exchange Act (including such proposed nominee’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected), (C) a description of any direct or indirect material interest in any material contract or agreement between or among any Nominating Person, on the one hand, and each proposed nominee or his or her respective associates or any other participants in such solicitation, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 under Regulation S-K if such Nominating Person were the “registrant” for purposes of such rule and the proposed nominee were a director or executive officer of such registrant (the disclosures to be made pursuant to the foregoing clauses (A) through (C) are referred to as “Nominee Information”), and (D) a completed and signed questionnaire, representation and agreement as provided in Section 2.5(vi); and

 

(d)         The Corporation may require any proposed nominee to furnish such other information (A) as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as an independent director of the Corporation in accordance with the Corporation’s Corporate Governance Guidelines or (B) that could be material to a reasonable stockholder’s understanding of the independence or lack of independence of such proposed nominee.

 

(iv)                              For purposes of this Section 2.5, the term “Nominating Person” shall mean (a) the stockholder providing the notice of the nomination proposed to be made at the meeting, (b) the beneficial owner or beneficial owners, if different, on whose behalf the notice of the nomination proposed to be made at the meeting is made and (c) any associate of such stockholder or beneficial owner or any other participant in such solicitation.

 

(v)                                 A stockholder providing notice of any nomination proposed to be made at a meeting shall further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 2.5 shall be true and correct as of the record date for notice of the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for notice of the meeting (in the case of the update and supplement required to be made as of such record date), and not later than eight (8) business days prior to the date for the meeting or, if practicable, any adjournment or postponement thereof (and, if not practicable, on the first practicable date prior to the date to which the meeting has been adjourned or postponed) (in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof).

 

(vi)                              To be eligible to be a nominee for election as a director of the Corporation at an annual or special meeting, the proposed nominee must be nominated in the manner prescribed in Section 2.5 and must deliver (in accordance with the time period prescribed for delivery in a notice to such proposed nominee given by or on behalf of the Board), to the Secretary at the principal executive offices of the Corporation, (a) a completed written questionnaire (in a form provided by the Corporation) with respect to the background, qualifications, stock ownership and independence of such proposed nominee and (b) a written

 

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representation and agreement (in form provided by the Corporation) that such proposed nominee (A) is not and, if elected as a director during his or her term of office, will not become a party to (1) any agreement, arrangement or understanding with, and has not given and will not give any commitment or assurance to, any person or entity as to how such proposed nominee, if elected as a director of the Corporation, will act or vote on any issue or question (a “Voting Commitment”) or (2) any Voting Commitment that could limit or interfere with such proposed nominee’s ability to comply, if elected as a director of the Corporation, with such proposed nominee’s fiduciary duties under applicable law, (B) is not, and will not become a party to, any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation or reimbursement for service as a director and (C) if elected as a director of the Corporation, will comply with all applicable corporate governance, conflict of interest, confidentiality, stock ownership and trading and other policies and guidelines of the Corporation applicable to directors and in effect during such person’s term in office as a director (and, if requested by any proposed nominee, the Secretary of the Corporation shall provide to such proposed nominee all such policies and guidelines then in effect).

 

(vii)                           In addition to the requirements of this Section 2.5 with respect to any nomination proposed to be made at a meeting, each Proposing Person shall comply with all applicable requirements of the Exchange Act with respect to any such nominations.

 

(viii)                        No proposed nominee shall be eligible for nomination as a director of the Corporation unless such proposed nominee and the Nominating Person seeking to place such proposed nominee’s name in nomination have complied with this Section 2.5, as applicable.   The presiding officer at the meeting shall, if the facts warrant, determine that a nomination was not properly made in accordance with this Section 2.5, and if he or she should so determine, he or she shall so declare such determination to the meeting, the defective nomination shall be disregarded and any ballots cast for the proposed nominee in question (but in the case of any form of ballot listing other qualified nominees, only the ballots case for the nominee in question) shall be void and of no force or effect.

 

2.6       NOTICE OF STOCKHOLDERS’ MEETINGS.

 

Unless otherwise provided by law, the certificate of incorporation or these bylaws, the notice of any meeting of stockholders shall be sent or otherwise given in accordance with either Section 2.7 or Section 8.1 of these bylaws not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting.  The notice shall specify the place, if any, date and hour of the meeting, the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called.

 

2.7                               MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE.

 

Notice of any meeting of stockholders shall be deemed given:

 

(i)                                     if mailed, when deposited in the U.S. mail, postage prepaid, directed to the stockholder at his or her address as it appears on the Corporation’s records; or

 

(ii)                                  if electronically transmitted as provided in Section 8.1 of these bylaws.

 

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An affidavit of the secretary or an assistant secretary of the Corporation or of the transfer agent or any other agent of the Corporation that the notice has been given by mail or by a form of electronic transmission, as applicable, shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

 

2.8                               QUORUM.

 

Unless otherwise provided by law, the certificate of incorporation or these bylaws, the holders of a majority in voting power of the stock issued and outstanding and entitled to vote, present in person, or by remote communication, if applicable, or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of the stockholders.  If, however, a quorum is not present or represented at any meeting of the stockholders, then either (i) the chairperson of the meeting or (ii) a majority in voting power of the stockholders entitled to vote at the meeting, present in person, or by remote communication, if applicable, or represented by proxy, shall have power to adjourn the meeting from time to time in the manner provided in Section 2.9 of these bylaws until a quorum is present or represented.  At such adjourned meeting at which a quorum is present or represented, any business may be transacted that might have been transacted at the meeting as originally noticed.

 

2.9                               ADJOURNED MEETING; NOTICE.

 

When a meeting is adjourned to another time or place, unless these bylaws otherwise require, notice need not be given of the adjourned meeting if the time, place, if any, thereof, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken.  At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting.  If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

 

2.10                        CONDUCT OF BUSINESS.

 

The chairperson of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of business.

 

2.11                        VOTING.

 

The stockholders entitled to vote at any meeting of stockholders shall be determined in accordance with the provisions of Section 2.13 of these bylaws, subject to Section 217 (relating to voting rights of fiduciaries, pledgors and joint owners of stock) and Section 218 (relating to voting trusts and other voting agreements) of the DGCL.

 

Except as may be otherwise provided in the certificate of incorporation or these bylaws, each stockholder shall be entitled to one (1) vote for each share of capital stock held by such stockholder.

 

At all duly called or convened meetings of stockholders, at which a quorum is present, for the election of directors, a plurality of the votes cast shall be sufficient to elect a director.  Except as otherwise provided by the certificate of incorporation, these bylaws, the rules or regulations of any stock exchange applicable to the Corporation, or applicable law or pursuant to any regulation applicable to the Corporation or its securities, all other elections and questions presented to the stockholders at a duly called or convened meeting, at which

 

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a quorum is present, shall be decided by the majority of the votes cast affirmatively or negatively (excluding abstentions and broker non-votes) and shall be valid and binding upon the Corporation.

 

2.12                        NO STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING.

 

Subject to the rights of the holders of the shares of any series of Preferred Stock or any other class of stock or series thereof having a preference over the Common Stock as to dividends or upon liquidation, and except as otherwise provided in the certificate of incorporation, any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of stockholders of the Corporation and may not be effected by any consent in writing by such stockholders.

 

2.13                        RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS.

 

In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix, in advance, a record date, which record date shall not precede the date on which the resolution fixing the record date is adopted and which shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other such action.

 

If the Board does not so fix a record date:

 

(i)                  The record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.

 

(ii)               The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.

 

A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting.

 

2.14                        PROXIES.

 

Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for such stockholder by proxy authorized by an instrument in writing or by a transmission permitted by law filed in accordance with the procedure established for the meeting, but no such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period.  The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of Section 212 of the DGCL.  A proxy may be in the form of a telegram, cablegram or other means of electronic transmission which sets forth or is submitted with information from which it can be determined that the telegram, cablegram or other means of electronic transmission was authorized by the stockholder.

 

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2.15                        LIST OF STOCKHOLDERS ENTITLED TO VOTE.

 

The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder.  The Corporation shall not be required to include electronic mail addresses or other electronic contact information on such list.  Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of at least ten (10) days prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the Corporation’s principal executive office.  In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation.  If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.  If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting.  Such list shall presumptively determine the identity of the stockholders entitled to vote at the meeting and the number of shares held by each of them.

 

2.16                        INSPECTORS OF ELECTION.

 

Before any meeting of stockholders, the Board shall appoint an inspector or inspectors of election to act at the meeting or its adjournment and make a written report thereof.  The number of inspectors shall be either one (1) or three (3).  If any person appointed as inspector fails to appear or fails or refuses to act, then the chairperson of the meeting may, and upon the request of any stockholder or a stockholder’s proxy shall, appoint a person to fill that vacancy.

 

Such inspectors shall:

 

(i)                                     determine the number of shares outstanding and the voting power of each, the number of shares represented at the meeting, the existence of a quorum, and the authenticity, validity, and effect of proxies;

 

(ii)                                  receive votes or ballots;

 

(iii)                               hear and determine all challenges and questions in any way arising in connection with the right to vote;

 

(iv)                              count and tabulate all votes;

 

(v)                                 determine when the polls shall close;

 

(vi)                              determine the result; and

 

(vii)                           do any other acts that may be proper to conduct the election or vote with fairness to all stockholders.

 

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The inspectors of election shall perform their duties impartially, in good faith, to the best of their ability and as expeditiously as is practical.  If there are three (3) inspectors of election, the decision, act or certificate of a majority is effective in all respects as the decision, act or certificate of all.  Any report or certificate made by the inspectors of election is prima facie evidence of the facts stated therein.  The inspectors of election may appoint such persons to assist them in performing their duties as they determine.

 

ARTICLE III - DIRECTORS

 

3.1                               POWERS.

 

Subject to the provisions of the DGCL and any limitations in the certificate of incorporation or these bylaws relating to action required to be approved by the stockholders or by the outstanding shares, the business and affairs of the Corporation shall be managed and all corporate powers shall be exercised by or under the direction of the Board.

 

3.2                               NUMBER OF DIRECTORS.

 

The authorized number of directors shall be determined from time to time by resolution of the Board, provided the Board shall consist of at least one (1) member and not more than (12) members.  No reduction of the authorized number of directors shall have the effect of removing any director before that director’s term of office expires.

 

3.3                               ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS.

 

Except as provided in Section 3.4 of these bylaws, each director, including a director elected to fill a vacancy, shall hold office until the expiration of the term for which elected and until such director’s successor is elected and qualified or until such director’s earlier death, resignation or removal.  Directors need not be stockholders unless so required by the certificate of incorporation or these bylaws.  The certificate of incorporation or these bylaws may prescribe other qualifications for directors.

 

If so provided in the certificate of incorporation, the directors of the Corporation shall be divided into three (3) classes.

 

3.4                               RESIGNATION AND VACANCIES.

 

Any director may resign at any time upon notice given in writing or by electronic transmission to the Corporation.  When one or more directors so resigns and the resignation is effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as provided in this section in the filling of other vacancies.

 

Unless otherwise provided in the certificate of incorporation or these bylaws, vacancies and newly created directorships resulting from any increase in the authorized number of directors shall, unless the Board determines by resolution that any such vacancies or newly created directorships shall be filled by stockholders, be filled only by a majority of the directors then in office, although less than a quorum, or by a sole remaining director.  Any director elected in accordance with the preceding sentence shall hold office for

 

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the remainder of the full term of the director for which the vacancy was created or occurred and until such director’s successor shall have been elected and qualified. A vacancy in the Board of Directors shall be deemed to exist under these bylaws in the case of the death, removal or resignation of any director.

 

3.5                               PLACE OF MEETINGS; MEETINGS BY TELEPHONE.

 

The Board may hold meetings, both regular and special, either within or outside the State of Delaware.

 

Unless otherwise restricted by the certificate of incorporation or these bylaws, members of the Board, or any committee designated by the Board, may participate in a meeting of the Board, or any committee, by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting pursuant to this bylaw shall constitute presence in person at the meeting.

 

3.6                               REGULAR MEETINGS.

 

Regular meetings of the Board may be held without notice at such time and at such place as shall from time to time be determined by the Board.

 

3.7                               SPECIAL MEETINGS; NOTICE.

 

Special meetings of the Board for any purpose or purposes may be called at any time by the chairperson of the Board, the chief executive officer, the president, the secretary or a majority of the authorized number of directors.

 

Notice of the time and place of special meetings shall be:

 

(i)                                     delivered personally by hand, by courier or by telephone;

 

(ii)                                  sent by United States first-class mail, postage prepaid;

 

(iii)                               sent by facsimile; or

 

(iv)                              sent by electronic mail,

 

directed to each director at that director’s address, telephone number, facsimile number or electronic mail address, as the case may be, as shown on the Corporation’s records.

 

If the notice is (i) delivered personally by hand, by courier or by telephone, (ii) sent by facsimile or (iii) sent by electronic mail, it shall be delivered or sent at least twenty-four (24) hours before the time of the holding of the meeting.  If the notice is sent by U.S. mail, it shall be deposited in the U.S. mail at least four (4) days before the time of the holding of the meeting.  Any oral notice may be communicated to the director.  The notice need not specify the place of the meeting (if the meeting is to be held at the Corporation’s principal executive office) nor the purpose of the meeting.

 

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3.8                               QUORUM.

 

At all meetings of the Board, a majority of the authorized number of directors shall constitute a quorum for the transaction of business.  The vote of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board, except as may be otherwise specifically provided by statute, the certificate of incorporation or these bylaws.  If a quorum is not present at any meeting of the Board, then the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.

 

A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for that meeting.

 

3.9                               BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING.

 

Unless otherwise restricted by the certificate of incorporation or these bylaws, any action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board or committee.  Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

 

3.10                        FEES AND COMPENSATION OF DIRECTORS.

 

Unless otherwise restricted by the certificate of incorporation or these bylaws, the Board shall have the authority to fix the compensation of directors.

 

3.11                        REMOVAL OF DIRECTORS.

 

Except as otherwise provided by the DGCL or the certificate of incorporation, the Board of Directors or any individual director may be removed from office at any time, but only with cause by the affirmative vote of the holders of at least sixty six and two thirds percent (66-2/3%) of the voting power of all the then outstanding shares of voting stock of the Corporation with the power to vote at an election of directors (the “Voting Stock”).

 

No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of such director’s term of office.

 

ARTICLE IV - COMMITTEES

 

4.1                               COMMITTEES OF DIRECTORS.

 

The Board may designate one (1) or more committees, each committee to consist of one (1) or more of the directors of the Corporation.  The Board may designate one (1) or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.  In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may

 

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unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member.  Any such committee, to the extent provided in the resolution of the Board or in these bylaws, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers that may require it; but no such committee shall have the power or authority to (i) approve or adopt, or recommend to the stockholders, any action or matter expressly required by the DGCL to be submitted to stockholders for approval, or (ii) adopt, amend or repeal any bylaw of the Corporation.

 

4.2                               COMMITTEE MINUTES.

 

Each committee shall keep regular minutes of its meetings and report the same to the Board when required.

 

4.3                               MEETINGS AND ACTION OF COMMITTEES.

 

Meetings and actions of committees shall be governed by, and held and taken in accordance with, the provisions of:

 

(i)                                     Section 3.5 (place of meetings and meetings by telephone);

 

(ii)                                  Section 3.6 (regular meetings);

 

(iii)                               Section 3.7 (special meetings and notice);

 

(iv)                              Section 3.8 (quorum);

 

(v)                                 Section 7.12 (waiver of notice); and

 

(vi)                              Section 3.9 (action without a meeting),

 

with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the Board and its members.  However:

 

(i)                                     the time of regular meetings of committees may be determined either by resolution of the Board or by resolution of the committee;

 

(ii)                                  special meetings of committees may also be called by resolution of the Board or the chairperson of the applicable committee;

 

(iii)                               notice of special meetings of committees shall also be given to all alternate members, who shall have the right to attend all meetings of the committee; and

 

(iv)                              the Board may adopt rules for the governance of any committee to override the provisions that would otherwise apply to the committee pursuant to this Section 4.3, provided that such rules do not violate the provisions of the certificate of incorporation or applicable law.

 

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ARTICLE V - OFFICERS

 

5.1                               OFFICERS.

 

The officers of the Corporation shall be a president and a secretary.  The Corporation may also have, at the discretion of the Board, a chairperson of the Board, a vice chairperson of the Board, a chief executive officer, a chief financial officer or treasurer, one (1) or more vice presidents, one (1) or more assistant vice presidents, one (1) or more assistant treasurers, one (1) or more assistant secretaries, and any such other officers as may be appointed in accordance with the provisions of these bylaws.  Any number of offices may be held by the same person.

 

5.2                               APPOINTMENT OF OFFICERS.

 

The Board shall appoint the officers of the Corporation, except such officers as may be appointed in accordance with the provisions of Section 5.3 of these bylaws, subject to the rights, if any, of an officer under any contract of employment.

 

5.3                               SUBORDINATE OFFICERS.

 

The Board may appoint, or empower the chief executive officer or, in the absence of a chief executive officer, the president, to appoint, such other officers and agents as the business of the Corporation may require.  Each of such officers and agents shall hold office for such period, have such authority, and perform such duties as are provided in these bylaws or as the Board may from time to time determine.

 

5.4                               REMOVAL AND RESIGNATION OF OFFICERS.

 

Subject to the rights, if any, of an officer under any contract of employment, any officer may be removed, either with or without cause, by an affirmative vote of the majority of the Board at any regular or special meeting of the Board or, except in the case of an officer chosen by the Board, by any officer upon whom such power of removal may be conferred by the Board.

 

Any officer may resign at any time by giving written notice to the Corporation.  Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice.  Unless otherwise specified in the notice of resignation, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the Corporation under any contract to which the officer is a party.

 

5.5                               VACANCIES IN OFFICES.

 

Any vacancy occurring in any office of the Corporation shall be filled by the Board or as provided in Section 5.2.

 

5.6                               REPRESENTATION OF SHARES OF OTHER CORPORATIONS.

 

The chairperson of the Board, the chief executive officer, the president, any vice president, the treasurer, the secretary or assistant secretary of this Corporation, or any other person authorized by the Board, the chief executive officer, the president or a vice president, is authorized to vote, represent and exercise on behalf of this Corporation all rights incident to any and all shares of any other corporation or corporations

 

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standing in the name of this Corporation.  The authority granted herein may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by such person having the authority.

 

5.7                               AUTHORITY AND DUTIES OF OFFICERS.

 

All officers of the Corporation shall respectively have such authority and perform such duties in the management of the business of the Corporation as may be designated from time to time by the Board or the stockholders and, to the extent not so provided, as generally pertain to their respective offices, subject to the control of the Board.

 

ARTICLE VI - RECORDS AND REPORTS

 

6.1                               MAINTENANCE AND INSPECTION OF RECORDS.

 

The Corporation shall, either at its principal executive office or at such place or places as designated by the Board, keep a record of its stockholders listing their names and addresses and the number and class of shares held by each stockholder, a copy of these bylaws as amended to date, accounting books and other records.

 

Any stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the Corporation’s stock ledger, a list of its stockholders, and its other books and records and to make copies or extracts therefrom.  A proper purpose shall mean a purpose reasonably related to such person’s interest as a stockholder.  In every instance where an attorney or other agent is the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing that authorizes the attorney or other agent so to act on behalf of the stockholder.  The demand under oath shall be directed to the Corporation at its registered office in Delaware or at its principal executive office.

 

6.2                               INSPECTION BY DIRECTORS.

 

Any director shall have the right to examine the Corporation’s stock ledger, a list of its stockholders, and its other books and records for a purpose reasonably related to his or her position as a director.  The Court of Chancery is hereby vested with the exclusive jurisdiction to determine whether a director is entitled to the inspection sought.  The Court may summarily order the Corporation to permit the director to inspect any and all books and records, the stock ledger, and the stock list and to make copies or extracts therefrom.  The Court may, in its discretion, prescribe any limitations or conditions with reference to the inspection, or award such other and further relief as the Court may deem just and proper.

 

ARTICLE VII - GENERAL MATTERS

 

7.1                               EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS.

 

The Board, except as otherwise provided in these bylaws, may authorize any officer or officers, or agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the Corporation; such authority may be general or confined to specific instances.  Unless so authorized or ratified

 

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by the Board or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.

 

7.2                               STOCK CERTIFICATES; PARTLY PAID SHARES.

 

The shares of the Corporation shall be represented by certificates or shall be uncertificated.  Certificates for the shares of stock, if any, shall be in such form as is consistent with the certificate of incorporation and applicable law. Every holder of stock represented by a certificate shall be entitled to have a certificate signed by, or in the name of the Corporation by the chairperson or vice-chairperson of the Board, or the president or vice-president, and by the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the Corporation representing the number of shares registered in certificate form.  Any or all of the signatures on the certificate may be a facsimile.  In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue.

 

The Corporation may issue the whole or any part of its shares as partly paid and subject to call for the remainder of the consideration to be paid therefor.  Upon the face or back of each stock certificate issued to represent any such partly paid shares, upon the books and records of the Corporation in the case of uncertificated partly paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated.  Upon the declaration of any dividend on fully paid shares, the Corporation shall declare a dividend upon partly paid shares of the same class, but only upon the basis of the percentage of the consideration actually paid thereon.

 

7.3                               SPECIAL DESIGNATION ON CERTIFICATES.

 

If the Corporation is authorized to issue more than one class of stock or more than one series of any class, then the powers, the designations, the preferences and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate that the Corporation shall issue to represent such class or series of stock; provided, however, that, except as otherwise provided in Section 202 of the DGCL, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate that the Corporation shall issue to represent such class or series of stock a statement that the Corporation will furnish without charge to each stockholder who so requests the powers, the designations, the preferences and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

 

7.4                               LOST CERTIFICATES.

 

Except as provided in this Section 7.4, no new certificates for shares shall be issued to replace a previously issued certificate unless the latter is surrendered to the Corporation and canceled at the same time.  The Corporation may issue a new certificate of stock or uncertificated shares in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or such owner’s legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.

 

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7.5                               CONSTRUCTION; DEFINITIONS.

 

Unless the context requires otherwise, the general provisions, rules of construction and definitions in the DGCL shall govern the construction of these bylaws.  Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, and the term “person” includes both a corporation and a natural person.

 

7.6                               DIVIDENDS.

 

The Board, subject to any restrictions contained in either (i) the DGCL or (ii) the certificate of incorporation, may declare and pay dividends upon the shares of its capital stock.  Dividends may be paid in cash, in property or in shares of the Corporation’s capital stock.

 

The Board may set apart out of any of the funds of the Corporation available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve. Such purposes shall include but not be limited to equalizing dividends, repairing or maintaining any property of the Corporation, and meeting contingencies.

 

7.7                               FISCAL YEAR.

 

The fiscal year of the Corporation shall be fixed by resolution of the Board and may be changed by the Board.

 

7.8                               SEAL.

 

The Corporation may adopt a corporate seal, which shall be adopted and which may be altered by the Board.  The Corporation may use the corporate seal by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.

 

7.9                               TRANSFER OF STOCK.

 

Shares of the Corporation shall be transferable in the manner prescribed by law and in these bylaws.  Shares of stock of the Corporation shall be transferred on the books of the Corporation only by the holder of record thereof or by such holder’s attorney duly authorized in writing, upon surrender to the Corporation of the certificate or certificates representing such shares endorsed by the appropriate person or persons (or by delivery of duly executed instructions with respect to uncertificated shares), with such evidence of the authenticity of such endorsement or execution, transfer, authorization and other matters as the Corporation may reasonably require, and accompanied by all necessary stock transfer stamps.  No transfer of stock shall be valid as against the Corporation for any purpose until it shall have been entered in the stock records of the Corporation by an entry showing the names of the persons from and to whom it was transferred.

 

7.10                        STOCK TRANSFER AGREEMENTS.

 

The Corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes of stock of the Corporation to restrict the transfer of shares of stock of the Corporation of any one or more classes owned by such stockholders in any manner not prohibited by the DGCL.

 

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7.11                        REGISTERED STOCKHOLDERS.

 

The Corporation:

 

(i)                                     shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and to vote as such owner;

 

(ii)                                  shall be entitled to hold liable for calls and assessments the person registered on its books as the owner of shares; and

 

(iii)                               shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of another person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

 

7.12                        WAIVER OF NOTICE.

 

Whenever notice is required to be given under any provision of the DGCL, the certificate of incorporation or these bylaws, a written waiver, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to notice.  Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.  Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the certificate of incorporation or these bylaws.

 

ARTICLE VIII - NOTICE BY ELECTRONIC TRANSMISSION

 

8.1                               NOTICE BY ELECTRONIC TRANSMISSION.

 

Without limiting the manner by which notice otherwise may be given effectively to stockholders pursuant to the DGCL, the certificate of incorporation or these bylaws, any notice to stockholders given by the Corporation under any provision of the DGCL, the certificate of incorporation or these bylaws shall be effective if given by a form of electronic transmission consented to by the stockholder to whom the notice is given.  Any such consent shall be revocable by the stockholder by written notice to the Corporation.  Any such consent shall be deemed revoked if:

 

(i)                                     the Corporation is unable to deliver by electronic transmission two (2) consecutive notices given by the Corporation in accordance with such consent; and

 

(ii)                                  such inability becomes known to the secretary or an assistant secretary of the Corporation or to the transfer agent, or other person responsible for the giving of notice.

 

However, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action.

 

Any notice given pursuant to the preceding paragraph shall be deemed given:

 

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(i)                                     if by facsimile telecommunication, when directed to a number at which the stockholder has consented to receive notice;

 

(ii)                                  if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice;

 

(iii)                               if by a posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and

 

(iv)                              if by any other form of electronic transmission, when directed to the stockholder.

 

An affidavit of the secretary or an assistant secretary or of the transfer agent or other agent of the Corporation that the notice has been given by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

 

8.2                               DEFINITION OF ELECTRONIC TRANSMISSION.

 

An “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.

 

ARTICLE IX - INDEMNIFICATION

 

9.1                               INDEMNIFICATION OF DIRECTORS AND OFFICERS.

 

The Corporation shall indemnify and hold harmless, to the fullest extent permitted by the DGCL as it presently exists or may hereafter be amended, any director or officer of the Corporation who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”) by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or non-profit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such person in connection with any such Proceeding.  Notwithstanding the preceding sentence, except as otherwise provided in Section 9.4, the Corporation shall be required to indemnify a person in connection with a Proceeding initiated by such person only if the Proceeding was authorized in the specific case by the Board.

 

9.2                               INDEMNIFICATION OF OTHERS.

 

The Corporation shall have the power to indemnify and hold harmless, to the extent permitted by applicable law as it presently exists or may hereafter be amended, any employee or agent of the Corporation who was or is made or is threatened to be made a party or is otherwise involved in any Proceeding by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was an employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or non-profit entity,

 

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including service with respect to employee benefit plans, against all liability and loss suffered and expenses reasonably incurred by such person in connection with any such Proceeding.

 

9.3                               PREPAYMENT OF EXPENSES.

 

The Corporation shall to the fullest extent not prohibited by applicable law pay the expenses (including attorneys’ fees) incurred by any officer or director of the Corporation, and may pay the expenses incurred by any employee or agent of the Corporation, in defending any Proceeding in advance of its final disposition; provided, however, that, to the extent required by law, such payment of expenses in advance of the final disposition of the Proceeding shall be made only upon receipt of an undertaking by the person to repay all amounts advanced if it should be ultimately determined that the person is not entitled to be indemnified under this Article IX or otherwise.

 

9.4                               DETERMINATION; CLAIM.

 

If a claim for indemnification (following the final disposition of such Proceeding) or advancement of expenses under this Article IX is not paid in full within sixty (60) days after a written claim therefor has been received by the Corporation the claimant may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim to the fullest extent permitted by law.  In any such action the Corporation shall have the burden of proving that the claimant was not entitled to the requested indemnification or payment of expenses under applicable law.

 

9.5                               NON-EXCLUSIVITY OF RIGHTS.

 

The rights conferred on any person by this Article IX shall not be exclusive of any other rights which such person may have or hereafter acquire under any statute, provision of the certificate of incorporation, these bylaws, agreement, vote of stockholders or disinterested directors or otherwise.

 

9.6                               INSURANCE.

 

The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust enterprise or non-profit entity against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify him or her against such liability under the provisions of the DGCL.

 

9.7                               OTHER INDEMNIFICATION.

 

The Corporation’s obligation, if any, to indemnify or advance expenses to any person who was or is serving at its request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, enterprise or non-profit entity shall be reduced by any amount such person may collect as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, enterprise or non-profit enterprise.

 

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9.8                               CONTINUATION OF INDEMNIFICATION.

 

The rights to indemnification and to prepayment of expenses provided by, or granted pursuant to, this Article IX shall continue notwithstanding that the person has ceased to be a director or officer of the Corporation and shall inure to the benefit of the estate, heirs, executors, administrators, legatees and distributees of such person.

 

9.9                               AMENDMENT OR REPEAL.

 

The provisions of this Article IX shall constitute a contract between the Corporation, on the one hand, and, on the other hand, each individual who serves or has served as a director or officer of the Corporation (whether before or after the adoption of these bylaws), in consideration of such person’s performance of such services, and pursuant to this Article IX the Corporation intends to be legally bound to each such current or former director or officer of the Corporation.  With respect to current and former directors and officers of the Corporation, the rights conferred under this Article IX are present contractual rights and such rights are fully vested, and shall be deemed to have vested fully, immediately upon adoption of theses bylaws.  With respect to any directors or officers of the Corporation who commence service following adoption of these bylaws, the rights conferred under this provision shall be present contractual rights and such rights shall fully vest, and be deemed to have vested fully, immediately upon such director or officer commencing service as a director or officer of the Corporation.  Any repeal or modification of the foregoing provisions of this Article IX shall not adversely affect any right or protection (i) hereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification or (ii) under any agreement providing for indemnification or advancement of expenses to an officer or director of the Corporation in effect prior to the time of such repeal or modification.

 

ARTICLE X - AMENDMENTS

 

Subject to the limitations set forth in Section 9.9 of these bylaws or the provisions of the certificate of incorporation, the Board is expressly empowered to adopt, amend or repeal the bylaws of the Corporation. Any adoption, amendment or repeal of the bylaws of the Corporation by the Board shall require the approval of a majority of the authorized number of directors. The stockholders also shall have power to adopt, amend or repeal the bylaws of the Corporation; provided, however, that, in addition to any vote of the holders of any class or series of stock of the Corporation required by law or by the certificate of incorporation, such action by stockholders shall require the affirmative vote of the holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the then-outstanding shares of the Voting Stock.

 

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MIRNA THERAPEUTICS, INC.

 

CERTIFICATE OF AMENDMENT AND RESTATEMENT OF BYLAWS

 


 

The undersigned hereby certifies that he or she is the duly elected, qualified, and acting Secretary of Mirna Therapeutics, Inc., a Delaware corporation, and that the foregoing bylaws were amended and restated on [·], 2015 by the Corporation’s board of directors.

 

IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this [·] day of [·], 2015.

 

 

 

 

 

Jon Irvin, Secretary

 




Exhibit 4.3

 

MIRNA THERAPEUTICS, INC.

 

THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

 

THIS THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (this “Agreement”) is entered into as of this 31st day of March, 2015, by and among MIRNA THERAPEUTICS, INC., a Delaware corporation (the “Company”), and each of the persons and entities listed on Exhibit A hereto (the “Investors” and each individually an “Investor”).

 

RECITALS

 

WHEREAS, certain of the Investors and the Company have previously entered into that certain Second Amended and Restated Investor Rights Agreement dated as of October 22, 2012 (as amended, the “Prior Agreement”);

 

WHEREAS, the Prior Agreement may be amended, and any provision therein waived, with the written consent of the Company and the Investors (as defined in the Prior Agreement) holding at least a majority of the then outstanding shares of Common Stock issued or issuable upon the conversion of the Preferred Stock;

 

WHEREAS, on the date of this Agreement, certain of the Investors (the “Series D Purchasers”) are purchasing, severally and not jointly, shares of the Company’s Series D Preferred Stock, par value $0.001 per share (the “Series D Preferred Stock”), pursuant to that certain Series D Preferred Stock Purchase Agreement dated as of the date hereof (the “Purchase Agreement”), by and among the Company and the Series D Purchasers (the “Series D Financing”);

 

WHEREAS, the obligations of the Company and the Investors in the Purchase Agreement are conditioned upon the execution and delivery of this Agreement; and

 

WHEREAS, in connection with the consummation of the Series D Financing, the Company and the Investors have agreed to the registration rights, information rights, and other rights with respect to the Preferred Stock (as defined below) held by the Investors as set forth below and have agreed to amend and restate the Prior Agreement as set forth herein;

 

NOW, THEREFORE, in consideration of these premises and for other good and valid consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investors who constitute the requisite parties necessary to amend the Prior Agreement hereby agree that the Prior Agreement shall be amended and restated in its entirety by this Agreement, and the parties hereto further agree as follows:

 

AGREEMENT

 

SECTION 1.                         DEFINITIONS.

 

As used in this Agreement the following terms shall have the following respective meanings:

 

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(a)                                 Affiliate” means, with respect to any specified person, any other person who or which, directly or indirectly, controls, is controlled by, or is under common control with such specified person, including without limitation any partner, officer, director, manager or employee of such person and any venture capital or private equity fund now or hereafter existing that is controlled by or under common control with one or more general partners or managing members of, or shares the same management company with, such person.

 

(b)                                 Baxter” means Baxter Healthcare Corporation and its Affiliates.

 

(c)                                  Baxter Transferee” means Baxalta Incorporated or any of its Affiliates to whom Baxter transfers its shares of Common Stock and Preferred Stock pursuant to the Third Amended and Restated Right of First Refusal and Co-Sale Agreement dated the date hereof by and among the Company and the parties listed therein, as it may be amended or restated from time to time.

 

(d)                                 Common Stock” means common stock, par value $0.001 per share, of the Company.

 

(e)                                  Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

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

 

(g)                                 GAAP” means generally accepted accounting principles in the United States.

 

(h)                                 Holder” means any person owning of record Registrable Securities that have not been sold to the public or any assignee of record of such Registrable Securities in accordance with Section 2.9 hereof.

 

(i)                                    Initial Offering” means the Company’s first firm commitment underwritten public offering of its Common Stock registered under the Securities Act.

 

(j)                                    Investment Company Act” means the Investment Company Act of 1940, as amended.

 

(k)                                 NEA” means New Enterprise Associates 14, L.P., NEA Ventures 2012, Limited Partnership and their respective Affiliates.

 

(l)                                    Pfizer” means Pfizer Inc. and its Affiliates.

 

(m)                             Preferred Directors” has the meaning set forth in the Restated Certificate.

 

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(n)                                 Preferred Stock” means, collectively, the Series A Preferred Stock, the Series B Preferred Stock, the Series B-1 Preferred Stock, the Series C Preferred Stock and the Series D Preferred Stock.

 

(o)                                 Register,” “registered,” and “registration” refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement or document.

 

(p)                                 Registrable Securities” means (a) Common Stock of the Company issuable or issued upon conversion of the Preferred Stock, (b) Common Stock of the Company held by the Investors (other than shares of Common Stock of the Company issued or issuable upon exercise of options or other awards granted pursuant to stock purchase or stock option plans or other similar incentive plans or arrangements), (c) Common Stock of the Company held by a transferee or assignee of Registrable Securities who has agreed in writing to be bound by the terms of this Agreement under Section 2.9, and (d) any Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, such above-described securities (other than shares of Common Stock of the Company issued or issuable upon exercise of options or other awards granted pursuant to stock purchase or stock option plans or other similar incentive plans or arrangements). Notwithstanding the foregoing, Registrable Securities shall not include any securities (i) sold by a person to the public either pursuant to a registration statement or Rule 144, (ii) sold in a private transaction in which the transferor’s rights under Section 2 of this Agreement are not assigned or (iii) held by a Holder (together with its Affiliates) if, as reflected on the Company’s list of stockholders, such Holder (together with its Affiliates) holds less than 1% of the Company’s outstanding Common Stock (treating all shares of Preferred Stock on an as-converted basis), the Company has completed its Initial Offering and all shares of Common Stock of the Company issuable or issued upon conversion of the Shares held by and issuable to such Holder (and its Affiliates) may be sold pursuant to Rule 144 without limitation during any ninety (90) day period; provided, the foregoing exception to the definition of Registrable Securities shall not apply to the operation of Sections 2.12 and 2.13 below.  A Holder of Registrable Securities need not convert such Registrable Securities into Common Stock prior to requesting registration hereunder but may make such request in contemplation of conversion of such Registrable Securities into Common Stock prior to the effectiveness of such registration.

 

(q)                                 Registrable Securities then outstanding” shall be the number of shares of the Company’s Common Stock that are Registrable Securities and either (a) are then issued and outstanding or (b) are issuable pursuant to then exercisable or convertible securities.

 

(r)                                  Registration Expenses” shall mean all expenses incurred by the Company in complying with Sections 2.1, 2.2 and 2.3 hereof, including, without limitation, all registration and filing fees, printing and accounting expenses, fees and disbursements of counsel for the Company, reasonable fees and disbursements of a single special counsel for the selling Holders, blue- sky fees and expenses and the expense of any special audits incident to or required by any such registration (but excluding the compensation of regular employees of the Company which shall be paid in any event by the Company).

 

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(s)                                   Required Holders” means the Investors holding at least a majority of the then outstanding shares of Common Stock issued or issuable upon the conversion of the Preferred Stock.

 

(t)                                    Restated Certificate” means the Sixth Amended and Restated Certificate of Incorporation of the Company, as amended from time to time.

 

(u)                                 Right of First Refusal Agreement” means the Third Amended and Restated Right of First Refusal and Co-Sale Agreement of even date herewith by and among the Company, the Investors and certain other parties named therein.

 

(v)                                 SEC” or “Commission” means the Securities and Exchange Commission.

 

(w)                               Securities Act” shall mean the Securities Act of 1933, as amended.

 

(x)                                 Selling Expenses” shall mean all underwriting discounts and selling commissions applicable to the sale of Registrable Securities.

 

(y)                                 Series A Preferred Stock” shall mean Series A preferred stock, par value $0.001 per share, of the Company.

 

(z)                                  Series B Preferred Stock” shall mean Series B preferred stock, par value $0.001 per share, of the Company.

 

(aa)                          Series B-1 Preferred Stock” shall mean Series B-1 preferred stock, par value $0.001 per share, of the Company.

 

(bb)                          Series C Preferred Stock” shall mean Series C preferred stock, par value $0.001 per share, of the Company.

 

(cc)                            Shares” shall mean the Preferred Stock held by the Investors listed on Exhibit A hereto and their permitted assigns.

 

(dd)                          Sofinnova” shall mean Sofinnova Venture Partners VIII, L.P. and its Affiliates.

 

(ee)                            Special Registration Statement” shall mean (i) a registration statement relating to any employee benefit plan, (ii) a registration statement with respect to any corporate reorganization or transaction under Rule 145 of the Securities Act, including any registration statements related to the issuance or resale of securities issued in such a transaction, or (iii) a registration statement in which the only Common Stock being registered is Common Stock issued upon conversion of debt securities that are also being registered

 

(ff)                              Transfer” shall mean any direct or indirect sale, transfer, assignment, exchange, pledge, hypothecation, mortgage or grant of a proxy, or any other encumbrance or disposition of an interest.

 

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(gg)                          Voting Agreement” shall mean that certain Third Amended and Restated Voting Agreement dated as of the date hereof, by and among the Company, the Investors and certain other parties set forth therein.

 

SECTION 2.                         REGISTRATION.

 

2.1                               Demand Registration.

 

(a)                                 Subject to the conditions of this Section 2.1, if the Company shall receive a written request from the Required Holders (for purposes of this Section 2.1, the “Initiating Holders”) that the Company file a registration statement under the Securities Act covering the registration of at least twenty percent (20%) of shares of the Common Stock issuable or issued upon conversion of the Preferred Stock (the “Preferred Stock Registrable Securities”), then the Company shall, within fifteen (15) days after the receipt thereof, give written notice of such request to all Holders, and subject to the limitations of this Section 2.1, shall, as expeditiously as possible and in any event within sixty (60) days after receipt of the request from the Initiating Holders, file a registration statement under the Securities Act of all Registrable Securities that the Initiating Holders requested to be registered and any additional Registrable Securities that all other Holders request to be registered, as specified by notice given by each such other Holder to the Company within twenty (20) days after the date that the written notice by the Company referred to above is given.

 

(b)                                 Notwithstanding the foregoing obligations, if the Company furnishes to the Initiating Holders a certificate signed by the Company’s chief executive officer stating that in the good faith judgment of the Company’s board of directors (the “Board”) it would be materially detrimental to the Company and its stockholders for such registration statement to either become effective or remain effective for as long as such registration statement otherwise would be required to remain effective, because such action would (i) materially interfere with a significant acquisition, corporate reorganization, or other similar transaction involving the Company; (ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act, then the Company shall have the right to defer taking action with respect to such filing, and any time periods with respect to filing or effectiveness thereof shall be tolled correspondingly, for a period of not more than ninety (90) days after the request of the Initiating Holders is given; provided, however, that the Company may not invoke this right more than once in any twelve (12) month period; and provided, further, that the Company shall not register any securities for its own account or that of any other stockholder during such ninety (90) day period other than pursuant to a Special Registration Statement.

 

(c)                                  If the Initiating Holders intend to distribute the Preferred Stock Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 2.1 or any request pursuant to Section 2.3 and the Company shall include such information in the written notice referred to in Section 2.1(a) or Section 2.3(a), as applicable.  In such event, the right of any Holder to include its Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in

 

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the underwriting to the extent provided herein.  All Holders proposing to distribute their securities through such underwriting shall, together with the Company as provided in Section 2.5(e), enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by a majority in interest of the Initiating Holders (which underwriter or underwriters shall be reasonably acceptable to the Company).  Notwithstanding any other provision of this Section 2.1 or Section 2.3, if the managing underwriter advises the Company that marketing factors require a limitation of the number of securities to be underwritten (including Preferred Stock Registrable Securities) then the Company shall so advise all Holders of Registrable Securities that would otherwise be underwritten pursuant hereto, and the number of shares that may be included in the underwriting shall be allocated to the Holders of such Registrable Securities on a pro rata basis based on the number of Registrable Securities held by all such Holders (including the Initiating Holders); provided, however, that the number of shares of Preferred Stock Registrable Securities to be included in such underwriting and registration shall not be reduced unless all other securities of the Company are first entirely excluded from the underwriting and registration.  Any Registrable Securities excluded or withdrawn from such underwriting shall be withdrawn from the registration.

 

(d)                                 The Company shall not be required to effect a registration pursuant to this Section 2.1:

 

(i)                                    prior to the earlier of (A) the third anniversary of the date hereof or (B) one hundred eighty (180) days following the effective date of the registration statement pertaining to the Initial Offering;

 

(ii)                                after the Company has effected two (2) registrations pursuant to this Section 2.1, and such registrations have been declared or ordered effective;

 

(iii)                            if within fifteen (15) days of receipt of a written request from the Initiating Holders pursuant to Section 2.1(a), the Company gives notice to each of the Initiating Holders of the Company’s intention to file a registration statement for its Initial Offering within ninety (90) days after receipt of such written request from the Initiating Holders, provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective during such period;

 

(iv)                             if the Initiating Holders propose to dispose of shares of Preferred Stock Registrable Securities that may be immediately registered on Form S-3 pursuant to a request made pursuant to Section 2.3 below; or

 

(v)                                 in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance unless the Company is already qualified to do business or subject to service of process, as applicable, in such jurisdiction and except as may be required by the Securities Act.

 

2.2                               Piggyback Registrations.  The Company shall notify all Holders of Registrable Securities in writing at least twenty (20) days prior to the filing of any registration statement

 

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under the Securities Act for purposes of a public offering of securities of the Company (including, but not limited to, registration statements relating to secondary offerings of securities of the Company, but excluding Special Registration Statements) and will afford each such Holder an opportunity to include in such registration statement, and the Company shall cause to be registered, all or part of such Registrable Securities held by such Holder.  Each Holder desiring to include in any such registration statement all or any part of the Registrable Securities held by it shall, within fifteen (15) days after receipt of the above-described notice from the Company, so notify the Company in writing.  Such notice shall state the intended method of disposition of the Registrable Securities by such Holder.  If a Holder decides not to include all of its Registrable Securities in such registration statement filed by the Company, such Holder shall nevertheless continue to have the right to include any Registrable Securities in any subsequent registration statement or registration statements as may be filed by the Company with respect to offerings of its securities, all upon the terms and conditions set forth herein.

 

(a)                                 Underwriting.  If the registration statement under which the Company gives notice under this Section 2.2 is for an underwritten offering, the Company shall so advise the Holders of Registrable Securities.  In such event, the right of any such Holder to be included in a registration pursuant to this Section 2.2 shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein.  All Holders proposing to distribute their Registrable Securities through such underwriting shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Company.  Notwithstanding any other provision of this Agreement, if the underwriter determines in good faith that marketing factors require a limitation of the number of shares to be underwritten, the number of shares that may be included in the underwriting shall be allocated, first, to the Company; second, to the holders of Preferred Stock Registrable Securities (the “Preferred Holders”) on a pro rata basis based on the total number of Preferred Stock Registrable Securities held by such Preferred Holders; third, to the Holders (other than the Preferred Holders) on a pro rata basis based on the total number of Registrable Securities held by such Holders; and fourth, to any stockholder of the Company (other than a Holder) on a pro rata basis; provided, however, that no such reduction shall reduce the amount of securities of the selling Holders included in the registration below thirty percent (30%) of the total amount of securities included in such registration, unless such offering is the Initial Offering and such registration does not include shares of any other selling stockholders, in which event any or all of the Registrable Securities of the Holders may be excluded in accordance with the immediately preceding clause.  In no event will shares of any other selling stockholder be included in such registration that would reduce the number of shares which may be included by Holders without the written consent of Holders of not less than a majority of the Registrable Securities (including a majority of the Preferred Stock Registrable Securities, if applicable) proposed to be sold in the offering.  If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw therefrom by written notice to the Company and the underwriter, delivered at least ten (10) business days prior to the effective date of the registration statement.  Any Registrable Securities excluded or withdrawn from such underwriting shall be excluded and withdrawn from the registration.  For any Holder that is a partnership or corporation, the partners, retired partners, members, former members and stockholders of such Holder, or the estates and family members of any such partners and retired partners and any trusts for the benefit of any of the foregoing person shall be deemed to be a single “Holder,” and any pro rata

 

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reduction with respect to such “Holder” shall be based upon the aggregate amount of shares carrying registration rights owned by all entities and individuals included in such “Holder,” as defined in this sentence.

 

(b)                                 Right to Terminate Registration.  The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.2 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration.  The Registration Expenses of such withdrawn registration shall be borne by the Company in accordance with Section 2.4 hereof.

 

2.3                               Form S-3 Registration.  In case the Company shall receive from any Holder or Holders of Registrable Securities a written request or requests that the Company effect a registration on Form S-3 (or any successor to Form S-3) or any similar short-form registration statement and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holder or Holders, the Company shall:

 

(a)                                 promptly (and in any event within fifteen (15) days after such written request is delivered) give written notice of the proposed registration, and any related qualification or compliance, to all other Holders of Registrable Securities; and

 

(b)                                 as soon as practicable, effect such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holder’s or Holders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Holder or Holders joining in such request as are specified in a written request given within fifteen (15) days after receipt of such written notice from the Company; provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance pursuant to this Section 2.3:

 

(i)                                    if Form S-3 is not available for such offering by the Holders;

 

(ii)                                if the Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public of less than one million dollars ($1,000,000);

 

(iii)                            if within fifteen (15) days of receipt of a written request from any Holder or Holders pursuant to this Section 2.3, the Company gives notice to such Holder or Holders of the Company’s intention to make a public offering within ninety (90) days after receipt of such written request from such Holder or Holders, other than pursuant to a Special Registration Statement; provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective during such period; provided, further, that such Holders were permitted to register such shares as requested to be registered pursuant to Section 2.2 hereof without reduction by the underwriter thereof;

 

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(iv)                             if the Company has, within the twelve (12) month period preceding the date of such written request, already effected two (2) registrations on Form S-3 for the Holders pursuant to this Section 2.3; or

 

(v)                                 in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance unless the Company is already qualified to do business or subject to service of process, as applicable, in such jurisdiction and except as may be required by the Securities Act.

 

(c)                                  Subject to the foregoing, the Company shall file a Form S-3 registration statement covering the Registrable Securities and other securities so requested to be registered as soon as practicable after receipt of the requests of the Holders.  Registrations effected pursuant to this Section 2.3 shall not be counted as demands for registration or registrations effected pursuant to Section 2.1.

 

(d)                                 Notwithstanding the foregoing obligations, if the Company furnishes to the Holder or Holders requesting a registration pursuant to this Section 2.3 a certificate signed by the Company’s chief executive officer stating that in the good faith judgment of the Board it would be materially detrimental to the Company and its stockholders for such registration statement to either become effective or remain effective for as long as such registration statement otherwise would be required to remain effective, because such action would (i) materially interfere with a significant acquisition, corporate reorganization, or other similar transaction involving the Company; (ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act, then the Company shall have the right to defer taking action with respect to such filing, and any time periods with respect to filing or effectiveness thereof shall be tolled correspondingly, for a period of not more than ninety (90) days after the request for registration on Form S-3 referred to in Section 2.3 is given; provided, however, that the Company may not invoke this right more than once in any twelve (12) month period; and provided, further, that the Company shall not register any securities for its own account or that of any other stockholder during such ninety (90) day period other than pursuant to a Special Registration Statement.

 

2.4                               Expenses of Registration.  Except as specifically provided herein, all Registration Expenses incurred in connection with any registration, qualification or compliance pursuant to Section 2.1 or any registration under Section 2.2 or Section 2.3 herein shall be borne by the Company.  All Selling Expenses incurred in connection with any registrations hereunder shall be borne by the holders of the securities so registered pro rata on the basis of the number of shares so registered.  The Company shall not, however, be required to pay for expenses of any registration proceeding begun pursuant to Section 2.1 or 2.3, the request of which has been subsequently withdrawn by the Holders which initiated such request unless (a) the withdrawal is based upon material adverse information concerning the Company of which such Holders were not aware at the time of such request or (b) the Holders of a majority of Registrable Securities then outstanding agree to forfeit their right to one (1) requested registration pursuant to Section 2.1 or 2.3, as applicable, in which event such right shall be forfeited by all Holders.  If the Holders are required to pay the Registration Expenses, such expenses shall be borne by the

 

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holders of securities (including Registrable Securities) requesting or joining such registration in proportion to the number of shares that were to be included in such registration.  If the Company is required to pay the Registration Expenses of a withdrawn offering pursuant to clause (a) above, then the Holders shall not forfeit their rights pursuant to Section 2.1 or 2.3.

 

2.5                               Obligations of the Company.  Whenever required to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:

 

(a)                                 Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use best efforts to cause such registration statement to become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for up to one hundred twenty (120) days or, if earlier, until the Holder or Holders have completed the distribution related thereto; provided, however, that (i) such one hundred twenty (120) day period shall be extended for a period of time equal to the period the Holder refrains, at the request of an underwriter of Common Stock (or other securities) of the Company, from selling any securities included in such registration, and (ii) in the case of any registration of Registrable Securities on Form S-3 that are intended to be offered on a continuous or delayed basis, subject to compliance with applicable SEC rules, such one hundred twenty (120) day period shall be extended for up to sixty (60) days, if necessary, to keep the registration statement effective until all such Registrable Securities are sold;

 

(b)                                 Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement for the period set forth in subsection (a) above;

 

(c)                                  Comply with Rule 172 of the Securities Act and (i) advise the selling Holders promptly of any failure by the Company to satisfy the conditions of such Rule 172 and (ii) promptly furnish to the Holders such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them;

 

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

 

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

 

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(f)                                   Use its best efforts to cause all such Registrable Securities covered by such registration statement to be listed on a national securities exchange or trading system and each securities exchange and trading system (if any) on which similar securities issued by the Company are then listed;

 

(g)                                 Provide a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and provide a CUSIP number for all such Registrable Securities, in each case no later than the effective date of such registration;

 

(h)                                 Promptly make available for inspection by the selling Holders, any managing underwriter(s) participating in any disposition pursuant to such registration statement, and any attorney or accountant or other agent retained by any such underwriter or selected by the selling Holders, all financial and other records, pertinent corporate documents, and properties of the Company, and cause the Company’s officers, directors, employees, and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant, or agent, in each case, as necessary or advisable to verify the accuracy of the information in such registration statement and to conduct appropriate due diligence in connection therewith;

 

(i)                                    Notify each selling Holder, promptly after the Company receives notice thereof, of the time when such registration statement has been declared effective or a supplement to any prospectus forming a part of such registration statement has been filed;

 

(j)                                    After such registration statements become effective, notify each selling Holder of any request by the SEC that the Company amend or supplement such registration statement or prospectus;

 

(k)                                 Promptly notify each selling Holder of any stop order issued or threatened by the SEC or any state securities commission and take all reasonable actions required to prevent the entry of such stop order or to remove it if entered;

 

(l)                                    Use its best efforts to prevent the issuance of any stop order or other suspension of effectiveness and, if such order is issued, obtain the withdrawal of any such order at the earliest possible moment;

 

(m)                             Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and as promptly as practicable thereafter, prepare and file with the SEC, and furnish without charge to the appropriate Holders and managing underwriter(s), if any, an amendment or supplement to such registration statement or prospectus in order to cause such registration statement or prospectus not to include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then

 

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existing and furnish such copies thereof as the Holders of any underwriter may reasonably request; and

 

(n)                                 Use best efforts to furnish, on the date that such Registrable Securities are delivered to the underwriters for sale, if such securities are being sold through underwriters, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and (ii) a letter, dated as of such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering addressed to the underwriters.

 

2.6                               Termination of Registration Rights.  All registration rights granted under this Section 2 shall terminate and be of no further force and effect upon the earlier to occur of (i) three (3) years after the date of the Company’s Initial Offering, or (ii) as to any Holder, at such time as such Holder could sell all of its Registrable Securities without limitation during any 90 day period under Rule 144 of the Securities Act.

 

2.7                               Delay of Registration; Furnishing Information.

 

(a)                                 No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.

 

(b)                                 It shall be a condition precedent to the obligations of the Company to take any action pursuant to Section 2.1, 2.2 or 2.3 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of such securities as shall be required to effect the registration of their Registrable Securities.

 

(c)                                  The Company shall have no obligation with respect to any registration requested pursuant to Section 2.1 or Section 2.3 if, due to the operation of subsection 2.1(b), the number of shares or the anticipated aggregate offering price of the Registrable Securities to be included in the registration does not equal or exceed the number of shares or the anticipated aggregate offering price required to originally trigger the Company’s obligation to initiate such registration as specified in Section 2.1 or Section 2.3, whichever is applicable.

 

2.8                               Indemnification.  In the event any Registrable Securities are included in a registration statement under Section 2.1, 2.2 or 2.3:

 

(a)                                 To the extent permitted by law, the Company will indemnify and hold harmless each selling Holder, the partners, members, stockholders, officers and directors of each such Holder, legal counsel and accountants of each such Holder, any underwriter (as defined in the Securities Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any of the

 

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following statements, omissions or violations (collectively a “Violation”) by the Company:  (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement or incorporated by reference therein, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law in connection with the offering covered by such registration statement; and the Company will reimburse each such Holder, partner, member, stockholder, officer, director, underwriter or controlling person, or other aforementioned person for any legal or other expenses reasonably incurred by them, as incurred, in connection with investigating or defending any such loss, claim, damage, liability or action; provided however, that the indemnity agreement contained in this Section 2.8(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed, nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by such Holder, partner, member, stockholder, officer, director, underwriter or controlling person, or other aforementioned person of such Holder.

 

(b)                                 To the extent permitted by law, each selling Holder will, if Registrable Securities held by such Holder are included in the securities as to which such registration qualifications or compliance is being effected, severally and not jointly, indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, and each person, if any, who controls the Company within the meaning of the Securities Act, any underwriter and any other Holder selling securities under such registration statement or any of such other Holder’s partners, members, stockholders, directors or officers or any person who controls such Holder, against any losses, claims, damages or liabilities (joint or several) to which the Company or any such director, officer, controlling person, underwriter or other such Holder, or partner, member, stockholder, director, officer or controlling person of such other Holder may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any of the following statements:  (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement or incorporated by reference therein, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act (collectively, a “Holder Violation”), in each case to the extent (and only to the extent) that such Holder Violation occurs in reliance upon and in conformity with written information furnished by such Holder under an instrument duly executed by such Holder and stated to be specifically for use in connection with such registration; and each such Holder will reimburse any legal or other expenses reasonably incurred by the Company or any such director, officer, controlling person, underwriter or other Holder, or partner, member, stockholder, officer, director or controlling person of such other Holder, as incurred, in connection with investigating

 

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or defending any such loss, claim, damage, liability or action if it is judicially determined that there was such a Holder Violation; provided, however, that the indemnity agreement contained in this Section 2.8(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the prior written consent of the Holder, which consent shall not be unreasonably withheld, conditioned or delayed; provided further, that in no event shall any indemnity under this Section 2.8(b) when combined with the amounts paid or payable by such Holder pursuant to Section 2.8(d), exceed the net proceeds from the offering received by such Holder.

 

(c)                                  Promptly after receipt by an indemnified party under this Section 2.8 of notice of the commencement of any action (including any governmental action) for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.8, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding.  The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if materially prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 2.8, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.8.

 

(d)                                 If the indemnification provided for in this Section 2.8 is held by a court of competent jurisdiction (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) to be unavailable to an indemnified party with respect to any losses, claims, damages or liabilities referred to herein, the indemnifying party, in lieu of indemnifying such indemnified party thereunder, shall to the extent permitted by applicable law contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the Violation(s) or Holder Violation(s) that resulted in such loss, claim, damage or liability, as well as any other relevant equitable considerations.  The relative fault of the indemnifying party and of the indemnified party shall be determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, that (x) no Holder will be required to contribute any amount in excess of the public offering price of all such Registrable Securities offered and sold by such Holder pursuant to such registration statement, and (y) in no event shall any contribution by a Holder hereunder, when combined with the amounts paid or payable by such Holder pursuant to Section 2.8(b), exceed the net proceeds from the offering received by such Holder.

 

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(e)                                  The obligations of the Company and Holders under this Section 2.8 shall survive completion of any offering of Registrable Securities in a registration statement and the termination of this Agreement.  No indemnifying party, in the defense of any such claim or litigation, shall, except with the consent of each indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.

 

2.9                               Assignment of Registration Rights.  The rights to cause the Company to register Registrable Securities pursuant to this Section 2 may be assigned by a Holder to a transferee or assignee of Registrable Securities that (a) is a partner or retired partner of any Holder that is a partnership, (b) is a member or former member of any Holder that is a limited liability company, (c) is a Holder’s family member or trust for the benefit of such family member or of an individual Holder, (d) is an Affiliate of such Holder, (e) is any affiliated venture capital fund of an Investor, or (f) is a transferee which acquires at least twenty-five percent (25%) of the shares of Preferred Stock held by the transferor; provided, however, (i) the transferor shall, within ten (10) days after such transfer, furnish to the Company written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned and (ii) such transferee shall agree to be subject to all restrictions set forth in this Agreement.

 

2.10                        Amendment of Registration Rights.  Any provision of this Section 2 may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Holders of a majority of the Registrable Securities then outstanding (including a majority of shares of the Preferred Stock then outstanding).  Any amendment or waiver effected in accordance with this Section 2.10 shall be binding upon each Holder and the Company.  By acceptance of any benefits under this Section 2, the Holders of Registrable Securities hereby agree to be bound by the provisions hereunder.

 

2.11                        Limitation on Subsequent Registration Rights.  Other than as provided in Section 5.10, after the date of this Agreement, the Company shall not, without the prior written consent of the Holders of a majority of the Registrable Securities then outstanding (including a majority of shares of the Preferred Stock then outstanding), enter into any agreement with any holder or prospective holder of any securities of the Company that would grant such holder registration rights senior to those granted to the Holders hereunder, other than the right to a Special Registration Statement.

 

2.12                        “Market Stand-Off” Agreement.  Each Holder hereby agrees that such Holder shall not sell, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale with respect to, any Common Stock (or other securities) of the Company held by such Holder (other than those included in the registration) for a period specified by the representative of the underwriters of Common Stock (or other securities) of the Company not to exceed one hundred eighty (180) days following the effective date of a registration statement of the Company filed under the Securities Act (the “Standoff Period”); provided that:

 

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(a)                                 such agreement shall apply only to the Company’s Initial Offering; and

 

(b)                                 all officers and directors of the Company and holders of at least one percent (1%) of the Company’s voting securities are subject to the same restrictions.

 

The Company may impose stop-transfer instructions with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of the Standoff Period.  The underwriters of the Company’s stock are intended third party beneficiaries of this Section 2.12 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto.

 

2.13                        Agreement to Furnish Information.  Each Holder agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriter that are consistent with the Holder’s obligations under Section 2.12 or that are necessary to give further effect thereto.  In addition, if requested by the Company or the representative of the underwriters of Common Stock (or other securities) of the Company, each Holder shall provide, within ten (10) days of such request, such information as may be required by the Company or such representative in connection with the completion of any public offering of the Company’s securities pursuant to a registration statement filed under the Securities Act.  The obligations described in Section 2.12 and this Section 2.13 shall not apply to a Special Registration Statement.  The Company may impose stop-transfer instructions with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of said one hundred eighty (180) day period.  Each Holder agrees that any transferee of any shares of Registrable Securities shall be bound by Sections 2.12 and 2.13.  The underwriters of the Company’s stock are intended third party beneficiaries of Sections 2.12 and 2.13 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto.

 

2.14                        Rule 144 Reporting.  With a view to making available to the Holders the benefits of certain rules and regulations of the SEC which may permit the sale of the Registrable Securities to the public without registration, the Company shall:

 

(a)                                 Make and keep public information available, as those terms are understood and defined in SEC Rule 144 or any similar or analogous rule promulgated under the Securities Act, at all times after the effective date of the first registration filed by the Company for an offering of its securities to the general public;

 

(b)                                 File with the SEC, in a timely manner, all reports and other documents required of the Company under the Exchange Act; and

 

(c)                                  So long as a Holder owns any Registrable Securities, furnish to such Holder forthwith upon request: (i) a written statement by the Company as to its compliance with the reporting requirements of said Rule 144 of the Securities Act, and of the Exchange Act (at any time after it has become subject to such reporting requirements), or its qualification as a registrant whose securities may be resold pursuant to Form S-3 (at any time after the Company so qualifies); (ii) a copy of the most recent annual or quarterly report and such other periodic reports of the Company filed with the Commission; and (iii) such other reports and documents as

 

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a Holder may reasonably request in connection with availing itself of any rule or regulation of the SEC allowing it to sell any such securities without registration or pursuant to such Form S-3.

 

SECTION 3.                         COVENANTS OF THE COMPANY.

 

3.1                               Basic Financial Information and Reporting.

 

(a)                                 The Company shall maintain true books and records of account in which full and correct entries will be made of all its business transactions pursuant to a system of accounting established and administered in accordance with GAAP consistently applied, and will set aside on its books all such proper accruals and reserves as shall be required under GAAP consistently applied.

 

(b)                                 So long as an Investor (with its Affiliates) shall own not less than 3,000,000 shares (as adjusted for any stock dividends, splits, combinations, recapitalizations and the like) of Registrable Securities (each, a “Major Holder”), as soon as practicable and in any event within one hundred twenty (120) days after the end of each fiscal year of the Company, the Company shall furnish each Major Holder (i) an audited consolidated balance sheet of the Company, as at the end of such fiscal year, and audited consolidated statements of income and cash flows of the Company, for such year, all prepared in accordance with GAAP consistently applied and setting forth in each case in comparative form the figures for the previous fiscal year and as included in the Budget (as defined below) for such year, with an explanation of any material differences between such figures, all in reasonable detail, and (ii) a statement of stockholders’ equity as of the end of such year.  Such financial statements shall be accompanied by a report and opinion thereon by independent public accountants of national standing selected by the Board, including a majority of the Preferred Directors.

 

(c)                                  Upon request, the Company shall furnish each Major Holder, as soon as practicable and in any event within forty-five (45) days after the end of each of the first three (3) fiscal quarters of the Company, (i) an unaudited consolidated balance sheet of the Company as of the end of such fiscal quarter and unaudited consolidated statements of income and cash flows of the Company for such fiscal quarter, all prepared in accordance with GAAP consistently applied (except that such financial statements may (x) be subject to normal year-end audit adjustments and (y) not contain all notes thereto that may be required in accordance with GAAP), and (ii) a statement of stockholders’ equity as of the end of such fiscal quarter.

 

(d)                                 Upon request, the Company shall furnish each Major Holder, as soon as practicable and in any event within thirty (30) days after the end of each month, an unaudited consolidated balance sheet of the Company as of the end of such month, and unaudited consolidated statements of income and cash flows of the Company, together with supporting schedules, for such month and for the current fiscal year to date, prepared in accordance with GAAP consistently applied.

 

(e)                                  The Company will furnish each Major Holder: (i) at least thirty (30) days prior to the beginning of each fiscal year a budget, projected financial statements and operating plans for such fiscal year (the “Budget”), and as soon as available, any subsequent significant written revisions thereto; (ii) within ten (10) days of delivery, such other notices, information and

 

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data with respect to the Company as the Company delivers to the holders of Common Stock as a result of their ownership of securities in the Company; and (iii) promptly, such other information and data as such Major Holder may from time to time reasonably request.

 

3.2                               Inspection Rights.  Each Major Holder shall have the right to visit and inspect any of the properties of the Company or any of its subsidiaries, and to discuss the affairs, finances and accounts of the Company or any of its subsidiaries with its officers, and to review such information as is reasonably requested all at such reasonable times and as often as may be reasonably requested; provided, however, that the Company shall not be obligated under this Section 3.2 with respect to a competitor of the Company or with respect to information which the Board determines in good faith is confidential or attorney-client privileged and should not, therefore, be disclosed.  Notwithstanding anything to the contrary contained in this Agreement, in the event that either Pfizer, Baxter or the Baxter Transferee is deemed to be a competitor of the Company, the investment, legal, finance, tax, accounting and audit personnel of Pfizer, Baxter or the Baxter Transferee and their respective Affiliates may exercise the rights set forth in this Section 3.2 solely for the purpose of managing, evaluating and reporting on Pfizer, Baxter or the Baxter Transferee’s investment in the Company.

 

3.3                               Confidentiality of Records.  Each Investor agrees that it shall keep confidential and shall not disclose or divulge any confidential, proprietary, or secret information which such Investor may obtain from the Company pursuant to the financial statements, reports, and other materials submitted by the Company to such Investor pursuant to this Agreement or otherwise, or pursuant to visitation or inspection rights granted under this Agreement, unless (a) such information enters the public domain through no fault of such Investor, (b) such information is communicated to such Investor by a third party without breach of any obligation of confidentiality such third party may have to the Company, (c) the Company provides written consent to the disclosure of such information, (d) such information is developed by Investor or its agents independently of and without reference to any confidential information communicated by the Company, or (e) required by a valid order of a court or governmental body having jurisdiction or otherwise required by law, statutes, rules or regulations or pursuant to any direction, request or requirement (whether or not having the force of law but if not having the force of law being of a type with which institutional or corporate investors in the relevant jurisdiction are accustomed to comply) of any self-regulating organization or any governmental, fiscal, monetary or other authority; provided, however, that an Investor may disclose such information (A) to its partners, subsidiaries, parents, officers, employees, agents, directors, Affiliates, attorneys, accountants, consultants, and other professionals for the purpose of evaluating its investment in the Company as long as such attorneys, advisors, accountants, partners, subsidiaries, parents, officers, employees, agents, directors or Affiliates are advised of the confidentiality provisions of this Section 3.3, (B) to any prospective purchaser of any Shares from such Investor as long as such prospective purchaser agrees in writing to be bound by the provisions of this Section 3.3, (C) for internal market, industry and investment analyses, or (D) to any Affiliate of such Investor or to a partner or stockholder of such Purchaser; and provided, further, that if any Investor is required or requested to disclose information pursuant to (e) above, such Investor shall use its commercially reasonable efforts to limit such disclosure and to obtain confidential treatment or a protective order for such information and shall give the Company prompt written notice prior to such disclosure to the extent practicable.  The Company acknowledges that certain of the Investors are in the business of venture capital or private equity

 

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investing and therefore review the business plans and related proprietary information of many enterprises, including enterprises that may have products or services that compete directly or indirectly with those of the Company.  Nothing in this Agreement shall preclude or in any way restrict the Investors from investing or participating in any particular enterprise, regardless of whether such enterprise has products or services that compete with those of the Company.  The Company and each Investor acknowledges and agrees that certain of the Investors or their Affiliates may presently have, or may engage in the future in, internal development programs, or may receive information from third parties that relates to, and may develop and commercialize products independently or in cooperation with such third parties, that are similar to or that are directly or indirectly competitive with the Company’s development programs, products or services.  Nothing in this Agreement or any other agreement related to the transactions contemplated by this Agreement shall in any way preclude or restrict such Investors or their Affiliates from conducting any development program, commercializing any product or service or otherwise engaging in any enterprise, whether or not such development program, product, service or enterprise competes with those of the Company, so long as such activities do not result in a violation of the confidentiality provisions of this Agreement.

 

3.4                               Reservation of Common Stock.  The Company will at all times reserve and keep available, solely for issuance and delivery upon the conversion of the Preferred Stock, all Common Stock issuable from time to time upon such conversion.

 

3.5                               Proprietary Information and Inventions Agreement.  The Company shall require all employees, advisors and consultants of the Company or any of its subsidiaries to execute and deliver a Proprietary Information and Inventions Agreement substantially in a form approved by the Board.

 

3.6                               Employee Vesting.  Unless otherwise approved by the Board, all future employees, advisors and consultants of the Company who purchase, receive options to purchase, or receive awards of shares of the Company’s capital stock after the date hereof shall be required to execute restricted stock or option agreements, as applicable, providing for (i) vesting of shares over a four (4) year period, with the first twenty-five percent (25%) of such shares vesting following twelve (12) months of continued employment or service, and the remaining shares vesting in equal monthly installments over the following thirty-six (36) months, and (ii) a one hundred eighty (180) day lockup period in connection with the Initial Offering.  The Company shall, upon termination of employment of a holder of restricted stock for any reason, have the right to repurchase unvested shares at the lower of cost or the fair market value of such shares at the time of repurchase.

 

3.7                               Matters Requiring Preferred Directors’ Approval.  The Company shall not, without approval of the Board, which approval must include the affirmative vote of a majority of the Preferred Directors or if there is only one Preferred Director, the affirmative vote of such remaining Preferred Director:

 

(a)                                 incur indebtedness in excess of $500,000, individually or in the aggregate, other than payables incurred in the ordinary course of business;

 

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(b)                                 change the principal line or lines of business of the Company, enter into any material new line of business, or exit the current line of business;

 

(c)                                  enter into or be a party to any transaction with or modify any agreement with any director, officer, or employee of the Company or any “associate” (as defined in Rule 12b-2 promulgated under the Exchange Act) of any such Person, except for transactions contemplated by this Agreement or customary compensation or benefit arrangements that are approved by the Board; or

 

(d)                                 amend the Company’s 2008 Long Term Incentive Plan, as amended, or approve any new equity incentive plan.

 

3.8                               Directors’ Liability and Indemnification.  The Restated Certificate and the Company’s Bylaws, as amended from time to time (the “Bylaws”), shall provide (a) for elimination of the liability of directors to the maximum extent permitted by law and (b) for indemnification of directors for acts on behalf of the Company to the maximum extent permitted by law.

 

3.9                               Insurance.  The Company shall obtain, as soon as possible after the date hereof, from a financially sound and reputable insurer, directors and officers liability insurance to the maximum extent permitted by law and providing for at least $5,000,000 in coverage, and shall cause such insurance policy to be maintained until such time as the Board, including a majority of the Preferred Directors, determines that such insurance should be discontinued.  The Company shall use commercially reasonable efforts to obtain, as soon as possible after the date hereof, from a financially sound and reputable insurer, term “key-person” life insurance on the Company’s chief executive officer, in the aggregate amount of $3,000,000, and shall cause such insurance policy to be maintained until such time as the Board, including a majority of the Preferred Directors, determines that such insurance should be discontinued.  The key-person policy shall name the Company as loss payee, and neither policy shall be cancelable by the Company without prior approval of the Board, including a majority of the Preferred Directors.

 

3.10                        Successor Indemnification.  If the Company or any of its successors or assignees (i) consolidates with or merges into any other person and is not the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers or conveys all or substantially all of its properties and assets to any person, then, and in each such case, to the extent reasonably necessary, the Company will use commercially reasonable efforts for proper provision to be made so that the successors and assignees of the Company assume the obligations of the Company with respect to indemnification of members of the Board as in effect immediately before such transaction, whether such obligations are contained in the Bylaws, the Restated Certificate or elsewhere, as the case may be.

 

3.11                        Meeting of the Board; Board Expenses; Compensation of Directors.  The Board shall meet at least five (5) times each year in accordance with an agreed-upon schedule.  The Company shall reimburse each non-employee director for (i) all reasonable expenses incurred for services on the Board and (ii) out-of-pocket travel expenses incurred in connection with travel to and from the meetings of the Board. Unless otherwise approved by the Board, which must include a majority of the Preferred Directors, if any non-employee director receives

 

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equity compensation for his or her services as a director of the Company, each other non-employee director shall be entitled to receive the same equity compensation; provided, however, that each such non-employee director shall have the right in his or her discretion to waive receiving such equity compensation.

 

3.12        Qualifying Investments.  Any future purchases of Company securities by Sofinnova in connection with or upon a registered public offering of the Company shall constitute a qualifying investment, as such term is defined in Rule 203(l)-1 promulgated under the Investment Advisers Act of 1940, as amended.

 

3.13        Small Business Stock; Real Property Holding Corporation.

 

(a)           For so long as any of the shares of Preferred Stock are held by an Investor (or a transferee in whose hands such shares are eligible to qualify as “Qualified Small Business Stock” as defined in Section 1202(c) of the Internal Revenue Code of 1986, as amended (the “Code”)), the Company will use its reasonable efforts to comply with the reporting and recordkeeping requirements of Section 1202 of the Code, any regulations promulgated thereunder and any similar state laws and regulations.  The Company agrees to submit to any Investor and to the Internal Revenue Service, if necessary, any reports that may be required under Section 1202(d)(1)(c) of the Code and any related Treasury Regulations.  In addition, within ten (10) days after any Investor has delivered to the Company a written request therefor, the Company shall deliver to such Investor a written statement indicating whether Preferred Stock constitutes “Qualified Small Business Stock” as defined in Section 1202(c) of the Code.  The Company’s obligation to furnish a written statement pursuant to this Section 3.15(a) shall continue notwithstanding the fact that a class of the Company’s stock may be traded on an established securities market.

 

(b)           The Company shall provide prompt notice to each Investor following any “determination date” (as defined in Treasury Regulation Section 1.897-2(c)(1)) on which the Company becomes a United States real property holding corporation.  In addition, upon a written request by any Investor, the Company shall provide such Investor with a written statement informing such Investor whether such Investor’s interest in the Company constitutes a United States real property interest.  The Company’s determination shall comply with the requirements of Treasury Regulation Section 1.897-2(h)(1) or any successor regulation, and the Company shall provide timely notice to the Internal Revenue Service, in accordance with and to the extent required by Treasury Regulation Section 1.897-2(h)(2) or any successor regulation, that such statement has been made.  The Company’s written statement shall be delivered to such Investor within ten (10) days of such Investor’s written request therefor.  The Company’s obligation to furnish such written statement pursuant to this Section 3.15(b) shall continue notwithstanding the fact that a class of the Company’s stock may be regularly traded on an established securities market or the fact that there is no preferred stock then outstanding.

 

3.14        Certain Covenants Relating to SBA Matters.

 

(a)           Compliance.  So long as any Investor which is a licensed Small Business Investment Company (an “SBIC Investor”) holds any securities of the Company, the Company will at all times comply with the non-discrimination requirements of 13 C.F.R. Parts 112, 113

 

21



 

and 117.

 

(b)           Information for SBIC Investor.  Within forty-five (45) days after the end of each fiscal year and at such other times as an SBIC Investor may reasonably request, the Company shall deliver to such SBIC Investor a written assessment, in form and substance satisfactory to such SBIC Investor, of the economic impact of such SBIC Investor’s financing specifying the full-time equivalent jobs created or retained in connection with such investment, and the impact of the financing on the Company’s business in terms of profits and on taxes paid by the Company and its employees.  Upon request, the Company agrees to promptly provide each SBIC Investor with sufficient information to permit such Investor to comply with their obligations under the Small Business Investment Act of 1958, as amended, and the regulations promulgated thereunder and related thereto; provided, however, each SBIC Investor agrees that it will protect any information which the Company labels as confidential to the extent permitted by law.  Any submission of any financial information under this Section shall include a certificate of the Company’s president, chief executive officer, treasurer or chief financial officer.

 

3.15        FCPA Compliance.  The Company shall not, and shall not permit any of its subsidiaries and Affiliates or any of its or their respective directors, officers, managers, employees, independent contractors, representatives or agents (collectively, “Representatives”) to, promise, authorize or make any payment to, or otherwise contribute any item of value to, directly or indirectly, any non-U.S. government official, in each case, in violation of the U.S. Foreign Corrupt Practices Act (“FCPA”) or any other applicable anti-bribery or anti-corruption law. The Company shall, and shall cause each of its subsidiaries and Affiliates to, cease all of its or their respective activities, as well as remediate any actions taken by the Company, its subsidiaries or Affiliates or any of its or their respective Representatives in violation of the FCPA or any other applicable anti-bribery or anti-corruption law. The Company shall, and shall cause each of its Affiliates and subsidiaries to, maintain systems or internal controls (including, but not limited to, accounting systems, purchasing systems and billing systems) to ensure compliance with the FCPA or any other applicable anti-bribery or anti-corruption law.

 

3.16        Bad Actor Status.               The Company will notify the Investors promptly in writing in the event a “Bad Actor” disqualifying event described in Rule 506(d)(1)(i) to (viii) of the Securities Act (a “Disqualification Event”) becomes applicable to the Company, except for a Disqualification Event as to which Rule 506(d)(2)(ii)-(iv) or (d)(3) is applicable.

 

3.17        Observer Rights.

 

(a)           Baxter Observer. During such time that Baxter or the Baxter Transferee is not entitled to  designate a member of the Board pursuant to the Voting Agreement, the Company covenants and agrees that Baxter or the Baxter Transferee shall be entitled to designate one observer (the “Baxter Observer”) who may be present at all regular meetings of the Board, and that the Company will give the Baxter Observer notice of and invitation to such meetings, by telecopy or by such other means as such notices are delivered to the members of the Board, in the same manner that notice is provided or delivered to the Board and provide the Baxter Observer with copies all notices, minutes, consents, documents and other materials that it provides to the members of the Board at the same time and in the same manner as provided to such members of the Board; provided, that such designated Baxter Observer may be required at

 

22



 

the discretion of the Company to enter into a confidentiality agreement with the Company prior to the exercise of the rights contained in this Section 3.20; provided, further, that the Baxter Observer may be excluded from any meeting or portion thereof and the Company reserves the right to withhold any information from the Baxter Observer if the Company reasonably believes that such withholding of information or exclusion is reasonably necessary to preserve the attorney-client privilege, to protect confidential proprietary information of the Company or a third party, the Company reasonably determines that there exists a conflict of interest, or for other similar reasons; provided, further, that the Board shall be entitled to hold executive sessions which the Baxter Observer may not be invited to attend.  The Company further covenants and agrees to reimburse the Baxter Observer for all reasonable travel expenses incurred in attending meetings of the Board.

 

(b)           Eastern Capital Observer. For so long as Eastern Capital Limited continues to hold at least three million (3,000,000) shares of Preferred Stock, the Company covenants and agrees that Eastern Capital Limited shall be entitled to designate one observer (the “Eastern Capital Observer”) who may be present at all regular meetings of the Board, and that the Company will give the Eastern Capital Observer notice of and invitation to such meetings, by telecopy or by such other means as such notices are delivered to the members of the Board, in the same manner that notice is provided or delivered to the Board and provide the Eastern Capital Observer with copies all notices, minutes, consents, documents and other materials that it provides to the members of the Board at the same time and in the same manner as provided to such members of the Board; provided, that such designated Eastern Capital Observer may be required at the discretion of the Company to enter into a confidentiality agreement with the Company prior to the exercise of the rights contained in this Section 3.20; provided, further, that the Eastern Capital Observer may be excluded from any meeting or portion thereof and the Company reserves the right to withhold any information from the Eastern Capital Observer if the Company reasonably believes that such withholding of information or exclusion is reasonably necessary to preserve the attorney-client privilege, to protect confidential proprietary information of the Company or a third party, the Company reasonably determines that there exists a conflict of interest, or for other similar reasons; provided, further, that the Board shall be entitled to hold executive sessions which the Eastern Capital Observer may not be invited to attend.  The Company further covenants and agrees to reimburse the Eastern Capital Observer for all reasonable travel expenses incurred in attending meetings of the Board.

 

3.18        Termination of Covenants.  All covenants of the Company contained in Section 3 of this Agreement (other than the provisions of Sections 3.3, 3.8, 3.10, 3.12 and 3.13) shall terminate and be of no further force or effect as to each Investor (a) immediately prior to the consummation of the Qualified IPO (as defined in the Restated Certificate) or (b) when the Company first becomes subject to the periodic reporting requirements of Section 12(g) or 15(d) of the Exchange Act, whichever event occurs first.

 

SECTION 4.                         RIGHTS OF FIRST REFUSAL.

 

4.1          Subsequent Offerings.  Subject to applicable securities laws, each Major Holder shall have a right of first refusal to purchase all or any portion of its Pro Rata Share (as defined below) of all Equity Securities, as defined below, that the Company may, from time to time,

 

23



 

propose to sell and issue after the date of this Agreement, other than the Equity Securities excluded by Section 4.6 hereof.  Each Major Holder’s Pro Rata Share is equal to the ratio of (x) the number of shares of the Common Stock (including all shares of Common Stock issuable or issued upon conversion of the Shares) held by such Major Holder immediately prior to the issuance of such Equity Securities to (y) the total number of shares of Common Stock (including all shares of Common Stock issued or issuable upon conversion of the Shares or upon the exercise of any outstanding warrants or options) outstanding immediately prior to the issuance of the Equity Securities.  The term “Equity Securities” shall mean (a) any Common Stock, Preferred Stock or other security of the Company, (b) any security or right convertible into or exercisable or exchangeable for, with or without consideration, any Common Stock, Preferred Stock or other security (including any option to purchase such a convertible security), (c) any security carrying any warrant or right to subscribe to or purchase any Common Stock, Preferred Stock or other security or (d) any such warrant or right.

 

4.2          Exercise of Rights.  If the Company proposes to issue any Equity Securities, it shall give each Major Holder written notice (the “Offer Notice”) of its intention, describing the Equity Securities, the price and the terms and conditions upon which the Company proposes to issue the same.  Each Major Holder shall have forty-five (45) days after receipt of the Offer Notice to elect to purchase its Pro Rata Share of the Equity Securities for the price and upon the terms and conditions specified in the Offer Notice by giving written notice to the Company and stating therein the quantity of Equity Securities to be purchased.  If not all of the Major Holders elect to purchase their Pro Rata Share of the Equity Securities, then the Company shall promptly notify in writing (the “Overallotment Notice”) the Major Holders who elect to purchase their full Pro Rata Share of the Equity Securities (each a “Fully-Exercising Holder”) of any other Major Holder’s failure to do likewise and shall offer such Fully-Exercising Holder(s) the right to acquire such unsubscribed shares that the Major Holders were entitled to subscribe for but that were not subscribed for by the Major Holders (the “Overallotment Shares”).  Each Fully-Exercising Holder shall have ten (10) days after receipt of the Overallotment Notice to notify the Company of its election to purchase up to such portion of the Overallotment Shares as is equal to the ratio of (x) the number of shares of the Common Stock (including all shares of Common Stock issuable or issued upon conversion of the Shares) held by such Fully-Exercising Holder immediately prior to the issuance of such Equity Securities to (y) the total number of shares of Common Stock (including all shares of Common Stock issued or issuable upon conversion of the Shares or upon the exercise of any outstanding warrants or options) held by all Fully-Exercising Holders immediately prior to the issuance of the Equity Securities.  The closing of any sale pursuant to this Section 4.2 shall occur within sixty (60) days after the date that the Offer Notice is received by the Major Holders.

 

4.3          Issuance of Equity Securities to Other Persons.  To the extent that the Major Holders fail to exercise in full the rights of first refusal pursuant to Section 4.2 with respect to the Equity Securities being offered by the Company, the Company shall have thirty (30) days after the expiration of the of the periods provided in Section 4.2 to sell the Equity Securities in respect of which the Major Holders’ rights were not exercised, at a price and upon general terms and conditions no more favorable to the purchasers thereof than specified in the Offer Notice pursuant to Section 4.2 hereof.  If the Company has not sold such Equity Securities within such thirty (30) day period, the Company shall not thereafter issue or sell any Equity Securities without first offering such securities to the Major Holders in the manner provided above.

 

24



 

4.4          Termination and Waiver of Rights of First Refusal.  The rights of first refusal set forth in this Section 4 shall not apply to, and shall terminate (a) immediately prior to the Qualified IPO or (b) when the Company first becomes subject to the periodic reporting requirements of Section 12(g) or 15(d) of the Exchange Act, whichever event occurs first.  The rights of first refusal established by this Section 4 may be amended, or any provision waived with the written consent of the Required Holders pursuant to Section 5.5.

 

4.5          Transfer of Rights of First Refusal.  The rights of first refusal of each Holder under this Section 4 may be transferred to the same parties as set forth in Section 2.9, subject to the same restrictions as any transfer of registration rights pursuant to Section 2.9.

 

4.6          Excluded Securities.  The rights of first refusal set forth in this Section 4 shall have no application to the Exempted Securities (as defined in the Restated Certificate).

 

4.7          Waiver of Rights of First Refusal. In the event that the right of first refusal in this Section 4 is waived pursuant to Section 5.5 hereof with respect to an issuance of Equity Securities by the Company, and any Major Holder is nevertheless permitted to purchase any such Equity Securities, each Major Holder shall be entitled to purchase its Adjusted Pro Rata Share (as defined below) of such Equity Securities upon the terms and conditions set forth in this Section 4.  For purposes of this Section 4.7, a Major Holder’s Adjusted Pro Rata Share of the Equity Securities subject to the waiver described in this Section 4.7 shall be equal to (i) such Major Holder’s Pro Rata Share multiplied by (ii) the total amount of Equity Securities to be sold directly (or indirectly in a series of related transactions) to existing Investors or their respective Affiliates.  For example, if 40% of the Equity Securities to be issued by the Company are to be allocated to existing Investors, then each Major Investor’s Adjusted Pro Rata shall be calculated using only 40% of the Equity Securities and the remaining 60% of Equity Securities to be issued by the Company may be issued to purchasers without applying the provisions of Section 4 herein.

 

SECTION 5.                         MISCELLANEOUS.

 

5.1          Governing Law; Jurisdiction.  This Agreement shall be governed by and construed under the laws of the State of California without regard to any conflicts of laws principles except for the internal affairs doctrine.  The parties agree that any action brought by any party under or in relation to this Agreement, including, without limitation, to interpret or enforce any provision of this Agreement, may be brought in, and each party agrees to and does hereby submit to the jurisdiction and venue of the state courts of the State of California and the State of Texas and to the jurisdiction of the United States District Court for the Northern District of California and the United States District Court for the Western District of Texas—Austin Division.  Each party hereby waives, and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.

 

25



 

5.2          Successors and Assigns.  Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the parties hereto and their respective successors, assigns, heirs, executors, and administrators and shall inure to the benefit of and be enforceable by each person who shall be a holder of Registrable Securities from time to time; provided, however, that any attempted Transfer of the rights of a Holder or Investor pursuant to this Agreement or pursuant to the Right of First Refusal Agreement that does not comply with the applicable provisions of the Right of First Refusal Agreement and Sections 2.9 and 4.5 of this Agreement and shall be void ab initio and shall not confer any rights on the purported transferee or assignee, and the Company may deem and treat the person listed as the holder of such shares in its records as the absolute owner and holder of such shares for all purposes, including the payment of dividends or any redemption price and voting or exercising the rights of a Holder or Investor pursuant to this Agreement or the Right of First Refusal Agreement.  Subject to restrictions otherwise set forth therein, the rights of any Investor under this Agreement may be assigned, in whole or in part, to any Affiliate of such Investor in connection with a transfer of the related Registrable Securities by such Investor to such Affiliate.

 

5.3          Entire Agreement.  This Agreement and the Exhibits and Schedules hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and no party shall be liable or bound to any other in any manner by any oral or written representations, warranties, covenants and agreements except as specifically set forth herein.  Each party expressly represents and warrants that it is not relying on any oral or written representations, warranties, covenants or agreements outside of this Agreement.

 

5.4          Severability.  In the event one or more of the provisions of this Agreement should, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

 

5.5          Amendment and Waiver.

 

(a)           Except as otherwise expressly provided herein, and subject to Section 4.7, this Agreement may be amended, modified or terminated and observance of any provision of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the Investors holding at least a majority of the outstanding shares Preferred Stock then-held by the Investors, voting together as a single class on an as-converted to Common Stock basis.  Notwithstanding the foregoing, this Agreement may not be amended, modified or terminated and the observance of any term hereof may not be waived with respect to any Investor without the written consent of such Investor if such amendment, modification, termination or waiver materially and adversely affects such Investor in a disproportionate manner than any other Investor (it being agreed that a waiver of the provisions of Section 4 (excluding and subject to Section 4.7) with respect to a transaction shall not be deemed to materially and adversely affect any Major Holder in a disproportionate manner than the other Major Holders if such Major Holder will not be able to purchase all or any portion of its Pro Rata Share of Equity Securities if such waiver does so by its terms, notwithstanding the fact that certain Major Holders may nonetheless by agreement with the Company, purchase Equity Securities in such transaction).  Any amendment, modification,

 

26



 

termination or waiver effected in accordance with this Section 5.5 shall be binding upon the Company, each of the other parties hereto and any successor or permitted assignee of any such party whether or not such party, successor or assignee entered into or approved such amendment, modification or waiver.

 

(b)           For the purposes of determining the number of Holders or Investors entitled to vote or exercise any rights hereunder, the Company shall be entitled to rely solely on the list of record holders of its stock as maintained by or on behalf of the Company.

 

5.6          Delays or Omissions.  It is agreed that no delay or omission to exercise any right, power, or remedy accruing to any party, upon any breach, default or noncompliance by another party under this Agreement shall impair any such right, power, or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of any similar breach, default or noncompliance thereafter occurring.  It is further agreed that any waiver, permit, consent, or approval of any kind or character on any party’s part of any breach, default or noncompliance under this Agreement or any waiver on such party’s part of any provisions or conditions of this Agreement must be in writing and shall be effective only to the extent specifically set forth in such writing.  All remedies, either under this Agreement, by law, or otherwise afforded to any party, shall be cumulative and not alternative.

 

5.7          Notices.  All notices required or permitted hereunder shall be in writing and shall be deemed effectively given:  (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient; if not, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt.  All communications shall be sent (x) to the Company at the address as set forth on the signature page hereof, with a copy to Latham & Watkins LLP, 140 Scott Drive, Menlo Park, CA 94025, Attention:  Alan Mendelson and Mark Roeder, (650) 463-2600 (fax), and (y) to any other party to be notified at the address as set forth on the signature pages hereof or Exhibit A hereto or at such other address or electronic mail address as such party may designate by ten (10) days advance written notice to the other parties hereto.

 

5.8          Attorneys’ Fees.  In the event that any suit or action is instituted under or in relation to this Agreement, including, without limitation, to enforce any provision in this Agreement, the prevailing party in such dispute shall be entitled to recover from the losing party all fees, costs and expenses of enforcing any right of such prevailing party under or with respect to this Agreement, including, without limitation, such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses of appeals.

 

5.9          Titles and Subtitles.  The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

 

5.10        Additional Investors.  Notwithstanding anything to the contrary contained herein, if the Company shall issue additional shares of Preferred Stock after the date hereof, any purchaser of such shares of Preferred Stock may become a party to this Agreement by executing and delivering an additional counterpart signature page to this Agreement and shall be deemed

 

27



 

an “Investor,” a “Holder” and a party hereunder.  Notwithstanding anything to the contrary contained herein, each stockholder of Asuragen, Inc., a Delaware corporation (“Asuragen”), who received Registrable Securities in connection with the distribution by Asuragen of the Equity Securities held by Asuragen on December 31, 2009 automatically, and without any further action on the part of the Company, Asuragen, such stockholder or any other person, became a party to this Agreement and shall be deemed an “Investor,” a “Holder” and a party hereunder, and shall be bound by this Agreement to the same extent as if such stockholder had joined in the execution and delivery of this Agreement.

 

5.11        Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be an original, but all of which together shall constitute one instrument.

 

5.12        Aggregation of Stock.  All shares of Preferred Stock or Registrable Securities held or acquired by affiliated entities or persons or persons or entities under common management or control shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

 

5.13        Pronouns.  All pronouns contained herein, and any variations thereof, shall be deemed to refer to the masculine, feminine or neutral, singular or plural, as to the identity of the parties hereto may require.

 

5.14        Prior Agreement.  The Company and the Investors party to the Prior Agreement (which parties hold the requisite percentages to amend the Prior Agreement by written consent) hereby amend and restate the Prior Agreement in its entirety and the Prior Agreement shall automatically terminate and be no further force or effect.

 

[THIS SPACE INTENTIONALLY LEFT BLANK]

 

28



 

IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

 

COMPANY:

 

 

 

MIRNA THERAPEUTICS, INC.

 

 

 

By: 

/s/ Paul Lammers

 

Name:

Paul Lammers, M.D., M.Sc.

 

Title:

President and Chief Executive Officer

 

 

 

 

Address: 

2150 Woodward Street, Suite 100

 

 

Austin, Texas 78744

 

THIRD AMENDED AND RESTATED

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

 



 

IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

 

INVESTOR:

 

 

 

BAXTER HEALTHCARE CORPORATION

 

 

 

 

By: 

/s/ Robert Hombach

 

Name:

Robert J. Hombach

 

Title:

CVP, Chief Financial Officer

 

 

 

 

Address:

One Baxter Parkway

 

 

Deerfield, IL 60015

 

THIRD AMENDED AND RESTATED

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

 


 

IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

 

INVESTOR:

 

 

 

SOFINNOVA VENTURE PARTNERS VIII, L.P.

 

 

 

By:

Sofinnova Management VIII, L.L.C.,

 

 

its General Partner

 

 

 

 

By:

/s/ Michael Powell

 

Name:

Michael F. Powell

 

Title:

Managing Member

 

 

 

Address:           3000 Sand Hill Road, Bldg. 4, Suite 250
Menlo Park, CA 94025

 

THIRD AMENDED AND RESTATED

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

 



 

IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

 

INVESTOR:

 

 

 

EASTERN CAPITAL LIMITED

 

 

 

By:

/s/ Mark VanDevelde

 

Name:

Mark VanDevelde

 

Title:

Director

 

 

 

 

Address:

 

 

 

Eastern Capital Limited

 

Attn: William Sullivan

 

10 Market Street, # 773

 

Camana Bay

 

Grand Cayman KY1-9006

 

CAYMAN ISLANDS

 

 

 

Telephone: 345-949-7950

 

Fax: 345-945-1531

 

Email address: william.sullivan@ps-ltd.com

 

 

 

with a copy to:

 

 

 

Vinson & Elkins LLP

 

2801 Via Fortuna, Suite 100

 

Austin, TX 78746-7568

 

Attention: Milam Newby

 

THIRD AMENDED AND RESTATED

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

 



 

IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

 

INVESTORS:

 

 

 

NEW ENTERPRISE ASSOCIATES 14, L.P.

 

 

 

By:

NEA Partners 14, L.P., its general partner

 

By:

NEA 14 GP, LTD, its general partner

 

 

 

 

By:

/s/ Louis Citron

 

Name:

Louis Citron

 

Title:

Chief Legal Officer

 

 

 

Address:

1119 St. Paul Street

 

 

Baltimore, MD 21202

 

 

 

 

 

 

NEA VENTURES 2012, LIMITED PARTNERSHIP

 

 

 

 

 

 

 

By:

/s/ Louis Citron

 

Name:

Louis Citron

 

Title:

Vice President

 

 

 

Address:

1119 St. Paul Street

 

 

Baltimore, MD 21202

 

THIRD AMENDED AND RESTATED

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

 



 

IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

 

INVESTOR:

 

 

 

PFIZER INC.

 

 

 

By:

 

/s/ Barbara Dalton

 

Name:

 

Barbara Dalton

 

Title:

VP, Venture Capital Worldwide Business Development

 

 

 

 

Address:

235 East 42nd Street

 

 

New York, NY 10017

 

THIRD AMENDED AND RESTATED

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

 



 

IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

 

INVESTOR:

 

 

 

OSAGE UNIVERSITY PARTNERS I, L.P.

 

 

 

By:

Osage University GP, LP, its general partner

 

By:

Osage Partners, LLC, its general partner

 

 

 

 

By:

/s/ William Harrington

 

Name:

William Harrington

 

Title:

Member

 

 

 

Address:

Osage Management Co., L.P.

 

 

50 Monument Road

 

 

Suite 201

 

 

Bala Cynwyd, PA 19004

 

THIRD AMENDED AND RESTATED

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

 



 

IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

 

INVESTOR:

 

 

 

CORRELATION VENTURES, L.P.

 

As nominee for Correlation Ventures L.P.,

 

Correlation Ventures Executives Fund, L.P.

 

 

 

By:

Correlation Ventures GP, LLC

 

 

 

 

By:

/s/ David E. Coats

 

Name:

David E. Coats

 

Title:

Managing Member

 

 

 

 

 

 

Address:

9255 Towne Center Drive, Suite 350

 

 

San Diego, CA 92121

 

THIRD AMENDED AND RESTATED

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

 



 

IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

 

INVESTOR:

 

 

 

 

/s/ William Bennett

 

William Bennett

 

THIRD AMENDED AND RESTATED

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

 



 

IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

 

INVESTOR:

 

 

 

 

/s/ Rolland Carlson

 

Rolland Carlson

 

THIRD AMENDED AND RESTATED

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

 



 

IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

 

INVESTOR:

 

 

 

 

/s/ Robert E. Maxson, Jr.

 

Robert E. Maxson, Jr.

 

THIRD AMENDED AND RESTATED

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

 


 

IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

 

INVESTOR:

 

 

 

 

/s/ John E. Mooney

 

John E. Mooney

 

THIRD AMENDED AND RESTATED

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

 



 

IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

 

INVESTOR:

 

 

 

 

/s/ Matthew Winkler

 

Matthew Winkler

 

THIRD AMENDED AND RESTATED

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

 



 

IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

 

INVESTOR:

 

 

 

/s/ Neile P. Wolfe

 

Neile P. Wolfe

 

THIRD AMENDED AND RESTATED

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

 



 

IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

 

INVESTOR:

 

 

 

THE STATE OF TEXAS

 

 

 

 

 

By:

/s/ Jeffrey S. Boyd

 

Name:

Jeffrey S. Boyd

 

Title:

Chief of Staff, Office of the Governor

 

 

 

Address:

Financial Services

 

 

ETF Compliance

 

 

PO Box 12878

 

 

Austin, TX 78711-2878

 

 

 

 

 

with a concurrent copy to:

 

 

 

 

 

ATTN: Emerging Technology Fund
Award Program

 

 

General Counsel

 

 

Office of the Governor

 

 

P.O. Box 12428

 

 

Austin, Texas 78711

 

THIRD AMENDED AND RESTATED

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

 



 

IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

 

INVESTOR:

 

 

 

PTV SCIENCES II, L.P.

 

 

 

By:

Pinto Technology Ventures GP,

 

 

L.P., its general partner

 

 

 

 

By:

Pinto TV GP Company LLC,

 

 

its general partner

 

 

 

 

By:

/s/ Evan S. Melrose

 

Name:

Evan S. Melrose, M.D.

 

Title:

 

 

 

 

Address:

 

 

THIRD AMENDED AND RESTATED

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

 



 

IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

 

INVESTOR:

 

 

 

 

/s/ Christopher Earl

 

Christopher Earl

 

THIRD AMENDED AND RESTATED

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

 



 

IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

 

INVESTOR:

 

 

 

 

/s/ Judith Hasko

 

Judith Hasko

 

THIRD AMENDED AND RESTATED

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

 



 

IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

 

INVESTOR:

 

 

 

 

/s/ Mark V. Roeder

 

Mark V. Roeder

 

THIRD AMENDED AND RESTATED

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

 



 

IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

 

INVESTOR:

 

 

 

THE MICHELE FINCH LIVING TRUST

 

 

 

 

 

By:

/s/ Michele Finch

 

Name:

Michele Finch

 

Title:

Trustee

 

THIRD AMENDED AND RESTATED

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

 



 

IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

 

INVESTOR:

 

 

 

SANTE HEALTH VENTURES II. LP

 

 

 

 

 

By:

SHV Management Services II, LP, its general partner

 

 

 

 

By:

/s/ Kevin M. Lalande

 

Name:

Kevin M. Lalande

 

Title:

Managing Member

 

THIRD AMENDED AND RESTATED

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

 


 

IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

INVESTOR:

 

 

 

FOR AND ON BEHALF OF

 

MORNINGSIDE VENTURE INVESTMENTS LIMITED

 

 

 

By:

/s/ Louis Mary Garbano

 

Name:

Louise Mary Garbiano/Jill Marie Franklin

 

Title:

Authorized Signatory

 

THIRD AMENDED AND RESTATED

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

 



 

IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

INVESTOR:

 

 

 

VP COMPANY INVESTMENTS 2008, LLC

 

 

 

By:

/s/ Alan C. Mendelson

 

Name:

Alan C. Mendelson

 

Title:

Member, Management Committee

 

THIRD AMENDED AND RESTATED

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

 



 

IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

INVESTOR:

 

 

 

LAWRENCE M. ALLEVA PROFIT SHARING PLAN

 

 

 

By:

/s/ Lawrence M. Alleva

 

Name:

Lawrence M. Alleva

 

Title:

Trustee

 

THIRD AMENDED AND RESTATED

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

 



 

IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

INVESTOR:

 

 

 

THE ALAN C. AND AGNES B. MENDELSON FAMILY TRUST

 

 

 

By:

/s/ Alan Mendelson

 

Name:

Alan Mendelson

 

Title:

Trustee

 

THIRD AMENDED AND RESTATED

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

 



 

EXHIBIT A

 

SCHEDULE OF INVESTORS

 

Series D Investors

 

Eastern Capital Limited

Sofinnova Venture Partners VIII, L.P.

Baxter Healthcare Corporation

New Enterprise Associates 14, L.P.

Pfizer Inc.

Morningside Venture Investments Limited

Santé Health Ventures II, LP

Winkler, Matthew

Osage University Partners I, L.P.

Rock Springs Capital Master Fund LP

Correlation Ventures, L.P.

Wolfe, Neile P.

Carlson, Rolland

Mooney, John E.

Bennett, William

VP Company Investments 2008, LLC

The Michele Finch Living Trust

Sargent, David

Lawrence M. Alleva Profit Sharing Plan

The Alan C. and Agnés B. Mendelson Family Trust

Maxson Jr., Robert E.

Roeder, Mark

Hasko, Judith

 

Series C Investors

 

Sofinnova Venture Partners VIII, L.P.

New Enterprise Associates 14, L.P.

NEA Ventures 2012, Limited Partnership

Pfizer Inc.

Osage University Partners I, L.P.

Correlation Ventures, L.P.

Bennett, William

Carlson, Rolland

Hershey, John D.

Maxson Jr., Robert E.

Mooney, John E.

Winkler, Matthew

Wolfe, Neile P.

Daniel Winkler 2000 Trust

John Winkler 2000 Trust

 



 

Joshua Winkler 2000 Trust

 

Series B-1 Investors

 

The Office of Governor Economic Development and Tourism of the State of Texas

 

Series B Investors

 

Bennett, William

Carlson, Rolland

Finch, Michele

Hershey, John and Panda

Hershey, John D.

Maxson Jr., Robert E.

Smitheal, Jeremy

The Steinhardt/Alderton 2005 Revocable Living Trust

Winkler, Matthew

 

Series A Investors

 

Akelman, Edward

Alfred P. Sloan Foundation

Ann S. Bowers Separate Property Trust

Asuragen, Inc.

Bennett, William

Blackstone Holdings III, LP Quebec SEC

Boynton, Melbourne D.

BPEF 2 Ambion Partners, LP

The Bradford J. Faxon, Jr. Living Trust

Brown, David

Carlson, Rolland

d’Amato, Charles

Dahler, John

Dan Hill and Associates Money Purchase Pension Plan

DiGiovanni, Christopher

Donald and Sharon Edlow ttees Fielding B. Trust

Donald and Sharon Edlow ttees Fielding E. Trust

Donald Edlow IRA

Dwyer, Earlene Reed

Earl, Christopher D.

Fadale, Paul

Fealy, Stephen

Ferguson, Gary M.

Froehlich, John A.

Glassmeyer, Penelope M.

Green, Andrew

 



 

Growth Capital Partners, L.P.

Hajim, Edmund A.

Haverford Florida, LLC

High Plains Investments, LLP

Hime, John A.

Hippocrates Partners, L.P.

HOC Investments, LLC

Hollister, Rachelle

Huffard, Kimberly

Hulstyn, Michael J.

Hunicke-Smith, Scott

Innovative Promotions LLC

Investment Fund, LP

Jacobs, Melvin

Jaime Ernesto Yordan 2006 Annuity Trust

James F. Clark, Limited Partner

Jean Calhoun QPRT Trust

John O. Downing 2000 Family Trust

Kaderli, Mark D.

Karcher, John D.

The Ken L. Edlow Charitable Remainder Trust

Kulvinder and Kimberly S. Sachar

Labourier, Emmanuel

Leander, Bruce W.

Lim, Su-min

Lone Juniper, LP (Lone Pine Capital)

Maller, James L.

Martinez, Noel

Mary P. Adams Family Trust

Matthew L. Root IRA

Maxson Jr., Robert E.

McNabb II, John T.

Miller, Craig

Mont Blanc Holdings, LLC

Mooney, John E.

Moses, Bianca

Moss, Donell

Neufeld, Todd

Odessa, David G.

Odessa, Edward P.

OKAY Investment Club

The Osterweis Revocable Trust U/A dated 9/13/93

Pamela Perkins Pension and Profit Sharing Plan

Pasloske, Brittan

Peter Rauenbuehler and Mary L. Mines Trust

The Karen Winkler Phillips Family Trust UTD 3/19/2004

 



 

PTV Sciences II, LP

Rebello, James

Robert Calhoun QPRT Trust

RogHen I Limited Partnership

Rutman, James Morgan

Sargent, David W.

Schmaltz, Richard R.

SCP Equity Long Only Fund, L.P.

Sellers, R. Scot

Shelton, Jeffrey and Elizabeth

Sluder, Greenfield

The Steinhardt/Alderton 2005 Revocable Living Trust

Stenzel, Tim

Stern, Peter

Sullivan, Gregory W.

Sullivan, Maureen

Sullivan, Patrick K.

Suryaputra, Ivonne

TekkiShodan Limited Partnership

Telegraph Hill Partners SBIC, L.P.

Telegraph Hill Partners, L.P.

Terek, Richard Mark

The Michele Finch Living Trust

The Michael K. Wilson Revocable Trust

THP Affiliates Fund, LLC

Thornburgh, Richard E.

Todd Neufeld IRA

Vallejo, Ramiro R.

Von Rumohr, Cai

Walkerpeach, Cindy

Weiland, Andrew

Weiss, Dr. Arnold-Peter C.

Williams, Jeffrey

Winkler, Matthew

Daniel Winkler 2000 Trust

John Winkler 2000 Trust

Joshua Winkler 2000 Trust

Wolfe, Neile P.

Wyper, George U.

Wyper Partners, LLC

Zdeblick, Dr. Thomas A. and Catherine D.

 




Exhibit 4.4

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (this “Agreement”) is made and entered into as of [          ] by and between Mirna Therapeutics, Inc., a Delaware corporation (the “Company”), and the Cancer Prevention and Research Institute of Texas, an institution of the State of Texas (“CPRIT”).

 

This Agreement is made in connection with the Stock Purchase Agreement dated as of September 1, 2015 between the Company and CPRIT (the “Purchase Agreement”), pursuant to which CPRIT has agreed to purchase shares of the Company’s Common Stock (the “Shares” and such offering, the “Offering”).  The execution and delivery of this Agreement is a condition precedent to certain obligations of CPRIT under the Purchase Agreement.

 

Unless otherwise defined herein, capitalized terms so used herein and not defined shall have the same meaning as provided in the Purchase Agreement.

 

In consideration of the premises, the representations, warranties, covenants and agreements contained herein and in the Purchase Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, intending to be legally bound hereby, the parties hereby agree as follows:

 

1.                                      Certain Definitions.

 

(a)                                 As used in this Agreement, the following terms shall have the following respective meanings and grammatical variations thereof shall have corresponding meanings:

 

Affiliate” means, with respect to any specified person, any other person who or which, directly or indirectly, controls, is controlled by, or is under common control with such specified person, including without limitation any partner, officer, director, manager or employee of such person and any venture capital or private equity fund now or hereafter existing that is controlled by or under common control with one or more general partners or managing members of, or shares the same management company with, such person.

 

Board” means the Company’s board of directors.

 

Business Day” means any day except Saturday, Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

 

Commission” means the United States Securities and Exchange Commission.

 

Common Stock” means shares of the common stock of the Company, par value $0.001 per share, and also includes any other class of securities into which such common stock may hereafter be reclassified or changed into.

 



 

Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute thereto, and the rules and regulations of the SEC promulgated thereunder, all as the same shall be in effect at the time.

 

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

 

Holder” means any person owning of record Registrable Securities that have not been sold to the public or any assignee of record of such Registrable Securities.

 

Initial Offering” means the Company’s first firm commitment underwritten public offering of its Common Stock registered under the Securities Act.

 

Investor Rights Agreement” means that certain Third Amended and Restated Investor Rights Agreement dated March 31, 2015 by and among the Company and the stockholders party thereto.

 

Person” shall mean an individual, partnership, corporation, association, trust, joint venture, unincorporated organization and any government, governmental department or agency or political subsection thereof.

 

Preferred Stock” means, collectively, the Series A Preferred Stock, the Series B Preferred Stock, the Series B-1 Preferred Stock, the Series C Preferred Stock and the Series D Preferred Stock.

 

register,” “registered” and “registration” refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement or document

 

Registrable Securities” means (a) the Shares, (b) any Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, such above-described securities (other than shares of Common Stock of the Company issued or issuable upon exercise of options or other awards granted pursuant to stock purchase or stock option plans or other similar incentive plans or arrangements), and (c) Registrable Securities as defined in the Investor Rights Agreement.  Notwithstanding the foregoing, Registrable Securities shall not include any Shares (i) sold by a person to the public either pursuant to a registration statement or Rule 144, (ii) sold in a private transaction in which the transferor’s rights under Section 2 of this Agreement are not assigned or (iii) held by a Holder (together with its Affiliates) if, as reflected on the Company’s list of stockholders, such Holder (together with its Affiliates) holds less than 1% of the Company’s outstanding Common Stock (treating all shares of Preferred Stock on an as-converted basis), the Company has completed its Initial Offering and all shares of Common Stock of the Company issuable or issued upon conversion of the Shares held by and issuable to such Holder (and its Affiliates) may be sold pursuant to Rule 144 without limitation during any ninety (90) day period; provided, the

 

2



 

foregoing exception to the definition of Registrable Securities shall not apply to the operation of Sections 2(i) and 2(j) below.

 

Registration” has the meaning specified in Section 2(a) of this Agreement.

 

Registration Expenses” shall mean all expenses incurred by the Company in complying with Section 2 hereof, including, without limitation, all registration and filing fees, printing and accounting expenses, fees and disbursements of counsel for the Company, reasonable fees and disbursements of a single special counsel for the selling Holders, blue- sky fees and expenses and the expense of any special audits incident to or required by any such registration (but excluding the compensation of regular employees of the Company which shall be paid in any event by the Company).

 

Registration Statement” or “registration statement” means the requisite registration statement and prospectus related thereto to effect a Registration.

 

Restated Certificate” means the Company’s Certificate of Incorporation, as amended from time to time.

 

Rule 144” means Rule 144 promulgated by the Commission under the Securities Act, as such rule may be amended from time to time, or any other similar or successor rule or regulation of the Commission that may at any time permit Holder to sell securities of the Company to the public without registration.

 

Securities Act” means the Securities Act of 1933, as amended, or any successor statute thereto, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect at the time.

 

Securities Laws” means the Securities Act, the Exchange Act and all rules, regulations or ordinances promulgated thereunder.

 

Selling Expenses” shall mean all underwriting discounts and selling commissions applicable to the sale of the CPRIT Registrable Securities.

 

Series A Preferred Stock” shall mean Series A preferred stock, par value $0.001 per share, of the Company.

 

Series B Preferred Stock” shall mean Series B preferred stock, par value $0.001 per share, of the Company.

 

Series B-1 Preferred Stock” shall mean Series B-1 preferred stock, par value $0.001 per share, of the Company.

 

Series C Preferred Stock” shall mean Series C preferred stock, par value $0.001 per share, of the Company.

 

Series D Preferred Stock” shall mean Series D preferred stock, par value $0.001 per share, of the Company.

 

3



 

Special Registration Statement” shall mean (i) a registration statement relating to any employee benefit plan, (ii) a registration statement with respect to any corporate reorganization or transaction under Rule 145 of the Securities Act, including any registration statements related to the issuance or resale of securities issued in such a transaction, or (iii) a registration statement in which the only Common Stock being registered is Common Stock issued upon conversion of debt securities that are also being registered.

 

(b)                                 All references to “dollars” or “$” herein shall be deemed references to United States Dollars unless specifically provided otherwise.

 

2.                                      Registration Rights.

 

(a)                                 Piggyback Registrations.  The Company shall notify CPRIT in writing at least twenty (20) days prior to the filing of any registration statement under the Securities Act for purposes of a public offering of securities of the Company (including, but not limited to, registration statements relating to secondary offerings of securities of the Company, but excluding Special Registration Statements) and will afford CPRIT an opportunity to include in such registration statement, and the Company shall cause to be registered, all or part of the Shares held by CPRIT.  If CPRIT shall desire to include in any such registration statement all or any part of the Shares, it shall, within fifteen (15) days after receipt of the above-described notice from the Company, so notify the Company in writing. Such notice shall state the intended method of disposition of the Shares by CPRIT.  If CPRIT decides not to include all of the Shares in such registration statement filed by the Company, CPRIT shall nevertheless continue to have the right to include any of the Shares in any subsequent registration statement or registration statements as may be filed by the Company with respect to offerings of its securities, all upon the terms and conditions set forth herein.

 

(i)                                     Underwriting. If the registration statement under which the Company gives notice under this Section 2(a) is for an underwritten offering, the Company shall so advise CPRIT.  In such event, the right of CPRIT to be included in a registration pursuant to this Section 2(a) shall be conditioned upon CPRIT’s participation in such underwriting and the inclusion of the Shares in the underwriting to the extent provided herein. CPRIT shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Company.  Notwithstanding any other provision of this Agreement, if the underwriter determines in good faith that marketing factors require a limitation of the number of shares to be underwritten, the number of shares that may be included in the underwriting shall be allocated, first, to the Company; second, to the Holders of shares of the Common Stock issuable or issued upon conversion of the Preferred Stock (the “Preferred Stock Registrable Securities”) (the “Preferred Holders”) and Registrable Securities held by CPRIT (the “CPRIT Registrable Securities”) on a pro rata basis based on the total number of Registrable Securities held by such Holders; third, to the Holders (other than the Preferred Holders and CPRIT) on a pro rata basis based on the total number of Registrable Securities held by such Holders; and fourth, to any stockholder of the Company (other than a Holder) on a pro rata basis; provided, however, that no such reduction shall reduce the amount of securities of the selling Holders included in the registration below thirty percent (30%) of the total amount of securities included in such registration, unless such offering is the Initial Offering and such registration does not include shares of any other selling stockholders, in which event any or all of the Registrable

 

4



 

Securities of CPRIT may be excluded in accordance with the immediately preceding clause. In no event will shares of any other selling stockholder be included in such registration that would reduce the number of shares which may be included by Holders without the written consent of Holders of not less than a majority of the Registrable Securities (including a majority of each of (1) the Preferred Stock Registrable Securities and (2) the CPRIT Registrable Securities, if applicable) proposed to be sold in the offering. If CPRIT disapproves of the terms of any such underwriting, CPRIT may elect to withdraw therefrom by written notice to the Company and the underwriter, delivered at least ten (10) business days prior to the effective date of the registration statement. Any Registrable Securities excluded or withdrawn from such underwriting shall be excluded and withdrawn from the registration. For any Holder that is a partnership or corporation, the partners, retired partners, members, former members and stockholders of such Holder, or the estates and family members of any such partners and retired partners and any trusts for the benefit of any of the foregoing person shall be deemed to be a single “Holder,” and any pro rata reduction with respect to such “Holder” shall be based upon the aggregate amount of shares carrying registration rights owned by all entities and individuals included in such “Holder,” as defined in this sentence.

 

(ii)                                  Right to Terminate Registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2(a) prior to the effectiveness of such registration whether or not CPRIT has elected to include securities in such registration. The Registration Expenses of such withdrawn registration shall be borne by the Company in accordance with Section 2(c) hereof.

 

(b)                                 Form S-3 Registration.  In case the Company shall receive from CPRIT a written request or requests that the Company effect a registration on Form S-3 or any similar short-form registration statement and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by CPRIT, the Company shall:

 

(i)                                     promptly (and in any event within fifteen (15) days after such written request is delivered) give written notice of the proposed registration, and any related qualification or compliance, to all other Holders of Registrable Securities; and

 

(ii)                                  as soon as practicable, effect such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of CPRIT’s Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Holder or Holders joining in such request as are specified in a written request given within fifteen (15) days after receipt of such written notice from the Company; provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance pursuant to this Section 2(b):

 

1)                                     if Form S-3 is not available for such offering by CPRIT;

 

2)                                     if CPRIT, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public of less than one million dollars ($1,000,000);

 

5



 

3)                                     if within fifteen (15) days of receipt of a written request from CPRIT pursuant to this Section 2(b), the Company gives notice to such CPRIT of the Company’s intention to make a public offering within ninety (90) days after receipt of such written request from CPRIT, other than pursuant to a Special Registration Statement; provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective during such period; provided, further, that such Holders were permitted to register such shares as requested to be registered pursuant to Section 2(a) hereof without reduction by the underwriter thereof;

 

4)                                     if the Company has, within the twelve (12) month period preceding the date of such written request, already effected two (2) registrations on Form S-3 for the Holders;

 

5)                                     in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance unless the Company is already qualified to do business or subject to service of process, as applicable, in such jurisdiction and except as may be required by the Securities Act;

 

6)                                     if CPRIT Registrable Securities constitute less than 10% of the outstanding shares of Common Stock of the Company (calculated as of the date of the registration pursuant to this Section 2(b)); or

 

7)                                     if CPRIT could sell all of the Shares without any limitations under Rule 144.

 

(iii)                               Subject to the foregoing, the Company shall file a Form S-3 registration statement covering the Registrable Securities and other securities so requested to be registered as soon as practicable after receipt of the requests of the Holders.

 

(iv)                              Notwithstanding the foregoing obligations, if the Company furnishes to CPRIT a registration pursuant to this Section 2(b) a certificate signed by the Company’s chief executive officer stating that in the good faith judgment of the Board it would be materially detrimental to the Company and its stockholders for such registration statement to either become effective or remain effective for as long as such registration statement otherwise would be required to remain effective, because such action would (i) materially interfere with a significant acquisition, corporate reorganization, or other similar transaction involving the Company; (ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act, then the Company shall have the right to defer taking action with respect to such filing, and any time periods with respect to filing or effectiveness thereof shall be tolled correspondingly, for a period of not more than ninety (90) days after the request for registration on Form S-3 referred to in this Section 2(b) is given; provided, however, that the Company may not invoke this right more than once in any twelve (12) month period; and provided, further, that the Company shall not register any securities for

 

6



 

its own account or that of any other stockholder during such ninety (90) day period other than pursuant to a Special Registration Statement.

 

(c)                                  Expenses.  Except as specifically provided herein, all Registration Expenses incurred in connection with any registration under Section 2(a) or 2(b) shall be borne by the Company.  All Selling Expenses incurred in connection with any registrations hereunder shall be borne by CPRIT.

 

(d)                                 Obligations of the Company.  Whenever required to effect the registration of CPRIT Registrable Securities, the Company shall, as expeditiously as reasonably possible, to the extent that CPRIT is selling such Registrable Securities:

 

(i)                                     Prepare and file with the Commission a registration statement with respect to the Shares and use best efforts to cause such registration statement to become effective, and, upon the request of CPRIT, keep such registration statement effective for up to one hundred twenty (120) days or, if earlier, until CPRIT has completed the distribution related thereto; provided, however, that such one hundred twenty (120) day period shall be extended for a period of time equal to the period CPRIT refrains, at the request of an underwriter of Common Stock (or other securities) of the Company, from selling any securities included in such registration;

 

(ii)                                  Prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement for the period set forth in Section 2(d)(i) above;

 

(iii)                               Comply with Rule 172 of the Securities Act and (i) advise CPRIT promptly of any failure by the Company to satisfy the conditions of such Rule 172 and (ii) promptly furnish to CPRIT such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as CPRIT may reasonably request in order to facilitate the disposition of Registrable Securities owned by CPRIT;

 

(iv)                              Use best efforts to register and qualify the securities covered by such registration statement under such other securities or blue-sky laws of such jurisdictions as shall be reasonably requested by CPRIT; provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already qualified to do business or subject to service of process, as applicable, in such jurisdiction and except as may be required by the Securities Act;

 

(v)                                 In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter(s) of such offering (CPRIT shall also enter into and perform its obligations under such an agreement);

 

7


 

(vi)                              Use its best efforts to cause all such CPRIT Registrable Securities covered by such registration statement to be listed on a national securities exchange or trading system and each securities exchange and trading system (if any) on which similar securities issued by the Company are then listed;

 

(vii)                           Provide a transfer agent and registrar for all CPRIT Registrable Securities registered pursuant to this Agreement and provide a CUSIP number for all such CPRIT Registrable Securities, in each case no later than the effective date of such registration;

 

(viii)                        Promptly make available for inspection by CPRIT, any managing underwriter(s) participating in any disposition pursuant to such registration statement, and any attorney or accountant or other agent retained by any such underwriter or selected by the selling Holders, all financial and other records, pertinent corporate documents, and properties of the Company, and cause the Company’s officers, directors, employees, and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant, or agent, in each case, as necessary or advisable to verify the accuracy of the information in such registration statement and to conduct appropriate due diligence in connection therewith;

 

(ix)                              Notify CPRIT, promptly after the Company receives notice thereof, of the time when such registration statement has been declared effective or a supplement to any prospectus forming a part of such registration statement has been filed;

 

(x)                                 After such registration statements become effective, notify CPRIT of any request by the SEC that the Company amend or supplement such registration statement or prospectus;

 

(xi)                              Promptly notify CPRIT of any stop order issued or threatened by the Commission or any state securities commission and take all reasonable actions required to prevent the entry of such stop order or to remove it if entered;

 

(xii)                           Use its best efforts to prevent the issuance of any stop order or other suspension of effectiveness and, if such order is issued, obtain the withdrawal of any such order at the earliest possible moment;

 

(xiii)                        Notify CPRIT at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and as promptly as practicable thereafter, prepare and file with the Commission, and furnish without charge to CPRIT and the managing underwriter(s), if any, an amendment or supplement to such registration statement or prospectus in order to cause such registration statement or prospectus not to include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing and furnish such copies thereof as CPRIT or any underwriter may reasonably request; and

 

8



 

(xiv)                       Use best efforts to furnish, on the date that such Registrable Securities are delivered to the underwriters for sale, if such securities are being sold through underwriters, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and (ii) a letter, dated as of such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering addressed to the underwriters.

 

(e)                                  Termination of Registration Rights.  All registration rights granted under this Agreement shall terminate and be of no further force and effect upon the earlier to occur of (i) three (3) years after the date of the Company’s Initial Offering, or (ii) at such time as CPRIT could sell all of its Shares without any limitations during any 90-day period under Rule 144.

 

(f)                                   Delay of Registration; Furnishing Information.

 

(i)                                     CPRIT shall not have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.

 

(ii)                                  It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 2 with respect to the Registrable Securities of CPRIT that CPRIT shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of such securities as shall be required to effect the registration of their Registrable Securities.

 

(g)                                  Assignment of Registration Rights. The rights to cause the Company to register Registrable Securities pursuant to this Section 2 may be assigned by CPRIT to a transferee or assignee of Registrable Securities that is an Affiliate of CPRIT; provided, however, (i) the transferor shall, within ten (10) days after such transfer, furnish to the Company written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned and (ii) such transferee shall agree to be subject to all restrictions and obligations set forth in this Agreement.

 

(h)                                 Amendment of Registration Rights. Any provision of this Section 2 may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and CPRIT. Any amendment or waiver effected in accordance with this Section 2(h) shall be binding upon CPRIT and the Company.

 

(i)                               Market Stand-Off Agreement.  CPRIT hereby agrees that CPRIT shall not sell, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale with respect to, any Common Stock (or other securities) of the Company held by CPRIT (other than those included in the registration) for a period specified by the representative of the underwriters of Common Stock (or other

 

9



 

securities) of the Company not to exceed one hundred eighty (180) days following the effective date of a registration statement of the Company filed under the Securities Act (the “Standoff Period”).  In connection with any offering in connection with a registration under Section 2(a) or 2(b) hereof, CPRIT further agrees to execute and deliver any lock-up agreement (a “Follow-On Lock-Up”) with the representative of the underwriters that is signed by each of (1) Sofinnova Venture Partners VIII, L.P., (2) New Enterprise Associates 14, L.P. and (3) Pfizer Inc., but only to the extent that such entity is (x) a holder of 10% or more of the Company’s outstanding shares of Common Stock (calculated as of the date of such lock-up agreement) and (y) an “affiliate” of the Company as defined in Rule 12b-2 of the Exchange Act (collectively, the “Major Holders”); provided that CPRIT’s execution of any such Follow-On Lock-Up would not disproportionately and adversely affect CPRIT relative to the Major Holders

 

The Company may impose stop-transfer instructions with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of the Standoff Period and/or the expiration of a Follow-On Lockup, as applicable. The underwriters of the Company’s stock are intended third party beneficiaries of this Section 2(i) and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto.

 

(j)                                    Agreement to Furnish Information.  CPRIT agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriter that are consistent with CPRIT’s obligations under Section 2(i) or that are necessary to give further effect thereto. In addition, if requested by the Company or the representative of the underwriters of Common Stock (or other securities) of the Company, CPRIT shall provide, within ten (10) days of such request, such information as may be required by the Company or such representative in connection with the completion of any public offering of the Company’s securities pursuant to a registration statement filed under the Securities Act. The obligations described in Section 2(i) and this Section 2(j) shall not apply to a Special Registration Statement.  The Company may impose stop-transfer instructions with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of said one hundred eighty (180) day period.  CPRIT agrees that any transferee of any shares of Registrable Securities shall be bound by Sections 2(i) and 2(j).  The underwriters of the Company’s stock are intended third party beneficiaries of Sections 2(i) and 2(j) and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto.

 

(k)                                 Compliance with Registration Requirements. While any registration statement which registers CPRIT Registrable Securities pursuant to this Agreement remains effective, CPRIT may sell such Registrable Securities in accordance with the plan of distribution contained in such registration statement and if it does so it will comply therewith and with the related prospectus delivery requirements unless an exemption therefrom is available.  CPRIT agrees that if it is notified by the Company in writing at any time that such registration statement is not effective or that the prospectus included in such registration statement no longer complies with the requirements of Section 10 of the Securities Act, CPRIT will refrain from selling such Registrable Securities until such time as CPRIT is notified by the Company that such registration statement is effective or such prospectus is compliant with Section 10 of the Securities Act.

 

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3.                                      Indemnification and Contribution.

 

(a)                                 Indemnification by the Company.  In the event of any registration or qualification under applicable Securities Laws pursuant to Section 2 of any Registrable Securities covered by such registration or qualification, to the extent permitted by law, the Company will indemnify and hold harmless CPRIT, the partners, members, stockholders, officers and directors of CPRIT, legal counsel and accountants of CPRIT, any underwriter (as defined in the Securities Act) for CPRIT and each person, if any, who controls CPRIT or underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a “Violation”) by the Company: (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement or incorporated by reference therein, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law in connection with the offering covered by such registration statement; and the Company will reimburse CPRIT, each such partner, member, stockholder, officer, director, underwriter or controlling person, or other aforementioned person for any legal or other expenses reasonably incurred by them, as incurred, in connection with investigating or defending any such loss, claim, damage, liability or action; provided however, that the indemnity agreement contained in this Section 3(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed, nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by CPRIT, such partner, member, stockholder, officer, director, underwriter or controlling person, or other aforementioned person of CPRIT.

 

(b)                                 Indemnification by CPRIT.  In the event of any registration or qualification under applicable Securities Laws pursuant to Section 2 of any Registrable Securities covered by such registration or qualification, to the extent permitted by law, CPRIT will, if Registrable Securities held by CPRIT are included in the securities as to which such registration qualifications or compliance is being effected, severally and not jointly, indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, and each person, if any, who controls the Company within the meaning of the Securities Act, any underwriter and any other Holder selling securities under such registration statement or any of such other Holder’s partners, members, stockholders, directors or officers or any person who controls such Holder, against any losses, claims, damages or liabilities (joint or several) to which the Company or any such director, officer, controlling person, underwriter or other such Holder, or partner, member, stockholder, director, officer or controlling person of such other Holder may become subject under the Securities Act, the Exchange Act or other federal or

 

11



 

state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any of the following statements: (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement or incorporated by reference therein, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act (collectively, a “CPRIT Violation”), in each case to the extent (and only to the extent) that such CPRIT Violation occurs in reliance upon and in conformity with written information furnished by CPRIT under an instrument duly executed by CPRIT and stated to be specifically for use in connection with such registration; and CPRIT will reimburse any legal or other expenses reasonably incurred by the Company or any such director, officer, controlling person, underwriter or other Holder, or partner, member, stockholder, officer, director or controlling person of such other Holder, as incurred, in connection with investigating or defending any such loss, claim, damage, liability or action if it is judicially determined that there was such a CPRIT Violation; provided, however, that the indemnity agreement contained in this Section 3(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the prior written consent of CPRIT, which consent shall not be unreasonably withheld, conditioned or delayed; provided further, that in no event shall any indemnity under this Section 3(b) when combined with the amounts paid or payable by CPRIT pursuant to Section 3(d), exceed the net proceeds from the offering received by CPRIT.

 

Notwithstanding anything in the foregoing paragraph of Section 3(b) or any other provision of this Agreement, the Company acknowledges that CPRIT is an agency of the State of Texas and as such there are constitutional and statutory limitations on the authority of CPRIT to enter into certain terms and conditions of this Agreement or any agreement related thereto, including but not limited to, terms and conditions relating to liens on CPRIT’s property; disclaimers and limitations of warranties; disclaimers and limitations of liability for damages; waivers, disclaimers and limitations of legal rights, remedies, requirements and processes; limitations of periods to bring legal action; granting control of litigation or settlement to another party; liability for acts or omissions of third parties, payment of attorneys’ fees, dispute resolution; indemnities; and confidentiality (collectively, the “Limitations”), and terms and conditions related to the Limitations will not be binding on CPRIT except to the extent authorized by the laws and Constitution of the State of Texas.

 

(c)                                  Notice. Promptly after receipt by an indemnified party under this Section 3 of notice of the commencement of any action (including any governmental action) for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 3, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding.  The failure to deliver

 

12



 

written notice to the indemnifying party within a reasonable time of the commencement of any such action, if materially prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 3, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 3.

 

(d)                                 Defenses. If the indemnification provided for in this Section 3 is held by a court of competent jurisdiction (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) to be unavailable to an indemnified party with respect to any losses, claims, damages or liabilities referred to herein, the indemnifying party, in lieu of indemnifying such indemnified party thereunder, shall to the extent permitted by applicable law contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the Violation(s) or CPRIT Violation(s) that resulted in such loss, claim, damage or liability, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, that (x) CPRIT will not be required to contribute any amount in excess of the public offering price of all such Registrable Securities offered and sold by CPRIT pursuant to such registration statement, and (y) in no event shall any contribution by CPRIT hereunder, when combined with the amounts paid or payable by CPRIT pursuant to Section 3(b), exceed the net proceeds from the offering received by CPRIT.

 

(e)                                  Survival.  The obligations of the Company and CPRIT under this Section 3 shall survive completion of any offering of Registrable Securities in a registration statement and the termination of this Agreement. No indemnifying party, in the defense of any such claim or litigation, shall, except with the consent of each indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.

 

(f)                                   Indemnification Payment.  To the extent permitted by law, the indemnification required by this Section 3 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or expense, loss, damage or liability is incurred, or as otherwise agreed to between the parties hereto.

 

4.                                      Covenants Relating to Rule 144 and Multi-Jurisdictional Registrations.

 

With a view to making available to CPRIT the benefits of certain rules and regulations of the Commission which may permit the sale of the Registrable Securities to the public without registration, the Company shall:

 

13



 

(a)                                 make and keep public information available, as those terms are understood and defined in Rule 144 or any similar or analogous rule promulgated under the Securities Act, at all times after the effective date of the first registration filed by the Company for an offering of its securities to the general public;

 

(b)                                 file with the SEC, in a timely manner, all reports and other documents required of the Company under the Exchange Act; and

 

(c)                                  so long as CPRIT owns any Registrable Securities, furnish to CPRIT forthwith upon request: (i) a written statement by the Company as to its compliance with the reporting requirements of said Rule 144 of the Securities Act, and of the Exchange Act (at any time after it has become subject to such reporting requirements), or its qualification as a registrant whose securities may be resold pursuant to Form S-3 (at any time after the Company so qualifies); (ii) a copy of the most recent annual or quarterly report and such other periodic reports of the Company filed with the Commission; and (iii) such other reports and documents as CPRIT may reasonably request in connection with availing itself of any rule or regulation of the SEC allowing it to sell any such securities without registration or pursuant to such Form S-3.

 

5.                                      Other Registration Rights.

 

The Company represents and warrants that it has not granted any registration rights to any Person other than pursuant to this Agreement and the Investor Rights Agreement.

 

6.                                      Miscellaneous.

 

(a)                                 Termination.  This Agreement, except for any obligations under Section 3, shall terminate when all of the Shares have been (a) registered or qualified for distribution and disposed of in accordance with the prospectus covering them, or (b) publicly sold.

 

(b)                                 Notices.  Unless otherwise expressly provided in this Agreement, any notice or other communication to be given under this Agreement (a “notice”) shall be in writing addressed as follows:

 

if to the Company, to :

 

Mirna Therapeutics, Inc.

 

 

2150 Woodward Street, Suite 100

 

 

Austin, Texas 78744

 

 

Telephone No.: (512) 901-0900

 

 

Attention: Paul Lammers, M.D., M.Sc.

 

 

 

with a copy to:

 

Latham & Watkins LLP

 

 

140 Scott Drive

 

 

Menlo Park, California 94025

 

 

Telephone No.: (650) 328-4600

 

 

Facsimile No.: (650) 463-2600

 

 

Attention: Alan C. Mendelson

 

 

Mark V. Roeder

 

14



 

if to CPRIT:

 

CPRIT

 

 

Chief Executive Officer

 

 

1701 N. Congress Avenue Ste. 6-127

 

 

Telephone No.: (512) 463-3190

 

 

Facsimile No.: (512) 475-2563

 

 

 

with a copy to:

 

CPRIT

 

 

General Counsel

 

 

1701 N. Congress Avenue Ste. 6-127

 

 

Telephone No.: (512) 463-3190

 

 

Facsimile No.: (512) 475-2563

 

or such other address as may be designated in writing hereafter, in the same manner, by such Person.

 

Each notice shall be personally delivered to the addressee or sent by facsimile transmission to the addressee and (i) a notice which is personally delivered shall, if delivered on a Business Day during regular business hours, be deemed to be given and received on that day and, in any other case, be deemed to be given and received on the first Business Day following the day on which it is delivered; and (ii) a notice which is sent by facsimile transmission shall be deemed to be given and received on the first Business Day following the day on which it is sent.

 

(c)                                  Governing Law.  This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware, without regard to conflicts of law principles thereof.

 

(d)                                 Headings.  The descriptive headings of the several sections and paragraphs of this Agreement are inserted for convenience only, and do not constitute a part of this Agreement and shall not affect in any way the meaning or interpretation of this Agreement.

 

(e)                                  Entire Agreement; Amendments.  This Agreement and the other writings referred to herein or delivered pursuant hereto which form a part hereof contain the entire understanding of the parties with respect to its subject matter.  This Agreement supersedes all prior agreements and understandings between the parties with respect to its subject matter.  This Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a written instrument duly executed by the Company and CPRIT.

 

(f)                                   Assignability.  The provisions of this Agreement shall inure to the benefit of and be binding upon the parties and their successors and permitted assigns.  This Agreement and all of the provisions hereof may not be assigned without the consent of CPRIT, and any such assignment shall comply with all applicable Securities Laws.

 

(g)                                  Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

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IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.

 

 

MIRNA THERAPEUTICS, INC.

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

CANCER PREVENTION AND RESEARCH
INSTITUTE OF TEXAS

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[Signature Page to Mirna Therapeutics, Inc. Registration Rights Agreement]

 




Exhibit 10.3(A)

 

[***] 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.

 

LICENSE AGREEMENT

 

THIS LICENSE AGREEMENT (the “Agreement”) is made and entered into effective as of December 22, 2011 (the “Effective Date”) by and between MIRNA THERAPEUTICS, INC., a Delaware corporation with a place of business at 2150 Woodward Street, Suite 100, Austin, Texas 78744 (“MirnaRx”), and MARINA BIOTECH, INC., a Delaware corporation with a place of business at 3830 Monte Villa Parkway, Bothell, Washington 98021 USA (“Marina Bio”).  Marina Bio and MirnaRx are sometimes referred to herein individually as a “Party”, and collectively as the “Parties.”

 

RECITALS

 

WHEREAS, Marina Bio owns or controls certain patent rights and know-how relating to its proprietary oligonucleotide delivery technology that may be useful for delivery of microRNA sequences for use treating certain cancers and other diseases or conditions; and

 

WHEREAS, MirnaRx has capabilities in the research and development of microRNA drug candidates and products and desires to obtain from Marina Bio, and Marina Bio is willing to grant to MirnaRx, a license under Marina Bio’s technology and intellectual property relating to Marina Bio’s liposomal delivery technology known as NOV340, to exclusively develop and commercialize drug products containing such delivery technology combined with one or more selected MirnaRx mircoRNA molecules worldwide, on the terms and conditions set forth herein;

 

NOW, THEREFORE, based on the premises and the mutual covenants and obligations set forth below, and intending to be bound hereby, the Parties agree as follows:

 

ARTICLE 1

 

DEFINITIONS

 

For purposes of this Agreement, the following terms shall have the meanings as set forth below:

 

1.1                               Additional Indication” means, with respect to a particular Licensed Product, an indication for treating or preventing a human disease or condition that is the subject of and covered by a unique NDA application and Regulatory Approval, different from and subsequent to the original Regulatory Approval for such Licensed Product.

 

1.2                               Affiliate” means, with respect to a particular Party, an entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such Party.  For purposes of this definition, the term “control” (with correlative meanings for the terms “controlled by” and “under common control with”) means that the applicable entity has the actual power, direct or indirect, to direct and to cause the direction of the management and policies of the applicable other entity, whether through ownership of fifty percent (50%) or more of the voting securities of such other entity, by contract or otherwise.  An

 



 

entity will be an Affiliate for purposes of this Agreement only so long as it satisfies the definition set forth above in this Section.

 

1.3                               Applicable Law” means all applicable laws, rules, ordinances, and regulations, including any rules, regulations, guidelines or other requirements of relevant government agencies, that may be in effect from time to time in the applicable country or jurisdiction, applicable to the specific activities being undertaken pursuant to this Agreement.

 

1.4                               Available” means, with respect to a particular MirnaRx Compound for which MirnaRx submits a notice under Section 2.6, that at the time of such notice Marina Bio is not bound by an agreement with a Third Party that grants such Third Party exclusive license rights under the Licensed Technology with respect to such MirnaRx Compound.

 

1.5                               Bankrupt Party” shall have the meaning ascribed to such term in Section 10.2(b).

 

1.6                               Claim” means any claim, allegation, suit, complaint, action or legal proceeding.

 

1.7                               Commercialize” or “Commercialization” means those activities comprising or relating to the manufacturing, promotion, marketing, advertising, distribution and sale of Licensed Products, including Phase IV Trials or equivalent clinical trials conducted following Regulatory Approval as needed or useful to promote and market the Licensed Product and/or maintain such Regulatory Approval.

 

1.8                               Commercially Reasonable Efforts” means, with respect to particular tasks or activities hereunder in developing or Commercialization Licensed Product, a level of efforts applied to such tasks or activities reasonably consistent with the efforts commonly used by similarly-situated companies in the pharmaceutical industry to conduct such activities on products at a similar (as compared to the Licensed Product at the applicable time) stage in its product life and of similar market potential, profit potential and strategic value resulting from its own research efforts, based on information and conditions then-prevailing, including, without limitation, efficacy of the product, the competitiveness of alternative products in the marketplace, the patent and other proprietary position of the product, the likelihood of regulatory approval given the regulatory structure involved and the likelihood of adequate reimbursement.  Commercially Reasonable Efforts shall be determined on a country-by-country or market-by-market basis (as most applicable) for a particular Licensed Product, and it is anticipated that the level of effort will change over time reflecting changes in the status of the Licensed Product and the country (or markets) involved.

 

1.9                               Confidential Information” of a Party means all confidential or proprietary information received or otherwise obtained by the other Party from such Party or its Affiliates pursuant to this Agreement, other than that portion of such information that:

 

(a)                                 is now, or hereafter becomes, generally available to the public through no fault of the receiving Party, or its Affiliates, or any entity that obtained such information or materials from the receiving Party;

 



 

(b)                                 the receiving Party or its Affiliates already possesses, as evidenced by its written records, prior to receipt thereof from the disclosing Party;

 

(c)                                  is obtained without restriction from a Third Party that had the legal right to disclose the same to the receiving Party or its Affiliates; or

 

(d)                                 has been independently developed by the receiving Party or its Affiliates without the aid, application or use of any Confidential Information of the disclosing Party, as demonstrated by competent written proof.

 

1.10                        Confidentiality Agreement” shall mean that certain Confidential Disclosure Agreement dated November 25, 2011, among Marina Bio, MirnaRx and Asuragen, Inc.

 

1.11                        Cumulative Sublicense Fees” shall have the meaning ascribed to such term in Section 5.6.

 

1.12                        Default” shall mean a failure by a Party to perform one or more of its material obligations under this Agreement which, if not cured within the applicable cure period set forth in Section 10.2(c) or (d), is likely to cause material harm to the other Party.

 

1.13                        Dispute” shall have the meaning ascribed to such term in Section 11.1.

 

1.14                        Field of Use” means any use of Licensed Product for or relating to the prophylaxis, treatment or palliation of cancer or any other disease or health condition in humans or animals, but excluding any DNAi human therapeutic use.

 

1.15                        Field Infringement” shall have the meaning ascribed to such term in Section 6.4.

 

1.16                        Financial Event” shall have the meaning ascribed to that term in Section 10.2(b).

 

1.17                        First Commercial Sale” means, with respect to a particular country, the first commercial sale of a Licensed Product by MirnaRx, its Affiliates or Sublicensees to a Third Party in a country, after all needed Regulatory Approvals for the Licensed Product have been granted in such country.

 

1.18                        GAAP” means generally accepted accounting principles.

 

1.19                        Generic Product” means, with respect to a Licensed Product, a generic product containing the applicable Selected MirnaRx Compound in a formulation similar to and substitutable for such Licensed Product.

 

1.20                        Improvement Patent Claim” means any claim in a patent application filed by MirnaRx (or in any patent issuing on any such application) that:  (i) claims any improvements, modifications or enhancements to the Licensed Technology invented by MirnaRx prior to the date [***] after the Effective Date in conducting manufacturing process development and scale-up with respect to the Licensed Technology under this Agreement, and (ii) cannot be

 

[***] 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.

 



 

practiced without infringing the Licensed Patents, and including for clarity applicable claims in continuing patent applications (such as continuations, divisions, or continuations-in-part) or in any reissue, re-examined or extended patent.  For clarity, the term “Improvement Patent Claims” expressly excludes:  (x) any claims in patent applications or patents covering inventions made by or on behalf of MirnaRx (or its Affiliate) prior to the Effective Date without use of any Confidential Information or materials of Marina Bio, and (y) any claims in patent applications or patents covering inventions made by or on behalf of MirnaRx (or its Affiliate) after the Effective Date but independent of work done under this Agreement, in each case without use of any Confidential Information or materials of Marina Bio.

 

1.21                        IND” means an Investigational New Drug application, as defined in 21 C.F.R. 312 or any successor regulation or comparable application in accordance with the Regulatory Authority in the applicable jurisdiction.

 

1.22                        Indemnified Party” shall have the meaning ascribed to it in Section 8.3.

 

1.23                        Indemnifying Party” shall have the meaning ascribed to it in Section 8.3.

 

1.24                        Information” means any and all data, results, improvements, processes, methods, protocols, formulas, inventions, know-how, trade secrets and any other information, patentable or otherwise, which may include (but is not limited to) scientific, research and development, manufacturing know-how, pre-clinical, clinical, regulatory, manufacturing, safety, marketing, financial and commercial information or data.

 

1.25                        Licensed Know-How” means any and all proprietary Information owned or controlled by Marina Bio (or its Affiliate) that relates directly to the use or practice of the Licensed Patents and/or is otherwise necessary to develop, make, use or sell Licensed Product.

 

1.26                        Licensed Patent” means:

 

(a)                                 The patents and patent applications that are owned or controlled by Marina Bio or its Affiliate that claim or cover the Marina Bio Technology (including the manufacture or use thereof), including those patents and patent applications listed in Appendix A of this Agreement;

 

(b)                                 all additional patent applications based on or relating to the patents and applications set forth in subclause (a) above;

 

(c)                                  any and all patent applications that are continuing applications (including continuations, continuations-in-part or divisionals, or any foreign equivalents thereof) of the patents and applications described in (a) or (b) above;

 

(d)                                 any and all issued and unexpired patents resulting from any of the applications described in (a), (b) or (c) above;

 

(e)                                  any and all issued and unexpired reissues, reexaminations, renewals, extensions (and any foreign equivalents of any of the foregoing) of any of the patents described in (a), (c) or (d) above; and

 



 

(f)                                   any and all supplemental protection certificates (and any foreign equivalents thereof) applicable to products that, prior to the expiration of any patents listed on Appendix A or any patents included in the scope of (d) above, were covered by one or more Valid Claims of such patents.

 

1.27                        Licensed Product” means a pharmaceutical composition developed or sold by MirnaRx (or its Affiliate or Sublicensee) that contains a Selected MirnaRx Compound and Marina Bio Technology and is claimed or covered by the Licensed Patents, and including any improvements, enhancements or modifications to such composition.

 

1.28                        Licensed Technology” means the Licensed Patents and Licensed Know-How.

 

1.29                        Losses” means costs and expenses (including, without limitation, reasonable legal expenses and attorneys’ fees), judgments, liabilities, fines, damages, assessments and/or other losses.

 

1.30                        Major Market” means [***].  For clarity, obtaining Regulatory Approval of Licensed Product from [***], shall be deemed to be obtaining a Regulatory Approval in a Major Market for purposes of the applicable provisions of this Agreement.

 

1.31                        Manufacturing Processes” means all Information that is Controlled by Marina Bio or its Affiliates and is used to manufacture the delivery formulation in the Marina Bio Technology.

 

1.32                        Marina Bio Indemnitees” shall have the meaning ascribed. to such term in Section 8.2.

 

1.33                        Marina Bio Technology” means Marina Bio’s proprietary NOV340 formulation referred to generally as SMARTICLES® liposomal delivery technology and including any Technology Improvements.

 

1.34                        Milestone Payment Sum” shall have the meaning ascribed to such term in Section 5.6.

 

1.35                        miRNA Compound” means a product containing, comprised of or based on a native or chemically modified RNA oligomer designed to either provide the function of a miRNA and/or modulate a miRNA., where miRNA is understood to be a naturally occurring short RNA molecule found in eukaryotic cells.

 

1.36                        MirnaRx Compound” means any miRNA Compound that is researched or developed by MirnaRx (or its Affiliate) for use in the Field of Use.

 

1.37                        MirnaRx Indemnitees” shall have the meaning ascribed to such term in Section 8.1.

 

1.38                        NDA” means a New Drug Application, as defined in 21 C.F.R. 314, and any other appropriate application or registration submitted to the appropriate Regulatory Authority in

 

[***] 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.

 



 

a particular country in the Territory to seek Regulatory Approval for sale of Licensed Product in such country.

 

1.39                        Net Sales” means, with respect to a certain time period, all revenues recognized, and deductions applied, in accordance with GAAP consistently applied, based on invoices for the sales of Licensed Products sold by MirnaRx or its Affiliate to Third Parties (but not including sales relating to transactions between MirnaRx, its Affiliates and/or its respective Sublicensees and agents) during such time period, less the total of the following estimated and/or incurred charges or expenses with respect to such sales:  (a) [***]; (b) [***]; (c) [***]; (d) [***]; (e) [***]; (f) [***]; and (g) [***].

 

Any disposal of Licensed Products for, or use of Licensed Products in, clinical or pre-Clinical trials, given as free samples, including, without limitation, sample cards, or distributed for indigent programs shall not be included in Net Sales.

 

Upon any sale or other disposal of any Licensed Product that should be included within Net Sales for any consideration other than an exclusively monetary consideration on bona fide arm’s-length terms, then for purposes of calculating the Net Sales under this Agreement, [***].

 

1.40                        Option Compound” means any of the MirnaRx Compounds on the list in the Side Letter (not to exceed [***] compounds, but subject to the substitution rights in Section 2.6), or, for any such MirnaRx Compound, any other MirnaRx Compound that has at least [***]% sequence homology with such compound.

 

1.41                        Phase IV Trial” means a clinical trial of a pharmaceutical product initiated in a country in an approved indication after receipt of Regulatory Approval for such product in such indication in such country, intended to delineate additional information about such product’s risks, benefits and/or optimal use.

 

1.42                        Prosecution” shall have the meaning ascribed to such term in Section 6.3,

 

1.43                        Regulatory Approval” means all approvals (including supplements, amendments, pre- and post-approvals and price approvals), licenses, registrations or authorizations of any national, supra-national, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity, necessary for the distribution, use or sale of a Licensed Product in the applicable country or regulatory jurisdiction.

 

1.44                        Regulatory Authority” means any regulatory agency, department, bureau, commission, council or other governmental entity involved in granting approvals, registrations or licenses for the development, manufacturing, marketing, reimbursement, and/or pricing of a Licensed Product in a particular country or regulatory jurisdiction.

 

1.45                        Regulatory Documents” means all regulatory documents and filings, correspondence with Regulatory Authorities, annual reports and amendments thereto related to a Licensed Product.

 

1.46                        Royalty Term” means, as to a particular Licensed Product sold in a country, the period from the date of First Commercial Sale of such Licensed Product in such country until the

 

[***] 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.

 



 

later of:  (i) the date of expiration of the last to expire patent included in the Licensed Patents having a Valid Claim that claims the Licensed Product in such country, or (ii) 10 years after such First Commercial Sale of the Licensed Product in. such country.

 

1.47                        Royalties Report” shall have the meaning ascribed to such term in Section 5.7.

 

1.48                        Selected MirnaRx Compound” means:  (a) the MirnaRx Compound known as miR-34 (the sequence of which is set forth in the Side Letter); or (b) any other MirnaRx Compound that MirnaRx selects, as provided in Section 2.6, to combine with the Marina Bio Technology and to develop (or have developed) as a Licensed Product, and including, for any such Selected MirnaRx Compound, any other MirnaRx Compound that has at least [***]% sequence homology with such Selected MirnaRx Compound.

 

1.49                        Side Letter” means that certain letter agreement between the Parties dated as of the Effective Date.

 

1.50                        Sublicensee” means a sublicensee, direct or indirect, of MirnaRx under MirnaRx’s rights pursuant to Section 2.1.

 

1.51                        Sublicense Fees” shall have the meaning as ascribed to such term in Section 5.6.

 

1.52                        Sublicensing Revenues” means all consideration received by MirnaRx (or its Affiliate) from a Sublicensee in consideration of the grant of a sublicense under the Licensed Patents to such Sublicensee (which may include upfront fees, milestone payments, royalties and other similar fees), but excluding:  (a) any amounts paid as reimbursement of research or development costs and expenses incurred by MirnaRx or its Affiliate (including past and ongoing costs and expenses) relating to Licensed Product; (b) direct reimbursement of patent prosecution or enforcement costs; (c) payments of a share of amounts recovered in enforcing patent or other intellectual property rights (except to the extent such share is calculated or treated as royalties under the terms of such sublicense); (d) transfer price payments for sale of compounds or products ([***] of actual fully-burdened cost of goods; (e) bona fide loans on commercial terms; and (f) any payments made to purchase equity in MirnaRx or a MirnaRx Affiliate at fair market value.

 

1.53                        Technology Improvement” means any improvements, enhancements or modifications to the Marina Bio Technology created solely. by Marina Bio within [***] of the Effective Date of the Agreement and which are not created pursuant to any agreement between Marina Bio and a Third Party, but excluding agreements with a contract research organization or consultant (or similar organization) that is contracted to improve the technology on behalf of Marina Bio and where Marina Bio owns or has exclusive license rights to the improvements made under such agreement.

 

1.54                        Term” means the term of this Agreement as set forth in Section 10.1.

 

1.55                        Territory” means the entire world.

 

1.56                        Third Party” means any entity or person other than Marina Bio or MirnaRx or an Affiliate of either of them.

 

[***] 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.

 



 

1.57                        Third Party Claim” means any claim, action, allegation, suit or legal proceeding brought by a Third Party against another entity or person.

 

1.58                        Trademark” means any trade name, service mark, logo or trademark (whether or not registered), together with all goodwill associated therewith, and any renewals, extensions or modifications thereto.

 

1.59                        True-Up Payment” shall have the meaning ascribed to such term in Section 5.6.

 

1.60                        Valid Claim” means an unexpired claim of an issued patent within the Licensed Patents that. has not been ruled to be unpatentable, invalid or unenforceable by a court or other authority in the country of the patent with competent jurisdiction, from which decision no appeal is taken or can be taken.

 

ARTICLE 2

 

LICENSES AND RELATED RIGHTS

 

2.1                               License Grants.  Marina Bio hereby grants to MirnaRx (and its Affiliates) (a) an exclusive royalty-bearing right and license, with full rights to grant sublicenses through multiple tiers, under the Licensed Patents and Licensed Know-How to research (however, for clarity, such research shall not be performed solely on the Licensed Technology), develop, make, have made, use, sell, offer for sale, import, export and otherwise Commercialize Licensed Products within the Field of Use in the Territory, and (b) a non-exclusive, worldwide, royalty-free rights and license, without any right to grant sublicenses, under the Licensed Patents and Licensed Know-How solely to make and conduct research on compositions containing MirnaRx Compound, but excluding any rights to conduct clinical development on or to sell, offer for sale or otherwise commercialize any such compositions.

 

2.2                               Sublicenses.  Any sublicenses granted to Third Party Sublicenses under the license rights granted in Section 2.1(a) shall be subject to the following terms:  MirnaRx shall promptly notify Marina Bio of the granting of any sublicense hereunder including the name of the Sublicensee, financial terms relating to the grant of sublicense, and a general description of the .rights sublicensed, and each such sublicense shall be consistent with the terms of this Agreement.

 

2.3                               Retained Rights.  For clarity, Marina Bio retains all rights under the Licensed Technology, subject only to the license rights granted to MirnaRx under Section 2.1.

 

2.4                               Limitations on License Rights.  Except as granted under Section 2.1, no other rights to use or practice the Licensed Technology for any other use or purpose are granted to MirnaRx.

 

2.5                               Licensed Know-How Transfer.  As soon as is reasonably practicable after the Effective Date, Marina Bio will provide to MirnaRx copies of all the Licensed Know-How, including Manufacturing Processes, then in existence that is reasonably needed to research, develop, manufacture and/or Commercialize Licensed Products in the Field of Use, including full technology transfer to MirnaRx (and/or its contract manufacturer) of all Manufacturing

 



 

Processes and other manufacturing information in the Licensed Know-How in MirnaRx’s or its Affiliate’s or contract manufacturer’s possession as needed to manufacture the Marina Bio Technology formulation for use in Licensed Products.  The Licensed Know-How will be provided to MirnaRx in written form, electronically if reasonably practicable and otherwise in hard copy documents, in a form reasonably acceptable to MirnaRx.  Upon MirnaRx’s request during the Term, Marina Bio shall provide reasonable consultation services (by teleconference or in-person during regular business hours) to assist MirnaRx in its understanding and/or use of the Licensed Technology as licensed under for the development of Licensed Product..  Such transfer and assistance shall be provided by Marina Bio without charge until the internal costs and expenses of providing such transfer and assistance equal to $[***].  Thereafter, MirnaRx shall reimburse Marina Bio for its internal costs and expenses at reasonable, agreed rates for the assistance expressly requested by MirnaRx.

 

2.6                               Selection of Additional MirnaRx Compounds.  At its sole discretion, MirnaRx may from time to time during the Term select one or more additional MirnaRx Compounds (which are not already a Selected MirnaRx Compound) to he combined with the Marina Bio Technology in a formulation to create a new Licensed Product, by providing Marina Bio written notice of such selection.  Upon any such notice, and provided that such MirnaRx Compound is Available at the time notice is given, the MirnaRx Compound shall be deemed a new “Selected MirnaRx Compound”, and MirnaRx shall then be obligated to pay the Selection Fee with respect to the additional Licensed Product containing such new Selected MirnaRx Compound as provided in Section 5.2.  MirnaRx may make such selection at any time, [***].  Marina Bio agrees that, for a period of [***] after the Effective Date, it and its Affiliates [***].  During each [***] of the above [***] period, [***].

 

ARTICLE 3

 

PRODUCT DEVELOPMENT AND REGULATORY MATTERS

 

3.1                               Development in Field of Use.  MirnaRx shall have the sole rights to control and conduct, itself and/or through Affiliates or Sublicensees, and in its sole discretion except as provided below, the research and development of Licensed Products for commercialization and use in the Field of Use in the Territory.  MirnaRx agrees to use Commercially Reasonable Efforts to conduct such research and development (pre-clinical and clinical) of Licensed Products as necessary to obtain Regulatory Approval of a Licensed Product in the Field of Use in the Major Markets and in such other countries in the Territory where MirnaRx determines it is commercially reasonable to do so.  MirnaRx may satisfy the foregoing diligence obligation through activities of its Affiliates, subcontractors and/or Sublicensees.  MirnaRx may subcontract all or part of the conduct of such development program to appropriately qualified third parties except as limited by Section 2.1(b).

 

3.2                               Development Reporting.  Every year within [***] after the anniversary of the Effective Date, MirnaRx shall provide to Marina Bio a written report setting out a reasonably detailed summary of progress and results of the development program on Licensed Product since the last report, including a summary of results and of the efforts taken in relation to the preparation submission of applications and other filings for Regulatory Approvals for the Licensed Product in the Field of Use.  MirnaRx shall also provide prompt written notice to

 

[***] 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.

 



 

Marina Bio of (i) any Regulatory Approval received for any Licensed Product in any country and (ii) the anticipated commercial launch date for the Licensed Product in each country.  The information contained in such reports and notices shall be deemed to be MirnaRx’s Confidential Information.

 

3.3                               Uncertainty In Development.  With respect to the development of Licensed Products and efforts to obtain Regulatory Approval, each of the Parties agrees as follows:

 

(a)                                 Drug product research and development is uncertain and has many risks and potential problems (including efficacy and toxicity issues); and that the development program on Licensed Products may produce no results, or unpredictable or inaccurate results, or results that cannot support Regulatory Approval or further development or commercial activity;

 

(b)                                 Neither Party gives to the other any warranty or assurance that the development program for Licensed Products will have any particular result, that Regulatory Approval(s) will be obtained, or that such product development or Commercialization will be successful;

 

(c)                                  For the avoidance of doubt, deviations from or changes to the development program on Licensed Product due to unexpected, unpredictable, inaccurate, or otherwise undesirable results (including results indicating toxicity issue or a lack of efficacy shall not be considered a failure of MirnaRx to meet its obligations hereunder and it shall not be deemed a material. breach to this Agreement per Section 10.2(c) of this Agreement.

 

3.4                               Regulatory Matters Generally.  MirnaRx (or its Affiliate or Sublicensee, as applicable) shall have the exclusive rights to manage and conduct all regulatory activities relating Licensed Products for use in the Field of Use in the Territory.  MirnaRx may subcontract all or part of the conduct of such regulatory activities to appropriately qualified third parties.

 

3.5                               Communications with Regulatory Authorities.  From and after the Effective Date, MirnaRx shall be solely responsible for all contacts with all Regulatory Authorities with respect to Licensed Products within the Field of Use in the Territory.  At MirnaRx’s request, Marina Bio shall participate in such regulatory discussions, to the extent reasonably needed with respect to the Marina Bio Technology components of a Licensed Product, provided that Marina Bio’s participation shall be limited to those matters for which MirnaRx expressly requests Marina Bio’s comment or other involvement in such discussions.  MirnaRx shall reimburse Marina Bio for its reasonable expenses at reasonable, agreed rates that reflect the actual internal costs and Marina Bio’s reasonable external expenses regarding travel, per diem and lodging, with respect to such requested participation.

 

3.6                               Regulatory Filings.  MirnaRx (or its Affiliate or Sublicensee) shall control and have sole responsibility for, at its expense and in its name, preparing and filing with the appropriate Regulatory Authorities of all Regulatory Documents, including all INDs and that are necessary or useful to conduct clinical studies of the Licensed Products, and all NDAs and other applications for Regulatory Approval to market and sell Licensed Products in the Field of Use in the Territory, and all amendments or supplements thereto.  MirnaRx (or its Affiliate or Sublicensee, as applicable) shall own the entire and exclusive rights in all its Regulatory

 


 

Documents and Regulatory Approvals.  Marina Bio shall provide all reasonable assistance to MirnaRx as reasonably requested by MirnaRx in all such regulatory efforts, with respect to the CMC component of such regulatory filings or applications as relating to the Marina Bio Technology components of the applicable Licensed Product covered by such application.  MirnaRx shall reimburse Marina Bio for its reasonable expenses in providing the above assistance, at agreed rates that reflect the actual internal costs of such assistance.

 

ARTICLE 4

 

COMMERCIALIZATION; MANUFACTURING

 

4.1                               Commercialization Rights in Yield of Use.  MirnaRx shall have the sole rights, itself and/or through Affiliates or Sublicensees (and their respective distributors) to Commercialize and otherwise exploit Licensed Products developed by MirnaRx or its Affiliates . (or Sublicensee) for all uses in the Field of Use in the Territory.  MirnaRx agrees to use Commercially Reasonable Efforts to conduct such Commercialization activities of a Licensed Product in the Field of Use in the Major Markets and in such other countries in the Territory where MirnaRx determines it is commercially reasonable to do so.  MirnaRx may satisfy the foregoing diligence obligation through activities of its Affiliates, subcontractors and/or Sublicensees.  MirnaRx (and its Affiliates and Sublicensees) shall have sole control over all decisions regarding Commercialization, including pricing and marketing strategies.

 

4.2                               Commercialization Reporting.  Every year within [***] of the anniversary of the Effective Date after Regulatory Approval is granted, MirnaRx shall provide to Marina Bio written report setting out a reasonably detailed summary of efforts and progress of the Commercialization program on Licensed Product in the Field of Use since the last report, including a summary of marketing results.

 

4.3                               Manufacturing.  MirnaRx (and/or its Affiliate or Sublicensee) shall have the sole responsibility for conducting all manufacturing process development and scale-up, as needed to have an appropriate manufacturing process for Licensed Products sufficient to meet all expected demand for Licensed Products.  Marina Bio shall provide all reasonable assistance to MirnaRx as reasonably requested by MirnaRx in such manufacturing scale-up efforts with respect to the Marina Bio Technology components of the applicable Licensed Product.  MirnaRx shall reimburse Marina Bio for its reasonable expenses in providing the above assistance, at agreed rates that reflect the actual internal costs of such assistance.

 

ARTICLE 5

 

CONSIDERATION; PAYMENTS; REPORTS

 

5.1                               Upfront License Fee.  In part consideration of the license rights granted by Marina Bio under this Agreement, MirnaRx shall pay Marina Bio an upfront license fee of $[***], to be paid within [***] of the Effective Date but no later than [***].  For the avoidance of doubt, this upfront license fee includes designation of miR-34 as a Selected MirnaRx Compound (as provided in Section 1.48(a)).

 

[***] 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.

 



 

5.2                               Selection Fee Payments.  In part consideration of the license rights granted by Marina Bio under this Agreement, in the event that MirnaRx selects, under Section 2,6„ a new MirnaRx Compound (which is not then a Selected MirnaRx Compound) as a Selected MirnaRx Compound and develops such new Selected MirnaRx Compound as an additional Licensed Product, then MirnaRx shall pay Marina Bio an additional compound selection fee of $[***], such amount to be paid as follows:  (a) with respect to any Option Compound that is selected by MirnaRx in its discretion as a Selected MirnaRx Compound in accordance with Section 2.6, (i) $[***] of such amount shall be paid within [***] of the date that MirnaRx selects the Selected MirnaRx Compound under Section 2.6, and (ii) the balance ($[***]) will be paid [***], and (b) with respect to any Selected MirnaRx Compounds that are not Option Compounds when selected by MirnaRx under Section 2.6, the total amount of $[***] for such Selected MirnaRx Compound shall be paid within [***] of the date that MirnaRx selects the Selected MirnaRx Compound under Section 2.6.  All such selection fees shall be in addition to any amounts due based on Sublicensing Revenue received by MirnaRx (if any) for sublicensing a Licensed Product containing the applicable Selected MirnaRx Compound, as set forth in Section 5.6 below.

 

5.3                               Milestone Payments.

 

(a)                                 In part consideration of the license rights granted by Marina Bio under this Agreement.  MirnaRx shall pay to Marina Bio a milestone payment upon first achievement by MirnaRx (independent of work done by or in collaboration with a Sublicensee) of the applicable milestone event set forth in the table below, such payments to be in the listed amounts for the applicable milestone event:

 

Milestone Event

 

Milestone Payment

 

(i) For each Licensed Product:

 

 

 

(1) [***]

 

$

[***]

 

(2) [***]

 

$

[***]

 

(3) [***]

 

$

[***]

 

(4) [***]

 

$

[***]

 

(ii) For each Additional. Indication for the Licensed Product, up to total of [***] Additional Indications:

 

 

 

(1) [***]

 

$

[***]

 

 

For clarity each of the above milestone payments shall be paid only once for a particular Licensed Product, regardless if any such Milestone Event is achieved more than once, [***].  Further, if a particular Licensed Product achieves a particular Milestone Event under subclause (i) of the above table without having achieved a previous Milestone Event such

 

[***] 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.

 



 

subclause (1), then such previous Milestone Event shall be deemed also achieved, and the Milestone Payment associated with such Milestone Event shall then be paid with the achievement of the subsequent Milestone Event.  For illustrative purposes only, if the [***] Milestone Event as set forth in (i)(3) in the table above is not achieved for a Licensed.  Product but the [***] Milestone Event as set forth in (i)(4) above is achieved for such Licensed Product, then the Milestone Payment for achievement of the Milestone Event in clause (i)(3) ($[***]) will be paid when the Milestone Payment for (i)(4) is paid.  The total amount of milestone payments payable for a particular Licensed Product under the above shall not, in any event, exceed $6,000,000 under subclause (i) of the above table and $10,000,000 in total.  For additional clarity, if MirnaRx. (or its Affiliate) enters into a sublicense Agreement under which the applicable Sublicensee is granted sublicense rights to Commercialize a Licensed Product, then achievement of any of the above Milestone Events by such Sublicensee, or by MirnaRx or its Affiliate working in collaboration with such Sublicensee under the sublicense agreement, shall not create a Milestone Payment obligation, but instead MirnaRx shall have the obligation to share Sublicense Revenues received under such sublicense agreement as provided in Section 5.6 below.

 

(b)                                 MirnaRx shall promptly notify Marina Bio of the achievement of any Milestone Event for each Licensed Product.  All Milestone Payments under subsection (a) above are non-refundable and. non-creditable, and shall be due within [***] of achievement of the applicable Milestone Event.

 

5.4                               Royalties.  In part consideration of the license rights granted by Marina Bio under this Agreement, and subject to the provisions of Sections 5.5, MirnaRx shall pay royalties to Marina Bio on sales by MirnaRx or any of its Affiliates of Licensed Products during the Royalty Term, as follows:

 

(a)                                 For sales of License Product in country(ies) where such sale would infringe, absent the license granted in Section 2.1, a Valid Claim of an issued Licensed Patent, MirnaRx shall pay to Marina Bio royalties equal to [***]% of the Net Sales revenue recognized by MirnaRx or any of its Affiliates from such sales;

 

(b)                                 For sales of License Product in country(ies) where either (i) there is no Valid Claim in an issued Licensed Patent that would be infringed, absent the license granted in Section 2.1, by such sale of the Licensed Product, or (b) there are sales of Generic Products during the same royalty period as such sales of Licensed Product, then MirnaRx shall pay to Marina Bio royalties equal to [***]% of the Net Sales revenue recognized by MirnaRx or any of its Affiliates from such Licensed Product sales.

 

5.5                               Anti-Stacking Provisions.  If MirnaRx, or its Affiliate owes to one or more Third Parties, under license agreement(s) granting .MirnaRx (or its Affiliate or Sublicensee) license rights covering patents (or other intellectual property rights) that are needed to make, use, sell or otherwise Commercialize the Licensed Technology as contained in the Licensed Product, royalties or similar payments on sales of such Licensed Products, then MirnaRx may reduce the royalties owed to Marina Bio under Section 5.4 based on such sales of Licensed Product by [***]% of the royalty or similar payments actually paid to such Third Parties, provided that MirnaRx shall not reduce any particular royalty payment to Marina Bio by more than [***]% of

 

[***] 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.

 



 

the amount otherwise owed under the royalty provisions of Section 5.4 for the applicable royalty period.

 

5.6                               Sublicense Fees.  In part consideration of the license rights granted by Marina Bio under this Agreement and the right to sublicense such licenses.  MirnaRx shall pay to Marina Bio an amount (“Sublicense Fees”) equal to a percentage of any Sublicensing Revenue received by MirnaRx (or its Affiliate) from any Sublicensee based on the grant to such Sublicensee of sublicense rights under MirnaRx’s license rights under the Licensed Patents.  Such percentage shall be determined based on the development stage of the applicable Licensed Product (that is covered by the sublicense) at the time that the particular sublicense agreement is executed by the parties thereto, as follows:

 

[***]

 

Percentage of
Sublicense Revenue

 

[***]

 

[***]%

 

[***]

 

[***]%

 

[***]

 

[***]%

 

[***]

 

[***]%

 

[***]

 

[***]%

 

 

If, as to a particular Licensed Product being developed by a Sublicensee, such Sublicensee first achieves, with respect to such Licensed Product, one of the Milestone Events in the milestone table in Section 5.3(a) above, then in no event will the cumulative amount (the “Cumulative Sublicense Fees”, as of the applicable date) of Sublicense Fees paid to Marina Bio by MirnaRx. under this Section 5.6, by the date [***] after the date that such Milestone Event is achieved, with. respect to Sublicense Revenues received by MirnaRx from such Sublicensee, be less than the cumulative amount (the “Milestone Payment Sum”, as of the applicable date) of the Milestone Payments that would have been due under Section 5.3(a) by such date, for all Milestone Events achieved by such Sublicensee (as of such date), had MirnaRx achieved such Milestone Events.  If, as to a Sublicensee that first achieves a particular Milestone Event for the applicable Licensed Product sublicensed to such Sublicensee, the Cumulative Sublicense Fees paid by MirnaRx to Marina Bio based on Sublicense Revenues received from such Sublicensee, by the date that is [***] after the date when such Milestone Event is achieved, is less than the Milestone Payment Sum effective as of such date, then MirnaRx will by such date also pay to Marina Bio the amount of such difference (such amount, the “True-Up Payment” as to the applicable Milestone Event achieved by such Sublicensee).  An example of the calculation of such amounts and the determination of such difference (if any) is given in Appendix B of this Agreement.  For clarity, any such True-Up Payment shall be deemed a Sublicensee Fee payment for all purposes of this Agreement.  Further, if in the sublicense agreement between MirnaRx and a particular Sublicensee, the definition of “Major Markets” (or equivalent definition) is different from the definition in Section 1.27 of this Agreement, then the definition in such sublicense agreement will be used with respect to the achievement of the Milestone Event in subclause (i)(4) of the milestone table in Section 5.3(a) above, for the purpose of determining

 

[***] 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.

 



 

whether any “True-Up Payment” is owed by MirnaRx based on the Sublicensee achieving Regulatory Approval of the applicable Licensed Product in a Major Market.

 

5.7                               Payment of Royalty and Sublicense Fee Obligations.  The royalty obligation under Section 5.4 shall accrue upon the sales of a Licensed Product in each particular country in the Territory, commencing upon [***], and such obligation shall end upon the expiration of the Royalty Term applicable to such Licensed Product in such country.  All such royalty payments are .non-refundable and non-creditable and shall be due within [***] of the end of each calendar quarter and are payable in immediately available funds.  The Sublicense Fees owed under Section 5.6 shall be paid, with respect to particular Sublicense Revenue received by MirnaRx., within [***] of MirnaRx’s receipt of the applicable revenues, and are payable in immediately available funds.  MirnaRx shall notify Marina Bio in writing promptly upon the first commercial sale of Licensed Product in each country and thereafter MirnaRx shall furnish Marina Bio with a written report (the “Royalties Report”) for each completed [***] showing, on a country-by-country basis, according to the volume of units of Licensed Product sold in each such country (by SKU) during the reporting period (whether Product is sold by MirnaRx or its Affiliates or Sublicensees):  (a) the gross invoiced sales of the Product sold in each country during the reporting period, and the amounts deducted therefrom to determine Net Sales from such gross invoiced sales; (b) the royalties payable in dollars, if any, which shall have accrued hereunder based upon Net Revenues from sales of Product; and (c) the withholding taxes, if any, required by Applicable Law to be deducted in respect of such sales (provided that, as to sales by Sublicensees, MirnaRx shall report only the net sales numbers (using the definition for such term in the applicable sublicense agreement) as reported by the Sublicensee, if such Sublicensee does not report gross invoiced sales numbers).  With respect to sales of Licensed Product invoiced in US dollars, the gross invoiced sales, Net Revenues and royalties payable shall be expressed in the Royalties Report in US Dollars.  With respect to sales of Licensed Product invoiced in a currency other than US dollars, the gross invoiced sales, Net Sales and royalties payable shall be expressed in the Royalties Report in the domestic currency of the party making the sale as well as in the US dollar equivalent of the Royalty payable and the exchange rate used in determining the amount of US dollars.  The US dollar equivalent shall be calculated on a calendar-month basis using the average monthly interbank rate listed in the Wall Street Journal.

 

5.8                               Currency Restrictions.  If at any time legal restrictions in any country in the world prevent the prompt remittance of any payments with respect to sales in that country, MirnaRx shall have the right anti option upon written notice to Marina Bio to make such payments by depositing the amount thereof in local currency to Marina Bio’s account (or such other designated nominee by Marina Bin) in a bank or depository in such country.

 

5.9                               Taxes.  In the event that laws, rules or regulations require MirnaRx to withhold taxes with respect to any payment to be made by MirnaRx to Marina Bio pursuant to this Agreement, MirnaRx will notify Marina Bio of such withholding requirement prior to making the payment to Marina Bio and shall make such withholding from such payment of the required amount of withholding and shall make the required tax payment to the appropriate tax authority, and provide such assistance to Marina Bio, including the provision of such documentation as may be required by a tax authority, as may be reasonably necessary in Marina Bio’s efforts to claim an exemption from or reduction of such taxes.

 

[***] 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.

 



 

5.10                        Late Payments.  All fees and royalties due under this Agreement not received within the period due shall bear interest from the date they are due until the date they are paid at the rate of [***] percent ([***]%) per annum or the maximum rate permitted by law, whichever is less.

 

5.11                        Audit.  MirnaRx and its Affiliates shall keep complete and accurate records of the underlying revenue and expense data relating to the calculations of Net Sales, Sublicensee Revenues and payments required under this Agreement.  Marina Bio shall have the right, at its own expense and no more than [***], to have an independent, certified public accountant, selected by Marina Bio and reasonably acceptable to MirnaRx, review all such records upon reasonable notice and during regular business hours and under obligations of strict confidence, for the sole purpose of verifying the basis and accuracy of payments required and made under this Agreement within the prior [***] period.  No calendar quarter may be audited more than one time.  MirnaRx shall receive a copy of each audit report promptly from Marina Bio.  Should the inspection lead to the discovery of a discrepancy to Marina Bio’s detriment, MirnaRx shall pay the amount of the discrepancy in Marina Bio’s favor within [***] after being notified thereof.  Marina Bio shall pay the full cost of the inspection unless the discrepancy is greater than [***] percent ([***]%), in which case MirnaRx shall pay to Marina Bio the actual cost charged by such accountant for such inspection.  If such audit shows a discrepancy in MirnaRx’s favor, then MirnaRx may credit the amount of such discrepancy against subsequent amounts owed to Marina Bio, or if no further amounts are owed under this Agreement, then Marina Bio shall pay MirnaRx the amount of the discrepancy within [***] after being notified thereof.

 

ARTICLE 6

 

INTELLECTUAL PROPERTY

 

6.1                               Intellectual Property Ownership.  Any information, know-how, data, results, and inventions, and any associated intellectual property, that is made, discovered, created, invented or generated by MirnaRx or its Affiliate in any activities or work under this Agreement shall be owned by MirnaRx.

 

6.2                               Grant-Back License.  Subject to the terms of the Agreement, MirnaRx hereby grants to Marina Bio (and its Affiliates) the [***] license, with the right to sublicense (subject to the limitation below) in the Territory under the Improvement Patent Claims solely to use and practice the Improvement Patent Claims in connection with the manufacture. use or sale of the Licensed Technology.  In no event shall Marina Bio or its Affiliates or sublicensees) grant, or have any rights to grant, any sublicense under the foregoing license that is separate from a license (to the applicable sublicensee) under Marina Bio Technology.  Marina Bio shall pay to MirnaRx a royalty of [***]% of the net sales of any products sold by Marina Bio or its Affiliate or sublicensee where the manufacture, use or sale of such product is claimed by a valid claim in the issued Improvement Patent Claims (where the terms “net sales” and “valid claim” have the same meanings as Net Sales and Valid Claims applied mutatis mutandis to the situation involving such product sold by Marina Bio (or its Affiliate or sublicensee) and Improvement Patent Claim).

 

[***] 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.

 



 

6.3                               Prosecution and Maintenance.  Marina Bio shall, at its expense, file, prosecute, defend and maintain, including conducting re-examination, reissue, opposition and interference proceedings (and any other similar patent proceedings) regarding, the Licensed Patents before all patent authorities (collectively, “Prosecution”).  Marina Bio shall keep MirnaRx reasonably informed of such Prosecution efforts and results.  Marina Bio shall not abandon any patent rights in the Licensed Patents without first notifying MirnaRx in writing at least [***] prior to any such abandonment.  If Marina Bio intends to abandon any such rights of Licensed Patent, or does not conduct the Prosecution of any claim or patent application or patent within the Licensed Patents in any specific country, after MirnaRx’s request, then MirnaRx shall have the right, on written notice to Marina Bio, to undertake the Prosecution of such claims, applications or patents at MirnaRx’s sole cost and expense, and in such case Marina Bio shall do all things to provide MirnaRx with the right and opportunity to conduct the Prosecution of such claim or patent application or patent.

 

6.4                               Infringement by Third Parties.  If requested by MirnaRx, Marina Bio shall use Commercially Reasonable Efforts to enforce the Licensed Patents against infringers that are causing a material negative impact on MirnaRx (or its Affiliate or Sublicensee) in the market for Licensed Product due to the infringement of the Licensed Patents.  Marina Bio shall keep MirnaRx fully informed of the progress and results of any such enforcement action.  Any recoveries in any such enforcement actions against an infringement brought under this Section 6.2 shall be used first to reimburse Marina Bio’s out-of-pocket costs and expenses (including attorneys’ fees) for such action and any remainder shall be shared equally by the licensees of the Licensed Patents affected by the infringement action.  Marina Bio shall not enter into any settlement of any action under this Section 6.2 that materially negatively affects MirnaRx’s (or its Affiliate’s or Sublicensee’s) rights or interests under this Agreement without MirnaRx’s written consent, which consent shall not be unreasonably withheld or delayed.  If a third party is infringing a Licensed Patent by making, using or selling a Licensed .Product (a “Field Infringement”), and Marina Bio does not enforce the Licensed Patent against such Field Infringement within [***] after request by MirnaRx, or ceases such enforcement without causing the Field Infringement to terminate, then thereafter MirnaRx shall have the right to enforce the applicable Licensed Patents against such Field Infringement, at its expense, and shall keep Marina Bio reasonably informed of such enforcement:  In any such enforcement by MirnaRx, Marina Bio agrees to join the action as a party plaintiff (at MirnaRx’s expense) if required for MirnaRx to have standing to pursue the action and to cooperate and provide all reasonable assistance in MirnaRx’s enforcement.

 

6.5                               Defense of Third Party Actions.  Each Party shall promptly notify the other Party upon receiving written notice of any potential infringement, or any Third Party claim or action against Marina Bio or MirnaRx or any of their Affiliates or Sublicensees for possible infringement, of a Third Party patent right resulting from the practice or use by MirnaRx (or its Affiliate or Sublicensee) of the Licensed Technology under this Agreement.  Each Party shall be responsible for defending, and shall control the defense of, any such action brought against such Party.

 

[***] 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.

 


 

ARTICLE 7

 

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

7.1                               Representations and Warranties of Marina Bio.  As of the Effective Date, Marina Bio hereby represents and warrants to MirnaRx as follows:

 

(a)                                 Corporate Existence and Power.  Marina Bio is a corporation duly organized, validly existing and. in good standing under the laws of the State of Delaware, and has full corporate power and authority and the legal right to own and operate its property and assets and to carry on its business as it is now being conducted.

 

(b)                                 Authority and Binding Agreement.  Marina Bio has the corporate power and authority and the legal right to enter into this Agreement and perform its obligations hereunder.  Marina Bio has taken all necessary corporate action on its part required to authorize the execution and delivery of the Agreement and the performance of its obligations hereunder.  The Agreement has been duly executed and delivered by Marina Bio and constitutes a legal, valid and binding obligation of Marina Bio that is enforceable against it in accordance with its terms.

 

(c)                                  No Conflict.  The execution, delivery. and performance of this Agreement by Marina Bio does not conflict with, and will not result in a breach of, any material agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material law or regulation of any court, governmental body or administrative or other agency having jurisdiction over it.  Marina Bio hereby covenants that it and its Affiliates shall not enter into any agreement that will conflict with its obligations and covenants in this Agreement or prevent or interfere with its performance of such obligations.

 

(d)                                 IP Rights.  Marina Bio owns all the Licensed Technology has the full legal rights and authority to grant the licenses and rights under the Licensed Technology granted under this Agreement and has not assigned, transferred, conveyed or licensed its right, title and interest in the Licensed Technology in any manner inconsistent with such license grant or the other terms of this Agreement.  There is no pending litigation or, to the best of Marina Bio’s knowledge, written threat of litigation that has been received by Marina Bio (and has not been resolved by taking a license or otherwise), which alleges that Marina Bio’s activities with respect to the Licensed Patents or Licensed Products have infringed, or misappropriated any of the intellectual property rights of any Third Party.  To the best of Marina Bio’s knowledge, the practice of the Licensed Technology as contemplated by this Agreement does not infringe any patent rights, or misappropriate any other intellectual property, owned by a Third Party.

 

(e)                                  Disclaimer.  EXCEPT FOR THE WARRANTIES EXPRESSLY SET FORTH ABOVE IN THIS SECTION 7.1, MARINA BIO MAKES NO OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY KIND, INCLUDING AS TO MERCHANTABILITY, FITNESS FOR A PARTICULAR USE OR NON-INFRINGEMENT OF THE LICENSED TECHNOLOGY OR THE LICENSED PRODUCTS.

 



 

7.2                               Representations and Warranties of MirnaRx.  As of the Effective Date, MirnaRx hereby represents and warrants to Marina Bio as follows:

 

(a)                                 Corporate Existence and Power.  MirnaRx is a corporation duly organized, validly existing and in good standing under the laws of Delaware, and has full corporate power and authority and the legal right to own and operate its property and assets and to carry on its business as it is now being conducted.

 

(b)                                 Authority and Binding Agreement.  MirnaRx has the corporate power and authority and the legal right to enter into this Agreement and perform its obligations hereunder.  MirnaRx has taken all necessary corporate action on its part required to authorize the execution and delivery of the Agreement and the performance of its obligations hereunder.  The Agreement has been duly executed and delivered by MirnaRx and constitutes a legal, valid and binding obligation of MirnaRx that is enforceable against it in accordance with its terms.

 

(c)                                  No Conflict.  The execution, delivery and performance of this Agreement by MirnaRx does not conflict with, and would not result in a breach of, any material agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material law or regulation of any court, governmental body or administrative or other agency having jurisdiction over it.

 

(d)                                 EXCEPT FOR THE WARRANTIES EXPRESSLY SET FORTH ABOVE IN THIS SECTION 7.2, MIRNARX MAKES NO OTHER .REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY KIND, INCLUDING AS TO MERCHANTABILITY, FITNESS FOR A PARTICULAR USE OR NON-INFRINGEMENT, OR THAT THE DEVELOPMENT OR COMMERCIALIZATION OF ANY LICENSED PRODUCT WILL BE SUCCESSFUL.

 

ARTICLE 8

 

INDEMNIFICATION

 

8.1                               Indemnification by Marina Bio.  Marina Bio hereby agrees to defend, hold harmless and indemnify MirnaRx and its Affiliates, and each of their respective officers, directors and employees (collectively, the “MirnaRx Indemnitees”), from and against any and all Losses arising out of any Third Party Claim based upon or resulting from:  (i) any of Marina Bio’s representations and warranties set forth in Section 7.1 of this Agreement being untrue in any material respect when made; (ii) Marina Bio’s failure to perform, in any material respect, any covenant or obligation of Marina Bio set forth in this Agreement; and (iii) Marina Bio’s gross negligence or willful misconduct; except, in each case, to the extent any such Losses result from the gross negligence or willful misconduct of MirnaRx Indemnitees or from the breach of any representation, or warranty or obligation under this Agreement by MirnaRx or its Affiliate.

 

8.2                               Indemnification by MirnaRx.  MirnaRx hereby agrees to defend, hold harmless and indemnify Marina Bio and its Affiliates, and each of their respective officers, directors and employees (collectively, the “Marina Bio Indemnitees”), from and against any and all Losses arising out of any Third Party Claim based upon or resulting from:  (1) any of MirnaRx’s

 



 

representations and warranties set forth in Section 7.2 of this Agreement being untrue in any material respect when made; (ii) MirnaRx’s or its Affiliate’s failure to perform, in any material respect, any covenant or obligation of MirnaRx set forth in this Agreement; (iii) the exercise or practice by MirnaRx, its Affiliates or Sublicensees of the licenses granted to MirnaRx under Sections 2.1 (excluding any such Claim that alleges that the exercise or practice of the Licensed Technology infringes a patent or misappropriates- other intellectual property of the Third Party); or (iv) the development, manufacture or Commercialization of any Licensed Product by or for MirnaRx, its Affiliates or Sublicensees; except. in each ease, to the extent any such Losses result from the gross negligence or willful misconduct of Marina Bio Indemnitees or from the breach of any representation or warranty or covenant or obligation under this Agreement by Marina Bio.

 

8.3                               Indemnification Procedures.  Each Party (Marina Bio on behalf of Marina Bio Indemnitees, or MirnaRx on behalf of MirnaRx Indemnitees) will promptly notify the other Party when it becomes aware of a Claim for which indemnification may be sought hereunder.  To be eligible to be indemnified for a Claim, a Person seeking indemnification (the “indemnified Party”) shall (i) provide the Party required to indemnify such Person (the “Indemnifying Party”) with prompt written notice of the Claim giving rise to the indemnification obligation under this Article 8, provided that, the failure to provide such prompt notice shall not relieve the Indemnifying Party of any of its obligations under this Article 8 except to the extent the Indemnifying Party is actually prejudiced thereby; (ii) provide the Indemnifying Party with the exclusive ability to defend (with the reasonable cooperation of the Indemnified Party) against the Claim; and (iii) not settle, admit or materially prejudice the Claim, without the Indemnifying Party’s prior written consent.  The Indemnified Party shall reasonably cooperate with the Indemnifying Party, at the Indemnifying Party’s expense, in the defense of any Claim.  Notwithstanding the foregoing, the Indemnified Party shall have the right to participate in and have its own counsel participate in any action or proceeding for which the Indemnified Party seeks to be indemnified by the Indemnifying Party.  Such participation shall be at the Indemnified Party’s expense, unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the Indemnifying Party and the Indemnified Party and representation of both Parties by the same counsel would be inappropriate due to actual or potential differing interests between them.  The Indemnifying Party’s obligations under Section 8.1 or 8.2, as the case may be, shall not apply to the extent of the Indemnified Party’s failure to take reasonable action to mitigate any Losses.  The :Indemnifying Party shall not settle or compromise or consent to the entry of any judgment with respect to any Claim, without the prior written consent of the indemnified Party, which will not be unreasonably withheld or delayed.

 

8.4                               Insurance.  MirnaRx shall, at its own expense, procure and maintain during the Term and for a period of [***] thereafter, insurance policy/policies, including product liability insurance, adequate to cover its obligations hereunder and which are consistent with normal business practices of prudent companies similarly situated.

 

[***] 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.

 



 

ARTICLE 9

 

CONFIDENTIALITY

 

9.1                               Treatment of Confidential Information.  The Parties agree that during the Term, and for a period of [***] after this Agreement expires or terminates, a Party receiving Confidential Information of the other Party shall (i) maintain in confidence such Confidential information; (ii) not disclose such Confidential Information to any Third Party without prior written consent of the disclosing Party, except as otherwise permitted in this Article 9; and (iii) not use such Confidential Information for any purpose other than the performance of or exercise of its rights under this Agreement.

 

9.2                               Authorized Disclosure.

 

(a)                                 If, based upon the advice of legal counsel skilled in the subject matter, a Party is required to disclose specific Confidential Information of the other Party to comply with an applicable law, regulation, legal process, or order of a government authority or court of competent jurisdiction, the Party may disclose such Confidential Information only to the entity or person required to receive such disclosure; provided, however, that the Party required to disclose such Confidential Information shall (a) to the extent permitted by such law, regulation, process, order or rules, first have given prompt (but in no event less than five (5) business days) advance notice to such other Party to enable it to seek any available exemptions from or limitations on such disclosure requirement and shall reasonably cooperate in such efforts by the other Party, (b) furnish only the portion of the Confidential Information which is legally required to be disclosed; (c) use all reasonable efforts to secure confidential protection of such Confidential Information, and (d) continue to perform its obligations of confidentiality and non-use set out in this Article 9.

 

(b)                                 MirnaRx (and its Affiliates and Sublicensees) may disclose Confidential Information of Marina Bio to Regulatory Authorities to the extent such disclosure is reasonably necessary in regulatory filings required for the development and/or commercialization of Licensed Products.  In addition, each Party may disclose Confidential Information of the other Party to the extent such disclosure is reasonably necessary in the following instances:  filing or prosecuting, patents as permitted by this Agreement; and disclosure to Affiliates and Sublicensees and potential Sublicensees or other similar commercial partners, who need to know such information for the development, manufacture and commercialization of Licensed Products, to bankers, lawyers, accountants, agents or other Third Parties in connection with due diligence or similar investigations, and to potential Third Party investors in confidential financing documents or potential acquirers or merger partners in confidence pursuant to due diligence; provided that any such Sublicensee, licensee, contractor, employee, consultant, banker, lawyer, accountant, agent or Third Party is bound by obligations of confidentiality and non-use at least as restrictive as those set forth herein.  In the case of each disclosure, the Party making such disclosure shall use reasonable efforts to obtain confidential treatment of any such disclosure, and shall not disclose Confidential Information of the other Party other than is reasonably necessary.

 

[***] 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.

 



 

9.3                               Publicity; Terms of Agreement.  The Parties shall treat the existence and material terms of this Agreement as confidential and shall not disclose such information to Third Parties without the prior written consent of the other Party or except as provided in Section 9.2 (treating such information as Confidential Information for purposes of Section 9.2) or as provided below.  The Parties agree that upon execution of this Agreement or shortly thereafter, the Parties shall issue a joint press release, such press release attached hereto as Appendix C.  Except for such press release or as otherwise required by applicable law or applicable stock exchange requirements, neither Marina Bio nor MirnaRx shall issue or cause the publication of any other press release or public announcement with respect to the transactions contemplated by this Agreement without the express prior approval of the other Party, which approval shall not be unreasonably withheld or delayed; provided that, each of Marina Bio and MirnaRx may make any public statement in response to questions by the press, analysts, investors or those attending industry conferences or financial analyst calls, or issue press releases, so long as any such public statement or press release is not inconsistent with prior public disclosures or public statements approved by the other Party pursuant to this Section 9.3 and which do not reveal non-public information about the other Party.  With respect to complying with the disclosure requirements of the Securities and Exchange Commission or other regulatory agencies, in connection with any required filing of this Agreement with such agency, the Parties shall consult with one another concerning which terms of this Agreement shall be requested to be redacted in any public disclosure of the Agreement by the agency, and each Party shall seek confidential treatment by the agency in public disclosure of the Agreement by the agency for all sensitive commercial, financial and technical information, including the definitions of Licensed Products and Field of Use, and any dollar amounts set forth herein.  Marina Bio agrees that the Side Letter contains the highly confidential information of MirnaRx and such information shall be deemed and treated as the Confidential Information of MirnaRx, and Marina Bio shall not disclose the contents of the Side Letter without MirnaRx’s prior written consent or use such information for any purpose other than performing under this Agreement, except to the extent that specific information in such contents are within the exceptions in Section 1.9(a)-(d).

 

9.4                               Injunctive Relief.  Given the nature of the Confidential information and the competitive damage that would result to a Party upon unauthorized disclosure, use or transfer of its Confidential Information to any Third Party, the Parties agree that monetary damages may not be a sufficient remedy for any breach of this .Article 9.  In addition to all other remedies, a Party shall be entitled to seek specific performance and injunctive and other equitable relief as a remedy for any breach or threatened breach of this Article 9.

 

ARTICLE 10

 

TERM AND TERMINATION

 

10.1                        Term.  The term of this Agreement, as to a particular Licensed Product in a particular country, shall expire (on a country-by-country basis) upon the earlier of:  (i) the expiration of the Royalty Term for such Licensed Product in such country, or (ii) the end of calendar quarter in which sales in such country of Generic Products exceed [***]% (on a “per unit” basis) of the sales of the Licensed Product in such country.  Upon expiration of the Royalty Term with respect to a Licensed Product in a particular country, then the licenses granted in Section 2.1 for such Licensed Product in such country shall become non-exclusive, fully paid up

 

[***] 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.

 



 

and irrevocable, and shall survive any expiration or termination of this Agreement.  This Agreement shall expire in its entirety upon the expiration of the last Royalty Term for any Licensed Product with respect to which MirnaRx has a license under this Agreement, unless earlier terminated pursuant to this Article 10.

 

10.2                        Termination.

 

(a)                                 Termination for Convenience.  MirnaRx shall have the right to terminate this Agreement for convenience by giving sixty (60) days prior written notice to Marina Bio, provided that no such termination shall be effective sooner than the date that is six (6) months after the Effective Date.

 

(b)                                 Termination for Bankruptcy/Insolvency.  A Party- may immediately terminate this Agreement on written notice in the event (each, a “Financial Event”) any of the following occurs with respect to the other Party (the “Bankrupt Party”):  (a) such Bankrupt Party files a petition in bankruptcy or makes a general assignment for the benefit of creditors or otherwise acknowledges in writing insolvency, or is adjudged bankrupt, and such Bankrupt Party (i) fails to assume this Agreement in any such bankruptcy proceeding within thirty (30) days after filing or (ii) assumes and assigns this Agreement to a Third Party; (b) such Bankrupt Party goes into or is placed in a process of complete liquidation; (c) a trustee or receiver is appointed for any substantial portion of such Bankrupt Party’s business and such trustee or receiver is not discharged within sixty (60) days after appointment; (d) any case or proceeding shall have been commenced or other action taken against such Bankrupt Party in bankruptcy or seeking liquidation; reorganization, dissolution, a winding-up arrangement, composition or readjustment of its debts or any other relief under any bankruptcy, insolvency, reorganization or similar act or law of any jurisdiction now or hereafter in effect and is not dismissed or converted into a voluntary proceeding governed by clause (a) above within sixty (60) days after filing; or (e) there shall have been issued a warrant of attachment, execution, distraint or similar process against any substantial part of the property of such Bankrupt Party and such event shall have continued for a period of sixty (60) days and none of the following has occurred:  (i) it is dismissed, (ii) it is bonded in a manner reasonably satisfactory to the other Party, or (iii) it is discharged.

 

(c)                                  Termination for MirnaRx Default.  Upon any Default by MirnaRx under this Agreement, Marina Bio may notify MirnaRx of such Default and require that MirnaRx cure such Default, which cure period shall be not shorter than thirty (30) days of Marina Bio’s notice for any Default of a payment obligation under this Agreement, or ninety (90) days of Marina Bin’s notice for any other Default.  In the event MirnaRx shall not have cured the Default by the end of the applicable cure period, Marina Bio may terminate this Agreement immediately upon written notice to MirnaRx.  Notwithstanding the foregoing cure period, non-payment of the upfront license fee set forth in Section 5.1 by [***], shall automatically and immediately terminate this Agreement.

 

(d)                                 Termination for Marina Bio Default.  Upon any Default by Marina Bio under this Agreement, MirnaRx may notify Marina Bio in writing of such Default and require that Marina Bio cure such Default within ninety (90) days of MirnaRx’s notice.  In the event Marina Bio shall not have cured the Default by the end of the cure period, MirnaRx may terminate this Agreement immediately upon written notice to Marina Bio.

 

[***] 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.

 



 

10.3                        Effects of Termination.  Upon termination of this Agreement pursuant to Section 10.2:  (a) all licenses granted hereunder to MirnaRx shall revert to Marina Bio; (b) sublicenses granted by MirnaRx under the rights or licenses granted to MirnaRx under this Agreement shall survive such termination, provided that the applicable Sublicensees are not in material breach of such sublicense agreements, and shall become direct licenses with Marina Bio except that Marina Bio shall not have any obligations under any such sublicense agreements that are greater than the obligations of Marina Bio under this Agreement; and (c) MirnaRx (and its Affiliates) shall immediately cease all development and Commercialization of any Licensed Products that contain Licensed Know-How that is Confidential Information of Marina Bio and/or are claimed by a Valid Claim, and shall return to Marina Bio all physical manifestations of the Licensed Technology and Marina Bio Confidential Information.

 

10.4                        Survival.  The following provisions shall survive any expiration or termination of this Agreement:  Articles [***] and [***], and. Sections [***] and [***] and the applicable Sections of Article 1 (as needed to apply to the foregoing surviving Sections and Articles).  Termination of this Agreement shall not relieve the Parties of any liability which accrued hereunder prior to the effective date of such termination nor preclude either Party from pursuing all rights and remedies it may have hereunder or at law or in equity with respect to any Default of this Agreement nor prejudice either Party’s right to obtain performance of any obligation.

 

ARTICLE 11

 

DISPUTE RESOLUTION

 

11.1                        Disputes.  In the event that any issue, controversy or claim between the Parties arises out of, relating to or in connection with, any provision of this Agreement, or the rights or obligations of the Parties hereunder (a “Dispute”), the Parties shall try to settle such Dispute and their differences amicably between themselves.  Either Party may initiate such informal dispute resolution by sending written notice of the Dispute to the other Party. and within [***] after such notice appropriate representatives of the Parties shall meet for attempted resolution by good faith negotiations.  If such representatives are unable to resolve promptly such Dispute, it shall be referred to the Executive Officers for discussion and resolution.  If such personnel are unable to resolve such Dispute within [***] of initiating such negotiations, unless otherwise agreed by the Parties, such dispute shall be finally settled under Section 11.2.

 

11.2                        Arbitration.  For any Dispute involving amounts owed under the Agreement, or whether a Party has breached its obligations under the Agreement (and/or has cured such breach), such Dispute (if not resolved by the Parties under Section 11.1) shall be resolved by final and binding arbitration in accordance with this Section 11.2, under the Commercial Arbitration Rules and Supplementary Procedures for Large Complex Disputes of the American Arbitration Association (“AAA”) by a single arbitrator.  Either Party may, following the end of the good faith negotiation period referenced in Section 11.1, refer any such Dispute to arbitration by submitting written notice to the other Party.  Within [***] of delivery of such notice, the Parties shall meet and discuss in good faith and agree on (a) an arbitrator to resolve the issue, which arbitrator shall be neutral and independent of both Parties and all of their respective Affiliates, shall have significant experience and expertise in licensing and partnering agreements in the pharmaceutical industry and other relevant experience and (b) any changes in these

 

[***] 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.

 



 

arbitration provisions or the rules of arbitration which are herein adopted, in an effort to expedite the process and otherwise ensure that the process is appropriate given the nature of the dispute and the values at risk.  If the Parties cannot agree on such arbitrator within [***] of request by a Party for arbitration, then such arbitrator shall be appointed by AAA, which arbitrator must meet the foregoing criteria.  The arbitration shall be held in New York, New York, and the proceedings shall be conducted in the English language.  The arbitrators may proceed to an award, notwithstanding the failure of either Party to participate in the proceedings.  The arbitrator shall be instructed that time is of the essence in the arbitration proceeding.  The arbitrator shall, within [***] after the conclusion of the arbitration hearing, issue a written award and statement of decision describing the essential findings and conclusions on which the award is based, including the calculation of any damages awarded (if applicable).  The arbitrator shall be authorized to award compensatory damages, but shall not be authorized to (i) award non-economic or punitive damages to the extent expressly excluded under this Agreement, or (ii) reform, modify or materially change this Agreement or any other agreements contemplated hereunder; provided, however, that the damage limitations described in part (i) of this sentence will not apply if such damages are statutorily imposed.  Judgment on the award rendered by the arbitrator may be enforced in any court having competent jurisdiction thereof, or application may be made to the court for a judicial recognition of the award or an order of enforcement as the case may be, subject only to revocation on grounds of fraud or clear bias on the part of the arbitrator.  Notwithstanding anything contained in this Section 11.2 to the contrary, either Party shall have the right to seek equitable relief or interim or provisional relief from a court of competent jurisdiction, including a temporary restraining order, preliminary injunction or other interim equitable relief; concerning a dispute 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.  The Parties agree that the arbitration shall be kept confidential and that the existence of the proceeding and any element of its (including any pleadings, briefs or other documents submitted or exchanged, any testimony or other oral submissions and any awards) shall not be disclosed beyond the arbitrator, the Parties, their counsel and any person necessary to the conduct of the proceeding, except as may lawfully be required in judicial proceedings relating to the arbitration or otherwise.

 

ARTICLE 12

 

MISCELLANEOUS

 

12.1                        Entire Agreement; Amendment.  This Agreement, including the appendices, constitutes the entire agreement between the Parties (or their Affiliates) related to the subject matter hereof.  All prior and contemporaneous negotiations, representations, warranties, agreements, statements, promises and understandings related to the subject matter hereof are superseded by and merged into and extinguished and completely expressed by this Agreement, including the exhibits.  No Party shall be bound by or charged with any written or oral agreements, representations, warranties, statements, promises or understandings not specifically set forth in this Agreement.  As of the Effective Date, the Confidentiality Agreement is hereby superseded by this Agreement as to Marina Bio and MirnaRx, provided that all Confidential information (as defined in the Confidentiality Agreement) disclosed thereunder shall be treated as Confidential Information disclosed under, and subject to the terms of, this Agreement.  No

 

[***] 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.

 



 

subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by an authorized officer of each Party.

 

12.2                        Notices.  Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been sufficiently given for all purposes (i) when delivered, if sent by recognized overnight courier or personally delivered, or (ii) upon confirmation of receipt, if sent by facsimile transmission (provided a duplicate hard copy is promptly delivered by one of the other foregoing means), in each case using the mailing addresses of the Parties as set forth below (or such other mailing address of which a Party is notified pursuant to this Section 11.2):

 

For MirnaRx:

Mirna Therapeutics, Inc.
2150 Woodward St., Suite 100
Austin, TX 78744
Attn: Chief Executive Officer
Tel : (512) 901-0900
Fax : (512) 681-5201

 

 

With a copy to:

Cooley LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306-2155
Attn: Barclay James Kamb, Esq.
Facsimile: (650) 849-7400

 

 

For Marina Bio:

Marina Bio Biotech, Inc.
3830 Monte Villa Parkway
Bothell, Washington 98021
Attn: President & CEO
Facsimile: (425) 908-3650

 

 

With a copy to:

Pryor Cashman LLP
7 Times Square
New York, NY 10036
Attn:  Lawrence Remmel
Facsimile:  (212) 798-365

 

12.3                        Governing Law.  This Agreement shall be governed and construed in accordance with the laws of the State of New York, without regard to any applicable principles of conflicts of law.

 

12.4                        Limitation of Liability.  EXCEPT FOR LIABILITY FOR BREACH OF OBLIGATIONS UNDER ARTICLE 9 OR FOR FRAUD OR COMPARABLE INTENTIONAL MISCONDUCT, NEITHER PARTY SHALL BE ENTITLED TO RECOVER FROM THE OTHER PARTY ANY INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES IN CONNECION WITH THIS AGREEMENT OR ANY LICENSE GRANTED HEREUNDER.  However, the foregoing limitations in this Section 12.4 shall not

 


 

apply with respect to either Party’s indemnification Obligations under Sections 8.1 or 8.2 for Third Party Claims.

 

12.5                        Interpretation.  Marina Bio and MirnaRx have each participated in negotiations and due diligence and consulted their respective counsel regarding this Agreement.  In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provisions of this Agreement.

 

12.6                        Assignment.  This Agreement may not be assigned by either party without the express written consent of the other party, except that either Party may assign the Agreement to its Affiliate or to its successor in interest in connection with. a merger, consolidation or sale of all or substantially all of its assets.

 

12.7                        Performance by Affiliates.  Each of Marina Bio and MirnaRx acknowledge that obligations under this Agreement may be performed by Affiliates of MirnaRx.

 

12.8                        Severability.  In the event that any one or more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the Parties shall negotiate in good faith with a view to the substitution therefor of a suitable and equitable provision in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid provision; provided, however, that the validity, legality and enforceability’ of any such provision in every other respect and of the remaining provisions contained herein shall not be in any way impaired thereby, it being intended that all of the rights and privileges of the Parties hereto shall be enforceable to the fullest extent permitted by law.

 

12.9                        Headings.  The heading for each article and section in this Agreement has been inserted for convenience of reference only and is not intended to limit or expand on the meaning of the language contained in the particular article or section.

 

12.10                 Further Actions.  Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of the Agreement,

 

12.11                 Independent Contractors.  The relationship between MirnaRx and Marina Bio created by this Agreement is solely that of independent contractors.  This Agreement does not create any agency, distributorship, employee-employer, partnership, joint venture or similar business relationship between the Parties.  Neither Party is a legal representative of the other Party, and neither Party can assume or create any obligation, representation, warranty or guarantee, express or implied, on behalf of the other Party for any purpose whatsoever.  Each Party shall use its own discretion and shall have complete and authoritative control over its employees and the details of performing its obligations under this Agreement.

 

12.12                 No Waiver.  A Party’s consent to or waiver, express or implied, of the other Party’s breach of its obligations hereunder shall not be deemed to be or construed as a consent to or waiver of any other breach of the same or any other obligations of the other Party.  A Party’s failure to complain of any act, or failure to act, by the other Party, to declare the other Party in

 



 

default, to insist upon the strict performance of any Obligation or condition of this Agreement or to exercise any right or .remedy consequent upon a breach thereof, no matter how long such failure continues, shall not constitute a waiver by such Party of its rights hereunder, of any such breach, or of any other obligation or condition.  A Party’s consent in any one instance shall not limit or waive the necessity to obtain such Party’s consent in any future instance and in any event no consent or waiver shall be effective for any purpose .hereunder unless such consent or waiver is in writing and signed by the Party granting such consent or waiver.

 

12.13                 Fees and Expenses.  Regardless of whether or not the transactions contemplated by this Agreement are consummated, each Party shall bear its own fees and expenses incurred in connection with the negotiation and execution of this Agreement.

 

12.14                 No Other Rights.  The Parties acknowledge and agree that, except as expressly set forth in this Agreement, neither Party grants any fights or licenses to the other Party under this Agreement nor shall either Party have any rights or obligations under this Agreement.

 

12.15                 Parties in Interest.  This Agreement shall be binding upon and inure solely to the benefit of each Party hereto and its respective successors and permitted assigns, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement (with the exception of MirnaRx Indemnitees and Marina Bio Indemnitees under Sections 8.1 and 8.2, respectively).

 

12.16                 Rules of Construction.  The use in this Agreement of the term “including” (or any cognates thereof, such as “include” or “includes”) means “including (or the applicable cognate thereof), without limitation.”  The words “herein,” “hereof,” “hereunder,” and other words of similar import refer to this Agreement as a whole, including the exhibits, and not to any particular section, subsection, paragraph, subparagraph or clause contained in this Agreement.  All references to sections and exhibits mean those sections of this Agreement and the Appendixes attached to this Agreement, except where otherwise-stated.

 

12.17                 Counterparts.  This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

[Signature page follows]

 



 

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

 

MARINA BIOTECH, INC.

MIRNA THERAPEUTICS, INC.

 

 

 

 

By:

/s/ J. Michael French

 

By:

/s/ Paul Lammers

 

 

Print Name:

J. Michael French

 

Print Name:

Dr. Paul Lammers

 

 

Title:

President and CEO

 

Title:

President and CEO

 



 

APPENDIX A

 

LIST OF CERTAIN LICENSED PATENTS

 

Case No.

 

Title

 

Jurisdiction

 

Application
Number

 

Filing
Date

 

Patent
Number

 

Date
Issued

 

Estimated
Expiration
Date

 

Status

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

 

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

 


 

APPENDIX B

 

EXAMPLE OF CALCULATION OF CUMULATIVE SUBLICENSE FEES

 

The following is an example of the calculation of payment of Sublicense Fees under Section 5.6, under a hypothetical sublicense agreement under this Agreement:

 

Hypothetical: Assume that MirnaRx grants a sublicense to a Sublicensee to develop and commercialize its Licensed Product “[***]” when such product has [***] but before [***].  Assume further that under such sublicense agreement, the Sublicensee pays MirnaRx an upfront sublicense fee of $[***], pays no milestone payment on [***], and pays MirnaRx the following milestone payments with respect to such sublicense grant on achieving the listed milestone events:  (a) $[***] on [***], $[***] on [***], and $[***] on [***].

 

Based on the foregoing assumptions (and understanding that this is just a hypothetical example and provides no precedence or assumption of the terms of an actual sublicense deal), MirnaRx would pay to Marina Bio Sublicense Fees in the following amounts and times under such hypothetical:

 

·                                          Sublicense Fee of $[***], by the date [***] after the upfront sublicense fee is paid ([***]% of the upfront)

 

·                                          Sublicense Fee of $[***], by the date [***] after the [***] milestone for [***] is achieved by Sublicensee (the “True-Up Payment” of $[***] equal to the difference between the “[***]” milestone payment amount under Section 5.3(a)(i)(2) and the “Cumulative Sublicense Fees” paid to Marina Bio up to that point for such product)

 

·                                          Sublicense Fee of $[***], by the date [***] after [***] (equal to [***]% of the milestone payment made by the Sublicensee, plus a “True-up Payment” of $[***], such that the Cumulative Sublicensee Fees as of such date (such cumulative amount equal to $[***] after such True-Up Payment) equals the Milestone Payment Sum as of such date (which is $[***], including the milestone payment amount under Section 5.3(a)(i)(3) for achieving a [***] milestone)

 

·                                          Sublicense Fee of $[***] by the date [***] after [***] ([***]% of the milestone payment paid by Sublicensee to MirnaRx for [***])

 

·                                          Sublicense Fee of $[***], by the date [***] after [***] (equal to [***]% of the milestone payment by the Sublicensee, plus a “True-up Payment” of $[***], such that the Cumulative Sublicensee Fees as of such date (such cumulative amount equal to $[***] after such True-Up Payment) equals the Milestone Payment Sum as of such date (which is $[***], including the milestone payment amount under Section 5:3(a)(i)(4) for [***])

 

[***] 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.

 



 

APPENDIX C

 

JOINT PRESS RELEASE

 

Marina Biotech and Mirna Therapeutics Announce License

Agreement for the Development of microRNA-based Therapeutics

 

- Mirna Therapeutics will develop oncology-focused compounds utilizing their proprietary microRNAs combined with Marina Biotech’s novel SMARTICLES® liposomal delivery technology -

 

Bothell, WA and Austin, TX December 23, 2011 — Marina Biotech, Inc. (Nasdaq:  MRNA), a leading oligonucleotide-based drug discovery and development company, and Mirna Therapeutics, Inc. (Mirna), a privately-held biotechnology company pioneering microRNA (miRNA) replacement therapy for cancer, announced today that they have entered into a license agreement regarding the development and commercialization of microRNA-based therapeutics utilizing Mirna’s proprietary microRNAs and Marina Biotech’s novel SMARTICLES liposomal delivery technology.  Mirna will have full responsibility for the development and commercialization of any products arising under the Agreement and Marina Biotech will support pre-clinical and process development efforts.  Under terms of the Agreement, Marina Biotech could receive up to $63 million in total upfront, clinical and commercialization milestone payments, as well as royalties on sales, based on the successful outcome of the collaboration.  Further terms of the Agreement were not disclosed.

 

“Given the challenge of effectively delivering oligonucleotides to target tissues, we devoted considerable effort to identifying an optimal delivery technology that would allow for systemic administration of our potent miRNA tumor suppressors and which is already in clinical testing,” said Paul Lammers, M.D., M.Sc., President and CEO of Mirna Therapeutics.  “With the dramatic in vivo results achieved with our miRNA. mimics, we believe the SMARTICLES technology solves the delivery challenge for us, and we are now looking forward to bringing our miRNA mimics into the clinic in the next 18 months as promising targeted cancer therapeutics.

 

“We are extremely pleased to have entered into this relationship with a company as well respected in the area of microRNA-based therapeutics as Mirna Therapeutics,” stated J. Michael French, President and CEO of Marina Biotech. “We are excited to see the continued advancement of oligonucleotide-based therapeutics and to be able to provide a technology capable of effectively delivering, in this case, systemically administered miRNA mimetics.  We look forward to the rapid advancement. of Mirna. Therapeutics’ clinical pipeline and the opportunity to bring novel therapeutics to patients in need.”

 

In a recent poster entitled “The Development of a miRNA-based Therapeutic Candidate for Hepatocellular Carcinoma,” presented at the November, 2011 AACR-.NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics in San Francisco, CA, Mirna scientists showed that mimics of five tumor suppressor miRNAs, including miR-34 and let-7, all significantly inhibited the growth of liver tumors compared to animals treated with formulated negative control miRNAs.  The five miRNA mimics were complexed. with Marina

 



 

Biotech’s SMARTICLES delivery formulation and injected into NOD/SCID mice with orthotopically grown Hep3B human liver cancer xenografts.

 

The companies will present their respective science and technologies at the upcoming Biotech ShowcaseTM 2012, January 9-11, 2012 at the Parc 55 Wyndham San Francisco - Union Square at 55 Cyril Magnin Street, San Francisco, CA.  Mirna Therapeutics will present on Monday, 9 January at 3:00 pm and Marina Biotech will present on Tuesday, 10 January at 2:30 pm.

 

About Marina Biotech, Inc.

 

Marina Biotech is a biotechnology company focused on the development and commercialization. of oligonucleotide-based therapeutics utilizing multiple mechanisms of action including RNA interference (RNAi) and messenger RNA translational blocking.  The Marina Biotech pipeline currently includes a clinical program in Familial Adenomatous Polyposis (a precancerous syndrome) and two preclinical programs — in bladder cancer and malignant ascites.  Marina Biotech entered into an exclusive agreement with The Debiopharm Group for the development and commercialization of the bladder cancer program.  Marina Biotech’s goal is to improve human health through the development of RNAi- and oligonucleotide-based compounds and drug delivery technologies that together provide superior therapeutic options for patients.  Additional information about Marina Biotech is available at http://www.marinabio.com.

 

About Mirna Therapeutics, Inc.

 

Mirna Therapeutics is a biotechnology company focused on the development and commercialization of microRNA (miRNA) therapeutics.  The Company has a substantial intellectual property portfolio on the therapeutic use of miRNAs developed by its own scientists as well as in-licensed from other institutions.  Mirna’s IP portfolio contains >300 miRNAs with applications in oncology and other diseases.  Oncology-directed miRNAs include those that are key tumor suppressors in cancer, such as miR-34 and let-7 that have proven to block tumor growth in. a number of different pre-clinical animal studies.  The Company, founded in 2007, is located in Austin, Texas, and has received significant funding from the State of Texas, both through the State’s Emerging Technology Fund and from the Cancer Prevention and Research Institute of Texas (CPRIT).  Mirna Therapeutics is the recipient of a $10.3 million commercialization award from CPRIT.  For more information, visit www.MirnaRx.com

 

Forward-Looking Statements

 

Statements made in this news release may be forward-looking statements within the meaning of Federal Securities laws that are subject to certain risks and uncertainties and involve factors that may cause actual results to differ materially from those projected or suggested.  Factors that could cause actual results to differ materially from those in forward-looking statements include, but are not limited to:  (i) the ability of Marina Biotech to obtain additional funding; (ii) the ability of Marina Biotech to attract and/or maintain manufacturing, research, development and commercialization partners; (iii) the ability of Marina Biotech and/or a partner to successfully complete product research and development, including preclinical and clinical studies and commercialization; (iv) the ability of Marina Biotech and/or a partner to obtain required governmental approvals; and (v) the ability of Marina Biotech and/or a partner to develop and

 



 

commercialize products prior to, and that can compete favorably with those of, competitors.  Additional factors that could cause actual results to differ materially from those projected or suggested in any forward-looking statements are contained in Marina Biotech’s most recent periodic reports on Form 10-K and Form 10-Q that are filed with the Securities and Exchange Commission.  Marina Biotech assumes no obligation to update and supplement forward-looking statements because of subsequent events.

 

Marina Biotech, Inc.

Philip Ranker

Interim Chief ‘Financial Officer

(425) 908-3615

pranker@marinabio.com

 

Mirna Therapeutics, Inc.

Paul Lammers, M.D., M.Sc.

President and Chief Executive Officer

(512) 901-0900

plammers@mirnarx.com

 




Exhibit 10.3(D)

 

[***] 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.

 

AMENDMENT No. 1 to LICENSE AGREEMENT

 

This AMENDMENT NO. 1 to LICENSE AGREEMENT (this “Amendment”) is made and entered into effective as of December 27, 2013 (the “Amendment Effective Date”), by and between Mirna Therapeutics, Inc., a Delaware corporation with offices at 2150 Woodward Street, Suite 100, Austin, Texas 78744 (“MirnaRx”), and Marina Biotech, Inc., a Delaware corporation with offices at 3830 Monte Villa Parkway, Bothell, Washington 98021 (“Marina Bio”).

 

WHEREAS, MirnaRx and Marina Bio are parties to a License Agreement dated December 22, 2011 (the “License Agreement”), pursuant to which Marina Bio granted to MirnaRx a license under Marina Bio’s technology and intellectual property rights relating to Marina Bio’s liposomal delivery technology known as NOV340 (the “Marina Technology”), to develop and commercialize drug products incorporating such Marina Technology in combination with MirnaRx’s proprietary compound miR-34, and other specified compounds selected by MirnaRX pursuant to the terms of the License Agreement; and

 

WHEREAS, MirnaRx and Marina Bio desire to amend the License Agreement to modify the consideration payable by MirnaRX to Marina Bio upon selection by MirnaRx of certain additional compounds for further development and commercialization using the Marina Technology, the timing of the payment of such consideration, and to modify certain milestone and royalty payment obligations relating to the development and commercialization of products containing miR-34 using the Marina Technology.

 

NOW THEREFORE, in consideration of the foregoing premises, the mutual promises and covenants of the Parties hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, do hereby agree as follows.

 

1.1.                            Amendment of License Agreement.  In accordance with Section 12.1 of the License Agreement, the Parties hereby agree to amend the License Agreement, effective as of the Amendment Effective Date, in accordance with the remainder of this Section 1.  Capitalized terms not defined in this Amendment shall have the meaning given to those terms in the License Agreement.  With the exception of those sections of the License Agreement that are expressly amended by this Amendment, the remainder of the Master Agreement shall remain in full force and effect as provided therein.

 

1.2.                            Section 1.48 of the License Agreement shall be amended and restated in its entirety with the following:

 

1.48                        Selected MirnaRx Compound” means:  (a) the MirnaRx Compound known as miR-34 (the sequence of which is set forth in the Side Letter); or (b) any other MirnaRx Compound that MirnaRx selects, as provided in Section 2.6, to combine with the Marina Bio Technology and to develop (or have developed) as a Licensed Product, and including, for any such Selected MirnaRx Compound, any other MirnaRx Compound that

 



 

has at least [***] sequence homology with such Selected MirnaRx Compound, and for each of (a) and (b) including without limitation the compounds listed on Appendix D.

 

1.3.                            Section 5.2 of the License Agreement shall be amended and restated in its entirety with the following:

 

5.2                               Selection Fee Payments:

 

(a)                                 As permitted by Section 2.6, in addition to miR-34, MirnaRx has selected three (3) Option Compounds that are listed on Appendix D to be Selected MirnaRx Compounds.  In partial consideration of the license rights granted by Marina Bio under this Agreement, and for the right to develop and commercialize such additional Selected MirnaRx Compounds, MirnaRx shall pay Marina Bio an upfront selection fee for the designation of such three (3) Option Compounds as Selected MirnaRx Compounds equal to $1,000,000, which amount shall be paid in full on or before December 27, 2013

 

(b)                                 With respect to any new MirnaRx Compound that is selected by MirnaRx as a Selected MirnaRx Compound in accordance with Section 2.6 (including without limitation any Option Compound not listed on Appendix D), then MirnaRx shall pay Marina Bio an additional compound selection fee of [***], such amount to be paid as follows:  (i) with respect to any Option Compound (other than those listed on Appendix D) that is selected by MirnaRx as a Selected MirnaRx Compound in accordance with Section 2.6, (i) [***] of such amount shall be paid within [***] of the date that MirnaRx selects the Selected MirnaRx Compound under Section 2.6, and (ii) the balance [***] will be paid [***], and (b) with respect to any Selected MirnaRx Compounds that are not Option Compounds when selected by MirnaRx under Section 2.6, the total amount of [***] for such Selected MirnaRx Compound shall be paid within [***] of the date that MirnaRx selects the Selected MirnaRx Compound under Section 2.6.  All such selection fees shall be in addition to any amounts due based on sublicensing Revenue received by MirnaRx (if any) for sublicensing a Licensed Product containing the applicable Selected MirnaRx Compound, as set forth in Section 5.6 below.

 

1.4.                            A new Appendix D shall be added to the License Agreement entitled “Selected MirnaRx Compounds”, which shall read in its entirety as follows:

 

Appendix D

 

miR-34

[***]

 

1.5.                            Simultaneous with the execution of this Amendment, MirnaRx shall provide to Marina Bio the sequences of each of the Selected MirnaRx Compounds listed an Appendix D in a separate side letter (the “Amendment Side Letter”).  The Amendment Side Letter shall also set forth the sequences of the remaining Option Compounds that have not been designated by MirnaRx as Selected MirnaRx Compounds as of the Amendment Effective Date.

 

[***] 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.

 



 

1.6.                            Section 5.3 shall be amended and restated in its entirety with the following:

 

5.3                               Milestone Payments.

 

(a)                                 In partial consideration of the license rights granted by Marina Bio under this Agreement, MirnaRx shall pay to Marina Bio a milestone payment upon the first achievement by MirnaRx (independently of work done by or in collaboration with a Sublicensee) of the applicable milestone event set forth in the table below, such payments to be in the listed amounts for the applicable Milestone Event:

 

Milestone Event

 

Milestone Payment

(i) For each Licensed Product:

 

 

[***]

 

[***]

(ii) For each Additional Indication for the Licensed Product, up to total of [***] Additional Indications:

 

 

(1) [***]

 

[***]

 

(b)                                 For clarity, each of the above milestone payments shall be paid only once for a particular Licensed Product, regardless if any such Milestone Event is achieved more than once, except that [***].  Further, if a particular Licensed Product achieves a particular Milestone Event under subclause (i) of the above table without having achieved a previous Milestone Event in such subclause (i), then such previous Milestone Event shall be deemed also achieved, and the Milestone Payment associated with such Milestone Event shall then be paid with the achievement of the subsequent Milestone Event.  For illustrative purposes only, if the [***] Milestone Event as set forth in (i)(3) in the table above is not achieved for a Licensed Product but the [***] Milestone Event as set forth in (i)(4) above is achieved for such Licensed Product, then the Milestone Payment for achievement of the Milestone Event in clause (i)(3) [***] will be paid when the Milestone Payment for (i)(4) is paid.  The total amount of milestone payments payable for a particular Licensed Product under the above shall not, in any event, exceed $6,000,000 under subclause (i) of the above table and $10,000,000 in total.  For additional clarity, if MirnaRx (or its Affiliate) enters into a sublicense Agreement under which the applicable Sublicensee is granted sublicense rights to Commercialize a Licensed Product, then achievement of any of the above Milestone Events by such Sublicensee, or by MirnaRx or its Affiliate working in collaboration with such Sublicensee under the sublicense agreement, shall not create a Milestone Payment obligation, but instead MirnaRx shall have the obligation to share Sublicense Revenues received under such sublicense agreement as provided in Section 5.6 below.

 

(c)                                  Notwithstanding Sections 5.3(a) and 5.3(b) and the milestone table above, (i) no Milestone Payment for achievement of [***] of the milestone table above, and (ii) no

 

[***] 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.

 



 

Milestone Payments for [***] of the milestone table above, shall be payable with respect to any Licensed Product containing or incorporating miR-34.  For clarity, Sections 5.3(a) and 5.3(b) and the milestone table above shall apply in full to all Licensed Products other than any Licensed Product containing or incorporating miR-34, unless the Parties mutually agree otherwise in writing.

 

1.7.                            The Parties acknowledge and agree that as of the Amendment Effective Date, the Milestone Payment for the achievement of the Milestone Event [***] of the milestone table above has been paid in full by MirnaRx [***].

 

1.8.                            Section 5.4 shall be amended and restated in its entirety with the following:

 

5.4                               Royalties.  In part consideration of the license rights granted by Marina Bio under this Agreement, and subject to the provisions of Sections 5.5, MirnaRx shall pay royalties to Marina Bio on sales by MirnaRx or any of its Affiliates of Licensed Products during the Royalty Term, as follows:

 

(a)                                 For sales of Licensed Product in country(ies) where such sale would infringe, absent the license granted in Section 2.1, a Valid Claim of an issued Licensed Patent, MirnaRx shall pay to Marina Bio royalties equal to [***] of the Net Sales revenue recognized by MirnaRx or any of its Affiliates from such sales, provided that solely with respect to any Licensed Product containing or incorporating miR-34, no royalty shall be payable by MirnaRx with respect to sales in any country.

 

(b)                                 For sales of Licensed Product in country(ies) where either (i) there is no Valid Claim in an issued Licensed Patent that would be infringed, absent the license granted in Section 2.1, by such sale of the Licensed Product, or (b) there are sales of Generic Products during the same royalty period as such sales of Licensed Product, then MirnaRx shall pay to Marina Bio royalties equal to [***] of the Net Sales revenue recognized by MirnaRx or any of its Affiliates from such Licensed Product sales, provided that solely with respect to any Licensed Product containing or incorporating miR-34, no royalty shall be payable by MirnaRx with respect to sales in any country.

 

1.9.                            Section 12.1 shall be amended and restated in its entirety with the following:

 

12.1                        Entire Agreement; Amendment.  This Agreement, including the appendices, and the Side Letter, constitutes the entire agreement between the Parties (or their Affiliates) related to the subject matter hereof.  All prior and contemporaneous negotiations, representations, warranties, agreements, statements, promises and understandings related to the subject matter hereof are superseded by and merged into and extinguished and completely expressed by this Agreement, including the exhibits and the Side Letter.  No Party shall be bound by or charged with any written or oral agreements, representations, warranties, statements, promises or understandings not specifically set forth in this Agreement and the Side Letter.  As of the Effective Date, the Confidentiality Agreement is hereby superseded by this Agreement as to Marina Bio and MirnaRx, provided that all Confidential Information (as defined in the Confidentiality Agreement) disclosed thereunder shall be treated as Confidential Information disclosed

 

[***] 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.

 



 

under, and subject to the terms of, this Agreement.  No subsequent alteration, amendment, change or addition to this Agreement or the Side Letter shall be binding upon the Parties unless reduced to writing and signed by an authorized officer of each Party.

 

1.10.                     Counterparts; Facsimile Execution.  This Amendment may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  This Amendment may be executed by facsimile signatures and such signatures shall be deemed to bind each Party as if they were original signatures.

 

[Signature Page Follows]

 



 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the Amendment Effective Date.

 

MIRNA THERAPEUTICS, INC.

MARINA BIOTECH, INC.

 

 

 

 

Signature:

/s/ Paul Lammers

 

Signature:

/s/ J. Michael French

 

 

 

 

 

Name:

Dr. Paul Lammers

 

Name:

J. Michael French

 

 

 

 

 

Title:

President and CEO

 

Title:

President and CEO

 




Exhibit 10.3(E)

 

[***] 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.

 

CONFIDENTIAL

 

January 9, 2014

 

Marina Biotech, Inc.

3830 Monte Villa Parkway

Bothell, Washington, 98021

Attn: Michael French, Chief executive Officer

 

Re:                             Agreement re Option Compound and miR-34 Sequences

 

Dear Michael:

 

As you know, Mirna Therapeutics, Inc. (“MirnaRx”) and Marina Biotech, Inc. (“Marina Bio”) have entered into an amendment, effective as December 27, 2013, to that certain license agreement dated December 22, 2011 (the “License Agreement”, and such amendment the “Amendment”).  This letter agreement is that certain Amendment Side Letter referred to in the Amendment, and it sets forth the RNA oligonucleotide sequences of the Option Compounds that the Parties are agreeing to designate as Selected MirnaRx Compounds pursuant to the terms of the License Agreement.  Capitalized terms not defined in this Amendment Side Letter shall have the meaning given to those terms in the License Agreement.

 

The Parties hereby agree that the list of RNA oligonucleotide sequences attached as the Appendix of this Amendment Side Letter comprises sequences of miR-34, let-7, miR-25, [***] as well as the sequences of two Option Compounds [***] under the terms of the License Agreement.  The Parties further agree that such sequences are the highly confidential information of MirnaRx, and Marina Bio shall comply with the confidentiality obligations set forth in the License Agreement with respect thereto, and shall not disclose such sequences to any third party or use them for any purpose outside of the License Agreement.

 

AGREED TO BY:

Mirna Therapeutics, Inc.

 

 

 

 

 

Signature:

/s/ Paul Lammers

 

 

Paul Lammers, M,D., M.Sc.

 

 

Chief Executive Officer

 

 

 

 

 

Marina Biotech, Inc.

 

 

 

 

 

Signature:

/s/ Michael French

 

 

Michael French

 

 

Chief Executive Officer

 



 

CONFIDENTIAL

 

APPENDIX

 

miR-34 Sequence:

[***]

 

[***]

 

[***] 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.

 




Exhibit 10.3(F)

 

[***] 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.

 

AMENDMENT No. 2 to LICENSE AGREEMENT

 

This AMENDMENT NO. 2 to LICENSE AGREEMENT (this “Amendment No. 2”) is made and entered into effective as of May 11, 2015 (the “Amendment No. 2 Effective Date”), by and between Mirna Therapeutics, Inc., a Delaware corporation with offices at 2150 Woodward Street, Suite 100, Austin, Texas 78744 (“MirnaRx”), and Marina Biotech, Inc., a Delaware corporation with offices c/o Pryor Cashman LLP, 7 Times Square, New York, New York 10036 (“Marina Bio”).

 

WHEREAS, MirnaRx and Marina Bio are parties to a License Agreement dated December 22, 2011, as amended by the Letter Amendment dated November 16, 2012, and Amendment No. 1, dated December 27, 2013 (“Amendment No. 1”) and as further supplemented by that certain Amendment Side Letter referred to in Amendment No. 1, dated January 9, 2014 (collectively, the “License Agreement”);

 

WHEREAS, pursuant to the License Agreement, Marina Bio granted to MirnaRx a license under Marina’ Bio’s technology and intellectual property rights relating to Marina Bio’s liposomal delivery technology known as NOV340 (the “Marina Technology”), to develop and commercialize drug products incorporating such Marina Technology in combination with MirnaRx’s proprietary compound miR-34, and other specified compounds selected by MirnaRX pursuant to the terms of the License Agreement; and

 

WHEREAS, MirnaRx and Marina Bio desire to amend the License Agreement to modify the consideration payable by MirnaRx to Marina Bio with respect to development of products containing miR-34 and using the Marina Technology.

 

NOW THEREFORE, in consideration of the foregoing premises, the mutual promises and covenants of the Parties hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, do hereby agree as follows.

 

1.1.                            Amendment of License Agreement. In accordance with Section 12.1 of the License Agreement, the Parties hereby agree to amend the License Agreement, effective as of the Amendment No. 2 Effective Date, in accordance with the remainder of this Section 1.  Capitalized terms not defined in this Amendment No. 2 shall have the meaning given to those terms in the License Agreement.  With the exception of those sections of the License Agreement that are expressly amended by this Amendment No. 2, the remainder of the License Agreement as in effect prior to the date hereof shall remain in full force and effect as provided therein.

 

1.2.                            Section 5.3(c) (as amended by Amendment No. 1) shall be amended and restated in its entirety with the following:

 

5.3(c)  Notwithstanding Sections 5.3(a) and 5.3(b) and the milestone table above, and solely with respect to Licensed Products containing or incorporating miR-34:

 



 

(i) no Milestone Payment shall be payable by MirnaRx for (A) achievement of the Milestone Event [***] of the milestone table above, or (B) any [***] of the milestone table above; and

 

(ii) with respect to the Milestone Payment payable to Marina Bio [***] of the milestone table above, MirnaRx may elect to pre-pay such Milestone Payment to Marina Bio prior to the achievement of such Milestone Event (the “miR-34 Prepayment”), and if such miR-34 Prepayment is made to Marina Bio on or before May 13, 2015 (the “Prepayment Date”), such Milestone Payment shall be [***].  Marina Bio agrees that if the miR-34 Prepayment is made on or before the Prepayment Date, such payment shall constitute [***] of the milestone table.

 

For clarity, Sections 5.3(a) and 5.3(b) and the milestone table shall apply in full to all Licensed Products other than any Licensed Product containing or incorporating miR-34, unless the Parties mutually agree otherwise in writing.

 

1.3.                            No Other Amendments.  Except as specifically modified herein, the remaining terms of the License Agreement shall remain in full force and effect.

 

1.4.                            Prepayment.  MirnaRx hereby agrees to pay to Marina Bio, within five (5) business days after the Amendment No. 2 Effective Date, an amount equal to [***] of the License Agreement for a Licensed Product containing the Selected MirnaRx Compound miR-34, in accordance with Section 5.3(c) of the License Agreement, as amended by this Amendment No. 2.

 

1.5.                            Counterparts; Facsimile Execution.  This Amendment No. 2 may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  This Amendment No. 2 may be executed by facsimile signatures and such signatures shall be deemed to bind each Party as if they were original signatures.

 

[Signature Page Follows]

 

[***] 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.

 



 

IN WITNESS WHEREOF, the Parties have caused this Amendment No. 2 to be executed by their respective officers thereunto duly authorized as of the Amendment Effective Date.

 

 

MIRNA THERAPEUTICS, INC.

 

MARINA BIOTECH, INC.

 

 

 

Signature :

/s/ Dr. Paul Lammers

 

Signature :

/s/ J. Michael French

 

 

 

 

 

Name :

Dr. Paul Lammers

 

Name :

J. Michael French

 

 

 

 

 

Title :

President & CEO

 

Title :

President & CEO

 

[Signature page to Amendment No. 2 to License Agreement]

 




Exhibit 10.3(G)

 

[MIRNA THERAPEUTICS LETTERHEAD]

 

[***] 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.

 

CONFIDENTIAL

 

August 24, 2015

 

Marina Biotech, Inc.

3830 Monte Villa Parkway

Bothell, Washington 98201

Attn: J. Michael French, President & Chief Executive Officer

 

Re: Selection and Agreement Regarding Option Compound

 

Dear Michael:

 

Reference is made to that certain License Agreement effective December 22, 2011 by and between Mirna Therapeutics, Inc., a Delaware corporation (“MirnaRx”), and Marina Biotech, Inc., a Delaware corporation (“Marina Bio”), as amended by Amendment No. 1 effective December 27, 2013 and Amendment No. 2 effective May 11, 2015, and as further supplemented by Side Letters dated December 22, 2011, November 16, 2012, and January 9, 2014 (collectively, as amended, the “Agreement”).  Capitalized words used but not defined herein shall have the meaning ascribed to such terms in the Agreement.

 

MirnaRx and Marina Bio agree as follows:

 

1.              MirnaRx desires to select the Option Compound [***] as the fifth Selected MirnaRx Compound in accordance with Section 2.6 of the Agreement.  Marina Bio confirms that the selected Option Compound is Available and shall be deemed a Selected MirnaRx Compound.

 

2.              With respect to the associated selection fee payment set forth in Section 5.2(b)(i) of the Agreement, (a) the initial portion of the selection fee shall be [***] provided that it is [***] by MirnaRx to Marina Bio on or before [***], and (b) the [***] due upon MirnaRx’s sublicensing to a Sublicensee of the Licensed Product containing the selected Selected MirnaRx Compound, as set forth in Section 5.2(b)(ii) of the Agreement.

 

3.              The sequence of the selected Selected MirnaRx Compound is the highly confidential information of MirnaRx, and Marina Bio shall comply with the confidentiality obligations set forth in the Agreement with respect thereto.

 



 

4.              This side letter (the “Side Letter”) shall be subject to the terms and conditions of the Agreement; provided that, to the extent that the terms set forth in this Side Letter conflict with the terms of the Agreement, the terms of this Side Letter shall govern and control.

 

 

AGREED TO BY:

MIRNA THERAPEUTICS, INC.

 

 

 

 

 

Signature:

/s/ Casi DeYoung

 

Casi DeYoung

 

Chief Business Officer

 

 

 

 

 

MARINA BIOTECH, INC.

 

 

 

 

 

Signature:

/s/ J. Michael French

 

J. Michael French

 

President & Chief Executive Officer

 

GRAPHIC

Mirna Therapeutics Inc. | 2150 Woodward St., Suite 100 | Austin, TX  78744 | 1.512.901.0900 | www.mirnarx.com

 




Exhibit 10.4

 

[***] 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.

 

AMENDED AND RESTATED AGREEMENT

 

THIS AMENDED AND RESTATED AGREEMENT (the “Agreement”) by and between YALE UNIVERSITY, a corporation organized and existing under and by virtue of a charter granted by the general assembly of the Colony and State of Connecticut and located in New Haven, Connecticut (“YALE”), and Mirna Therapeutics, Inc., a corporation organized and existing under the laws of the State of Delaware and with principal offices located in Austin, Texas (“LICENSEE”) is effective as of the date of final signature below (“EFFECTIVE DATE”).

 

Article 1.                                                BACKGROUND

 

1.1                               As of August 28, 2006 YALE and Asuragen, Inc., a corporation organized and existing under the law of the State of Delaware with principal offices located in Austin, Texas (“ASURAGEN”) entered into an exclusive license agreement (“ORIGINAL AGREEMENT”) related to certain patents which arose in the course of research conducted under YALE auspices by Dr. Frank Slack in the Department of Molecular, Cellular and Developmental Biology at YALE (the “INVENTOR”), including an invention entitled “Regulation of Oncogenes by microRNAs” (the “INVENTION”).

 

1.2                               On November 9, 2009, ASURAGEN transferred all of its assets related to research and development of microRNA therapeutics to LICENSEE, including the ORIGINAL AGREEMENT (with notice of such transfer having been sent to YALE on December 19, 2009).

 

1.3                               YALE and LICENSEE have decided to expand the scope of the ORIGINAL AGREEMENT to include (a) certain additional intellectual property which arose in the course of research conducted under YALE auspices by Dr. Slack and/or by personnel in his lab (the “INVENTORS”) related to microRNAs and owned by YALE including, without limitation, the INVENTION (the “ INVENTIONS”) and (b) certain intellectual property owned by the LICENSEE related to the INVENTIONS (collectively, the “POOLED PATENTS” as defined below).

 

1.4                               To the extent that the INVENTORS of any claims of the INVENTIONS were employees or agents of YALE at the time any of the INVENTIONS were invented (including, without limitation, the INVENTION), such INVENTORS have assigned to YALE all of their right, title and interest in and to the INVENTIONS and any resulting patents.

 

1.5                               YALE wishes to have the INVENTIONS and any resulting patents commercialized to benefit the public good.

 

1.6                               LICENSEE has represented to YALE to induce YALE to enter into this Agreement that it shall act diligently to develop and commercialize the PRODUCTS for public use throughout the LICENSED TERRITORY (as defined below).

 

1.7                               YALE is willing to grant a license to LICENSEE, subject to the terms and conditions of this Agreement.

 

1



 

1.8                               In consideration of these statements and mutual promises, YALE and LICENSEE agree to the terms of this Agreement and amend and restate, in their entirety, the terms of the ORIGINAL AGREEMENT as of the EFFECTIVE DATE.

 

Article 2.                                                DEFINITIONS

 

The following terms used in this Agreement shall be defined as set forth below:

 

2.1                               “AFFILIATE” shall mean any entity or person that directly or indirectly controls, is controlled by or is under common control with LICENSEE.  For purposes of this definition, “control” means possession of the power to direct the management of such entity or person, whether through ownership of more than fifty percent (50%) of voting securities, by contract or otherwise.

 

2.2                               “CONFIDENTIAL INFORMATION” shall mean all information disclosed by one party to the other during the negotiation of or under this Agreement in any manner, whether orally, visually or in tangible form, that relates to ALL PATENTS or the Agreement itself, unless such information is subject to an exception described in Article 8.2; provided, however, that CONFIDENTIAL INFORMATION that is disclosed in tangible form shall be marked “Confidential” at the time of disclosure and CONFIDENTIAL INFORMATION that is disclosed orally or visually shall be identified as confidential at the time of disclosure and subsequently reduced to writing, marked confidential and delivered to the other party within thirty (30) days of such disclosure.  CONFIDENTIAL INFORMATION shall include, without limitation, materials, know-how and data, technical or non-technical, trade secrets, inventions, methods and processes, whether or not patentable.  Notwithstanding any other provisions of this Article 2.2, CONFIDENTIAL INFORMATION of LICENSEE that is subject to Article 8 of this Agreement is limited to information that LICENSEE supplies pursuant to LICENSEE’s obligations under Articles 7 and 9 of this Agreement, unless otherwise mutually agreed to in writing by the parties.

 

2.3                               “EARNED ROYALTY” is defined in Article 6.1.

 

2.4                               “EFFECTIVE DATE” is defined in the introductory paragraph of this Agreement.

 

2.5                               “FDA” shall mean the United States Food and Drug Administration or any comparable regulatory authority in a country or group of countries other than the United States.

 

2.6                               “FIELD” shall mean all human therapeutic uses.

 

2.7                               “FIRST SALE” shall mean the first sale to a THIRD PARTY of any PRODUCT in any country.

 

2.8                               “ND” shall mean an investigational new drug application filed with the United States Food and Drug Administration prior to beginning clinical trials in humans in the United States or any comparable application filed with regulatory authorities in or for a country or group of countries other than the United States.

 

2.9                               “INVENTION”, “INVENTIONS”, “INVENTORS” and “INVENTOR” are defined in Article 1.1.

 



 

2.10                        “INSOLVENT” shall mean that LICENSEE (i) has ceased to pay its debts in the ordinary course of business, (ii) has current assets that are insufficient to pay its current obligations and has been in this situation for at least 12 months, (iii) is insolvent as defined by the United States Federal Bankruptcy Law, as amended from time to time, or (iv) has commenced bankruptcy, reorganization, receivership or insolvency proceedings, or any other proceeding under any Federal, state or other law for the relief of debtors.

 

2.11                        “LICENSE” refers to the licenses granted under Article 3.1.

 

2.12                        “LICENSED TERRITORY” shall mean The United States of America, including its territories and possessions, and any foreign countries where either party may have filed or obtained corresponding foreign patents or applications for one or more POOLED PATENTS.

 

2.13                        “NDA” shall mean a new drug application filed with the United States Food and Drug Administration to obtain marketing approval for a PRODUCT in the United States or any comparable application filed with a regulatory authority in or for a country or group of countries other than the United States.

 

2.14                        “NET SALES” shall mean:

 

(a)                                 gross revenues actually received from the sale, lease or other transfer or disposition of ROYALTY PRODUCTS, or from services performed using ROYALTY PRODUCTS, by LICENSEE, SUBLICENSEES or AFFILIATES to THIRD PARTIES, except as set forth in Article 2.16(b), less the following deductions, provided they actually pertain to the disposition of the ROYALTY PRODUCTS [***]:

 

(i)                                     all discounts, credits and allowances on account of returns;

 

(ii)                                  transportation and insurance; and

 

(iii)                               duties, taxes and other governmental charges levied on the import, export, sale, transportation or delivery of ROYALTY PRODUCTS, but not including revenue taxes.

 

(b)                                 No deductions shall be made for any other costs or expenses, including but not limited to [***].

 

(c)                                  “NET SALES” shall not include the gross revenues for ROYALTY PRODUCTS sold to, or services performed using ROYALTY PRODUCTS for, any AFFILIATE unless such AFFILIATE is an end-user of any ROYALTY PRODUCT, in which case such consideration shall be included in NET SALES at the [***] during the same quarter.

 

2.15                        “POOLED PATENTS” shall mean all United States and foreign patent application(s) and patents(s) listed in Exhibit A and owned or controlled in whole or in part by YALE and/or LICENSEE during the TERM of this Agreement, together with any continuations, divisionals, and continuations-in-part, to the extent the claims of any such patent or patent application are directed to subject matter specifically described in the patent applications listed on Exhibit A; any reissues, re-examinations, or extensions thereof, or substitutes therefor; and

 

[***] 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.

 



 

the relevant international equivalents of any of the foregoing.  Exhibit A shall be updated by the parties as necessary but at least on an annual basis.

 

(1)                                 It is understood that the parties will co-operate as promptly as possible after the EFFECTIVE DATE and on an on-going basis during the TERM of the Agreement, in good faith, to expeditiously determine and update as necessary, legally proper inventorship for the POOLED PATENTS.  Such determination shall involve the selection and engagement of an independent intellectual property attorney with no prior relationship to either party within [***] days following the EFFECTIVE DATE by mutual written agreement of the parties.  Such attorney shall provide to both parties a full written disclosure of any prior relationship or potential conflict with either party.  The parties shall endeavor to have the determination completed for all inventorship determinations [***] as soon as possible following the selection of the intellectual property attorney in accordance with the process set out in 2.12(2).

 

(2)                                 The attorney selected and engaged pursuant to the above this Paragraph shall be required to conduct [***] of the POOLED PATENTS to [***].  As part of his/her engagement, such attorney shall [***] upon completion of his/her analysis [***], and the parties shall request that such analysis to be completed within [***] days of the attorney’s engagement to the extent that such is practicable.  The parties agree that the determination by such attorney [***] and is [***].

 

(3)                                 The parties agree to [***] associated with the review by such attorney.

 

(4)                                 If, as a result of the procedure outlined in Article 2.12(1), it is determined that, with respect to either party to this Agreement, there is no employee or agent of that party that is a joint or sole inventor of [***] POOLED PATENT, then:  (i) that party acknowledges and agrees that it shall [***].  In such event, the [***], and (ii) in such event, LICENSEE acknowledges that, notwithstanding the result of the procedure referenced in Article 2.12(1), the results of such determination [***] in Articles 4.3, 5.1, 5.2, 6.1, 6.3, 7.3 and 11.2(a).

 

YALE and LICENSEE agree and understand that [***] as a result of the procedure referenced in Article 2.12(1) and 2.12(2) above or [***].  The parties agree that the rights licensed by YALE herein shall include whatever rights YALE has or will have to any patents or patents applications that [***] the POOLED PATENTS.

 

2.16                        “PRODUCT” shall mean any product (including any apparatus or kit) or component part thereof, the manufacture, use or sale of which would infringe a VALID CLAIM of a POOLED PATENT in a country in the LICENSED TERRITORY.

 

2.17                        “REASONABLE COMMERCIAL EFFORTS” shall mean documented efforts that are [consistent with those utilized by companies of similar size and type, in similar commercial circumstances, that are developing, or have successfully developed, products and/or services similar to PRODUCTS.  In determining REASONABLE COMMERCIAL EFFORTS with respect to a particular PRODUCT, LICENSEE may not reduce such efforts due to the competitive, regulatory or other impact of any other product or method that it owns, licenses or is developing or commercializing.

 

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2.18                        “ROYALTY PRODUCT” shall mean any PRODUCT [***], the manufacture, use or sale of which would infringe a VALID CLAIM of a POOLED PATENT in a country in the LICENSED TERRITORY and is either a LET7 PRODUCT, a MIR34 PRODUCT or a MIR16 PRODUCT.

 

(a)                                 “LET7 PRODUCT” shall mean any PRODUCT in the FIELD which contains [***] of the let-7 microRNA (miRNA) family as the [***].  For the sake of clarity it is understood that LET7 PRODUCTS shall include, without limitation, any PRODUCT which comprises [***].

 

(b)                                 “MIR34 PRODUCT” shall mean any PRODUCT in the FIELD which contains [***] of the miR-34 microRNA (miRNA) family as the [***] which may or may not be [***], provided that any additional miRNA may not be [***].  For the sake of clarity it is understood that MIR34 PRODUCTS shall include, without limitation, any PRODUCT which comprises [***].

 

(c)                                  “MIR16 PRODUCT shall mean any PRODUCT in the FIELD which contains [***] of the miR-16 microRNA (miRNA) family as the [***] which may or may not be [***], provided that any [***] may not be a [***].

 

2.19                        “SUBLICENSE REVENUES” shall mean the gross revenues actually received by LICENSEE or an AFFILIATE from any SUBLICENSEE in connection with the grant of or the option to a grant of a sublicense or other right, license, privilege or immunity under the POOLED PATENTS to make, have made, use, sell, have sold, distribute, import or export ROYALTY PRODUCTS, but excluding consideration included within NET SALES.  SUBLICENSE REVENUE shall include without limitation [***], provided that SUBLICENSE REVENUE excludes specifically any amounts received by LICENSEE from a SUBLICENSEE (1) as [***], (2) [***], (3) as [***] LICENSEE.

 

2.20                        “SUBLICENSEE” shall mean any THIRD PARTY sublicensed by LICENSEE to make, have made, use, sell, have sold, import or export any of the PRODUCTS.

 

2.21                        “TERM” is defined in Article 3.4.

 

2.22                        “THIRD PARTY(IES)” shall mean any person other than YALE and LICENSEE or their respective AFFILIATES.

 

2.23                        “THIRD PARTY LICENSE(S)” is defined in Article 4.3(d).

 

2.24                        “VALID CLAIM” shall mean (a) subject to subsection (b), an issued and unexpired claim of a POOLED PATENT existing as of the EFFECTIVE DATE so long as such claim shall not have been irrevocably abandoned or declared to be invalid in an unappealable decision of a court or other authority or competent jurisdiction, or (b), if within [***] after the EFFECTIVE DATE, a pending claim of a POOLED PATENT existing as of the EFFECTIVE DATE, provided that such pending claim [***] at the time of the relevant event; and further provided that, if such claim shall ultimately issue, such claim shall be considered a VALID CLAIM but [***] date of issuance.  For the sake of clarity, it is understood that in order to

 

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qualify or potentially qualify as a VALID CLAIM, a claim of a POOLED PATENT must be [***].

 

Article 3.                                                LICENSE GRANT AND TERM

 

3.1                               Subject to all the terms and conditions of this Agreement, YALE hereby grants to LICENSEE an exclusive license, with the right to sublicense, under the POOLED PATENTS to the extent of YALE’s rights therein, to make, have made, use, sell, have sold, import or export PRODUCTS in the FIELD in the LICENSED TERRITORY.

 

3.2                               To the extent that any invention included within the POOLED PATENTS which is owned in whole or in part by YALE has been funded in whole or in part by the United States government (“Yale US Gov’t Funded Pooled Patents”), the United States government retains certain rights in such invention as set forth in 35 U.S.C. §200-212 and all regulations promulgated thereunder, as amended, and any successor statutes and regulations (the “Federal Patent Policy”).  As a condition of the license granted hereby, LICENSEE acknowledges and shall comply with all aspects of the Federal Patent Policy applicable to the Yale US Gov’t Funded Pooled Patents, including the obligation that PRODUCTS used or sold in the United States which are covered by one of more Yale US Gov’t Funded Pooled Patents at the time of such use or sale be manufactured substantially in the United States.  Nothing contained in this Agreement obligates or shall obligate YALE to take any action that would conflict in any respect with its past, current or future obligations to the United States Government under the Federal Patent Policy with respect to Yale US Gov’t Funded Pooled Patents.

 

3.3                               The LICENSE is expressly made subject to YALE’s reservation of the right to make, use and practice the POOLED PATENTS (but only to the extent of YALE’s rights therein) and PRODUCTS (but only to the extent of YALE’s rights therein) for research, clinical, teaching or other non-commercial purposes, and to grant to other academic research institutions non-exclusive licenses to the POOLED PATENTS (but only to the extent of YALE’s rights therein) and PRODUCTS (but only to the extent of YALE’s rights therein) for research, clinical, or teaching purposes and not for purposes of commercial development, use, manufacture or distribution.  LICENSEE shall use REASONABLE COMMERCIAL EFFORTS to [***].  Nothing in this Agreement shall be construed to grant by implication, estoppel or otherwise any licenses under patents of YALE other than the POOLED PATENTS.

 

3.4                               Unless terminated earlier as provided in Article 13, the term of this Agreement (the “TERM”) shall commence on the EFFECTIVE DATE and shall automatically expire, on a country-by-country basis in the LICENSED TERRITORY, on the date on which the last VALID CLAIM of the POOLED PATENTS, whether owned in whole or in part by YALE or LICENSEE, in such country expires, lapses or is declared to be invalid by a non-appealable decision of a court or other authority of competent jurisdiction through no fault or cause of LICENSEE, and LICENSEE’S payment obligations shall also terminate on such date in such country.  This Agreement shall terminate in its entirety on the date on which the last VALID CLAIM of the POOLED PATENTS, whether owned in whole or in part by YALE or LICENSEE, in all countries of the LICENSED TERRITORY expires, lapses or is declared to be invalid by a non-appealable decision of a court or other authority of competent jurisdiction through no fault or cause of LICENSEE.  Notwithstanding the foregoing, all of LICENSEE’s

 

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payment obligations shall survive any early termination of this Agreement pursuant to Article 13 as set forth in Article 13.4(c), and such payment obligations shall expire until the earlier of the events to occur in Article 6.1.(d) (i) for each ROYALTY PRODUCT except that LICENSEE shall have no such payment obligations in the event of LICENSEE’S termination due to breach by YALE under Article 13.3(b) in which case the payment obligations shall terminate on the effective date of LICENSEE’S termination.

 

3.5                               Except as expressly provided in this Agreement, under no circumstances will either party, as a result of this Agreement, obtain any interest in or any other right to any technology, know-how, patents, patent applications, materials or other intellectual or proprietary property of the other party.

 

Article 4.                                                SUBLICENSES

 

4.1                               In the event LICENSEE sublicenses the rights granted to it under this Agreement the provisions of Articles 4.2, 4.3 and 4.4 shall apply.

 

4.2                               Any sublicense granted by LICENSEE shall include substantially the same definitions and provisions regarding Due Diligence, Confidentiality and Publicity, Reporting Requirements, Indemnification, Insurance and Warranties, Patent Notices and Use of YALE’s Name, as are agreed to in this Agreement, and such other provisions as are needed to enable LICENSEE to comply with this Agreement.  LICENSEE will provide YALE with a copy of each Sublicense Agreement promptly after execution.  LICENSEE shall remain responsible for the enforcement of all sublicense agreements including but not limited to payment of any royalties other payments provided for hereunder, regardless of whether the terms of any sublicense provide for such amounts to be paid by the SUBLICENSEE directly to YALE.

 

4.3                               LICENSEE shall pay [***] SUBLICENSEES to LICENSEE under a sublicense agreement.  In addition, based on the particular ROYALTY PRODUCT, LICENSEE shall pay to YALE a certain percentage of any SUBLICENSE REVENUE from sublicenses [***] executed between LICENSEE and a THIRD PARTY [***] and a certain percentage of any SUBLICENSE REVENUE from sublicenses [***] executed between LICENSEE and a THIRD PARTY [***] as follows:

 

(a)                                 [***] PRODUCTS, the manufacture, use or sale of which would infringe a

 

VALID CLAIM of one or more POOLED PATENTS [***] at the time of the execution of the sublicense between LICENSEE and a THIRD PARTY:

 

(i)                                     [***]

 

(ii)                                  [***]

 

(b)                                 [***] PRODUCTS or [***] PRODUCTS, the manufacture, use or sale of which would infringe a VALID CLAIM of one or more POOLED PATENTS [***] at the time of the execution of the sublicense between LICENSEE and a THIRD PARTY:

 

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(i)                                     [***]

 

(ii)                                  [***]

 

(c)                                  [***] PRODUCTS, [***], the manufacture, use or sale of which would infringe a VALID CLAIM of one or more POOLED PATENTS, [***] at the time of the execution of the sublicense between LICENSEE and a THIRD PARTY:

 

(i)                                     [***]

 

(d)                                 In the event that during the term of the Agreement, LICENSEE or its AFFILIATES are required to pay SUBLICENSE REVENUE for [***] PRODUCTS, and at least one of which is [***], or which are [***], the parties shall [***] PRODUCTS under this Article 4.3.

 

(e)                                  for the sake of clarity, it is understood that, in the event the ROYALTY PRODUCT that is the subject of the SUBLICENSE REVENUE paid to LICENSEE is [***] at the time the event occurs which triggers the obligation for the relevant THIRD PARTY to pay SUBLICENSE REVENUE to LICENSEE, then [***].

 

4.4                               LICENSEE agrees that it has sole responsibility to promptly:

 

(a)                                 provide YALE with a copy of any amendments to sublicenses granted by LICENSEE under this Agreement and to notify YALE of termination of any sublicense; and

 

(b)                                 provide copies of all reports prepared by SUBLICENSEES for LICENSEE under this Agreement.

 

Article 5.                                                LICENSE ISSUE ROYALTY;
LICENSE MAINTENANCE ROYALTY; MILESTONE FEES

 

5.1                               During the TERM of this Agreement for as long as at least one ROYALTY PRODUCT is being researched, developed or sold by LICENSEE, its AFFILIATES and/or its SUBLICENSEES, the manufacture, use or sale of which is covered by one or more VALID CLAIMS of one or more POOLED PATENTS [***], LICENSEE agrees to pay to YALE an annual license maintenance royalty (“LMR”) commencing on the first anniversary of the EFFECTIVE DATE and every anniversary thereafter until [***].  The LMR shall be [***].

 

5.2                               (a) LICENSEE shall pay the following milestone fees to YALE for each [***] PRODUCT developed by LICENSEE, its SUBLICENSEES, or AFFILIATES, the manufacture, use or sale of which would infringe a VALID CLAIM of one or more POOLED PATENTS that is [***]:

 

(i)                                     a non-refundable milestone fee of [***].

 

(ii)                                  a non-refundable milestone fee of [***].

 

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(b)                                 LICENSEE shall pay the following milestone fees to YALE for each [***] PRODUCT developed by LICENSEE, its SUBLICENSEES, or AFFILIATES, the manufacture, use or sale of which would infringe a VALID CLAIM of one or more POOLED PATENTS at the time the milestone occurs, [***]:

 

(i)                                     a non-refundable milestone fee of [***].

 

(ii)                                  a non-refundable milestone fee of [***].

 

(c)                                  Each such milestone fee shall be due [***] for a [***] PRODUCT [***]. No milestone fee shall be owed to YALE for any PRODUCT under this Section 5.2 [***].

 

(d)                                 for the sake of clarity, it is understood that, in the event the [***] PRODUCT that is the subject of the relevant milestone event is not covered at the time the milestone event occurs by one or more VALID CLAIMS, then LICENSEE shall not owe any payment to YALE for the achievement of such milestone.

 

5.3                               [***].

 

Article 6.                                                EARNED ROYALTIES:  MINIMUM ROYALTY PAYMENTS

 

6.1                               During the TERM of this Agreement, as partial consideration for the LICENSE, LICENSEE shall pay to YALE an earned royalty on NET SALES of ROYALTY PRODUCTS by LICENSEE or its SUBLICENSEES or AFFILIATES in any country of the LICENSED TERRITORY as follows (“EARNED ROYALTIES”):

 

(a)                                 LICENSEE shall pay to YALE an EARNED ROYALTY of [***] of the NET SALES of each [***] PRODUCT in all countries of the LICENSED TERRITORY where there is at least one VALID CLAIM of one or more POOLED PATENTS [***] PRODUCT sold in such country at the time of the sale.

 

(b)                                 LICENSEE shall pay to YALE an EARNED ROYALTY of [***] of the NET SALES of each [***] PRODUCT in all countries of the LICENSED TERRITORY where there is at least one VALID CLAIM of one or more POOLED PATENTS [***] PRODUCT sold in such country at the time of the sale, [***].

 

(c)                                  LICENSEE shall pay to YALE an EARNED ROYALTY of [***] of the NET SALES of each [***] PRODUCT in all countries of the LICENSED TERRITORY where there is at least one VALID CLAIM of one or more POOLED PATENTS [***] PRODUCT sold in such country at the time of the sale.

 

(d)                                 LICENSEE shall pay to YALE an EARNED ROYALTY of [***] of the NET SALES of each [***] PRODUCT in all countries of the LICENSED TERRITORY where there is at least one VALID CLAIM of one or more POOLED PATENTS [***] PRODUCT sold in such country at the time of the sale, [***].

 

provided that:

 

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(i)                                     the obligation to pay an EARNED ROYALTY shall terminate, on a ROYALTY PRODUCT by ROYALTY PRODUCT and country by country basis in the LICENSED TERRITORY, upon the earlier of (a) the expiration or invalidation of the last VALID CLAIM of a POOLED PATENT that covers the particular ROYALTY PRODUCT in the particular country, or (b) the launch of a generic version [***] ROYALTY PRODUCT in such country, provided such generic version has been approved by the regulatory authorities in such country.

 

(ii)                                  Notwithstanding the above, if during the term of the Agreement, LICENSEE, its AFFILIATES and/or its SUBLICENSEES are required to pay royalties on sales of ROYALTY PRODUCTS to a THIRD PARTY licensor in order to avoid infringing such THIRD PARTY’s patent(s) in the development, manufacture and/or sale of ROYALTY PRODUCTS under this Agreement (“THIRD PARTY LICENSE(S)”), [***] under the THIRD PARTY LICENSES shall be deducted from the EARNED ROYALTY for ROYALTY PRODUCTS owed to YALE [***], provided that:

 

a                                         In the event that the NET SALES of a particular ROYALTY PRODUCT which is the subject of the royalty obligation under THIRD PARTY LICENSES during such period is covered by one or more VALID CLAIMS of a POOLED PATENT [***], then (i) if the particular ROYALTY PRODUCT is [***] PRODUCT, the amount of royalties payable by the LICENSEE to YALE for the NET SALES for [***] of such NET SALES, and (b) if the particular ROYALTY PRODUCT is a [***] PRODUCT, the amount of royalties payable by the LICENSEE to YALE for the NET SALES for [***] of such NET SALES,

 

b                                         In the event that the NET SALES of a particular ROYALTY PRODUCT which is the subject of the royalty obligation under THIRD PARTY LICENSES during [***] is covered by one or more VALID CLAIMS of a POOLED PATENT, [***], then the amount of royalties payable by the LICENSEE to YALE for the NET SALES for such period shall [***] of such NET SALES.

 

6.2                               LICENSEE shall pay all EARNED ROYALTIES accruing to YALE within [***] days from the end of each calendar quarter (March 31, June 30, September 30 and December 31), beginning in the first calendar quarter in which NET SALES occur.

 

6.3                               During the TERM of this Agreement, LICENSEE agrees to pay YALE annual Minimum Royalty Payments (“MRP”) with respect to [***] PRODUCTS [***], consistent with LICENSEE’S obligations under Article 6.2, above, commencing in [***] following the date of the first sale of a [***] PRODUCT that results in NET SALES (“FIRST NET SALES”).  The MRP shall be in the annualized amount of [***] twelve (12) month periods following the FIRST NET SALES, and shall [***] to an annualized amount of [***] twelve (12) months periods following FIRST NET SALES and [***] every twelve (12) month period thereafter.  LICENSEE shall continue to pay the MRP so long as any one of [***] PRODUCTS being manufactured, used or sold in the United States would infringe one or more VALID CLAIMS of any POOLED PATENTS in the United States [***] at the time of the sale, YALE shall fully credit all MRP made against any EARNED ROYALTIES on [***] PRODUCTS payable by LICENSEE in [***] twelve (12) month period.

 

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6.4                               All EARNED ROYALTIES and other payments due under this Agreement shall be paid to YALE in United States Dollars.  Conversion of foreign currency to U.S. dollars shall be made at the conversation rate existing in the United States in amounts based on the average rate of exchange for the reporting period as calculated on the Web site www.oanda.com.  If the www.oanda.com Web site is not available, LICENSEE will use the conversion rate as reported in the Wall Street Journal on the last working day of the royalty period.  If overdue, the royalties and any other payments due under this Agreement shall bear interest until payment at a [***] and YALE shall be entitled to [***].  The payment of such interest shall not foreclose YALE from exercising any other right it may have as a consequence of the failure of LICENSEE to make any payment when due.

 

Article 7.                                                DUE DILIGENCE

 

7.1                               LICENSEE shall use all REASONABLE COMMERCIAL EFFORTS after the EFFECTIVE DATE of this Agreement, at its sole expense, to diligently commercialize [***] the PRODUCTS,

 

7.2                               Within [***] days after each anniversary of the EFFECTIVE DATE of this Agreement, LICENSEE shall provide a written report to YALE indicating LICENSEE’s [***] developing and commercializing [***] PRODUCTS.

 

7.3                               Subject to Article 7.4, and only for so long as [***] POOLED PATENTS which has a VALID CLAIM which would be infringed by a ROYALTY PRODUCT (i.e., a LET7 PRODUCT, a MIR34 PRODUCT or a MIR16 PRODUCT), YALE shall have the right to terminate the AGREEMENT with respect to the relevant ROYALTY PRODUCT category (but not with respect to any other ROYALTY PRODUCT category or any other PRODUCTS) as follows:

 

(a)                                 If LICENSEE has [***] for [***] within [***] after the EFFECTIVE DATE, LICENSEE may extend such time period by [***] by paying YALE [***] within [***] days after the [***] anniversary of the EFFECTIVE DATE, and may further extend such time period by [***] by paying YALE [***] within [***] days after the [***] anniversary of the EFFECTIVE DATE, and may further extend such time period by [***] by paying YALE [***] within [***] days after the [***] anniversary of the EFFECTIVE DATE.  In the event that LICENSEE has [***] within the relevant timeframe (or extension of such, as provided above), YALE may terminate this AGREEMENT with respect to [***], provided, however, that YALE has (1) notified LICENSEE in writing of YALE’S intention to terminate the AGREEMENT with respect to [***], (2) given LICENSEE [***] days to respond to YALE’s written notice, and (3) if requested by LICENSEE, given LICENSEE [***] within such timeframe.  If the [***] is beyond LICENSEE’S reasonable control, YALE shall [***] for an additional time extension to enable LICENSEE to [***], provided that [***].

 

(b)                                 If LICENSEE does not demonstrate [***] for [***] PRODUCTS, YALE may terminate this AGREEMENT with respect to [***], provided, however, that YALE has (1) notified LICENSEE in writing of YALE’s intention to terminate the AGREEMENT with respect to [***], (2) given LICENSEE [***] days to respond to YALE’s written notice, and (3) if requested by LICENSEE, given LICENSEE [***] has not been demonstrated.  If the

 

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demonstration of such [***] is beyond LICENSEE’s reasonable control, YALE shall [***] for an additional time extension to enable LICENSEE to [***], provided that [***].

 

(c)                                  If after [***], LICENSEE does not demonstrate [***] for [***] PRODUCTS, YALE may terminate this AGREEMENT with respect to [***] only, but not with respect to [***], provided, however, that YALE has (1) notified LICENSEE in writing of YALE’s intention to terminate the AGREEMENT with respect to [***], (2) given LICENSEE [***] days to respond to YALE’s written notice, and (3) if requested by LICENSEE, given LICENSEE [***] has not been demonstrated.  If the demonstration of [***] is beyond LICENSEE’S reasonable control, YALE shall [***] for an additional time extension to enable LICENSEE to [***], provided that YALE [***].

 

7.4                               LICENSEE and YALE may at any time mutually agree in writing to amend the date [***] under Article 7.3, above.

 

7.5                               LICENSEE shall immediately notify YALE if at any time LICENSEE (a) abandons or suspends, or intends to abandon or suspend, its research, development or marketing of [***] PRODUCTS, or (b) fails to comply with its due diligence obligations under this Article for a period exceeding [***].  In such event, this Agreement shall terminate with respect to that category of ROYALTY PRODUCTS only, and not with respect to any other category of ROYALTY PRODUCTS or any other PRODUCTS.

 

Article 8.                                                CONFIDENTIALITY AND PUBLICITY

 

8.1                               Subject to the parties’ rights and obligations pursuant to this Agreement, YALE and LICENSEE agree that during the TERM of this Agreement and for [***] years thereafter, each of them:

 

(a)                                 will keep confidential and will cause their AFFILIATES and, in the case of LICENSEE, its SUBLICENSEES, to keep confidential, CONFIDENTIAL INFORMATION disclosed to it by the other party, by taking whatever action the party receiving the CONFIDENTIAL INFORMATION would take to preserve the confidentiality of its own CONFIDENTIAL INFORMATION, which in no event shall be less than reasonable care; and

 

(b)                                 will only disclose that part of the other’s CONFIDENTIAL INFORMATION to its officers, employees or agents that is necessary for those officers, employees or agents who need to know to carry out its responsibilities under this Agreement; and

 

(c)                                  will not use the other party’s CONFIDENTIAL INFORMATION other than as expressly set forth in this Agreement or disclose the other’s CONFIDENTIAL INFORMATION to any THIRD PARTIES under any circumstance without advance written permission from the other party; and

 

(d)                                 will, within [***] days of termination of this Agreement, return all the CONFIDENTIAL INFORMATION disclosed to it by the other party pursuant to this Agreement except for one copy which may be retained by the recipient for monitoring compliance with this Article 8.

 

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8.2                               The obligations of confidentiality described above shall not pertain to that part of the CONFIDENTIAL INFORMATION that:

 

(a)                                 was known to the recipient prior to the disclosure by the disclosing party; or

 

(b)                                 is at the time of disclosure or has become thereafter publicly known through no fault or omission attributable to the recipient; or

 

(c)                                  is rightfully given to the recipient from sources independent of the disclosing party; or

 

(d)                                 is independently developed by the receiving party without use of or reference to the CONFIDENTIAL INFORMATION of the other party; or

 

(e)                                  is required to be disclosed by law in the opinion of recipient’s attorney, but only after the disclosing party is given prompt written notice and an opportunity to seek a protective order.

 

8.3                               Except as required by law, neither party may disclose the financial terms of this Agreement without the prior written consent of the other party, however LICENSEE may disclose such financial terms to potential investors in LICENSEE who have agreed to respect the confidentiality of such information.

 

8.4                               Except as otherwise provided in Article 8.3, no public announcement or other disclosure to THIRD PARTIES concerning the existence or terms of this AGREEMENT shall be made by either Party, except to the extent legally required, without first obtaining the written approval and agreement of the other Party on the nature and text of such public announcement or disclosure.

 

Article 9.                                                REPORTS, RECORDS AND INSPECTIONS

 

9.1                               LICENSEE shall, within [***] days after the calendar year in which NET SALES first occur, and within [***] days after each calendar quarter (March 31, June 30, September 30 and December 31) thereafter, provide YALE with a written report detailing the NET SALES and uses, if any, made by LICENSEE, its SUBLICENSEES and AFFILIATES of ROYALTY PRODUCTS during the preceding calendar quarter and calculating the payments due pursuant to Article 6.  NET SALES of ROYALTY PRODUCTS shall be deemed to have occurred on the date of invoice for such above-mentioned PRODUCTS. Each such report shall be signed by an officer of LICENSEE (or the officer’s designee), and must include:

 

(a)                                 a calculation of NET SALES for the applicable reporting period in each country, including the gross invoice prices charged for the ROYALTY PRODUCTS and any permitted deductions made pursuant to Article 2.16;

 

(b)                                 a calculation of total royalties or other payment due, including any exchange rates used for conversion; and

 

[***] 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.

 



 

(c)                                  names and addresses of all SUBLICENSEES and the type and amount of any SUBLICENSE REVENUE received from each SUBLICENSEE.

 

9.2                               LICENSEE and its SUBLICENSEES shall keep and maintain complete and accurate records and books containing an accurate accounting of all data in sufficient detail to enable verification of EARNED ROYALTIES and other payments under this Agreement. LICENSEE shall preserve such books and records for [***] years after the calendar year to which they pertain.  Such books and records shall be open to inspection by an independent certified public accountant selected by YALE and agreed upon by LICENSEE, at YALE’S expense, during normal business hours upon [***] days prior written notice, solely for the purpose of verifying the accuracy of the reports and computations rendered by LICENSEE.  In the event LICENSEE underpaid the amounts due to YALE with respect to the audited period by more than [***], LICENSEE shall pay the reasonable cost of such examination, together with the deficiency not previously paid, within [***] days of receiving notice thereof from YALE.  Such audits will be scheduled at the mutual convenience of the parties and no more often than annually.  YALE agrees that its aforementioned independent certified public accountant shall be under an obligation of confidentiality at least as restrictive as those confidentiality obligations set forth in this Agreement.

 

Article 10.                                         PATENT PROTECTION

 

10.1                        LICENSEE shall be responsible for all costs of filing, prosecution and maintenance of all United States patents and patent applications contained in POOLED PATENTS incurred after the EFFECTIVE DATE.  LICENSEE shall be responsible for all costs of filing, prosecution and maintenance of all foreign patent applications and patents contained in the POOLED PATENTS provided that, to the extent such POOLED PATENTS are [***], LICENSEE shall bear such costs [***], and wherein such costs were incurred after the EFFECTIVE DATE.

 

10.2                        YALE’s ownership interest in the POOLED PATENTS shall remain with YALE and LICENSEE’s ownership interest in the POOLED PATENTS shall remain with LICENSEE.

 

10.3                        If LICENSEE does not agree to pay the expenses of filing, prosecuting or maintaining a POOLED PATENT owned in whole or in part by YALE in any country outside the United States, or fails to pay the expenses of filing, prosecuting or maintaining a POOLED PATENT owned in whole or in part by YALE in the United States, then [***].  In the event that LICENSEE decides to abandon or discontinue paying the expenses of filing, prosecuting or maintaining any of the POOLED PATENTS owned in whole or in part by LICENSEE, then LICENSEE shall promptly inform YALE of such decision, and in no event less than [***] days before any deadline necessary to maintain patent rights with that particular POOLED PATENT.  YALE may then elect, at its sole discretion and its sole expense, to continue to prosecute or maintain such POOLED PATENT.  In such event, LICENSEE shall provide reasonable cooperation to YALE at YALE’s sole expense.  Nothing in this Agreement shall be construed to grant (by implication, estoppel or otherwise) any licenses to YALE under any patents owned or controlled by LICENSEE including, without limitation, any POOLED PATENTS owned in whole or part by LICENSEE, whether or not abandoned by LICENSEE and/or subsequently prosecuted or maintained by YALE under this Article.

 

[***] 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.

 



 

10.4                        Patent Prosecution/Maintenance

 

(a)                                 All patent applications falling under the definition of POOLED PATENTS which are owned solely by YALE herein shall be prepared, prosecuted, filed and maintained by patent counsel chosen by YALE and reasonably acceptable to LICENSEE.  Said patent counsel shall be ultimately responsible to YALE but YALE shall consult with LICENSEE on all matters associated with the preparation, prosecution, filing and maintenance of such patent applications though the ultimate decision making authority on such matters shall reside with YALE.

 

(b)                                 All patent applications falling under the definition of POOLED PATENTS which are owned solely by LICENSEE or jointly by LICENSEE and YALE shall be prepared, prosecuted, filed and maintained by patent counsel chosen by LICENSEE and reasonably acceptable to YALE.  Said patent counsel shall be ultimately responsible to LICENSEE, but LICENSEE shall consult with YALE on all matters associated with the preparation, prosecution, filing and maintenance of such patent applications though the ultimate decision making authority on such matters shall reside with LICENSEE.  Notwithstanding the foregoing, in the case of POOLED PATENTS that are [***], LICENSEE shall not take any actions that [***] such POOLED PATENT, to the extent that such action would result in (i) [***] and/or (ii) the [***], without YALE’s prior written approval, such approval not to be unreasonably withheld or delayed.  In the event the parties do not agree on the appropriate action to be taken within [***] after submission of the proposed action to YALE by LICENSEE, the parties will submit the matter to an independent intellectual property attorney [***] within [***] days following the date the parties determine that they cannot agree on the action to be taken, provided that the parties shall use the same intellectual property attorney they used for the inventorship determination under Article 2.15 if such attorney is available and if he/she does not have, at that time, [***].  The attorney selected and engaged pursuant to the above shall be required to complete his/her analysis of the action to be taken within [***] of the attorney’s engagement to the extent that such is practicable.  The parties agree that the determination by such attorney [***] and is purely an effort to [***] and the parties further agree that [***].  The parties agree to [***] associated with the review by such attorney.

 

(c)                                  YALE and LICENSEE shall instruct patent counsel respectively responsible to them to keep both YALE and LICENSEE fully informed of the progress of all patent applications and patents, and to give both YALE and LICENSEE reasonable opportunity to consult and comment on the type and scope of useful claims, the nature of supporting disclosures and the decisions as to filing and maintenance of resulting patent applications and issued patents.

 

(d)                                 Neither party shall have any liability to the other party for damages, whether direct, indirect or incidental, consequential or otherwise, allegedly arising from such Party’s good faith decisions, actions and omissions in connection with the preparation, prosecution, filing or maintenance of any patent application.

 

10.5                        LICENSEE shall mark, and shall require SUBLICENSEES to mark, all ROYALTY PRODUCTS in the LICENSED TERRITORY with the numbers of POOLED PATENTS that cover the ROYALTY PRODUCTS (but this obligation shall apply only to the extent a POOLED PATENT is owned in whole or in part by YALE).  Without limiting the

 

[***] 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.

 



 

foregoing, all ROYALTY PRODUCTS shall be marked in such a manner as to conform with the patent marking notices required by the law of any country where such ROYALTY PRODUCTS are made, sold, used or shipped, including, but not limited to, the applicable patent laws of that country.

 

Article 11.                                         INFRINGEMENT AND LITIGATION

 

11.1                        Each party shall promptly notify the other in writing in the event that it obtains knowledge of infringing activity by THIRD PARTIES, or is sued or threatened with an infringement suit, in any country in the LICENSED TERRITORY as a result of activities that concern the POOLED PATENTS and shall supply the other party with documentation of the infringing activities that it possesses.

 

11.2                        During the TERM of this Agreement:

 

(a)                                 LICENSEE shall have the first right and obligation to enforce the POOLED PATENTS against infringement or interference in the FIELD and in the LICENSED TERRITORY by THIRD PARTIES.  This right and obligation includes bringing any legal action for infringement and defending any counter claim of invalidity or action of a THIRD PARTY for declaratory judgment for non-infringement or non-interference.  If, in the reasonable opinion of LICENSEE’S and YALE’s respective counsel, or if required by a court, YALE is required to be a named party to any such suit for standing purposes, LICENSEE may identify YALE as a party in the initial complaint or later join YALE as a party; provided, however, that (i) YALE shall not be the first named party in any such action, (ii) the pleadings and any public statements about the action shall state that the action is being pursued by LICENSEE and that LICENSEE has joined YALE as a party; and (iii) LICENSEE shall keep YALE reasonably apprised of all developments in any such action.  LICENSEE may settle such suits solely in its own name and solely at its own expense and through counsel of its own selection; provided, however, that no settlement that requires [***] shall be entered without YALE’s prior written consent.  Settlements that do not [***] may be made at the sole discretion of LICENSEE.  LICENSEE shall bear the expense of such legal actions.  Except for providing reasonable assistance, at the request and expense of LICENSEE, YALE shall have no obligation regarding the legal actions described in Article 11.2 unless required to participate by law.  However, YALE shall have the right to participate in any such action through its own counsel and at its own expense.  Any recovery related to POOLED PATENTS owned in whole or in part by YALE shall [***].  YALE shall receive [***] of any excess recovery over those expenses with respect [***].  With regard to POOLED PATENTS [***], YALE shall have [***] related thereto.

 

(b)                                 In the event LICENSEE fails to initiate and pursue or participate in the actions described in Article 11.2(a) with respect to a POOLED PATENT owned in whole or in part by YALE within [***] days of (i) notification of infringement from YALE, or (ii) the date LICENSEE otherwise first becomes aware of an infringement, whichever is earlier, YALE shall have the right to initiate such legal action at its own expense and YALE may use the name of LICENSEE as party plaintiff to uphold the particular POOLED PATENT.  In such case, LICENSEE shall provide reasonable assistance to YALE if requested to do so.  With regard to POOLED PATENTS owned solely by YALE, YALE may settle such actions solely through its own counsel, provided that any such settlement does not involve cash or other valuable

 

[***] 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.

 



 

consideration to be paid by LICENSEE.  Any recovery shall be [***], and secondly to [***] incurred as a result of [***].  With regard to POOLED PATENTS [***], YALE may not settle such actions without the prior written consent of LICENSEE, and any recovery shall be [***].

 

11.3                        In the event LICENSEE is permanently enjoined from exercising its LICENSE under this Agreement pursuant to an infringement action brought by a THIRD PARTY, or if both LICENSEE and YALE elect not to undertake the defense or settlement of a suit alleging infringement for a period of [***] from notice of such suit, then either party shall have the right to terminate this Agreement in the country where the suit was filed with respect to the licensed patent following [***] written notice to the other party in accordance with the terms of Article 15.

 

Article 12.                                         USE OF YALE’S NAME

 

12.1                        LICENSEE shall not use the name “Yale” or “Yale University,” nor any variation or adaptation thereof, nor any trademark, trade name or other designation owned by YALE, nor the names of any of its trustees, officers, faculty, students, employees or agents, for any purpose without the prior written consent of YALE in each instance, except that LICENSEE may state that it has licensed from YALE one or more of the patents and/or applications comprising the POOLED PATENTS.

 

Article 13.                                         TERMINATION AND
EXPIRATION

 

13.1                        YALE shall have the right to terminate this Agreement after written notice to LICENSEE in the event LICENSEE:

 

(a)                                 fails to make any material payment due and payable pursuant to this Agreement unless LICENSEE shall make all such payments (and all interest due on such payments under Article 6.4) within the thirty (30) day period after receipt of written notice from YALE; or

 

(b)                                 commits a material breach of any other provision of this Agreement which is not cured (if capable of being cured) within the sixty (60) day period after receipt of written notice thereof from YALE, or upon receipt of such notice if such breach is not capable of being cured; or

 

(c)                                  fails to obtain or maintain adequate insurance as described in Article 14, whereupon YALE may terminate this Agreement immediately upon written notice to LICENSEE.

 

13.2                        This Agreement shall terminate automatically without any notice to LICENSEE in the event LICENSEE shall cease to carry on its business or becomes INSOLVENT, or a petition in bankruptcy is filed against LICENSEE and is consented to, acquiesced in or remains undismissed for sixty (60) days, or LICENSEE makes a general assignment for the benefit of creditors, or a receiver is appointed for LICENSEE.

 

[***] 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.

 



 

13.3                        LICENSEE shall have the right to terminate this Agreement upon written notice to YALE:

 

(a)                                 at any time on three (3) months’ notice to YALE, provided LICENSEE is not in breach and upon payment of all amounts due YALE throughout the effective date of termination; or

 

(b)                                 in the event YALE commits a material breach of any of the provisions of this Agreement and such breach is not cured (if capable of being cured) within the sixty (60) day period after receipt of written notice thereof from LICENSEE, or upon receipt of such notice if such breach is not capable of being cured,

 

13.4                        Upon termination of this Agreement for any reason, all rights and licenses granted to LICENSEE under the terms of this Agreement are terminated.  Upon such termination, and subject to Article 13.4, YALE may elect, in its sole discretion, to cause LICENSEE, its SUBLICENSEES, or AFFILIATES to immediately cease to manufacture or sell some or all ROYALTY PRODUCTS.  Within sixty (60) days after the effective date of termination LICENSEE shall return to YALE:

 

(a)                                 all materials relating to or containing the POOLED PATENTS and CONFIDENTIAL INFORMATION disclosed by YALE;

 

(b)                                 the last report required under Article 7 or 9; and

 

(c)                                  all payments incurred up to the effective date of termination. LICENSEE’S payment obligations under the Agreement shall terminate upon the effective date of termination except with respect to payments incurred prior to such effective date. Notwithstanding the foregoing, in the event that YALE elects to allow LICENSEE, its SUBLICENSEES, or AFFILIATES to continue to manufacture and sell ROYALTY PRODUCTS, LICENSEE (or its SUBLICENSEES or AFFILIATES) shall continue to pay royalties to YALE until the earlier of the events to occur in Article 6.1(d)(i) for each such ROYALTY PRODUCT.

 

Also upon termination of this Agreement, all sublicenses to the POOLED PATENTS that are granted by LICENSEE pursuant to this Agreement shall also terminate on the date of termination of this Agreement subject to Article 13.4(c).  Notwithstanding the foregoing, each SUBLICENSEE shall have the continuing obligation to pay EARNED ROYALTIES to YALE on any ROYALTY PRODUCT (including those covered only by POOLED PATENTS owned solely by LICENSEE) after any such termination, and shall continue until the earlier of the events to occur in Article 6.1(d)(í) for each such ROYALTY PRODUCT.

 

13.5                        Termination of this Agreement shall not affect any rights or obligations accrued prior to the effective date of such termination and specifically LICENSEE’s obligation to pay all royalties and other payments specified by Articles 4, 5 and 6.  The following provisions shall survive any termination:  Article 3.4 (with respect to post early termination payment obligations), Article 3.5, Article 8.1 (for the time period set forth therein), Articles 8.2 through 8.4, the preservation and inspection obligations of Article 9, Article 10.2, Article 10.4(d), Article 11 (with respect to litigation initiated prior to the effective date of termination), Article 12,

 


 

Article 13.4, this Article 13.5, Article 13.6, Article 13.8 (with respect to post early termination payment obligations), Article 14, Article 15, Article 16.1, and Article 17.  In addition, any provision hereof required to interpret and enforce the parties’ rights and obligations under this Agreement shall survive, but only to the extent required for the full observation and performance of this Agreement.  The parties agree that claims giving rise to indemnification may arise after the TERM or termination of the LICENSE granted herein.

 

13.6                        The rights provided in this Article 13 shall be in addition and without prejudice to any other rights which the parties may have with respect to any default or breach of the provisions of this Agreement.

 

13.7                        Waiver by either party of one or more defaults or breaches shall not deprive such party of the right to terminate because of any subsequent default or breach.

 

13.8                        The TERM of this Agreement shall expire as set forth in Article 3.4.

 

Article 14.                                         INDEMNIFICATION; INSURANCE; NO WARRANTIES

 

14.1                        LICENSEE shall defend, indemnify and hold harmless YALE, its trustees, directors, officers, employees, and agents and their respective successors, heirs and assigns against any and all liabilities, claims, demands, damages, judgments, losses and expenses of any nature of any THIRD PARTY, including without limitation legal expenses and attorneys’ fees, arising out of any theory of liability (including without limitation tort, warranty, or strict liability) and the death, personal injury, or illness of any person or out of damage to any property related in any way to the rights granted under this Agreement; or resulting from the production, manufacture, sale, use, lease, or other disposition or consumption or advertisement of the PRODUCTS by LICENSEE, its AFFILIATES, SUBLICENSEES or any other transferees; or in connection with any statement, representation or warranty of LICENSEE, its AFFILIATES, SUBLICENSEES or any other transferees with respect to the PRODUCTS.

 

14.2                        LICENSEE shall purchase and maintain in effect and shall require its SUBLICENSEES to purchase and maintain in effect a policy of commercial, general liability insurance to protect YALE with respect to events described in Article 14.1.  Such insurance shall:

 

(a)                                 list “YALE, its trustees, directors, officers, employees and agents” as additional insureds under the policy;

 

(b)                                 provide that such policy is primary and not excess or contributory with regard to other insurance YALE may have;

 

(c)                                  be endorsed to include product liability coverage in amounts no less than [***] per incident and [***] annual aggregate; and

 

(d)                                 be endorsed to include contractual liability coverage for LICENSEE’s indemnification under Article 14.1; and

 

[***] 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.

 



 

(e)                                  by virtue of the minimum amount of insurance coverage required under Article 14.2(c), not be construed to create a limit of LICENSEE’s liability with respect to its indemnification under Article 14.1.

 

14.3                        By signing this Agreement, LICENSEE certifies that the requirements of Article 14.2 will be met on or before the earlier of (a) the date of FIRST SALE of any PRODUCT or (b) the date any PRODUCT is tested or used on humans, and will continue to be met thereafter. Upon YALE’S request, LICENSEE shall furnish a Certificate of Insurance and a copy of the current Insurance Policy to YALE.  LICENSEE shall give [***] written notice to YALE prior to any cancellation of or material change to the policy.

 

14.4                        (a) YALE MAKES NO, AND EXPRESSLY DISCLAIMS ALL, REPRESENTATIONS OR WARRANTIES THAT ANY CLAIMS OF THE POOLED PATENTS, ISSUED OR PENDING, ARE VALID, OR THAT THE MANUFACTURE, USE, SALE OR OTHER DISPOSAL OF THE PRODUCTS DOES NOT OR WILL NOT INFRINGE UPON ANY PATENT OR OTHER RIGHTS NOT VESTED IN YALE. LICENSEE MAKES NO, AND EXPRESSLY DISCLAIMS ALL, REPRESENTATIONS OR WARRANTIES THAT ANY CLAIMS OF THE POOLED PATENTS, ISSUED OR PENDING, ARE VALID, OR THAT THE MANUFACTURE, USE, SALE OR OTHER DISPOSAL OF THE PRODUCTS DOES NOT OR WILL NOT INFRINGE UPON ANY PATENT OR OTHER RIGHTS NOT VESTED IN LICENSEE.

 

(b)                                 YALE MAKES NO, AND EXPRESSLY DISCLAIMS ALL, REPRESENTATIONS AND WARRANTIES WHATSOEVER WITH RESPECT TO THE POOLED PATENTS OR PRODUCTS, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.  LICENSEE SHALL MAKE NO STATEMENTS, REPRESENTATION OR WARRANTIES WHATSOEVER TO ANY THIRD PARTIES WHICH ARE INCONSISTENT WITH SUCH DISCLAIMER BY YALE.  LICENSEE MAKES NO, AND EXPRESSLY DISCLAIMS ALL, REPRESENTATIONS AND WARRANTIES WHATSOEVER WITH RESPECT TO THE POOLED PATENTS OR PRODUCTS, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

 

(c)                                  IN NO EVENT SHALL THE TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES AND AFFILIATES OF EITHER YALE OR LICENSEE, BE LIABLE FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL OR INDIRECT DAMAGES OF ANY KIND, INCLUDING ECONOMIC DAMAGE OR INJURY TO PROPERTY AND LOST PROFITS, REGARDLESS OF WHETHER LICENSEE OR YALE SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT SHALL KNOW OF THE POSSIBILITY OF THE FOREGOING.

 

IN NO EVENT SHALL THE TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES AND AFFILIATES OF EITHER YALE OR LICENSEE, BE LIABLE FOR DAMAGES IN EXCESS OF AMOUNTS THAT SUCH PARTY HAS RECEIVED FROM THE OTHER PARTY UNDER THIS LICENSE.

 

[***] 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.

 



 

Article 15.                                         NOTICES, PAYMENTS

 

15.1                        Any payment, notice or other communication required by this Agreement (a) shall be in writing, (b) may be delivered personally or sent by reputable overnight courier with written verification of receipt or by registered or certified first class United States Mail, postage prepaid, return receipt requested, (c) shall be sent to the following addresses or to such other address as such party shall designate by written notice to the other party, and (d) shall be effective upon receipt:

 

FOR YALE:

 

FOR LICENSEE:

Managing Director

 

President & CEO

YALE UNIVERSITY

 

Mirna Therapeutics, Inc.

Office of Cooperative Research

 

2150 Woodward St., Suite 100

433 Temple Street

 

Austin, Texas 78744

New Haven, CT 06511

 

cc:

 

 

 

 

Article 16.                                         LAWS, FORUM AND REGULATIONS

 

16.1                        Any matter arising out of or related to this Agreement shall be governed by and in accordance with the substantive laws of the State of Connecticut, without regard to its conflicts of law principles, except where the federal laws of the United States are applicable and have precedence.  Any dispute arising out of or related to this Agreement shall be brought in a court of competent jurisdiction in the State of Connecticut.

 

16.2                        LICENSEE shall comply, and shall require its AFFILIATES and SUBLICENSEES to comply, with all foreign and United States federal, state, and local laws, regulations, rules and orders applicable to the testing, production, transportation, packaging, labeling, export, sale and use of the PRODUCTS.  In particular, LICENSEE shall be responsible for assuring compliance with all United States export laws and regulations applicable to this LICENSE and LICENSEE’S activities under this Agreement.

 

Article 17.                                         MISCELLANEOUS

 

17.1                        This Agreement shall be binding upon and inure to the benefit of the parties and their respective legal representatives, successors and permitted assigns.

 

17.2                        This Agreement constitutes the entire agreement of the parties relating to the POOLED PATENTS AND PRODUCTS including, without limitation, the ORIGINAL AGREEMENT and, to the extent inconsistent therewith, the Collaboration Agreement between the parties related to a project entitled [***] and effective as of February 22, 2011, and all prior representations, agreements and understandings, written or oral, are merged into it and are superseded by this Agreement.

 

17.3                        The provisions of this Agreement shall be deemed separable, if any part of this Agreement is rendered void, invalid, or unenforceable, such determination shall not affect the validity or enforceability of the remainder of this Agreement unless the part or parts which are void, invalid or unenforceable shall substantially impair the value of the entire Agreement as to either party.

 

[***] 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.

 



 

17.4                        Paragraph headings are inserted for convenience of reference only and do not form a part of this Agreement.

 

17.5                        No person not a party to this Agreement, including any employee of any party to this Agreement, shall have or acquire any rights by reason of this Agreement.  Nothing contained in this Agreement shall be deemed to constitute the parties partners with each other or any THIRD PARTY.

 

17.6                        This Agreement may not be amended or modified except by written agreement executed by each of the parties.  This Agreement is personal to LICENSEE and shall not be assigned by LICENSEE without the prior written consent of YALE, except that LICENSEE may assign this Agreement without prior written consent of YALE to an AFFILIATE, or to a THIRD PARTY that acquires from LICENSEE the line of business of which this Agreement is a part (whether by merger, acquisition of stock or assets, or otherwise), provided that LICENSEE gives YALE timely notice of the assignment.  Any attempted assignment in contravention of this Article 17.6 shall be null and void and shall constitute a material breach of this Agreement.

 

17.7                        LICENSEE, or any SUBLICENSEE or assignee, will not create, assume or permit to exist any lien, pledge, security interest or other encumbrance on this Agreement or any sublicense.

 

17.8                        The failure of any party hereto to enforce at any time, or for any period of time, any provision of this Agreement shall not be construed as a waiver of either such provision or of the right of such party thereafter to enforce each and every provision of this Agreement.

 

17.9                        This Agreement may be executed in any number of counterparts and any party may execute any such counterpart, each of which when executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument,

 

{signature page follows}

 



 

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

 

YALE UNIVERSITY

 

MIRNA THERAPEUTICS, INC.

 

 

 

 

 

By:

/s/ Jonathan Soderstrom

 

By:

/s/ Paul Lammers

E. Jonathan Soderstrom, Ph.D.

 

 

Paul Lammers, M.D., M.Sc.

Its: Managing Director,

 

Its:

President & CEO

Office of Cooperative Research

 

 

 

 

 

Dated:

6 Feb 2014

 

Dated:

Feb 03, 2014

 



 

Exhibit A

 

POOLED PATENTS

 

[***]

 

[***] 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.

 



 

Exhibit B — [***]

 

[***] shall mean the demonstration of [***] for LICENSED PRODUCTS, which shall be evidenced by [***]:

 

[***]

 

[***] 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.

 




Exhibit 10.5

 

[***] 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.

 

LICENSE AGREEMENT

 

This agreement (“Agreement”) is made by and between

 

University of Zurich
Rämistrasse 71
CH-8006 Zurich (Switzerland)

 

(“UNIVERSITY”)

 

and

 

Mirna Therapeutics, Inc.
2150 Woodward St., Suite 100
Austin, TX  78744 (USA)

 

(“LICENSEE”)

 

UNIVERSITY and LICENSEE are hereafter collectively referred to as “the Parties” or separately as a “Party”.

 

This Agreement is effective on March 10, 2013 (“Effective Date”).

 

RECITALS

 

WHEREAS, UNIVERSITY is owner of Patent Rights as defined below on an invention in the field of treatment of certain types of B-cell lymphoma with microRNA (“Invention”);

 

WHEREAS, UNIVERSITY is desirous that the Invention be developed and exploited to the fullest possible extent so that its benefits can be enjoyed by the general public;

 

WHEREAS, LICENSEE wishes to obtain, and UNIVERSITY is willing to grant, an exclusive license to the Patent Rights on the terms and conditions set out below.

 

NOW, THEREFORE, the Parties agree:

 

ARTICLE 1. DEFINITIONS

 

All terms, as defined herein, shall have the same meanings in both their singular and plural forms.

 

1.1                               “Affiliate” means any corporation or other business entity in which LICENSEE owns or controls, directly or indirectly, at least fifty percent (50%) of the outstanding stock or other voting rights entitled to elect directors, or in which LICENSEE is owned or controlled directly or indirectly by at least fifty percent (50%) of the outstanding stock or other voting rights entitled to elect directors.

 



 

1.2                               “Sublicensee” means a third party to whom LICENSEE grants a sublicense of certain rights granted to LICENSEE under this Agreement.

 

1.3                               “Field” means any application related to therapeutics and diagnostics.

 

1.4                               “Territory” means world-wide.

 

1.5                               “Term” means the period of time beginning on the Effective Date and ending on the expiration date of the longest-lived Patent Rights.

 

1.6                               “Patent Rights” means any of the following:  the [***], and all national and regional phase applications resulting therefrom, and continuing applications thereof including divisions, substitutions, and continuations-in-part; any patents issuing on said applications including reissues, reexaminations and extensions; and any corresponding applications, patents and extensions in other countries.

 

1.7                               “Licensed Product” means any composition, product or service which, in the course of manufacture, use, sale or importation, would be within the scope of one or more Valid Claims of Patent Rights.

 

1.8                               “Valid Claim” means (a) any claim of an issued and unexpired patent within the Patents Rights which has not been held unenforceable or invalid by a court or other governmental agency of competent jurisdiction in an unappealed or unappealable decision, or (b) a claim in a pending patent application within the Patent Rights, which application was filed no more than [***].

 

1.9                               “Net Sales” means the total of the gross receipts for sales of Licensed Products by or on behalf of LICENSEE or its Affiliates or its Sublicensees to third parties in bona fide arm’s length transactions, and from leasing, renting, or otherwise making Licensed Products available to others without sale or other dispositions, whether invoiced or not, less the sum of the following actual and customary deductions where applicable and separately itemized on the invoice and actually paid or allowed:  cash, trade, or quantity discounts; value added, sales or use taxes, and custom duties; transportation charges; or credits to customers because of rejections or returns.

 

For the avoidance of doubt Net Sales shall be calculated only once for the first sale of such Licensed Product by either LICENSEE, its Affiliates, or Sublicensees, as the case may be, to a third party other than an Affiliate or Sublicensee.  The initial sale of Licensed Product by LICENSEE, its Affiliates, or Sublicensees to a wholesaler shall be regarded as the first sale of the Licensed Product for the purpose of calculating Net Sales.

 

ARTICLE 2. GRANTS

 

2.1                               License.  Subject to the limitations set forth in this Agreement, UNIVERSITY hereby grants to LICENSEE, and LICENSEE hereby accepts, a license under Patent Rights to make and have made, use, sell, offer for sale, and import Licensed Products in the Field within the Territory and during the Term.

 

[***] 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.

 



 

The license granted herein is exclusive for Patent Rights and UNIVERSITY shall not grant to third parties a further license under Patent Rights in the Field, within the Territory and during the Term.

 

2.2                               Sublicense.

 

(a)                                 The license granted in Paragraph 2.1 includes the right of LICENSEE to grant sublicenses to third parties during the Term.  The terms and conditions of any sublicense shall be in accordance with sound and reasonable business practices and any fees charged shall not be unreasonable for comparable rights.

 

(b)                                 With respect to any sublicense granted pursuant to Paragraph 2.2(a), LICENSEE shall:

 

(1)                                 [***] from a third party under a sublicense granted pursuant to Paragraph 2.2(a) without the express written consent of UNIVERSITY;

 

(2)                                 to the extent applicable, include all of the rights of and obligations due to UNIVERSITY and contained in this Agreement;

 

(3)                                 promptly notify UNIVERSITY of each sublicense agreement entered into and provide UNIVERSITY with a copy of such sublicense agreement; and

 

(4)                                 collect and guarantee payment of all payments due, directly or indirectly, to UNIVERSITY from Sublicensees and summarize and deliver all reports due, directly or indirectly, to UNIVERSITY from Sublicensees.

 

(c)                                  Upon termination of this Agreement in accordance with its terms for whatever reasons, UNIVERSITY, at its sole discretion, shall determine whether LICENSEE shall have to cancel or to assign to UNIVERSITY any and all sublicenses provided that sublicensee wishes to receive such direct license from the UNIVERSITY.  Save as otherwise agreed by UNIVERSITY and the assignee, such assignment shall be contingent upon the express acceptance by the Sublicensee of all provisions of this Agreement.

 

2.3                               Reservation of Rights.  UNIVERSITY reserves the right to use the Invention and Patent Rights for educational and research purposes free of charge.

 

ARTICLE 3. CONSIDERATIONS

 

3.1                               Fees and Royalties.  In consideration for the license granted herein to LICENSEE under Patent Rights LICENSEE agrees to pay to UNIVERSITY:

 

(a)                                 license maintenance fees of i) [***] on the [***] anniversary of the Effective Date, and ii) [***] on the [***] anniversary of the Effective Date, and iii) [***] on the [***] and annually thereafter on each anniversary of the Effective date;

 

(b)                                 an earned royalty of [***] on Net Sales;

 

[***] 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.

 



 

(c)                                  [***] of all sublicense fees received by LICENSEE from its Sublicensees that are not earned royalties.

 

All fees and royalty payments specified in this Paragraph 3.1 shall be paid by LICENSEE in accordance with the provisions of Paragraph 4.3.

 

If there are multiple, stacking royalties required to be paid by LICENSEE to any third party in order to exercise its rights hereunder to make, have made, use or sell the Licensed Products and the resulting aggregate royalty rate is [***], then the royalty rate under Section 3.1.(b) will be adjusted so that the combined royalty payments from LICENSEE to all of its licensors, including UNIVERSITY, does not exceed [***].  The royalty rate payable to UNIVERSITY will be reduced [***] to a rate determined by [***], provided, however, that in no event shall the royalty rate payable to LICENSEE be less than [***].  Notwithstanding the foregoing, if LICENSEE’s agreement with any of such other licensors provides for a royalty proration formula based on an aggregate royalty rate [***], LICENSEE and UNIVERSITY will replace the aggregate royalty rate set forth in this Section with [***].

 

3.2                               Due Diligence.

 

(a)                                 LICENSEE (directly and/or through one or more Affiliates and/or Sublicensees) shall use commercially reasonable efforts to develop, manufacture and sell and market Licensed Products.

 

(b)                                 If LICENSEE fails to perform any of its obligations specified in Paragraph 3.2(a), then UNIVERSITY shall [***].  If UNIVERSITY [***], the Parties shall [***].  In the absence of [***].

 

ARTICLE 4. REPORTS, RECORDS AND PAYMENTS

 

4.1                               Reports.

 

(a)                                 Progress Reports.

 

(1)                                 Beginning January 1, 2015 and ending on the date of first commercial sale of a Licensed Product in the United States and Europe, LICENSEE shall submit to UNIVERSITY annual progress reports covering LICENSEE’s (and each Affiliate’s and Sublicensee’s) [***].  Such reports shall include a summary of work completed; summary of work in progress; current schedule of anticipated events or milestones; market plans for introduction of Licensed Products; and summary of resources spent in the reporting period.

 

(2)                                 LICENSEE shall also report to UNIVERSITY, in its immediately subsequent progress report, the date of first commercial sale of a Licensed Product in each country.

 

(b)                                 Royalty Reports.  After the First Commercial Sale of a Licensed Product anywhere in the world, LICENSEE shall submit to UNIVERSITY annual royalty reports on or before each March 31 of each year.  Each royalty report shall cover LICENSEE’s (and each Affiliate’s and Sublicensee’s) most recently completed calendar year and shall show:

 

[***] 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.

 



 

(1)                                 the gross sales, deductions as provided in Paragraph 1.9, and Net Sales during the precedent calendar year and the royalties payable with respect thereto;

 

(2)                                 the number of each type of Licensed Product sold on a country by country basis;

 

(3)                                 sublicense fees and royalties received during the precedent calendar year;

 

(4)                                 the method used to calculate the royalties; and

 

(5)                                 the exchange rates used.

 

If no sales of Licensed Products have been made and no sublicense revenues have been received by LICENSEE during any reporting period, LICENSEE shall so report.

 

The royalty report shall be certified as correct by an authorized officer of LICENSEE.

 

4.2                               Records & Audits.

 

(a)                                 LICENSEE shall keep, and shall require its Affiliates and Sublicensees to keep, accurate and correct records of all Licensed Products manufactured, used, and sold, and sublicense fees received under this Agreement.  Such records shall be retained by LICENSEE for at least [***] following a given reporting period.

 

(b)                                 All records shall be available during normal business hours for inspection at the expense of UNIVERSITY by UNIVERSITY’S Internal Audit Department or by a public accountant selected by UNIVERSITY, reasonably acceptable to LICENSEE, and in compliance with the other terms of this Agreement for the sole purpose of verifying reports and payments.  Such inspector shall not disclose to UNIVERSITY any information other than information relating to the accuracy of reports and payments made under this Agreement or other compliance issues.  In the event that any such inspection shows an underpayment in excess of [***] for any twelve (12) month period, then LICENSEE shall pay the cost of the audit as well as any additional sum which would have been payable to UNIVERSITY had LICENSEE reported correctly, plus an interest charge at a rate of [***] per year on such additional sum.  Such interest shall be calculated from the date on which the correct payment was due to UNIVERSITY up to the date when such payment is actually made by LICENSEE.  For underpayment not in excess of [***] for any twelve (12) month period, LICENSEE shall pay the difference within [***].

 

(c)                                  LICENSEE agrees to have an audit of sales and royalties conducted by an independent auditor at least [***] if annual Net Sales by LICENSEE, its Affiliates or Sublicensees are totaling [***].  The audit shall address, at a minimum, the amount of gross sales and Net Sales by or on behalf of LICENSEE during the audit period, the amount of royalties owed to UNIVERSITY under this Agreement, and whether the royalties owed have been paid to UNIVERSITY.  A report certified by the auditor shall be submitted promptly by the auditor directly to UNIVERSITY on completion.  [***].

 

[***] 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.

 



 

4.3                               Payments.

 

(a)                                 All fees due to UNIVERSITY shall be paid to the following bank account, or to such other bank account specified in writing by UNIVERSITY to LICENSEE:

 

[***]

 

(b)                                 Royalty Payments.

 

(1)                                 Royalties shall accrue when Licensed Products are invoiced, or if not invoiced, when delivered to a third party or Affiliate.

 

(2)                                 LICENSEE shall pay earned royalties annually on or before March 31 of each calendar year.  Each such payment shall be for earned royalties accrued within LICENSEE’s most recently completed calendar year.

 

(3)                                 LICENSEE shall pay [***] as required by law and provide UNIVERSITY with appropriate documentation of such tax payment.  LICENSEE shall use reasonable efforts to:  (i) [***]; and (ii) [***].

 

(4)                                 In the event that any patent or patent claim within Patent Rights is held invalid or unenforceable in a final decision by a patent office from which no appeal or additional patent prosecution has been or can be taken, or by a court of competent jurisdiction and last resort and from which no appeal has or can be taken, all obligation to pay royalties based solely on that patent or claim or any claim patentably indistinct therefrom shall cease as of the date of such final decision.  LICENSEE shall not, however, be relieved from paying any royalties which (i) accrued before the date of such final decision, or (ii) are based on another patent or claim not involved and not affected by such final decision.

 

(c)                                  Late Payments.  In the event royalty, reimbursement and/or fee payments are not received by UNIVERSITY when due, LICENSEE shall pay to UNIVERSITY interest charges at a rate of [***] per year.  Such interest shall accrue as from the date when such payment was due until the corresponding amount is actually received by UNIVERSITY.

 

ARTICLE 5. PATENT MATTERS

 

5.1                               Patent Prosecution and Maintenance.

 

(a)                                 LICENSEE, at its own expense, utilizing patent attorneys of its choice, shall be responsible for the filing, prosecution and maintenance of patent applications and patents within the Patent Rights in at least the following countries:  [***].  Any such filings shall be in the name of UNIVERSITY and LICENSEE shall be acting in the best interest of UNIVERSITY in filing, prosecuting and maintaining the Patent Rights.  LICENSEE, or its patent counsel shall provide UNIVERSITY on an ongoing basis with copies of all documentation relating to such filing, prosecution and maintenance and UNIVERSITY shall keep this documentation confidential.

 

(b)                                 UNIVERSITY shall fully cooperate with LICENSEE in preparing, filing, prosecuting and maintaining any patent applications and patents in the Patent Rights.  LICENSEE, or its patent counsel, shall consult with UNIVERSITY in all aspects of the preparation, filing, prosecution and maintenance of Patent Rights and shall provide

 

[***] 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.

 



 

UNIVERSITY sufficient opportunity to comment on any document that LICENSEE intends to file or to cause to be filed with the relevant intellectual property or patent office.  LICENSEE, or its patent counsel, shall provide UNIVERSITY on an ongoing basis with copies of all documentation relating to such prosecution and UNIVERSITY shall keep this documentation confidential.

 

(c)                                  LICENSEE shall apply for an extension of the term of any patent in Patent Rights if appropriate under the US Drug Price Competition and Patent Term Restoration Act and/or European, Japanese and other foreign counterparts thereof.  LICENSEE shall prepare all documents for such applications, and UNIVERSITY shall execute such documents and take any other additional action as LICENSEE may reasonably request in connection therewith.

 

5.2                               Patent Infringement.

 

(a)                                 If LICENSEE learns of any substantial infringement of Patent Rights, LICENSEE shall so inform UNIVERSITY and provide UNIVERSITY with reasonable available evidence of such infringement.  Neither Party shall notify a third party of the infringement of Patent Rights without the consent of the other Party, which consent shall not be unreasonably withheld.  Both parties shall use reasonable efforts and cooperation to terminate infringement without litigation.

 

(b)                                 LICENSEE may request UNIVERSITY to take legal action against such third party for the infringement of Patent Rights.  Such request shall be made in writing and shall include [***].  If the infringing activity has not abated [***] following LICENSEE’S request, UNIVERSITY shall elect to or not to commence suit on its own account.  UNIVERSITY shall give notice of its election in writing to LICENSEE by [***] after receiving notice of such request from LICENSEE.  LICENSEE may thereafter bring suit for patent infringement at its own expense, if and only if UNIVERSITY elects not to commence suit and the infringement occurred in a jurisdiction where LICENSEE has an exclusive license under this Agreement.  University shall give all necessary powers for instituting infringement proceedings.  If LICENSEE elects to bring suit, UNIVERSITY may join that suit at its own expense.  If however UNIVERSITY joins such suit on demand of LICENSEE because it is legally necessary, [***].

 

(c)                                  Recoveries from actions brought pursuant to Paragraph 5.2(b) shall belong to the Party bringing suit except that in the event that LICENSEE brings suit for infringement of Patent Rights and an acceptable settlement is entered into or monetary damages are awarded in a final non-appealable judgment, UNIVERSITY shall be reimbursed for any amount which would have been due to UNIVERSITY under this Agreement if the products sold by the infringer actually had been sold by LICENSEE.  Legal actions brought jointly by UNIVERSITY and LICENSEE and fully participated in by both shall be at the joint expense of the parties and all recoveries shall be shared jointly by them in proportion to the share of expense paid by each party.

 

(d)                                 Each party shall cooperate with the other in litigation proceedings at the expense of the party bringing suit.  Litigation shall be controlled by the party bringing the suit, except that UNIVERSITY may be represented by counsel of its choice in any suit brought by LICENSEE.

 

[***] 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.

 


 

5.3                               Patent Marking.  LICENSEE shall mark all Licensed Products made, used or sold under the terms of this Agreement, or their containers, in accordance with the applicable patent marking laws.

 

ARTICLE 6. GOVERNMENTAL MATTERS

 

Governmental Approval or Registration.  If this Agreement or any associated transaction is required by the law of any nation to be either approved or registered with any governmental agency, LICENSEE shall assume all legal obligations to do so.  LICENSEE shall notify UNIVERSITY if it becomes aware that this Agreement is subject to any government reporting or approval requirement.  LICENSEE shall make all necessary filings and pay all costs including fees, penalties, and all other out-of-pocket costs associated with such reporting or approval process.

 

ARTICLE 7. TERMINATION OF THE AGREEMENT

 

7.1                               Termination by UNIVERSITY.

 

(a)                                 If LICENSEE fails to perform or violates any term of this Agreement including but not limited to if LICENSEE is [***] in arrears with payment according to Paragraph 4.3, then UNIVERSITY shall be entitled to give LICENSEE written notice of default specifying the nature of default and requiring to cure it (“Notice of Default”).  If LICENSEE fails to cure the default within sixty (60) days of the Notice of Default, then UNIVERSITY shall be entitled to terminate this Agreement and the license granted herein by sending a second written notice (“Notice of Termination”) to LICENSEE.  If such a Notice of Termination is sent to LICENSEE, this Agreement shall automatically terminate on the effective date of that notice.  Termination shall not relieve LICENSEE of its obligation to pay any fees owed at the time of termination and shall not impair any accrued right of UNIVERSITY.  In case of termination caused by default of payment all respective interest for default are to be paid additionally.

 

(b)                                 UNIVERSITY shall have the right to terminate this Agreement by giving written notice, in the event of the filing by LICENSEE of a petition of bankruptcy or insolvency or both, or in the event of an adjudication that LICENSEE is bankrupt or insolvent or both, or after filing by LICENSEE of any petition or pleading asking reorganization, readjustment or rearrangement of its business under any law relating to bankruptcy or insolvency, or upon or after appointment of a receiver for all or substantially all of the property of LICENSEE or upon or after the making of any assignment for the benefit of creditors or upon or after the institution of any proceedings for the liquidation or winding-up of LICENSEE’s business or for the termination of its corporate charter, and this Agreement shall terminate upon the date specified in such written notice.

 

(c)                                  If at any time during the term of this Agreement LICENSEE directly or indirectly opposes or assists any third party to oppose the grant of letters patent or any patent application within the Patent Rights or disputes or directly or indirectly assists any third party to dispute the validity of any patent within the Patent Rights or any of the claims thereof, then UNIVERSITY shall be entitled at any time thereafter to terminate all or any of the licenses granted hereunder forthwith by written notice thereof to LICENSEE.

 

[***] 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.

 



 

(d)                                 UNIVERSITY shall be entitled to terminate this Agreement immediately in accordance with Paragraph 3.2(b).

 

7.2                               Termination by Licensee.

 

(a)                                 LICENSEE shall have the right at any time and for any reason to terminate this Agreement upon a six (6) months written notice to UNIVERSITY.  Said notice shall state LICENSEE’s reason for terminating this Agreement.

 

(b)                                 Any termination under Paragraph 7.2(a) shall not relieve LICENSEE of any obligation or liability accrued under this Agreement prior to termination or rescind any payment made to UNIVERSITY or action by LICENSEE prior to the time termination becomes effective.  Termination shall not affect in any manner any rights of UNIVERSITY arising under this Agreement prior to termination.

 

7.3                               Survival on Termination.  Upon expiration or termination of the Agreement, the obligations which by their nature are intended to survive expiration or termination of the Agreement shall survive.

 

7.4                               Disposition of Licensed Products on Hand.  Upon termination of this Agreement, LICENSEE may dispose of all previously made or partially made Licensed Product within a period of [***] of the effective date of such termination provided that the sale of such Licensed Product by LICENSEE, its Sublicensees, or Affiliates shall be subject to the terms of this Agreement, including but not limited to the rendering of reports and payment of royalties required under this Agreement.

 

7.5                               In the event of the termination of this Agreement, LICENSEE shall provide UNIVERSITY without delay with all necessary information, documents etc. relating to the application, filing and/or prosecution of the Patent Rights in order to prepare and effect a transfer to patent attorneys of UNIVERSITY’s choice and take all actions at its own costs to ensure patent maintenance until termination becomes effective.

 

ARTICLE 8. LIMITED WARRANTY AND INDEMNIFICATION

 

8.1                               Limited Warranty.

 

(a)                                 UNIVERSITY warrants that it has the lawful right to grant this license.

 

(b)                                 The license granted herein is provided “AS IS” and without WARRANTY OF MERCHANTABILITY or WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE or any other warranty, express or implied.  UNIVERSITY makes no representation or warranty that the Licensed Product or the use of Patent Rights will not infringe any other patent or other proprietary rights.

 

(c)                                  In no event shall UNIVERSITY be liable for any incidental, special or consequential damages resulting from exercise of the license granted herein or the use of the Invention or Licensed Product.

 

[***] 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.

 



 

(d)                                 Nothing in this Agreement shall be construed as:

 

(1)                                 a warranty or representation by UNIVERSITY as to the validity or scope of any Patent Rights;

 

(2)                                 a warranty or representation that anything made, used, sold or otherwise disposed of under any license granted in this Agreement is or shall be free from infringement of patents of third parties;

 

(3)                                 an obligation to bring or prosecute actions or suits against third parties for patent infringement except as provided in Paragraph 5.2 hereof.

 

8.2                               Indemnification.

 

(a)                                 LICENSEE shall indemnify, hold harmless and defend UNIVERSITY, its officers, employees, and agents and the inventors of the patents and patent applications in Patent Rights against any and all claims, suits, losses, damage, costs, fees, and expenses resulting from or arising out of exercise of this license or any sublicense.  This indemnification shall include, but not be limited to, any product liability.

 

(b)                                 LICENSEE, at its sole cost and expense, shall insure its activities in connection with the work under this Agreement and obtain, keep in force and maintain insurance or an equivalent program of self insurance.  For the purposes of this provision, a general liability corporate insurance will be deemed sufficient.

 

(c)                                  UNIVERSITY shall notify LICENSEE in writing of any claim or suit brought against UNIVERSITY in respect of which UNIVERSITY intends to invoke the provisions of this Article.  LICENSEE shall keep UNIVERSITY informed on a current basis of its defense of any claims under this Article.

 

ARTICLE 9. USE OF NAMES AND TRADEMARKS, CONFIDENTIALITY

 

9.1                               Nothing contained in this Agreement confers any right to use in advertising, publicity, or other promotional activities any name, trade name, trademark, or other designation of either Party hereto (including contraction, abbreviation or simulation of any of the foregoing).

 

9.2                               UNIVERSITY may disclose to the inventors of the Invention the terms and conditions of this Agreement upon their request.  If such disclosure is made, UNIVERSITY shall request the Inventors not disclose such terms and conditions to any other persons or entities.

 

9.3                               UNIVERSITY may disclose the existence of this Agreement and the extent of the grant in Article 2 to third parties, but UNIVERSITY shall refrain from disclosing the financial terms of this Agreement to third parties, except where UNIVERSITY is required by law to do so.

 

ARTICLE 10. MISCELLANEOUS PROVISIONS

 

10.1                        Correspondence.  Any notice required to be given to either Party under this Agreement shall be deemed to have been properly given and effective:

 



 

(a)                                 on the date of delivery if delivered in person or by facsimile, or

 

(b)                                 five (5) business days after mailing if mailed by registered mail, postage paid, to the respective addresses given below, or to such other address as is designated by written notice given to the other Party.

 

If sent to LICENSEE:

 

Mirna Therapeutics, Inc.
2150 Woodward St., Suite 100
Austin, Texas  78744
United States of America
Tel.:  +1-512-901-0900
Attn:  Chief Executive Officer

 

If sent to UNIVERSITY:

 

University of Zurich, c/o Unitectra, Technology Transfer Office; Ref. UZ-12/394; Möhrlistrasse 23; CH 8006 Zurich (SWITZERLAND); Facsimile 0041 44 634 44 09

 

10.2                        Assignability.  This Agreement shall not be assigned by LICENSEE except:

 

(a)                                 with the prior written consent of UNIVERSITY, which consent shall not be withheld unreasonably; or

 

(b)                                 as part of a sale or transfer of substantially the entire business of LICENSEE relating to operations which concern this Agreement.

 

LICENSEE shall notify UNIVERSITY within ten (10) days of any assignment of this Agreement by LICENSEE pursuant to Section 10.3(b).

 

10.3                        No Waiver.  No waiver by either Party of any breach or default of any covenant or agreement set forth in this Agreement shall be deemed a waiver as to any subsequent and/or similar breach or default.

 

10.4                        Governing Laws and Jurisdiction.  THIS AGREEMENT SHALL BE INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SWITZERLAND.  For any and all disputes arising from this Agreement, the Commercial Court of the Canton of Zurich shall have exclusive jurisdiction, subject to the appeal to the Swiss Supreme Court.

 

10.5                        Force Majeure.  A Party to this Agreement may be excused from any performance required herein if such performance is rendered impossible or unfeasible due to any catastrophe or other major event beyond its reasonable control, including, without limitation, war, riot, and insurrection; laws, proclamations, edicts, ordinances, or regulations; strikes, lockouts, or other serious labor disputes; and floods, fires, explosions, or other natural disasters.  When such events have abated, the non-performing Party’s obligations herein shall resume.

 



 

10.6                        Headings.  The headings of the several sections are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

 

10.7                        Entire Agreement.  This Agreement embodies the entire understanding of the Parties and supersedes all previous communications, representations or understandings, either oral or written, between the Parties relating to the subject matter hereof.

 

10.8                        Amendments.  No amendment or modification of this Agreement shall be valid or binding on the parties unless made in writing and signed on behalf of each Party.

 

10.9                        Severability.  Should some or several provisions of this Agreement be ineffective or invalid, or should there be an omission in this Agreement, the effectiveness, respectively the validity of the remaining provisions shall not be affected thereby.  An ineffective, respectively, invalid provision shall be replaced by the interpretation of the agreement which comes nearest to the meaning and the envisaged purpose of the ineffective respectively, invalid provision.  The same applies in the case of a contractual gap.

 

10.10                 The terms and conditions of this Agreement shall, at UNIVERSITY’s sole option, be considered by UNIVERSITY to be withdrawn from LICENSEE’s consideration and the terms and conditions of this Agreement, and the Agreement itself to be null and void, unless this Agreement is executed by the LICENSEE and a fully executed original is received by UNIVERSITY within sixty (60) days from the date of UNIVERSITY signature found below.

 

IN WITNESS WHEREOF, both UNIVERSITY and LICENSEE have executed this Agreement, in duplicate originals, by their respective and duly authorized officers on the day and year first above written.

 

UNIVERSITY

 

 

 

 

 

 

Date:

7.3.13

 

 

 

 

 

 

 

 

 

 

By:

Stefan Schnyder

 

/s/ Stefan Schnyder

 

Director Finance, Human Resources

 

(Signature)

 

and Infrastructure

 

 

 

 

 

 

Date:

5.3.13

 

 

 

 

 

 

By:

Prof. Dr. Daniel Wyler

 

/s/ Daniel Wyler

 

Vice President

 

(Signature)

 

 

 

 

 

 

 

 

LICENSEE (Mirna Therapeutics, Inc.)

 

 

 

 

 

 

Date:

18 March 2013

 

 

 

 

 

 

 

 

 

 

By:

Dr. Paul Lammers

 

/s/ Paul Lammers

 

President and CEO

 

(Signature)

 




Exhibit 10.9(A)

 

MIRNA THERAPEUTICS, INC.
2015 EQUITY INCENTIVE AWARD PLAN

 

ARTICLE 1.

 

PURPOSE

 

The purpose of the Mirna Therapeutics, Inc. 2015 Equity Incentive Award Plan (as it may be amended from time to time, the “Plan”) is to promote the success and enhance the value of Mirna Therapeutics, Inc. (the “Company”) by linking the individual interests of the members of the Board, Employees, and Consultants to those of the Company’s stockholders and by providing such individuals with an incentive for outstanding performance to generate superior returns to the Company’s 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.

 

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 13 hereof.  With reference to the duties of the Administrator under the Plan which have been delegated to one or more persons pursuant to Section 13.6 hereof, 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                               Affiliate” shall mean any Parent or Subsidiary.

 

2.3                               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.

 

2.4                               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.

 



 

2.5                               Award” shall mean an Option, a Restricted Stock award, a Restricted Stock Unit award, a Performance Award, a Dividend Equivalents award, a Deferred Stock award, a Deferred Stock Unit 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                               Board” shall mean the Board of Directors of the Company.

 

2.8                               Cause” shall mean, unless such term or an equivalent term is otherwise defined by the applicable Award Agreement or other written agreement between a Holder and the Company applicable to an Award, the occurrence of any of the following events:  (i) a Holder’s act of personal dishonesty, willful violation of any law, rule or regulation (other than minor traffic violations or similar offenses), or breach of fiduciary duty involving personal profit, (ii) a Holder’s failure to satisfactorily perform such Holder’s duties and responsibilities for the Company or any Affiliate, (iii) a Holder’s conviction of, or plea of nolo contender to, any felony or a crime involving moral turpitude, (iv) a Holder has engaged in negligence or willful misconduct in the performance of such Holder’s duties, including, but not limited to, willfully refusing without proper legal reason to perform such Holder’s duties and responsibilities, (v) a Holder has materially breached any corporate policy or code of conduct established by the Company or any Subsidiary as such policies or codes may be adopted from time to time, (vi) a Holder has violated the terms of any confidentiality, nondisclosure, intellectual property, nonsolicitation, noncompetition, proprietary information or inventions agreement, or any other agreement between such Holder and the Company or any Subsidiary related to such Holder’s service with the Company or any Subsidiary, or (vii) a Holder has engaged in conduct that is likely to have a deleterious effect on the Company or any Subsidiary or their legitimate business interests, including, but not limited to, their goodwill and public image. The determination that a Holder’s Termination of Service is either for Cause or without Cause shall be made by the Company in its sole discretion.  Any determination by the Company that a Holder experienced a Termination of Service by reason of dismissal without Cause for the purposes of outstanding Awards held by such Holder shall have no effect upon any determination of the rights or obligations of the Company or such Holder for any other purpose.

 

2.9                               Change in Control” shall mean the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:

 

(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) 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

 

2



 

(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 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

 

(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;  or

 

(d)                                 The Company’s stockholders approve a liquidation or dissolution of the Company.

 

Notwithstanding the foregoing, 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

 

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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 is 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, whether issued prior or subsequent to the grant of any Award.

 

2.11                        Committee” shall mean the Compensation Committee of the Board, a subcommittee of the Compensation Committee of the Board or another committee or subcommittee of the Board, appointed as provided in Section 13.1 hereof.

 

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 hereof.

 

2.14                        Consultant” shall mean any consultant or advisor engaged to provide services to the Company or any Affiliate who qualifies as a consultant or advisor under the applicable rules of the Securities and Exchange Commission for registration of shares on a Form S-8 Registration Statement or any successor Form thereto or, prior to the Public Trading Date, under Rule 701 of the Securities Act.

 

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

 

2.16                        Deferred Stock” shall mean a right to receive Shares awarded under Section 10.4 hereof.

 

2.17                        Deferred Stock Unit” shall mean a right to receive Shares awarded under Section 10.5 hereof.

 

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

 

2.19                        Dividend Equivalent” shall mean a right to receive the equivalent value (in cash or Shares) of dividends paid on Shares, awarded under Section 10.2 hereof.

 

2.20                        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.

 

2.21                        Effective Date” shall mean the date immediately preceding the pricing of the Company’s its initial public offering, provided that the Board has adopted the Plan prior to or on such date, subject to approval of the Plan by the Company’s stockholders.

 

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

 

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2.23                        Employee” shall mean any officer or other employee (as determined in accordance with Section 3401(c) of the Code and the Treasury Regulations thereunder) of the Company or any Affiliate.

 

2.24                        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 stock-based Awards.

 

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

 

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

 

(a)                                 If the Common Stock is (i) listed on any established securities exchange (such as the New York Stock Exchange, the NASDAQ Global Market and the NASDAQ Global Select Market), (ii) listed on any national market system or (iii) listed, quoted or traded on any 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;

 

(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.

 

2.27                        Good Reason” shall mean, unless such term or an equivalent term is otherwise defined by the applicable Award Agreement or other written agreement between a Holder and the Company applicable to an Award, with respect to any particular Holder, the Holder’s

 

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resignation from all positions he or she then-holds with the Company if (A) without Holder’s written consent (I) there is a material reduction of the Holder’s base salary; provided, however, that a material reduction in the Holder’s base salary pursuant to a salary reduction program affecting all or substantially all of the employees of the Company and that does not adversely affect Holder to a greater extent than other similarly situated employees shall not constitute Good Reason; or (II) the Holder is required to relocate his or her primary work location to a facility or location that would increase the Holder’s one way commute distance by more than fifty (50) miles from the Holder’s primary work location as of immediately prior to such change, (B) the Holder provides written notice outlining such conditions, acts or omissions to the Company’s General Counsel within thirty (30) days immediately following such material change or reduction, (C) such material change or reduction is not remedied by the Company within thirty (30) days following the Company’s receipt of such written notice and (D) the Holder’s resignation is effective not later than thirty (30) days after the expiration of such thirty (30) day cure period.

 

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

 

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

 

2.30                        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.

 

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

 

2.32                        Non-Employee Director Equity Compensation Policy” shall have the meaning set forth in Section 4.6 hereof.

 

2.33                        Non-Qualified Stock Option” shall mean an Option that is not an Incentive Stock Option or which is designated as an Incentive Stock Option but does not meet the applicable requirements of Section 422 of the Code.

 

2.34                        Option” shall mean a right to purchase Shares at a specified exercise price, granted under Article 6 hereof.  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.

 

2.35                        Option Term” shall have the meaning set forth in Section 6.4 hereof.

 

2.36                        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 representing more than 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.

 

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2.37                        Performance Award” shall mean a cash bonus award, stock bonus award, performance award or incentive award that is paid in cash, Shares or a combination of both, awarded under Section 10.1 hereof.

 

2.38                        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.

 

2.39                        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 the following:  (i) net earnings or losses (either before or after one or more of the following: (A) interest, (B) taxes, (C) depreciation, (D) amortization and (E) non-cash equity-based compensation expense); (ii) gross or net sales or revenue or sales or revenue growth; (iii) net income (either before or after taxes); (iv) adjusted net income; (v) operating income, earnings or profit (either before or after taxes); (vi) cash flow (including, but not limited to, cash flow return on investments, operating cash flow and free cash flow); (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) funds from operations; (xv) expenses; (xvi) working capital; (xvii) earnings or loss per Share; (xviii) adjusted earnings or loss per share; (xix) price per Share or dividends per Share (or appreciation in and/or maintenance of such price of dividends); (xx) regulatory achievements or compliance (including, without limitation, regulatory body approval for commercialization of a product); (xxi) implementation or completion of critical projects; (xxii) market share; (xxiii) economic value; (xxiv) debt levels or reduction; (xxv) customer retention; (xxvi) sales-related goals; (xxvii) comparisons with other stock market indices; (xxviii) operating efficiency; (xxix) customer satisfaction and/or growth; (xxx) employee satisfaction; (xxxi) research and development achievements; (xxxii) financing and other capital raising transactions; (xxxiii) recruiting and maintaining personnel; and (xxxiv) year-end cash, any of which may be measured either in absolute terms for the Company or any department or operating unit of the Company 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 Administrator may, in its sole discretion, provide that one or more objectively determinable adjustments shall be made to one or more of the Performance Goals.  Such adjustments may include, but are not limited to, one or more of the following:  (i) items related to a change in accounting principle; (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

 

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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; or (xix) items relating to any other unusual or nonrecurring events or changes in Applicable Laws, accounting principles 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.

 

2.40                        Performance Goals” shall mean, with respect to 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 such Performance Goals, the Performance Goals may be expressed in terms of overall Company performance or the performance of an Affiliate, a division, business unit or one or more individuals.  The achievement of each Performance Goal shall be determined, to the extent applicable, with reference to Applicable Accounting Standards.

 

2.41                        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, a Performance Award.

 

2.42                        Performance Stock Unit” shall mean a Performance Award awarded under Section 10.1 hereof which is denominated in units of value including dollar value of shares of Common Stock.

 

2.43                        Permitted Transferee” shall mean, with respect to a Holder, (a) prior to the Public Trading Date, any “family member” of the Holder, as defined under Rule 701 of the Securities Act and (b) on or after the Public Trading Date, any “family member” of the Holder, as defined under the General Instructions to Form S-8 Registration Statement under the Securities Act or any successor Form thereto, or any other transferee specifically approved by the Administrator, after taking into account Applicable Law.

 

2.44                        Plan” shall have the meaning set forth in Article 1 hereof.

 

2.45                        Prior Plan” shall mean the Mirna Therapeutics, Inc. 2008 Long Term Incentive Plan, as such plan may be amended from time to time.

 

2.46                        Program” shall mean any program adopted by the Administrator pursuant to the Plan containing the terms and conditions intended to govern a specified type of Award granted under the Plan and pursuant to which such type of Award may be granted under the Plan.

 

2.47                        Public Trading Date” shall mean the first date upon which the Common Stock is listed (or approved for listing) upon notice of issuance on any securities exchange or

 

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designated (or approved for designation) upon notice of issuance as a national market security on an interdealer quotation system.

 

2.48                        Restricted Stock” shall mean an award of Shares made under Article 8 hereof that is subject to certain restrictions and may be subject to risk of forfeiture or repurchase.

 

2.49                        Restricted Stock Unit” shall mean a contractual right awarded under Article 9 hereof to receive in the future a Share or the Fair Market Value of a Share in cash.

 

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

 

2.51                        Shares” shall mean shares of Common Stock.

 

2.52                        Share Limit” shall have the meaning set forth in Section 3.1(a) hereof.

 

2.53                        Stock Appreciation Right” shall mean a stock appreciation right granted under Article 11 hereof.

 

2.54                        Stock Appreciation Right Term” shall have the meaning set forth in Section 11.4 hereof.

 

2.55                        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 10.3 hereof.

 

2.56                        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 more than 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.

 

2.57                        Substitute Award” shall mean an Award granted under the Plan upon the assumption of, or in substitution for, outstanding equity awards previously 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.

 

2.58                        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 an Affiliate is terminated for any reason, with or without cause, including, without limitation, by resignation, discharge, death or retirement, but excluding terminations where the Consultant simultaneously commences or remains in employment or service with the Company or any Affiliate.

 

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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 or retirement, but excluding terminations where the Holder simultaneously commences or remains in employment or service with the Company or any Affiliate.

 

(c)                                  As to an Employee, the time when the employee-employer relationship between a Holder and the Company or any Affiliate 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 Affiliate.

 

The Administrator, in its sole discretion, shall determine the effect of all matters and questions relating to Terminations 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 Program, the Award Agreement or otherwise, 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 and the then applicable regulations and revenue rulings under said Section.  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 Affiliate employing or contracting with such Holder ceases to remain an Affiliate 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

 

3.1                               Number of Shares.

 

(a)                                 Subject to Sections 14.1, 14.2 and 3.1(b) hereof, the aggregate number of Shares which may be issued or transferred pursuant to Awards under the Plan shall be equal to the sum of (i) 18,111,000 Shares, (ii) any of the Shares which as of the Effective Date are available for issuance under the Prior Plan, or are subject to awards under the Prior Plan that, on or after the Effective Date, terminate, expire or lapse for any reason without the delivery of Shares to the holder thereof, up to a maximum of 14,542,459 Shares, and (iii) an annual increase on the first day of each year beginning in 2016 and ending in 2025 equal to the lesser of (A) five percent (5%) of the Shares outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year and (B) such smaller number of Shares as determined by the Board (such sum, the “Share Limit”); provided, however, no more than 125,000,000 Shares may be issued upon the exercise of Incentive Stock Options.  Notwithstanding the foregoing, Shares added to the Share Limit pursuant to Section 3.1(a)(ii) or Section 3.1(a)(iii) hereof shall be available for issuance as Incentive Stock Options only to the extent that making such Shares available for issuance as Incentive Stock Options would not cause any Incentive Stock Option to

 

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cease to qualify as such.  Notwithstanding the foregoing, to the extent permitted under Applicable Law, Awards that provide for the delivery of Shares subsequent to the applicable grant date may be granted in excess of the Share Limit if such Awards provide for the forfeiture or cash settlement of such Awards to the extent that insufficient Shares remain under the Share Limit in this Section 3.1 at the time that Shares would otherwise be issued in respect of such Award.

 

(b)                                 If any Shares subject to an Award are forfeited or expire or such Award is settled for cash (in whole or in part), the Shares subject to such Award shall, to the extent of such forfeiture, expiration or cash settlement, again be available for future grants of Awards under the Plan and shall be added back to the Share Limit. In addition, the following Shares shall be available for future grants of Awards under the Plan and shall be added back to the Share Limit::  (i) Shares tendered by a Holder or withheld by the Company in payment of the exercise price of an Option; (ii) Shares tendered by the Holder or withheld by the Company to satisfy any tax withholding obligation with respect to an Award; and (iii) Shares subject to Stock Appreciation Rights that are not issued in connection with the stock settlement of the Stock Appreciation Rights on exercise thereof. Notwithstanding anything to the contrary contained herein, Shares purchased on the open market with the cash proceeds from the exercise of Options shall not be added back to the Share Limit and shall not be available for future grants of Awards.  Any Shares repurchased by the Company under Section 8.4 hereof at the same price paid by the Holder or a lower price so that such Shares are returned to the Company will again be available for Awards.  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)                                  Substitute Awards shall not reduce the Shares authorized for grant under the Plan.  Additionally, in the event that a company acquired by the Company or any Affiliate or with which the Company or any Affiliate combines has shares available under a pre-existing plan approved by its stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for grant under the Plan; provided that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not employed by or providing services to the Company or its Affiliates immediately prior to such acquisition or combination.

 

 

3.2                               Stock 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.

 

3.3                   Limitation on Number of Shares Subject to Awards to Non-Employee Directors. The maximum aggregate value of Awards (with such value determined as of the date of grant

 

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under Applicable Accounting Standards) that may be granted to any Non-Employee Director during any calendar year shall be $2,000,000.

 

ARTICLE 4.

 

GRANTING OF AWARDS

 

4.1                               Participation.  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 4.6 hereof 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.

 

4.2                               Award 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.

 

4.3                               Limitations 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.

 

4.4                               At-Will Service; Voluntary Participation.  Nothing in the Plan or in any Program or Award Agreement hereunder shall confer upon any Holder any right to continue in the employ of, or as a Director or Consultant for, the Company or any Affiliate, or shall interfere with or restrict in any way the rights of the Company and any Affiliate, 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 Affiliate.  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.

 

4.5                               Foreign Holders.  Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws in countries other than the United States in which the Company and its Affiliates operate or have Employees, Non-Employee Directors or Consultants, or in

 

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order to comply with the requirements of any foreign securities exchange, the Administrator, in its sole discretion, shall have the power and authority to: (a) determine which Affiliates shall be covered by the Plan; (b) determine which Eligible Individuals outside the United States are eligible to participate in the Plan; (c) modify the terms and conditions of any Award granted to Eligible Individuals outside the United States to comply with applicable foreign laws or listing requirements of any such foreign securities exchange; (d) establish subplans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable (any such subplans and/or modifications shall be attached to the Plan as appendices); provided, however, that no such subplans and/or modifications shall increase the share limitations contained in Sections 3.1 and 3.3 hereof; and (e) take any action, before or after an Award is made, that it deems advisable to obtain approval or comply with any necessary local governmental regulatory exemptions or approvals or listing requirements of any such foreign securities exchange.  Notwithstanding the foregoing, the Administrator may not take any actions hereunder, and no Awards shall be granted, that would violate the Code, the Exchange Act, the Securities Act, any other securities law or governing statute, the rules of the securities exchange or automated quotation system on which the Shares are listed, quoted or traded or any other Applicable Law.  For purposes of the Plan, all references to foreign laws, rules, regulations or taxes shall be references to the laws, rules, regulations and taxes of any applicable jurisdiction other than the United States or a political subdivision thereof.

 

4.6                               Non-Employee Director Awards.  The Administrator may, in its discretion, provide that Awards granted to Non-Employee Directors shall be granted pursuant to a written non-discretionary 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.

 

4.7                               Stand-Alone and Tandem Awards.  Awards granted pursuant to the Plan may, in the sole 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.

 

5.1                               Purpose.  The Committee, in its sole discretion, may determine at the time an Award is granted or at any time thereafter whether any Award is intended to qualify as Performance-Based Compensation. If the Committee, in its sole discretion, decides to grant such an Award to an Eligible Individual that is intended to qualify as Performance-Based Compensation, then the provisions of this Article 5 shall control over any contrary provision

 

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contained in the Plan.  The Administrator may in its sole discretion grant Awards to other Eligible Individuals that are based on Performance Criteria or Performance Goals but that do not satisfy the requirements of this Article 5 and that are not intended to qualify as Performance-Based Compensation.  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.

 

5.2                               Applicability.  The grant of an Award to an Eligible Individual for a particular Performance Period shall not require the grant of an Award to such Eligible Individual in any subsequent Performance Period and the grant of an Award to any one Eligible Individual shall not require the grant of an Award to any other Eligible Individual in such period or in any other period.

 

5.3                               Types of Awards.  Notwithstanding anything in the Plan to the contrary, the Committee may grant any Award to an Eligible Individual intended to qualify as Performance-Based Compensation, including, without limitation, Restricted Stock the restrictions with respect to which lapse upon the attainment of specified Performance Goals, Restricted Stock Units that vest and become payable upon the attainment of specified Performance Goals and any Performance Awards described in Article 10 hereof that vest or become exercisable or payable upon the attainment of one or more specified Performance Goals.

 

5.4                               Procedures 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 granted to one or more Eligible Individuals which is intended to qualify as Performance-Based Compensation, no later than ninety (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 Goals, and (d) specify the relationship between the 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, unless otherwise provided in an applicable Program or Award Agreement, the Committee shall have the right to reduce or eliminate (but not to increase) 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 individual or corporate performance for the Performance Period.

 

5.5                               Payment of Performance-Based Awards.  Unless otherwise provided in the applicable Program or Award Agreement or pursuant to Section 14.2 hereof and only to the extent otherwise permitted by Section 162(m)(4)(C) 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 an Affiliate throughout the applicable Performance Period.  Unless otherwise

 

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provided in the applicable Performance Goals, Program or 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 applicable Performance Period are achieved.

 

5.6                               Additional 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, the Program and the Award Agreement shall be deemed amended to the extent necessary to conform to such requirements.

 

ARTICLE 6.

 

GRANTING OF OPTIONS

 

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

 

6.2                               Qualification of Incentive Stock Options.  No Incentive Stock Option shall be granted to any person who is not an Employee of the Company or any subsidiary corporation (as defined in Section 424(f) of the Code) of the Company.  No person who qualifies as a Greater Than 10% Stockholder may be granted an Incentive Stock Option unless such Incentive Stock Option conforms to the applicable provisions of Section 422 of the Code.  Any Incentive Stock Option granted under the Plan may be modified by the Administrator, with the consent of the Holder, to disqualify such Option from treatment as an “incentive stock option” under Section 422 of the Code.  To the extent that the aggregate fair market value of stock with respect to which “incentive stock options” (within the meaning of Section 422 of the Code, but without regard to Section 422(d) of the Code) are exercisable for the first time by a Holder during any calendar year under the Plan, and all other plans of the Company and any subsidiary or parent corporation thereof (each as defined in Section 424(f) and (e) of the Code, respectively), exceeds $100,000, the Options shall be treated as Non-Qualified Stock Options to the extent required by Section 422 of the Code.  The rule set forth in the preceding sentence shall be applied by taking Options and other “incentive stock options” into account in the order in which they were granted and the Fair Market Value of stock shall be determined as of the time the respective options were granted.  In addition, to the extent that any Options otherwise fail to qualify as Incentive Stock Options, such Options shall be treated as Nonqualified Stock Options.

 

6.3                               Option Exercise Price.  Except as provided in Article 14 hereof, the exercise price per Share subject to each Option shall be set by the Administrator, but shall not be less than one hundred percent (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).  In addition, in the case of Incentive Stock Options granted to a Greater Than 10% Stockholder, such price shall not be less than one hundred ten percent (110%) of the Fair Market Value of a Share on the date the Option is

 

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granted (or the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code).

 

6.4                               Option Term.  The term of each Option (the “Option Term”) shall be set by the Administrator in its sole 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 or Section 422 of the Code and regulations and rulings thereunder, the Administrator may extend the Option Term of any outstanding Option, may extend the time period during which vested Options may be exercised following any Termination of Service of the Holder, and may amend any other term or condition of such Option relating to such a Termination of Service.

 

6.5                               Option 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 Affiliate, any of the Performance Criteria, or any other criteria selected by the Administrator.  At any time after the grant of an Option, the Administrator may, in its sole discretion and subject to whatever terms and conditions it selects, accelerate the vesting of the Option, including following a Termination of Service; provided, that in no event shall an Option become exercisable following its expiration, termination or forfeiture.

 

(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 Administrator either in the Program, the Award Agreement or by action of the Administrator following the grant of the Option.

 

6.6                               Substitute Awards.  Notwithstanding the foregoing provisions of this Article 6 to the contrary, in the case of an Option that is a Substitute Award, the price per share of the shares subject to such Option may be less than the Fair Market Value per share on the date of grant; provided that the excess of:  (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the aggregate exercise price thereof does not exceed the excess of:  (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Administrator) of the shares of the predecessor entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate exercise price of such shares.

 

6.7                               Substitution of Stock Appreciation Rights.  The Administrator may provide in the applicable Program or the Award Agreement evidencing the grant of an Option that the Administrator, in its sole discretion, shall have the right to substitute a Stock Appreciation

 

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Right for such Option at any time prior to or upon exercise of such Option; provided that such Stock Appreciation Right shall be exercisable with respect to the same number of Shares for which such substituted Option would have been exercisable, and shall also have the same exercise price, vesting schedule and remaining Option Term as the substituted Option.

 

ARTICLE 7.

 

EXERCISE OF OPTIONS

 

7.1                               Partial Exercise.  An exercisable Option may be exercised in whole or in part.  However, an Option shall not be exercisable with respect to fractional Shares 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.

 

7.2                               Manner 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, 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 sole discretion, deems necessary or advisable to effect compliance with all Applicable Law.  The Administrator may, in its sole 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 pursuant to Section 12.3 hereof 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 sole discretion of the Administrator; and

 

(d)                                 Full payment of the exercise price and applicable withholding taxes to the stock administrator of the Company for the shares with respect to which the Option, or portion thereof, is exercised, in a manner permitted by Section 12.1 and 12.2 hereof.

 

7.3                               Notification 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 (2) 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) of such Option to such Holder, or (b) one (1) year after the transfer of such shares to such Holder.

 

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ARTICLE 8.

 

AWARD OF RESTRICTED STOCK

 

8.1                               Award 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 to the extent required by Applicable Law.

 

8.2                               Rights as Stockholders.  Subject to Section 8.4 hereof, 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 the applicable Program or 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 sole discretion of the Administrator, any extraordinary distributions with respect to the Shares shall be subject to the restrictions set forth in Section 8.3 hereof.  In addition, with respect to a share of Restricted Stock with performance-based vesting, dividends which are paid prior to vesting shall only be paid out to the Holder to the extent that performance-based vesting conditions are subsequently satisfied and the share of Restricted Stock vests.

 

8.3                               Restrictions.  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 the applicable Program or in 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, the Performance Criteria, Company or Affiliate 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 Program and/or the Award Agreement.  Restricted Stock may not be sold or encumbered until all restrictions are terminated or expire.

 

8.4                               Repurchase or Forfeiture of Restricted Stock.  Except as otherwise determined by the Administrator at the time of the grant of the Award or thereafter, if no price was paid by

 

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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. 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 Program or the Award Agreement.  Notwithstanding the foregoing, the Administrator in its sole discretion may provide that in the event of certain events, including a Change in Control, the Holder’s death, retirement or disability or any other specified Termination of Service or any other event, the Holder’s rights in unvested Restricted Stock shall not lapse, such Restricted Stock shall vest and, if applicable, the Company shall not have a right of repurchase.

 

8.5                               Certificates 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 must include an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock.  The Company may, in it sole discretion, (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.

 

8.6                               Section 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.

 

ARTICLE 9.
AWARD OF RESTRICTED STOCK UNITS

 

9.1                               Grant 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.

 

9.2                               Term.  Except as otherwise provided herein, the term of a Restricted Stock Unit award shall be set by the Administrator in its sole discretion.

 

9.3                               Purchase 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.

 

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9.4                               Vesting 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 Affiliate, one or more Performance Criteria, 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.

 

9.5                               Maturity 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 determined by the Administrator, set forth in any applicable Award Agreement, and subject to compliance with Section 409A of the Code, in no event shall the maturity date relating to each Restricted Stock Unit occur following the later of (a) the fifteenth (15th) day of the third (3rd) month following the end of calendar year in which the Restricted Stock Unit vests; or (b) the fifteenth (15th) day of the third (3rd) month following the end of the Company’s fiscal year in which the Restricted Stock Unit vests.  On the maturity date, the Company shall, subject to Section 12.4(e) hereof, 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 sole 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.

 

9.6                               Payment upon Termination of Service.  An Award of Restricted Stock Units shall only be payable while the Holder is an Employee, a Consultant or a member of the Board, as applicable; provided, however, that the Administrator, in its sole and absolute discretion may provide (in an Award Agreement or otherwise) that a Restricted Stock Unit award may be paid subsequent to a Termination of Service in certain events, including a Change in Control, the Holder’s death, retirement or disability or any other specified Termination of Service.

 

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

 

9.8                               Dividend Equivalents.  Subject to Section 10.2 hereof, the Administrator may, in its sole discretion, provide that Dividend Equivalents shall be earned by a Holder of Restricted Stock Units based on dividends declared on the Common Stock, to be credited as of dividend payment dates during the period between the date an Award of Restricted Stock Units is granted to a Holder and the maturity date of such Award.

 

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ARTICLE 10.

 

AWARD OF PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS, STOCK PAYMENTS, DEFERRED STOCK, DEFERRED STOCK UNITS

 

10.1                        Performance Awards.

 

(a)                                 The Administrator is authorized to grant Performance Awards, including Awards of Performance Stock Units, to any Eligible Individual and to determine whether such Performance Awards shall be Performance-Based Compensation.  The value of Performance Awards, including Performance Stock Units, may be linked to any one or more of the Performance Criteria or other specific criteria determined by the Administrator, in each case on a specified date or dates or over any period or periods determined by the Administrator.  Performance Awards, including Performance Stock Unit awards may be paid in cash, Shares, or a combination of cash and Shares, as determined by the Administrator.

 

(b)                                 Without limiting Section 10.1(a) hereof, the Administrator may grant Performance Awards to any Eligible Individual in the form of a cash bonus payable upon the attainment of objective Performance Goals, or such other criteria, whether or not objective, which are established by the Administrator, in each case on a specified date or dates or over any period or periods determined by the Administrator.  Any such bonuses paid to a Holder which are intended to be Performance-Based Compensation shall be based upon objectively determinable bonus formulas established in accordance with the provisions of Article 5 hereof.

 

10.2                        Dividend 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 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 of Common Stock by such formula and at such time and subject to such limitations as may be determined by the Administrator.

 

(b)                                 Notwithstanding the foregoing, no Dividend Equivalents shall be payable with respect to Options or Stock Appreciation Rights.

 

10.3                        Stock 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 Criteria or any other specific criteria, including service to the Company or any Affiliate, 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 will 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.

 

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10.4                        Deferred Stock.  The Administrator is authorized to grant Deferred Stock to any Eligible Individual.  The number of shares of Deferred Stock shall be determined by the Administrator and may (but is not required to) be based on one or more Performance Criteria or other specific criteria, including service to the Company or any Affiliate, as the Administrator determines, in each case on a specified date or dates or over any period or periods determined by the Administrator.  Shares underlying a Deferred Stock award which is subject to a vesting schedule or other conditions or criteria set by the Administrator will be issued on the vesting date(s) or date(s) that those conditions and criteria have been satisfied, as applicable.  Unless otherwise provided by the Administrator, a Holder of Deferred Stock shall have no rights as a Company stockholder with respect to such Deferred Stock until such time as the Award has vested and any other applicable conditions and/or criteria have been satisfied and the Shares underlying the Award have been issued to the Holder.

 

10.5                        Deferred Stock Units.  The Administrator is authorized to grant Deferred Stock Units to any Eligible Individual.  The number of Deferred Stock Units shall be determined by the Administrator and may (but is not required to) be based on one or more Performance Criteria or other specific criteria, including service to the Company or any Affiliate, as the Administrator determines, in each case on a specified date or dates or over any period or periods determined by the Administrator.  Each Deferred Stock Unit shall entitle the Holder thereof to receive one share of Common Stock on the date the Deferred Stock Unit becomes vested or upon a specified settlement date thereafter (which settlement date may (but is not required to) be the date of the Holder’s Termination of Service).  Shares underlying a Deferred Stock Unit award which is subject to a vesting schedule or other conditions or criteria set by the Administrator will not be issued until on or following the date that those conditions and criteria have been satisfied.  Unless otherwise provided by the Administrator, a Holder of Deferred Stock Units shall have no rights as a Company stockholder with respect to such Deferred Stock Units until such time as the Award has vested and any other applicable conditions and/or criteria have been satisfied and the Shares underlying the Award have been issued to the Holder.

 

10.6                        Term.  The term of a Performance Award, Dividend Equivalent award, Stock Payment award, Deferred Stock award and/or Deferred Stock Unit award shall be set by the Administrator in its sole discretion.

 

10.7                        Purchase Price.  The Administrator may establish the purchase price of a Performance Award, Shares distributed as a Stock Payment award, shares of Deferred Stock or Shares distributed pursuant to a Deferred 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.

 

10.8                        Termination of Service.  A Performance Award, Stock Payment award, Dividend Equivalent award, Deferred Stock award and/or Deferred Stock Unit award is distributable only while the Holder is an Employee, Director or Consultant, as applicable.  The Administrator, however, in its sole discretion may provide that the Performance Award, Dividend Equivalent award, Stock Payment award, Deferred Stock award and/or Deferred Stock Unit award may be distributed subsequent to a Termination of Service in certain events,

 

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including a Change in Control, the Holder’s death, retirement or disability or any other specified Termination of Service.

 

ARTICLE 11.

 

AWARD OF STOCK APPRECIATION RIGHTS

 

11.1                        Grant of Stock Appreciation Rights.

 

(a)                                 The Administrator is authorized to grant Stock Appreciation Rights to Eligible Individuals from time to time, in its sole discretion, on such terms and conditions as it may determine consistent 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.  Except as described in (c) below or in Section 14.2 hereof, the exercise price per Share subject to each Stock Appreciation Right shall be set by the Administrator, but shall not be less than one hundred percent (100%) of the Fair Market Value on the date the Stock Appreciation Right is granted.

 

(c)                                  Notwithstanding the foregoing provisions of Section 11.1(b) hereof to the contrary, in the case of a Stock Appreciation Right that is a Substitute Award, the price per Share of the Shares subject to such Stock Appreciation Right may be less than one hundred percent (100%) of the Fair Market Value per share on the date of grant; provided that the excess of:  (i) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (ii) the aggregate exercise price thereof does not exceed the excess of:  (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Administrator) of the shares of the predecessor entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate exercise price of such shares.

 

11.2                        Stock 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 Affiliate, any of the Performance Criteria or any other criteria selected by the Administrator.  At any time after grant of a Stock Appreciation Right, the Administrator may, in its sole discretion and subject to whatever terms and conditions it selects, accelerate the period during which a Stock Appreciation Right vests.

 

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(b)                                 No portion of a Stock Appreciation Right which is unexercisable at Termination of Service shall thereafter become exercisable, except as may be otherwise provided by the Administrator either in the applicable Program or Award Agreement or by action of the Administrator following the grant of the Stock Appreciation Right, including following a Termination of Service; provided, that in no event shall a Stock Appreciation Right become exercisable following its expiration, termination or forfeiture.

 

11.3                        Manner 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 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 sole discretion, deems necessary or advisable to effect compliance with all applicable provisions of the Securities Act and any other federal, state or foreign securities laws or regulations.  The Administrator may, in its sole discretion, also take whatever additional actions it deems appropriate to effect such compliance; and

 

(c)                                  In the event that the Stock Appreciation Right shall be exercised pursuant to this Section 11.3 hereof 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.

 

11.4                        Stock Appreciation Right Term.  The term of each Stock Appreciation Right (the “Stock Appreciation Right Term”) shall be set by the Administrator in its sole discretion; provided, however, that the 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 expiration date of the Stock Appreciation Right Term.  Except as limited by the requirements of Section 409A of the Code and regulations and rulings thereunder or the first sentence of this Section 11.4, the Administrator may extend the Stock Appreciation Right Term of any outstanding Stock Appreciation Right, may extend the time period during which vested Stock Appreciation Rights may be exercised following any Termination of Service of the Holder, and may amend any other term or condition of such Stock Appreciation Right relating to such a Termination of Service.

 

11.5                        Payment.  Payment of the amounts payable with respect to Stock Appreciation Rights pursuant to this Article 11 shall be in cash, Shares (based on its Fair Market Value as of the date the Stock Appreciation Right is exercised), or a combination of both, as determined by the Administrator.

 

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ARTICLE 12.

 

ADDITIONAL TERMS OF AWARDS

 

12.1                        Payment.  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) or Shares 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 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 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) other form of legal consideration acceptable to the Administrator.  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.

 

12.2                        Tax Withholding.  The Company or any Affiliate 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 or employment tax 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 may in its sole discretion and in satisfaction of the foregoing requirement allow a Holder to satisfy such obligations by any payment means described in Section 12.1 hereof, including without limitation, by allowing such Holder to elect to have the Company withhold Shares otherwise issuable under an Award (or allow the surrender of Shares). 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.

 

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12.3                        Transferability of Awards.

 

(a)                                 Except as otherwise provided in Sections 12.3(b) and 12.3(c) hereof:

 

(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) 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, and any attempted disposition of an Award prior to the satisfaction of these conditions shall be null and void and of no effect, except to the extent that such disposition is permitted by clause (i) of this provision; 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 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 applicable Program or 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 12.3(a) hereof, the Administrator, in its sole discretion, may determine to permit a Holder or a Permitted Transferee of such Holder to transfer an Award other than an Incentive Stock Option (unless such Incentive Stock Option is to become a Non-Qualified 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 to another Permitted Transferee of the applicable Holder) 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 (or transferring Permitted Transferee) 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 federal, state and foreign securities laws and (C) evidence the transfer.

 

(c)                                  Notwithstanding Section 12.3(a) hereof, 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,

 

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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 Program or Award Agreement applicable to the Holder, except to the extent the Plan, the Program and the 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 his or her beneficiary with respect to more than fifty percent (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, as applicable.  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.

 

12.4                        Conditions 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 pursuant to the exercise of 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 all 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.

 

(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 sole discretion of the Administrator.

 

(d)                                 No fractional Shares shall be issued and the Administrator shall determine, in its sole discretion, 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 any 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).

 

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12.5                        Forfeiture 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, must 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 sole 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 requirements of Applicable Law, including, without limitation, 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.

 

12.6                        Repricing.  The Administrator shall, without the approval of the stockholders of the Company, have the authority to (i) amend any outstanding Option or Stock Appreciation Right to reduce its price per Share, or (ii) 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, in its sole discretion.

 

12.7                        Leave of Absence.  Unless the Administrator provides otherwise, vesting of Awards granted hereunder shall be suspended during any unpaid leave of absence.  A Holder shall not cease to be considered an Employee, Non-Employee Director or Consultant, as applicable, in the case of any (a) leave of absence approved by the Company, (b) transfer between locations of the Company or between the Company and any of its Affiliates or any successor thereof, or (c) change in status (Employee to Director, Employee to Consultant, etc.), provided that such change does not affect the specific terms applying to the Holder’s Award.

 

ARTICLE 13.

 

ADMINISTRATION

 

13.1                        Administrator.  The Committee (or another committee or a subcommittee of the Board or the Compensation Committee of the Board assuming the functions of the Committee under the Plan) shall administer the Plan (except as otherwise permitted herein) and, unless

 

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otherwise determined by the Board, shall consist solely of two or more Non-Employee Directors appointed by and holding office at the pleasure of the Board, 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; provided that 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 13.l 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 13.6 hereof.

 

13.2                        Duties and Powers of Administrator.  It shall be the duty of the Administrator to conduct the general administration of the Plan in accordance with its provisions.  The Administrator shall have the power to interpret the Plan, the Program and the Award Agreement, 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 Program or Award Agreement; provided that the rights or obligations of the Holder of the Award that is the subject of any such Program or Award Agreement are not affected materially and adversely by such amendment, unless the consent of the Holder is obtained or such amendment is otherwise permitted under Section 14.10 hereof.  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 sole 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 Section 162(m) of the Code, 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 sole discretion of the Committee.

 

13.3                        Action 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 Affiliate, 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.

 

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13.4                        Authority 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 each Eligible Individual;

 

(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, or purchase price, any performance criteria, 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, any Program 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

 

(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 and Sections 3.4 and 14.2(d) hereof.

 

13.5                        Decisions Binding.  The Administrator’s interpretation of the Plan, any Awards granted pursuant to the Plan, any Program, any Award Agreement and all decisions and

 

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determinations by the Administrator with respect to the Plan are final, binding, and conclusive on all parties.

 

13.6                        Delegation 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 Article 13; 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, 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 Section 162(m) of the Code and 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 13.6 hereof shall serve in such capacity at the pleasure of the Board and the Committee.

 

ARTICLE 14.

 

MISCELLANEOUS PROVISIONS

 

14.1                        Amendment, Suspension or Termination of the Plan.  Except as otherwise provided in this Section 14.1, 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 14.2 hereof, increase the limits imposed in Section 3.1 hereof on the maximum number of shares which may be issued under the Plan.  Except as provided in Section 14.10 hereof, no amendment, suspension or termination of the Plan shall, without the consent of the Holder, materially and adversely affect 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 Incentive Stock Option be granted under the Plan after the tenth (10th) anniversary of the Effective Date.

 

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

 

(a)                                 In the event of any 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 of the Company’s stock or the share price of the Company’s stock other than an Equity Restructuring, 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 Section 3.1 hereof on the maximum number and kind of shares which may be issued under the Plan); (ii) the number and kind of shares of Common

 

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Stock (or other securities or property) subject to outstanding Awards; (iii) the number and kind of shares of Common Stock (or other securities or property) for which grants are subsequently to be made to new and continuing Non-Employee Directors pursuant to Section 4.6 hereof; (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.

 

(b)                                 In the event of any transaction or event described in Section 14.2(a) hereof or any unusual or nonrecurring transactions or events affecting the Company, any Affiliate of the Company, or the financial statements of the Company or any Affiliate, or of changes in Applicable Law, the Administrator, in its sole 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 and/or other property, 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 14.2 the Administrator determines in good faith that no amount would have been attained upon the exercise 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 sole 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 or Deferred 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;

 

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(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 Program or Award Agreement; and

 

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

 

(c)                                  In connection with the occurrence of any Equity Restructuring, and notwithstanding anything to the contrary in Sections 14.2(a) and 14.2(b) hereof:

 

(i)                                     The number and type of securities subject to each outstanding Award and the exercise price or grant price thereof, if applicable, shall be equitably adjusted; and/or

 

(ii)                                  The Administrator shall make such equitable adjustments, if any, as the Administrator in its discretion may deem appropriate to reflect such Equity Restructuring with respect to the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations in Section 3.1 hereof on the maximum number and kind of shares which may be issued under the Plan).

 

The adjustments provided under this Section 14.2(c) shall be nondiscretionary and shall be final and binding on the affected Holder and the Company.

 

(d)                                 Change in Control.

 

(i)                                     In the event of a Change in Control, each outstanding Award shall be assumed or an equivalent Award substituted by the successor corporation or a parent or subsidiary of the successor corporation, in each case, as determined by the Administrator.

 

(ii)                                  In the event that the successor corporation in a Change in Control and its parents and subsidiaries refuse to assume or substitute for any Award in accordance with Section 14.2(d)(i) hereof, each such non-assumed/substituted Award, except for any Performance Awards, shall become fully vested and, as applicable, exercisable and shall be deemed exercised, immediately prior to the consummation of such transaction, and all forfeiture restrictions on any or all such Awards shall lapse at such time.  For the avoidance of doubt, the vesting of any Performance Awards not assumed in a Change in Control will not be automatically accelerated pursuant to this Section 14.2(d)(ii) and will instead vest pursuant to the terms and conditions of the applicable Award Agreement upon a Change in Control where the successor corporation and its parents and subsidiaries refuse to assume or substitute for any Award in accordance with Section 14.2(d)(i) hereof.  If an Award vests and, as applicable, is exercised in lieu of assumption or substitution in connection with a Change in Control, the Administrator shall notify the Holder of such vesting and any applicable exercise period, and the Award shall terminate upon the Change in Control.  For the avoidance of doubt, if the value of an Award that is terminated in connection with this Section 14.2(d)(ii) is zero or negative at the time of such Change in Control, such Award shall be terminated upon the Change in Control without payment of consideration therefor.

 

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(iii)                               Notwithstanding anything to the contrary, in the event that, within the twelve (12) month period immediately following a Change in Control, a Holder experiences a Termination of Service by the Company for other than Cause or by a Holder for Good Reason, then the vesting and, if applicable, exercisability of that number of Shares equal to one hundred percent (100%) of the then-unvested Shares subject to the outstanding Awards held by such Holder shall accelerate upon the date of such Termination of Service.

 

(e)                                  The Administrator may, in its sole discretion, 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.

 

(f)                                   With respect to Awards which are granted to Covered Employees and are intended to qualify as Performance-Based Compensation, no adjustment or action described in this Section 14.2 or in any other provision of the Plan shall be authorized to the extent that such adjustment or action would cause such Award to fail to so qualify as Performance-Based Compensation, unless the Administrator determines that the Award should not so qualify.  No adjustment or action described in this Section 14.2 or in any other provision of the Plan shall be authorized to the extent that such adjustment or action would 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.

 

(g)                                  The existence of the Plan, the Program, 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.

 

(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 sole discretion may refuse to permit the exercise of any Award during a period of thirty (30) days prior to the consummation of any such transaction.

 

14.3                        Approval of Plan by Stockholders.  The Plan will be submitted for the approval of the Company’s stockholders within twelve (12) months after the date of the Board’s initial adoption of the Plan.  Awards may be granted or awarded prior to such stockholder approval; provided that such Awards shall not be exercisable, shall not vest and the restrictions thereon

 

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shall not lapse and no Shares shall be issued pursuant thereto prior to the time when the Plan is approved by the stockholders; and provided, further, that if such approval has not been obtained at the end of said twelve (12) month period, all Awards previously granted or awarded under the Plan shall thereupon be canceled and become null and void.

 

14.4                        No 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.

 

14.5                        Paperless 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.

 

14.6                        Effect 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 Affiliate.  Nothing in the Plan shall be construed to limit the right of the Company or any Affiliate:  (a) to establish any other forms of incentives or compensation for Employees, Directors or Consultants of the Company or any Affiliate, or (b) 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.

 

14.7                        Compliance 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, 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 awarded hereunder shall be deemed amended to the extent necessary to conform to such Applicable Law.

 

14.8                        Titles 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.

 

14.9                        Governing 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.

 

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14.10                 Section 409A.  To the extent that the Administrator determines that any Award granted under the Plan is subject to Section 409A of the Code, the Program pursuant to which such Award is granted and 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, the Program and any Award Agreements shall be interpreted in accordance with Section 409A of the Code and 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 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 and related Department of Treasury guidance (including such Department of Treasury guidance as may be issued after the Effective Date), the Administrator may adopt such amendments to the Plan and the applicable Program and 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 related Department of Treasury guidance and thereby avoid the application of any penalty taxes under such Section.

 

14.11                 No 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 uniformly.

 

14.12                 Unfunded 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 Program or Award Agreement shall give the Holder any rights that are greater than those of a general creditor of the Company or any Affiliate.

 

14.13                 Indemnification.  To the extent allowable pursuant to Applicable Law, each member of the Committee or of the Board and any officer or other employee to whom authority to administer any component of the Plan is delegated 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 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.

 

14.14                 Relationship 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,

 

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group insurance, welfare or other benefit plan of the Company or any Affiliate except to the extent otherwise expressly provided in writing in such other plan or an agreement thereunder.

 

14.15                 Expenses.  The expenses of administering the Plan shall be borne by the Company and its Affiliates.

 

*  *  *  *  *

 

I hereby certify that the foregoing Plan was duly adopted by the Board of Directors of Mirna Therapeutics, Inc. on August 25, 2015.

 

*  *  *  *  *

 

I hereby certify that the foregoing Plan was approved by the stockholders of Mirna Therapeutics, Inc. on                , 2015.

 

Executed on this      day of                , 2015.

 

 

 

 

 

[Name, Title]

 

 

37




Exhibit 10.9(B)

 

MIRNA THERAPEUTICS, INC.
2015 EQUITY INCENTIVE AWARD PLAN

 

STOCK OPTION GRANT NOTICE

 

Mirna Therapeutics, Inc., a Delaware corporation, (the “Company”), pursuant to its 2015 Equity Incentive Award Plan, as may be amended from time to time (the “Plan”), hereby grants to the holder listed below (“Participant”), an option to purchase the number of shares of the Company’s common stock (“Stock”), set forth below (the “Option”).  This Option is subject to all of the terms and conditions set forth herein, as well as in the Plan and the Stock Option Agreement attached hereto as Exhibit A (the “Stock Option Agreement”), each of which are incorporated herein by reference.  Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Grant Notice and the Stock Option Agreement.

 

Participant:

 

«Participant»

 

 

 

Grant Date:

 

«Grant_Date»

 

 

 

Vesting Commencement Date:

 

«VCD»

 

 

 

Exercise Price per Share:

 

$[   ]

 

 

 

Total Exercise Price:

 

«Total_Price»

 

 

 

Total Number of Shares Subject to the Option:

 

«Shares» shares

 

 

 

Expiration Date:

 

«Expiration»

 

 

 

Vesting Schedule:

 

«Vesting_Schedule»

 

Type of Option:           

o   Incentive Stock Option            

o   Non-Qualified Stock Option

 

By his or her signature and the Company’s signature below, Participant agrees to be bound by the terms and conditions of the Plan, the Stock Option Agreement, and this Grant Notice.  Participant has reviewed the Stock Option Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of this Grant Notice, the Stock Option 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, this Grant Notice or the Stock Option Agreement.

 

MIRNA THERAPEUTICS, INC.: HOLDER:

 

PARTICIPANT:

 

 

 

By:

 

 

By:

 

Print Name:

 

 

Print Name:

«Participant»

Title:

 

 

 

 

Address:

 

 

Address:

 

 



 

EXHIBIT A

TO STOCK OPTION GRANT NOTICE

 

MIRNA THERAPEUTICS, INC. STOCK OPTION AGREEMENT

 

Pursuant to the Stock Option Grant Notice (the “Grant Notice”) to which this Stock Option Agreement (this “Agreement”) is attached, Mirna Therapeutics, Inc., a Delaware corporation (the “Company”), has granted to Participant an Option under the Company’s 2015 Equity Incentive Award Plan, as may be amended from time to time (the “Plan”), to purchase the number of shares of Stock indicated in the Grant Notice.

 

ARTICLE 1.

 

GENERAL

 

1.1                               Defined Terms.  Wherever the following terms are used in this Agreement they shall have the meanings specified below, unless the context clearly indicates otherwise.  Capitalized terms not specifically defined herein shall have the meanings specified in the Plan and the Grant Notice.

 

1.2                               Incorporation of Terms of Plan.  The Option is subject to the terms and conditions of the Plan which are 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

 

2.1                               Grant of Option.  In consideration of Participant’s past and/or continued employment with or service to the Company or any Affiliate and for other good and valuable consideration, effective as of the Grant Date set forth in the Grant Notice (the “Grant Date”), the Company irrevocably grants 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 Plan and this Agreement, subject to adjustments as provided in Section 14.2 of the Plan.  Unless designated as a Non-Qualified Stock Option in the Grant Notice, the Option shall be an Incentive Stock Option to the maximum extent permitted by law.

 

2.2                               Exercise Price.  The exercise price of the shares of Stock subject to the Option shall be as set forth in the Grant Notice, without commission or other charge; provided, however, that the price per share of the shares of Stock subject to the Option shall not be less than 100% of the Fair Market Value of a share of Stock on the Grant Date.  Notwithstanding the foregoing, if this Option is designated as an Incentive Stock Option and Participant is a Greater Than 10% Stockholder as of the Date of Grant, the exercise price per share of the shares of Stock subject to the Option shall not be less than 110% of the Fair Market Value of a share of Stock on the Grant Date.

 

2.3                               Consideration 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 Affiliate.  Nothing in the Plan or this Agreement shall confer upon Participant any right to continue in the employ or service of the Company or any Affiliate or shall interfere with or restrict in any way the rights of the Company and its Affiliates, 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

 

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extent expressly provided otherwise in a written agreement between the Company or an Affiliate and Participant.

 

ARTICLE 3.

PERIOD OF EXERCISABILITY

 

3.1                               Commencement of Exercisability.

 

(a)                                 Subject to Sections 3.2, 3.3, 5.11 and 5.17 hereof, the Option shall become vested and exercisable in such amounts and at such times as are set forth in the Grant Notice.

 

(b)                                 No portion of the Option which has not become vested and exercisable at the date of Participant’s Termination of Service shall thereafter become vested and exercisable, except as may be otherwise provided by the Administrator or as set forth in a written agreement between the Company and Participant.

 

(c)                                  Notwithstanding Section 3.1(a) hereof and the Grant Notice, but subject to Section 3.1(b) hereof, in the event of a Change in Control the Option shall be treated pursuant to Section 14.2 of the Plan.

 

3.2                               Duration 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.

 

3.3                               Expiration 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, which shall in no event be more than ten (10) years from the Grant Date;

 

(b)                                 If this Option is designated as an Incentive Stock Option and Participant, at the time the Option was granted, was a Greater Than 10% Stockholder, the expiration of five (5) years from the Grant Date;

 

(c)                                  The expiration of three (3) months from the date of Participant’s Termination of Service, unless such termination occurs by reason of Participant’s death or disability; or

 

(d)                                 The expiration of one (1) year from the date of Participant’s Termination of Service by reason of Participant’s death or disability.

 

3.4                               Special Tax Consequences.  Participant acknowledges that, to the extent that the aggregate Fair Market Value (determined as of the time the Option is granted) of all shares of Stock with respect to which Incentive Stock Options, including the Option (if applicable), are exercisable for the first time by Participant in any calendar year exceeds $100,000, the Option and such other options shall be Non-Qualified Stock Options to the extent necessary to comply with the limitations imposed by Section 422(d) of the Code.  Participant further acknowledges that the rule set forth in the preceding sentence shall be applied by taking the Option and other “incentive 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

 

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than three (3) months after Participant’s Termination of Employment, other than by reason of death or disability, will be taxed as a Non-Qualified Stock Option.

 

3.5                               Tax Indemnity.

 

(a)                                 Participant agrees to indemnify and keep indemnified the Company, any Affiliate and Participant’s employing company, if different, from and against any liability for or obligation to pay any Tax Liability (a “Tax Liability” being any liability for income tax, withholding tax and any other employment related taxes or social security contributions in any jurisdiction) that is attributable to (1) the grant or exercise of, or any benefit derived by Participant from, the Option, (2) the acquisition by Participant of the Stock on exercise of the Option or (3) the disposal of any Stock.

 

(b)                                 The Option cannot be exercised until Participant has made such arrangements as the Company may require for the satisfaction of any Tax Liability that may arise in connection with the exercise of the Option and/or the acquisition of the Stock by Participant.  The Company shall not be required to issue, allot or transfer Stock until Participant has satisfied this obligation.

 

(c)                                  Participant hereby acknowledges that the Company (i) makes no representations or undertakings regarding the treatment of any Tax Liabilities in connection with any aspect of the Option and (ii) does not commit to and is under no obligation to structure the terms of the grant or any aspect of any Award, including the Option, to reduce or eliminate Participant’s liability for Tax Liabilities or achieve any particular tax result.  Furthermore, if Participant becomes subject to tax in more than one jurisdiction between the date of grant of an Award, including the Option, and the date of any relevant taxable event, Participant acknowledges that the Company may be required to withhold or account for Tax Liabilities in more than one jurisdiction.

 

ARTICLE 4.

EXERCISE OF OPTION

 

4.1                               Person Eligible to Exercise.  Except as provided in Section 5.3 hereof, during the lifetime of Participant, only Participant may exercise the Option or any portion thereof, unless it has been disposed of pursuant to a DRO.  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 the deceased 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.

 

4.2                               Partial Exercise.  Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised in whole or in part at any time prior to the time when the Option or portion thereof becomes unexercisable under Section 3.3 hereof.  However, the Option shall not be exercisable with respect to fractional shares of Stock.

 

4.3                               Manner 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; for the avoidance of doubt, delivery shall include electronic delivery), 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

 

A-3



 

established by the Administrator.  The notice shall be signed by Participant or other person then entitled to exercise the Option or such portion of the Option;

 

(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, including payment of any applicable withholding tax, which shall be made by deduction from other compensation payable to Participant or in such other form of consideration permitted under Section 4.4 hereof that is acceptable to the Company;

 

(c)                                  Any other written representations or documents as may be required in the Administrator’s sole discretion to evidence compliance with the Securities Act, the Exchange Act or any other applicable law, rule or regulation; and

 

(d)                                 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 Company 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.

 

4.4                               Method 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; or

 

(c)                                  Other legal consideration acceptable to the Administrator (including, without limitation, through the delivery of a notice that Participant has placed a market sell order with a broker 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 Company, but in any event not later than the settlement of such sale).

 

4.5                               Conditions to Issuance of Stock.  The shares of Stock deliverable upon the exercise of the Option, or any portion thereof, may be either previously authorized but unissued shares of Stock or issued shares of Stock which have then been reacquired by the Company.  Such shares of Stock shall be fully paid and nonassessable.  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 conditions in Section 12.4 of the Plan and 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

 

A-4



 

Commission or of any 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, including payment of any applicable withholding tax, which may be in one or more of the forms of consideration permitted under Section 4.4 hereof; and

 

(e)                                  The lapse of such reasonable period of time following the exercise of the Option as the Administrator may from time to time establish for reasons of administrative convenience.

 

4.6                               Rights as Stockholder.  The holder of the Option shall not be, nor have any of the rights or privileges of, a stockholder of the Company, including, without limitation, voting rights and rights to dividends, in respect of any shares of Stock purchasable upon the exercise of any part of the Option unless and until such shares of Stock shall have been issued by the Company and held of record by such holder (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company).  No adjustment will be made for a dividend or other right for which the record date is prior to the date the shares of Stock are issued, except as provided in Section 14.2 of the Plan.

 

ARTICLE 5.

OTHER PROVISIONS

 

5.1                               Administration.  The Administrator shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan 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 in good faith shall be final and binding upon Participant, the Company and all other interested persons.  No member of the Committee or the Board shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, this Agreement or the Option.

 

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

 

5.3                               Option Not Transferable.

 

(a)                                 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 or, subject to the consent of the Administrator, pursuant to a DRO, unless and until the Option has been exercised and 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 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, 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) unless and until the Option has been exercised, and any attempted disposition thereof prior to exercise shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence.

 

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(b)                                 During the lifetime of Participant, only Participant may exercise the Option (or any portion thereof), unless it has been disposed of pursuant to a DRO; after the death of Participant, any exercisable portion of the Option may, prior to the time when such portion becomes unexercisable under the Plan or this Agreement, 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.

 

(c)                                  Notwithstanding any other provision in this Agreement, Participant may, in the manner determined by the Administrator, designate a beneficiary to exercise the rights of Participant and to receive any distribution with respect to the Option upon Participant’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 this Agreement, except to the extent the Plan and this Agreement otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Administrator.  If Participant 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 Participant’s spouse or domestic partner, as applicable, as his or her beneficiary with respect to more than 50% of Participant’s interest in the Option shall not be effective without the prior written consent of Participant’s spouse or domestic partner.  If no beneficiary has been designated or survives Participant, payment shall be made to the person entitled thereto pursuant to Participant’s will or the laws of descent and distribution.  Subject to the foregoing, a beneficiary designation may be changed or revoked by Participant at any time provided the change or revocation is filed with the Administrator prior to Participant’s death.

 

5.4                               Tax Consultation.  Participant understands that Participant may suffer adverse tax consequences as a result of the grant, vesting and/or exercise of the Option, and/or with the purchase or disposition of the shares of Stock subject to the Option.  Participant represents that Participant has consulted with any tax consultants Participant deems advisable in connection with the purchase or disposition of such shares of Stock and that Participant is not relying on the Company for any tax advice.

 

5.5                               Binding Agreement.  Subject to the limitation on the transferability of the Option  contained herein, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

 

5.6                               Adjustments Upon Specified Events.  The Administrator may accelerate the vesting 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 14.2 of the Plan (including, without limitation, an extraordinary cash dividend on such Stock), the Administrator shall make such adjustments 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 Section 14.2 of the Plan.

 

5.7                               Notices.  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 5.7, either party may hereafter designate a different address for notices to be given to that party.  Any notice which is required to be given to Participant shall, if Participant is then deceased, be given to the person entitled to exercise his or her Option pursuant to Section 4.1 hereof by written notice under this Section 5.7.  Any notice shall be deemed duly given when sent via email or when sent by certified mail (return

 

A-6



 

receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service.

 

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

 

5.9                               Governing 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.

 

5.10                        Conformity to Securities Laws.  Participant acknowledges that the Plan and this Agreement are intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act and any and all Applicable Law and regulations and rules promulgated by the Securities and Exchange Commission thereunder, 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 such 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 such Applicable Law.

 

5.11                        Amendment, 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, however, 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.

 

5.12                        Successors 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 herein set forth in Section 5.3 hereof, this Agreement shall be binding upon Participant and his or her heirs, executors, administrators, successors and assigns.

 

5.13                        Notification of Disposition.  If this Option is designated as an Incentive Stock Option, Participant shall give prompt 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 with respect to such shares of Stock 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.

 

5.14                        Limitations Applicable to Section 16 Persons.  Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Option 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.

 

5.15                        Not a Contract of Service Relationship.  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 of its Affiliates or interfere with or restrict in any way with the right of the Company

 

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or any of its Affiliates, which rights are hereby expressly reserved, to discharge or to terminate for any reason whatsoever, with or without cause, the services of Participant’s at any time.

 

5.16                        Entire Agreement.  The Plan, the Grant Notice and this Agreement (including all Exhibits thereto) 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.

 

5.17                        Section 409A.  This Option 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 (or any Exhibits hereto), if at any time the Administrator determines that the Option (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 any Exhibits hereto), 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 either for the Option to be exempt from the application of Section 409A or to comply with the requirements of Section 409A.

 

5.18                        Limitation on Participant’s Rights.  Participation in the Plan confers no rights or interests other than as herein provided.  This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and 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.

 

5.19                        Consent to Personal Data Use.  Participant acknowledges and agrees that the Company is permitted to collect, hold, store, process, modify, transfer, lock or delete certain personal (and sensitive) data in any medium about Participant (i.e., name, home address, telephone number, e-mail address, date of birth, tax identification number and payroll information) as a part of its personnel and other business records for the exclusive purpose of tracking stock option grants, processing stock option exercises and subsequent share transfers and sales, arranging for appropriate tax reporting and withholding and regulatory tracking and reporting purposes and the Company may disclose such information to third parties in the event that such disclosure is in the Company’s view required for the proper tracking of stock option grants, processing stock option exercises and subsequent share transfers and sales, arranging for appropriate tax reporting and withholding and regulatory tracking. For these purposes, this personal data will be transferred to other locations, including locations outside of the European Union and in so-called insecure third-party countries that do not guarantee the data privacy protection level of the European Union.

 

5.20                        Rules Particular To Specific Countries.

 

(a)                                 Generally.  Participant shall, if required by the Administrator, enter into an election with the Company or an Affiliate (in a form approved by the Company) under which any liability to the Company’s (or an Affiliate’s) Tax Liability, including, but not limited to, National Insurance Contributions (“NICs”) and the Fringe Benefit Tax (“FBT”), is transferred to and met by Participant.  For purposes of this Section 5.20, Tax Liability shall mean any and all liability under applicable non-U.S. laws, rules or regulations from any income tax, the Company’s (or an Affiliate’s) NICs, FBT or similar liability and Participant’s NICs, FBT or similar liability that are attributable to:

 

A-8



 

(A) the grant or exercise of, or any other benefit derived by Participant from the Option; (B) the acquisition by Participant of the shares of Stock on exercise of the Option; or (C) the disposal of any shares of Stock acquired upon exercise of the Option.

 

(b)                                 Tax Indemnity.  Participant shall indemnify and keep indemnified the Company and any of its Affiliates from and against any Tax Liability.

 

*     *     *     *     *

 

A-9




Exhibit 10.9(C)

 

MIRNA THERAPEUTICS, INC.

2015 EQUITY INCENTIVE AWARD PLAN
RESTRICTED STOCK AWARD GRANT NOTICE

 

Mirna Therapeutics, Inc., a Delaware corporation, (the “Company”), pursuant to its 2015 Equity Incentive Award Plan, as amended from time to time (the “Plan”), hereby grants to the individual listed below (the “Participant”), in consideration of the mutual agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the number of shares of the Company’s Common Stock set forth below (the “Shares”).  This Restricted Stock award is subject to all of the terms and conditions as set forth herein and in the Restricted Stock Award Agreement attached hereto as Exhibit A (the “Agreement”) (including without limitation the Restrictions on the Shares set forth in the Agreement) and the Plan, each of which is incorporated herein by reference.  Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Restricted Stock Award Grant Notice (the “Grant Notice”) and the Agreement.

 

Participant:

 

[                                         ]

 

 

 

Grant Date:

 

[                                         ]

 

 

 

Total Number of Shares of Restricted Stock:

 

[                      ] Shares

 

 

 

Vesting Commencement Date:

 

[                                         ]

 

 

 

Vesting Schedule:

 

[                 ]

 

 

 

Termination:

 

If the Participant experiences a Termination of Service prior to the applicable vesting date, any portion of the Award (and the Shares subject thereto) that has not become vested on or prior to the date of such Termination of Service (after taking into consideration any vesting that may occur in connection with such Termination of Service, if any) will thereupon be automatically forfeited by the Participant, and the Participant’s rights in such portion of the Award and any Shares subject thereto shall thereupon lapse and expire.

 

By his or her signature and the Company’s signature below, the Participant agrees to be bound by the terms and conditions of the Plan, the Agreement and this Grant Notice.  The Participant has reviewed the Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of this Grant Notice, the Agreement and the Plan.  The Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, this Grant Notice or the Agreement.  In addition, by signing below, the Participant also agrees that the Company, in its sole discretion, may satisfy any withholding obligations in accordance with Section 2.2(c) of the Agreement by (i) withholding shares of Common Stock otherwise issuable to the Participant upon vesting of the shares of Restricted Stock, (ii) instructing a broker on the Participant’s behalf to sell shares of Common Stock otherwise issuable to the Participant upon vesting of the shares of Restricted Stock and submit the proceeds of such sale to the Company, or (iii) using any other method permitted by Section 2.2(c) of the Agreement or the Plan.  If the participant is married or part of a registered domestic partnership, his or her spouse or domestic partner has signed the Consent of Spouse or Registered Domestic Partner attached to this Grant Notice as Exhibit B.

 

MIRNA THERAPEUTICS, INC.:

 

PARTICIPANT:

 

 

 

By:

 

 

By:

 

Print Name:

 

 

Print Name:

 

Title:

 

 

 

 

Address:

 

 

Address:

 

 

 

 

 

 

 

1



 

EXHIBIT A
TO RESTRICTED STOCK AWARD GRANT NOTICE

 

RESTRICTED STOCK AWARD AGREEMENT

 

Pursuant to the Restricted Stock Award Grant Notice (the “Grant Notice”) to which this Restricted Stock Award Agreement (this “Agreement”) is attached, Mirna Therapeutics, Inc., a Delaware corporation (the “Company”) has granted to the Participant the number of shares of Restricted Stock (the “Shares”) under the Company’s 2015 Equity Incentive Award Plan, as amended from time to time (the “Plan”), as set forth in the Grant Notice.  Capitalized terms not specifically defined herein shall have the meanings specified in the Plan and Grant Notice.

 

ARTICLE I.

GENERAL

 

1.1                               Incorporation of Terms of Plan.  The Award (as defined below) is subject to the terms and conditions of the Plan, which are incorporated herein by reference.  In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control.

 

ARTICLE II.

AWARD OF RESTRICTED STOCK

 

2.1                               Award of Restricted Stock.

 

(a)                                 Award.  Pursuant to the Grant Notice and upon the terms and conditions set forth in the Plan and this Agreement, effective as of the Grant Date set forth in the Grant Notice, the Company has granted to the Participant an award of Restricted Stock (the “Award”) under the Plan in consideration of the Participant’s past and/or continued employment with or service to the Company or any Affiliate, and for other good and valuable consideration.  The number of Shares subject to the Award is set forth in the Grant Notice.  The Participant is an Employee, Director or Consultant of the Company or one of its Affiliates.

 

(b)                                 Book Entry Form; Certificates.  At the sole discretion of the Administrator, the Shares will be issued in either (i) uncertificated form, with the Shares recorded in the name of the Participant in the books and records of the Company’s transfer agent with appropriate notations regarding the restrictions on transfer imposed pursuant to this Agreement, and upon vesting and the satisfaction of all conditions set forth in Sections 2.2(b) and (d) hereof, the Company shall remove such notations on any such vested Shares in accordance with Section 2.2(e) below; or (ii) certificated form pursuant to the terms of Sections 2.1(c), (d) and (e) below.

 

(c)                                  Legend.  Certificates representing Shares issued pursuant to this Agreement shall, until all Restrictions (as defined below) imposed pursuant to this Agreement lapse or have been removed and the Shares have thereby become vested or the Shares represented thereby have been forfeited hereunder, bear the following legend (or such other legend as shall be determined by the Administrator):

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN VESTING REQUIREMENTS AND MAY BE SUBJECT TO FORFEITURE UNDER THE TERMS OF A RESTRICTED STOCK AWARD AGREEMENT, BY AND BETWEEN MIRNA THERAPEUTICS, INC. AND THE REGISTERED OWNER OF

 

A-1



 

SUCH SHARES, AND SUCH SHARES MAY NOT BE, DIRECTLY OR INDIRECTLY, OFFERED, TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNDER ANY CIRCUMSTANCES, EXCEPT PURSUANT TO THE PROVISIONS OF SUCH AGREEMENT.”

 

(d)                                 Escrow.  The Secretary of the Company or such other escrow holder as the Administrator may appoint may retain physical custody of any certificates representing the Shares until all of the Restrictions on transfer imposed pursuant to this Agreement lapse or shall have been removed; in such event, the Participant shall not retain physical custody of any certificates representing unvested Shares issued to him or her.  The Participant, by acceptance of the Award, shall be deemed to appoint, and does so appoint, the Company and each of its authorized representatives as the Participant’s attorney(s)-in-fact to effect any transfer of unvested forfeited Shares (or Shares otherwise reacquired by the Company hereunder) to the Company as may be required pursuant to the Plan or this Agreement and to execute such documents as the Company or such representatives deem necessary or advisable in connection with any such transfer.

 

(e)                                  Removal of Notations; Delivery of Certificates Upon Vesting.  As soon as administratively practicable after the vesting of any Shares subject to the Award pursuant to Section 2.2(b) hereof, the Company shall, as applicable, either remove the notations on any Shares subject to the Award issued in book entry form which have vested or deliver to the Participant a certificate or certificates evidencing the number of Shares subject to the Award which have vested (or, in either case, such lesser number of Shares as may be permitted pursuant to Section 12.2 of the Plan). The Participant (or the beneficiary or personal representative of the Participant in the event of the Participant’s death or incapacity, as the case may be) shall deliver to the Company any representations or other documents or assurances required by the Company.  The Shares so delivered shall no longer be subject to the Restrictions hereunder.

 

2.2                               Restrictions.

 

(a)                                 Forfeiture.  Notwithstanding any contrary provision of this Agreement, upon the Participant’s Termination of Service for any or no reason, any portion of the Award (and the Shares subject thereto) which has not vested prior to or in connection with such Termination of Service (after taking into consideration any accelerated vesting and lapsing of Restrictions which may occur in connection with such Termination of Service (if any)) shall thereupon be forfeited immediately and without any further action by the Company, and the Participant’s rights in any Shares and such portion of the Award shall thereupon lapse and expire.  For purposes of this Agreement, “Restrictions” shall mean the restrictions on sale or other transfer set forth in Section 3.3 hereof and the exposure to forfeiture set forth in this Section 2.2(a).

 

(b)                                 Vesting and Lapse of Restrictions.  Subject to Section 2.2(a) above, the Award shall vest and Restrictions shall lapse in accordance with the vesting schedule set forth in the Grant Notice (rounding down to the nearest whole Share).

 

(c)                                  Tax Withholding.  As set forth in Section 12.2 of the Plan, the Company shall have the authority and the right to deduct or withhold, or to require the Participant to remit to the Company, an amount sufficient to satisfy all applicable federal, state and local taxes required by law to be withheld with respect to any taxable event arising in connection with the Award.  The Company shall not be obligated to deliver any new certificate representing Shares to the Participant or the Participant’s legal representative or enter such Shares in book entry form unless and until the Participant or the Participant’s legal representative shall have paid or otherwise satisfied in full the amount of all federal, state and local

 

A-2



 

taxes applicable to the taxable income of the Participant resulting from the grant or vesting of the Award or the issuance of Shares.

 

(d)                                 Conditions to Delivery of Shares.  Subject to Section 2.1 above, the Shares deliverable under this Award may be either previously authorized but unissued Shares, treasury Shares or Shares purchased on the open market.  Such Shares shall be fully paid and nonassessable.  The Company shall not be required to issue or deliver any Shares under this Award prior to fulfillment of the conditions set forth in Section 12.4 of the Plan.

 

Notwithstanding the foregoing, the issuance of such Shares shall not be delayed if and to the extent that such delay would result in a violation of Section 409A of the Code.  In the event that the Company delays the issuance of such Shares because it reasonably determines that the issuance of such Shares will violate Applicable Law, such issuance shall be made at the earliest date at which the Company reasonably determines that issuing such Shares will not cause such violation, as required by Treasury Regulation Section 1.409A-2(b)(7)(ii).

 

(e)                                  To ensure compliance with the Restrictions, the provisions of the charter documents of the Company, and/or Applicable Law and for other proper purposes, the Company may issue appropriate “stop transfer” and other instructions to its transfer agent with respect to the Restricted Stock.  The Company shall notify the transfer agent as and when the Restrictions lapse.

 

2.3                               Consideration to the Company.  In consideration of the grant of the Award pursuant hereto, the Participant agrees to render faithful and efficient services to the Company or any Affiliate.

 

ARTICLE III.


OTHER PROVISIONS

 

3.1                               Section 83(b) Election.  If the Participant 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 Participant would otherwise be taxable under Section 83(a) of the Code, the Participant hereby agrees to deliver a copy of such election to the Company promptly after filing such election with the Internal Revenue Service.

 

3.2                               Administration. The Administrator shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan 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 in good faith shall be final and binding upon the Participant, the Company and all other interested persons.  No member of the Administrator or the Board shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, this Agreement or the Award.

 

3.3                               Restricted Stock Not Transferable.  Until the Restrictions hereunder lapse or expire pursuant to this Agreement and the Shares vest, the Restricted Stock (including any Shares received by holders thereof with respect to Restricted Stock as a result of stock dividends, stock splits or any other form of recapitalization) shall be subject to the restrictions on transferability set forth in Section 12.3 of the Plan; provided, however, that this Section 3.3 notwithstanding, with the consent of the Administrator, the Shares may be transferred to one or more Permitted Transferees, subject to and in accordance with Section 12.3 of the Plan.

 

A-3



 

3.4                               Rights as Stockholder.  Except as otherwise provided herein, upon the Grant Date, the Participant shall have all the rights of a stockholder of the Company with respect to the Shares, subject to the Restrictions, including, without limitation, voting rights and rights to receive any cash or stock dividends, in respect of the Shares subject to the Award and deliverable hereunder.

 

3.5                               Tax Consultation.  The Participant understands that the Participant may suffer adverse tax consequences in connection with the Restricted Stock granted pursuant to this Agreement (and the Shares issuable with respect thereto).  The Participant represents that the Participant has consulted with any tax consultants the Participant deems advisable in connection with the Restricted Stock and that the Participant is not relying on the Company for any tax advice.

 

3.6                               Adjustments Upon Specified Events.  The Administrator may accelerate the vesting of the Restricted Stock in such circumstances as it, in its sole discretion, may determine.  The Participant acknowledges that the Restricted Stock is subject to adjustment, modification and termination in certain events as provided in this Agreement and Section 14.2 of the Plan.

 

3.7                               Notices.  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 the Participant shall be addressed to the Participant at the Participant’s last address reflected on the Company’s records.  By a notice given pursuant to this Section 3.7, 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.

 

3.8                               Participant’s Representations.  If the Shares issuable hereunder have not been registered under the Securities Act or any applicable state laws on an effective registration statement at the time of such issuance, the Participant shall, if required by the Company, concurrently with such issuance, make such written representations as are deemed necessary or appropriate by the Company and/or its counsel.

 

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

 

3.10                        Governing 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.

 

3.11                        Conformity to Securities Laws.  The Participant acknowledges that the Plan and this Agreement are intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act, and any and all Applicable Law.  Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Award is granted, only in such a manner as to conform to such 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 such Applicable Law.

 

3.12                        Amendment, 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, however, that, except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall adversely affect the Award in any material way without the prior written consent of the Participant.

 

A-4



 

3.13                        Successors and Assigns.  The Company or any Affiliate 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 and its Affiliates.  Subject to the restrictions on transfer set forth in Section 3.3 hereof, this Agreement shall be binding upon the Participant and his or her heirs, executors, administrators, successors and assigns.

 

3.14                        Limitations Applicable to Section 16 Persons.  Notwithstanding any other provision of the Plan or this Agreement, if the Participant is subject to Section 16 of the Exchange Act, then the Plan, the Award 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.

 

3.15                        Not a Contract of Service Relationship.  Nothing in this Agreement or in the Plan shall confer upon the Participant any right to continue to serve as an Employee or other service provider of the Company or any of its Affiliates or shall interfere with or restrict in any way the rights of the Company and its Affiliates, which rights are hereby expressly reserved, to discharge or terminate the services of the 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 an Affiliate and the Participant.

 

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

 

3.17                        Limitation on the 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.  The Participant shall have only the rights of a general unsecured creditor of the Company and its Affiliates with respect to amounts credited and benefits payable, if any, with respect to the Shares issuable hereunder.

 

A-5



 

EXHIBIT B
TO RESTRICTED STOCK AWARD GRANT NOTICE

 

CONSENT OF SPOUSE OR REGISTERED DOMESTIC PARTNER

 

I,                , spouse or domestic partner of                , have read and approve the Restricted Stock Award Grant Notice (the “Grant Notice”) to which this Consent of Spouse or Registered Domestic Partner is attached and the Restricted Stock Award Agreement (the “Agreement”) attached to the Grant Notice.  In consideration of issuing to my spouse or domestic partner the shares of the common stock of Mirna Therapeutics, Inc. set forth in the Grant Notice, I hereby appoint my spouse or domestic partner as my attorney-in-fact in respect to the exercise of any rights under the Agreement and agree to be bound by the provisions of the Agreement insofar as I may have any rights in said Agreement or any shares of the common stock of Mirna Therapeutics, Inc. issued pursuant thereto under the community property laws or similar laws relating to marital property in effect in the state of our residence as of the date of the signing of the foregoing Agreement.

 

Dated:

 

 

 

 

 

Signature of Spouse or Domestic Partner

 

B-1


 

MIRNA THERAPEUTICS, INC.
2015 EQUITY INCENTIVE AWARD PLAN

 

RESTRICTED STOCK UNIT AWARD GRANT NOTICE

 

Mirna Therapeutics, Inc., a Delaware corporation, (the “Company”), pursuant to its 2015 Equity Incentive Award Plan, as amended from time to time (the “Plan”), hereby grants to the holder listed below (the “Participant”), an award of restricted stock units (“Restricted Stock Units” or “RSUs”).  Each vested Restricted Stock Unit represents the right to receive, in accordance with the Restricted Stock Unit Award Agreement attached hereto as Exhibit A (the “Agreement”), one share of Common Stock (“Share”).  This award of Restricted Stock Units is subject to all of the terms and conditions set forth herein and in the Agreement and the Plan, each of which are incorporated herein by reference.  Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Restricted Stock Unit Award Grant Notice (the “Grant Notice”) and the Agreement.

 

Participant:

 

[                          ]

 

 

 

Grant Date:

 

[                          ]

 

 

 

Total Number of RSUs:

 

[             ]

 

 

 

Vesting Commencement Date:

 

[             ]

 

 

 

Vesting Schedule:

 

[             ]

 

 

 

Termination:

 

If the Participant experiences a Termination of Service prior to the applicable vesting date, all RSUs that have not become vested on or prior to the date of such Termination of Service (after taking into consideration any vesting that may occur in connection with such Termination of Service, if any) will thereupon be automatically forfeited by the Participant without payment of any consideration therefor.

 

By his or her signature and the Company’s signature below, the Participant agrees to be bound by the terms and conditions of the Plan, the Agreement and this Grant Notice.  The Participant has reviewed the Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of this Grant Notice, the Agreement and the Plan.  The Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, this Grant Notice or the Agreement.  In addition, by signing below, the Participant also agrees that the Company, in its sole discretion, may satisfy any withholding obligations in accordance with Section 2.6(b) of the Agreement by (i) withholding shares of Common Stock otherwise issuable to the Participant upon vesting of the RSUs, (ii) instructing a broker on the Participant’s behalf to sell shares of Common Stock otherwise issuable to the Participant upon vesting of the RSUs and submit the proceeds of such sale to the Company, or (iii) using any other method permitted by Section 2.6(b) of the Agreement or the Plan.

 

MIRNA THERAPEUTICS, INC.:

 

PARTICIPANT:

 

 

 

By:

 

 

By:

 

Print Name:

 

 

Print Name:

 

Title:

 

 

 

 

Address:

 

 

Address:

 

 



 

EXHIBIT A

TO RESTRICTED STOCK UNIT AWARD GRANT NOTICE

 

RESTRICTED STOCK UNIT AWARD AGREEMENT

 

Pursuant to the Restricted Stock Unit Award Grant Notice (the “Grant Notice”) to which this Restricted Stock Unit Award Agreement (this “Agreement”) is attached, Mirna Therapeutics, Inc., a Delaware corporation (the “Company”), has granted to the Participant the number of restricted stock units (“Restricted Stock Units” or “RSUs”) set forth in the Grant Notice under the Company’s 2015 Equity Incentive Award Plan, as amended from time to time (the “Plan”).  Each vested Restricted Stock Unit represents the right to receive one share of Common Stock (“Share”).  Capitalized terms not specifically defined herein shall have the meanings specified in the Plan and Grant Notice.

 

ARTICLE IV.

GENERAL

 

4.1                                           Incorporation of Terms of Plan.  The RSUs are subject to the terms and conditions of the Plan, which are incorporated herein by reference.  In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control.

 

ARTICLE V.

GRANT OF RESTRICTED STOCK UNITS

 

5.1                                           Grant of RSUs.  Pursuant to the Grant Notice and upon the terms and conditions set forth in the Plan and this Agreement, effective as of the Grant Date set forth in the Grant Notice, the Company hereby grants to the Participant an award of RSUs under the Plan in consideration of the Participant’s past and/or continued employment with or service to the Company or any Affiliates and for other good and valuable consideration.

 

5.2                                           Unsecured Obligation to RSUs.  Unless and until the RSUs have vested in the manner set forth in Article 2 hereof, the Participant will have no right to receive Common Stock under any such RSUs.  Prior to actual payment of any vested RSUs, such RSUs will represent an unsecured obligation of the Company, payable (if at all) only from the general assets of the Company.

 

5.3                                           Vesting Schedule.  Subject to Section 2.5 hereof, the RSUs shall vest and become nonforfeitable with respect to the applicable portion thereof according to the vesting schedule set forth in the Grant Notice (rounding down to the nearest whole Share).

 

5.4                                           Consideration to the Company.  In consideration of the grant of the award of RSUs pursuant hereto, the Participant agrees to render faithful and efficient services to the Company or any Affiliate.

 

5.5                                           Forfeiture, Termination and Cancellation upon Termination of Service.  Notwithstanding any contrary provision of this Agreement or the Plan, upon the Participant’s Termination of Service for any or no reason, all Restricted Stock Units which have not vested prior to or in connection with such Termination of Service (after taking into consideration any accelerated vesting which may occur in connection with such Termination of Service (if any)) shall thereupon automatically be forfeited, terminated and cancelled as of the applicable termination date without payment of any consideration by the Company, and the Participant, or the Participant’s beneficiary or personal representative, as the case

 



 

may be, shall have no further rights hereunder.  No portion of the RSUs which has not become vested as of the date on which the Participant incurs a Termination of Service shall thereafter become vested.

 

5.6                                           Issuance of Common Stock upon Vesting.

 

(a)                                 As soon as administratively practicable following the vesting of any Restricted Stock Units pursuant to Section 2.3 hereof, but in no event later than thirty (30) days after such vesting date (for the avoidance of doubt, this deadline is intended to comply with the “short term deferral” exemption from Section 409A of the Code), the Company shall deliver to the Participant (or any transferee permitted under Section 3.2 hereof) a number of Shares (either by delivering one or more certificates for such Shares or by entering such Shares in book entry form, as determined by the Company in its sole discretion) equal to the number of RSUs subject to this Award that vest on the applicable vesting date, unless such RSUs terminate prior to the given vesting date pursuant to Section 2.5 hereof.  Notwithstanding the foregoing, in the event Shares cannot be issued pursuant to Section 12.4 of the Plan, the Shares shall be issued pursuant to the preceding sentence as soon as administratively practicable after the Administrator determines that Shares can again be issued in accordance with such Section.

 

(b)                                 As set forth in Section 12.2 of the Plan, the Company shall have the authority and the right to deduct or withhold, or to require the Participant to remit to the Company, an amount sufficient to satisfy all applicable federal, state and local taxes required by law to be withheld with respect to any taxable event arising in connection with the Restricted Stock Units.  The Company shall not be obligated to deliver any new certificate representing Shares to the Participant or the Participant’s legal representative or enter such Shares in book entry form unless and until the Participant or the Participant’s legal representative shall have paid or otherwise satisfied in full the amount of all federal, state and local taxes applicable to the taxable income of the Participant resulting from the grant or vesting of the Restricted Stock Units or the issuance of Shares.

 

5.7                                           Conditions to Delivery of Shares.  The Shares deliverable hereunder may be either previously authorized but unissued Shares, treasury Shares or issued Shares which have then been reacquired by the Company.  Such Shares shall be fully paid and nonassessable.  The Company shall not be required to issue or deliver any certificates or make any book entries evidencing Shares deliverable hereunder prior to fulfillment of the conditions set forth in Section 12.4 of the Plan.

 

5.8                                           Rights as Stockholder.  The holder of the RSUs shall not be, nor have any of the rights or privileges of, a stockholder of the Company, including, without limitation, voting rights and rights to dividends, in respect of the RSUs and any Shares underlying the RSUs and deliverable hereunder unless and until such Shares shall have been issued by the Company and held of record by such holder (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company).  No adjustment shall be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 14.2 of the Plan.

 

ARTICLE VI.

OTHER PROVISIONS

 

6.1                                           Administration.  The Administrator shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan 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 in good faith shall be final and binding upon the Participant, the Company and all other interested persons.  No member of the Administrator or

 



 

the Board shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, this Agreement or the RSUs.

 

6.2                                           RSUs Not Transferable.  The RSUs shall be subject to the restrictions on transferability set forth in Section 12.3 of the Plan; provided, however, that this Section 3.2 notwithstanding, with the consent of the Administrator, the RSUs may be transferred to one or more Permitted Transferees, subject to and in accordance with Section 12.3 of the Plan.

 

6.3                               Tax Consultation.  The Participant understands that the Participant may suffer adverse tax consequences in connection with the RSUs granted pursuant to this Agreement (and the Shares issuable with respect thereto).  The Participant represents that the Participant has consulted with any tax consultants the Participant deems advisable in connection with the RSUs and the issuance of Shares with respect thereto and that the Participant is not relying on the Company for any tax advice.

 

6.4                               Binding Agreement. Subject to the limitation on the transferability of the RSUs contained herein, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

 

6.5                               Adjustments Upon Specified Events.  The Administrator may accelerate the vesting of the RSUs in such circumstances as it, in its sole discretion, may determine.  The Participant acknowledges that the RSUs are subject to adjustment, modification and termination in certain events as provided in this Agreement and Section 14.2 of the Plan.

 

6.6                               Notices.  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 the Participant shall be addressed to the Participant at the Participant’s last address reflected on the Company’s records.  By a notice given pursuant to this Section 3.6, 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.

 

6.7                               Participant’s Representations.  If the Shares issuable hereunder have not been registered under the Securities Act or any applicable state laws on an effective registration statement at the time of such issuance, the Participant shall, if required by the Company, concurrently with such issuance, make such written representations as are deemed necessary or appropriate by the Company and/or its counsel.

 

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

 

6.9                               Governing 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.

 

6.10                        Conformity to Securities Laws.  The Participant acknowledges that the Plan and this Agreement are intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act and any other Applicable Law.  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 to such Applicable Law.

 



 

6.11                        Amendment, 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, however, 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 the Participant.

 

6.12                        Successors 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 herein set forth in Section 3.2 hereof, this Agreement shall be binding upon the Participant and his or her heirs, executors, administrators, successors and assigns.

 

6.13                        Limitations Applicable to Section 16 Persons.  Notwithstanding any other provision of the Plan or this Agreement, if the Participant is subject to Section 16 of the Exchange Act, then the Plan, the RSUs 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.

 

6.14                        Not a Contract of Service Relationship.  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 of its Affiliates or interfere with or restrict in any way with the right of the Company or any of its Affiliates, which rights are hereby expressly reserved, to discharge or to terminate for any reason whatsoever, with or without cause, the services of the Participant’s at any time.

 

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

 

6.16                        Section 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.

 

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

 



 

payable, if any, with respect to the RSUs, and rights no greater than the right to receive the Common Stock as a general unsecured creditor with respect to RSUs, as and when payable hereunder.

 




Exhibit 10.10

 

MIRNA THERAPEUTICS, INC.
2015 EMPLOYEE STOCK PURCHASE PLAN

 

ARTICLE I.
PURPOSE, SCOPE AND ADMINISTRATION OF THE PLAN

 

1.1                               Purpose and Scope.  The purpose of the Mirna Therapeutics, Inc. 2015 Employee Stock Purchase Plan, as it may be amended from time to time, (the “Plan”) is to assist employees of Mirna Therapeutics, Inc., a Delaware corporation, (the “Company”) and its Designated Subsidiaries in acquiring a stock ownership interest in the Company pursuant to a plan which is intended to qualify as an “employee stock purchase plan” under Section 423 of the Code and to help such employees provide for their future security and to encourage them to remain in the employment of the Company and its Subsidiaries.

 

ARTICLE II.
DEFINITIONS

 

Whenever the following terms are used in the Plan, they shall have the meaning specified below unless the context clearly indicates to the contrary.  The singular pronoun shall include the plural where the context so indicates.

 

2.1                               Agent” means the brokerage firm, bank or other financial institution, entity or person(s), if any, engaged, retained, appointed or authorized to act as the agent of the Company or an Employee with regard to the Plan.

 

2.2                               Administrator” shall mean the Committee, or such individuals to which authority to administer the Plan has been delegated under Section 7.1 hereof.

 

2.3                               Board” shall mean the Board of Directors of the Company.

 

2.4                               Code” shall mean the Internal Revenue Code of 1986, as amended.

 

2.5                               Committee” shall mean the Compensation Committee of the Board.

 

2.6                               Common Stock” shall mean the common stock of the Company.

 

2.7                               Company” shall have such meaning as set forth in Section 1.1 hereof.

 

2.8                               Compensation” of an Employee shall mean the regular straight-time earnings or base salary paid to the Employee from the Company on each Payday as compensation for services to the Company or any Designated Subsidiary, before deduction for any salary deferral contributions made by the Employee to any tax-qualified or nonqualified deferred compensation plan, including overtime, shift differentials, vacation pay, salaried production schedule premiums, holiday pay, jury duty pay, funeral leave pay, paid time off, military pay, prior week adjustments and weekly bonus, but excluding education or tuition reimbursements, imputed income arising under any group insurance or benefit program, travel

 



 

expenses, business and moving reimbursements, income received in connection with any stock options, restricted stock, restricted stock units or other compensatory equity awards and all contributions made by the Company or any Designated Subsidiary for the Employee’s benefit under any employee benefit plan now or hereafter established.  Such Compensation shall be calculated before deduction of any income or employment tax withholdings, but shall be withheld from the Employee’s net income.

 

2.9                               Designated Subsidiary shall mean each Subsidiary that have been designated by the Board or Committee from time to time in its sole discretion as eligible to participate in the Plan, including any Subsidiary in existence on the Effective Date and any Subsidiary formed or acquired following the Effective Date, in accordance with Section 7.2 hereof.

 

2.10                        Effective Date” shall mean the date immediately preceding the date the Company’s registration statement relating to its initial public offering becomes effective, provided that the Board has adopted, and the Company’s stockholders have approved, the Plan prior to or on such date.

 

2.11                        Eligible Employee” shall mean an Employee who (a) is customarily scheduled to work at least twenty (20) hours per week, (b) whose customary employment is more than five (5) months in a calendar year and (c) after the granting of the Option would not be deemed for purposes of Section 423(b)(3) of the Code to possess five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or any Subsidiary. For purposes of clause (c), the rules of Section 424(d) of the Code with regard to the attribution of stock ownership shall apply in determining the stock ownership of an individual, and stock which an Employee may purchase under outstanding options shall be treated as stock owned by the Employee.  Notwithstanding the foregoing, the Administrator may exclude from participation in the Plan as an Eligible Employee (x) any Employee that is a “highly compensated employee” of the Company or any Designated Subsidiary (within the meaning of Section 414(q) of the Code), or that is such a “highly compensated employee” (A) with compensation above a specified level, (B) who is an officer and/or (C) is subject to the disclosure requirements of Section 16(a) of the Exchange Act and/or (y) any Employee who is a citizen or resident of a foreign jurisdiction (without regard to whether they are also a citizen of the United States or a resident alien (within the meaning of Section 7701(b)(1)(A) of the Code)) if either (i) the grant of the Option is prohibited under the laws of the jurisdiction governing such Employee, or (ii) compliance with the laws of the foreign jurisdiction would cause the Plan or the Option to violate the requirements of Section 423 of the Code; provided that any exclusion in clauses (x), and/or (y) shall be applied in an identical manner under each Offering Period to all Employees of the Company and all Designated Subsidiaries, in accordance with Treasury Regulation Section 1.423-2(e).

 

2.12                        Employee” shall mean any person who renders services to the Company or a Designated Subsidiary in the status of an employee within the meaning of Section 3401(c) of the Code.  “Employee” shall not include any director of the Company or a Designated Subsidiary who does not render services to the Company or a Designated Subsidiary in the status of an employee within the meaning of Section 3401(c) of the Code.  For purposes of the Plan, the employment relationship shall be treated as continuing intact while the individual is on military leave, sick leave or other leave of absence approved by the Company or Designated Subsidiary

 

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and meeting the requirements of Treasury Regulation Section 1.421-1(h)(2).  Where the period of leave exceeds three (3) months, or such other period specified in Treasury Regulation Section 1.421-1(h)(2), and the individual’s right to reemployment is not guaranteed either by statute or by contract, the employment relationship shall be deemed to have terminated on the first day immediately following such three (3)-month period, or such other period specified in Treasury Regulation Section 1.421-1(h)(2).

 

2.13                        Enrollment Date” shall mean the first date of each Offering Period.

 

2.14                        Exercise Date” shall mean the last Trading Day of each Offering Period, except as provided in Section 5.2 hereof.

 

2.15                        Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

2.16                        Fair Market Value” shall mean, as of any date, the value of Common Stock determined as follows:

 

(a)                                 If the Common Stock is (i) listed on any established securities exchange (such as the New York Stock Exchange, the NASDAQ Global Market and the NASDAQ Global Select Market), (ii) listed on any national market system or (iii) listed, quoted or traded on any automated quotation system, its Fair Market Value shall be the closing sales price for a share of Common Stock as quoted on such exchange or system for such date or, if there is no closing sales price for a share of Common Stock on the date in question, the closing sales price for a share of Stock 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;

 

(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 of Common Stock on such date, the high bid and low asked prices for a share of Common Stock 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.

 

2.17                        Grant Date” shall mean the first Trading Day of an Offering Period.

 

2.18                        New Exercise Date” shall have such meaning as set forth in Section 5.2(b) hereof.

 

2.19                        Offering Period” shall mean such period of time commencing on such date(s) as determined by the Board or Committee, in its sole discretion, and with respect to which Options shall be granted to Participants.  The duration and timing of Offering Periods may be established or changed by the Board or Committee at any time, in its sole discretion.

 

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Notwithstanding the foregoing, in no event may an Offering Period exceed twenty-seven (27) months.

 

2.20                        Option” shall mean the right to purchase shares of Common Stock pursuant to the Plan during each Offering Period.

 

2.21                        Option Price” shall mean the purchase price of a share of Common Stock hereunder as provided in Section 4.2 hereof.

 

2.22                        Parent” means any entity that is a parent corporation of the Company within the meaning of Section 424 of the Code and the Treasury Regulations thereunder.

 

2.23                        Participant” shall mean any Eligible Employee who elects to participate in the Plan.

 

2.24                        Payday” shall mean the regular and recurring established day for payment of Compensation to an Employee of the Company or any Designated Subsidiary.

 

2.25                        Plan” shall have such meaning as set forth in Section 1.1 hereof.

 

2.26                        Plan Account” shall mean a bookkeeping account established and maintained by the Company in the name of each Participant.

 

2.27                        Section 423 Option” shall have such meaning as set forth in Section 3.1(b) hereof.

 

2.28                        Subsidiary” shall mean any entity that is a subsidiary corporation of the Company within the meaning of Section 424 of the Code and the Treasury Regulations thereunder.  In addition, with respect to any sub-plans adopted under Section 7.1(d) hereof which are designed to be outside the scope of Section 423 of the Code, Subsidiary shall include any corporate or noncorporate entity in which the Company has a direct or indirect equity interest or significant business relationship.

 

2.29                        Trading Day” shall mean a day on which the principal securities exchange on which the Common Stock is listed is open for trading or, if the Common Stock is not listed on a securities exchange, shall mean a business day, as determined by the Administrator in good faith.

 

2.30                        Withdrawal Election” shall have such meaning as set forth in Section 6.1(a) hereof.

 

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ARTICLE III.
PARTICIPATION

 

3.1                               Eligibility.

 

(a)                                 Any Eligible Employee who shall be employed by the Company or a Designated Subsidiary on a given Enrollment Date for an Offering Period shall be eligible to participate in the Plan during such Offering Period, subject to the requirements of Articles IV and V hereof, and the limitations imposed by Section 423(b) of the Code and the Treasury Regulations thereunder.

 

(b)                                 No Eligible Employee shall be granted an Option under the Plan which permits the Participant’s rights to purchase shares of Common Stock under the Plan, and to purchase stock under all other employee stock purchase plans of the Company, any Parent or any Subsidiary subject to the Section 423 of the Code (any such Option or other option, a “Section 423 Option”), to accrue at a rate which exceeds $25,000 of fair market value of such stock (determined at the time the Section 423 Option is granted) for each calendar year in which any Section 423 Option granted to the Participant is outstanding at any time.  For purposes of the limitation imposed by this subsection,

 

(i)                                     the right to purchase stock under a Section 423 Option accrues when the Section 423 Option (or any portion thereof) first becomes exercisable during the calendar year,

 

(ii)                                  the right to purchase stock under a Section 423 Option accrues at the rate provided in the Section 423 Option, but in no case may such rate exceed $25,000 of fair market value of such stock (determined at the time such option is granted) for any one calendar year, and

 

(iii)                               a right to purchase stock which has accrued under a Section 423 Option may not be carried over to any other Section 423 Option; provided that Participants may carry forward amounts so accrued that represent a fractional share of stock and were withheld but not applied towards the purchase of Common Stock under an earlier Offering Period, and may apply such amounts towards the purchase of additional shares of Common Stock under a subsequent Offering Period.

 

The limitation under this Section 3.1(b) shall be applied in accordance with Section 423(b)(8) of the Code and the Treasury Regulations thereunder.

 

3.2                               Election to Participate; Payroll Deductions

 

(a)                                 Except as provided in Section 3.3 hereof, an Eligible Employee may become a Participant in the Plan only by means of payroll deduction.  Each individual who is an Eligible Employee as of an Offering Period’s Enrollment Date may elect to participate in such Offering Period and the Plan by delivering to the Company a payroll deduction authorization no later such period of time prior to the applicable Enrollment Date as determined by the Administrator, in its sole discretion.

 

(b)                                 Subject to Section 3.1(b) hereof, payroll deductions (i) shall be equal to at least one percent (1%) of the Participant’s Compensation as of each Payday of the Offering Period following the Enrollment Date, but not more than the lesser of fifteen percent (15%) of the Participant’s Compensation as of each Payday of the Offering Period following the Enrollment Date or $30,000 per Offering Period; and (ii) may be expressed as a whole number

 

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percentage.  Amounts deducted from a Participant’s Compensation with respect to an Offering Period pursuant to this Section 3.2 shall be deducted each Payday through payroll deduction and credited to the Participant’s Plan Account.

 

(c)                                  Following at least one (1) payroll deduction, a Participant may decrease (to as low as zero) the amount deducted from such Participant’s Compensation only once during an Offering Period upon ten (10) calendar days’ prior written notice to the Company.  A Participant may not increase the amount deducted from such Participant’s Compensation during an Offering Period.

 

(d)                                 Notwithstanding the foregoing, upon the termination of an Offering Period, each Participant in such Offering Period shall automatically participate in the immediately following Offering Period at the same payroll deduction percentage as in effect at the termination of the prior Offering Period, unless such Participant delivers to the Company a different election with respect to the successive Offering Period in accordance with Section 3.1(a) hereof, or unless such Participant becomes ineligible for participation in the Plan.

 

3.3                               Leave of Absence.  During leaves of absence approved by the Company meeting the requirements of Treasury Regulation Section 1.421-1(h)(2) under the Code, a Participant may continue participation in the Plan by making cash payments to the Company on his or her normal payday equal to his or her authorized payroll deduction.

 

ARTICLE IV.
PURCHASE OF SHARES

 

4.1                               Grant of Option.  Each Participant shall be granted an Option with respect to an Offering Period on the applicable Grant Date.   Subject to the limitations of Section 3.1(b) hereof, the number of shares of Common Stock subject to a Participant’s Option shall be determined by dividing (a) such Participant’s payroll deductions accumulated prior to such Exercise Date and retained in the Participant’s Plan Account on such Exercise Date by (b) the applicable Option Price; provided that in no event shall a Participant be permitted to purchase during each Offering Period more than 50,000 shares of Common Stock (subject to any adjustment pursuant to Section 5.2 hereof).  The Administrator may, for future Offering Periods, increase or decrease, in its absolute discretion, the maximum number of shares of Common Stock that a Participant may purchase during such future Offering Periods.  Each Option shall expire on the Exercise Date for the applicable Offering Period immediately after the automatic exercise of the Option in accordance with Section 4.3 hereof, unless such Option terminates earlier in accordance with Article 6 hereof.

 

4.2                               Option Price.  The “Option Price” per share of Common Stock to be paid by a Participant upon exercise of the Participant’s Option on the applicable Exercise Date for an Offering Period shall be equal to eighty five percent (85%) of the lesser of the Fair Market Value of a share of Common Stock on (a) the applicable Grant Date and (b) the applicable Exercise Date; provided that in no event shall the Option Price per share of Common Stock be less than the par value per share of the Common Stock.

 

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4.3                               Purchase of Shares.

 

(a)                                 On the applicable Exercise Date for an Offering Period, each Participant shall automatically and without any action on such Participant’s part be deemed to have exercised his or her Option to purchase at the applicable per share Option Price the largest number of whole shares of Common Stock which can be purchased with the amount in the Participant’s Plan Account.  Any balance less the per share Option Price that is remaining in the Participant’s Plan Account (after exercise of such Participant’s Option) as of the Exercise Date shall be carried forward to the next Offering Period, unless the Participant has elected to withdraw from the Plan pursuant to Section 6.1 hereof or, pursuant to Section 6.2 hereof, such Participant has ceased to be an Eligible Employee. Any balance not carried forward to the next Offering Period in accordance with the prior sentence promptly shall be refunded to the applicable Participant. For the avoidance of doubt, in no event shall an amount greater than or equal to the per share Option Price as of an Exercise Date be carried forward to the next Offering Period.

 

(b)                                 As soon as practicable following the applicable Exercise Date, the number of shares of Common Stock purchased by such Participant pursuant to Section 4.3(a) hereof shall be delivered (either in share certificate or book entry form), in the Company’s sole discretion, to either (i) the Participant or (ii) an account established in the Participant’s name at a stock brokerage or other financial services firm designated by the Company.  If the Company is required to obtain from any commission or agency authority to issue any such shares of Common Stock, the Company shall seek to obtain such authority.  Inability of the Company to obtain from any such commission or agency authority which counsel for the Company deems necessary for the lawful issuance of any such shares shall relieve the Company from liability to any Participant except to refund to the Participant such Participant’s Plan Account balance, without interest thereon.

 

4.4                               Transferability of Rights.

 

(a)                                 An Option granted under the Plan shall not be transferable, other than by will or the applicable laws of descent and distribution, and is exercisable during the Participant’s lifetime only by the Participant.  No option or interest or right to the Option shall be available to pay off any debts, contracts or engagements of the Participant or his or her successors in interest or shall be subject to disposition by 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 attempt at disposition of the option shall have no effect.

 

ARTICLE V.
PROVISIONS RELATING TO COMMON STOCK

 

5.1                               Common Stock Reserved.  Subject to adjustment as provided in Section 5.2 hereof, the maximum number of shares of Common Stock that shall be made available for sale under the Plan shall be the sum of (a) 1,811,000 shares of Common Stock and (b) an annual increase on the first day of each year beginning in 2016 and ending in 2025 equal to the lesser of (i) one percent (1%) of the shares of Common Stock outstanding (on an as converted basis) on

 

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the last day of the immediately preceding fiscal year and (ii) such number of shares of Common Stock as determined by the Board; provided, however, no more than 21,000,000 shares of Common Stock may be issued under the Plan.  Shares of Common Stock made available for sale under the Plan may be authorized but unissued shares, treasury shares of Common Stock, or reacquired shares reserved for issuance under the Plan.

 

5.2                               Adjustments Upon Changes in Capitalization, Dissolution, Liquidation, Merger or Asset Sale.

 

(a)                                 Changes in Capitalization.  Subject to any required action by the stockholders of the Company, the number of shares of Common Stock which have been authorized for issuance under the Plan but not yet placed under Option, as well as the price per share and the number of shares of Common Stock covered by each Option under the Plan which has not yet been exercised shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.”  Such adjustment shall be made by the Administrator, whose determination in that respect shall be final, binding and conclusive.  Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Option.

 

(b)                                 Dissolution or Liquidation.  In the event of the proposed dissolution or liquidation of the Company, the Offering Period then in progress shall be shortened by setting a new Exercise Date (the “New Exercise Date”), and shall terminate immediately prior to the consummation of such proposed dissolution or liquidation, unless provided otherwise by the Administrator.  The New Exercise Date shall be before the date of the Company’s proposed dissolution or liquidation.  The Administrator shall notify each Participant in writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the Participant’s Option has been changed to the New Exercise Date and that the Participant’s Option shall be exercised automatically on the New Exercise Date, unless prior to such date the Participant has withdrawn from the Offering Period as provided in Section 6.1 hereof.

 

(c)                                  Merger or Asset Sale.  In the event of a proposed sale of all or substantially all of the assets of the Company, or the merger of the Company with or into another corporation, each outstanding Option shall be assumed or an equivalent Option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation.  In the event that the successor corporation refuses to assume or substitute for the Option, any Offering Periods then in progress shall be shortened by setting a New Exercise Date and any Offering Periods then in progress shall end on the New Exercise Date.  The New Exercise Date shall be before the date of the Company’s proposed sale or merger.  The Administrator shall notify each Participant in writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the Participant’s Option has been changed to the New Exercise Date and that the Participant’s

 

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Option shall be exercised automatically on the New Exercise Date, unless prior to such date the Participant has withdrawn from the Offering Period as provided in Section 6.1 hereof.

 

5.3                               Insufficient Shares.  If the Administrator determines that, on a given Exercise Date, the number of shares of Common Stock with respect to which Options are to be exercised may exceed the number of shares of Common Stock remaining available for sale under the Plan on such Exercise Date, the Administrator shall make a pro rata allocation of the shares of Common Stock available for issuance on such Exercise Date in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all Participants exercising Options to purchase Common Stock on such Exercise Date, and unless additional shares are authorized for issuance under the Plan, no further Offering Periods shall take place and the Plan shall terminate pursuant to Section 7.4 hereof.  If an Offering Period is so terminated, then the balance of the amount credited to the Participant’s Plan Account which has not been applied to the purchase of shares of Common Stock shall be paid to such Participant in one lump sum in cash within thirty (30) days after such Exercise Date, without any interest thereon.

 

5.4                               Rights as Stockholders.  With respect to shares of Common Stock subject to an Option, a Participant shall not be deemed to be a stockholder of the Company and shall not have any of the rights or privileges of a stockholder.  A Participant shall have the rights and privileges of a stockholder of the Company when, but not until, shares of Common Stock have been deposited in the designated brokerage account following exercise of his or her Option.

 

ARTICLE VI.
TERMINATION OF PARTICIPATION

 

6.1                               Cessation of Contributions; Voluntary Withdrawal.

 

(a)                                 A Participant may cease payroll deductions during an Offering Period and elect to withdraw from the Plan by delivering written notice of such election to the Company in such form and at such time prior to the Exercise Date for such Offering Period as may be established by the Administrator (a “Withdrawal Election”).  A Participant electing to withdraw from the Plan may elect to either (i) withdraw all of the funds then credited to the Participant’s Plan Account as of the date on which the Withdrawal Election is received by the Company, in which case amounts credited to such Plan Account shall be returned to the Participant in one (1) lump-sum payment in cash within thirty (30) days after such election is received by the Company, without any interest thereon, and the Participant shall cease to participate in the Plan and the Participant’s Option for such Offering Period shall terminate; or (ii) exercise the Option for the maximum number of whole shares of Common Stock on the applicable Exercise Date with any remaining Plan Account balance returned to the Participant in one (1) lump-sum payment in cash within thirty (30) days after such Exercise Date, without any interest thereon, and after such exercise cease to participate in the Plan.  Upon receipt of a Withdrawal Election, the Participant’s payroll deduction authorization and his or her Option to purchase under the Plan shall terminate.

 

(b)                                 A participant’s withdrawal from the Plan shall not have any effect upon his or her eligibility to participate in any similar plan which may hereafter be adopted by

 

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the Company or in succeeding Offering Periods which commence after the termination of the Offering Period from which the Participant withdraws.

 

(c)                                  A Participant who ceases contributions to the Plan during any Offering Period shall not be permitted to resume contributions to the Plan during that Offering Period.

 

6.2                               Termination of Eligibility.  Upon a Participant’s ceasing to be an Eligible Employee, for any reason, such Participant’s Option for the applicable Offering Period shall automatically terminate, he or she shall be deemed to have elected to withdraw from the Plan,  and such Participant’s Plan Account shall be paid to such Participant or, in the case of his or her death, to the person or persons entitled thereto pursuant to applicable law, within thirty (30) days after such cessation of being an Eligible Employee, without any interest thereon.

 

ARTICLE VII.
GENERAL PROVISIONS

 

7.1                               Administration.

 

(a)                                 The Plan shall be administered by the Committee, which shall be composed of members of the Board.  The Committee may delegate administrative tasks under the Plan to the services of an Agent and/or Employees to assist in the administration of the Plan, including establishing and maintaining an individual securities account under the Plan for each Participant.

 

(b)                                 It shall be the duty of the Administrator to conduct the general administration of the Plan in accordance with the provisions of the Plan.  The Administrator shall have the power, subject to, and within the limitations of, the express provisions of the Plan:

 

(i)                                     To establish Offering Periods;

 

(ii)                                  To determine when and how Options shall be granted and the provisions and terms of each Offering Period (which need not be identical);

 

(iii)                               To select Designated Subsidiaries in accordance with Section 7.2 hereof; and

 

(iv)                              To construe and interpret the Plan, the terms of any Offering Period and the terms of the Options and to adopt such rules for the administration, interpretation, and application of the Plan as are consistent therewith and to interpret, amend or revoke any such rules.  The Administrator, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan, any Offering Period or any Option, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effect, subject to Section 423 of the Code and the Treasury Regulations thereunder.

 

(c)                                  The Administrator may adopt rules or procedures relating to the operation and administration of the Plan to accommodate the specific requirements of local laws

 

10


 

and procedures.  Without limiting the generality of the foregoing, the Administrator is specifically authorized to adopt rules and procedures regarding handling of participation elections, payroll deductions, payment of interest, conversion of local currency, payroll tax, withholding procedures and handling of stock certificates which vary with local requirements.  In its absolute discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Administrator under the Plan.

 

(d)                                 The Administrator may adopt sub-plans applicable to particular Designated Subsidiaries or locations, which sub-plans may be designed to be outside the scope of Section 423 of the Code.  The rules of such sub-plans may take precedence over other provisions of this Plan, with the exception of Section 5.1 hereof, but unless otherwise superseded by the terms of such sub-plan, the provisions of this Plan shall govern the operation of such sub-plan.

 

(e)                                  All expenses and liabilities incurred by the Administrator in connection with the administration of the Plan shall be borne by the Company.  The Administrator may, with the approval of the Committee, employ attorneys, consultants, accountants, appraisers, brokers or other persons.  The Administrator, the Company and its officers and directors shall be entitled to rely upon the advice, opinions or valuations of any such persons.  All actions taken and all interpretations and determinations made by the Administrator in good faith shall be final and binding upon all Participants, the Company and all other interested persons.  No member of the Board or Administrator shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or the options, and all members of the Board or Administrator shall be fully protected by the Company in respect to any such action, determination, or interpretation.

 

7.2                               Designation of Subsidiary Corporations.  The Board or Committee shall designate from among the Subsidiaries, as determined from time to time, the Subsidiary or Subsidiaries that shall constitute Designated Subsidiaries.  The Board or Committee may designate a Subsidiary, or terminate the designation of a Subsidiary, without the approval of the stockholders of the Company.

 

7.3                               No Right to Employment.  Nothing in the Plan shall be construed to give any person (including any Participant) the right to remain in the employ of the Company, a Parent or a Subsidiary or to affect the right of the Company, any Parent or any Subsidiary to terminate the employment of any person (including any Participant) at any time, with or without cause, which right is expressly reserved.

 

7.4                               Amendment and Termination of the Plan.

 

(a)                                 The Board may, in its sole discretion, amend, suspend or terminate the Plan at any time and from time to time; provided, however, that without approval of the Company’s stockholders given within twelve (12) months before or after action by the Board, the Plan may not be amended to increase the maximum number of shares of Common Stock subject to the Plan or change the designation or class of Eligible Employees; and provided, further that without approval of the Company’s stockholders, the Plan may not be amended in

 

11



 

any manner that would cause the Plan to no longer be an “employee stock purchase plan” within the meaning of Section 423(b) of the Code.

 

(b)                                 In the event the Administrator determines that the ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Administrator may, to the extent permitted under Section 423 of the Code, in its discretion and, to the extent necessary or desirable, modify or amend the Plan to reduce or eliminate such accounting consequence including, but not limited to:

 

(i)                                     altering the Option Price for any Offering Period including an Offering Period underway at the time of the change in Option Price;

 

(ii)                                  shortening any Offering Period so that the Offering Period ends on a new Exercise Date, including an Offering Period underway at the time of the Administrator action; and

 

(iii)                               allocating shares of Common Stock.

 

Such modifications or amendments shall not require stockholder approval or the consent of any Participant.

 

(c)                                  Upon termination of the Plan, the balance in each Participant’s Plan Account shall be refunded as soon as practicable after such termination, without any interest thereon.

 

7.5                               Use of Funds; No Interest Paid.  All funds received by the Company by reason of purchase of Common Stock under the Plan shall be included in the general funds of the Company free of any trust or other restriction and may be used for any corporate purpose.  No interest shall be paid to any Participant or credited under the Plan.

 

7.6                               Approval by Stockholders.  The 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 of the Plan.  Options may be granted prior to such stockholder approval; provided, however, that such Options shall not be exercisable prior to the time when the Plan is approved by the stockholders; provided, further that if such approval has not been obtained by the end of said twelve (12)-month period, all Options previously granted under the Plan shall thereupon terminate and be canceled and become null and void without being exercised.

 

7.7                               Effect Upon Other Plans.  The adoption of the Plan shall not affect any other compensation or incentive plans in effect for the Company, any Parent or any Subsidiary.  Nothing in the Plan shall be construed to limit the right of the Company, any Parent or any Subsidiary (a) to establish any other forms of incentives or compensation for Employees of the Company or any Parent or any Subsidiary, or (b) to grant or assume Options otherwise than under the Plan in connection with any proper corporate purpose, including, but not by way of 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, firm or association.

 

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7.8                               Conformity to Securities Laws.  Notwithstanding any other provision of the Plan, the Plan and the participation in the Plan by 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 exemption 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, the Plan shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

 

7.9                               Notice of Disposition of Shares.  Each Participant shall give the Company prompt notice of any disposition or other transfer of any shares of Common Stock, acquired pursuant to the exercise of an Option, if such disposition or transfer is made (a) within two (2) years after the applicable Grant Date or (b) within one (1) year after the transfer of such shares of Common Stock to such Participant upon exercise of such Option.  The Company may direct that any certificates evidencing shares acquired pursuant to the Plan refer to such requirement.

 

7.10                        Tax Withholding.  The Company or any Parent or any Subsidiary shall be entitled to require payment in cash or deduction from other compensation payable to each Participant of any sums required by federal, state or local tax law to be withheld with respect to any purchase of shares of Common Stock under the Plan or any sale of such shares.

 

7.11                        Governing Law.  The Plan and all rights and obligations thereunder shall be construed and enforced in accordance with the laws of the State of Delaware.

 

7.12                        Notices.  All notices or other communications by a participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.

 

7.13                        Conditions 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 of Common Stock pursuant to the exercise of an Option by a Participant, unless and until the Board or the Committee has determined, with advice of counsel, that the issuance of such shares of Common Stock is in compliance with all applicable laws, regulations of governmental authorities and, if applicable, the requirements of any securities exchange or automated quotation system on which the shares of Common Stock are listed or traded, and the shares of Common Stock 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 Participant make such reasonable covenants, agreements, and representations as the Board or the Committee, in its discretion, deems advisable in order to comply with any such laws, regulations, or requirements.

 

(b)                                 All certificates for shares of Common Stock delivered pursuant to the Plan and all shares of Common Stock issued pursuant to book entry procedures are subject to any stop-transfer orders and other restrictions as the Committee deems necessary or advisable to comply with federal, state, or foreign securities or other laws, rules and regulations and the rules

 

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of any securities exchange or automated quotation system on which the shares of Common Stock are listed, quoted, or traded.  The Committee may place legends on any certificate or book entry evidencing shares of Common Stock to reference restrictions applicable to the shares of Common Stock.

 

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

 

(d)                                 Notwithstanding any other provision of the Plan, unless otherwise determined by the Committee or required by any applicable law, rule or regulation, the Company may, in lieu of delivering to any Participant certificates evidencing shares of Common Stock issued in connection with any Option, record the issuance of shares of Common Stock in the books of the Company (or, as applicable, its transfer agent or stock plan administrator).

 

7.14                        Equal Rights and Privileges.  Except with respect to sub-plans designed to be outside the scope of Section 423 of the Code, all Eligible Employees of the Company (or of any Designated Subsidiary) shall have equal rights and privileges under this Plan to the extent required under Section 423 of the Code or the regulations promulgated thereunder so that this Plan qualifies as an “employee stock purchase plan” within the meaning of Section 423 of the Code or the Treasury Regulations thereunder.  Any provision of this Plan that is inconsistent with Section 423 of the Code or the Treasury Regulations thereunder shall, without further act or amendment by the Company or the Board, be reformed to comply with the equal rights and privileges requirement of Section 423 of the Code or the Treasury Regulations thereunder.

 

* * * * * *

 

I hereby certify that the foregoing Mirna Therapeutics, Inc. Employee Stock Purchase Plan was duly approved by the Board of Directors of Mirna Therapeutics, Inc. on [     ], 2015.

 

I hereby certify that the foregoing Mirna Therapeutics, Inc. Employee Stock Purchase Plan was duly approved by the stockholders of Mirna Therapeutics, Inc. on [     ], 2015.

 

Executed on this     day of        , 2015.

 

 

 

 

[Name, Title]

 

14




Exhibit 10.11

 

MIRNA THERAPEUTICS, INC.

 

NON-EMPLOYEE DIRECTOR COMPENSATION PROGRAM

 

Non-employee members of the board of directors (the “Board”) of Mirna Therapeutics, Inc. (the “Company”) shall be eligible to receive cash and equity compensation as set forth in this Non-Employee Director Compensation Program (this “Program”), which is being adopted pursuant to the Board’s resolutions on August 31, 2015.  The cash and equity compensation described in this Program shall be paid or be made, as applicable, automatically and without further action of the Board, to each member of the Board who is not an employee of the Company or any parent or subsidiary of the Company (each, a “Non-Employee Director”) who may be eligible to receive such cash or equity compensation, unless such Non-Employee Director declines the receipt of such cash or equity compensation by written notice to the Company.  This Program shall remain in effect until it is revised or rescinded by further action of the Board.  This Program may be amended, modified or terminated by the Board at any time, without advance notice, in its sole discretion.  The terms and conditions of this Program shall supersede any prior cash and/or equity compensation arrangements for service as a member of the Board between the Company and any of its Non-Employee Directors.  This Program shall become effective on the date of the pricing of the initial public offering of Company common stock (the “Effective Date”).

 

1.                                      Cash Compensation.

 

(a)                                 Annual Retainers.  Each Non-Employee Director shall be eligible to receive an annual retainer of $35,000 for service on the Board.

 

(b)                                 Additional Annual Retainers.  In addition, a Non-Employee Director shall receive the following annual retainers:

 

(i)                                     Chairman of the Board.  A Non-Employee Director serving as Chairman of the Board shall receive an additional annual retainer of $25,000 for such service.

 

(ii)                                  Audit Committee.  A Non-Employee Director serving as Chairperson of the Audit Committee shall receive an additional annual retainer of $15,000 for such service.  A Non-Employee Director serving as a member of the Audit Committee (other than the Chairperson) shall receive an additional annual retainer of $7,500 for such service.

 

(iii)                               Compensation Committee.  A Non-Employee Director serving as Chairperson of the Compensation Committee shall receive an additional annual retainer of $10,000 for such service.  A Non-Employee Director serving as a member of the Compensation Committee (other than the Chairperson) shall receive an additional annual retainer of $5,000 for such service.

 

(vi)                            Nominating and Corporate Governance Committee.  A Non-Employee Director serving as Chairperson of the Nominating and Corporate Governance Committee shall receive an additional annual retainer of $7,500 for such service.  A Non-Employee Director serving as a member of the Nominating and Corporate Governance Committee (other than the Chairperson) shall receive an additional annual retainer of $3,750 for such service.

 

(c)                                  Payment of Retainers.  The annual retainers described in Sections 1(a) and 1(b) shall be earned on a quarterly basis based on a calendar quarter and shall be paid by the Company in arrears not later than the fifteenth day following the end of each calendar quarter.  In the event a Non-Employee Director does not serve as a Non-Employee Director, or in the applicable positions described in Section 1(b), for an entire calendar quarter, the retainer paid to such Non-Employee Director shall be

 



 

prorated for the portion of such calendar quarter actually served as a Non-Employee Director, or in such position, as applicable.

 

2.                                      Equity Compensation.  Non-Employee Directors shall be granted the equity awards described below.  The awards described below shall be granted under and shall be subject to the terms and provisions of the Company’s 2015 Equity Incentive Award Plan or any other applicable Company equity incentive plan then-maintained by the Company (the “Equity Plan”) and shall be evidenced by the execution and delivery of award agreements, including attached exhibits, in substantially the forms previously approved by the Board.  All applicable terms of the Equity Plan apply to this Program as if fully set forth herein, and all grants of stock options hereby are subject in all respects to the terms of the Equity Plan.

 

(a)                                 Initial Awards.  Each Non-Employee Director who is initially elected or appointed to the Board after the Effective Date shall automatically be granted, on the date of such initial election or appointment, an option to purchase 180,000 shares of the Company’s common stock. The awards described in this Section 2(a) shall be referred to as “Initial Awards.”  No Non-Employee Director shall be granted more than one Initial Award.

 

(b)                                 Subsequent Awards.  A Non-Employee Director who (i) has been serving on the Board immediately prior to any annual meeting of the Company’s stockholders after the Effective Date and (ii) will continue to serve as a Non-Employee Director immediately following such meeting, shall be automatically granted, on the date of such annual meeting, an option to purchase 90,000 shares of the Company’s common stock.  The awards described in this Section 2(b) shall be referred to as “Subsequent Awards.”  For the avoidance of doubt, a Non-Employee Director elected for the first time to the Board at an annual meeting of the Company’s stockholders shall only receive an Initial Award in connection with such election, and shall not receive any Subsequent Award on the date of such meeting as well.

 

(c)                                  IPO Awards.  Each Non-Employee Director who is serving on the Board as of the Effective Date and will continue to serve as a Non-Employee Director following the Effective Date, shall be automatically granted, on the Effective Date, an option (an “IPO Award”) to purchase that number of shares of the Company’s common stock (subject to adjustment as provided in the Equity Plan) as set forth on Exhibit A attached hereto.

 

(d)                                 Termination of Service of Employee Directors.  Members of the Board who are employees of the Company or any parent or subsidiary of the Company who subsequently terminate their service with the Company and any parent or subsidiary of the Company and remain on the Board will not receive an Initial Award pursuant to Section 2(a) above, but to the extent that they are otherwise eligible, will be eligible to receive, after termination from service with the Company and any parent or subsidiary of the Company, Subsequent Awards as described in Section 2(b) above.

 

(e)                                  Terms of Awards Granted to Non-Employee Directors

 

(i)                                     Purchase Price.  The per share exercise price of each option granted to a Non-Employee Director shall equal the Fair Market Value (as defined in the Equity Plan) of a share of common stock on the date the option is granted.  Without limiting the foregoing, Fair Market Value as of the Effective Date shall be equal to the price per share to the public in the Company’s initial public offering, as set forth on the cover of the final prospectus of the initial public offering of Company common stock.

 

(ii)                                  Vesting.  Each Initial Award shall vest and become exercisable in substantially equal installments on each of the first three anniversaries of the date of grant, subject to the

 

2



 

Non-Employee Director continuing to provide services to the Company through each such vesting date.  Each Subsequent Award and each IPO Award shall vest and become exercisable in full on the earlier of (A) the first anniversary of the date of grant or (B) immediately prior to the next annual meeting of the Company’s stockholders after the date of grant, subject to the Non-Employee Director continuing to provide services to the Company through such vesting date.

 

(ii)                                  Change in Control Acceleration.  All of a Non-Employee Director’s Initial Awards and Subsequent Awards, and any other stock options or other equity-based awards outstanding and held by the Non-Employee Director, shall vest and, if applicable, become exercisable with respect to one hundred percent (100%) of the shares subject thereto immediately prior to the occurrence of a Change in Control (as defined in the Equity Plan), to the extent outstanding at such time.

 

(iv)                              Term.  The term of each stock option granted to a Non-Employee Director shall be ten (10) years from the date the option is granted.

 

3.                                      Reimbursements.  The Company shall reimburse each Non-Employee Director for all reasonable, documented, out-of-pocket travel and other business expenses incurred by such Non-Employee Director in the performance of his or her duties to the Company in accordance with the Company’s applicable expense reimbursement policies and procedures as in effect from time to time.

 

* * * * *

 

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Exhibit A

 

Name

 

Number of
Shares

Clay Siegall

 

180,000

Larry Alleva

 

108,000

Michael Powell

 

108,000

Edward Mathers

 

108,000

Elaine Jones

 

108,000

Matt Winkler

 

108,000

Total:

 

720,000

 

4




Exhibit 10.12

 

MIRNA THERAPEUTICS, INC.

 

CHANGE IN CONTROL SEVERANCE AGREEMENT

 

This Change in Control Severance Agreement (the “Agreement”) is made and entered into by and between [        ] (“Executive”) and Mirna Therapeutics, Inc. (the “Company”), effective as of the latest date set forth by the signatures of the parties hereto below (the “Effective Date”).

 

R E C I T A L S

 

A.                                    The Board of Directors of the Company (the “Board”) recognizes that the possibility of an acquisition of the Company or an involuntary termination can be a distraction to Executive and can cause Executive to consider alternative employment opportunities.  The Board has determined that it is in the best interests of the Company and its stockholders to assure that the Company will have the continued dedication and objectivity of Executive, notwithstanding the possibility, threat or occurrence of such an event.

 

B.                                    The Board believes that it is in the best interests of the Company and its stockholders to provide Executive with an incentive to continue Executive’s employment and to motivate Executive to maximize the value of the Company upon a Change in Control (as defined below) for the benefit of its stockholders.

 

C.                                    The Board believes that it is imperative to provide Executive with severance benefits upon certain terminations of Executive’s service to the Company that enhance Executive’s financial security and provide incentive and encouragement to Executive to remain with the Company notwithstanding the possibility of such an event.

 

D.                                    Unless otherwise defined herein, capitalized terms used in this Agreement are defined in Section 9 below.

 

The parties hereto agree as follows:

 

1.                                      Term of Agreement.  This Agreement shall become effective as of the Effective Date and terminate upon the date that all obligations of the parties hereto with respect to this Agreement have been satisfied.

 

2.                                      At-Will Employment.  The Company and Executive acknowledge that Executive’s employment is and shall continue to be “at-will,” as defined under applicable law.  If Executive’s employment terminates for any reason, Executive shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement.

 

3.                                      Covered Termination Other Than During a Change in Control Period.  If Executive experiences a Covered Termination other than during a Change in Control Period, and if Executive delivers to the Company a general release of all claims against the Company and its affiliates (a

 



 

Release of Claims”) that becomes effective and irrevocable within sixty (60) days, or such shorter period of time specified by the Company, following such Covered Termination, then in addition to any accrued but unpaid salary, bonus, benefits, vacation and expense reimbursement payable in accordance with applicable law, the Company shall provide Executive with the following:

 

(a)                                 Severance.  Executive shall be entitled to receive a severance payment equal to [   ] ([  ])(1) months of Executive’s base salary at the rate in effect immediately prior to the Termination Date payable in a cash lump sum, less applicable withholdings, on the first payroll date following the date the Release of Claims becomes effective and irrevocable.

 

(b)                                 Continued Healthcare.  If Executive elects to receive continued healthcare coverage pursuant to the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall directly pay, or reimburse Executive for, the premium for Executive and Executive’ s covered dependents through the earlier of (i) the last day of the [   ] ([  ])(2) full calendar month anniversary following the date Release of Claims becomes effective and irrevocable and (ii) the date Executive and Executive’s covered dependents, if any, become eligible for healthcare coverage under another employer’s plan(s).  After the Company ceases to pay premiums pursuant to the preceding sentence, Executive may, if eligible, elect to continue healthcare coverage at Executive’s expense in accordance the provisions of COBRA.  Executive shall notify the Company immediately if Executive becomes covered by a group health plan of a subsequent employer.

 

4.                                      Covered Termination During a Change in Control Period.  If Executive experiences a Covered Termination during a Change in Control Period, and if Executive delivers a Release of Claims that becomes effective and irrevocable within sixty (60) days, or such shorter period of time specified by the Company, following such Covered Termination, then in addition to any accrued but unpaid salary, bonus, benefits, vacation and expense reimbursement payable in accordance with applicable law, the Company shall provide Executive with the following:

 

(a)                                 Severance.  Executive shall be entitled to receive an amount equal to the sum of (i) [   ] ([  ])(3) months of Executive’s annual base salary and (ii) [   ] ([  ])(4) times Executive’s target annual bonus assuming achievement of performance goals at target, in each case, at the rate in effect

 

2



 

immediately prior to the Termination Date, payable in a cash lump sum, less applicable withholdings, on the first payroll date following the date the Release of Claims becomes effective and irrevocable.

 

(b)                                 Continued Healthcare.  If Executive elects to receive continued healthcare coverage pursuant to the provisions of COBRA, the Company shall directly pay, or reimburse Executive for, the premium for Executive and Executive’s covered dependents through the earlier of (i) the last day of the [   ] ([  ])(5) full calendar month anniversary following the date Release of Claims becomes effective and irrevocable and (ii) the date Executive and Executive’s covered dependents, if any, become eligible for healthcare coverage under another employer’s plan(s).  After the Company ceases to pay premiums pursuant to the preceding sentence, Executive may, if eligible, elect to continue healthcare coverage at Executive’s expense in accordance the provisions of COBRA.

 

(c)                                  Equity Awards.  Each outstanding and unvested equity award, including, without limitation, each stock option and restricted stock award, held by Executive shall automatically become vested and, if applicable, exercisable and any forfeiture restrictions or rights of repurchase thereon shall immediately lapse, in each case, with respect to one hundred percent (100%) of that number of unvested shares underlying Executive’s equity awards as of the Termination Date.

 

5.                                      Certain Reductions.  Notwithstanding anything herein to the contrary, the Company shall reduce Executive’s severance benefits under this Agreement, in whole or in part, by any other severance benefits, pay in lieu of notice, or other similar benefits payable to Executive by the Company in connection with Executive’s termination, including but not limited to payments or benefits pursuant to (a) any applicable legal requirement, including, without limitation, the Worker Adjustment and Retraining Notification Act, or (b) any Company agreement, arrangement, policy or practice relating to Executive’s termination of employment with the Company.  The benefits provided under this Agreement are intended to satisfy, to the greatest extent possible, any and all statutory obligations that may arise out of Executive’s termination of employment.  Such reductions shall be applied on a retroactive basis, with severance benefits previously paid being recharacterized as payments pursuant to the Company’s statutory obligation.

 

6.                                      Deemed Resignation.  Upon termination of Executive’s employment for any reason, Executive shall be deemed to have resigned from all offices and directorships, if any, and then held with the Company or any of its affiliates, and, at the Company’s request, Executive shall execute such documents as are necessary or desirable to effectuate such resignations.

 

7.                                      Other Terminations.  If Executive’s service with the Company is terminated by the Company or by Executive for any or no reason other than as a Covered Termination, then Executive shall not be entitled to any benefits hereunder other than accrued but unpaid salary, bonus, vacation and

 

3



 

expense reimbursement in accordance with applicable law and to elect any continued healthcare coverage as may be required under COBRA or similar state law.

 

8.                                      Limitation on Payments. Notwithstanding anything in this Agreement to the contrary, if any payment or distribution Executive would receive pursuant to this Agreement or otherwise (“Payment”) would (a) constitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and (b) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall either be (i) delivered in full, or (ii) delivered as to such lesser extent which would result in no portion of such Payment being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by Executive on an after-tax basis, of the largest payment, notwithstanding that all or some portion the Payment may be taxable under Section 4999 of the Code.  The accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change in Control shall perform the foregoing calculations.  The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder.  The accounting firm shall provide its calculations to the Company and Executive within fifteen (15) calendar days after the date on which Executive’s right to a Payment is triggered (if requested at that time by the Company or Executive) or such other time as requested by the Company or Executive.  Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Company and Executive.  Any reduction in payments and/or benefits pursuant to this Section 8 will occur in the following order: (1) reduction of cash payments; (2) cancellation of accelerated vesting of equity awards other than stock options; (3) cancellation of accelerated vesting of stock options; and (4) reduction of other benefits payable to Executive.

 

9.                                      Definition of Terms.  The following terms referred to in this Agreement shall have the following meanings:

 

(a)                                 Cause.  “Cause” means the occurrence of any of the following events, as determined by the Board or a committee designated by the Board, in its sole discretion: (i) the conviction of Executive by a court of competent jurisdiction of a crime involving moral turpitude; (ii) the commission, or attempted commission, by Executive of an act of fraud on the Company; (iii) the misappropriation, or attempted misappropriation, by Executive of any of the Company’s funds or property; (iv) the failure by Executive to perform in any material respect his or her obligations under the terms of this Agreement, which such failure has gone unremedied within ten (10) days after the Company provides Executive with written notice of such failure; (v) the knowing engagement by Executive, without the written approval of the Board, in any direct, material conflict of interest with the Company without compliance with the Company’s conflict of interest policy; (vi) the knowing engagement by Executive, without written approval of the Board, in any activity which competes with the Company’s business or which would result in a material injury to the Company or which otherwise violates any provision of this Agreement, any employment agreement or any confidentiality agreement; or (vii) the knowing engagement by Executive in any activity that would constitute a material violation of the provisions of the Company’s business ethics policy, employee handbook or similar policies, if any, then in effect.

 

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(b)                                 Change in Control.  “Change in Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:

 

(i)                                     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) whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended) (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 Securities Exchange Act of 1934, as amended) of securities of the Company possessing more than fifty percent (50%) of the total combined voting power of the Company’s securities outstanding immediately after such acquisition;

 

(ii)                                  During any period of two (2) 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 Sections 9(b)(i) or 9(b)(iii) hereof) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the two (2)-year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or

 

(iii)                               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:

 

(1)                                 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

 

(2)                                 after which no person or group beneficially owns voting securities representing fifty percent (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 9(b)(iii)(2) as beneficially owning fifty percent (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.

 

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A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.  Notwithstanding the foregoing, a “Change in Control” must also constitute a “change in control event,” as defined in Treasury Regulation §1.409A-3(i)(5).

 

(c)                                  Change in Control Period.  “Change in Control Period” means the period of time commencing on the consummation of a Change in Control and ending twelve (12) months following the Change in Control.

 

(d)                                 Constructive Termination.  “Constructive Termination” means Executive’s resignation from all positions he or she then holds with the Company if: (i) without Executive’s prior written consent, (A) there is a material diminution in Executive’s duties and responsibilities with the Company; provided, however, that a change in title or reporting relationship will not constitute a Constructive Termination; (B) there is a material reduction of Executive’s then-existing base salary; provided, however, that a material reduction in Executive’s base salary pursuant to a salary reduction program affecting all or substantially all of the employees of the Company and that does not adversely affect Executive to a greater extent than other similarly situated employees shall not constitute a Constructive Termination; or (C) Executive is required to relocate Executive’s primary work location to a facility or location that would increase Executive’s one-way commute distance by more than fifty (50) miles from Executive’s primary work location as of immediately prior to such change, (ii) Executive provides written notice outlining such conditions, acts or omissions to the Company within thirty (30) days immediately following such material change or reduction, (iii) such material change or reduction is not remedied by the Company within thirty (30) days following the Company’s receipt of such written notice and (iv) Executive’s resignation is effective not later than thirty (30) days after the expiration of such thirty (30) day cure period.

 

(e)                                  Covered Termination.  “Covered Termination” means Executive’s Constructive Termination or the termination of Executive’s employment by the Company other than for Cause.

 

(f)                                   Termination Date.  “Termination Date” means the date Executive experiences a Covered Termination.

 

10.                               Successors.

 

(a)                                 Company’s Successors.  Except as set forth above, any successor to the Company (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets shall assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession.  For all purposes under this Agreement, the term “Company” shall include any successor to the Company’s business and/or assets which executes and delivers the assumption agreement described in this Section 10(a) or which becomes bound by the terms of this Agreement by operation of law.

 

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(b)                                 Executive’s Successors.  The terms of this Agreement and all rights of Executive hereunder shall inure to the benefit of, and be enforceable by, Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

 

11.                               Notices.  Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or one day following mailing via Federal Express or similar overnight courier service.  In the case of Executive, mailed notices shall be addressed to Executive at Executive’s home address that the Company has on file for Executive.  In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its [Chief Executive Officer](6).

 

12.                               Confidentiality; Non-Disparagement.

 

(a)                                 Confidentiality.  Executive hereby expressly confirms Executive’s continuing obligations to the Company pursuant to Executive’s Proprietary Information and Inventions Agreement with the Company (the “Confidential Information Agreement”).

 

(b)                                 Non-Disparagement.  Executive agrees that Executive shall not disparage, criticize or defame the Company, its affiliates and their respective affiliates, directors, officers, agents, partners, stockholders or employees, either publicly or privately.  The Company agrees that it shall not, and it shall instruct its officers and members of its Board to not, disparage, criticize or defame Executive, either publicly or privately.  Nothing in this Section 12(b) shall have application to any evidence or testimony required by any court, arbitrator or government agency.

 

13.                               Dispute Resolution.  To ensure the timely and economical resolution of disputes that arise in connection with this Agreement, Executive and the Company agree that any and all disputes, claims, or causes of action arising from or relating to the enforcement, breach, performance or interpretation of this Agreement, Executive’s employment, or the termination of Executive’s employment, shall be resolved to the fullest extent permitted by law by final, binding and confidential arbitration in Austin, Texas through Judicial Arbitration & Mediation Services/Endispute (“JAMS”) in conformity with the then-existing JAMS employment arbitration rules and Texas law.  By agreeing to this arbitration procedure, both Executive and the Company waive the right to resolve any such dispute through a trial by jury or judge or administrative proceeding.  The arbitrator shall: (a) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; and (b) issue a written arbitration decision, to include the arbitrator’s essential findings and conclusions and a statement of the award.  The Company shall pay all JAMS’s arbitration fees in excess of the amount of court fees that would be required if the dispute were decided in a court of law.  Nothing in this Agreement is intended to prevent either Executive or the Company from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration.  Notwithstanding the foregoing,

 

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Executive and the Company each have the right to resolve any issue or dispute over intellectual property rights by Court action instead of arbitration.

 

14.                               Miscellaneous Provisions.

 

(a)                                 Section 409A.

 

(i)                                     Separation from Service.  Notwithstanding any provision to the contrary in this Agreement, no amount deemed deferred compensation subject to Section 409A of the Code shall be payable pursuant to Sections 3 or 4 above unless Executive’s termination of employment constitutes a “separation from service” with the Company within the meaning of Section 409A of the Code and the Department of Treasury regulations and other guidance promulgated thereunder (“Separation from Service”) and, except as provided under Section 14(a)(ii) of this Agreement, any such amount shall not be paid, or in the case of installments, commence payment, until the sixtieth (60th) day following Executive’s Separation from Service.  Any installment payments that would have been made to Executive during the sixty (60) day period immediately following Executive’s Separation from Service but for the preceding sentence shall be paid to Executive on the sixtieth (60th) day following Executive’s Separation from Service and the remaining payments shall be made as provided in this Agreement.

 

(ii)                                  Specified Employee.  Notwithstanding any provision to the contrary in this Agreement, if Executive is deemed at the time of his separation from service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion of the benefits to which Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of Executive’s benefits shall not be provided to Executive prior to the earlier of (A) the expiration of the six (6)-month period measured from the date of Executive’s Separation from Service or (B) the date of Executive’s death.  Upon the first business day following the expiration of the applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this Section 14(a)(ii) shall be paid in a lump sum to Executive, and any remaining payments due under this Agreement shall be paid as otherwise provided herein.

 

(iii)                               Expense Reimbursements.  To the extent that any reimbursements payable pursuant to this Agreement are subject to the provisions of Section 409A of the Code, any such reimbursements payable to Executive pursuant to this Agreement shall be paid to Executive no later than December 31st of the year following the year in which the expense was incurred, the amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year, and Executive’s right to reimbursement under this Agreement will not be subject to liquidation or exchange for another benefit.

 

(iv)                              Installments.  For purposes of Section 409A of the Code (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), Executive’s right to receive any installment payments under this Agreement shall be treated as a right to receive a series of separate payments and, accordingly, each such installment payment shall at all times be considered a separate and distinct payment.

 

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(b)                                 Waiver.  No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by Executive and by an authorized officer of the Company (other than Executive).  No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

 

(c)                                  Whole Agreement.  This Agreement and the Confidential Information Agreement represent the entire understanding of the parties hereto with respect to the subject matter hereof and supersede all prior promises, arrangements and understandings regarding same, whether written or written, including, without limitation, any severance or change in control benefits in Executive’s offer letter agreement and employment agreement or previously approved by the Board.

 

(d)                                 Choice of Law.  The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Texas.

 

(e)                                  Severability.  The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect.

 

(f)                                   Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.

 

(Signature page follows)

 

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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year set forth below.

 

 

 

MIRNA THERAPEUTICS, INC.

 

 

 

By:

 

 

 

 

Title:

 

 

 

 

Date:

 

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

[            ]

 

 

 

 

 

Date:

 

 

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Exhibit 10.13

 

MIRNA THERAPEUTICS, INC.

 

INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement (this “Agreement”) is effective as of [·] by and between Mirna Therapeutics, Inc., a Delaware corporation (the “Company”), and «Indemnitee» (“Indemnitee”).

 

A.            The Company recognizes the difficulty in obtaining liability insurance for its directors, officers, employees, controlling persons, fiduciaries and other agents and affiliates, the significant cost of such insurance and the general limitations in the coverage of such insurance.

 

B.            The Company further recognizes the substantial increase in corporate litigation in general, subjecting directors, officers, employees, controlling persons, fiduciaries and other agents and affiliates to expensive litigation risks at the same time as the availability and coverage of liability insurance has been severely limited.

 

C.            The current protection available to directors, officers, employees, controlling persons, fiduciaries and other agents and affiliates of the Company may not be adequate under the present circumstances, and directors, officers, employees, controlling persons, fiduciaries and other agents and affiliates of the Company (or persons who may be alleged or deemed to be the same), including the Indemnitee, may not be willing to serve or continue to serve or be associated with the Company in such capacities without additional protection.

 

D.            The Company (a) desires to attract and retain the involvement of highly qualified persons, such as Indemnitee, to serve and be associated with the Company, and (b) accordingly, wishes to provide for the indemnification and advancement of expenses to the Indemnitee to the maximum extent permitted by law.

 

E.             In view of the considerations set forth above, the Company desires that Indemnitee shall be indemnified and advanced expenses by the Company as set forth herein.

 

AGREEMENT:

 

In consideration of the mutual promises and covenants contained herein, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.              Certain Definitions.

 

(a)                               Change in Control” shall be deemed to have occurred if, on or after the date of this Agreement, (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company acting in such capacity or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company

 

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representing more than fifty percent (50%) of the total voting power represented by the Company’s then outstanding Voting Securities, (ii) during any period of two (2) consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Company and any new director whose election by the Board of Directors or nomination for election by the Company’s stockholders was approved by a vote of at least two- thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof, (iii) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation other than a merger or consolidation which would result in the Voting Securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least eighty percent (80%) of the total voting power represented by the Voting Securities of the Company or such surviving entity outstanding immediately after such merger or consolidation or (iv) the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of (in one transaction or a series of related transactions) all or substantially all of the Company’s assets.

 

(b)                                 Claim” shall mean with respect to a Covered Event:  any threatened, asserted, pending or completed action, suit, proceeding or alternative dispute resolution mechanism, or any hearing, inquiry or investigation (formal or informal) that Indemnitee (or in the case of a Fund Indemnitor (as defined in Section 18 below) seeking to be indemnified, a Fund Indemnitor) in good faith believes might lead to the institution of any such action, suit, proceeding or alternative dispute resolution mechanism, whether civil, criminal, administrative, investigative or other, including any appeal therefrom.

 

(c)                                  References to the “Company” shall include, in addition to Mirna Therapeutics, Inc., any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger to which Mirna Therapeutics, Inc. (or any of its wholly owned subsidiaries) is a party, which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees, agents or fiduciaries, so that if Indemnitee is or was a director, officer, employee, agent or fiduciary of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, employee benefit plan, trust or other enterprise, Indemnitee shall stand in the same position under the provisions of this Agreement with respect to the resulting or surviving corporation as Indemnitee would have with respect to such constituent corporation if its separate existence had continued.

 

(d)                                 Covered Event” shall mean any event or occurrence by reason of the fact that Indemnitee is or was a director, officer, employee, agent or fiduciary of the Company, or any subsidiary of the Company, direct or indirect, or is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action or inaction on the part of Indemnitee while serving in such capacity.

 

(e)                                  Expense Advance” shall mean a payment to Indemnitee for Expenses pursuant to Section 3 hereof, in advance of the settlement of or final judgment in any action, suit,

 

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proceeding or alternative dispute resolution mechanism, hearing, inquiry or investigation, which constitutes a Claim.

 

(f)                                   Expenses” shall mean any and all direct and indirect costs, losses, claims, damages, fees, expenses and liabilities, joint or several (including reasonable attorneys’ fees and all other costs, expenses and obligations reasonably incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, to be a witness in or to participate in, any action, suit, proceeding, alternative dispute resolution mechanism, hearing, inquiry or investigation), judgments, fines, penalties and amounts paid in settlement (if such settlement is approved in advance by the Company, which approval shall not be unreasonably withheld) actually and reasonably incurred, of any Claim and any federal, state, local or foreign taxes imposed on the Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement.

 

(g)                                  Independent Legal Counsel” shall mean an attorney or firm of attorneys, selected in accordance with the provisions of Section 2(d) hereof, who shall not have otherwise performed services for (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning the rights of Indemnitee under this Agreement, or of other indemnitees under similar indemnity agreements) or (ii) any other party to the Claim giving rise to a claim for indemnification hereunder, within the last three (3) years.  Notwithstanding the foregoing, the term “Independent Legal Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

 

(h)                                 References to “other enterprises” shall include employee benefit plans; references to “fines shall include any excise taxes assessed on Indemnitee with respect to an employee benefit plan; and references to “serving at the request of the Company” shall include any service as a director, officer, employee, agent or fiduciary of the Company which imposes duties on, or involves services by, such director, officer, employee, agent or fiduciary with respect to an employee benefit plan, its participants or its beneficiaries; and if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan, Indemnitee shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement.

 

(i)                                  Reviewing Party” shall mean, subject to the provisions of Section 2(d), any person or body appointed by the Board of Directors in accordance with applicable law to review the Company’s obligations hereunder and under applicable law, which may include a member or members of the Company’s Board of Directors, Independent Legal Counsel or any other person or body not a party to the particular Claim for which Indemnitee is seeking indemnification, exoneration or hold harmless rights.

 

(j)                                    Section” refers to a section of this Agreement unless otherwise indicated.

 

(k)                                 Voting Securities” shall mean any securities of the Company that vote generally in the election of directors.

 

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2.              Indemnification.

 

(a)                                 Indemnification of Expenses.  Subject to the provisions of Section 2(b) below, the Company shall indemnify, exonerate or hold harmless Indemnitee for Expenses to the fullest extent permitted by law if Indemnitee was, is or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, any Claim (whether by reason of or arising in part out of a Covered Event), including all interest, assessments and other charges incurred in connection with or in respect of such Expenses.

 

(b)                                 Review of Indemnification Obligations.

 

(i)                                     Notwithstanding the foregoing, in the event any Reviewing Party shall have determined (in a written opinion, in any case in which Independent Legal Counsel is the Reviewing Party) that Indemnitee is not entitled to be indemnified, exonerated or held harmless hereunder under applicable law, (A) the Company shall have no further obligation under Section 2(a) to make any payments to Indemnitee not made prior to such determination by such Reviewing Party and (B) the Company shall be entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for all Expenses theretofore paid in indemnifying, exonerating or holding harmless Indemnitee (within thirty (30) days after such determination); provided, however, that if Indemnitee has commenced or thereafter commences legal proceedings in a court of competent jurisdiction to secure a determination that Indemnitee is entitled to be indemnified, exonerated or held harmless hereunder under applicable law, any determination made by any Reviewing Party that Indemnitee is not entitled to be indemnified hereunder under applicable law shall not be binding and Indemnitee shall not be required to reimburse the Company for any Expenses theretofore paid in indemnifying, exonerating or holding harmless Indemnitee until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or lapsed).  Indemnitee’s obligation to reimburse the Company for any Expenses shall be unsecured and no interest shall be charged thereon.

 

(ii)                                  Subject to Section 2(b)(iii) below, if the Reviewing Party shall not have made a determination within forty-five (45) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (A) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification or (B) a prohibition of such indemnification under applicable law; provided, however, that such 45-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto.

 

(iii)                               Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of the Claim.

 

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(c)                                  Indemnitee Rights on Unfavorable Determination; Binding Effect.  If any Reviewing Party determines that Indemnitee substantively is not entitled to be indemnified, exonerated or held harmless hereunder in whole or in part under applicable law, Indemnitee shall have the right to commence litigation seeking an initial determination by the court or challenging any such determination by such Reviewing Party or any aspect thereof, including the legal or factual bases therefor, and, subject to the provisions of Section 15 hereof, the Company hereby consents to service of process and to appear in any such proceeding.  Absent such litigation, any determination by any Reviewing Party shall be conclusive and binding on the Company and Indemnitee.

 

(d)                                 Selection of Reviewing Party; Change in Control.  If there has not been a Change in Control, any Reviewing Party shall be selected by the Board of Directors, and if there has been such a Change in Control (other than a Change in Control which has been approved by a majority of the Company’s Board of Directors who were directors immediately prior to such Change in Control), any Reviewing Party with respect to all matters thereafter arising concerning Indemnitee’s indemnification, exoneration or hold harmless rights for Expenses under this Agreement or any other agreement or under the Company’s Certificate of Incorporation or bylaws as now or hereafter in effect, or under any other applicable law, if desired by Indemnitee, shall be Independent Legal Counsel selected by the Indemnitee and approved by Company (which approval shall not be unreasonably withheld). Such counsel, among other things, shall render its written opinion to the Company and Indemnitee as to whether and to what extent Indemnitee would be entitled to be indemnified, exonerated or held harmless hereunder under applicable law and the Company agrees to abide by such opinion.  The Company agrees to pay the reasonable fees of the Independent Legal Counsel referred to above and to fully indemnify, exonerate and hold harmless such counsel against any and all expenses (including attorneys’ fees), claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.  Notwithstanding any other provision of this Agreement, the Company shall not be required to pay Expenses of more than one Independent Legal Counsel in connection with all matters concerning a single Indemnitee, and such Independent Legal Counsel shall be the Independent Legal Counsel for any or all other Indemnitees unless (i) the Company otherwise determines or (ii) any Indemnitee shall provide a written statement setting forth in detail a reasonable objection to such Independent Legal Counsel representing other Indemnitees.

 

(e)                                  Mandatory Payment of Expenses.  Notwithstanding any other provision of this Agreement other than Section 10 hereof, to the fullest extent permitted by applicable law and to the extent that Indemnitee was a party to (or participant in) and has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in defense of any Claim, Indemnitee shall be indemnified, exonerated and held harmless against all Expenses actually and reasonably incurred by Indemnitee in connection therewith.  If Indemnitee is not wholly successful in such Claim but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Claim, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with or related to each successfully resolved claim, issue or matter to the fullest extent permitted by law.  For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Claim by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

 

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(f)                                   Contribution.  If the indemnification, exoneration or hold harmless rights provided for in this Agreement is for any reason held by a court of competent jurisdiction to be unavailable to an Indemnitee, then in lieu of indemnifying, exonerating or holding harmless Indemnitee thereunder, the Company shall contribute to the amount paid or required to be paid by Indemnitee as a result of such Expenses (i) in such proportion as is deemed fair and reasonable in light of all of the circumstances in order to reflect the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Claim or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with the action or inaction which resulted in such Expenses, as well as any other relevant equitable considerations.  In connection with the registration of the Company’s securities, the relative benefits received by the Company and Indemnitee shall be deemed to be in the same respective proportions that the net proceeds from the offering (before deducting expenses) received by the Company and Indemnitee, in each case as set forth in the table on the cover page of the applicable prospectus, bear to the aggregate public offering price of the securities so offered.  The relative fault of the Company and Indemnitee shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or Indemnitee and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

 

The Company and Indemnitee agree that it would not be just and equitable if contribution pursuant to this Section 2(f) were determined by pro rata or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph.  In connection with the registration of the Company’s securities, in no event shall Indemnitee be required to contribute any amount under this Section 2(f) in excess of the net proceeds received by Indemnitee from its sale of securities under such registration statement.  No person found guilty of fraudulent misrepresentation (within the meaning of Section 11(a) of the Securities Act of 1933, as amended) shall be entitled to contribution from any person who was not found guilty of such fraudulent misrepresentation.

 

3.              Expense Advances.

 

(a)                                 Obligation to Make Expense Advances.  The Company shall make Expense Advances to Indemnitee upon receipt of a written undertaking by or on behalf of the Indemnitee to repay such amounts if it shall ultimately be determined that the Indemnitee is not entitled to be indemnified, exonerated or held harmless therefor by the Company.

 

(b)                                 Form of Undertaking.  Any written undertaking by the Indemnitee to repay any Expense Advances hereunder shall be unsecured and no interest shall be charged thereon.

 

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4.              Procedures for Indemnification and Expense Advances.

 

(a)                                 Timing of Payments.  All payments of Expenses (including without limitation Expense Advances) by the Company to the Indemnitee pursuant to this Agreement shall be made to the fullest extent permitted by law as soon as practicable after written demand by Indemnitee therefor is presented to the Company, but in no event later than forty-five (45) days after such written demand by Indemnitee is presented to the Company, except in the case of Expense Advances, which shall be made no later than twenty (20) days after such written demand by Indemnitee is presented to the Company.  If the Company disputes a portion of the amounts for which indemnification is requested, the undisputed portion shall be paid and only the disputed portion withheld pending resolution of any such dispute.

 

(b)                                 Notice/Cooperation by Indemnitee.  Indemnitee shall, as a condition precedent to Indemnitee’s right to be indemnified, exonerated or held harmless or Indemnitee’s right to receive Expense Advances under this Agreement, give the Company notice in writing as soon as practicable of any Claim made against Indemnitee for which indemnification, exoneration or hold harmless rights will or could be sought under this Agreement.  Notice to the Company shall be directed to the President and the Secretary of the Company at the address shown on the signature page of this Agreement (or such other address as the Company shall designate in writing to Indemnitee) and shall include a description of the nature of the Claim and the facts underlying the Claim, in each case to the extent known to Indemnitee.  To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Claim.  In addition, Indemnitee shall give the Company such information and cooperation as the Company may reasonably require and as shall be within Indemnitee’s power.  The failure by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, and any delay in so notifying the Company shall not constitute a waiver by Indemnitee of any rights under this Agreement, except to the extent (solely with respect to the indemnity hereunder) that such failure or delay materially prejudices the Company.

 

(c)                                  No Presumptions; Burden of Proof.  For purposes of this Agreement, the termination of any Claim by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification, exoneration or hold harmless right is not permitted by this Agreement or applicable law.  In addition, neither the failure of any Reviewing Party to have made a determination as to whether Indemnitee has met any particular standard of conduct or had any particular belief, nor an actual determination by any Reviewing Party that Indemnitee has not met such standard of conduct or did not have such belief, prior to the commencement of legal proceedings by Indemnitee to secure a judicial determination that Indemnitee should be indemnified, exonerated or held harmless under this Agreement or applicable law, shall be a defense to Indemnitee’s claim or create a presumption that Indemnitee has not met any particular standard of conduct or did not have any particular belief.  In connection with any determination by any Reviewing Party or otherwise as to whether the Indemnitee is entitled to be indemnified, exonerated or held harmless hereunder, the burden of proof shall be on the Company to establish that Indemnitee is not so entitled.

 

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(d)                                 Notice to Insurers.  If, at the time of the receipt by the Company of a notice of a Claim pursuant to Section 4(b) hereof, the Company has liability insurance in effect which may cover such Claim, the Company shall give prompt notice of the commencement of such Claim to the insurers in accordance with the procedures set forth in the respective policies.  The Company shall thereafter take all reasonably necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Claim in accordance with the terms of such policies.

 

(e)                                  Selection of Counsel.  In the event the Company shall be obligated hereunder to provide indemnification, exoneration or hold harmless rights for or make any Expense Advances with respect to the Expenses of any Claim, the Company, if appropriate, shall be entitled to assume the defense of such Claim with counsel approved by Indemnitee (which approval shall not be unreasonably withheld) upon the delivery to Indemnitee of written notice of the Company’s election to do so.  After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees or expenses of separate counsel subsequently employed by or on behalf of Indemnitee with respect to the same Claim; provided, however, that (i) Indemnitee shall have the right to employ Indemnitee’s separate counsel in any such Claim at Indemnitee’s expense and (ii) if (A) the employment of separate counsel by Indemnitee has been previously authorized by the Company, (B) Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company and Indemnitee in the conduct of any such defense or (C) the Company shall not continue to retain such counsel to defend such Claim, then the fees and expenses of Indemnitee’s separate counsel shall be Expenses for which Indemnitee may receive indemnification, exoneration or hold harmless rights or Expense Advances hereunder.  The Company shall have the right to conduct such defense as it sees fit in its sole discretion, including the right to settle any claim, action or proceeding against Indemnitee without the consent of Indemnitee, provided that the terms of such settlement include either: (i) a full release of Indemnitee by the claimant from all liabilities or potential liabilities under such claim or (ii), in the event such full release is not obtained, the terms of such settlement do not limit any indemnification, exoneration or hold harmless rights Indemnitee may now, or hereafter, be entitled to under this Agreement, the Company’s Certificate of Incorporation, bylaws, any agreement, any vote of stockholders or disinterested directors, the General Corporation Law of the State of Delaware (the “DGCL”) or otherwise.

 

5.              Additional Indemnification Rights; Nonexclusivity.

 

(a)                                 Scope.  The Company hereby agrees to indemnify, exonerate and hold harmless the Indemnitee to the fullest extent permitted by law, notwithstanding that such indemnification, exoneration or hold harmless right is not specifically authorized by the other provisions of this Agreement, the Company’s Certificate of Incorporation, the Company’s bylaws or by statute, a vote of stockholders or a resolution of directors, or otherwise.  The rights of indemnification and to receive Expense Advances as provided by this Agreement shall be interpreted independently of, and without reference to, any other such rights to which Indemnitee may at any time be entitled.  In the event of any change after the date of this Agreement in any applicable law, statute or rule which expands the right of a Delaware corporation to indemnify, exonerate or hold harmless a member of its board of directors or an officer, employee, agent or fiduciary, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the

 

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greater benefits afforded by such change.  In the event of any change in any applicable law, statute or rule which narrows the right of a Delaware corporation to indemnify, exonerate or hold harmless a member of its board of directors or an officer, employee, agent or fiduciary, such change, to the extent not otherwise required by such law, statute or rule to be applied to this Agreement, shall have no effect on this Agreement or the parties’ rights and obligations hereunder except as set forth in Section 10(a) hereof.

 

(b)                                 Nonexclusivity.  The indemnification, exoneration or hold harmless rights and the payment of Expense Advances provided by this Agreement shall be in addition to any rights to which Indemnitee may be entitled under the Company’s Certificate of Incorporation, its bylaws, any other agreement, any vote of stockholders or disinterested directors, the DGCL, or otherwise.  The indemnification, exoneration or hold harmless rights and the payment of Expense Advances provided under this Agreement shall continue as to Indemnitee for any action taken or not taken while serving in an indemnified, exonerated or held harmless capacity even though subsequent thereto Indemnitee may have ceased to serve in such capacity.

 

6.              No Duplication of Payments.  The Company shall not be liable under this Agreement to make any payment in connection with any Claim made against Indemnitee to the extent Indemnitee has otherwise actually received payment (under any insurance policy, provision of the Company’s Certificate of Incorporation, bylaws or otherwise) of the amounts otherwise payable hereunder, except as provided in Section 18 below.

 

7.              Partial Indemnification.  If Indemnitee is entitled under any provision of this Agreement to indemnification, exoneration or hold harmless rights by the Company for some or a portion of Expenses incurred in connection with any Claim, but not, however, for the total amount thereof, the Company shall nevertheless indemnify, exonerate or hold harmless Indemnitee for the portion of such Expenses to which Indemnitee is entitled.

 

8.              Mutual Acknowledgment.  Both the Company and Indemnitee acknowledge that in certain instances, federal law or applicable public policy may prohibit the Company from indemnifying, exonerating or holding harmless its directors, officers, employees, agents or fiduciaries under this Agreement or otherwise.  Indemnitee understands and acknowledges that the Company may be required in the future to undertake with the Securities and Exchange Commission to submit the question of indemnification, exoneration or hold harmless rights to a court in certain circumstances for a determination of the Company’s right under public policy to indemnify, exonerate or hold harmless Indemnitee.

 

9.              Liability Insurance.  To the extent the Company maintains liability insurance applicable to directors, officers, employees, agents or fiduciaries, Indemnitee shall be covered by such policies in such a manner as to provide Indemnitee the same rights and benefits as are provided to the most favorably insured of the Company’s directors who are not employees of the Company, if Indemnitee is a director who is not employed by the Company; or of the Company’s officers, if Indemnitee is a director of the Company and is also employed by the Company, or is not a director of the Company but is an officer; or in the Company’s sole discretion, if Indemnitee is not an officer or director but is an employee, agent or fiduciary.

 

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10.       Exceptions.  Notwithstanding any other provision of this Agreement, the Company shall not be obligated pursuant to the terms of this Agreement:

 

(a)                                 Excluded Action or Omissions.  To indemnify, exonerate or hold harmless Indemnitee for Expenses resulting from acts, omissions or transactions for which Indemnitee is prohibited from receiving indemnification, exoneration or hold harmless rights under this Agreement or applicable law; provided, however, that notwithstanding any limitation set forth in this Section 10(a) regarding the Company’s obligation to provide indemnification, exoneration or hold harmless rights to Indemnitee, Indemnitee shall be entitled under Section 3 to receive Expense Advances hereunder with respect to any such Claim unless and until a court having jurisdiction over the Claim shall have made a final judicial determination (as to which all rights of appeal therefrom have been exhausted or lapsed) that Indemnitee has engaged in acts, omissions or transactions for which Indemnitee is prohibited from receiving indemnification under this Agreement or applicable law.

 

(b)                                 Claims Initiated by Indemnitee.  To indemnify, exonerate or hold harmless or make Expense Advances to Indemnitee with respect to Claims initiated or brought voluntarily by Indemnitee and not by way of defense, counterclaim or cross claim, except (i) with respect to actions or proceedings brought to establish or enforce an indemnification, exoneration or hold harmless right under this Agreement or any other agreement or insurance policy or under the Company’s Certificate of Incorporation or bylaws now or hereafter in effect relating to Claims for Covered Events, (ii) in specific cases if the Board of Directors has approved the initiation or bringing of such Claim or (iii) as otherwise required under Section 145 of the DGCL, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, exoneration, hold harmless right, Expense Advances or insurance recovery, as the case may be.

 

(c)                                  Lack of Good Faith.  To indemnify, exonerate or hold harmless Indemnitee for any Expenses incurred by Indemnitee with respect to any action instituted (i) by Indemnitee to enforce or interpret this Agreement, if a court having jurisdiction over such action determines as provided in Section 13 hereof that each of the material assertions made by Indemnitee as a basis for such action was not made in good faith or was frivolous or (ii) by or in the name of the Company to enforce or interpret this Agreement, if a court having jurisdiction over such action determines as provided in Section 13 hereof that each of the material defenses asserted by Indemnitee in such action was made in bad faith or was frivolous.

 

(d)                                 Claims Under Section 16(b) or Sarbanes-Oxley Act.  To indemnify, exonerate or hold harmless Indemnitee for expenses and the payment of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended, or any similar successor statute or (ii) any reimbursement of the Company by Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act); provided, however, that notwithstanding any limitation set forth in this Section 10(d) regarding the Company’s obligation to provide indemnification or exoneration or hold harmless,

 

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Indemnitee shall be entitled under Section 3 hereof to receive Expense Advances hereunder with respect to any such Claim unless and until a court having jurisdiction over the Claim shall have made a final judicial determination (as to which all rights of appeal therefrom have been exhausted or lapsed) that Indemnitee has violated said statute.

 

11.       Counterparts.  This Agreement may be executed in counterparts and by facsimile or electronic transmission, each of which shall constitute an original and all of which, together, shall constitute one instrument.

 

12.       Binding Effect; Successors and Assigns.  This Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company), spouses, heirs, and personal and legal representatives.  The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all, or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.  This Agreement shall continue in effect regardless of whether Indemnitee continues to serve as a director, officer, employee, agent or fiduciary (as applicable) of the Company or of any other enterprise at the Company’s request.  The Company and Indemnitee agree that the Fund Indemnitors (as defined in Section 18 below) are express third party beneficiaries of this Agreement.

 

13.       Expenses Incurred in Action Relating to Enforcement or Interpretation.  In the event that any action is instituted by Indemnitee under this Agreement or under any liability insurance policies maintained by the Company to enforce or interpret any of the terms hereof or thereof, Indemnitee shall be entitled to be indemnified for all Expenses incurred by Indemnitee with respect to such action (including without limitation attorneys’ fees), regardless of whether Indemnitee is ultimately successful in such action, unless as a part of such action a court having jurisdiction over such action makes a final judicial determination (as to which all rights of appeal therefrom have been exhausted or lapsed) that each of the material assertions made by Indemnitee as a basis for such action was not made in good faith or was frivolous; provided, however, that until such final judicial determination is made, Indemnitee shall be entitled under Section 3 to receive payment of Expense Advances hereunder with respect to such action.  In the event of an action instituted by or in the name of the Company under this Agreement to enforce or interpret any of the terms of this Agreement, Indemnitee shall be entitled to be indemnified, exonerated or held harmless for all Expenses incurred by Indemnitee in defense of such action (including without limitation costs and expenses incurred with respect to Indemnitee’s counterclaims and cross-claims made in such action), unless as a part of such action a court having jurisdiction over such action makes a final judicial determination (as to which all rights of appeal therefrom have been exhausted or lapsed) that each of the material defenses asserted by Indemnitee in such action was made in bad faith or was frivolous; provided, however, that until such final judicial determination is made, Indemnitee shall be entitled under Section 3 to receive payment of Expense Advances hereunder with respect to such action.

 

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14.       Notices.  All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed duly given (i) if delivered by hand and signed for by the party addressed, on the date of such delivery or (ii) if mailed by domestic certified or registered mail with postage prepaid, on the third business day after the date postmarked.  Addresses for notice to either party are as shown on the signature page of this Agreement or as subsequently modified by written notice.

 

15.       Consent to Jurisdiction.  The Company and Indemnitee each hereby irrevocably consent to the jurisdiction of the courts of the State of Delaware for all purposes in connection with any action or proceeding which arises out of or relates to this Agreement and agree that any action instituted under this Agreement shall be commenced, prosecuted and continued only in the Court of Chancery of the State of Delaware in and for New Castle County, which shall be the exclusive and only proper forum for adjudicating such a claim.

 

16.       Severability.  The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law.  Furthermore, to the fullest extent possible, the provisions of this Agreement (including without limitation each portion of this Agreement containing any provision held to be invalid, void or otherwise unenforceable, that is not itself invalid, void or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

 

17.       Choice of Law.  This Agreement, and all rights, remedies, liabilities, powers and duties of the parties to this Agreement, shall be governed by and construed in accordance with the laws of the State of Delaware without regard to principles of conflicts of laws.

 

18.       Primacy of Indemnification; Subrogation.

 

(a)                                 The Company hereby acknowledges that Indemnitee has or may in the future have certain indemnification, exoneration, hold harmless or Expense advancement rights and/or insurance provided by [Fund] and certain of its affiliates (collectively, the “Fund Indemnitors”).  The Company hereby agrees (i) that it is the indemnitor of first resort (i.e., its obligations to Indemnitee are primary and any obligation of the Fund Indemnitors to advance Expenses or to provide indemnification, exoneration or hold harmless rights for the same Expenses incurred by Indemnitee are secondary), (ii) that it shall be required to advance the full amount of Expenses incurred by Indemnitee and shall be liable for the full amount of all Expenses, to the extent legally permitted and as required by the Certificate of Incorporation or bylaws of the Company (or any agreement between the Company and Indemnitee), without regard to any rights Indemnitee may have against the Fund Indemnitors, (iii) that it irrevocably waives, relinquishes and releases the Fund Indemnitors from any and all claims against the Fund Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof and (iv) if any Fund Indemnitor is a party to or a participant in a legal proceeding, which participation or involvement arises solely as a result of Indemnitee’s service to the Company as a director of the Company, then such Fund Indemnitor shall be entitled to all of the indemnification rights and remedies under this Agreement to the same extent as Indemnitee.  The

 

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Company further agrees that no advancement or payment by the Fund Indemnitors on behalf of Indemnitee with respect to any Claim for which Indemnitee has sought indemnification, exoneration or hold harmless rights from the Company shall affect the foregoing and the Fund Indemnitors shall have a right to receive from the Company, contribution and/or be subrogated, to the extent of such advancement or payment to all of the rights of recovery of Indemnitee against the Company.

 

(b)                                 [Except as provided in Section 18(a) above, ][I]n the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee from any insurance policy purchased by the Company, who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company effectively to bring suit to enforce such rights.  In no event, however, shall the Company or any other person have any right of recovery, through subrogation or otherwise, against (i) Indemnitee, or (ii) any Fund Indemnitor or (iii) any insurance policy purchased or maintained by Indemnitee [or any Fund Indemnitor].

 

19.       Amendment and Termination.  No amendment, modification, termination or cancellation of this Agreement shall be effective unless it is in writing signed by both the parties hereto.  No waiver of any of the provisions of this Agreement shall be deemed to be or shall constitute a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver.

 

20.       Integration and Entire Agreement.  This Agreement sets forth the entire understanding between the parties hereto and supersedes and merges all previous written and oral negotiations, commitments, understandings and agreements relating to the subject matter hereof between the parties hereto, including any existing director or officer indemnification agreement; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the bylaws, any directors and officers insurance maintained by the Company and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

 

21.       No Construction as Employment AgreementNothing contained in this Agreement shall be construed as giving Indemnitee any right to employment by the Company or any of its subsidiaries or affiliated entities.

 

22.       Additional Acts.  If for the validation of any of the provisions in this Agreement any act, resolution, approval or other procedure is required, the Company undertakes to cause such act, resolution, approval or other procedure to be affected or adopted in a manner that will enable the Company to fulfill its obligations under this Agreement.

 

(The remainder of this page is intentionally left blank.)

 

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IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement as of the date first above written.

 

 

MIRNA THERAPEUTICS, INC.

 

 

 

 

 

By:

 

 

 

AUTHORIZED OFFICER

 

 

 

Address:

 

2150 Woodward St., Suite 100

 

Austin, TX 78744

 

 

AGREED TO AND ACCEPTED BY:

 

 

 

INDEMNITEE:

 

 

 

 

 

By:

 

 

 

«INDEMNITEE»

 

 

 

Date: [·]

 

 

 

Address:

 

«Address»

 

 

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Exhibit 10.15

 

STOCK PURCHASE AGREEMENT

 

This Stock Purchase Agreement (this “Agreement”) is dated as of September 1, 2015 (the “Effective Date”) by and between Mirna Therapeutics, Inc., a Delaware corporation (the “Company”), and the Cancer Prevention and Research Institute of Texas, an institution of the State of Texas (“CPRIT”).

 

RECITALS

 

A.                                    The Company and CPRIT are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act, and Rule 506 of Regulation D as promulgated by the Commission under the Securities Act.

 

B.                                    CPRIT wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, shares of Common Stock of the Company (the “Shares”), concurrent with and conditional upon the consummation of the Company’s Qualified IPO pursuant to an effective registration statement under the Securities Act, at a purchase price per share (the “Purchase Price”) equal to the price per share offered to the public in the IPO.

 

C.                                    The parties hereto additionally contemplate executing and delivering a Registration Rights Agreement in substantially the form attached hereto as Exhibit A (the “Registration Rights Agreement”), as set forth herein.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and CPRIT hereby agree as follows:

 

ARTICLE I.
DEFINITIONS

 

1.1       Definitions.  In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms shall have the meanings indicated in this Section 1.1:

 

Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, Controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act.

 

Agreement” has the meaning set forth in the Preamble.

 

Business Day” means any day except Saturday, Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

 

Closing” means the closing of the purchase and sale of the Shares pursuant to this Agreement.

 

Closing Date” has the meaning set forth in Section 2.1(b).

 

Commission” means the United States Securities and Exchange Commission.

 

Common Stock” means shares of the common stock of the Company, par value $0.001 per share, and also includes any other class of securities into which such common stock may hereafter be reclassified or changed into.

 



 

Company” has the meaning set forth in the Preamble.

 

Company Counsel” means Latham & Watkins LLP.

 

Company Deliverables” has the meaning set forth in Section 2.2(a).

 

“Company Intellectual Property” has the meaning set forth in Section 3.1(l).

 

Company’s Knowledge” means the knowledge of the executive officers of the Company.

 

“Confidential Information” has the meaning set forth in Section 3.1(l).

 

Control” (including the terms “controlling,” “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

CPRIT” has the meaning set forth in the Preamble.

 

CPRIT Counsel” means Andrews Kurth LLP.

 

CPRIT Deliverables” has the meaning set forth in Section 2.2(b).

 

Disclosure Schedules” has the meaning set forth in Section 3.1.

 

Effective Date” has the meaning set forth in the recitals.

 

Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

 

FDA” means the United States Food and Drug Administration.

 

Financial Statements” has the meaning set forth in Section 3.1(y).

 

GAAP” has the meaning set forth in Section 3.1(y).

 

Grant Contract” means that certain Cancer Research Grant Contract by and between the Company and CPRIT effective as of June 1, 2014.

 

Hazardous Materials” has the meaning set forth in Section 3.1(cc).

 

“In-Licensed Rights” has the meaning set forth in Section 3.1(l).

 

Investment Amount” has the meaning set forth in Section 2.1(a).

 

Lien” means any lien, charge, claim, encumbrance, security interest, right of first refusal, preemptive right or other restrictions of any kind.

 

Lock-Up Agreement” means (i) a lock-up agreement with the underwriters of the IPO, in substantially the form provided to CPRIT, as well as (ii) any other lock-up agreement signed by all holders of 10% or more of the Company’s outstanding shares of common stock (calculated as of the Effective Date)

 

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(the “Major Holders”); provided that, with respect to (ii), CPRIT’s execution of any such lock-up agreement would not disproportionately and adversely affect CPRIT relative to the Major Holders.

 

Material Adverse Effect” means a material adverse effect on the Company or its business, assets (including intangible assets), liabilities, condition (financial or otherwise), property, results of operations or prospects.

 

Material Contract” has the meaning set forth in Section 3.1(aa)(ii).

 

Material Permits” has the meaning set forth in Section 3.1(i).

 

“Out-Licensed Rights” has the meaning set forth in Section 3.1(l).

 

Person” means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein.

 

Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

 

Project Failure” has the meaning set forth in Attachment F of the Grant Contract.

 

Purchase Price” has the meaning set forth in the Recitals.

 

Qualified IPO” shall have the same meaning as set forth in the Company’s certificate of incorporation, as may be amended or supplemented from time to time.  The Trading Market in connection with the Qualified IPO shall be any market provided by the New York Stock Exchange or NASDAQ within the United States.  All references to the Company’s “IPO” shall be deemed to refer to a Qualified IPO.

 

Registration Rights Agreement” has the meaning set forth in the Recitals.

 

Regulation D” means Regulation D as promulgated by the Commission under the Securities Act.

 

Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

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

 

Shares” has the meaning set forth in the Recitals.

 

Statement Date” has the meaning set forth in Section 3.1(y).

 

Texas Courts” means the state courts of the State of Texas and the United States District Court for the Western District of Texas—Austin Division.

 

Trading Market” means the trading market on which the Common Stock is to be listed on and quoted for trading in connection with the IPO, which, as of the date of this Agreement is expected to be The NASDAQ Global Market.

 

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Transaction Documents” means this Agreement, the schedules and exhibits attached hereto, any Lock-Up Agreement, the Grant Contract, the Registration Rights Agreement and any other documents or agreements explicitly contemplated hereunder.

 

Transfer Agent” means American Stock Transfer & Trust Company, LLC, the current transfer agent of the Company, or any successor transfer agent for the Company.

 

ARTICLE II.
PURCHASE AND SALE

 

2.1       Closing.

 

(a)         Amount.  Subject to the terms and conditions set forth in this Agreement, at the Closing, the Company shall issue and sell to CPRIT, and CPRIT shall purchase from the Company, the number of shares of Common Stock equal to the number obtained by dividing $16,765,076.00 (the “Investment Amount”) by the Purchase Price, rounded down to the nearest whole share.

 

(b)         Closing.  The Closing of the purchase and sale of the Shares shall take place at the offices of Company Counsel on the business day immediately preceding the consummation of the IPO (the “Closing Date”) (or, with the written consent of both CPRIT and the Company, prior to the Closing Date) or at such other locations or remotely by facsimile transmission or other electronic means as the parties may mutually agree.

 

(c)          Form of Payment.  On the Closing Date, CPRIT shall pay to the Company the Investment Amount by wire transfer of immediately available funds and the Company shall irrevocably instruct the Transfer Agent to deliver to CPRIT the Shares in book-entry form.

 

2.2       Deliverables.

 

2.3       .    (a)                        On or prior to the Closing Date, the Company shall issue, deliver or cause to be delivered to CPRIT the following (the “Company Deliverables”):

 

(i)                                     the Shares in book-entry form, bearing the restrictive and other legends set forth in Section 4.1(b) hereof;

 

(ii)                                  a certificate evidencing the formation and good standing of the Company issued by the Secretary of State of Delaware, as of a date within five (5) Business Days of the Closing Date;

 

(iii)                               a certified copy of the certificate of incorporation of the Company, as certified by the Secretary of State of Delaware, as of a date within five (5) Business Days of the Closing Date;

 

(iv)                              a certificate executed by the Chief Executive Officer or Chief Financial Officer of the Company, dated as of the Closing Date, to the effect that (A) the representation set forth in Section 3.1(f) (Issuance of the Shares) shall be true and correct as of the Closing Date with the same force and effect as if it had been made as of such Closing Date and (B) on the Closing Date, the sale and issuance of the Shares shall be exempt from the registration requirements of the Securities Act and the registration and/or qualification requirements of all other applicable state securities laws;

 

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(v)                                 an opinion of Company Counsel, dated as of the Closing Date, in the form agreed to by CPRIT; and

 

(vi)                              the Registration Rights Agreement, duly executed by the Company.

 

(b)         CPRIT shall deliver or cause to be delivered to the Company the following (the “CPRIT Deliverables”):

 

(i)                                     On or prior to the Effective Date:

 

1.                                      an opinion of CPRIT Counsel, in the form agreed to by the Company; and

 

2.                                      the Lock-Up Agreement in substantially the form provided to CPRIT, duly executed by CPRIT.

 

(ii)                                  On or prior to the Closing Date:

 

1.                                      the Investment Amount;

 

2.                                      all Lock-Up Agreements, each duly executed by CPRIT; and

 

3.                                      the Registration Rights Agreement, duly executed by CPRIT.

 

ARTICLE III.
REPRESENTATIONS AND WARRANTIES

 

3.1       Representations and Warranties of the Company.  Except as set forth in the schedules delivered herewith (the “Disclosure Schedules”), which Disclosure Schedules shall be deemed a part hereof and shall qualify any representation made herein to the extent of the disclosure contained in the corresponding section of the Disclosure Schedules, the Company hereby represents and warrants as of the date hereof to CPRIT:

 

(a)         Subsidiaries.  The Company has no subsidiaries (as defined in Rule 405 under the Securities Act).

 

(b)         Organization and Qualification.  The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware, with the requisite corporate power and authority to own or lease and use its properties and assets and to carry on its business as currently conducted and as presently proposed to be conducted.  The Company is not in violation or default of any of the provisions of its certificate of incorporation or bylaws.  The Company is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not have or reasonably be expected to result in a Material Adverse Effect.

 

(c)          Authorization; Enforcement; Validity.  The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder and thereunder.  The Company’s execution and delivery of each of the Transaction Documents to which it is a party and the consummation by it of the transactions contemplated hereby and thereby (including, but not limited to, the issuance, sale and delivery of the Shares) have been duly authorized by all necessary corporate action on the

 

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part of the Company.  Each of the Transaction Documents to which it is a party has been (or upon delivery will have been) duly executed by the Company and is, or when delivered in accordance with the terms hereof, will constitute the legal, valid and binding obligation of the Company, enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.

 

(d)         No Conflicts.  The execution, delivery and performance by the Company of the Transaction Documents to which it is a party and the consummation by the Company of the transactions contemplated hereby or thereby do not and will not (i) conflict with or violate any provisions of the Company’s certificate of incorporation or bylaws or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would result in a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any Material Contract, except in the case of clause (ii), such as would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.

 

(e)          Filings, Consents and Approvals.  The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents (including the issuance of the Shares), other than (i) filings in connection with the IPO, (ii) the filing with the Commission of one or more registration statements in accordance with the requirements of the Registration Rights Agreement, (iii) filings required by applicable state securities laws, (iv) the filing of a Form D with the Commission under Regulation D, (v) the filings required in accordance with Section 4.3 of this Agreement and (vi) those that have been made or obtained prior to the Effective Date.

 

(f)           Issuance of the Shares.  The Shares have been duly authorized and, when issued and paid for in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, and shall not be subject to preemptive or similar rights.

 

(g)          Capitalization. The authorized, issued and outstanding shares of capital stock of the Company are as set forth on Schedule 3.1(g) (except for subsequent issuances, if any, (A) pursuant to this Agreement and the IPO, (B) pursuant to reservations, agreements or employee benefit plans in existence on or prior to the Effective Date or (C) pursuant to the exercise of convertible securities or options in existence on or prior to the Effective Date).  The outstanding shares of capital stock of the Company (i) have been duly authorized and validly issued and are fully paid and nonassessable and (ii) were issued in material compliance with all applicable federal and state securities laws.  None of the outstanding shares of capital stock of the Company were issued in violation of the preemptive or other similar rights of any securityholder of the Company.

 

(h)         Compliance.  The Company is not (i) in violation in any material respect of any order of any court, arbitrator or governmental body having jurisdiction over the Company or its business, products, properties or assets, (ii) in violation in any material respect of, or in receipt of written notice that it is in violation of, any statute, rule or regulation of any governmental authority applicable to the Company or its business, products, properties or assets, or (iii) subject to any injunctions on production at any facility of the Company or clinical holds, other than any partial clinical holds that subsequently have been lifted, on any clinical investigations by the Company; except, in each case, as would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.

 

(i)             Regulatory Permits. The Company possesses all material certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct

 

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its respective business as currently conducted (“Material Permits”), and the Company has not received any notice of Proceedings relating to the revocation or modification of any such Material Permits.

 

(j)            Title to Assets.  The Company has good and marketable title in fee simple to all real property owned by it.  The Company has good and marketable title to all tangible personal property owned by it that is material to the business of the Company, in each case free and clear of all Liens except such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company.  Any real property and facilities held under lease by the Company are held by the Company under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company.  The Company is in compliance with all material terms of each lease for real property and facilities to which it is a party or otherwise bound.

 

(k)         Obligations to Related Parties.  There are no obligations of the Company to any of its officers, directors, stockholders or employees or to their respective spouses or children or to any Affiliate of any of the foregoing, other than (a) for payment of compensation for services rendered to the Company, (b) reimbursement for reasonable expenses incurred on behalf of the Company and (c) for other standard employee benefits made generally available to all employees of the Company (including stock option agreements outstanding under any stock option plan approved by the Board of Directors of the Company).  To the Company’s Knowledge, none of the officers, directors or stockholders of the Company, or any members of their immediate families, is indebted to the Company or has any direct or indirect ownership interest in any firm or corporation with which the Company is affiliated or with which the Company has a business relationship, or any firm or corporation that competes with the Company, other than (i) passive investments in publicly traded companies (representing less than one percent (1%) of such company) which may compete with the Company and (ii) service as a board member of a company due to a person’s affiliation with a venture capital fund or similar institutional or corporate investor in such company.  No officer, stockholder, or director, or any member of their immediate families, is, directly or indirectly, interested in any material contract with the Company (other than such contracts as relate to any such person’s ownership of capital stock or other securities of the Company)

 

(l)             Intellectual Property.  The disclosure in Schedule 3.1(l) is true and correct in all material respects as of the Effective Date

 

(m)     Food and Drug Administration.

 

(i)                                     No Debarment.  The Company is not debarred by the FDA under the Generic Drug Enforcement Act of 1992 or other statutory regulation or otherwise excluded from or restricted in any manner from participation in any program related to pharmaceutical products, and, to the Company’s Knowledge, does not employ or use the services of any individual or entity who is so debarred or otherwise excluded or restricted.

 

(ii)                                  Compliance with Applicable Law.  Each of the product candidates of the Company is being, and at all times has been, developed, tested, manufactured and stored, as applicable, in compliance in all material respects with all applicable statutes, laws or regulations.

 

(iii)                               Applications and Submissions.  All applications and other submissions by the Company or any persons who are otherwise performing services for the benefit of the Company to the FDA and all other applicable governmental authorities were true and correct in all material respects as of the date of submission (or were corrected in or supplemented by a subsequent filing), and any material updates, changes, corrections or modifications to such applications and other documents required under applicable law have been submitted.

 

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(iv)                              Notices and Inspections.  The Company has not received any written notice or other written communication from the FDA or any other governmental authority alleging any material violation of any requirement of applicable law, including any failure to maintain systems and programs adequate to ensure compliance with any applicable law related to product and trial quality.  The Company has not received any (i) written notices of inspectional observations (including those recorded on Form FDA 483), establishment inspection reports, warning letters, or untitled letters, (ii) written notices of any intention to conduct an investigation or review, or (iii) other documents issued by the FDA or any other governmental authority that allege or assert any material lack of compliance with any applicable law by the Company, or by persons who are otherwise performing services for the benefit of the Company.  There have been no recalls (either voluntary or involuntary), field notifications, field corrections, market withdrawals or replacements, warnings, “dear doctor” letters, investigator notices, safety alerts or other notices of action relating to an alleged lack of safety, efficacy, or regulatory compliance of any product, or seizures ordered or adverse regulatory actions taken, or to the Company’s Knowledge threatened, by the FDA or any other governmental authority with respect to any products of the Company or any facilities where any such product is tested, produced, processed, packaged or stored which are owned or operated by the Company, or to the Company’s Knowledge by a third party.

 

(v)                                 No Pending Investigations.  The Company is not subject to any pending or, to the Company’s Knowledge, threatened, investigation by:  (i) the FDA pursuant to its “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities,” set forth in 56 Fed. Reg. 46191 (September 10, 1991); (ii) Department of Health and Human Services Officer of Inspector General or Department of Justice pursuant to the Federal Anti-Kickback Statute (42. U.S.C. Section 1320a-7(b)) or the Civil False Claims Act (31 U.S.C. Section 3729 et seq.); or (iii) any equivalent statute of any other country.  Neither the Company nor, to the Company’s Knowledge, (1) any officer or employee of the Company, (2) any authorized agent of the Company or (3) any principal investigator or sub-investigator of any clinical investigation sponsored by the Company has, in the case of each of (1) through (3) on account of actions taken for or on behalf of the Company, been convicted of any crime under 21 U.S.C. Section 335a(a) or any similar state or foreign statute, law or regulation or under 21 U.S.C. Section 335a(b) or any similar state or foreign statute, law or regulation.

 

(vi)                              No Shutdowns or Prohibitions.  To the Company’s Knowledge, no manufacturing site which assists in the manufacture of the products of the Company, or that of a contract manufacturer for the Company, has been subject to a shutdown or import or export prohibition by FDA or any other governmental authority.  No clinical trial of a product candidate of the Company has been suspended, put on hold or terminated prior to completion.

 

(n)         Organizational Documents. The certificate of incorporation and bylaws of the Company as of the Effective Date are in the forms previously made available to CPRIT in connection with that certain Series D Preferred Stock Purchase Agreement dated March 31, 2015.

 

(o)         Litigation. There is no claim, action, suit, proceeding, arbitration, complaint, charge or investigation pending or, to the Company’s Knowledge, currently threatened (a) against the Company or any of its officers or directors arising out of their employment or board relationship with the Company, (b) that questions the validity of this Agreement, or the Transaction Documents or the right of the Company to enter into any of such agreements, or to consummate the transactions contemplated hereby or thereby, or (c) which might result, either individually or in the aggregate, in a Material Adverse Effect, nor is the Company aware that there is any basis for any of the foregoing.  The foregoing includes, without limitation, actions pending or, to the Company’s Knowledge, threatened or any basis therefor known by the Company involving the prior employment of any of the Company’s employees, their use in connection with the Company’s business of any information or techniques allegedly proprietary to any of their former employers, or their obligations under any agreements with prior employers. The Company is not a party or subject to the provisions of any

 

8



 

order, writ, injunction, judgment or decree of any court or government agency or instrumentality.  There is no action, suit, proceeding or investigation by the Company currently pending or which the Company intends to initiate.

 

(p)         Obligations of Management. To the Company’s Knowledge, each officer of the Company is currently devoting substantially all of his or her business time to the conduct of the business of the Company.  The Company is not aware that any officer of the Company is planning to work less than full time at the Company in the future.  To the Company’s Knowledge, no officer is currently working or, to the Company’s Knowledge, plans to work for a competitive enterprise, whether or not such officer is or will be compensated by such enterprise

 

(q)         Registration Rights.  Except as required pursuant to that certain Third Amended and Restated Investor Rights Agreement, dated March 31, 2015, by and among the Company and certain investors, the Company is presently not under any obligation, and has not granted any rights, to Register (as defined therein) any of the Company’s presently outstanding securities or any of its securities that may hereafter be issued.

 

(r)            No Illegal Payments.  None of the Company and any of its directors, officers, employees or, to the Company’s Knowledge, agents acting on its behalf, has (a) directly or indirectly given, agreed, offered or promised to give any illegal gift, contribution, payment, bribe, kickback or similar benefit to any supplier, customer, governmental official or employee, political party, candidate for public office or other person or entity who was, is or may be in a position to help or hinder the Company, or has made or agreed to make an illegal contribution, or to reimburse any illegal political gift or contribution made by any other person or entity, to any candidate for federal, state, local or foreign public office or to a political party, or (b) established or maintained any unrecorded fund or asset or made any false, incomplete or misleading entries on any books or records for any purpose in any case, which could have resulted in a violation or liability pursuant to the U.S. Foreign Corrupt Practices Act or any other anti-corruption laws in any jurisdiction.

 

(s)           Certain Fees.   No Person will have, as a result of the transactions contemplated by this Agreement, any valid right, interest or claim against or upon the Company or CPRIT, for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Company, with respect to the issuance and sale of the Shares.

 

(t)            Private Placement. Assuming the accuracy of CPRIT’s representations and warranties set forth in this Agreement, the issuance and sale of the Shares by the Company to CPRIT pursuant to the Transaction Documents will be exempt from registration under the Securities Act, and will have been registered or qualified (or are exempt from registration and qualification) under the registration, permit or qualification requirements of all applicable state securities laws.

 

(u)         Investment Company. The Company is not, and immediately after receipt of payment for the Shares, will not be or be an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

(v)         No General Solicitation. Neither the Company nor, to the Company’s Knowledge, any person acting on behalf of the Company has offered or sold any of the Shares by any form of general solicitation or general advertising (within the meaning of Regulation D promulgated under the Securities Act).

 

(w)       No Integrated Offering.  Assuming the accuracy of CPRIT’s representations and warranties set forth in Section 3.2, none of the Company nor, to the Company’s Knowledge, any of its Affiliates or any Person acting on its behalf has, directly or indirectly, at any time within the past six (6) months, made any offers or sales of any Company security or solicited any offers to buy any security under

 

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circumstances that would (i) eliminate the availability of the exemption from registration under Regulation D under the Securities Act in connection with the offer and sale by the Company of the Shares as contemplated hereby or (ii) cause the offering of the Shares pursuant to the Transaction Documents to be integrated with prior offerings by the Company for purposes of any applicable law, regulation or stockholder approval provisions, including, without limitation, under the rules and regulations of the Trading Market.

 

(x)         Employees.  To the Company’s Knowledge, no current employee of the Company, nor any consultant with whom the Company has contracted under a currently effective agreement, is in violation of any term of any employment contract, proprietary information agreement or any other agreement relating to the right of any such individual to be employed by, or to contract with, the Company; and to the Company’s Knowledge, the continued employment by the Company or its present employees and the performance of the Company’s contracts with its independent contractors, will not result in any such violation.  The Company has complied in all material respects with all applicable state and federal equal employment opportunity laws and with other laws related to employment including those related to wages, hours, worker classification and collective bargaining.

 

(y)         Financial Statements.  The Company has made available (a) its audited balance sheet as at December 31, 2014 and audited statements of operations and cash flows for the 12 months ended December 31, 2014 and (b) its unaudited balance sheet as of June 30, 2015 (the “Statement Date”) and unaudited consolidated statements of operations and cash flows for the six month period ended on the Statement Date (collectively, the “Financial Statements”).  The Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods indicated, except as disclosed therein, and present fairly in all material respects the financial condition, operating results and position of the Company as of the dates, and for the periods, indicated therein; provided, however, that the unaudited Financial Statements are subject to normal year-end audit adjustments (which are not expected to be material either individually or in the aggregate), and do not contain all footnotes required under GAAP.  The Company maintains and will continue to maintain a standard system of accounting established and administered in accordance with GAAP.

 

(z)          Liabilities.  Except as set forth in the Financial Statements, the Company has no material liabilities or obligations, contingent or otherwise, except for (a) current liabilities incurred in the ordinary course of business since the Statement Date and (b) obligations under contracts and commitments incurred in the ordinary course of business not required to be reflected in the Financial Statements as prepared to accurately present the financial condition and position of the Company and in accordance with past practice, which, in all cases, individually or in the aggregate, have not had or would not be reasonably expected to have a Material Adverse Effect.

 

(aa)  Agreements; Action.

 

(i)                                     Except for the agreements explicitly contemplated hereby and by the Transaction Documents, there are no agreements, understandings, instruments, contracts or proposed transactions between the Company and any of its officers, directors, employees, Affiliates or any Affiliate thereof.

 

(ii)                                  There are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to which the Company is a party or to the Company’s Knowledge by which it is bound which may involve (A) future obligations (contingent or otherwise) of, or payments to, the Company individually in excess of $250,000, (B) the transfer or license of any patent, copyright, trade secret or other material proprietary right to or from the Company (other than licenses by the Company of “off the shelf” or other standard back-office or administrative software products), (C) provisions restricting the Company’s development, manufacture, assembly, license, marketing, sale or distribution of

 

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the Company’s products or services, (D) indemnification by the Company with respect to infringements or proprietary rights or (E) agreements, understandings, instruments, contracts or proposed transactions the loss, impairment or termination of which would reasonably be expected to have a Material Adverse Effect on the Company taken as a whole (clauses (A) through (E), collectively, the “Material Contracts”).  To the best of the Company’s Knowledge, all of the Material Contracts are legally valid, binding on the Company, and in full force and effect in all material respects, enforceable against the Company in accordance with their respective terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization or moratorium or other laws of general application affecting enforcement of creditors’ rights, or (b) general principles of equity that restrict the availability of equitable remedies.  Neither the Company nor, to the Company’s Knowledge, any other party thereto, is in material breach or default, and no event has occurred that with notice or lapse of time would constitute a material breach or default on the part of the Company and, to the Company’s Knowledge, any other party thereto, or permit termination, modification or acceleration, under any such Material Contract.

 

(iii)                               The Company has not (A) declared or paid any dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, other than in connection with the December 31, 2009 spin-off of the Company by Asuragen, Inc., a Delaware corporation (“Asuragen”), to the stockholders of Asuragen, (B) incurred or guaranteed any indebtedness for money borrowed or any other liabilities (other than with respect to dividend obligations, distributions, indebtedness and other obligations incurred in the ordinary course of business) individually in excess of $200,000 or, in the case of indebtedness and/or liabilities individually less than $200,000, in excess of $350,000 in the aggregate, (C) made any loans or advances to any person, other than ordinary advances for travel expenses, in excess of $20,000, or (D) sold, exchanged or otherwise disposed of any of its material assets or rights, other than the sale of its inventory in the ordinary course of business.

 

(iv)                              For the purposes of subsections (i) and (ii) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or entity (including persons or entities the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections.

 

(v)                                 Except for the transactions contemplated by this Agreement and the Transaction Documents, the Company has not engaged in the past six (6) months in any discussion (A) with any representative of any corporation or corporations regarding the consolidation or merger of the Company with or into any such corporation or corporations, (B) with any corporation, partnership, association or other business entity or any individual regarding the sale, conveyance or disposition of all or substantially all of the assets of the Company, or a transaction or series of related transactions in which more than fifty percent (50%) of the voting power of the Company is disposed of, or (C) regarding any other form of acquisition, liquidation, dissolution or winding up, of the Company.

 

(vi)                              The Company is not a guarantor or indemnitor of any indebtedness of any other person.

 

(bb)                          Changes.  Since the Statement Date, there has not been:

 

(i)                                     Any change in the assets, liabilities, financial condition, or operations of the Company, other than changes in the ordinary course of business, none of which individually or in the aggregate has had or would reasonably be expected to have a Material Adverse Effect;

 

(ii)                                  Any resignation or termination of any officer or group of employees of the Company;

 

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(iii)                               Any material change, except in the ordinary course of business, in the contingent obligations of the Company by way of amendment, modification, termination, guaranty, endorsement, indemnity, warranty or otherwise;

 

(iv)                              Any satisfaction or discharge of any lien, claim or encumbrance or payment of any obligation by the Company, except in the ordinary course of business and the satisfaction or discharge of which would not have a Material Adverse Effect;

 

(v)                                 Any damage, destruction or loss, whether or not covered by insurance, that has had or would reasonably be expected to have a Material Adverse Effect;

 

(vi)                              Any waiver or compromise by the Company of a valuable right or of a material debt owed to it;

 

(vii)                           Any material change in any compensation arrangement or agreement with any employee, officer, director or stockholder;

 

(viii)                        Any debt, obligation or liability incurred, assumed or guaranteed by the Company, except those not exceeding $200,000 and for current liabilities incurred in the ordinary course of business;

 

(ix)                              Any loan or guarantee made by the Company to or for the benefit of its employees, officers or directors, or any members of their immediate families, other than travel advances made in the ordinary course of business;

 

(x)                                 Any sale, assignment, or exclusive license or transfer of any patents, trademarks, copyrights, trade secrets or other material intangible assets;

 

(xi)                              Any amendment to or termination or expiration of any Material Contract to which the Company is a party or by which it is bound;

 

(xii)                           Any mortgage, pledge, transfer of a security interest in, or lien, created by the Company, with respect to any of its material properties or assets, other than statutory liens resulting from taxes which have not yet become delinquent and liens that arise in the ordinary course of business and do not materially impair the Company’s ownership or use of such property or assets;

 

(xiii)                        Any declaration, setting aside or payment or other distribution in respect of any of the Company’s capital stock, or any direct or indirect redemption, purchase, or other acquisition of any of such stock by the Company;

 

(xiv)                       Any other event or condition of any character that, either individually or cumulatively, has had or would reasonably be expected to have a Material Adverse Effect; or

 

(xv)                          Any arrangement or commitment by the Company to do any of the acts described in subsections (i) through (xiv) above.

 

(cc)    Environmental and Safety Laws.  The Company is not in violation of any applicable statute, law or regulation relating to the environment or occupational or public health and safety, release or threatened release of Hazardous Materials (as defined below), or the manufacture, handling, transport, use, treatment, storage or disposal of Hazardous Materials, and to the Company’s Knowledge, no material expenditures are or will be required in order to comply with any such existing statute, law or regulation.  No

 

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Hazardous Materials are used or have been used, stored, or disposed of by the Company or, to the Company’s Knowledge after reasonable investigation, by any other person or entity on any property owned, leased or used by the Company.  For the purposes of the preceding sentence, “Hazardous Materials” shall mean (i) materials which are listed or otherwise defined as “hazardous” or “toxic” under any applicable local, state, federal and/or foreign laws and regulations that govern the existence and/or remedy of contamination on property, the protection of the environment from contamination, the control of hazardous wastes, or other activities involving hazardous substances, including building materials, or (ii) any petroleum products or nuclear materials.

 

3.2       Representations and Warranties of CPRIT.  CPRIT hereby represents and warrants as of the date hereof to the Company as follows:

 

(a)         Organization; Authority.  CPRIT is an entity established under Article III, Section 67 of the Texas Constitution with the requisite statutory power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of each of the Transaction Documents to which it is a party and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary statutory action on the part of CPRIT.  Each Transaction Document to which it is a party has been duly executed by CPRIT, and when delivered by CPRIT in accordance with the terms hereof, will constitute the legal, valid and binding obligation of CPRIT, enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.

 

(b)         No Conflicts.  The execution, delivery and performance by CPRIT of the Transaction Documents to which it is a party and the consummation by CPRIT of the transactions contemplated hereby and thereby do not and will not (i) result in a violation of the organizational documents of CPRIT, or (ii) result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority (including federal and state securities laws) to which CPRIT is subject, except in the case of clause (ii) such as would not, individually or in the aggregate, have or reasonably be expected to have a material adverse effect on the ability of CPRIT to perform its obligations hereunder.

 

(c)          Government Consents and Approvals.  CPRIT is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any federal, state, local or other governmental authority or other similar Person in connection with the execution, delivery and performance by CPRIT of the Transaction Documents to which it is a party, other than those that have been made or obtained prior to the Effective Date.

 

(d)         Investment Intent.  CPRIT understands that the Shares are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Shares for its own account and not with a view to, or for distributing or reselling such Shares or any part thereof in violation of the Securities Act or any applicable state securities laws.  CPRIT is acquiring the Shares hereunder in the ordinary course of its business. CPRIT does not presently have any agreement, plan or understanding, directly or indirectly, with any Person to distribute or effect any distribution of any of the Shares (or any securities which are derivatives thereof) to or through any Person; CPRIT is not a registered broker-dealer under Section 15 of the Exchange Act or an entity engaged in a business that would require it to be so registered as a broker-dealer.

 

(e)          Status.  At the time CPRIT was offered the Shares, it was, and at the date hereof it is an “accredited investor” as defined in Rule 501(a) under the Securities Act.

 

13



 

(f)           General Solicitation.  CPRIT is not purchasing the Shares as a result of any advertisement, article, notice or other communication regarding Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general advertisement.

 

(g)          Experience.  CPRIT, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment.  CPRIT is able to bear the economic risk of an investment in the Shares and, at the present time, is able to afford a complete loss of such investment.

 

(h)         Access to Information.  CPRIT acknowledges that it has had the opportunity to review any materials that it has requested from the Company and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable CPRIT to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. Neither such inquiries nor any other investigation conducted by or on behalf of CPRIT or its representatives or counsel shall modify, amend or affect CPRIT’s right to rely on the truth, accuracy and completeness of any such materials and the Company’s representations and warranties contained in the Transaction Documents.  CPRIT has sought such accounting, legal and tax advice as it has considered necessary to make an informed decision with respect to its acquisition of the Shares.

 

(i)             Independent Investment Decision.  CPRIT has independently evaluated the merits of its decision to purchase Shares pursuant to the Transaction Documents CPRIT has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of the Shares.

 

The Company and CPRIT acknowledge and agree that no party to this Agreement has made or makes any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in this Article III and the Transaction Documents.

 

ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES

 

4.1                         Transfer Restrictions.

 

(a)         Compliance with Laws.  Notwithstanding any other provision of this Article IV, CPRIT acknowledges and agrees that the Shares may be disposed of only pursuant to an effective registration statement under, and in compliance with the requirements of, the Securities Act, or pursuant to an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, and in compliance with any applicable state and federal securities laws.  In connection with any transfer of the Shares other than (i) pursuant to an effective registration statement, (ii) to the Company or (iii) pursuant to Rule 144, the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Shares under the Securities Act.  As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement, the Registration Rights Agreement, and any Lock-Up Agreements, and shall have the rights of CPRIT under this Agreement with respect to such transferred Shares.

 

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(b)         Legends.  The book-entry form of the Shares shall bear any legend as required by the “blue sky” laws of any state, restrictive legends in substantially the following form, and any other restrictive legend reasonably deemed necessary or appropriate by the Company:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.

 

[THE SECURITIES REPRESENTED HEREBY ARE HELD BY AN AFFILIATE OF THE ISSUER AS DEFINED IN RULE 144 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY ONLY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED IN COMPLIANCE WITH THE REQUIREMENTS OF RULE 144 OR PURSUANT TO A REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM SUCH REGISTRATION.] [AS APPLICABLE]

 

THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO AN AGREEMENT BY THE REGISTERED HOLDER HEREOF NOT TO SELL SUCH SECURITIES (THE “LOCK-UP AGREEMENT”) FOR A PERIOD OF 180 DAYS FOLLOWING [DATE], THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT OF THE ISSUER.  SUCH LOCK-UP AGREEMENT IS IN EFFECT THROUGH AND INCLUDING [DATE], THE 180TH DAY AFTER THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT.

 

[THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO AN AGREEMENT BY THE REGISTERED HOLDER HEREOF NOT TO SELL SUCH SECURITIES (THE “COMPANY LOCK-UP AGREEMENT”), SUBJECT TO CERTAIN EXCEPTIONS.  SUCH COMPANY LOCK-UP AGREEMENT IS IN EFFECT THROUGH AND INCLUDING [DATE].] [AS APPLICABLE]

 

(c)          Removal of Legends.  The legends set forth in Section 4.1(b) above shall be removed and the Company shall cause to be issued the applicable Shares in book-entry form free and clear of such legends by electronic delivery at the applicable balance account at the Depository Trust Company, if (i) such Shares are registered for resale under the Securities Act, (ii) such Shares are sold or transferred pursuant to Rule 144 (if the transferor is not an Affiliate of the Company) or (iii) such Shares are eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such securities and without volume or manner-of-sale restrictions.  The Company agrees that it shall cause Company Counsel to provide any opinions of Company Counsel as may reasonable be required by the Transfer Agent in connection with the removal of legends pursuant to this Section 4.1(c) following receipt of any certificates and documents reasonably deemed necessary, appropriate or customary by Company Counsel in connection with such opinions.

 

4.2             No Integration.  The Company shall not, and shall use its commercially reasonable efforts to ensure that no Affiliate of the Company shall, sell, offer for sale or solicit offers to buy or otherwise

 

15



 

negotiate in respect of any security (as defined in Section 2 of the Securities Act) that will be integrated with the offer or sale of the Shares hereunder in a manner that would require the registration under the Securities Act of such sale of Shares, or that will be integrated with the offer or sale of the Shares for purposes of the rules and regulations of the Trading Market such that it would require stockholder approval prior to the closing of such other transaction unless stockholder approval is obtained before the closing of such subsequent transaction.

 

4.3       Form D; Blue Sky.  The Company agrees to timely file a Form D with respect to the Shares as required under Regulation D and to provide a copy thereof.  The Company, on or before the Closing Date, shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for or to qualify the Shares for sale to CPRIT under applicable securities or “Blue Sky” laws of the states of the United States (or to obtain an exemption from such qualification) and shall provide evidence of such actions promptly.

 

4.4       Trading Market Listing.  In the time and manner required by the Trading Market, the Company shall prepare and file with such Trading Market an additional shares listing application covering all of the Shares and shall use its commercially reasonable efforts to take all steps necessary to cause all of the Shares to be approved for listing on the Trading Market.

 

ARTICLE V.

CONDITIONS PRECEDENT TO CLOSING

 

5.1                         Conditions Precedent to the Obligation of CPRIT to Purchase Shares.  The obligation of CPRIT to acquire Shares at the Closing is subject to the fulfillment, on or prior to the Closing Date, of each of the following conditions, any of which may be waived by CPRIT:

 

(a)         Representations and Warranties.  The representations and warranties of the Company contained in Section 3.1 shall be true and correct in all material respects.

 

(b)         Performance.  The Company shall have performed, satisfied and complied with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to the Closing.

 

(c)          Consummation of the IPO. The IPO shall have been consummated on or prior to December 31, 2016.

 

(d)         No Project Failure. Prior to the consummation of the IPO, no Project Failure shall have occurred.

 

(e)          No Injunction.  No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents.

 

(f)           Consents.  The Company shall have obtained in a timely fashion any and all consents, permits, approvals, registrations and waivers necessary for consummation of the purchase and sale of the Shares, all of which shall be and remain so long as necessary in full force and effect.

 

(g)          Company Deliverables.  The Company shall have delivered the Company Deliverables in accordance with Section 2.2(a).

 

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5.2                               Conditions Precedent to the Obligations of the Company to sell Shares.  The Company’s obligation to sell and issue the Shares at the Closing to CPRIT is subject to the fulfillment to the satisfaction of the Company on or prior to the Closing Date of the following conditions, any of which may be waived by the Company:

 

(a)         Representations and Warranties.  The representations and warranties made by CPRIT in Section 3.2 hereof shall be true and correct in all material respects.

 

(b)         Performance.  CPRIT shall have performed, satisfied and complied respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by CPRIT at or prior to the Closing Date.

 

(c)          No Injunction.  No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents.

 

(d)         Consents.  The Company shall have obtained in a timely fashion any and all consents, permits, approvals, registrations and waivers necessary for consummation of the purchase and sale of the Shares, all of which shall be and remain so long as necessary in full force and effect.

 

(e)          CPRIT Deliverables.  CPRIT shall have delivered the CPRIT Deliverables in accordance with Section 2.2(b).

 

ARTICLE VI.
MISCELLANEOUS

 

6.1                         Fees and Expenses.  The Company and CPRIT shall each pay the fees and expenses of their respective advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party in connection with the negotiation, preparation, execution, delivery and performance of this Agreement.  The Company shall pay all Transfer Agent fees levied in connection with the sale and issuance of the Shares to CPRIT.

 

6.2                         Entire Agreement.  The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements, understandings, discussions and representations, oral or written, with respect to sale of the Shares, which the parties acknowledge have been merged into such documents, exhibits and schedules.  At or after the Closing, and without further consideration, the Company and CPRIT will execute and deliver to the other such further documents as may be reasonably requested in order to give practical effect to the intention of the parties under the Transaction Documents.

 

6.3                         Notices.  Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail, telex or facsimile if sent during normal business hours of the recipient, if not, then on the next Business Day, (c) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. The address for such notices and communications shall be as follows:

 

If to the Company:

Mirna Therapeutics, Inc.

 

2150 Woodward Street, Suite 100

 

Austin, Texas 78744

 

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Telephone No.: (512) 901-0900

 

Attention: Paul Lammers, M.D., M.Sc.

 

 

With a copy to:

Latham & Watkins LLP

 

140 Scott Drive

 

Menlo Park, California 94025

 

Telephone No.: (650) 328-4600

 

Facsimile No.: (650) 463-2600

 

Attention:

Alan C. Mendelson

 

 

Mark V. Roeder

 

 

If to CPRIT:

CPRIT

 

Chief Executive Officer

 

1701 N. Congress Avenue Ste. 6-127

 

Telephone No.: (512) 463-3190

 

Facsimile No.: (512) 475-2563

 

 

With a copy to:

CPRIT

 

General Counsel

 

1701 N. Congress Avenue Ste. 6-127

 

Telephone No.: (512) 463-3190

 

Facsimile No.: (512) 475-2563

 

or such other address as may be designated in writing hereafter, in the same manner, by such Person.

 

6.4                         Amendments; Waivers.  No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and CPRIT.  No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.

 

6.5                         Construction.  The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.  The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.  This Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement or any of the Transaction Documents.

 

6.6                         Successors and Assigns.  The provisions of this Agreement shall inure to the benefit of and be binding upon the parties and their successors and permitted assigns.  This Agreement, or any rights or obligations hereunder, may not be assigned by the Company without the prior written consent of CPRIT.

 

6.7                         No Third-Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

 

6.8                         Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the principles of conflicts of law thereof.  Each party agrees that all Proceedings concerning the interpretations, enforcement and defense of the transactions

 

18



 

contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective Affiliates, employees or agents) shall be commenced exclusively in the Texas Courts.  Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the Texas Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any such Texas Court, or that such Proceeding has been commenced in an improper or inconvenient forum.  Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

6.9                         Survival.  The representations, warranties, agreements and covenants contained herein shall survive the Closing and the delivery of the Shares for a period of three (3) years beginning on the Effective Date.

 

6.10                  Execution.  This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission, or by e-mail delivery of a “.pdf” data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

 

6.11                  Severability.  If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

 

6.12                  Broker’s Fees.  Each party hereby represents and warrants that no agent, broker, investment banker, person or firm acting on behalf of or under the authority of such party hereto is or will be entitled to any broker’s or finder’s fee or any other commission directly or indirectly in connection with the transactions contemplated herein.  Each party further agrees to indemnify each other party for any claims, losses or expenses incurred by such other party as a result of the representation in this Section 6.12 being untrue.

 

6.13                  No Waiver of Sovereign Immunity. No provision of this Agreement is in any way intended to constitute a waiver by CPRIT or the State of Texas of any immunities from suit or from liability that CPRIT or the State of Texas may have by operation of law.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties have executed this Stock Purchase Agreement as of the date first written above.

 

 

MIRNA THERAPEUTICS, INC.

 

 

 

 

 

By:

/s/ Paul Lammers

 

Name:

Dr. Paul Lammers

 

Title:

President & CEO

 

 

 

 

 

CANCER PREVENTION AND RESEARCH INSTITUTE OF TEXAS

 

 

 

 

By:

/s/ Wayne R. Roberts

 

Name:

Wayne R. Roberts

 

Title:

Chief Executive Officer

 




Exhibit 10.16(A)

 

[MIRNA

THERAPEUTICS

LETTERHEAD]

 

This EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into this 4th day of November, 2009 (the “Effective Date”) by and between Mima Therapeutics Inc., a Delaware corporation (the “Company”), and Paul Lammers, MD, MSc (“Employee”).

 

WITNESSETH

 

WHEREAS, the Company desires to employ Employee as its Chief Executive Officer on the terms and subject to the conditions set forth herein, and Employee desires to accept such employment;

 

NOW, THEREFORE, in consideration of the mutual covenants, promises and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

1.             Employment.

 

(a)           The Company hereby employs Employee and Employee hereby accepts employment as the Chief Executive Officer of the Company, subject to the direction of the Board of Directors of the Company (the “Board”). Employee agrees that he shall perform and discharge well and faithfully the duties and responsibilities that are assigned to him by the Board from time to time, which shall include, but not be limited to, the management of investor relations, the seeuring of additional financing for the Company, supervision and responsibility for setting the clinical strategy for the Company, and the preparation of all aspects relating to the commercial introduction of the Company’s products to market Employee recognizes mat he owes a duty of loyalty to the Company and agrees to act only in the best interests of the Company and to devote such of bis time, attention and energy to the business of the Company, and any of its subsidiaries or affiliates as may be required to perform the duties and responsibilities assigned to him by the Board, to the best of his ability and with requisite diligence.

 

(b)           Employee agrees to comply in all material respects, at all times during the Term (as defined in Section 2 hereof), with all applicable policies, rules and regulations of the Company.

 

2.             Term. This Agreement shall commence on the Effective Date and, unless earlier terminated as provided herein, shall terminate on the first anniversary of the Effective Date (the

 

1



 

Initial Term”); provided that this Agreement will automatically renew for successive one-year periods after the Initial Term (each an “Additional Term”) unless either party gives the other party sixty (60) days’ written notice prior the expiration of the then-applicable Initial Term or Additional Term of its intent not to renew this Agreement for an (or another) Additional Term. The Initial Term together with any Additional Term shall be referred to herein as the “Term.”

 

3.             Compensation.

 

(a)           The Company agrees to pay to Employee a salary at a bi-weekly rate of $12,923.08 (the “Base Salary”), which such Base Salary shall be paid pursuant to the Company’s payroll procedures as may exist from time to time. The Base Salary may be increased at the discretion of the Board.

 

(b)           Subject to the approval of the Board, the Company will promptly grant Executive an option to purchase shares up to 274,312 shares of common stock of the Company (which represents four percent (4%) of the fully diluted common stock of the Company as of the date of the Effective Date), which such grant shall be pursuant to the Mirna Therapeutics, Inc. 2008 Long Term Incentive Plan (as the same may be amended or modified from time to time, the “Incentive Plan”) and a Notice of Grant of Stock Option and Stock Option Agreement substantially similar to the forms attached to this Agreement as Exhibits B and C, respectively (as determined by the Board in its discretion). In addition, subject to the approval of the Board, the Company will promptly following a Qualified Financing grant Executive an additional option to purchase shares of common stock of the Company representing an additional two percent (2%) of the fully diluted common stock of the Company as of the date of such grant, which such grant shall be pursuant to the Incentive Plan and a Notice of Grant of Stock Option and Stock Option Agreement substantially similar to the forms attached to this Agreement as Exhibits B and C, respectively (as determined by the Board in its discretion). All options shall have an exercise price at least equal to the fair market value of a share of common stock at the time of grant, as determined by the Board, As used herein “fully diluted common stock” means the total number of shares of common stock of the Company, Series A Preferred Stock of the Company (on an as-converted to common stock basis) and shares of common stock of the Company reserved for issuance under the Incentive Plan. As used herein “Qualified Financing” means the issuance and sale by the Company of any preferred stock, common stock or other stock or similar securities of the Company or any security convertible or exchangeable into or for preferred stock, common stock or other stock or similar securities of the Company (“Equity Securities”) for cash on or before the date eighteen (18) months after the Effective Date of the Award Agreement in a single transaction or series of related transactions in which the gross proceeds to the Company equal at least S5,000,000 (excluding indebtedness converted into such Equity Securities); provided, that the transactions contemplated by the Texas Emerging Technology Fund Award and Security Agreement dated as of November      , 2009 (the “Award Agreement”) between the Company and the Sate of Texas, acting by and through the Office of Governor Economic Development and Tourism (“OOGEDT”) shall be disregard for purposes of determining whether a Qualified Financing has occurred.

 

2



 

4.             Fringe Benefits; Expenses.

 

(a)           Employee will be eligible to participate in benefit plans and programs in which other similarly situated employees arc eligible to participate and as may exist from time- to-time, which such plans now include Medical, Dental, Vision and Supplemental Life Insurance, Employee’s participation in any benefit plan or program is subject to the terms and conditions of the applicable plan and program.

 

(b)           The Company agrees to reimburse Employee for all reasonable, out-of- pocket expenses incurred by him in the performance of his duties, subject to the submission of appropriate documentation in accordance with the Company’s expense reimbursement policies as in existence from time to time. Employee is not permitted to receive a payment or benefit in lieu of reimbursement under this Section 4(b).

 

(c)           If the Employee relocates bis primary residence from the Houston, Texas area to the Austin, Texas area during the term of his employment with the Company, the Company agrees will reimburse Employee for the reasonable and documented moving company expenses for the movement of Employee’s household items from the Houston, Texas area to the Austin, Texas area plus reasonable and documented expenses incidental to the purchase of his primary residence in the Austin, Texas area. Such reimbursement shall be dependent upon Employee’s submission, within twenty (20) days after such expenses are incurred, of documentation reasonably acceptable to the Company that evidences such expenses. Such reimbursement, if any, shall occur no later than forty-five (45) days after the Company’s receipt of approved documentation. In no event shall Company reimburse more than seventy-five thousand dollars ($75,000) to Employee for such expenses pursuant to this Section 4(c).

 

5.             Confidential Information, Non-Solicitation and Arbitration. Employee has executed and agrees to comply with the Confidentiality, Covenant Not to Solicit & Arbitration Agreement, a copy of which is attached as Exhibit A hereto and incorporated herein by reference.

 

6.             Termination. In addition to terminating at the end of the Term after the issuance of a non-renewal notice as set forth in Section 2, this Agreement and the Employee’s employment may be terminated in any one of the following ways:

 

(a)           At any time during the Term, the Company may, at its sole discretion, terminate Employee’s employment, with or without Cause, for any reason or no reason at all. Such termination shall be effective on delivery of written notice to Employee of the Company’s election to tenninate this Agreement under this Section 6. For purposes of mis Agreement, the following events shall constitute “Cause”: (i)the conviction of Employee by a court of competent jurisdiction of a crime involving moral turpitude; (ii) the commission, or attempted commission, by Employee of an act of fraud on the Company; (iii) the misappropriation, or attempted misappropriation, by Employee of any funds or property of the Company; (iv) the failure by Employee to perform in any material respect his obligations under the terms of this Agreement, which such failure has gone unremedied within ten (10) days after the Company provides Employee with written notice of such failure; (v)the knowing engagement by Employee, without the written approval of the Board, in any direct, material conflict of interest

 

3



 

with the Company without compliance with the Company’s conflict of interest policy; (vi) the knowing engagement by Employee, without the written approval of the Board, in any activity which competes with the business of the Company or which would result in a material injury to the Company or which otherwise violates any provision of the Confidentiality, Covenant Not to Solicit & Arbitration Agreement attached as Exhibit A; or (vii) the knowing engagement by Employee in any activity that would constitute a material violation of the provisions of the Company’s Business Ethics Policy, Employee Handbook or similar policies, if any, then in effect.

 

(b)           This Agreement will terminate automatically upon the death or Disability of Employee. A “Disability” is defined as Employee’s inability to perform the essential functions of his position, with reasonable accommodation, due to Employee’s illness or physical or mental impairment or other incapacity which continues for a period in excess of one hundred twenty (120) days (whether consecutive or not). The determination of Disability shall be made by the Board. If requested by the Company, Employee shall submit to a mental or physical examination to be performed by an independent physician selected by the Company following consultation with Employee to assist the Company in making such determination. Any refusal by Employee to submit to a mental or physical examination under this section, or to provide medical documentation necessary for the Company to make its determination, shall be deemed to constitute conclusive evidence of Employee’s Disability.

 

(c)           At any time during the Term, Employee may retire or otherwise resign his employment with the Company provided that he first provides at least thirty (30) days prior written notice to the Company of his intent to terminate this Agreement, with the date of his retirement or resignation specified in such notice.

 

(d)           Employee may resign his employment, and terminate this Agreement, for “Good Reason,” which shall occur if, within one year of a Change of Control, there is a material diminution of Employee’s job responsibilities from those responsibilities set forth in Section 1; provided that in order for Good Reason to exist, each of the following conditions must be satisfied: (i) the material diminution condition must have arisen without Employee’s consent; (ii) Employee must provide written notice to the Company of such condition within 45 days of the initial existence of the condition; (iii) the condition specified in such notice must remain uncorrected for 30 days after receipt of such notice by Company; and (iv) the date of Employee’s termination of employment must occur within 90 days after the initial existence of the condition specified in such notice. As used herein, a “Change of Control” shall be deemed to have occurred if: (i) any person or entity other than the Company, the Existing Shareholders, the OOGEDT, a benefit plan of the Company or any of their respective affiliates or successor entities acquires (by acquisition, merger, consolidation, recapitalization, reorganization or otherwise), beneficial ownership (as defined in Section 13(d) of the Securities Exchange Act of 1934, as amended) of more than 50% of the outstanding common stock of the Company, or (ii) the Company shall have consummated a sale or other disposition of all or substantially all of its assets to any person other than to the Company, a benefit plan of the Company, the OOGEDT or any of their respective affiliates or successor entities. As used herein, “Existing Shareholders” means the stockholders of the Company as of the Effective Date and their respective affiliates and permitted transferees, and shall also include those persons who become

 

4



 

stockholders of the Company as a result of the spin-off of the Company to the stockholders of Asuragen, Inc.

 

7.             Effect of Termination.

 

(a)           If, during the Initial Term, the Company terminates the Employee’s employment for reasons other than Cause, Disability or Employee’s death, or if Employee terminates his employment for Good Reason, then the Company shall, subject to the provisions of Section 7(d), pay to Employee (or his estate or representative, if applicable) a lump sum severance payment in an amount equal to (i) his Base Salary multiplied by (ii) two multiplied by (iii) the number of complete months that Employee was employed by the Company. Provided that Employee complies with the provisions of Section 7(d) and his continuing obligations under this Agreement and the Confidentiality, Proprietary Information and Inventions and Non- Competition Agreement attached as Exhibit A, such payment shall be made no later than sixty (60) days from the date of Employee’s termination of employment.

 

(b)           If, after the expiration of the Initial Term and during any Additional Term, the Company terminates Employee’s employment for reasons other than Cause, Disability or Employee’s death, or if Employee terminates his employment for Good Reason, then the Company shall, subject to the provisions of Section 7(d), pay to Employee (or his estate or representative, if applicable) an amount equal to (i) his Base Salary multiplied by (ii) 26, which such amount will be paid in twelve (12) substantially equal monthly installments, with the first such installment being made no later than sixty (60) days after the date of Employee’s termination of employment and the successive eleven (11) installments being provided at monthly intervals thereafter so long as Employee complies with his continuing obligations under this Agreement and the Confidentiality, Proprietary Information and Inventions and Non- competition Agreement attached as Exhibit A.

 

(c)           If Employee’s employment is terminated for Cause or due to Employee’s death, Disability, retirement or resignation for reasons other than Good Reason, Employee (or his estate or representative, if applicable) shall be entitled to receive all compensation earned and all benefits and reimbursements due through the effective date of termination. Employee shall not be entitled to any additional compensation subsequent to termination.

 

(d)           As a condition to the receipt of any payments under Sections 7(a) and 7(b) above, Employee shall first execute (and not revoke in the time provided to do so) a release of all claims, in a form reasonably acceptable to the Board, which such release shall release the Company, its affiliates and their respective shareholders, members, partners, officers, directors, employees and agents from any and all claims and from any and all causes of action of any kind or character that may lawfully be released, including without limitation all clarms or causes of action arising out of Employee’s employment with the Company or the termination thereof.

 

8.             Assignment. Employee understands that he has been selected for employment by the Company on the basis of his personal qualifications, experience and skills. Employee, therefore, shall not assign all or any portion of Employee’s performance under this Agreement. Subject to the preceding two (2) sentences, tins Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties hereto and their respective heirs, legal

 

5



 

representatives, successors and assigns. Employee recognizes that the Company may assign this Agreement.

 

9.             Notices. All notices or other communications that are required or may be given under this Agreement shall be in writing and shall be deemed to have been duly given when delivered in person, transmitted by telecopier or mailed by registered or certified first class mail, postage prepaid, return receipt requested, to the parties hereto at the address set forth below (as the same may be changed from time to time by notice similarly given) or the last known business or residence address of such other person as may be designated by either party hereto in writing.

 

If to the Company:

 

Mirna Therapeutics Inc.

2150 Woodward St, Suite 100

Austin, Texas 78744

Attn: Matt Winkler

 

If to the Employee:

 

Paul Lammers, MD, MSc

 

10.          Waiver of Breach. A waiver by the Company or Employee of a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any other breach by the other party.

 

11.          Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas.

 

12.          Severability. If any provision of this Agreement shall, for any reason, be held to violate any applicable law, and so much of said Agreement is held to be unenforceable, then the invalidity of such specific provision herein shall not be held to invalidate any other provision herein which shall remain in full force and effect.

 

13.          Entire Agreement; Amendment. This Agreement, including the attached Exhibit A, constitutes and contains the entire agreement of the parties and supersedes any and all prior negotiations, correspondence, understandings and agreements between the parties respecting the subject matter hereof. This Agreement may be modified only by an agreement in writing executed by each of the parties hereto.

 

14.          Headings. The section and subsection headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

 

6



 

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

 

16.          Deemed Resignations. Unless otherwise agreed to in writing by the Company and Employee prior to the termination of Employee’s employment, any termination of Employee’s employment shall constitute (a) an automatic resignation of Employee as an officer of the Company and each affiliate of the Company, if applicable and (b) an automatic resignation of Employee from the Board (if applicable), from the board of directors of any affiliate of the Company (if applicable), and from the board of directors or similar governing body of any corporation, limited liability entity or other entity in which the Company or any affiliate holds an equity interest and with respect to which board or similar governing body Employee serves as the Company’s or such affiliate’s designee or other representative (if applicable).

 

17.          No Breach of Prior Agreements. Employee hereby represents and warrants to the Company that the execution of this Agreement by Employee and Employee’s employment by the Company and the performance of Employee’s duties hereunder will not violate or be a breach of any agreement with a former employer, client or any other person or entity. Employee further represents and covenants that he will not bring to the Company or place on the Company’s computer systems any confidential, proprietary or legally protected information belonging to, or obtained from, any previous employer (“Prior Employer Information”) and under no circumstances will Employee use or disclose Prior Employer Information in the course of his employment with the Company.

 

18.          Delaved Payment Restriction. Notwithstanding any provision of this Agreement to the contrary, if the payment of any amount or benefit under this Agreement would be subject to additional taxes and interest under Section 409A of the Internal Revenue Code because the timing of such payment is not delayed as provided in Section 409A(a)(2)(B)(i) of the Internal Revenue Code and the regulations thereunder, then any such payment or benefit that the Employee would otherwise be entitled to during the first six months following the Employee’s date of termination of employment shall be accumulated and paid or provided, as applicable, on the date that is six months after the date of the Employee’s date of termination (or if such date does not fall on a business day of the Company, the next following business day of the Company), or such earlier date upon which such amount can be paid or provided under Section 409A of the Code without being subject to such additional taxes and interest.

 

19.          Withholding of Taxes and Other Deductions. The Company may withhold from any benefits and payments made pursuant to this Agreement all federal, state, city and other taxes and withholdings as may be required pursuant to any law or governmental regulation or ruling and all other customary deductions made with respect to the Company’s employees generally.

 

[SIGNATURE PAGE FOLLOWS]

 

7



 

IN WITNESS HEREOF, the parties hereto have executed this Agreement as of the Effective Date.

 

 

MIRNA THERAPEUTICS, INC.

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

PAUL LAMMERS

 

 

 

 

 

/s/ Paul Lammers

 

SIGNATURE PAGE TO EMPLOYMENT AGREEMENT

 




Exhibit 10.16(B)

 

FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

 

This FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (the “Amendment) is effective as of January 5, 2011 (the “Effective Date”) and made by and between Mirna Therapeutics, Inc., a Delaware corporation (the “Company”) and Paul Lammers, MD, MSc (“Employee”).

 

WITNESSETH

 

WHEREAS, Employee is currently employed by the Company; and

 

WHEREAS, Employee and the Company previously entered into that certain Employment Agreement with an effective date of November 4, 2009 (the “Employment Agreement”); and

 

WHEREAS, Company desires to continue to employ Employee, and Employee desires to continue to be employed by the Company, pursuant/to the terms of the Employment Agreement as modified by this Amendment;

 

NOW, THEREFORE, the Employment Agreement shall be amended as follows, effective as of the Effective Date:

 

1.             Section 4(c) of the Employment Agreement shall be deleted in its entirety and the following shall be substituted therefor:

 

“(c)            If the Employee relocates his primary residence from the Houston, Texas area to the Austin, Texas area during the term of his employment with the Company hereunder, the Company will reimburse Employee for the reasonable and documented moving company expenses for the movement of Employee’s household items from the Houston, Texas area to the Austin, Texas area plus his reasonable and documented expenses related to the sale of his Houston, Texas area residence and purchase of a residence in the Austin, Texas area, (collectively, the “Relocation Expenses”). Such reimbursement shall be dependent upon Employee’s submission, within twenty (20) days after such expenses are incurred, of documentation reasonably acceptable to the Company that evidences such expenses. Reimbursement of the Relocation Expenses, if any, shall occur no later than forty-five (45) days after the Company’s receipt of approved documentation. In no event shall Company reimburse Employee for Relocation Expenses, including any Gross-Up Payment pursuant to Section 4(d), in excess of $75,000. Notwithstanding the foregoing, in the event that Employee’s employment is terminated by the Company for Cause (as defined below) or by Employee pursuant to a resignation other than for Good Reason (as defined below) within one year of the date that the Company provides a reimbursement for Relocation Expenses, then Employee shall be obligated to return to the Company all Relocation Expenses that he has been reimbursed, which such return shall occur no later than twenty (20) days after the date of Employee’s termination of employment with the Company.”

 

1



 

2.             A new Section 4(d) shall be included in the Employment Agreement, which such Section shall read as follows:

 

“(d)         In connection with any reimbursement of the Relocation Expenses by the Company pursuant to Section 4(c) (the “Reimbursement”), the Company shall provide an additional payment to Employee (the “Gross-Up Payment”) in an amount such that after application of all withholding taxes on the Reimbursement and the Gross-Up Payment, Employee will receive a net amount sufficient to pay the remainder of any federal income taxes imposed on the Reimbursement and the Gross-Up Payment, based upon the highest marginal federal income tax rate.”

 

3.             The first sentence of Section 13 of the Employment Agreement shall be deleted and the following shall be substituted therefor:

 

“This Agreement, including the attached Exhibit A, and the First Amendment to Employment Agreement effective as of January 4, 2011 constitutes and contains the entire agreement of the parties and supersedes any and all prior negotiations, correspondence, understandings and agreements between the parties respecting the subject matter hereof.”

 

4.             Except as modified herein, the Employment Agreement shall remain in full force and effect.

 

5.             This Amendment may be executed in multiple counterparts, which together shall be considered one and the same instrument.

 

[SIGNATURE PAGE FOLLOWS]

 

2



 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.

 

 

 

MIRNA THEREAPEUTICS, INC.

 

 

 

 

 

 

 

By:

/s/ Matthew Winkler

 

Name:

Matthew Winkler

 

Title:

Chairman

 

 

 

 

 

 

 

PAUL LAMMERS, MD, MSc

 

 

 

 

 

 

 

/s/ Paul Lammers

 

SIGNATURE PAGE TO FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

 




Exhibit 10.17(A)

 

[MIRNA

THERAPEUTICS

LETTERHEAD]

 

April 29, 2013

 

Sinil Kim, M.D.

 

Dear Sinil:

 

On behalf of Mirna Therapeutics, Inc. (“Mirna”), a Delaware corporation, I am pleased to offer you the full-time position of Vice President of Oncology and Chief Medical Officer. Your base salary will be $11,923.08 per two week pay period. We anticipate your start date to be May 22, 2013 (the ‘Start Date”).

 

In addition to this offer letter, your offer package includes the following documents:

 

·                       An Employment Agreement;

 

·                       A Confidentiality, Covenant Not To Compete, & Arbitration Agreement (Exhibit A to the Employment Agreement); and

 

·                       Two draft Notices of Grant of Stock Option, with appendices of Mirna’s 2008 Long Term Incentive Plan and a Stock Option Agreement (Exhibits B and C to the Employment Agreement).

 

You will receive a signing bonus of $30,000 within 20 days of executing and returning this offer letter and the Employment Agreement, including the Confidentiality, Covenant Not To Compete, and Arbitration Agreement. Should you terminate your employment prior to one year from your Start Date, you will be required to reimburse Mirna for the amount of your signing bonus. Your signature on this letter authorizes us to deduct the amount of your signing bonus from your final paycheck should this occur. If there are any amounts not covered by your final paycheck you agree to repay them within 30 days of your separation.

 

Subject to approval by Mirna’s Board of Directors, and as further described in the Employment Agreement, we anticipate granting you two options to purchase up to 225,000 shares of common stock of the Company (for a total of 450,000 shares). The first option would be granted at the next Board of Director’s meeting following your Start Date (to be held on June 6, 2013), while the second option would be dependent upon the progress of Mirna’s current clinical trial and the related receipt of anticipated funding.

 

Mirna offers group insurance and time off benefits for which you are eligible for beginning on July 1, 2013. You may choose insurance plans such as medical, dental, vision and supplemental life insurance (which is in addition to the amount Mirna provides for you). Mirna pays 100% of the premiums for short and long-term disability, basic life, accidental death and dismemberment, and an employee assistance program.

 

As of your Start Date, you will receive 15 days of vacation for your first year of employment, 7 days of sick time per calendar year and a total of 12 holidays (8 fixed date holidays and 4 flexible date or “flex” holidays) per calendar year. Vacation, sick time and the flex holidays will be prorated if your start date is after January 1.

 

Once you have 90 days of continuous service at Mirna, you are eligible to participate in Mirna’s 401 (k) Plan. The 401(k) Plan has a matching component that is presently 50 cents per dollar up to 8% of your base compensation. The Board of Directors reserves the right to modify this matching percentage.

 

Mirna Therapeutics Inc. | 2150 Woodward St, Suite 100 | Austin, TX 78744 | 1.512.901.0900 | www.mirnarx.com

 



 

Your relocation package shall consist of reimbursement of reasonable and necessary moving expenses, including up to two house-hunting trips for you and your spouse, with a maximum reimbursement of $30,000. Please retain all receipts for your move, as these must accompany your request for reimbursement. Due to the expense related to relocation, should you terminate your employment prior to one year from your Start Date, you will be required to reimburse Mirna for the relocation costs already paid by Mirna. Your signature on this letter authorizes us to deduct any moving costs from your final paycheck should this occur. If there are any amounts not covered by your final paycheck you agree to repay them within 30 days of your separation. Please note that many relocation expenses are taxable by the IRS. Should you have any questions we encourage you to speak with your accountant.

 

Mirna’s viability as a business hinges on its ability to protect its proprietary information. Therefore, please review the documents in this offer package, including the Confidentiality, Covenant Not To Compete, and Arbitration Agreement, and let me know if you have any questions about them. You will need to sign the Employment Agreement, including the Confidentiality, Covenant Not To Compete, and Arbitration Agreement, prior to starting work.

 

Your position is an “at will” position, which is the customary employment relationship in “at will” employment states such as Texas. This simply means that the employment relationship between Mirna and you is based upon mutual consent and can be terminated at any time by either you or Mirna without advance notice and without any requirement for cause. Your position is not governed by any agreements other than those contained in this offer package, and you are not employed for any specific period of time. No employee of Mirna has the authority to enter into any agreement with you concerning your employment other than what is specified in this offer package.

 

With the legal disclaimers out of the way, I am excited about your joining our Company and know that you can play a significant role in its continued growth. Please do not hesitate to call me or Jon Irvin if you have any questions. Please sign and return a copy of this letter by May 6, 2013 acknowledging your acceptance of this offer. You may send a scanned copy of this letter to jirvin@mirnarx.com or fax a copy to our confidential facsimile at (512) 681-5203.

 

Sincerely,

 

/s/ Paul Lammers

 

Paul Lammers, MD, M.Sc.

 

President and Chief Executive Officer

 

 

Accepted by:

 

 

 

Signature/Date

 

 



 

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

 

 

MIRNA THERAPEUTICS INC.

 

 

 

 

By:

/s/ Paul Lammers

 

Name:

Paul Lammers, M.D., M.Sc.

 

Title:

President & Chief Executive Officer

 

 

 

SINIL KIM, M.D.

 

 

 

/s/ Sinil Kim

 




Exhibit 10.17(B)

 

This EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into this 22 day of May, 2013 (the “Effective Date”) by and between Mirna Therapeutics, Inc., a Delaware corporation (the “Company”) and Sinil Kim, M.D. (“Employee”).

 

WITNESSETH

 

WHEREAS, the Company desires to employ Employee as its Vice President of Oncology and Chief Medical Officer on the terms and subject to the conditions set forth herein, and Employee desires to accept such employment;

 

NOW, THEREFORE, in consideration of the mutual covenants, promises and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

1.              Employment.

 

a.              The Company hereby employs Employee and Employee hereby accepts employment as the Vice President of Oncology and Chief Medical Officer of the Company, subject to the direction of the Board of Directors of the Company (the “Board”). Employee agrees that he shall perform and discharge well and faithfully the duties and responsibilities that are assigned to him by the Board from time to time, which shall include, but are not limited to, to assure delivery of quality medical care by the Company and/or its representatives and to facilitate interactions between medical staff and the Company in connection with the development of the Company’s oncology therapies. Employee recognizes that he owes a duty of loyalty to the Company and agrees to act only in the best interests of the Company and to devote such of his time, attention and energy to the business of the Company, and any of its subsidiaries or affiliates as may be required to perform the duties and responsibilities assigned to him by the Board, to the best of his ability and with requisite diligence.

 

b.              Employee agrees to comply in all material respects, at all times during the Term (as defined in Section 2 below), with all applicable policies, rules and regulations of the Company.

 

2.              Term.             This Agreement shall commence on the Effective Date and, unless earlier terminated as provided herein, shall automatically renew for successive one-year periods on the anniversary of the Effective Date (the “Term”).

 

3.              Compensation.

 

a.              The Company shall pay to Employee a yearly annual salary of $310,000 (the “Base Salary”), less all applicable withholdings, which shall be paid pursuant to the Company’s payroll procedures as may exist from time to time. The Base Salary may be increased at the discretion of the Board.

 

b.              The Company shall pay to Employee a signing bonus in the amount of $30,000, less all applicable withholdings, which shall be paid within twenty (20) days of the receipt by the Company of this Agreement, the Confidentiality, Covenant Not To Compete & Arbitration

 



 

Agreement (attached as Exhibit A hereto), and Employee’s offer letter, all as executed by Employee. In the event that Employee resigns his employment with the Company within one year of the Effective Date, then Employee shall be obligated to return the signing bonus to the Company, which such return shall occur no later than thirty (30) days after the date of Employee’s termination of employment with the Company. Employee hereby authorizes the Company to immediately offset against and reduce any amounts otherwise due to him for any amounts in respect of the obligation to repay the signing bonus.

 

c.               Subject to the approval of the Board, the Company shall grant Employee an option to purchase up to 225,000 shares of common stock of the Company pursuant to a Notice of Grant of Stock Option, the Mirna Therapeutics, Inc. 2008 Long Term Incentive Plan (as amended or modified from time to time, the “Incentive Plan”), and the Stock Option Agreement, collectively attached to this Agreement in draft form as Exhibit B. After enrollment of the twenty-fifth (25th) patient in the clinical research study entitled “A Phase I, Multicenter Study of MRX34 Given Intravenously Two Times per Week for Three Weeks, Repeated Every Four Weeks in Patients with Unresectable Primary Liver Cancer or Advanced or Metastatic Cancer With Liver Involvement,” and subsequent receipt by the Company of a second tranche of Series C funding, subject to approval of the Board, the Company shall grant Employee an option to purchase up to 225,000 additional shares of common stock of the Company pursuant to a Notice of Grant of Stock Option, the Incentive Plan, and the Stock Option Agreement, collectively attached to this Agreement in draft form as Exhibit C. If both options are exercised, the collective 450,000 shares represent approximately 0.8% of the Fully Diluted Common Stock of the Company as of the date of the Effective Date. All options shall have an exercise price at least equal to the fair market value of a share of common stock at the time of grant, as determined by the Board. As used herein, “Fully Diluted Common Stock” means the total number of shares of common stock of the Company, all outstanding shares of preferred stock of the Company (on an as-converted to common stock basis) and shares of common stock of the Company reserved for issuance under the Incentive Plan.

 

d.              Employee shall be eligible to participate in an informal bonus program based on individual performance, recommendation by the Company’s Chief Executive Officer, and approval by the Board’s Compensation Committee.

 

4.              Fringe Benefits; Expenses.

 

a.              Employee shall be eligible to participate in benefit plans and programs in which other similarly situated employees are eligible to participate and as may exist from time to time, such as medical, dental, vision, and supplemental life insurance. Employee’s participation in any benefit plan or program is subject to the terms and conditions of the applicable plan and program.

 

b.              The Company agrees to reimburse Employee for all reasonable, out-of-pocket expenses incurred by him in the performance of his duties, subject to the submission of appropriate documentation in accordance with the Company’s expense reimbursement policies as in

 



 

existence from time to time. Employee is not permitted to receive a payment or benefit in lieu of reimbursement under this Section 4b.

 

c.               If Employee relocates his primary residence from the La Jolla, California area to the Austin, Texas area during the term of his employment with the Company, the Company shall reimburse Employee for the reasonable and necessary documented moving expenses, including up to two (2) house-hunting trips for Employee and Employee’s spouse, for the moving of Employee’s household from the La Jolla, California area to the Austin, Texas area (the “Relocation Expenses”). Such reimbursement shall be dependent upon Employee’s submission, within thirty (30) days after such expenses are incurred, of documentation reasonably acceptable to the Company that evidences such expenses. Reimbursement of the Relocation Expenses, if any, shall be made no later than forty-five (45) days after the Company’s receipt of approved documentation. In no event shall the Company reimburse Employee for Relocation Expenses in excess of $30,000. Notwithstanding the foregoing, in the event that Employee resigns his employment with the Company within one year of the Effective Date, then Employee shall be obligated to return to the Company all Relocation Expenses for which he has been reimbursed, which such return shall occur no later than thirty (30) days after the date of Employee’s termination of employment with the Company. Employee hereby authorizes the Company to immediately offset against and reduce any amounts otherwise due to him for any amounts in respect of the obligation to repay the Relocation Expenses.

 

5.              Confidentiality, Covenant Not To Compete and Arbitration. Employee has executed and agrees to comply with the Confidentiality, Covenant Not To Compete & Arbitration Agreement, which is incorporated herein by reference.

 

6.              Termination. This Agreement and Employee’s employment may be terminated in any one of the following ways:

 

a.              At any time during the Term, the Company may, at its sole discretion, terminate Employee’s employment, with or without cause. Such termination shall be effective on delivery of written notice to Employee of the Company’s election to terminate this Agreement under this Section 6. Employee shall be entitled to receive all compensation earned and all benefits and reimbursements due through the effective date of termination. Employee shall not be entitled to any additional compensation subsequent to termination.

 

b.              This Agreement shall terminate automatically upon the death or Disability of Employee. A “Disability” is defined as Employee’s inability to perform the essential functions of his position, with reasonable accommodation, due to Employee’s illness or physical or mental impairment or other incapacity which continues for a period in excess of one hundred twenty (120) days (whether consecutive or not). The determination of Disability shall be made by the Board. If requested by the Company, Employee shall submit to a mental or physical examination to be performed by an independent physician selected by the Company following consultation with Employee to assist the Company in making such determination. Any refusal by Employee to submit to a mental or physical examination under this section, or to provide medical documentation necessary for the Company to make its determination,

 



 

shall be deemed to constitute conclusive evidence of Employee’s Disability. Employee (or his estate or representative, if applicable) shall be entitled to receive all compensation earned and all benefits and reimbursements due through the effective date of termination. Employee shall not be entitled to any additional compensation subsequent to termination.

 

c.               At any time during the Term, Employee may retire or otherwise resign his employment with the Company provided that he first provides at least thirty (30) days prior written notice to the Company of his intent to terminate this Agreement, with the date of his retirement or resignation specified in such notice.

 

7.              Deemed Resignations. Unless otherwise agreed to in writing by the Company and Employee prior to the termination of Employee’s employment, any termination of Employee’s employment shall constitute (a) an automatic resignation of Employee as an officer of the Company and each affiliate of the Company (if applicable), and (b) an automatic resignation of Employee from the Board (if applicable), and from the board of directors or similar governing body of any corporation, limited liability entity or other entity in which the Company or any affiliate holds an equity interest and with respect to which board or similar governing body Employee serves as the Company’s or such affiliate’s designee or other representative (if applicable).

 

8.              No Breach of Prior Agreements. Employee hereby represents and warrants to the Company that the execution of this Agreement by Employee and Employee’s employment by the Company and the performance of Employee’s duties hereunder shall not violate or be a breach of any agreement with a former employer, client or any other person or entity. Employee further represents and covenants that he will not bring to the Company or place on the Company’s computer systems any confidential, proprietary or legally protected information belonging to, or obtained from, any previous employer (“Prior Employer Information”) and under no circumstances shall Employee use or disclose Prior Employer Information in the course of his employment with the Company.

 

9.              Delayed Payment Restriction. Notwithstanding any provision of this Agreement to the contrary, if the payment of any amount or benefit under this Agreement would be subject to additional taxes and interest under Section 409A of the Internal Revenue Code (“Section 409A”) because the timing of such payment is not delayed as provided therein and the regulations thereunder, then any such amount or benefit that Employee would otherwise be entitled to during the first six months following Employee’s date of termination of employment shall be accumulated and paid or provided, as applicable, on the date that is six months after the date of Employee’s date of termination (or if the such date does not fall on a business day of the Company, the next following business day of the Company), or such earlier date upon which such amount or benefit can be paid or provided under Section 409A without being subject to such additional taxes and interest.

 

10.       Withholding of Taxes and Other Deductions. The Company may withhold from any benefits and payments made pursuant to this Agreement all federal, state, city and other taxes and withholdings as may be required pursuant to any law or governmental regulation or ruling and all other customary deductions made with respect to the Company’s employees generally.

 

11.       Assignment. Employee understands that he has been selected for employment by the Company on the basis of his personal qualifications, experience and skills. Employee, therefore, shall not assign all or any portion of Employee’s performance under this Agreement. Subject to the preceding two

 


 

sentences, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by the parties hereto and their respective heirs, legal representatives, successors and assigns. Employee recognizes that the Company may assign this Agreement.

 

12.       Notices. All notices or other communications that are required or may be delivered under this Agreement shall be in writing, and shall be deemed duly delivered on the same business day as delivery by hand or by fax with machine confirmation of complete transmission, or three (3) business days after delivery by deposit as United States certified mail return receipt requested, or the next business day after delivery by deposit with an overnight courier, to the parties hereto at the addresses set forth below (as the same may be changed from time to time by notice similarly given) or the last known business or residence address of such other person as may be designated by either party hereto in writing:

 

a.                   If to the Company:

 

Mirna Therapeutics, Inc.

2150 Woodward St., Suite 100

Austin, Texas 78744

Attention: Paul Lammers, President & Chief Executive Officer

 

b.                   If to Employee:

 

Sinil Kim, M.D.

 

13.       Waiver of Breach. A waiver by the Company or Employee of a breach of any provision of this Agreement by the other parry shall not operate or be construed as a waiver of any other breach by the other party.

 

14.       Governing Law. This Agreement shall be governed by the laws of the State of Texas, without regard to its or any other jurisdiction’s conflict of laws provisions. The Parties hereby submit to the jurisdiction of the Texas courts, both state and federal, in all matters concerning this Agreement.

 

15.       Severability. If one or more of the provisions of this Agreement shall be found to be illegal or invalid, it shall not affect the legality or validity of any of the remaining provisions.

 

16.       Entire Agreement; Amendment. This Agreement, including the attached Exhibits, constitutes and contains the entire agreement of the parties and supersedes any and all prior negotiations, correspondence, understandings and agreements between the parties respecting the subject matter hereof. This Agreement may be modified only by an agreement in writing executed by each of the parties hereto.

 

17.       Headings. The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

 



 

18.       Counterparts. This Agreement may be signed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

[Signature page follows]

 



 

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

 

 

MIRNA THERAPEUTICS INC.

 

 

 

 

By:

/s/ Paul Lammers

 

Name:

Paul Lammers, M.D., M.Sc.

 

Title:

President & Chief Executive Officer

 

 

 

SINIL KIM, M.D.

 

/s/ Sinil Kim

 

April 29, 2013

 




Exhibit 10.18

 

[MIRNA

THERAPEUTICS

LETTERHEAD]

 

This EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into this 1st day of March, 2014 (the “Effective Date”) by and between Mirna Therapeutics, Inc., a Delaware corporation (the “Company”) and Casi DeYoung (“Employee”).

 

WITNESSETH

 

WHEREAS, the Company desires to employ Employee as its Chief Business Officer on the terms and subject to the conditions set forth herein, and Employee desires to accept such employment;

 

NOW, THEREFORE, in consideration of the mutual covenants, promises and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

1.              Employment.

 

a.              The Company hereby employs Employee and Employee hereby accepts employment as the Chief Business Officer of the Company, subject to the direction of the Board of Directors of the Company (the “Board”). Employee agrees that she shall perform and discharge well and faithfully the duties and responsibilities that are assigned to her by the Board from time to time, which shall include, but are not limited to, improving the Company’s visibility and market position, achieving financial growth for the Company, defining the Company’s long- term organizational strategic goals, building key relationships and identifying business opportunities for the Company, negotiating and closing business deals for the Company, and maintaining extensive knowledge of the Company’s technology platform, product pipeline, and current market conditions. Employee recognizes that she owes a duty of loyalty to the Company and agrees to act only in the best interests of the Company and to devote such of her time, attention and energy to the business of the Company, and any of its subsidiaries or affiliates as may be required to perform the duties and responsibilities assigned to her by the Board, to the best of her ability and with requisite diligence.

 

b.              Employee agrees to comply in all material respects, at all times during the Term (as defined in Section 2 below), with all applicable policies, rules and regulations of the Company.

 

2.              Term. This Agreement shall commence on the Effective Date and, unless earlier terminated as provided herein, shall automatically renew for successive one-year periods on the anniversary of the Effective Date (the “Term”).

 

3.              Compensation.

 

a.              The Company shall pay to Employee a yearly annual salary of $285,000 (the “Base Salary”), less all applicable withholdings, which shall be paid pursuant to the Company’s payroll procedures as may exist from time to time. The Base Salary may be increased at the discretion of the Board.

 

b.              The Company shall pay to Employee a signing bonus in the amount of $25,000, less all applicable withholdings, which shall be paid within twenty (20) days of the receipt by the

 

Mirna Therapeutics Inc. | 2150 Woodward St., Suite 100 | Austin, TX 78744 | 1.512.901.0900 | www.mirnarx.com

 



 

Company of this Agreement, the Confidentiality, Covenant Not To Compete & Arbitration Agreement (attached as Exhibit A hereto), and Employee’s offer letter, all as executed by Employee. In the event that Employee resigns her employment with the Company within one year of the Effective Date, then Employee shall be obligated to return the signing bonus to the Company, which such return shall occur no later than thirty (30) days after the date of Employee’s termination of employment with the Company. Employee hereby authorizes the Company to immediately offset against and reduce any amounts otherwise due to her for any amounts in respect of the obligation to repay the signing bonus.

 

c.               Subject to the approval of the Board, the Company shall grant Employee an option to purchase up to 738,644 shares of common stock of the Company. Subject to the approval of the Board, provided that Employee remains in the employ of the Company, the option shall become exercisable with respect to ¼ of the shares on the one year anniversary of the vesting commencement date, and 1/48 of the shares on each monthly anniversary of the vesting commencement date thereafter, so that the option shall be exercisable with respect to 100% of the shares as of the four year anniversary of the vesting commencement date. All options shall have an exercise price at least equal to the fair market value of a share of common stock at the time of grant, as determined by the Board.

 

d.              Employee shall be eligible to participate in an informal bonus program based on individual performance, recommendation by the Company’s Chief Executive Officer, and approval by the Board’s Compensation Committee.

 

4.              Fringe Benefits; Expenses.

 

a.              Employee shall be eligible to participate in benefit plans and programs in which other similarly situated employees are eligible to participate and as may exist from time to time such as medical, dental, vision, and supplemental life insurance. Employee’s participation in any benefit plan or program is subject to the terms and conditions of the applicable plan and program.

 

b.              The Company agrees to reimburse Employee for all reasonable, out-of-pocket expenses incurred by her in the performance of her duties, subject to the submission of appropriate documentation in accordance with the Company’s expense reimbursement policies as in existence from time to time. Employee is not permitted to receive a payment or benefit in lieu of reimbursement under this Section 4b.

 

c.               If Employee relocates her primary residence from the Dallas, Texas area to the Austin Texas area during the term of her employment with the Company, the Company shall reimburse Employee for the reasonable and necessary documented moving expenses, including up to two (2) house-hunting trips for Employee and Employee’s family, for the moving of Employee’s household from the Dallas, Texas area to the Austin, Texas area (the “Relocation Expenses”). Such reimbursement shall be dependent upon Employee’s submission, within thirty (30) days after such expenses are incurred, of documentation reasonably acceptable to the Company that evidences such expenses. Reimbursement of the Relocation Expenses, if any, shall be made no later than forty-five (45) days after the

 



 

Company’s receipt of approved documentation. In no event shall the Company reimburse Employee for Relocation Expenses in excess of $15,000. Notwithstanding the foregoing, in the event that Employee resigns her employment with the Company within one year of the Effective Date, then Employee shall be obligated to return to the Company all Relocation Expenses for which she has been reimbursed, which such return shall occur no later than thirty (30) days after the date of Employee’s termination of employment with the Company. Employee hereby authorizes the Company to immediately offset against and reduce any amounts otherwise due to her for any amounts in respect of the obligation to repay the Relocation Expenses.

 

5.              Confidentiality, Covenant Not To Compete and Arbitration. Employee has executed and agrees to comply with the Confidentiality, Covenant Not To Compete & Arbitration Agreement, which is incorporated herein by reference.

 

6.              Termination. This Agreement and Employee’s employment may be terminated in any one of the following ways:

 

a.              At any time during the Term, the Company may, at its sole discretion, terminate Employee’s employment, with or without cause. Such termination shall be effective on delivery of written notice to Employee of the Company’s election to terminate this Agreement under this Section 6. Employee shall be entitled to receive all compensation earned and all benefits and reimbursements due through the effective date of termination. Employee shall not be entitled to any additional compensation subsequent to termination except as provided in i., below.

 

i.             If the Company terminates Employee’s employment in connection with or after a Change in Control or, after the first anniversary of the Effective Date, without cause, the Company shall pay to Employee a severance payment in an amount equal to six (6) months’ salary, which such amount shall be paid in six (6) equal monthly installments, with the first such installment being made no later than sixty (60) days from the date of Employee’s termination of employment and the successive five (5) installments being provided at monthly intervals thereafter so long as Employee complies with her continuing obligations under this Agreement and the Confidentiality, Covenant Not to Compete & Arbitration Agreement. Employee shall first execute (and not revoke in the time provided to do so) a release of all claims, in a form reasonably acceptable to the Board, which such release shall release the Company, its affiliates, and their respective shareholders, members, partners, officers, directors, employees and agents from any and all claims and from any and all causes of action of any kind or character that may lawfully be released, including without limitation all claims or causes of action arising out of Employee’s employment with the Company or the termination thereof. As used herein, a “Change in Control” shall be deemed to have occurred if: (x) any person or entity other than the Company, the Existing Shareholders, a benefit plan or the Company or any of their respective affiliates or successor entities acquires (by acquisition, merger, consolidation, recapitalization, reorganization or otherwise) beneficial ownership (as defined in Section 13(d) of the Securities Exchange Act of 1934, as amended) of more than 50% of the outstanding common stock of the Company, or (y) the

 



 

Company shall have consummated a sale or other disposition of all or substantially all of its assets to any person or entity other than to the Company, a benefit plan of the Company, or any of their respective affiliates or successor entities; provided, however, that the sale of equity securities by the Company for primarily capital raising purposes shall not constitute a Change of Control. As used herein, “Existing Shareholders” means the stockholders of the Company as of the Effective Date and their respective affiliates and permitted transferees.

 

b.              This Agreement shall terminate automatically upon the death or Disability of Employee. A “Disability’’ is defined as Employee’s inability to perform the essential functions of her position, with reasonable accommodation, due to Employee’s illness or physical or mental impairment or other incapacity which continues for a period in excess of one hundred twenty (120) days (whether consecutive or not). The determination of Disability shall be made by the Board. If requested by the Company, Employee shall submit to a mental or physical examination to be performed by an independent physician selected by the Company following consultation with Employee to assist the Company in making such determination. Any refusal by Employee to submit to a mental or physical examination under this section, or to provide medical documentation necessary for the Company to make its determination, shall be deemed to constitute conclusive evidence of Employee’s Disability. Employee (or her estate or representative, if applicable) shall be entitled to receive all compensation earned and ail benefits and reimbursements due through the effective date of termination. Employee shall not be entitled to any additional compensation subsequent to termination.

 

c.               At any time during the Term, Employee may retire or otherwise resign her employment with the Company provided that she first provides at least thirty (30) days prior written notice to the Company of her intent to terminate this Agreement, with the date of her retirement or resignation specified in such notice.

 

7.              Deemed Resignations. Unless otherwise agreed to in writing by the Company and Employee prior to the termination of Employee’s employment, any termination of Employee’s employment shall constitute (a) an automatic resignation of Employee as an officer of the Company and each affiliate of the Company (if applicable), and (b) an automatic resignation of Employee from the Board (if applicable), and from the board of directors or similar governing body of any corporation, limited liability entity or other entity in which the Company or any affiliate holds an equity interest and with respect to which board or similar governing body Employee serves as the Company’s or such affiliate’s designee or other representative (if applicable).

 

8.              No Breach of Prior Agreements. Employee hereby represents and warrants to the Company that the execution of this Agreement by Employee and Employee’s employment by the Company and the performance of Employee’s duties hereunder shall not violate or be a breach of any agreement with a former employer, client or any other person or entity. Employee further represents and covenants that she will not bring to the Company or place on the Company’s computer systems any confidential, proprietary or legally protected information belonging to, or obtained from, any previous employer (“Prior Employer Information”) and under no circumstances shall Employee use or disclose Prior Employer Information in the course of her employment with the Company.

 



 

9.              Delayed Payment Restriction. Notwithstanding any provision of this Agreement to the contrary, if the payment of any amount or benefit under this Agreement would be subject to additional taxes and interest under Section 409A of the Internal Revenue Code (“Section 409A”) because the timing of such payment is not delayed as provided therein and the regulations thereunder, then any such amount or benefit that Employee would otherwise be entitled to during the first six months following Employee’s date of termination of employment shall be accumulated and paid or provided, as applicable, on the date that is six months after the date of Employee’s date of termination (or if the such date does not fall on a business day of the Company, the next following business day of the Company), or such earlier date upon which such amount or benefit can be paid or provided under Section 409A without being subject to such additional taxes and interest.

 

10.       Withholding of Taxes and Other Deductions. The Company may withhold from any benefits and payments made pursuant to this Agreement all federal, state, city and other taxes and withholdings as may be required pursuant to any law or governmental regulation or ruling and all other customary deductions made with respect to the Company’s employees generally.

 

11.       Assignment. Employee understands that she has been selected for employment by the Company on the basis of her personal qualifications, experience and skills. Employee, therefore, shall not assign all or any portion of Employee’s performance under this Agreement. Subject to the preceding two sentences, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by the parties hereto and their respective heirs, legal representatives, successors and assigns. Employee recognizes that the Company may assign this Agreement.

 

12.       Notices. All notices or other communications that are required or may be delivered under this Agreement shall be in writing, and shall be deemed duly delivered on the same business day as delivery by hand or by fax with machine confirmation of complete transmission, or three (3) business days after delivery by deposit as United States certified mail return receipt requested, or the next business day after delivery by deposit with an overnight courier, to the parties hereto at the addresses set forth below (as the same may be changed from time to time by notice similarly given) or the last known business or residence address of such other person as may be designated by either party hereto in writing:

 

a.              If to the Company:

 

Mirna Therapeutics, Inc.

2150 Woodward St., Suite 100

Austin, Texas 78744

Attention: Paul Lammers, President & Chief Executive Officer

 

b.              If to Employee:

 

Casi DeYoung

 



 

13.       Waiver of Breach. A waiver by the Company or Employee of a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any other breach by the other party.

 

14.       Governing Law. This Agreement shall be governed by the laws of the State of Texas, without regard to its or any other jurisdiction’s conflict of laws provisions. The Parties hereby submit to the jurisdiction of the Texas courts, both state and federal, in all matters concerning this Agreement.

 

15.       Severability. If one or more of the provisions of this Agreement shall be found to be illegal or invalid, it shall not affect the legality or validity of any of the remaining provisions.

 

16.       Entire Agreement; Amendment. This Agreement, including the attached Exhibit, constitutes and contains the entire agreement of the parties and supersedes any and all prior negotiations, correspondence, understandings and agreements between the parties respecting the subject matter hereof. This Agreement may be modified only by an agreement in writing executed by each of the parties hereto.

 

17.       Headings. The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

 

18.       Counterparts. This Agreement may be signed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

[Signature page follows]

 



 

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

 

 

MIRNA THERAPEUTICS INC.

 

 

 

 

 

 

By:

/s/ Jon Irvin

 

Name:

Jon Irvin

 

Title:

Chief Financial Officer

 

 

 

 

 

CASI DEYOUNG

 

 

 

 

 

/s/ Casi DeYoung

 




Exhibit 10.19

 

 

GRAPHIC

DP140067

Andreas Bader

 

 

 

 

GRAPHIC

 

 

STATE OF TEXAS

COUNTY OF TRAVIS

 

This CANCER RESEARCH GRANT CONTRACT (“Contract”) is by and between the Cancer Prevention and Research Institute of Texas (“CPRIT”), hereinafter referred to as the “INSTITUTE”, acting through its Chief Executive Officer, and Mirna Therapeutics, Inc., hereinafter referred to as the “RECIPIENT”, acting through its authorized signing official.

 

RECITALS

 

WHEREAS, pursuant to TEX. HEALTH & SAFETY CODE, Ch. 102, the INSTITUTE may make grants to public and private persons in this state for research into the causes and cures for all types of cancer in humans; facilities for use in research into the causes and cures for cancer; research to develop therapies, protocols, medical pharmaceuticals, or procedures for the cure or substantial mitigation of all types of cancer; and cancer prevention and control programs.

 

WHEREAS, Article III, Section 67 of the Texas Constitution expressly authorizes the State of Texas to sell general obligation bonds on behalf of the INSTITUTE and for the INSTITUTE to use the proceeds from the sale of the bonds for the purposes of cancer research and prevention programs in this state.

 

WHEREAS, the INSTITUTE issued a request for applications for RFA P-14-ESTCO-1: Established Company Product Development Awards on or about December 2013.

 

WHEREAS, pursuant to TEX. HEALTH & SAFETY CODE § 102.251, and after a review by the INSTITUTE’s scientific research and prevention program committees, the INSTITUTE has approved a Grant (defined below) to be awarded to the RECIPIENT.

 

WHEREAS, to ensure that the Grant provided to the RECIPIENT pursuant to this Contract is utilized in a manner consistent with Tex. Const. Article III, Section 67 and other laws, and in exchange for receiving such Grant, the RECIPIENT agrees to comply with certain conditions and deliver certain performance.

 

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

 

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

 

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Article I

DEFINITIONS

 

The following terms shall have the following meaning throughout this Contract and any Attachments and amendments. Other terms may be defined elsewhere in this Contract.

 

(1)                                        Collaborator - any entity other than the RECIPIENT having one or more personnel participating in the Project and (a) designated as a collaborator in the application submitted by the RECIPIENT requesting the Grant funds awarded by the INSTITUTE, or (b) otherwise approved in writing as a collaborator by the INSTITUTE.

 

(2)                                        Contractor - any person or entity, other than a Collaborator or the RECIPIENT (or their respective personnel), who is contracted by the RECIPIENT to perform activities for the Project.

 

(3)                                           Equipment - an article of tangible, nonexpendable personal property having a useful life of more than one year and an acquisition cost of $5,000 or more per unit.

 

(4)                                 Grant - the funding assistance authorized by TEX. HEALTH & SAFETY CODE, Ch. 102 in the amount specified in Section 2.01 and awarded by the INSTITUTE to the RECIPIENT to carry out the Project pursuant to the terms and conditions of this Contract.

 

(5)                                           Indirect Costs - the expenses of doing business that are not readily identified with a particular grant, contract, project, function or activity, but are necessary for the general operation of the organization or the performance of the organization’s activities.

 

(6)                                        Institute-Funded Activity - all aspects of work conducted on or as part of the Project.

 

(7)                                           Non-Profit Organization - a university or other institution of higher education or an organization of the type described in 501(c)(3) of the Internal Revenue Code of 1986, as amended (26 U.S.C. 501 (c)(3)) and exempt from taxation under 501 (a) of the Internal Revenue Code (26 U.S.C. 501 (a)) or any nonprofit scientific or educational organization qualified under a state nonprofit organization statute.

 

(8)                                           Principal Investigator/Program Director - the individual designated by the RECIPIENT to direct the Project who is principally responsible and accountable to the RECIPIENT and the INSTITUTE for the proper conduct of the Project. References herein to “Principal Investigator/Program Director” include Co-Principal Investigators or Co-Program Directors as well. The Principal Investigator/Program Director and Co-Principal Investigators or Co-Program Directors are set forth on Attachment A.

 

(9)                                           Project - the activities specified or generally described in the Scope of Work or otherwise in this Contract (including without limitation any of the Attachments to the Contract) that are approved by the INSTITUTE for funding, regardless of whether the INSTITUTE funding constitutes all or only a portion of the financial support necessary to carry them out.

 

(10)                          Recipient Personnel - The RECIPIENT’s Principal Investigator/Program Director and RECIPIENT’s employees and consultants working on the Project.

 

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Article II
GRANT AWARD

 

Section 2.01                            Award of Monies. In accordance with the provisions of this Contract and any applicable agency administrative rules, the INSTITUTE shall disburse the proceeds of the Grant to the RECIPIENT in an amount not to exceed $ 16,765,076 to be used solely for the Project. This award is subject to compliance with the Scope of Work and demonstration of progress towards achievement of the milestones set forth in Section 2.02. This Grant is not intended to be a loan of money.

 

Section 2.02                            Scope of Work and Milestones. The RECIPIENT shall perform the Project in accordance with this Agreement and as outlined in Application DP140067 submitted by the RECIPIENT and approved by the INSTITUTE. The RECIPIENT shall conduct the Project within the State of Texas with Texas-based employees, Contractors and/or Collaborators unless otherwise specified in the Scope of Work or the Approved Budget. The INSTITUTE and the RECIPIENT hereby adopt the terms of Attachment A in their entirety, incorporate them as if fully set forth herein, and agree that the Project description, goals, timeline and milestones included as Attachment A accurately reflect the Scope of Work of the Project to be undertaken by the RECIPIENT (the “Scope of Work”) and the milestones expected to be achieved. RECIPIENT and the INSTITUTE mutually agree that the outcome of scientific research is unpredictable and cannot be guaranteed. The RECIPIENT shall use commercially reasonable efforts to complete the goals of the Project pursuant to the timeline reflected in Attachment A and shall timely notify the INSTITUTE if circumstances occur that materially and adversely affect completion thereof. Modifications, if any, to the Scope of Work must be agreed to in writing by both parties as set forth in Section 2.06 “Amendments and Modifications” herein. Material changes to the Scope of Work include, but are not limited to, changes in key personnel involved with the Project, the site of the Project, and the milestones expected to be achieved.

 

Section 2.03                            Contract Term. The Contract shall be effective as of June 01, 2014 (the Effective Date”) and terminate on May 31, 2017 or in accordance with the Contract termination provisions set forth in Article VIII herein, whichever shall occur first (the “Termination Date”). Unless otherwise approved by the INSTITUTE as evidenced by written communication from the INSTITUTE to the RECIPIENT and appended to the Contract, Grant funds distributed pursuant to the Contract shall be expended no earlier than the Effective Date or subsequent to the Termination Date. If, as of the Termination Date, the RECIPIENT has not used Grant money awarded by the INSTITUTE for permissible services, expenses, or costs related to the Project and has not received approval from the INSTITUTE for a no cost extension to the contract term pursuant to Section 3.11 “Carry Forward of Unspent Funds and No Cost Extension” herein, then the RECIPIENT shall not be entitled to retain such unused Grant funds from the INSTITUTE. Certain obligations as set forth in Section 9.09 of this Contract shall extend beyond the Termination Date.

 

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

 

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

 

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

 

(c)                    Attachment C —Assurances and Certifications

 

(d)                   Attachment D — Intellectual Property and Revenue Sharing

 

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(e)               Attachment E — Reporting Requirements

 

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

 

Section 2.05                            Entire Agreement.  All agreements, covenants, representations, certifications and understandings between the parties hereto concerning this Contract have been merged into this written Contract. No prior contemporaneous representation, agreement or understanding, express or implied, oral or otherwise, of the parties or their agents that may have related to the subject matter hereof in any way shall be valid or enforceable unless embodied in this Contract.

 

Section 2.06                            Amendments and Modifications. Requested amendments and modifications to the Contract must be submitted in writing to the INSTITUTE for review and approval (such approval shall not be unreasonably withheld.) Amendments and modifications (including alterations, additions, deletions, assignments and extensions) to the terms of this Contract shall be made solely in writing and shall be executed by both parties. The approved amendment shall be reflected in Attachment A if it is change to the Scope of Work, or as part of Attachment B if it is a budget amendment, or as part of Attachment F for all other changes.

 

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

 

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

 

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

 

If the Principal Investigator leaves the employment of the RECIPIENT or is replaced by the RECIPIENT for any reason during the course of the Grant with someone who is not already designated a co-Principal

 

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Investigator in the Application, the RECIPIENT shall notify the INSTITUTE prior to replacing the Principal Investigator. Written approval by the INSTITUTE is required for the replacement of the Principal Investigator with someone who is not already a co-Principal Investigator in the Application, which approval shall not be unreasonably withheld, conditioned or delayed.

 

Section 2.10                       Representations and Certifications. The RECIPIENT represents and certifies to the best of its knowledge and belief to the INSTITUTE as follows:

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 2.11                            Reliance upon Representations. By awarding the Grant and executing this Contract, the INSTITUTE is relying, and will continue to rely throughout the term of this Contract, upon the truthfulness, accuracy, and completeness of the RECIPIENT’s written assurances, certifications and representations. Moreover, the INSTITUTE would not have entered into this Contract with the RECIPIENT but for such written assurances, certifications and representations. The RECIPIENT acknowledges that the INSTITUTE is relying upon such assurances, certifications and representations and acknowledges their materiality and significance.

 

Section 2.12                            Contingent upon Availability of Grant Funds. This Contract is contingent upon funding being available for the term of the Contract and the RECIPIENT shall have no right of action against the

 

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INSTITUTE in the event that the INSTITUTE is unable to perform its obligations under this Contract as a result of the suspension, termination, withdrawal, or failure of funding to the INSTITUTE or lack of sufficient funding of the INSTITUTE for this Contract. If funds become unavailable to the INSTITUTE during the term of the Contract, Section 8.01(c) shall apply. For the sake of clarity, and except as otherwise provided by this Contract, if this Contract is not funded, then both parties are relieved of all of their obligations under this Contract. The INSTITUTE acknowledges and agrees that the Project is a multiyear project subject to Tex. Health & Safety Code, Ch. 102, Section 102.257.

 

Section 2.13                            Confidentiality of Documents and Information. In connection with work contemplated for the Project or pursuant to complying with various provisions of this Contract, the RECIPIENT may disclose its confidential business, financial, technical, scientific information and other information to the INSTITUTE (“Confidential Information”). To assist the INSTITUTE in identifying such information, the RECIPIENT shall mark or designate the information as “confidential,” provided however that the failure to so designate does not operate as a waiver to protections provided by applicable law or this Contract. The INSTITUTE shall use no less than reasonable care to protect the confidentiality of the Confidential Information to the fullest extent permissible under the Texas Public Information Act, Texas Government Code, Chapter 552 (the “TPIA”), and, except as otherwise provided in the TPIA to prevent the disclosure of the Confidential Information to third parties for a period of time equal to three (3) years from the termination of the contract, unless the INSTITUTE and the RECIPIENT agree in writing to extend such time period, provided that this obligation shall not apply to information that:

 

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

 

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

 

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

 

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

 

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

 

The INSTITUTE shall hold the Confidential Information in confidence, shall not use such Confidential Information except as provided by the terms of this Contract, and shall not disclose such Confidential Information to third parties without the prior written approval of the RECIPIENT or as otherwise allowed by the terms of the Contract. Subject in all respects to the terms of this Contract and the TPIA, the INSTITUTE has the right to use and disclose the Confidential Information reasonably in connection with the exercise of its rights under the Contract.

 

In the event that the INSTITUTE is requested or required (by oral questions, interrogatories, requests for information or documents in legal proceedings, subpoena, civil investigative demand or other similar process by a court of competent jurisdiction or by any administrative, legislative, regulatory or self-regulatory authority or entity) to disclose any Confidential Information, the INSTITUTE shall provide the RECIPIENT with prompt written notice of any such request or requirement so that the RECIPIENT may seek a protective order or other appropriate remedy. If, in the absence of a protective order or other remedy, the INSTITUTE is nonetheless legally compelled to make any such disclosure of Confidential Information to any person, the INSTITUTE may, without liability hereunder, disclose only that portion of the Confidential Information that is legally required to be disclosed, provided that the INSTITUTE will use reasonable efforts to assist the RECIPIENT, at the RECIPIENT’s expense, in obtaining an appropriate protective order or other reliable

 

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assurance that confidential treatment will be accorded the Confidential Information. To the extent that such Confidential Information does not become part of the public domain by virtue of such disclosure, it shall remain Confidential Information hereunder.

 

Article III

DISBURSEMENT OF GRANT AWARD PROCEEDS

 

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

 

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

 

Section 3.03                            Actual Costs and Allowable Expenses. Because the Approved budget for the Project(s) as set forth in Attachment B is only an estimate, the parties agree that the RECIPIENT’s billings under this Contract will reflect the actual costs and expenses incurred in performing the Project(s), regardless of the Approved Budget, up to the total contracted amount specified in Section 2.01 “Award of Monies.” The RECIPIENT shall use Grant proceeds only for allowable expenses consistent with state law and agency administrative rules. Allowable expenses for the Project(s) shall be only as outlined in the Approved Budget and any modifications to same.

 

Section 3.04                            Travel Expenses. Reimbursement for travel expenditures shall be in accordance with the Approved Budget. Prior written approval from the INSTITUTE must be obtained before travel that exceeds the amount included in the Approved Budget commences. Failure to obtain such prior written approval shall result in such excess travel costs constituting expenses that may not be taken into account for the purposes of calculating expenditure of Grant funds under this Contract.

 

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

 

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

 

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

 

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

 

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

 

All other budget changes or transfers require the INSTITUTE’s express prior written approval. Transfer of funds between categories in the Project’s Approved Budget may be allowed if requests are in writing, fit within the Scope of Work and the total Approved Budget, are beneficial to the achievement of the objectives of the Project, and appear to be an efficient, effective use of the INSTITUTE’s funds.

 

Section 3.06                            Withholding Payment. The INSTITUTE may withhold Grant award proceeds from RECIPIENT if required Financial Status Reports (Form 269a) are not on file for previous quarters or for the final period, if material program requirements are not met and remain uncured after a reasonable time period to cure, if the RECIPIENT is in breach of any material term of this Contract, or in accordance with provisions of this Contract as well as applicable state or federal laws, regulations or administrative rules, and the breach remains uncured after a reasonable time period to cure. The INSTITUTE shall have the right to withhold all or part of any future payments to the RECIPIENT to offset any prior advance payments made to the RECIPIENT for ineligible expenditures that have not been refunded to the INSTITUTE by the RECIPIENT.

 

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

 

Section 3.08                            Buy Texas. The RECIPIENT shall apply good faith efforts to purchase goods and services from suppliers in Texas to the extent reasonably possible, to achieve a goal of more than 50 percent of such purchases from suppliers in Texas.

 

Section 3.09                            Historically Underutilized Businesses. The RECIPIENT shall use reasonable efforts to purchase materials, supplies or services from a Historically Underutilized Business (HUB). The Texas Procurement and Support Services website will assist in finding HUB vendors (http://www.window.state.tx.us/procurement.) The RECIPIENT shall complete a HUB report with each annual report submitted to the INSTITUTE in accordance with Attachment E.

 

Section 3.10                            Limitation on Use of Grant Award Proceeds to Pay Indirect Costs. The RECIPIENT shall not spend more than five percent of the Grant award proceeds for Indirect Costs.

 

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

 

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Article IV

AUDITS AND INSPECTIONS

 

Section 4.01                            Record Keeping. The RECIPIENT, each Collaborator whose costs are funded in all or in part by the Grant shall maintain or cause to be maintained books, records, documents and other evidence (electronic or otherwise) pertaining in any way to its performance under and compliance with the terms and conditions of this Contract (“Records”). The RECIPIENT, each Collaborator and each Contractor shall use, or shall cause the entity which is maintaining such Records to use generally accepted accounting principles in the maintenance of such Records, and shall retain or require to be retained all of such Records for a period of three (3) years from the Termination Date of the Contract.

 

Section 4.02                                    Audits. Upon request and with reasonable notice, the RECIPIENT, each Collaborator and each Contractor whose costs are charged to the Project shall allow, or shall cause the entity which is maintaining such items to allow, the INSTITUTE, or auditors working on behalf of the INSTITUTE, including the State Auditor and/or the Comptroller of Public Accounts for the State of Texas, to review, inspect, audit, copy or abstract all of its Records during regular working hours. Acceptance of funds directly under the Contract or indirectly through a subcontract under the Contract constitutes acceptance of the authority of the INSTITUTE, or auditors working on behalf of the INSTITUTE, including the State Auditor and/or the Comptroller of Public Accounts, to conduct an audit or investigation in connection with those funds for a period of three (3) years from the Termination Date of the Contract.

 

Notwithstanding the foregoing, any RECIPIENT expending $500,000 or more in federal or state awards during its fiscal year shall obtain either an annual single audit or a program specific audit. A RECIPIENT expending funds from only one state program may elect to obtain a program specific audit in accordance with Office of Management and Budget (OMB) Circular A-133 or with the State of Texas Uniform Grant Management Standards (UGMS). A single audit is required if funds from more than one federal or state program are spent by the RECIPIENT. The audited time period is the RECIPIENT’s fiscal year, not the INSTITUTE funding period.

 

Section 4.03                            Inspections. In addition to the audit rights specified in Section 4.02 “Audits”, the INSTITUTE shall have the right to conduct periodic onsite inspections within normal working hours and on a day and a time mutually agreed to by the parties, to evaluate the Institute-Funded Activity. The RECIPIENT shall fully participate and cooperate in any such evaluation efforts.

 

Section 4.04                            On-going Obligation to Submit Requested Information. The RECIPIENT shall, submit other information related to the Grant to the INSTITUTE as may be reasonably requested from time-to-time by the INSTITUTE, by the Legislature or by any other funding or regulatory bodies covering the RECIPIENT’s activities under this Contract.

 

Section 4.05                            Duty to Resolve Deficiencies. If an audit and/or inspection under this Article IV finds there are deficiencies that should be remedied, then the RECIPIENT shall resolve and/or cure such deficiencies within a reasonable time frame specified by the INSTITUTE. Failure to do so shall constitute an Event of Default pursuant to Section 8.03 “Event of Default.” Upon the RECIPIENT’S request, the parties agree to negotiate in good faith, specific extensions so that the RECIPIENT can cure such deficiencies.

 

Section 4.06                            Repayment of Grant Proceeds for Improper Use. In no event shall RECIPIENT retain Grant funds that have not been used by the RECIPIENT for purposes for which the Grant was intended or in violation of the terms of this Contract. The RECIPIENT shall repay any portion of Grant proceeds used by the RECIPIENT for purposes for which the Grant was not intended, as determined by the final results of an audit conducted pursuant to the provisions of this Contract. Unless otherwise expressly provided for in writing and appended to this Contract, the repayment shall be made to the INSTITUTE no

 

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later than forty-five (45) days upon a written request by the INSTITUTE specifying the amount to be repaid and detailing the basis upon which such request is being made and the amount shall include interest calculated at an amount not to exceed five percent (5%) annually. The RECIPIENT may request that the INSTITUTE waive the interest, subject in all cases to the INSTITUTE’S sole discretion.

 

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

 

Article V
ASSURANCES AND CERTIFICATIONS

 

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

 

Article VI
INTELLECTUAL PROPERTY AND REVENUE SHARING

 

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

 

Article VII
REPORTING

 

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

 

Article VIII
EARLY TERMINATION AND EVENT OF DEFAULT

 

Section 8.01                                     Early Termination of Contract. This Contract may be terminated prior to the Termination Date specified in Section 2.03 “Contract Term” by:

 

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

 

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

 

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

 

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(d) The RECIPIENT for convenience.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

If the INSTITUTE intends to terminate for an Event of Default under Section 8.01(b) by the RECIPIENT, as described in Section 8.03 “Event of Default”, the INSTITUTE shall provide written notice to the RECIPIENT pursuant to Section 9.21 “Notices” and shall include a reasonable description of the Event of Default and, if applicable, the steps necessary to cure such Event of Default. Upon receiving notice from the INSTITUTE,

 

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

 

In the event that the INSTITUTE terminates the Contract under Section 8.01(c) above because allocated funds become legally unavailable during the Contract period, the INSTITUTE shall immediately provide written notification to the RECIPIENT of such fact pursuant to Section 9.21 “Notices.” The Contract is terminated upon the RECIPIENT’s receipt of that notification, subject to Section 9.09 “Survival of Terms.”

 

Section 8.05                            Duty to Report Event of Default. The RECIPIENT shall notify the INSTITUTE in writing pursuant to Section 9.21 “Notices”, promptly and in no event more than (30) days after it obtains knowledge of the occurrence of any Event of Default. The RECIPIENT shall include a statement setting forth reasonable details of each Event of Default and the action which the RECIPIENT proposes to take with respect thereto.

 

Section 8.06                            Obligations/Liabilities Affected by Early Termination. The RECIPIENT shall not incur new obligations that otherwise would have been paid for using Grant funds after the receipt of notice as provided by Section 8.04 “Notice Required”, unless expressly permitted by the INSTITUTE in writing, and shall cancel as many outstanding obligations as possible. The INSTITUTE shall not owe any fee, penalty or other amount for exercising its right to terminate the Contract in accordance with Section 8.01. In no event shall the INSTITUTE be liable for any services performed, or costs or expenses incurred, after the Termination Date of the Contract. Early termination by either party shall not nullify obligations already incurred, including the RECIPIENT’s revenue sharing obligations as set forth in Attachment D, or the performance or failure to perform obligations prior to the Termination Date.

 

Section 8.07                            Interim Remedies. Upon receipt by the RECIPIENT of a notice of Event of Default, and at any time thereafter until such Event of Default is cured to the satisfaction of the INSTITUTE or this Contract is terminated, the INSTITUTE may enforce any or all of the following remedies (such rights and remedies being in addition to and not in lieu of any rights or remedies set forth herein):

 

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

 

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

 

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

 

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Article IX
MISCELLANEOUS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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INSTITUTE detailing the RECIPIENT’s reasons for conducting the work outside of the State of Texas and the RECIPIENT’s efforts made to conduct the work in the State of Texas.

 

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

 

Section 9.08                            Severability. If any provision of this Contract is construed to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or enforceability shall not affect any other provisions hereof. The invalid, illegal or unenforceable provision shall be deemed stricken and deleted to the same extent and effect as if never incorporated herein. All other provisions shall continue as provided in this Contract.

 

Section 9.09                            Survival of Terms. Termination or expiration of this Contract for any reason will not release either party from any liabilities or obligations set forth in this Contract that: (1) the Parties have expressly agreed shall survive any such termination or expiration; or (2) remain to be performed or by their nature would be intended to be applicable following any such termination or expiration. Such surviving terms include, but are not limited to, Sections 2.13, 4.01, 4.02, 4.05, 4.06, 8.02, 8.06, 9.04, 9.05, 9.06, 9.07, 9.09, 9.14, 9.15, 9.16, 9.17, 9.18, and Attachment D.

 

Section 9.10                            Binding Effect and Assignment or Modification. This Contract and all terms, provisions and obligations set forth herein shall be binding upon and shall inure to the benefit of the parties and their successors and permitted assigns, including all other state agencies and any other agencies, departments, divisions, governmental entities, public corporations or other entities which shall be successors to either of the parties or which shall succeed to or become obligated to perform or become bound by any of the covenants, agreements or obligations hereunder of either of the parties hereto. Upon a permitted assignment of this Contract by RECIPIENT, all references to “the RECIPIENT” herein shall be deemed to refer to such permitted assignee.

 

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

 

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

 

Section 9.13                            Force Majeure. Neither the INSTITUTE nor the RECIPIENT will be liable for any failure or delay in performing its obligations under the Contract if such failure or delay is due to any cause beyond

 

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the reasonable control of such party, including, but not limited to, unusually severe weather, strikes, natural disasters, fire, civil disturbance, epidemic, war, court order or acts of God. The existence of such causes of delay or failure will extend the period of performance in the exercise of reasonable diligence until after the causes of delay or failure have been removed. Each party must inform the other in accordance with Section 9.21 “Notices” within five (5) business days, or as soon as it is practical, of the existence of a force majeure event or otherwise waive this right as a defense.

 

Section 9.14                            Disclaimer of Damages. IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, SPECIAL, PUNITIVE, EXEMPLARY, INCIDENTAL OR CONSEQUENTIAL DAMAGES. THIS LIMITATION WILL APPLY REGARDLESS OF WHETHER OR NOT THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

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

 

The RECIPIENT acknowledges and agrees that this indemnification shall apply to, but is not limited to, employment matters, taxes, personal injury, and negligence.

 

It is understood and agreed that it is not the intent of the parties to expand or increase the liability of the State of Texas under this Article. This provision is intended to prevent the RECIPIENT, the INSTITUTE and the State of Texas from attempting or appearing to assume liability it does not have the statutory or legal power to assume.

 

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

 

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

 

Section 9.18                            Attorneys’ Fees. In the event of any litigation, appeal or other legal action to enforce any provision of the Contract, the RECIPIENT shall pay all expenses of such action, including attorneys’ fees

 

16


 

and costs, if the INSTITUTE is the prevailing party. If the RECIPIENT is a State of Texas agency or institution of higher education, then this Section 9.18 is subject to the extent authorized by the Texas Constitution and the laws of the State of Texas.

 

Section 9.19                            Counterparts. This Contract may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but such counterparts shall together constitute one and the same instrument.

 

Section 9.20                            Construction of Terms The headings used in this Contract are inserted only as a matter of convenience and for reference and shall not affect the construction or interpretation of this Contract. Where context so indicates, a word in the singular form shall include the plural, a word in the masculine form the feminine, and vice-versa. The word “including” and similar constructions (such as “includes”, “included”, “for example”, “such as”, and “e.g.”) shall mean “including, without limitation” throughout this Contract. The words “and” and “or” are not intended to convey exclusivity or nonexclusivity except where expressly indicated or where the context so indicates in order to give effect to the intent of the parties.

 

Section 9.21                            Notices. All notices, requests, demands and other communications will be in writing and will be deemed given on the date received as demonstrated by (i) a courier’s receipt or registered or certified mail return receipt signed by the party to whom such notice was sent, provided that such notice was sent to the Authorized Signing Official (ASO) at the address provided in the CPRIT Grants Management System, (ii) a fax confirmation page showing that such fax was successfully transmitted to the fax number provided in the CPRIT Grants Management System, or (iii) via correspondence in the CPRIT Grants Management System.

 

17



 

GRAPHIC

 

DP140067, Contract Attachment A

 

Layperson’s Summary

 

Mirna Therapeutics, Inc., is a Texas-based company developing a new class of cancer treatments that are based on naturally occurring tumor suppressor microRNAs. In April 2013, Mirna’s lead product, a liposomal mimic of miR-34 (MRX34), entered a Phase I clinical trial for liver cancer. Key benefit of these therapies is the ability to simultaneously block multiple cancer processes which is important for the successful treatment of cancer that frequently originates from multiple mutations and thrives on multiple pathways. The ability to interfere with multiple cancer pathways is a new paradigm in cancer therapy that has the potential to create more effective cancer drugs. Because most cancer drugs are more effective in drug combinations, we propose here the preclinical and clinical development of one or more MRX34 combination therapies to maximize efficacy. Our primary focus will be the MRX34+erlotinib (Tarceva®) combination in non-small cell lung cancer (NSCLC), the number one cause of cancer deaths in Texas. Our preclinical data show strong synergy between the miR-34 therapy and erlotinib in erlotinib-resistant cancer cells. Because erlotinib alone, an FDA-approved drug to treat NSCLC, only benefits a limited fraction of patients, combining it with MRX34 is likely to maximize efficacy and broaden the base of patients that can be treated with this drug. Mirna will use Texas based resources and leverage relationships established with the ongoing clinical development of MRX34.

 



 

Timelines: EDITED  project_timeline.pdf

 

Goal 1: Preclinical-development of the MRX34+erlotinib combination

ADDED

 

Objective 1:
ADDED

 

Evaluate the MRX34+erlotinib combination in animal models of NSCLC. Milestone: Demonstrate that the MRX34+erlotinib combination is more effective than the single agents in an animal model of NSCLC.

 

 

 

Objective 2:
ADDED

 

Perform toxicology studies in preparation of a MRX34+erlotinib clinical trial. Milestone: Demonstrate that the combination is safe at predicted therapeutic dose levels.

 

Goal 2: Identification of novel MRX34 combination therapies (Fall-back strategy to Aim 1)

ADDED

 

Objective 1:
ADDED

 

Identify approved targeted therapeutics that synergize with miR-34 in cultured cancer cells. Milestone: Identify >1 synergistic combinations.

 

 

 

Objective 2:
ADDED

 

Evaluate the MRX34 + new drug combination in vivo. Milestone: Demonstrate superior activity of the MRX34+drug in an animal model of cancer.

 

 

 

Objective 3:
ADDED

 

Perform toxicology studies in preparation of the MRX34+drug clinical trial. Milestone: Demonstrate that the combination is safe at predicted therapeutic dose levels.

 

Goal 3: Clinical Trial investigating the MRX34 combination (erlotinib)

ADDED

 

Objective 1:
ADDED

 

Execute the lead-in Phase I portion of the clinical study. Milestone: Determine the initial safety profile and recommended Phase II dose of the MRX34+erlotinib combination.

 

 

 

Objective 2:
ADDED

 

Perform a randomized Phase II clinical study in patients with NSCLC. Milestone: Demonstrate superior efficacy of the MRX34+erlotinib combination vs erlotinib alone (clinical proof of concept).

 

 

 

 

 

 

 



 

 



 

GRAPHIC

 

Grant ID: DP140067

Principal Investigator/Program Director: Andreas Bader

 

ATTACHMENT B - Detailed Budget Form

 

Budget

 

Budget Year 1

 

Budget Year 2

 

Budget Year 3

 

Total Budget

 

a. Personnel

 

$

431,696.00

 

$

338,646.00

 

$

245,805.00

 

$

1,016,147.00

 

b. Fringe Benefits

 

$

84,612.00

 

$

66,375.00

 

$

48,178.00

 

$

199,165.00

 

c. Travel

 

$

10,000.00

 

$

16,667.00

 

$

10,000.00

 

$

36,667.00

 

d. Equipment

 

$

0.00

 

$

0.00

 

$

0.00

 

$

0.00

 

e. Supplies

 

$

360,546.00

 

$

700,000.00

 

$

700,000.00

 

$

1,760,546.00

 

f. Contractual

 

$

734,667.00

 

$

8,000.00

 

$

8,000.00

 

$

750,667.00

 

g. Other

 

$

3,170,213.00

 

$

4,533,333.00

 

$

4,500,000.00

 

$

12,203,546.00

 

h. Total Direct Charges

 

$

4,791,734.00

 

$

5,663,021.00

 

$

5,511,983.00

 

$

15,966,738.00

 

i. Indirect Charges (doesn’t apply to prevention awards)

 

$

239,587.00

 

$

283,151.00

 

$

275,599.00

 

$

798,337.00

 

j. Total Charges

 

$

5,031,321.00

 

$

5,946,172.00

 

$

5,787,582.00

 

$

16,765,075.00

 

 

* Note:

 

For purposes of contract initiation only:

 

Federal ID#:

 

26-1824804

Vendor ID#:

 

12618248046000

ASO Contact:

 

Irvin, Jon

Address:

 

2150 Woodward

Address 2:

 

ste 100

City, State, ZIP

 

Austin, TX 78744

Phone:

 

512-901-0916

Fax:

 

512-681-5201

Email:

 

jirvin@mirnarx.com

 


 

GRAPHIC

 

ATTACHMENT C

 

ASSURANCES AND CERTIFICATIONS

 

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

 

By signing this Contract, RECIPIENT certifies compliance with the following assurances and certifications required by the INSTITUTE (listed below). RECIPIENT further acknowledges that its obligations pursuant to the following assurances and certifications are ongoing.

 

Section C1.01      Demonstration of Matching Funds. Pursuant to TEX. HEALTH & SAFETY CODE § 102.255(d) and T.A.C. 25 § 703.11, RECIPIENT has an amount of funds equal to one-half of the amount of the Grant to be disbursed each fiscal year of the Contract term dedicated to the research that is the subject of the Grant as demonstrated by the form incorporated herein to Attachment C. The RECIPIENT shall update the matching funds certification and verficiation annually for each fiscal year that Grant funds are disbursed.

 

Section C1.02      Payment of Taxes. RECIPIENT’s payment of franchise taxes is current or, if the RECIPIENT is exempt from payment of franchise taxes, that it is not subject to the State of Texas franchise tax. If franchise tax payments become delinquent during the Contract term, payments under this Contract will be withheld until the RECIPIENT’s delinquent franchise tax is paid in full. The RECIPIENT also acknowledges that it is not otherwise exempt from state sales or occupancy tax as a result of this Contract.

 

Section C1.03      Compliance with Confidentiality Guidelines Relating to Personal and Medical Information. RECIPIENT complies with all applicable laws, rules and regulations relating to personal and medical information. Without in any way limiting the foregoing, RECIPIENT maintains and enforces appropriate facility and information technology access rules and procedures to protect against inappropriate disclosure of patient records and all other documents deemed confidential by law, which are maintained in connection with the Project and Institute-Funded Activities, including provisions that comply with the requirements of the INSTITUTE’s rules, 25 T.A.C. Section 703.14. Upon request from the INSTITUTE, RECIPIENT will timely furnish a copy of the RECIPIENT’s facility and information technology access rules and procedures, as well as any other applicable confidentiality guidelines.

 

If RECIPIENT, including any Collaborators or Contractors, works directly with patients or otherwise has access to or maintains patient personal and medical information, RECIPIENT specifically addresses Health Insurance Portability and Accountability Act of 1996 regulations concerning confidentiality of personal and medical information. Any disclosure of confidential information in any way related to the Project (including information that may be required by reports and inspections) must be in accordance with all applicable laws.

 

Section C1.04      Conduct of Research or Service Provided. RECIPIENT understands that the Project must be conducted with full consideration for the ethical and medical implications of the research

 

C1



 

performed or services delivered and comply with all federal and state laws regarding the conduct of the research or service.

 

Section C1.05      Regulatory Certificates, Licenses and Permits. All personnel, facilities and equipment involved or to be involved in the Project are certified, licensed, permitted, registered or approved by the appropriate regulating agency, where applicable. Any revocation, surrender, expiration, non-renewal, inactivation or suspension of any such certification, license, permit, registration or approval shall constitute grounds for Contract termination.

 

Section C1.06      Assurances and Certifications in Accordance with the NIH Grants Policy Statement:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

C2



 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section C1.07      Tobacco Free Workplace Policy. Pursuant to T.A.C. 25 § 703.20, RECIPIENT certifies that its board of directors, governing body, or similar has adopted and enforces a Tobacco-Free Workplace Policy that meets or exceeds all of the following minimum standards:

 

(a)     Prohibits the use of all forms of tobacco products, including but not limited to cigarettes, cigars, pipes, water pipes (hookah), bidis, kreteks, electronic cigarettes, smokeless tobacco, snuff and chewing tobacco;

 

(b)     Designates the property to which the policy applies (“designated area”). The designated area(s) must at least comprise all buildings and structures where the CPRIT project is taking place, as well as the sidewalks, parking lots, walkways, and attached parking structures immediately adjacent but only to the extent the CPRIT Grant Recipient owns, leases as the sole tenant, or controls the building, sidewalks, parking lots and/or parking structures. In the event that the RECIPIENT does not own, lease as the sole tenant, or control the building, sidewalks, parking lots and/or parking structures, then the designated area(s) must include all areas under the RECIPIENT’s control;

 

(c)     Applies to all employees and visitors in the designated area(s); and

 

(d)     Provides for or refers employees to tobacco use cessation services.

 

C3



 

If RECIPIENT cannot meet the minimum standards as set forth in this section, RECIPIENT certifies that it has received an approved waiver from the INSTITUTE’s CEO for the current fiscal year.

 

Section C1.08      No Donations to the Institute or a Foundation Established to Support Institute. RECIPIENT certifies that as of June 14, 2013, it has not made and will not make a contribution, during the term of the Contract, to the INSTITUTE or to any foundation established specifically to support the INSTITUTE.

 

C4



 

GRAPHIC

 

DP140067 - Product Development Contract Attachment C Part 2 Matching Compliance Certification (MCC) - Initial

 

For Public or Private Institutions of Higher Education ONLY (all other entities proceed to the table below): The grant recipient may credit toward the matching funds requirement the dollar equivalent to the difference between the institution’s federally approved indirect cost rate for research projects and CPRIT’s five percent (5%) indirect cost allowance. If a Public or Private Institution of Higher Education intends to fulfill its match requirement using expended funds only (no federally approved indirect cost rate credit), then choose “No” on the first question and proceed to the table below.

 

If the grant recipient’s Federally Approved Indirect Cost Rate is greater than or equal to 55% (the 50% matching funds requirement and the 5% CPRIT Indirect Cost Rate), then no further action is required once the appropriate information has been entered in lines “a” through “d” below.

 

If the combined Federally Approved Indirect Cost Rate and the CPRIT Indirect Cost Rate calculated for the Project is less than 55%, then the grant recipient must use the table below to demonstrate that it has encumbered funds available and not yet expended that are dedicated to the CPRIT-funded project for the portion of the match requirement not met by the Federally Approved Indirect Cost Rate credit.

 

 

                                Public or Private Institution of Higher Education:

 

(Choose ‘No’ if You Are Using Encumbered Funds)                                             No

 


 

 

 

Award Year #1

 

Award Year #2

 

Award Year #3

 

Current Year

 

 

 

Total Award
Amount for
Award Year
#1

 

Remaining Dollar
Amount to Fulfill
Match
Requirement

 

Actual “Non
CPRIT”
Funds
Expended
**

 

Total Award
Amount for
Award Year
#2

 

Remaining Dollar
Amount to Fulfill
Match
Requirement

 

Actual “Non
CPRIT”
Funds
Expended
**

 

Total Award
Amount for
Award Year
#3

 

Remaining
Dollar Amount
to Fulfill Match
Requirement

 

Actual
“Non
CPRIT”
Funds
Expended
**

 

Match Credit/
Deficiency (if any)

 

Public or Private Institutions of Higher Education

 

$

0.00

 

$

0.00

 

$

0.00

 

$

0.00

 

$

0.00

 

$

0.00

 

$

0.00

 

$

0.00

 

$

0.00

 

$

0.00

 

All Other Entities

 

$

5,031,321.00

 

$

2,515,660.50

 

$

0.00

 

$

5,946,172.00

 

$

0.00

 

$

0.00

 

$

5,787,582.00

 

$

0.00

 

$

0.00

 

$

2,515,660.50 DEF

 

Total Non-State Funds Leveraged as a Match for Award

 

 

 

 

 

$

0.00

 

 

 

 

 

$

0.00

 

 

 

 

 

$

0.00

 

 

 

 

The information above is the entity/Institution’s demonstration of encumbered available funds pursuant to its certification in Attachment C. The information in the certification shall be updated annually. By approving this form the grant recipient certifies that it has the matching funds available as reflected on the form.

 

Matching Fund Deficiencies (DEF) and Credits (CR)

 

The amount that appears in the “Remaining Dollar Amount to Fulfill Match Requirement” column is calculated to meet the matching funds requirement (50%). This is the amount that is certified at the beginning of the grant. The grantee will complete the third column at the end of the project year. It is possible for the grant recipient to actually expend more or less than the amount that is certified. In that event, the surplus/deficiency may be carried forward as a credit (CR) or deficiency (DEF).

 

If the grant recipient fails to expend its matching funds requirement for the year, the deficiency may be carried forward and added to the matching fund requirement for the next project year so long as: 1.) the deficiency is equal to or less than 20% of the total matching funds required for the same period; and 2.) the grant recipient has not previously had a matching funds deficiency. For a second deficiency of any amount, or for a deficiency greater than 20% of the total matching funds required for the same period, distribution of grant funds will be suspended. Depending upon the amount of the matching fund deficiency, CPRIT may declare the grant contract in default.

 

If the grant recipient actually expends more than its matching funds requirement for the year, the surplus may be carried forward to reduce the matching fund requirement for the next project year(s).

 


* Appropriate sources for encumbered funds dedicated to the CPRIT project may include but are not necessarily limited to: (1) Federal funds (including American Recovery and Reinvestment Act of 2009 funds, and the fair market value of drug development support provided to the

 



 

recipient by the National Cancer Institute (NCI) or other similar programs); (2) State of Texas funds (Non-CPRIT); (3) Other States’ funds; (4) Non-governmental funds (including private funds, foundation grants, gifts and donations); and (5) Un-recovered indirect costs not to exceed 10 percent of the grant award amount, subject to the following conditions: (A) These costs are not otherwise charged against the grant as the five percent indirect funds; (B) The Institution or recipient must have a documented federal indirect cost rate or an indirect certified by an independent accounting firm; and (C) Is not allowed if the grant recipient is a public or private institution of higher education.

 

The following items do not qualify as encumbered funds:

 

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

 

** All supporting documentation for non-CPRIT funds expended are subject to compliance review.

 



 

GRAPHIC

 

ATTACHMENT D

 

EQUITY INVESTMENT

 

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

 

PART 1
TRANSACTION SUMMARY

 

Section D1.01 Overview. This Attachment summarizes the principal terms of the private placement of Common Stock of Mirna Therapeutics, Inc. (the “Investment”) which may be completed in connection with an Initial Public Offering (the “IPO”) on or before December 31, 2016. The issuer will be RECIPIENT and the acquirer will be the INSTITUTE.

 

Section D1.02 Summary of Investment. Contemporaneous with the execution of the Contract, RECIPIENT and INSTITUTE have entered into agreements whereby INSTITUTE will acquire shares of Common Stock of RECIPIENT (the “Shares”), concurrent with and conditional upon the consummation of RECIPIENT’s Qualified IPO pursuant to an effective registration statement under the Securities Act, at a purchase price per share (the “Purchase Price”) equal to the price per share offered to the public in the IPO. In the event that RECIPIENT elects to pursue a private equity financing round prior to an IPO, RECIPIENT may invite and INSTITUTE, in its sole discretion, may accept participation in the next equity financing round (the “Next Equity Financing”) on terms mutually agreeable to the parties.

 

Section D1.03 Investment Agreements. The investment agreements (the “Investment Agreements”) include (a) a Stock Purchase Agreement (including schedules and exhibits attached thereto) executed by and between RECIPIENT and INSTITUTE on August 31, 2015 (the “Stock Purchase Agreement”), (b) a Lock-Up Agreement executed by and between RECIPIENT and INSTITUTE on August 31, 2015 (the “Lock-Up Agreement”) and (c) a Registration Rights Agreement to be executed by and between RECIPIENT and INSTITUTE on or prior to the Closing Date. The Investment Agreements together with the Contract and any other documents or agreements explicitly contemplated hereunder are referred to as the “Transaction Documents.”

 

PART 2
INVESTMENT CLOSING

 

Section D2.01 Investment Amount. Subject to the terms and conditions set forth in the Stock Purchase Agreement, at the Closing, RECIPIENT shall issue and sell to INSTITUTE, and INSTITUTE shall purchase from RECIPIENT, the number of shares of Common Stock equal to the number obtained by dividing

 

DP140067

 

D1



 

$16,765,076.00 (the “Investment Amount”) by the Purchase Price, rounded down to the nearest whole share.

 

Section D2.02 Date of Closing. The Closing of the purchase and sale of the Shares shall take place at the offices of RECIPIENT’s Counsel on the business day immediately preceding the consummation of the IPO (the “Closing Date”) (or, with the written consent of both INSTITUTE and RECIPIENT, prior to the Closing Date) or at such other locations or remotely by facsimile transmission or other electronic means as the parties may mutually agree.

 

Section D2.03 Form of Payment. On the Closing Date, INSTITUTE shall pay to RECIPIENT the Investment Amount by wire transfer of immediately available funds and RECIPIENT shall irrevocably instruct the Transfer Agent to deliver to INSTITUTE the Shares in book-entry form.

 

PART 3
CONDITIONS PRECEDENT TO CLOSING

 

Section D3.01 Conditions Precedent to the Obligation for INSTITUTE to Purchase Shares. In addition to conditions precedent in the Investment Agreements, the obligation of INSTITUTE to acquire Shares at the Closing is subject to the fulfillment, on or prior to the Closing Date, of the following conditions, any of which may be waived by INSTITUTE:

 

(a)         Performance. RECIPIENT shall have performed, satisfied and complied with all covenants, agreements and conditions required by the Contract to be performed, satisfied or complied with at or prior to the Closing.

 

(b)         Consummation of the IPO. The IPO shall have been consummated on or prior to December 31, 2016.

 

(c)          Project Failure. Prior to the consummation of the IPO, no Project Failure shall have occurred.

 

Section D3.02 IPO Not Consummated or Project Failure. If the IPO is not consummated on or prior to December 31, 2016 or in the event of a Project Failure prior to the IPO, INSTITUTE may terminate the Contract in accordance with Article VIII of the Contract and shall have no obligation to reimburse RECIPIENT for any funds expended on the Project from the Effective Date through the Termination Date.

 

PART 4
DEFINITIONS

 

Throughout this Attachment D, the following underlined terms shall have the meanings given below.

 

(1)                   Closing means the closing of the purchase and sale of the Shares pursuant to the Stock Purchase Agreement.

 

(2)                   Common Stock means shares of the common stock of RECIPIENT, par value $0.001 per share, and also includes any other class of securities into which such common stock may hereafter be reclassified or changed into.

 

(3)                   Project Failure means an event that leads to a declaration by RECIPIENT that the Project is no longer commercially viable due to an adverse safety or efficacy event.

 

(4)                   Qualified IPO has the meaning set forth in Section 1.1 of the Stock Purchase Agreement.

 

(5)                   RECIPIENT’s Counsel means Latham & Watkins LLP.

 

D2



 

(6)                       Securities Act means the Securities Act of 1933, as amended.

 

(7)                       Transfer Agent means the transfer agent named in Section 1.1 of the Stock Purchase Agreement

 

Other terms may be defined elsewhere in this Attachment or in the Contract.

 

D3


 

 

ATTACHMENT E


REPORTING REQUIREMENTS

 

 

 

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

 

INSTITUTE and RECIPIENT agree as follows:

 

ANNUAL REPORTING

 

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

 

Section E1.02 Contents of Reports. Each report shall contain a signed verification (electronic signature is acceptable) of RECIPIENT’s compliance with each of its obligations as set forth in the Contract and shall include the following for the period covered by such report, as may then be applicable:

 

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

 

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

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

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

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

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

 

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

 

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

 

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

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

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

 

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

 

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

 

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

 



 

Grant ID: DP140067
PI/PD/CR: Andreas Bader
Organization: Mirna Therapeutics, Inc.

 

 

GRAPHIC

 

Approved Contract Documents

 

Title

 

Approved By

 

Approved Date

Product Development Base Contract

 

Irvin, Jon

 

01 Sep 2015

Attachment A - Goals and Objectives

 

Nelson, Lisa

 

01 Sep 2015

Attachment B - Verification Request of Contract Document

 

Irvin, Jon

 

01 Sep 2015

Attachment C Part 1 - Assurances and Certifications

 

Irvin, Jon

 

01 Sep 2015

Attachment C Part 2 - Matching Compliance Certification

 

Ruiz, Wilfredo

 

01 Sep 2015

Attachment D - Intellectual Property and Revenue Sharing

 

Irvin, Jon

 

01 Sep 2015

Attachment E - Reporting Requirements

 

Irvin, Jon

 

01 Sep 2015

Chief Executive Officer Approval

 

Roberts, Wayne

 

01 Sep 2015

 



 

 

ATTACHMENT F


APPROVED AMENDMENTS TO CONTRACT

 

This Attachment F (this Attachment”) is hereby incorporated into and made a part of that certain CANCER RESEARCH GRANT CONTRACT (“Contract”) by and between the Cancer Prevention and Research Institute of Texas (“CPRIT or the INSTITUTE”) and Mirna Therapeutics, Inc. (the RECIPIENT”). A capitalized term used in this Attachment shall have the meaning given the term in the Contract or in the Attachments to the Contract, unless otherwise defined herein. In the event of a conflict between the provisions of this Attachment and the provisions of the Contract, this Attachment shall control. For the amendments below, additions to the Contract are shown in bold double underline and deletions are shown with strikethrough.

 

1.              Section (1) of Article I of the Contract is hereby amended and restated by adding a new defined term as follows:

 

“(11) Equity Investment the  purchase by INSTITUTE of ownership shares or units in the RECIPIENT as set forth in Attachment D.”

 

2.              Section 2.02 of the Contract is hereby amended and restated as follows:

 

“Section 2.02 Scope of Work and Milestones. The RECIPIENT shall perform the Project in accordance with this Agreement and as outlined in Application DP140067 submitted by the RECIPIENT and approved by the INSTITUTE. The RECIPIENT shall conduct the Project within the State of Texas with Texas-based employees, Contractors and/or Collaborators unless otherwise specified in the Scope of Work or the Approved Budget. The INSTITUTE and the RECIPIENT hereby adopt the terms of Attachment A in their entirety, incorporate them as if fully set forth herein, and agree that the Project description, goals, timeline and milestones included as Attachment A accurately reflect the Scope of Work of the Project to be undertaken by the RECIPIENT (the Scope of Work”) and the milestones expected to be achieved. RECIPIENT and the INSTITUTE mutually agree that the outcome of scientific research is unpredictable and cannot be guaranteed. The RECIPIENT shall use commercially reasonable efforts to complete the goals of the Project pursuant to the timeline reflected in Attachment A and shall timely notify the INSTITUTE if circumstances occur that materially and adversely affect completion thereof. Modifications, if any, to the Scope of Work must be agreed to in writing by both parties as set forth in Section 2.06 “Amendments and Modifications” herein. Material changes to the Scope of Work include, but are not limited to, changes in key personnel involved with the Project, the site of the Project, and the milestones expected to be achieved. Notwithstanding the forgoing, however, if the Project is determined by the RECIPIENT to no longer be commercially feasible after good faith efforts by RECIPIENT, the  RECIPIENT, in consultation with INSTITUTE, shall reallocate any remaining Approved Budget to other oncology related projects or activities being pursued by RECIPIENT.

 

3.              Section 2.03 of the Contract is hereby amended and restated as follows:

 

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“Section 2.03 Contract Term. The Contract shall be effective as of June 1, 2014 (the Effective  Date”) and terminate on August 31, 2018 or in accordance with the Contract termination provisions set forth in Article VIII herein, whichever shall occur first (the Termination Date”). Unless otherwise approved by the INSTITUTE as evidenced by written communication from the INSTITUTE to the RECIPIENT and appended to the Contract, Grant funds distributed pursuant to the Contract shall be expended no earlier than the Effective Date or subsequent to the Termination Date. If, as of the Termination Date, the RECIPIENT has not used Grant money awarded by the INSTITUTE for permissible services, expenses, or costs related to the Project and has not received approval from the INSTITUTE for a no cost extension to the contract term pursuant to Section 3.11 “Carry Forward of Unspent Funds and No Cost Extension” herein, then the RECIPIENT shall not be entitled to retain such unused Grant funds from the INSTITUTE.  Certain obligations as set forth in Section 9.09 of this Contract shall extend beyond the Termination Date.”

 

4.              Section 2.04(d) of the Contract is hereby amended and restated as follows:

 

“(d) Attachment D — Intellectual Property and Revenue SharingEquity Investment

 

5.              Section 2.09 of the Contract is hereby amended and restated as follows:

 

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

 

6.              Section 3.01 of the Contract is hereby amended and restated as follows:

 

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

 

7.              Section 3.02 of the Contract is hereby amended and restated as follows:

 

2



 

“Section 3.02    Requests for Reimbursement and Quarterly Financial Status Reports.  If the RECIPIENT does not receive an advance disbursement of Grant proceeds, the RECIPIENT's requests for reimbursement shall be made on INSTITUTE Form 269a (Financial Status Report).  If the RECIPIENT has elected to receive an advance disbursement of Grant proceeds, RECIPIENT shall submit INSTITUTE Form 269a (Financial Status Report) to document all costs and allowable expenses paid with Grant proceeds. The RECIPIENT shall submit the INSTITUTE Form 269a quarterly to the INSTITUTE within 90 days following the end of the quarter covered by the bill. A final INSTITUTE Form 269a shall be submitted by RECIPIENT not later than 90 days after the Termination Date. An extension of time for submission deadlines specified herein must be expressly authorized in writing by the INSTITUTE. In the event that RECIPIENT fails to or does not timely submit INSTITUTE Form 269a without good cause. INSTITUTE may levy a fine of $5.000 per submission. Good cause shall mean any event that delays or prevents the submission of a report despite RECIPIENT’s good faith efforts to comply with the report submission requirements. If the INSTITUTE levies a fine for failure to report, the INSTITUTE'S Executive Director or his/her designee shall notify RECIPIENT in writing. Within 10 days of receipt of the notice, RECIPIENT may provide an explanation demonstrating good cause, submit the report or pay the fine.”

 

8.              Section 3.06 of the Contract is hereby amended and restated as follows:

 

“Section 3.06 Withholding Payment. TheAs set forth in Attachment D, the INSTITUTE may withhold Grant award proceeds from the RECIPIENT if required Financial Status Reports (Form 269a) are not on file for previous quarters or for the final period, if material program requirements are not met and remain uncured after a reasonable time period to cure, if the RECIPIENT is in broach of any material term of this Contract, or in accordance with provisions of this Contract as well as applicable state or federal laws, regulations or administrative rules, and the breach remains uncured after a reasonable time period to cure. The INSTITUTE shall have the right to withhold all or part of any future payments to the RECIPIENT to offset any prior advance payments made to the RECIPIENT for ineligible expenditures that have not been refunded to the INSTITUTE by the RECIPIENTa Project Failure occurs prior to the Equity Investment by CPRIT or if such Equity Investment fails to occur prior to the Investment Expiration Date.

 

9.              Section 4.01 of the Contract is hereby amended and restated as follows:

 

“Section 4.01 Record Keeping. The RECIPIENT, each Collaborator and each Contractor whose costs for performance of the Project are funded in all or in part by the Grant shall maintain or cause to be maintained books, records, documents and other evidence (electronic or otherwise) pertaining in any way to its performance under and compliance with the terms and conditions of this Contract (“Records”). The RECIPIENT, each Collaborator and each Contractor shall use, or shall cause the entity which is maintaining such Records to use generally accepted accounting principles in the maintenance of such Records, and shall retain or require to be retained all of such Records for a period of three (3) years from the Termination Date of the Contract.”

 

10.  Section 4.03 of the Contract is hereby amended and restated as follows:

 

“Section 4.03 Inspections. In addition to the audit rights specified in Section 4.02 “Audits”, the INSTITUTE shall have the right to conduct periodic (no more frequently than on a semi-annual basis) onsite inspections within normal working hours and on a day and a time mutually agreed to by the

 

3


 

parties, to evaluate the Institute-Funded Activity. The RECIPIENT shall fully participate and cooperate in any such evaluation efforts.”

 

11.       Section 4.06 of the Contract is hereby amended and restated as follows:

 

This section has been intentionally deleted.

 

12.       Section 4.07 of the Contract is hereby amended and restated as follows:

 

This section has been intentionally deleted.

 

13.  Article VI of the Contract is hereby renamed “Equity Investment.”

 

14.  Article VII of the Contract is hereby amended and restated as follows:

 

“Adoption of Attachment E. The INSTITUTE and the RECIPIENT hereby adopt the terms of Attachment E in their entirety, incorporate them as if fully set forth herein, and agree to perform and be bound by all such terms. In the event that RECIPIENT fails to or does not timely submit a report required by Attachment E without good cause, INSTITUTE may levy a fine of $5.000 per submission. Good cause shall mean any event that delays or prevents the submission of a report despite RECIPIENT’s good faith efforts to comply with the report submission requirements. If the INSTITUTE levies a fine for failure to report, the INSTITUTE’s Executive Director or his/her designee shall notify RECIPIENT in writing. Within 10 days of receipt of the notice. RECIPIENT may provide an explanation demonstrating good cause, submit the report or pay the fine.”

 

15.  Section 8.01(b) of the Contract is hereby amended and restated as follows:

 

“(b)              The INSTITUTE for an Event of Default (defined in Section 8.03) by the RECIPIENT, provided that such Event of Default occurs after the equity investment set forth in Attachment D; or”

 

16.       Section 8.02 of the Contract is hereby amended and restated as follows:

 

This section has been intentionally deleted.

 

17.  Section 8.06 of the Contract is hereby amended and restated as follows:

 

“Section 8.06 Obligations/Liabilities Affected by Early Termination. The RECIPIENT shall not incur new obligations that otherwise would have been paid for using Grant funds after the receipt of notice as provided by Section 8.04 “Notice Required”, unless expressly permitted by the INSTITUTE in writing, and shall cancel as many outstanding obligations as possible. The INSTITUTE shall not owe any fee, penalty or other amount for exercising its right to terminate the Contract in accordance with Section 8.01. In no event shall the INSTITUTE be liable for any services performed, or costs or expenses incurred, after the Termination Date of the Contract. Early termination by either party shall not nullify obligations already incurred, including the RECIPIENT’s revenue sharing obligations as set forth in Attachment D, or the performance or failure to perform obligations prior to the Termination Date.”

 

18.  New Section 8.08 is hereby added to the Contract as follows:

 

4



 

“Section 8.08 Dispute Resolution for Non-Performance. All disputes, controversies or claims arising out of or relating to an Event of Default under Section 8.02(a) of this Agreement (“Disputed may be addressed by the three-step resolution process set forth:

 

1.              Step 1. First, the parties shall attempt in good faith to resolve the Dispute by negotiation and consultation between themselves (the “Initial Negotiation”) for a period of ten (10) days after notice from one party to the other parties to the Dispute (the “Initial Negotiation Period”).

 

2.              Step 2. Second, If the Dispute is not resolved by the Initial Negotiation during the Initial Negotiation Period, the Dispute may be escalated to the leadership of the respective parties (or to such other person of equivalent or superior position designated by such party in a written notice to the other parties, each a “Dispute Representative”) and each party will prepare a summary of the Dispute and that party’s proposed resolution for curing the Dispute (the “Escalation Brief”). Each party’s Escalation Brief will be submitted to the Dispute Representatives within five (5) days following the close of the Initial Negotiation Period. Within ten (10) business days of the delivery of the Escalation Notice, the Dispute Representatives of the parties shall initiate good faith negotiations to promptly resolve the Dispute.

 

Dispute Representative of INSTITUTE:

 

Chief Executive Officer, Cancer Prevention & Research Institute of Texas

 

 

 

Dispute Representative of RECIPIENT:

 

President, Mirna Therapeutics, Inc.

 

3.              Step 3. Third, if the Dispute is not resolved by the Dispute Representatives. then within ten (10) days after one party provides initial notice to the other party that it intends to seek resolution of the Dispute, the parties shall jointly submit the Dispute to nonbinding mediation (the “Mediation”) in accordance with the Commercial Mediation Procedures of the American Arbitration Association (“AAA”). The Mediation shall be conducted by an independent qualified mediator jointly selected by the parties to the Dispute from a list of three nominees presented by RECIPIENT, on the one hand, and three nominees presented by INSTITUTE on the other, provided that any mediator nominated shall have experience relevant to the Dispute. If the parties are unable to reach agreement as to the mediator from such nominees, then the mediator shall be selected from the roster of mediators maintained by the AAA having experience relevant to the Dispute using the AAA methodology for selection of mediators. The parties to the Dispute shall use all commercially reasonable efforts to promptly conclude the Mediation. The place of the Mediation shall be Austin, Texas. The expenses of the Mediation shall be borne equally by RECIPIENT, on one hand (and to the extent a party), and INSTITUTE on the other hand (and to the extent a party), provided that each shall pay for and bear the cost of its own experts, evidence and counsel’s fees. If the Dispute is not resolved in the Mediation, then the parties to the Dispute shall cause the mediator in such Mediation to promptly (and in any event within five (5) days after the conclusion of the Mediation) deliver to the Dispute Representatives (and in any event contemporaneous with the Escalation Notice), a written report prepared by such mediator describing the Dispute and the final positions communicated by each party, provided that such report shall not compromise the mediator’s duty of confidentiality.

 

5



 

Notwithstanding this three-step process, the Parties reserve their respective rights to seek any and all remedies at law the either might have including, but not limited to, compelling specific performance under the Agreement.

 

19.  Section 9.02(g), (h) and (i) of the Contract are hereby amended and restated as follows:

 

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

 

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

 

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

 

20.       Section 9.04 of the Contract is hereby amended and restated by adding new subsection (e) as follows:

 

(e)          Notwithstanding the foregoing, should the RECIPIENT engage in an initial public offering (IPO) for the public sale of shares in the company and should such an IPO occur, the RECIPIENT may make whatever acknowledgements or publications necessary and required for compliance with securities federal law and regulations including, but not limited to, requirements established by the U.S. Securities and Exchange Commission.

 

21.  Section 9.05 of the Contract is hereby amended and restated as follows:

 

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

 

22.  Section 9.09 of the Contract is hereby amended and restated as follows:

 

Section 9.09 Survival of Terms. Termination or expiration of this Contract for any reason will not release either party from any liabilities or obligations set forth in this Contract that: (1) the Parties have expressly agreed shall survive any such termination or expiration; or (2) remain to be performed or by their nature would be intended to be applicable following any such termination or expiration. Such surviving terms include, but are not limited to, Sections 2.13, 4.01,4.02, 4.05, 4.06, 8.02, 8.06, 8.08, 9.04, 9.05, 9.06, 9.07, 9.09, 9.14, 9.15, 9.16, 9.17, 9.18, and Attachment D.

 

6



 

23.       Section C1.01 of Attachment C (Certifications and Assurances) of the Contract is hereby amended and restated as follows:

 

Section C1.0l Demonstration of Matching Funds. Pursuant to TEX. HEALTH & SAFETY CODE § 102.255(d) and T.A.C. 25 § 703.11, at the time of Closing (as defined in Attachment D), RECIPIENT shall have has an amount of funds equal to one-half of the amount of the Grant to be disbursed each fiscal year of the Contract term dedicated to the same area of cancer research that is the subject of the Grant as demonstrated by the form incorporated herein to Attachment C. The INSTITUTE and RECIPIENT agree that RECIPIENT funds expended on the Project on or after the effective date of the Contract shall be counted towards the RECIPIENT’s matching requirement. The RECIPIENT shall update the matching funds certificationcomplete the verification annually until the matching requirement is fully met.for each fiscal year that Grant funds are disbursed. The update must be on or before the anniversary of the Effective Date.

 

24.       Section E1.02(b) and (c) of Attachment E (Reporting Requirements) of the Contract is hereby amended and restated as follows:

 

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

 

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

 

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

 

(2)        A statement of which of the funding sources identified pursuant to item (1) are Participating Funding Sources as defined in Attachment D.

 

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

 

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

 

 

Approved:

/s/ Jon Irvin

 

Approved:

/s/ Wayne R. Roberts

Mirna Therapeutics, Inc.

 

Wayne R. Roberts

Jon Irvin, Authorized Signing Official

 

CPRIT CEO

Date: September 1, 2015

 

Date: September 1, 2015

 

7




Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

        We consent to the reference to our firm under the caption "Experts" and to the use of our report dated July 15, 2015, in the Registration Statement (Form S-1) and related Prospectus of Mirna Therapeutics, Inc. for the registration of shares of its common stock.

/s/ Ernst & Young LLP

Austin, Texas
September 10, 2015