EXHIBIT 10.1

 

Text Marked By [* * *] Has Been Omitted Pursuant To A Request For Confidential
Treatment And Was Filed Separately With The Securities And Exchange Commission.

 

 
ASSET PURCHASE AGREEMENT
 
by and between
 
 
 
CytRx Corporation,
 
as Seller,
 
and
 
Orphazyme ApS,
 
as Buyer
 

 
May 13, 2011
 

 
 

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ASSET PURCHASE AGREEMENT
 
This Asset Purchase Agreement (this “Agreement”) is made as of May 13, 2011, by
and between CytRx Corporation, a Delaware corporation (“Seller”), and Orphazyme
ApS, a company organized under the laws of Denmark (“Buyer”).  Seller and Buyer
are each referred to individually as a “Party” and collectively as the
“Parties.”
 
RECITALS
 
WHEREAS, Seller owns certain pre-clinical and clinical data, intellectual
property rights and other assets relating to certain compounds, and Seller and
Buyer desire for Buyer to acquire such rights and assets upon the terms set
forth herein.
 
NOW, THEREFORE, the Parties agree as follows:
 
ARTICLE 1

 
DEFINITIONS
 
As used in this Agreement, the following terms shall have the meanings set forth
below:
 
“Acceptance of Filing Submission” means with respect to an MAA, the occurrence
of the earlier of: (a) the expiration of the period specified in Applicable Law
for any notice by the applicable Regulatory Authority that such MAA will not be
accepted for review, without Buyer, its Affiliates or their licensees having
received such notice from such Regulatory Authority; or (b) the receipt by
Buyer, its Affiliates or their licensees from the applicable Regulatory
Authority of notice that such MAA is accepted for review, provided that in any
case, if neither such period for acceptance  nor such notice is provided for in
Applicable Law, then the MAA shall be deemed “accepted” on the date such MAA was
submitted to the applicable Regulatory Authority.
 
“Acquired Patents” means the Patents set forth in Schedule 2.1(b)(i).
 
“Affiliate” means any corporation or other business entity controlled by,
controlling, or under common control with a Party to this Agreement.  For this
purpose, “control” means direct or indirect beneficial ownership of at least 50%
of the voting stock or income interest in such corporation or other business
entity, or such other relationship as, in fact, constitutes actual possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such corporation or other business entity, whether by
contract or otherwise.
 
 “ALS or Stroke Orphazyme Product” means an Orphazyme Product that is developed
or labeled for the treatment or prevention of amyotrophic lateral sclerosis or
stroke.
 
“Applicable Law” means applicable laws, statutes, rules, regulations and
guidances, including rules, regulations, guidances, guidelines or other
requirements of Regulatory Authorities or other Governmental Bodies, as in
effect from time to time in any jurisdiction.
 
“Assigned Contracts” has the meaning set forth in Section 2.1(c).
 

 
 

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“Assumed Liabilities” has the meaning set forth in Section 2.2.
 
“BIOREX Acquisition Agreement” has the meaning set forth in Section 2.3(a).
 
“BIOREX Acquisition Date” has the meaning set forth in Section 2.3(a).
 
“Books and Records” means, to the extent they relate to the Purchased Assets and
are maintained by Seller or its Affiliates as of the Closing Date, (a) all
books, records, files, documents, data, information and correspondence, whether
in electronic or tangible form, including all records with respect to supply
sources; (b) trial master files, all pre-clinical, clinical and process
development data and reports relating to research or development of the Products
or of any materials used in the research, development or manufacture of the
Products, including all raw data relating to clinical trials of the Products,
all case report forms relating thereto, all statistical programs developed (or
modified in a manner material to the use or function thereof) to analyze
clinical data; (c) all records, including vendor and supplier lists,
manufacturing records, sampling records, standard operating procedures, quality
control and release testing procedures and batch records, related to the
manufacturing process; (d) all data contained in laboratory notebooks relating
to the Products or relating to their biological, physiological, mechanical or
formula properties; (e) all drug master files, all adverse experience reports
and files related thereto (including source documentation), all periodic adverse
experience reports and all data contained in electronic data bases relating to
periodic adverse experience reports, all complaint databases and other
regulatory files; (f) all analytical and quality control data; (g) all
documentation relating to the Product Intellectual Property; and (h) all
correspondence, minutes or other communications with the FDA maintained by
Seller or any of its Affiliates as of the Closing Date, including all books,
records, files, documents, data, information and correspondence that Seller
acquired from  BIOREX Kutató és Fejlesztö Rt. pursuant to the BIOREX Acquisition
Agreement.
 
“Business Day” means any day other than a Saturday, Sunday or a statutory or
civic holiday in the State of California or Copenhagen, Denmark, or other day on
which banks in the State of California or Copenhagen, Denmark are permitted or
required to close by Applicable Law.
 
“Clinical Trial” means any controlled clinical study sponsored by Buyer, its
Affiliates or their licensees of an Orphazyme Product in humans designed to
establish the safety or efficacy of an Orphazyme Product.
 
“Closing” has the meaning set forth in Section 2.4.
 
“Closing Date” has the meaning set forth in Section 2.4.
 
“Closing Payment” has the meaning set forth in Section 2.5.
 
“Commercialize” means to manufacture, market, promote, distribute, import,
export, offer to sell or sell a drug.
 
“Competing Product” means any Product that is developed or labeled for the
treatment or prevention of lysosomal storage diseases.
 

 
 

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“Compound” means any of: (a) arimoclomol, iroxanadine and bimoclomol, as such
molecules are further described in Schedule 1; and (b) any other compound for
which its composition of matter is claimed under any of the Acquired Patents.
 
“Confidentiality Agreement” means the Mutual Nondisclosure Agreement dated
December 17, 2010 between Seller and Buyer.
 
“Disclosure Schedule” means the disclosure schedule delivered by Seller to Buyer
concurrently with the execution and delivery of this Agreement.
 
“EMA” means the European Medicines Agency or any successor thereto.
 
“Encumbrance” means any lien, pledge, security interest, mortgage, option,
license, right of first refusal or similar restriction.
 
“Excluded Liabilities” has the meaning set forth in Section 2.3.
 
“FDA” means the United States Food and Drug Administration or any successor
thereto.
 
“Governmental Authorization” means any approval, consent, license, permit, or
other authorization issued, granted, given, or otherwise made available by or
under the authority of any Governmental Body or pursuant to any Applicable Law.
 
“Governmental Body” means any Federal, state, provincial, local or foreign
government or any court, administrative or regulatory agency or commission or
other governmental authority or agency.
 
“IFRS” means International Financial Reporting Standards.
 
“IND” means any investigational new drug application (including any amendments
thereto) filed with the FDA pursuant to 21 C.F.R. § 312, Subpart B or any
comparable filings with any Regulatory Authority in any other jurisdiction,
including any application for a clinical trial authorization (CTA).
 
“Know-How” means all technical, scientific and medical information, data,
knowledge, know-how, inventions and trade secrets that are necessary or useful
for the development, registration, manufacturing, formulation, sale, use and
commercialization of the Compounds or Products, including any and all: (a)
research and development files, including information concerning the clinical,
toxicological and pharmacological properties of the Compound, (b) manufacturing
records, process development reports and files, batch documentation, master
batch records, quality control and release testing procedures, and
specifications, (c) adverse event reports and files, complaint databases and
other regulatory files, (d) pre-clinical and clinical studies and files,
including reports, case report forms and other materials or correspondence filed
with or received from a Governmental Body, investigator or contract research
organization, and (e) all technical, scientific and medical information, data,
knowledge, know-how, inventions and trade secrets that Seller acquired
from  BIOREX Kutató és Fejlesztö Rt. pursuant to the BIOREX Acquisition
Agreement.
 

 
 

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“Knowledge” means the actual knowledge of, with respect to any matter in
question, (i) in the case of Buyer, any officer or director of Buyer, and (ii)
in the case of Seller, David Haen, Benjamin Levin or any officer or director of
Seller.
 
“Legal Requirement” means any Federal, state, provincial, local or foreign
constitution, law, statute, rule or regulation.
 
“License Revenues” means, with respect to any license agreement entered into by
Buyer or its Affiliates and a Third Party within [***] after the Closing Date
that grants rights under the Purchased Assets to Commercialize an Orphazyme
Product,  (a) all upfront and other payments payable to Buyer or its Affiliates
in connection with the execution of such license agreement, (b) any development
or regulatory milestone payments payable to Buyer or its Affiliates prior to the
first commercial sale of an Orphazyme Product that is subject to any such
license agreement, and (c) license maintenance fees payable to Buyer or its
Affiliates; but excluding, without limitation, royalties, profit sharing and
other payments based on sales.
 
“MAA” means a marketing authorization application, new drug application or other
product registration application filed with any Regulatory Authority to obtain
approval to sell an Orphazyme Product in a country or region and all
supplements, variations and other amendments thereof.
 
“MAA Approval” means, with respect to each country or region, approval of the
applicable MAA by the applicable Regulatory Authority.
 
“Major European Union Country” means Germany, France, Italy, Spain or the United
Kingdom.
 
“Net Sales” means, in relation to an Orphazyme Product, the gross amounts
invoiced on sales of such Orphazyme Product by Buyer or any of its Affiliates or
their licensees to a Third Party purchaser in an arms-length transaction, less
the following customary deductions, to the extent specifically allocated to any
such Orphazyme Product and actually taken, paid, accrued or allowed:
 
(a)           normal and customary trade, cash and/or quantity discounts or
allowances, and credits allowed or paid, in the form of deductions actually
allowed or fees actually paid with respect to sales of such Orphazyme Product
(to the extent not already reflected in the amount invoiced) excluding
commissions for commercialization;
 
(b)           rebates, chargebacks, and discounts (or equivalent thereof)
actually granted to managed health care organizations, pharmacy benefit managers
(or equivalent thereof), federal, state/provincial, local or other governments,
or their agencies or purchasers, reimbursers, or trade customers;
 
(c)           excise taxes, use taxes, tariffs, sales taxes and customs duties,
and/or other government charges imposed on the sale of such Orphazyme Product to
the extent included in the price and separately itemized on the invoice price
but specifically excluding, for clarity, any income taxes assessed against the
income arising from such sale and including value add taxes, but only to the
extent that such value add taxes are not reimbursable or refundable;
 

 
 

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(d)           outbound freight, shipment and insurance costs to the extent
included in the price and separately itemized on the invoice price; and
 
(e)           retroactive price reductions, credits or allowances actually
granted upon claims, rejections or returns of such Orphazyme Product, including
for recalls or damaged goods and billing errors.
 
 “Non-ALS or Stroke Orphazyme Products” means an Orphazyme Product that is not
being developed, and is not labeled, for the treatment or prevention of
amyotrophic lateral sclerosis or stroke.
 
“Orphazyme Product” means any Product developed by Buyer, its Affiliates or
their licensees.
 
“Patent Assignment” means the Patent Assignment Agreement to be executed and
delivered at the Closing by Seller and Buyer, in the form attached hereto as
Exhibit A.
 
“Patents” means (a) all national, regional and international patents and patent
applications, including provisional patent applications, (b) all patent
applications filed either from such patents, patent applications or provisional
applications or from an application claiming priority from either of these,
including divisionals, continuations, continuations-in-part, provisionals,
converted provisionals, and continued prosecution applications, (c) any and all
patents that have issued or in the future issue from the foregoing patent
applications ((a) and (b)), including utility models, petty patents and design
patents and certificates of invention, (d) any and all extensions or
restorations by existing or future extension or restoration mechanisms,
including revalidations, reissues, re-examinations and extensions (including any
supplementary protection certificates and the like) of the foregoing patents or
patent applications ((a), (b) and (c)) and (e) any similar rights, including
so-called pipeline protection, or any importation, revalidation, confirmation or
introduction patent or registration patent or patent of additions to any of such
foregoing patent applications and patents ((a), (b), (c) and (d)).
 
“Person” means any individual, corporation, partnership, limited liability
company, trust, association, organization, or other entity or Governmental Body.
 
“Phase III Clinical Trial” means a controlled pivotal clinical study sponsored
by Buyer, its Affiliates or their licensees of an Orphazyme Product that is
prospectively designed to establish efficacy and safety for the purpose of
preparing and submitting an MAA.
 
“Proceeding” means any action, arbitration, investigation, litigation or suit
commenced, brought, conducted, or heard by or before, or otherwise involving,
any Governmental Body or arbitrator.
 
“Product” means any pharmaceutical formulation containing a Compound.
 
“Product Intellectual Property” means (i) the Acquired Patents and (ii) the
Know-How.
 
“Product Inventory” means all inventories of Compounds and Products in existence
as of the date of this Agreement, including samples, placebos, raw materials,
clinical trial materials and works in process owned by Seller or any of its
Affiliates.
 

 
 

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“Purchased Assets” has the meaning set forth in Section 2.1.
 
“Regulatory Authority” means any Governmental Body responsible for granting MAA
Approvals for drugs, including the FDA, EMA and any corresponding national or
regional regulatory authorities.
 
“Regulatory Approvals” means all Governmental Authorizations required by any
Governmental Body or under any Applicable Laws to own, use, develop or
manufacture the Purchased Assets, including all INDs.
 
“Regulatory Exclusivity” means any of: (a) a designation as a drug for rare
diseases or conditions under Sections 526 et seq. of the FDC Act or EC
Regulation No. 141/2000, as amended; (b) an exclusive right to sell pursuant to
Section 505(j)(4) of the FDC Act or the data exclusivity provisions under
Directives 2004/27/EC and 2001/83/EC and Regulation (EC) 726/2004, as amended;
or (c) the completion of pediatric studies requested by the FDA under Section
505A et seq. of the FDC Act or EU Regulation 1901/2006, as amended, and in each
of the foregoing, the equivalent rights in any other country.
 
“Royalties” has the meaning set forth in Section 2.8(a).
 
“Sales and Royalty Report” means a written report showing each of: (a) the Net
Sales of each Orphazyme Product during the reporting period; (b) the Royalties
payable with respect to such Net Sales; (c) the exchange rate(s) used to compute
such amounts; and (d) applicable withholding taxes.
 
“Tax” means any and all taxes, assessments, levies, tariffs, duties or other
charges, or impositions in the nature of a tax (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any applicable Governmental Body.
 
“Territory” means the world.
 
“Third Party” means any Person other than a Party or an Affiliate of a Party.
 
“Valid Claim” means a claim of an issued Acquired Patent that has not expired or
been revoked, held invalid or enforceable by an administrative agency, court or
other governmental agency or competent jurisdiction in a final and
non-appealable judgment (or judgment from which no appeal was taken within the
allowable time period).
 
ARTICLE 2
 
ASSETS TO BE PURCHASED
 
2.1           Purchased Assets.  Seller hereby sells, conveys, assigns,
transfers and delivers to Buyer free and clear of all Encumbrances (except for
the Encumbrances described on Schedule 2.1(a)), and Buyer hereby purchases and
acquires from Seller, all right, title and interest in and to the following (the
“Purchased Assets”):
 

 
 

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(a)           Product Inventory;
 
(b)           Product Intellectual Property;
 
(c)           all contracts relating to the Purchased Assets that are set forth
on Schedule 2.1(c) (the “Assigned Contracts”);
 
(d)           Books and Records;
 
(e)           Regulatory Approvals;
 
(f)           all present and future rights, claims, credits, causes of action,
rights of indemnity, warranty rights, guarantees, rights of contribution, rights
to refund, rights of recovery and rights of setoff against Third Parties to the
extent related to the Purchased Assets; and
 
(g)           all goodwill associated with the Purchased Assets.
 
2.2           Assumed Liabilities. Buyer hereby assumes and agrees to pay,
perform and discharge when due, only the liabilities, obligations or commitments
arising out of any Assigned Contract to the extent incurred after the Closing
Date, except for those liabilities specifically excluded in Section 2.3(c) and
(e) (the “Assumed Liabilities”) (and, for the avoidance of doubt, not including
any liability arising out of or relating to a breach of such contract which
occurred prior to the Closing).
 
2.3           Excluded Liabilities. Notwithstanding any other provision of this
Agreement or any other writing to the contrary, Buyer does not assume, and shall
not have any obligation to pay, perform or discharge, any liability of Seller
other than the Assumed Liabilities, all of which shall be retained by and remain
liabilities, obligations and commitments of Seller (collectively, the “Excluded
Liabilities”).  Excluded Liabilities shall include:
 
(a)           any liabilities, obligations or commitments arising out of or
relating to that certain Asset Sale and Purchase Agreement by and among BIOREX
Kutató és Fejlesztö Rt., BRX Research and Development Company Ltd and Seller
(the “BIOREX Acquisition Agreement”) dated October 4, 2004 (the “BIOREX
Acquisition Date”);
 
(b)           any liabilities, obligations or commitments arising out of or
relating to the ownership or use of the Purchased Assets prior to the Closing
Date;
 
(c)           any obligations with respect to the employment of any individual
who is a party to any confidentiality or non-disclosure agreement listed on
Schedule 2.1(c);
 
(d)           any liabilities and obligations arising out of or relating to the
return of Products or any product liability, breach of warranty or similar claim
for injury or other harm to person or property, regardless of when asserted,
that arises out the any clinical study or other development, use or misuse of
Products supplied by, for or on behalf of Seller prior to the Closing Date;
 
(e)           any obligations, if any, to make any payments to the ALS
Charitable Remainder Trust dated August 28, 2006 (“ALSCT”) in accordance with
that certain Royalty Agreement dated August 28, 2006 between Seller and ALSCT as
amended by that certain letter agreement dated August 13, 2009 between Seller
and ALSCT, on any sums payable by Buyer to Seller pursuant to this Agreement;
 

 
 

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           (f)           except to the extent specifically provided in Section
2.2, all other liabilities, obligations and commitments, regardless of when they
are asserted, billed or imposed or when they become due or payable, of whatever
kind and nature, primary or secondary, direct or indirect, absolute or
contingent, known or unknown, whether or not accrued, arising out of or relating
to, directly or indirectly, the Products or the Purchased Assets to the extent
such liabilities, obligations or commitments are attributable to any action,
omission, performance, non-performance, event, condition or circumstance prior
to the Closing Date.

2.4           Closing.  The closing of the transactions contemplated by this
Agreement (the “Closing”) shall take place on the date hereof, or such other
date as Buyer and Seller may mutually determine (the “Closing Date”).  Title to,
ownership of, control over and risk of loss of the Purchased Assets shall pass
to Buyer effective as of 12:01 a.m. on the Closing Date unless expressly
provided otherwise herein.  The Parties shall, at Buyer’s cost and risk, within
a reasonable period of time after the Closing Date, make arrangements for the
shipping, storage or disposal (upon written instructions from the Buyer and at
Buyer’s cost) of the Purchased Assets.
 
2.5           Closing Payment.   At the Closing, Buyer shall deliver to Seller
by wire transfer to an account specified by Seller, in immediately available
funds, an amount equal to the sum of $[***] (the “Closing Payment”).
 
2.6           Development and Regulatory Milestone Payments. Buyer shall also
pay the following development and regulatory milestone payments:
 
(a)           With respect to Non-ALS or Stroke Orphazyme Products and subject
to the terms set forth in subsection (b) below, Buyer shall make the following
non-refundable cash payments to Seller following the achievement of the
corresponding milestone event by Buyer, its Affiliates or their licensees:
 
Milestone Event
First Non-ALS or Stroke Orphazyme Product Milestone Payment
Second Non-ALS or Stroke Orphazyme Product Milestone Payment
First dosing in the first Clinical Trial
$[***]
$[***]
First dosing in the first Phase III Clinical Trial
$[***]
$[***]
MAA Approval by the EMA or the applicable Regulatory Authority in a Major
European Union Country
$[***]
$[***]
MAA Approval in the United States
$[***]
$[***]
MAA Approval in Japan
$[***]
$[***]

 
 

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(b)           Buyer shall pay to Seller the amounts set forth under the column
entitled “First Non-ALS or Stroke Orphazyme Product Milestone Payment” when the
first Non-ALS or Stroke Orphazyme Product developed by Buyer, its Affiliates or
their licensees achieves the corresponding milestone event. Buyer shall pay to
Seller the amounts set forth under the column entitled “Second Non-ALS or Stroke
Orphazyme Product Milestone Payment” when the second Non-ALS or Stroke Orphazyme
Product developed by Buyer, its Affiliates or their licensees achieves the
corresponding milestone event. A Non-ALS or Stroke Orphazyme Product will not be
considered the second Non-ALS or Stroke Orphazyme Product for purposes of the
preceding sentence unless it contains a different Compound than the first
Non-ALS or Stroke Orphazyme Product. The amounts payable under the column
entitled “First Non-ALS or Stroke Orphazyme Product Milestone Payment” will be
paid only once. The amounts payable under the column entitled “Second Non-ALS or
Stroke Orphazyme Product Milestone Payment” will be paid only once.  For the
avoidance of doubt, milestones achieved by Third Parties under
investigator-sponsored studies shall not be deemed achieved by Buyer, its
Affiliates or their licensees, even if Buyer provides product under a material
transfer agreement to such Third Party.
 
(c)           With respect to each ALS or Stroke Orphazyme Product, Buyer shall
make the following non-refundable cash payments to Seller following the
achievement of the corresponding milestone event by Buyer, its Affiliates or
their licensees:
 
Milestone Event
Milestone Payment
First dosing in the first Phase III Clinical Trial
$[***]
Acceptance of Filing Submission by EMA
$[***]
MAA Approval by the EMA or the applicable Regulatory Authority in a Major
European Union Country
$[***]
Acceptance of Filing Submission by FDA
$[***]
MAA Approval in the United States
$[***]
MAA Approval in Japan
$[***]

Each milestone payment shall be payable only once for each ALS or Stroke
Orphazyme Product irrespective of the number of times the milestone events shall
have been achieved by such ALS or Stroke Orphazyme Product. A subsequent ALS or
Stroke Orphazyme Product is eligible to achieve the milestone payments listed
above if: (i) it contains a Compound that is different than other ALS or Stroke
Orphazyme Products previously achieving such milestone; or (ii) it contains the
same Compound as another ALS or Stroke Orphazyme Product previously achieving
such milestone, but such subsequent ALS or Stroke Orphazyme Product is for a
different indication (i.e. ALS or Stroke) than such ALS or Stroke Orphazyme
Product previously achieving such milestone. Notwithstanding the foregoing, an
ALS or Stroke Orphazyme Product is eligible to achieve the milestone payments
listed above even if such product contains a Compound that was used to develop a
Non-ALS or Stroke Orphazyme Product that achieved one or more milestone payments
pursuant to subsections (a) and (b) above.  For the avoidance of doubt,
milestones achieved by Third Parties under investigator-sponsored studies shall
not be deemed achieved by Buyer, its Affiliates or their licensees, even if
Buyer provides product under a material transfer agreement to such Third Party.

 
 

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(d)           Buyer shall provide Seller with written notice of the achievement
of each milestone and pay to Seller the corresponding milestone payment within
30 days after such milestone is achieved.
 
2.7           Sales Milestones.  Within 30 days after the achievement by Buyer,
its Affiliates or their licensees in any calendar year of aggregate Net Sales of
Orphazyme Product(s) reaching the sales milestone levels set forth below, Buyer
shall pay to Seller the additional non-refundable amounts set forth below:
 
Sales Milestone (Annual Aggregate Net Sales)
Milestone Payment
Aggregate annual Net Sales > $[***]
$[***]
Aggregate annual Net Sales > $[***]
$[***]
Aggregate annual Net Sales > $[***]
$[***]

Each milestone payment shall be payable only once irrespective of the number of
times the milestone events shall have been achieved.  Multiple milestone
payments may be payable with in a particular calendar year if more than one
milestone event is achieved in that calendar year.

2.8           Royalties.
 
(a)           Buyer shall pay Seller royalties (the “Royalties”) equal to the
following percentages of Net Sales:
 
(i)           [***]% on Net Sales of all Orphazyme Products that are labeled and
prescribed for the treatment or prevention of amyotrophic lateral sclerosis or
stroke; and
 
(ii)           [***]% on Net Sales of all other Orphazyme Products.
 
(b)           Upon MAA Approval of an ALS or Stroke Orphazyme Product, Buyer and
Seller shall establish procedures for the calculation of Royalties with respect
to such product in accordance with subsection (a) above.  Any such procedures
shall include the use of Third Party prescription data.
 
2.9           Royalty Term.  Royalties shall be paid on a country-by-country
basis and Orphazyme Product by Orphazyme Product basis until the later of: (i)
the expiration of all Valid Claims claiming the composition of matter or use of
such Orphazyme Product for the approved indication in such country, (ii) the
expiration of all Regulatory Exclusivity for such approved indications in such
country for such Orphazyme Product; or (iii) [***] from the date of MAA Approval
in such country for such Orphazyme Product (the “Royalty Term”).  The Royalties
payable under Section 2.8 shall be reduced by [***]% on a country-by-country
basis and Orphazyme Product by Orphazyme Product basis for the remainder of the
Royalty Term upon the expiration of all Valid Claims claiming the composition of
matter or use of such Orphazyme Product for the approved indication in such
country and the expiration of all Regulatory Exclusivity for such approved
indications in such country for such Orphazyme Product. The Royalties payable
under Section 2.8 shall be reduced by [***]% on a country-by-country basis and
Orphazyme Product by Orphazyme Product basis for the remainder of the Royalty
Term if, at the time of the first commercial sale of an Orphazyme Product in a
country, there are no Valid Claims claiming the composition of matter or use of
such Orphazyme Product for the approved indication in such country and there is
no Regulatory Exclusivity for such approved indications in such country for such
Orphazyme Product.
 

 
 

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2.10           Third Party IP. If Buyer obtains a license or immunity from suit
from any Third Party that is reasonably necessary for Buyer, its Affiliates or
any of their licensees to exercise or use the rights granted to Buyer herein in
respect of any Orphazyme Product in any country or to develop or Commercialize
Orphazyme Products in any country, and Buyer, its Affiliates or any of their
licensees pays any Third Party any up-front fee, milestone, royalty, or other
payment (each, a “Third Party Payment”) in consideration of obtaining such
license or immunity from suit, Buyer shall have the right to offset up to [***]%
of such Third Party Payments that are allocable to an Orphazyme Product against
Royalties payable to Seller under Section 2.8 in respect of sales of such
Orphazyme Product; provided, that such offset shall not exceed [***]% of the
Royalties otherwise payable in respect of sale of such Orphazyme Product; and
provided further that any portion of the [***]% of such Third Party Payments
that may be offset against Royalties payable to Seller under Section 2.8 may be
applied against Royalties to be paid in respect of such Orphazyme Product in
subsequent periods until fully depleted. Not less than 20 Business Days prior to
entering into any agreement providing for payment of Third Party Payments, Buyer
shall send Seller a written notice describing in reasonable detail the terms of
the proposed agreement and reasons for entering into such agreement.  If
requested by Seller, the Parties shall then discuss such terms and Buyer shall
consider in good faith any views expressed by Seller.  For purposes of clarity,
any such license or immunity with respect to any Orphazyme Product will not be
deemed necessary and will not qualify as a Third Party Payment under this
Section 2.10 if said license or immunity is required only for combinations or
for formulations, delivery routes or methods of administration that were not
used by Seller and will not be subject to such offset unless agreed to in
writing by the Parties.
 
2.11           Royalty Adjustment for Generic Competition. In the event that
there is Generic Competition (as defined below) with respect to an Orphazyme
Product in any country during the Royalty Term, then the Royalties payable for
Net Sales in respect of such Orphazyme Product in such country shall be reduced
by [***]% following the first occurrence of Generic Competition in such country
and for long as Generic Competition prevails in such country.  In this Section,
“Generic Competition” means the initiation of commercial sales of a generic
version of an Orphazyme Product in a country.
 
2.12           Sales and Royalty Report. Within 60 days after each quarter
during the Royalty Term, Buyer will provide to Seller a Sales and Royalty
Report, together with a payment of all Royalties payable on Net Sales during
such quarter.
 
2.13           Audit of Sales and Royalty Report. Seller shall have the right
for a period of three years after receiving any Sales and Royalty Report to
appoint a U.S. or internationally-recognized independent accounting firm (which
is reasonably acceptable to Buyer) to inspect the relevant records of Buyer or
its Affiliates to verify such Sales and Royalty Report.  Buyer and its
Affiliates shall make their records available for inspection by the accounting
firm during regular business hours at such place or places where such records
are customarily kept, upon receipt of reasonable advance notice from Seller,
solely to verify the accuracy of the Sales and Royalty Reports.  Such inspection
right shall not be exercised more than once in any year. Seller shall pay for
such audits, as well as its own expenses associated with enforcing its rights
with respect to any payments hereunder, except that in the event there is any
upward adjustment in aggregate amounts payable for any year shown by such audit
of more than 5% of the amount paid, Buyer shall pay for such audit.
 

 
 

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2.14           Non-Royalty Licensing Fee.  With respect to any license agreement
entered into by Buyer or its Affiliates and a Third Party within 18 months after
the Closing Date that grants rights under the Purchased Assets to Commercialize
an Orphazyme Product, Buyer will pay Seller a fee equal to [***]% of any License
Revenues (the “Non-Royalty Licensing Fee”).  Buyer shall provide Seller with a
written notice within 30 days of the entry by Buyer or its Affiliates into each
license agreement of an Orphazyme Product, and shall pay to Seller any
Non-Royalty Licensing Fee within 30 days of receipt by Buyer or its Affiliates
of any License Revenues.  The Non-Royalty Licensing Fee will be in addition to,
and not in lieu of, the other any other payments Buyer is required to pay to
Seller with respect to any such licensed Orphazyme Product under this Agreement.
 
2.15           Disclaimer. BUYER DISCLAIMS ANY REPRESENTATION OR WARRANTY,
EITHER EXPRESS OR IMPLIED, THAT IT WILL BE ABLE TO SUCCESSFULLY COMMERCIALIZE
ANY ORPHAZYME PRODUCT OR, IF COMMERCIALIZED, THAT ANY PARTICULAR NET SALES LEVEL
OF SUCH PRODUCT WILL BE ACHIEVED. BUYER HEREBY DISCLAIMS ANY REPRESENTATION OR
WARRANTY, EITHER EXPRESS OF IMPLIED, THAT IT WILL USE DILIGENT OR ANY EFFORTS TO
REACH THE MILESTONES AND NET SALES LEVELS SET FORTH IN THIS AGREEMENT. THE
PARTIES AGREE THAT BUYER HAS ABSOLUTE DISCRETION WITH RESPECT TO WHICH COMPOUNDS
OR PRODUCTS IT PURSUES, IF ANY, AND THAT BUYER IS UNDER NO OBLIGATION TO PURSUE
ANY ALS OR STROKE ORPHAZYME PRODUCTS. THE PARTIES AGREE THAT THE BUYER MAY, IN
ITS SOLE DISCRETION, CEASE ANY FURTHER WORK OR EXPENDITURE ON ANY OF THE PRODUCT
INTELLECTUAL PROPERTY, AND MAY, AT ITS SOLE DISCRETION, ABANDON, NOT FURTHER
PURSUE OR RENEW THE SAME.
 
2.16           Currency; Holidays.  All currency amounts set forth or referred
to in this Agreement are in United States Dollars.  All payments under this
Agreement shall be made in United States Dollars to the credit of such bank
account as may be designated in writing by the Party receiving payment.  Any
payments which fall due on a date that is a legal holiday in California may be
made on the next following day that is not a legal holiday in California.
 
2.17           Taxes. Seller will pay any and all Taxes levied on account of any
payments made to it under this Agreement.  If any Taxes are required to be
withheld by Buyer, Buyer will: (a) deduct such Taxes from the payment made to
Seller; (b) timely pay the Taxes to the proper taxing authority; (c) send proof
of payment to Seller; and (d) reasonably assist Seller in its efforts to obtain
a credit for such Tax payment.  Each Party agrees to reasonably assist the other
Party in lawfully claiming exemptions from and/or minimizing such deductions or
withholdings under double taxation laws or similar circumstances.
 
2.18           Sales, Use and Other Taxes.  All transfer, documentary, sales,
use, valued-added, gross receipts, stamp, registration or other similar transfer
taxes (collectively, “Transfer Taxes”) incurred in connection with the transfer
and sale of the Purchased Assets as contemplated by the terms of this Agreement,
including all recording or filing fees and other similar costs of Closing, that
may be imposed, payable, collectible or incurred, shall be borne by Seller.  The
Parties hereto agree to reasonably cooperate with each other to claim any
applicable exemption from, or reduction of, any applicable Transfer Taxes.
 

 
 

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2.19           Assignment of Purchased Assets; Consents of Third
Parties.  Notwithstanding anything in this Agreement to the contrary, (a) this
Agreement shall not constitute an agreement to sell, transfer, assign or deliver
to Buyer any Purchased Assets if such Purchased Assets are not transferable
under applicable laws or regulations, and (b) this Agreement shall not
constitute an agreement to assign any asset or claim or right or any benefit
arising under or resulting from such asset if an attempted assignment thereof,
without the consent of a third party, would constitute a breach or other
contravention of the rights of such third party, or would be ineffective with
respect to any party to an agreement concerning such asset.  If any transfer or
assignment by Seller of any Purchased Assets is limited by the immediately
preceding sentence, or any assumption by Buyer of, any interest in, or
liability, obligation or commitment under any asset requires the consent of a
third party and such consent has not been obtained, then such transfer,
assignment or assumption shall be subject to any such consent or required
authorization being obtained.  Seller shall use commercially reasonable efforts
to obtain such consent or authorization as promptly as practicable, and Seller
and Buyer shall cooperate in any lawful and commercially reasonable mutually
agreeable arrangement under which (x) Buyer shall obtain (without infringing
upon the legal rights of such third party or outside party or violating any
applicable laws) the economic claims, right and after-Tax benefits under the
asset, claim or right with respect to which the consent or authorization has not
been obtained in accordance with this Agreement and (y) Buyer shall assume any
related economic burden with respect to the asset, claim or right with respect
to which the consent or authorization has not been obtained (including any
related Assumed Liability), at no additional costs to Buyer.
 
ARTICLE 3
 
REPRESENTATIONS OF SELLER
 
Seller represents to Buyer as follows as of the date of this Agreement:
 
3.1           Incorporation and Good Standing.  Seller is duly organized,
validly existing, and in good standing under the laws of the State of Delaware,
with all requisite power and authority to own or use the Purchased
Assets.  Seller is duly qualified to do business as a foreign entity and is in
good standing under the laws of each state in which either the ownership or use
of the properties owned or used by it, or the nature of the activities conducted
by it, requires such qualification.
 
3.2           Authority; Enforceability; No Conflict.
 
(a)           Seller has the requisite power and authority to enter into this
Agreement and the Patent Assignment and to consummate the transactions
contemplated hereby and thereby.  The execution and delivery of this Agreement
and the Patent Assignment by Seller and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by
Seller.  This Agreement has been duly executed and delivered by Seller and, upon
the execution and delivery by Seller of the Patent Assignment, and further
assuming the due authorization, execution and delivery of this Agreement and the
Patent Assignment by Buyer, this Agreement and the Patent Assignment will
constitute the legal, valid and binding obligations of Seller, enforceable
against it in accordance with their terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and other similar
laws affecting creditors’ rights generally and to general principles of equity
regardless of whether considered in a proceeding in equity or at law.
 

 
 

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(b)           Neither the execution and delivery of this Agreement nor the
Patent Assignment nor the consummation or performance of any of the transactions
contemplated hereby nor thereby by Seller will:  (i) violate any provision of
Seller’s Certificate of Incorporation or Bylaws; (ii) violate any Legal
Requirement applicable to Seller or the transactions contemplated hereby in any
material respect; or (iii) result in the creation of any Encumbrance upon any of
the Purchased Assets pursuant to the terms or provisions of, or will result in
the breach or violation in any material respect of, or constitute a default
under, any Assigned Contract.
 
(c)           Seller is not or will not be required to give any notice to any
Governmental Body or obtain any Governmental Authorization in connection with
the execution and delivery of this Agreement or the Patent Assignment or the
consummation or performance of any of the transactions contemplated hereby or
thereby.
 
(d)           Except as set forth on Schedule 3.2(d), no notice to, declaration,
filing or registration with, or authorization, consent, approval from any other
third party is required to be made or obtained by Seller in connection with the
execution and delivery of this Agreement or the Patent Assignment or the
consummation or performance of any of the transactions contemplated hereby or
thereby.
 
3.3           Title of Purchased Assets.  Seller has good and transferable title
to each of the Purchased Assets, free and clear of all Encumbrances.
 
3.4           Compliance With Legal Requirements; Governmental
Authorizations.  Seller is, and has since the BIOREX Acquisition Date been, in
compliance in all material respects with all Legal Requirements applicable to
the Purchased Assets.
 
3.5           No Proceedings; Orders.  There is no pending Proceeding that has
been commenced (a) relating to the Purchased Assets or (b) that challenges, or
that may have the effect of preventing, delaying, making illegal, or otherwise
interfering with, any of the transactions contemplated hereby.  To the Knowledge
of Seller, no such Proceeding has been threatened.  There is no order issued by
any Governmental Body to which any Purchased Asset is subject.
 
3.6           Contracts.
 
(a)           Except for the Assigned Contracts, Seller is not a party to or
bound by any oral or written contract, lease, license, indenture, agreement,
commitment or any other legally binding arrangement (including broker, agency,
supply and distribution agreements), that is used or held for use in connection
with the Purchased Assets.  Except for the Assigned Contracts, there are no
other oral or written contracts, leases, licenses, indentures, agreements,
commitments or any other legally binding arrangements (including broker, agency,
supply and distribution agreements) relating to the Purchased Assets.
 

 
 

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(b)           All Assigned Contracts are valid, binding and in full force and
effect and will continue to be legal, valid, binding and enforceable immediately
following the Closing in accordance with the terms thereof as is in effect
immediately prior to the Closing.  Seller has performed all obligations required
to be performed by it to date under the Assigned Contracts, and it is not (with
or without the lapse of time or the giving of notice, or both) in breach or
default thereunder and, to the Knowledge of Seller, no other party to any
Assigned Contract is (with or without the lapse of time or the giving of notice,
or both) in material breach or default in any respect thereunder. Seller has not
received any notice of the intention of any party to terminate any Assigned
Contract. Complete and correct copies of all Assigned Contracts and amendments
thereto have been made available to Buyer.
 
(c)           Except as set forth on Schedule 3.6(c), none of the recipients
under any of the material transfer agreements listed on Schedule 2.1(c) have any
right, title or interest in or to the Product Intellectual Property.
 
(d)           The Purchased Assets do not include any confidential information
disclosed to Seller pursuant to any of the confidentiality and non-disclosure
agreements listed on Schedule 2.1(c).
 
(e)           The molecule group NP 51 described on Exhibit A to that certain
Agreement dated February 10, 2006 between N-GENE Research Laboratories Inc. US
and Seller (the “N-GENE Agreement”) does not cover any Compound. The N-GENE
Agreement does not restrict Seller’s right to use any Compound and does not give
N-GENE any rights to any Compound.

3.7           Intellectual Property.
 
(a)           Seller or an Affiliate of Seller is the owner of all right, title
and interest in and to, or otherwise has the right to use, the Product
Intellectual Property free and clear of any Encumbrance.  No Person other than
Seller and its Affiliates, including any current or former employee or
consultant of Seller and its Affiliates, has any proprietary, commercial or
other interest in any of the Product Intellectual Property.  Details of the
registrations and applications relating to the Acquired Patents are set forth in
Schedule 2.1(b)(ii) hereto.
 
(b)           Except as set forth in Schedule 3.7(b) hereto, no Proceeding is
pending or, to the Knowledge of Seller, threatened against Seller or its
Affiliates based upon, challenging or seeking to deny or restrict the use of any
Product Intellectual Property or alleging that the development, manufacture,
marketing, use, sale, import, export of the Products infringes, misappropriates,
violates, dilutes or otherwise constitutes unauthorized use of the intellectual
property rights of any Third Party, and, to the Knowledge of Seller, there is no
reasonable basis for any such claim.
 
(c)            To the Knowledge of Seller, no Third Party is engaging in any
activity that infringes or misappropriates the Product Intellectual Property.

 
 
 

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(d)           Except as set forth in Schedule 3.7(d) hereto, Seller has not
received any written notice of any claim of invalidity or unenforceability of
the Acquired Patents in the Territory. None of the Acquired Patents are involved
in any litigation, reissue, interference, reexamination, or opposition, and to
the Knowledge of Seller, no inequitable conduct that would be in violation  of
37 C.F.R. § 1.56, or its foreign equivalent, if applicable, has been committed
in the prosecution of any of the Acquired Patents.
 
(e)           All necessary filing, issuance, registration, and maintenance fees
due from Seller with respect to the registered Product Intellectual Property in
the Territory have been paid in a timely manner.  All documents, certificates
and other materials required to maintain such pending, issued or registered
intellectual property rights within the Product Intellectual Property owned by
Seller or its Affiliates have been filed in a timely manner with the relevant
Governmental Bodies.
 
(f)           Except as set forth in Schedule 3.7(f) hereto, Seller has not
granted any licenses to the Product Intellectual Property to a Third Party.
Except as set forth in Schedule 3.7(f) hereto, there are no existing agreements,
options, commitments, or rights with, of or to any Person to acquire or obtain
any rights to, any of the Product Intellectual Property. Except as set forth in
Schedule 3.7(f) hereto, Seller nor its Affiliates have entered into any
agreement (i) granting any Person the right to bring infringement actions with
respect to, or otherwise to enforce rights with respect to, any of the Product
Intellectual Property, or (ii) expressly agreeing to indemnify any Person
against any charge of infringement of any Product Intellectual Property.
 
(g)           Seller or its Affiliates have the unrestricted right to assign,
transfer and/or grant to Buyer all rights in the Product Intellectual Property,
in each case free of any rights or claims of any Person and without obligations
to pay any royalties, license fees or other amounts to any Person.
 
(h)           The Acquired Patents set forth on Schedule 2.1(b)(i) constitute
all of the Patents owned or controlled by Seller or its Affiliates that claim or
disclose any of arimoclomol, iroxanadine and bimoclomol, as such molecules are
further described in Schedule 1, or any methods of manufacturing or using such
molecules.

3.8           Brokers or Finders.  Seller has not retained any agent, broker,
investment banker, financial advisor or other firm or Person that is or will be
entitled to any brokers’ or finders’ fee or any other commission or similar fee
in connection with any of the transactions contemplated by this Agreement.
 
3.9           Disclosure. Seller has made available to Buyer all material
information of Seller and its Affiliates concerning safety, efficacy, side
effects or toxicity related to the Products (in animals or humans), associated
with or derived from any pre-clinical or clinical use, studies, investigations
or tests of the Products (in animals or humans) in all indications for the
Products that have been studied by Seller, whether or not determined to be
attributed to the Products.
 
3.10           Regulatory Approvals.
 
(a)           A complete and accurate list of all Regulatory Approvals used in
connection with the Purchased Assets is set forth on Schedule 3.10(a).  Seller
has made available to Buyer complete and accurate copies of all such Regulatory
Approvals listed on Schedule 3.10(a).
 

 
 

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(b)           Except as disclosed on Schedule 3.10(b): (i) all Regulatory
Approvals listed on Schedule 3.10(a) are valid and in full force and effect, and
no other Regulatory Approvals are required for the lawful use of the Purchased
Assets as they are currently being used; (ii) no consent of or notice to any
Governmental Body is required in respect of any such Regulatory Approval by
reason of the transactions contemplated by this Agreement; (iii) no such
Regulatory Approval will be revoked, terminated prior to its normal expiration
date or not renewed solely as a result of the consummation of the transactions
contemplated by this Agreement; (iv) Seller is in compliance in all material
respects with such Regulatory Approvals and is not in violation of, or default
under, any such Regulatory Approvals; (v) to the Knowledge of Seller, no event
has occurred or circumstance exists that, with or without notice or the passage
of time or both, could (A) constitute or result in a violation of or failure to
comply with any such Regulatory Approval or (B) result in the revocation,
withdrawal, suspension, cancellation, termination or material modification of
any such Regulatory Approval; (vi) Seller has not received written or oral
notice from any Governmental Body or other Person regarding (A) any actual,
alleged or potential violation of or failure to comply with any such Regulatory
Approval or (B) any actual, proposed or potential revocation, withdrawal,
suspension, cancellation, termination or modification of any such Regulatory
Approval; and (vii) during the past 5 years Seller has duly filed on a timely
basis all applications that were required to be filed for the renewal of such
Regulatory Approvals, and has duly made on a timely basis all other filings
required to have been made in respect of such Regulatory Approvals and all such
applications and filings were true, complete and correct in all material
respects.
 
3.11           Regulatory Compliance.  To the extent applicable to any of the
Products in the Territory:
 
(a)           Seller has made available to Buyer copies of all material reports
of inspectors or officials from any Governmental Body of any event or condition
requiring attention or correction or that is objectionable or otherwise contrary
to applicable Legal Requirements.
 
(b)           Since the BIOREX Acquisition Date, and except as set forth on
Schedule 3.11(b), the Products have been developed, manufactured, labeled,
stored, tested and distributed in compliance with all applicable Legal
Requirements.
 
(c)           All preclinical trials and clinical trials, if any, conducted by
or, to the Knowledge of Seller, on behalf of Seller, with respect to the
Products have been, and are being, conducted in compliance in all material
respects with the applicable requirements of Good Laboratory Practice and Good
Clinical Practice requirements contained in 21 C.F.R. Part 58 and Part 312 and
all applicable requirements relating to protection of human subjects contained
in 21 C.F.R. Parts 50, 54, and 56, and all similar Legal Requirements.
 
(d)           With respect to the Products, to the Knowledge of the Seller, all
manufacturing operations conducted for the benefit of Seller with respect to the
Products have been and are being conducted in compliance in all material
respects with the FDA’s current Good Manufacturing Practice regulations for drug
products, including 21 C.F.R. Parts 210 and 211, and all similar Legal
Requirements.
 

 
 

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(e)           Since the BIOREX Acquisition Date, none of the Products has been
recalled, suspended or discontinued as a result of any action by the FDA or any
other Governmental Body within the Territory, by Seller or by any licensee,
distributor or marketer of the Products.
 
(f)           Since the BIOREX Acquisition Date, Seller has not received any
notice that the FDA or any other Governmental Body has commenced, or threatened
to initiate, any action to withdraw approval or request the recall of any of the
Products, or commenced, or threatened to initiate, any action to enjoin or place
restrictions on the production of any of the Products.
 
(g)           To the Knowledge of Seller, there are no facts, circumstances or
conditions that would be sufficient to presently, or solely with the passage of
time in the ordinary course of business, provide a reasonable basis for a
recall, suspension or discontinuance of any of the Products.
 
(h)           With respect to the Products, to the Knowledge of Seller, Seller
has not committed any act, made any statement or failed to make any statement
that would reasonably be expected to provide a basis for the FDA to invoke its
policy with respect to “Fraud, Untrue Statements of Material Facts, Bribery, and
Illegal Gratuities” set forth in 56 Fed. Reg. 46191 (September 10, 1991) and any
amendments thereto, or give rise to a claim of false advertising under the
Trademark Act of 1946 (Lanham Act), as amended (15 USC §§
1114-27).  Additionally, to the Knowledge of Seller, none of Seller or any of
its officers, key employees or agents involved with respect to the Purchased
Assets has been convicted of any crime or engaged in any conduct that has
resulted, or would reasonably be expected to result, in debarment under 21
U.S.C. Section 335a or any similar state law or regulation under 42 U.S.C.
Section 1320a-7.
 
(i)           Set forth on Schedule 3.11(i) is a complete and accurate list of
all clinical trials involving a Compound that have been initiated since the
BIOREX Acquisition Date, whether or not such trials are still ongoing, which
list shall include all investigator-initiated and Seller-sponsored clinical
trials.
 
3.12           Disclaimer of Other Representations and Warranties. EXCEPT FOR
THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT (INCLUDING THE
SCHEDULES TO THIS AGREEMENT), SELLER MAKES NO OTHER REPRESENTATION OR WARRANTY
TO BUYER, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, AND SELLER DISCLAIMS ANY SUCH
REPRESENTATION OR WARRANTY, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO BUYER
OR ANY OTHER PERSON OF ANY DOCUMENTATION OR OTHER INFORMATION BY THE OR ANY
OTHER PERSON WITH RESPECT TO ANY ONE OR MORE OF THE FOREGOING.
 
ARTICLE 4

 
REPRESENTATIONS OF BUYER
 
 
Buyer represents to Seller as follows as of the date of this Agreement:
 

 
 

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4.1           Incorporation and Good Standing.  Buyer is duly organized, validly
existing, and in good standing under the laws of Denmark.  Buyer is duly
qualified to do business as a foreign entity and is in good standing under the
laws of each jurisdiction in which either the ownership or use of the properties
owned or used by it, or the nature of the activities conducted by it, requires
such qualification.
 
4.2           Authority; No Conflict.
 
(a)           Buyer has the requisite power and authority to enter into this
Agreement and the Patent Assignment and to consummate the transactions
contemplated hereby.  The execution and delivery of this Agreement and the
Patent Assignment by Buyer and the consummation of the transactions contemplated
hereby and thereby have been duly and validly authorized by Buyer.  This
Agreement has been duly executed and delivered by Buyer and, upon the execution
and delivery by Buyer of the Patent Assignment, and further assuming the due
authorization, execution and delivery of this Agreement and the Patent
Assignment by Seller, this Agreement and the Patent Assignment will constitute
the legal, valid and binding obligations of Buyer, enforceable against it in
accordance with their terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and other similar laws affecting
creditors’ rights generally and to general principles of equity regardless of
whether considered in a proceeding in equity or at law.
 
(b)           Neither the execution and delivery of this Agreement nor the
Patent Assignment nor the consummation or performance of any of the transactions
contemplated hereby nor thereby will (i) violate any provision of Buyer’s
formation or organizational documents; (ii) violate any Legal Requirement
applicable to Buyer or the transactions contemplated hereby; or (iii) result in
the breach or violation of, or constitute a default under, any material contract
or agreement to which Buyer is a party or by which Buyer may be bound, except in
the case of clauses (ii) and (iii) for such violation, breach, or default which
would not reasonably be expected to prevent, delay or otherwise interfere with
the consummation or performance of any of the transactions contemplated hereby.
 
(c)           Buyer is not, and will not be, required to give any notice to any
Governmental Body or obtain any Governmental Authorization in connection with
the execution and delivery of this Agreement or the Patent Assignment or the
consummation or performance of any of the transactions contemplated hereby or
thereby, except for such notices, approvals, consents or authorizations which
have been obtained or made or which, if not obtained or made, would not
reasonably be expected to prevent, delay or otherwise interfere with the
consummation or performance of any of the transactions contemplated hereby.
 
(d)           No notice to, declaration, filing or registration with, or
authorization, consent, approval from any other third party is required to be
made or obtained by Buyer in connection with the execution and delivery of this
Agreement or the Patent Assignment or the consummation or performance of any of
the transactions contemplated hereby or thereby.
 
4.3           No Proceedings.  There is no pending Proceeding that has been
commenced against Buyer that challenges, or may have the effect of preventing,
delaying, making illegal, or otherwise interfering with, any of the transactions
contemplated hereby. To Buyer’s Knowledge, no such Proceeding has been
threatened.
 

 
 

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4.4           Brokers or Finders.  Buyer and its officers and agents have
incurred no obligation or liability, contingent or otherwise, for brokerage or
finders’ fees or agents’ commissions or other similar payment in connection with
this Agreement.
 
ARTICLE 5

 
COVENANTS
 
5.1           Bulk Transfer Laws.  Buyer hereby waives compliance by Seller with
the provisions of any so-called “bulk transfer law” of any jurisdiction in
connection with the acquisition of the Purchased Assets by Buyer.
 
5.2           Transition Services.  For a period beginning on the Closing Date
and ending on the 6-month anniversary of the Closing Date, as reasonably
requested by Buyer from time to time, Seller agrees to assist Buyer in
understanding the INDs and Know-How. If Buyer desires further assistance from
Seller beyond the initial 6-month period, Seller may, but is under no obligation
to, continue to assist Buyer at an hourly rate to be negotiated by the Parties.
 
5.3           Non-Competition.
 
(a)           From and after the Closing Date until the [***] anniversary of the
Closing Date (the “Restricted Period”), except as permitted by this Section 5.3,
neither Seller nor any of its Affiliates shall, directly or indirectly through
any third party, (i) conduct any preclinical or clinical development with regard
to, or make, have made, sell, offer to sell, import, license, market, promote or
Commercialize, any Competing Product in the Territory, or (ii) engage in, or
have any majority equity ownership in, or participate in the financing,
operation or management of, any Person that engages in, the direct or indirect
development, manufacture, licensing, promotion or Commercialization of any
Competing Product in the Territory (the “Restricted Business Activities”). This
Section 5.3 shall cease to be applicable to any Person at such time as it is no
longer an Affiliate of Seller.
 
(b)           Seller acknowledges that the restrictions set forth in this
Section 5.3 are considered by the parties to be reasonable for the purposes of
protecting the value of the business and goodwill of Buyer.  Seller acknowledges
that Buyer may be irreparably harmed and that monetary damages may not provide
an adequate remedy to Buyer in the event the covenants contained in this Section
5.3 are not complied with in accordance with their terms.  Accordingly, Seller
agrees that any breach or threatened breach by it of any provision of this
Section 5.3 may entitle Buyer to seek injunctive and other equitable relief to
secure the enforcement of these provisions, in addition to any other remedies
(including Damages) which may be available to Buyer.
 

 
 

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(c)           It is the desire and intent of the parties that the provisions of
this Section 5.3 be enforced to the fullest extent permissible under the laws
and public policies of each jurisdiction in which enforcement is sought.  If any
provisions of this Section 5.3 relating to the time period, scope of activities
or geographic area of restrictions is declared by a court of competent
jurisdiction to exceed the maximum permissible time period, scope of activities
or geographic area, as the case may be, the time period, scope of activities or
geographic area shall be reduced to the maximum which such court deems
enforceable.  If any provisions of this Section 5.3 other than those described
in the preceding sentence are adjudicated to be invalid or unenforceable, the
invalid or unenforceable provisions shall be deemed amended (with respect only
to the jurisdiction in which such adjudication is made) in such manner as to
render them enforceable and to effectuate as nearly as possible the original
intentions and agreement of the parties.
 
5.4           Later-Discovered Patents.  The Parties shall cooperate reasonably
with each other and with their respective representatives in connection with any
steps required to be taken as part of their respective obligations under this
Agreement, and shall ensure that all assets and rights intended to be deemed
Purchased Assets shall be treated as such and all liabilities, obligations and
commitments intended to be deemed Assumed Liabilities or Excluded Liabilities,
shall be treated as such.  In furtherance, and not limitation, of the foregoing,
if either Party discovers any Patent owned or controlled by Seller or its
Affiliates that claims or discloses any of arimoclomol, iroxanadine and
bimoclomol, as such molecules are further described in Schedule 1, or any
methods of manufacturing or using such molecules, and was not transferred to
Buyer at the Closing, Seller shall assign and transfer such Patent as promptly
as possible after such discovery.
 
ARTICLE 6

 
INDEMNIFICATION; REMEDIES
 
6.1           Indemnification by Seller.  Subject to the other provisions of
this Article 6, Seller shall indemnify, defend and hold harmless Buyer and its
Affiliates and their respective officers, directors, employees, representatives,
agents and shareholders (collectively, the “Buyer Indemnified Parties”) and
shall reimburse the Buyer Indemnified Parties for any loss, liability, claim,
damage or expense (including reasonable attorneys’ fees and expenses)
(collectively, “Damages”), to the extent caused by or arising from (a) any
breach of any representation or warranty of Seller in this Agreement or the
Patent Assignment, (b) any breach of any covenant or agreement of Seller in this
Agreement or the Patent Assignment, or (c) any Excluded Liabilities.
 
6.2           Indemnification by Buyer.  Subject to the other provisions of this
Article 6, Buyer will indemnify, defend and hold harmless Seller and its
Affiliates and their respective officers, directors, employees, representatives,
agents and shareholders (collectively, the “Seller Indemnified Parties”) and
shall reimburse the Seller Indemnified Parties for any Damages, to the extent
caused by or arising from (a) any breach of any representation or warranty of
Buyer in this Agreement or the Patent Assignment, (b) any breach of any covenant
or agreement of Buyer in this Agreement or the Patent Assignment, or (c) any
Assumed Liabilities.
 
6.3           Third Party Claims.
 
(a)           If a Third Party asserts that a Buyer Indemnified Party or any
Seller Indemnified Party (collectively, the “Indemnified Persons”) is liable to
such Third Party for a monetary or other obligation which may constitute or
result in Damages for which such Indemnified Person may be entitled to
indemnification pursuant to this Article 6, then such Indemnified Person may
make a claim for indemnification pursuant to this Article 6 and shall be
reimbursed in accordance with the applicable provisions of this Agreement for
any such Damages for which it is entitled to indemnification pursuant to this
Article 6 (subject to the right of the indemnifying Party to dispute the
Indemnified Person’s entitlement to indemnification under the applicable terms
of this Agreement).
 

 
 

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(b)           The Indemnified Person shall give prompt written notification to
Seller or Buyer, as the case may be, of the commencement of any Proceeding
relating to a Third Party claim for which indemnification pursuant to this
Article 6 may be sought; provided, however, that no delay on the part of the
Indemnified Person in notifying Seller or Buyer, as the case may be, shall
relieve Seller or Buyer, as the case may be, of any liability or obligation
hereunder except to the extent of any damage or liability caused by or arising
out of such failure.  Within 30 days after delivery of such notification, Seller
or Buyer, as the case may be, may, upon written notice thereof to the
Indemnified Person, assume control of the defense of such Proceeding provided
Seller or Buyer, as the case may be, acknowledges in writing to the Indemnified
Person that any damages, fines, costs or other liabilities that may be assessed
against the Indemnified Person in connection with such Proceeding constitute
Damages for which the Indemnified Person shall be entitled to indemnification
pursuant to this Article 6.  During such time as Seller or Buyer, as the case
may be, is controlling the defense, the Indemnified Person shall cooperate, and
cause its Affiliates, agents, licensees to cooperate upon request of Seller or
Buyer, as the case may be, in the defense, including by furnishing such records,
information and testimony and attending such conferences, discovery proceedings,
hearings, trials or appeals as may reasonably be requested by the Seller or
Buyer, as the case may be. If Seller or Buyer does not, as the case may be, so
assume control of such defense, the Indemnified Person shall control such
defense. The Party not controlling such defense may participate therein at its
own expense.  The Party controlling such defense shall keep the other Party
advised of the status of such Proceeding and the defense thereof.  The
Indemnified Person shall not agree to any settlement of such Proceeding without
the prior written consent of Seller or Buyer, as the case may be, which shall
not be unreasonably withheld, conditioned or delayed.  Seller or Buyer, as the
case may be, shall not agree to any settlement of such Proceeding without the
prior written consent of the Indemnified Person, which shall not be unreasonably
withheld, conditioned or delayed.
 
6.4           Certain Limitations on Indemnification Obligations.
 
(a)           The Buyer Indemnified Parties shall not be entitled to
indemnification under Section 6.1(a) until the aggregate amount of Damages
incurred by the Buyer Indemnified Parties for all claims under Section 6.1 in
the aggregate exceeds $10,000 (the “Basket Amount”), and the Seller will be
liable under Section 6.1(a) only for the amount of such Damages that exceed the
Basket Amount; provided, however, that this sentence shall not apply to
indemnification claims under Section 6.1(a) with respect to any breach of any
representation and warranty contained in Sections 3.1, 3.2 and 3.3.
 
(b)           The Seller shall have no liability under Section 6.1(a) other than
with respect to any breach of any representation and warranty contained in
Sections 3.1, 3.2 and 3.3 with respect to Damages incurred by the Buyer
Indemnified Parties in excess of an aggregate amount equal to the cumulative sum
of the Closing Payment and any milestone and royalty payments actually received
by Seller.  The limitation set forth in the preceding sentence shall not apply
to any Damages resulting from fraud, willful breach or intentional
misrepresentation and shall in no way restrict or limit Buyer’s right to offset
in accordance with Section 6.6 below.
 

 
 

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6.5           Treatment of Indemnity Payments. Any payment made to Buyer
pursuant to this Article 6 shall be treated as a reduction in the Closing
Payment for Tax purposes.  Any payment made to Seller pursuant to this Article 6
shall be treated as an increase in the Closing Payment for Tax purposes.
 
6.6           Buyer’s Right to Offset. Buyer may withhold sums payable to Seller
pursuant to this Agreement, to the extent of any claim asserted by a Buyer
Indemnified Party, and offset against the amounts due under this Agreement any
amounts or estimated amounts that a Buyer Indemnified Party is entitled pursuant
to indemnification or reimbursement under this Agreement. Any sums so withheld
will operate as a discharge, to the extent of the amount withheld, of Buyer’s
payment obligations to Seller under this Agreement.
 
ARTICLE 7

 
GENERAL PROVISIONS
 
7.1           Expenses.  Except as otherwise expressly provided in this
Agreement, each Party to this Agreement will bear its respective expenses
incurred in connection with the preparation, execution, and performance of this
Agreement and the transactions contemplated hereby, including all fees and
expenses of agents, representatives, counsel, and accountants.
 
7.2           Confidentiality.
 
(a)           Buyer acknowledges that the information being provided to it in
connection with the acquisition of the Purchased Assets and the consummation of
the other transactions contemplated hereby is subject to the terms of the
Confidentiality Agreement, the terms of which are incorporated herein by
reference.  Effective upon the Closing Date, the Confidentiality Agreement shall
terminate with respect to information provided to Buyer solely to the extent
that such information relates to the Purchased Assets; provided, that Buyer
acknowledges that any and all other information provided to it by Seller or its
respective representatives concerning Seller and their Affiliates (other than
such information related to the Purchased Assets) shall remain subject to the
terms and conditions of the Confidentiality Agreement for its duration.
 
(b)           Each Party may make a press release or other public announcement
with respect to the terms of this Agreement or the transactions contemplated
hereby after approval in advance by the other Party, which approval shall not be
unreasonably withheld. In the event that each Party desires to make a press
release or other public announcement, the parties agree that the terms of this
Agreement and the transactions contemplated hereby shall be consistently
described in each such press release or other public announcement. Prior to the
Closing, Buyer and Seller shall keep this Agreement strictly confidential and
may not make any disclosure of this Agreement to any Person.
 

 
 

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(c)           Each of Buyer and Seller agree that the terms of this Agreement
and the Patent Assignment shall not be disclosed or otherwise made available to
the public and that copies of this Agreement and the Patent Assignment shall not
be publicly filed or otherwise made available to the public, except where such
disclosure, availability or filing is required by applicable Legal Requirement
or the listing standards of any stock exchange on which equity securities of a
Party are traded.  In the event that such disclosure, availability or filing is
required by applicable Legal Requirement or such listing standards, each of
Buyer and Seller (as applicable) agrees to promptly notify the other Party and
to use commercially reasonable efforts to obtain “confidential treatment” of
this Agreement and the Patent Assignment with the U.S. Securities and Exchange
Commission (or the equivalent treatment by any other Governmental Body) and to
redact such terms of this Agreement and the Patent Assignment as the other Party
shall request.  Each Party shall be permitted to disclose the terms of this
Agreement, in each case under appropriate confidentiality provisions
substantially equivalent (in no event be required to be more restrictive than)
to those of this Agreement and the Confidentiality Agreement, to any actual or
potential acquirers, merger partners, collaboration partners, alliance partners,
sublicensees, licensees and professional advisors.
 
(d)           Seller shall keep confidential, and will cause its Affiliates,
employees, agents, consultants, licensees and sublicensees to keep confidential,
all information provided to Seller in connection with acquisition of the
Purchased Assets and the consummation of the other transactions contemplated
hereby and relating to the Purchased Assets, except as required by Legal
Requirement and except for information that is available to the public on the
Closing Date, or thereafter becomes available to the public other than as a
result of a breach of this Section 7.2(d).  The covenant set forth in this
Section 7.2(d) shall survive the Closing.
 
7.3           Notices.  All notices and other communications provided for
hereunder shall be in writing, shall specifically refer to this Agreement, shall
be addressed to the receiving Party’s address set forth below or to such other
address as a Party may designate by notice hereunder, and shall be deemed to
have been sufficiently given for all purposes on the next Business Day following
the date of first attempted delivery after being mailed by first class certified
or registered mail, postage prepaid, (b) the next Business Day after being sent
by nationally recognized overnight courier for next Business Day delivery with
proof of delivery to the recipient received by the courier in the form of a
signature of recipient, or (c) when personally delivered.
 
If to Buyer:
Orphazyme ApS
Ole Maaløs Vej 3
DK-2200 Copenhagen
Denmark
Attention: Anders Hinsby, Chief Executive Officer
   
with a copy to (which
shall not constitute notice):
Wiggin and Dana LLP
400 Atlantic Street
Stamford, Connecticut 06911
Attention: James F. Farrington, Jr.
   
If to Seller:
CytRx Corporation
11726 San Vicente Blvd
Suite 650
Los Angeles, CA 90049
Facsimile: 310-826-6139
Attention: Steven A. Kriegsman, Chief Executive Officer
   
with a copy to (which
shall not constitute notice):
CytRx Corporation
11726 San Vicente Blvd
Suite 650
Los Angeles, CA 90049
Facsimile: 310-826-6139
Attention: Benjamin S. Levin, General Counsel
   

 

 
 

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7.4           Further Assurances.  The Parties agree (a) to furnish upon request
to each other such further information, (b) to execute and deliver to each other
such other documents, and (c) to do such other acts and things, all as any other
Party may reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.
 
7.5           Damages. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, IN NO
EVENT SHALL ANY PARTY HERETO OR ITS AFFILIATES BE LIABLE OR RESPONSIBLE TO ANY
OTHER PARTY HERETO FOR SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, INCLUDING ANY
CLAIMS FOR DAMAGES BASED UPON LOST REVENUES OR PROFITS, HOWEVER CAUSED OR ON ANY
THEORY OF LIABILITY THAT ARISE OUT OF OR RELATE TO THIS AGREEMENT OR THE
PERFORMANCE OR BREACH THEREOF; PROVIDED,  THAT IF A BUYER INDEMNIFIED PARTY IS
HELD LIABLE TO A THIRD PARTY FOR ANY OF SUCH DAMAGES AND SELLER IS OBLIGATED TO
INDEMNIFY SUCH BUYER INDEMNIFIED PARTY FOR THE MATTER THAT GAVE RISE TO SUCH
DAMAGES, THEN SELLER SHALL BE LIABLE FOR, AND OBLIGATED TO REIMBURSE SUCH BUYER
INDEMNIFIED PARTY FOR, THE TOTAL AMOUNT OF SUCH DAMAGES HOWSOEVER CHARACTERIZED.
 
7.6           Waiver.  The rights and remedies of the Parties to this Agreement
are cumulative and not alternative.  Any term or condition of this Agreement may
be waived at any time by the Party that is entitled to the benefit thereof, but
no such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the Party waiving such term or condition.  The
waiver by either Party hereto of any right hereunder or of the failure to
perform or of a breach by the other Party shall not be deemed a waiver of any
right hereunder or of any other breach or failure by said other Party whether of
a similar nature or otherwise.
 
7.7           Entire Agreement and Modification.  Except for the Confidentiality
Agreement, which remains in full force and effect in accordance with Section
7.2, this Agreement supersedes all prior agreements between the Parties with
respect to its subject matter and constitutes (along with the Patent Assignment)
a complete and exclusive statement of the terms of the agreement between the
Parties with respect to its subject matter.  This Agreement may not be amended
or modified except by a written agreement duly executed by each of the Parties
hereto.
 
7.8           Disclosure Schedule.  The information and disclosures in the
Disclosure Schedule are intended only to qualify and limit the representations
and warranties of Seller contained in this Agreement and shall not be deemed to
expand in any way the scope or effect of any of such representations and
warranties.  The Section numbers in the Disclosure Schedule correspond to the
section numbers in this Agreement.  Capitalized terms used but not defined in
the Disclosure Schedule shall have the same meanings given them in this
Agreement.  In the event of any inconsistency between the statements in the body
of this Agreement and those in the Disclosure Schedule (other than an exception
expressly set forth as such in the Disclosure Schedule with respect to a
specifically identified representation or warranty), the statements in the body
of this Agreement will control.
 

 
 

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7.9           Assignments, Successors and No Third-Party Rights.  No Party may
assign this Agreement or any of its rights or obligations under this Agreement
without the prior consent of the other Party, and any purported assignment
without consent shall be void. Notwithstanding the preceding sentence, Buyer may
assign its rights with respect to the Products to a successor to Buyer by way of
a merger of Buyer or sale of all or substantially all of the assets of Buyer
relating to the Products if such assignee assumes in writing all of Buyer’s
obligations under this Agreement; provided that no such assignment shall relieve
Buyer of its obligations hereunder.  Subject to the preceding sentences, this
Agreement will apply to, be binding in all respects upon, and inure to the
benefit of the successors and permitted assigns of the Parties.  Nothing
expressed or referred to in this Agreement will be construed to give any Person
other than the Parties to this Agreement any legal or equitable right, remedy,
or claim under or with respect to this Agreement or any provision of this
Agreement.  This Agreement and all of its provisions and conditions are for the
sole and exclusive benefit of the Parties to this Agreement and their successors
and permitted assigns.
 
7.10           Severability.  If any provision of this Agreement is held invalid
or unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect.  Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
 
7.11           Section Headings; Construction; Conflicts.  The headings of
Sections in this Agreement are provided for convenience only and will not affect
its construction or interpretation.  All bare references to “Section” or
“Sections” without the accompanying words “of the Disclosure Schedule” refer to
the corresponding Section or Sections of this Agreement.  All references to
“hereof,” “hereto” and “hereunder” shall refer to this Agreement.  All words
used in this Agreement will be construed to be of such gender or number as the
circumstances require.  Unless otherwise expressly provided, the words
“include,” “includes” and “including” do not limit the preceding words or terms
and shall be deemed to be followed by the words “without limitation.” The
language of this Agreement shall be deemed to be the language mutually chosen by
the Parties and no rule of strict construction shall be applied against either
Party hereto. In the event of any conflict between the provisions of this
Agreement and the provisions of any Patent Assignment, the provisions of this
Agreement shall prevail.
 
7.12           Time of the Essence.  With regard to all dates and time periods
set forth or referred to in this Agreement, time is of the essence.
 
7.13           Governing Law.  This Agreement and the Patent Assignment will be
governed by the laws of the State of Delaware without regard to conflicts of
laws principles.
 

 
 

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7.14           Arbitration.  Except as otherwise expressly provided in this
Agreement, the Parties agree that any dispute not resolved internally by the
Parties shall be resolved through binding arbitration conducted under the
auspices of the American Arbitration Association in accordance with its
International Arbitration Rules (the “Rules”), except as modified in this
Agreement.  A Party may initiate arbitration by written notice to the other
Party of its intention to arbitrate, and such demand notice shall specify in
reasonable detail the nature of the dispute.  Each Party shall select one
arbitrator, and the two arbitrators so selected shall choose a third
arbitrator.  All three arbitrators shall serve as neutrals and have at least 10
years of (a) dispute resolution experience or (b) legal or business experience
in the biotech or pharmaceutical industry.  Notwithstanding anything to the
contrary in this Section 7.14, in the event of a dispute regarding the Acquired
Patents, at least one arbitrator shall have expertise in patent law. If a Party
fails to nominate its arbitrator, or if the Parties’ arbitrators cannot agree on
the third arbitrator, the necessary appointments shall be made in accordance
with the Rules.  Once appointed by a Party, such Party shall have no ex parte
communication with its appointed arbitrator.  The arbitration proceedings shall
be conducted in New York, New York.  The arbitration proceedings and all
pleadings and written evidence shall be in the English language.  Any written
evidence originally in another language shall be submitted in English
translation accompanied by the original or a true copy thereof.  Each Party
agrees to use reasonable efforts to make all of its current employees available
to the extent determined by the tribunal to be reasonably needed.  The
arbitrators shall be instructed and required to render a written, binding,
non-appealable resolution and award on each issue that clearly states the basis
upon which such resolution and award is made. The written resolution and award
shall be delivered to the Parties as expeditiously as possible, but in no event
more than 90 days after conclusion of the hearing, unless otherwise agreed by
the Parties.  Judgment upon such award may be entered in any competent court or
application may be made to any competent court for judicial acceptance of such
an award and order for enforcement.  Each Party agrees that, notwithstanding any
provision of applicable law or of this Agreement, it will not request, and the
arbitrators shall have no authority to award, punitive or exemplary damages
against any Party.  The Parties may apply to any court of competent jurisdiction
for a temporary restraining order, preliminary injunction or other interim or
conservatory relief, as necessary, without breaching these arbitration
provisions and without abridging the powers of the arbitrators.  At the request
of either Party, the arbitrators shall enter an appropriate protective order to
maintain the confidentiality of information produced or exchanged in the course
of the arbitration proceedings.  The arbitrators shall have the power to decide
all questions of arbitrability.  The Parties agree that (x) they shall share
equally the fees and expenses of the arbitrators and (y) each Party shall bear
its own attorneys’ fees and associated costs and expenses.

7.15           Service.  The Parties hereby agree that mailing of process or
other papers in connection with any action or proceeding in the manner provided
in Section 7.3 (Notices), or in such other manner as may be permitted by law,
shall be valid and sufficient service thereof and hereby waive any objections to
service accomplished in such manner.
 
7.16           Execution of Agreement; Counterparts.  This Agreement may be
executed and delivered (including by facsimile or other electronic transmission)
in multiple counterparts, each of which shall be an original and together which
shall constitute one and the same instrument.
 

[Remainder of Page Intentionally Left Blank – Signature Page Follows]

 
 

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IN WITNESS WHEREOF, the Parties have duly executed and delivered this Agreement
as of the date first written above.
 

Orphazyme ApS
 
 
By: /s/ Martin Bonde                                                         
Name: Martin Bonde
Title: Chairman of the Board
 
 
By: /s/ Anders Hinsby                                                         
Name: Anders Hinsby
Title: Chief Executive Officer
 
 
CytRx Corporation
 
 
By: /s/ Stephen A.
Kriegsman                                                           
Name: Stephen A. Kriegsman
Title: President and CEO
 
 

 
 

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Exhibit A
 
Patent Assignment
 
See attached.
 
 

 
 

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Schedule 1
Compounds

[***]

 
 

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