Document:

EXECUTION VERSION

 

SETTLEMENT AND LICENSE AGREEMENT 

 

among 

 

Biogen Swiss Manufacturing GmbH, 

 

Biogen International Holding Ltd., 

 

Forward Pharma A/S 

 

and 

 

Each of the Parties Listed on Appendix I 

 

Dated as of January 17, 2017

 

 

TABLE OF CONTENTS

 

	
ARTICLE I
    
	
 
    
	
Agreed Terms
    
	
 
    	
 
    
	
SECTION 1.01.   Definitions
    	
2
    
	
SECTION 1.02.   Index of Defined Terms
    	
10
    
	
 
    	
 
    
	
ARTICLE II
    
	
 
    
	
Covenants
    
	
 
    	
 
    
	
SECTION 2.01.   Release of Claims, Dismissal of Claims and Covenant Not To Sue
    	
14
    
	
SECTION 2.02. Intellectual   Property Challenge or Contestation
    	
16
    
	
SECTION 2.03.   Transfers of Intellectual Property; Liens
    	
16
    
	
SECTION 2.04.   Access to Information; Confidentiality; Notification
    	
17
    
	
SECTION 2.05.   Commercially Reasonable Efforts; Notification
    	
18
    
	
SECTION 2.06.   Public Announcements
    	
21
    
	
SECTION 2.07. No   Frustration
    	
21
    
	
SECTION 2.08.   Existence
    	
21
    
	
SECTION 2.09.   Solvency
    	
22
    
	
SECTION 2.10. TUPE   Regulations; Indemnification
    	
23
    
	
SECTION 2.11.   Specified Actions
    	
23
    
	
SECTION 2.12.   Joinder
    	
23
    
	
SECTION 2.13.   Ixchel
    	
24
    
	
SECTION 2.14.   Shareholder Litigation
    	
24
    
	
 
    	
 
    
	
ARTICLE III
    
	
 
    
	
Licenses and   Related Rights
    
	
 
    	
 
    
	
SECTION 3.01.   Co-Exclusive U.S. License
    	
24
    
	
SECTION 3.02.   Exclusive U.S. License
    	
25
    
	
SECTION 3.03.   Exclusive Worldwide (other than U.S.) License
    	
26
    
	
SECTION 3.04. Restrictions   on Transfer
    	
26
    
	
SECTION 3.05. Use   Through Affiliates
    	
26
    
	
SECTION 3.06. U.S.   Purchase Option
    	
26
    
	
SECTION 3.07.   Designated Countries Purchase Option
    	
28
    
	
 
    	
 
    
	
ARTICLE IV
    
	
 
    
	
Payment
    
	
 
    	
 
    
	
SECTION 4.01.   Upfront Fee
    	
30
    
	
SECTION 4.02. U.S.   Royalty
    	
30
    

 

 

	
SECTION 4.03.   Worldwide (other than U.S.) Royalties
    	
32
    
	
SECTION 4.04.   Form of Payment
    	
34
    
	
SECTION 4.05. Late   Penalties
    	
34
    
	
SECTION 4.06.   Taxes
    	
34
    
	
SECTION 4.07.   Audit Rights
    	
36
    
	
 
    	
 
    
	
ARTICLE V
    
	
 
    
	
Maintenance,   Prosecution and Litigation
    
	
 
    	
 
    
	
SECTION 5.01.   Submitting Agreement to PTAB
    	
37
    
	
SECTION 5.02. IP   Advisory Committee
    	
37
    
	
SECTION 5.03.   Licensor Maintenance, Prosecution and Litigation
    	
38
    
	
SECTION 5.04.   Licensee Maintenance, Prosecution and Litigation
    	
39
    
	
 
    	
 
    
	
ARTICLE VI
    
	
 
    
	
Conditions   Precedent
    
	
 
    	
 
    
	
SECTION 6.01.   Conditions for the Benefit of Each Party
    	
42
    
	
SECTION 6.02.   Frustration of Conditions to Effectiveness
    	
42
    
	
 
    	
 
    
	
ARTICLE VII
    
	
 
    
	
Representations   and Warranties
    
	
 
    
	
SECTION 7.01.   Representations and Warranties Regarding Licensor
    	
42
    
	
SECTION 7.02.   Representations and Warranties Regarding the Additional Parties
    	
48
    
	
SECTION 7.03.   Representations and Warranties Regarding Licensee
    	
49
    
	
SECTION 7.04. No   Additional Representations
    	
49
    
	
 
    	
 
    
	
ARTICLE VIII
    
	
 
    	
 
    
	
General   Provisions
    
	
 
    	
 
    
	
SECTION 8.01.   Amendment; Extension; Waiver
    	
50
    
	
SECTION 8.02.   Survival of Covenants, Agreements, Representations, Warranties,
    	
 
    
	
Obligations and   Undertakings
    	
50
    
	
SECTION 8.03.   Notices
    	
50
    
	
SECTION 8.04.   Interpretation
    	
52
    
	
SECTION 8.05.   Counterparts
    	
53
    
	
SECTION 8.06.   Severability
    	
53
    
	
SECTION 8.07.   Entire Agreement; Third-Party Beneficiaries; No Other Representations
    	
 
    
	
or Warranties
    	
53
    
	
SECTION 8.08.   GOVERNING LAW
    	
54
    
	
SECTION 8.09.   Assignment
    	
54
    
	
SECTION 8.10.   Dispute Resolution
    	
55
    

 

 

	
SECTION 8.11.   Authorized Agent
    	
57
    
	
SECTION 8.12.   Specific Enforcement
    	
57
    
	
SECTION 8.13.   Indirect Damages
    	
58
    
	
SECTION 8.14.   WAIVER OF JURY TRIAL
    	
58
    
	
SECTION 8.15.   Rights in Bankruptcy
    	
58
    
	
SECTION 8.16.   Further Assurances
    	
60
    
	
SECTION 8.17.   Costs
    	
60
    
	
SECTION 8.18.   Independent Contractors
    	
60
    
	
SECTION 8.19.   Representative of Additional Parties
    	
60
    
	
SECTION 8.20. Set   Off
    	
60
    
	
 
    	
 
    
	
APPENDICES
    	
 
    
	
 
    	
 
    
	
Appendix A — Scheduled   Patents and Patent Applications and Scheduled Trademark Rights
    	
 
    
	
Appendix B — Licensed Intellectual   Property Contracts
    	
 
    
	
Appendix C — List of   Non-Affiliates
    	
 
    
	
Appendix D — Specified   Actions
    	
 
    
	
Appendix E — Draft   Joint Submission of Agreement
    	
 
    
	
Appendix F — Aditech   Addendum
    	
 
    
	
Appendix G — Schedule   of Permitted Liens
    	
 
    
	
Appendix H — Scheduled Employment   Matters
    	
 
    
	
Appendix I — Additional   Parties
    	
 
    

 

 

SETTLEMENT AND LICENSE AGREEMENT (this “Agreement”) dated as of the Agreement Date (as defined below), among each of the following Parties:

 

Biogen Swiss Manufacturing GmbH, organized and existing under the Laws of Switzerland, having its principal place of business at Landys & Gyr Strasse 3, 6300 Zug, Switzerland (“U.S. Licensee”);

 

Biogen International Holding Ltd., organized and existing under the Laws of Bermuda, having its registered office at 22 Victoria Court, Hamilton, Bermuda (“Designated Countries Licensee” and together with the U.S. Licensee, “Licensee”);

 

Forward Pharma A/S, organized and existing under the Laws of Denmark, having its principal place of business at Østergade 24A, 1100 Copenhagen K, Denmark (“Licensor”); and

 

Each of the parties Listed on Appendix I (the “Additional Parties”) (each of the foregoing, a “Party” and collectively, the “Parties” hereunder).

 

RECITALS

 

WHEREAS Biogen Inc. (“Biogen”) and/or its Affiliates and Licensor are engaged in the following disputes, inter alia: (i) the Interference Proceeding (as defined below); (ii) the European Opposition Proceeding (as defined below); (iii) the opposition Licensor has filed against Biogen’s Affiliate Biogen MA Inc.’s European patent EP 2 137 537 (Application No. 8 725 256.5) at the European Patent Office; and (iv) the suits Licensor has filed in Germany under European patent EP 2 801 355 (Application No. 20140172398) and German Utility Model DE202005002112U1 against Biogen and/or its Affiliates;

 

WHEREAS Licensor and Licensee desire to reduce the expense and uncertainty of litigating their claims and have determined to resolve their disputes as set forth in this Agreement, including permitting the USPTO (as defined below) and the U.S. Court of Appeals for the Federal Circuit, as applicable, to make a determination of the Interference Proceeding to ensure that the applicable patentability and priority decisions are made according to U.S. Law and the European Patent Office and the Technical Board of Appeal and/or the Enlarged Board of Appeal, as applicable, to make a determination of the European Opposition Proceeding (as defined below) to ensure that the applicable patentability decisions are made according to European Union law;

 

WHEREAS Licensor and the Additional Parties wish to grant, and Licensee wishes to accept, the releases and the licenses to certain Intellectual Property (as defined below) granted herein;

 

WHEREAS, as of the Agreement Date (as defined below), the Boards of Directors of Licensee have approved this Agreement and the Transactions (as defined below), including the Licenses (as defined below), on the terms and subject to the conditions set forth in this Agreement;

 

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WHEREAS, as of the Agreement Date, the respective Boards of Directors (or similar governing bodies) of the Additional Parties have approved this Agreement and the Transactions (as defined below), including the Licenses (as defined below), on the terms and subject to the conditions set forth in this Agreement;

 

WHEREAS, as of the Effective Date (as defined below) at a duly called and convened Licensor Shareholders’ Meeting (as defined below), Licensor obtained Licensor Shareholder Approval (as defined below); and

 

WHEREAS, as a condition and inducement to Licensee’s willingness to enter into this Agreement, certain shareholders of Licensor (the “Specified Shareholders”) entered into a shareholders commitment agreement (the “Shareholders Commitment Agreement”) in connection with the Transactions;

 

NOW, THEREFORE, in consideration of the mutual agreements herein contained, the sufficiency and receipt of which are hereby acknowledged, without admitting any liability on any claim or counterclaim asserted in any Litigation or any other wrongdoing whatsoever, the Parties, intending to be legally bound hereby, agree as follows:

 

ARTICLE I

 

Agreed Terms

 

SECTION 1.01. Definitions.

 

“Aditech Addendum” means the form of addendum between Licensor on the one hand and Aditech Pharma AG (“Aditech”) on the other hand, attached hereto as Appendix F, to which Licensee and each of its Affiliates shall be third party beneficiaries.

 

“Aditech Letter Agreement” means the letter agreement, dated as of the Agreement Date, between Licensor on the one hand and Aditech on the other hand.

 

“Affiliate” of any Person means another Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person. For purposes of this definition, “control” (including the terms “controlled by” and “under common control with”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of shares of share capital or other equity or voting interests, by Contract or otherwise, including the ownership, directly or indirectly, of shares of share capital or other equity or voting interests having the power to elect a majority of the board of directors or comparable body governing the affairs of such Person. Such other Person shall be deemed to be an Affiliate only so long as such control exists. Notwithstanding the foregoing, none of (i) any entity not controlled by either Mr. Florian Schönharting or Licensor and (ii) any entity (or such entity’s controlled Affiliates) listed on Appendix C, shall be an Affiliate of Licensor or of any Additional Party, or of any Licensor Releasing Party for purposes of this Agreement.

 

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“Agreement Date” shall mean January 17, 2017.

 

“ANDA” means an abbreviated new drug application filed with the FDA, pursuant to its rules and regulations (or any equivalent or replacement mechanism).

 

“API” means an active pharmaceutical ingredient.

 

“Authorized Generic” means a generic product indicated for the treatment of a human for multiple sclerosis that is therapeutically equivalent to, and substitutable for an Infringing Product by orally administering dimethyl fumarate, wherein the therapeutically effective amount of dimethyl fumarate is 480 mg per day, that is (a) sold by or on behalf of Licensee or any of Licensee’s Affiliates, or its or their respective sublicensees, or (b) authorized by Licensee or any of Licensee’s Affiliates or its or their respective sublicensees by license, covenant not to sue, settlement agreement, release or by any other arrangement or means (including with respect to ANDA filers) (i) for distribution in the U.S. under New Drug Application No. 204063 and/or any and all amendments or supplements thereto; or (ii) for distribution in a Designated Country.

 

“Business Day” means any day except a Saturday, a Sunday or other day on which the banks in the City of New York or Denmark are authorized or required by Law to be closed.

 

“Combination Products” means the Designated Country Combination Products and the U.S. Combination Products.

 

“Companies Act” means the Danish Act on Public and Private Limited Companies, as amended from time to time (Selskabsloven).

 

“Confidential Intellectual Property Information” means any Intellectual Property, information or data, in each case that is (i) confidential, (ii) related to or referencing the subject matter of the Licensed Intellectual Property, (iii) not protected by the attorney client privilege or work product immunity and (iv) not generally known, including any know-how, unpublished research, unpatented inventions, scientific or technical data, including all related ideas, concepts, methods, inventions, discoveries, data, formulae, processes, techniques, specifications, trade secrets and like technical information of a confidential nature in whatever form held, such as paper, electronically stored data, magnetic media film and microfilm and any material communications with or from any Third Parties.

 

“Contract” means any contract, agreement, deed, lease or similar instrument, and any legally binding obligation, commitment, arrangement or understanding, whether written or oral.

 

“Designated Countries” means every country in the world other than the United States.

 

“Designated Countries License Term” means the period beginning upon the date Licensor receives the Designated Countries Upfront Fee and continuing perpetually.

 

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“Designated Countries Royalty Term” means the period beginning upon the date Licensor receives the Designated Countries Upfront Fee and ending on the expiration of the last to expire (or be invalidated in entirety by a final court ruling, from which no appeal can be taken or is timely taken) of the Patents (a) included in the Licensed Intellectual Property and (b) owned, registered or otherwise protected or enjoyable under the Laws of the Designated Countries.

 

“Designated Countries Upfront Fee” means an amount equal to USD$207,750,000.

 

“Designated Country Combination Product” means any fixed dose Designated Country Infringing Product that incorporates more than one API, at least one of which is not recited in a claim of a Patent included in the Designated Countries Licensed Intellectual Property, and has a duly authorized and valid marketing authorization.

 

“Designated Countries Royalty Consideration” has the meaning set forth in Section 4.03.

 

“Designated Country Generic Equivalent” means any product used, sold, offered for sale or imported in a Designated Country that is (a) both bioequivalent and therapeutically equivalent to, and substitutable for, an Infringing Product in such Designated Country, (b) not an Authorized Generic and (c) indicated for the treatment of multiple sclerosis.

 

“Designated Country Infringing Product” has the meaning set forth in Section 4.03.

 

“Effective Date” shall mean the date on which all Countersignatures (as defined in the Letter Agreement) have been released from escrow pursuant to and in accordance with the terms of the Letter Agreement.

 

“European Opposition Proceeding” means the Opposition against Licensor’s European patent EP 2801355 (Application No. 14172398.1) at the European Patent Office, including any appeals therefrom to the Technical Board of Appeal and/or the Enlarged Board of Appeal.

 

“Exclusive U.S. License Consideration” means one hundred thousand U.S. Dollars (USD$100,000).

 

“FDA” means the Food and Drug Administration of the United States, including any successor agency thereto.

 

“GAAP” means U.S. generally accepted accounting principles, consistently applied.

 

“Governmental Entity” means (i) any legislative, judicial or administrative authority, including any federal, state, local or foreign government (including, in each case, any self-regulatory organization), (ii) any court of competent jurisdiction, administrative agency or

 

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commission or other governmental authority or instrumentality, domestic or foreign or (iii) any officials of any of the entities set forth in subclauses (i) or (ii).

 

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

 

“Infringed Claim” means (i) any extant claim of a Relevant Patent or (ii) any extant claim of a Patent included in the Licensed Intellectual Property, that, in each case, but for the rights granted pursuant to this Agreement, would be infringed by the making, using, sale, offering for sale, importation, exportation or supply of a product indicated for the treatment of multiple sclerosis having dimethyl fumarate as an API.

 

“Infringing Products” means the Designated Country Infringing Products and the U.S. Infringing Products.

 

“Intellectual Property” means (i) all Patents; (ii) any and all trademark rights in “FP-187”, including those trademark rights listed in Appendix A, together with all goodwill associated therewith (including all translations, adaptations, derivations and combinations of the foregoing); (iii) copyrights and copyrightable works; (iv) registrations, applications, renewals, reissues, continuations, continuations in part, divisions, revisions, extensions or reexaminations for any of the items set forth in clause (i), (ii) or (iii); (v) any Licensor proprietary computer software; and (vi) trade secrets, confidential information, know-how, regulatory, market and data clearance or exclusivity information (including with respect to regulatory filings relating to investigational or approved medicines), drug master files, clinical data, models, assays, testing data and the like, in each of the foregoing clauses (i) through (vi), in any jurisdiction in the world, relating to the treatment of any human disease or condition, and in each of the foregoing clauses (ii), (iii), (iv), (v), and (vi) , only to the extent used or planned by Licensor for use in connection with dimethyl fumarate; provided that Intellectual Property shall not include any voicemails, or any emails that have been or will be deleted in accordance with the owner’s retention policies in effect prior to the Agreement Date.

 

“Interference Proceeding” means the interference proceeding at the Patent Trial and Appeal Board of the USPTO (the “PTAB”) having the caption: Biogen MA Inc. v. Forward Pharma A/S, Interference 106,023 (PTAB Declared Apr. 13, 2015), including any appeals therefrom to the Federal Circuit (including any en banc review).

 

“Laws” means, collectively, any applicable statute, law, ordinance, decree, order, rule, regulation, treaty, principle of common law, directive, resolution, code, stock exchange rule, judgment, ruling, injunction or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Entity.

 

“Letter Agreement” means the letter agreement, dated as of the Agreement Date, between Licensor and Licensee.

 

“Licensed Intellectual Property” means all Intellectual Property anywhere in the Territory owned or controlled by Licensor, any of Licensor’s controlled Affiliates or, with respect to Relevant Patents and related Intellectual Property only, the Additional Parties or under which Licensor, any of Licensor’s controlled Affiliates or the Additional Parties has the

 

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right to grant a license, as of the Agreement Date, and any Intellectual Property issuing from, based on, relating back to or claiming priority to any of the foregoing, including all such foregoing Intellectual Property (a) related to the treatment of any human disease or condition using dimethyl fumarate; (b) related to Licensor’s FP-187 product, including any and all Patents, Confidential Intellectual Property Information, regulatory exclusivity (including any period of data or marketing exclusivity) or regulatory clearance related thereto and all other Intellectual Property rights related to Licensor’s FP-187 product, (c) relating to the manufacture, formulation, method or means of delivery or administration of any therapeutic product for the treatment of any human disease or condition using dimethyl fumarate and (d) included in Appendix A hereto.

 

“Licensed Intellectual Property Rights” means any and all statutory and common law rights throughout the Territory in the Licensed Intellectual Property.

 

“Licensed Patents” means the Patents included in the Licensed Intellectual Property.

 

“Licensed Product” means any product made, used, sold, offered for sale or imported by or on behalf of Licensee, any of Licensee’s Affiliates or any of its or their respective sub-licensees and indicated for the treatment of multiple sclerosis that includes as an API a fumaric acid ester such as, by way of nonlimiting example, dimethyl fumarate or monomethyl fumarate. For clarity, and by way of nonlimiting example, Licensed Product includes Tecfidera and any Authorized Generic.

 

“License Term” means, collectively, the U.S. License Term and the Designated Countries License Term.

 

“Licenses” means the Co-Exclusive U.S. License, the Exclusive U.S. License and the Exclusive Designated Countries License.

 

“Licensor Articles” means the articles of association of Licensor as amended from time to time.

 

“Licensor Ordinary Shares” means the ordinary shares of Licensor, nominal value 0.10 DKK per share.

 

“Lien” means any lease, license, mortgage, deed of trust, pledge, lien, charge, hypothecation, option to purchase or otherwise acquire any interest, right of first refusal or offer or security interest, or any encumbrance created by any act of, or Contract entered into by, Licensor or any of its controlled Affiliates, of any kind or nature whatsoever, provided that none of (i) the Interference Proceeding, (ii) the European Opposition Proceeding or (iii) the Litigation involving Licensor’s European patent EP 2 801 355 (Application No. 20140172398)) shall be considered a “Lien”.

 

“Litigation” means any demand, suit, claim, counterclaim, action, cause of action, administrative action, arbitration, investigation, assessment or proceeding of any kind including any opposition proceeding.

 

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“Net Sales” means the gross amount invoiced by Licensee, its Affiliates or sublicensees for the sale or other disposition of an Infringing Product in a country to Third Parties (including distributors, wholesalers and end-users), less the following deductions (such deductions, collectively, “Sales Returns and Allowances”):

 

(a)    sales returns and allowances actually paid, granted or accrued on Infringing Products, including trade, quantity, prompt pay and cash discounts and any other adjustments, including those granted on account of price adjustments or billing errors;

 

(b)    credits or allowances given or made for rejection, recall, return or wastage replacement of, and for uncollectible amounts on, Infringing Products or for rebates or retroactive price reductions (including Medicare, Medicaid, managed care and similar types of rebates and chargebacks);

 

(c)     taxes, duties or other governmental charges levied on or measured by the billing amount for Infringing Products, as adjusted for rebates and refunds, including pharmaceutical excise taxes (such as those imposed on an Infringing Product by the United States Patient Protection and Affordable Care Act of 2010 and other comparable laws), but which shall not include any tax, duty, or other charge imposed on or measured by net income (however denominated) or any franchise taxes, branch profits taxes, or similar tax;

 

(d)    charges for freight, customs and insurance directly related to the distribution of Infringing Products and wholesaler and distributor administration fees; and

 

(e)     other future similar deductions, taken in the ordinary course of business and in accordance with applicable accounting standards and Licensee’s standard practices.

 

Net Sales shall not be imputed to transfers of Infringing Products without consideration or for nominal consideration for use in any clinical trial, or for any charitable, compassionate use or indigent patient program purpose where Infringing Products are sold or provided. For the avoidance of doubt, in the case of any transfer of any Infringing Product between or among Licensee and its Affiliates or sublicensees for resale, Net Sales shall be determined based only on the sale made by such Affiliate or sublicensee to a Third Party.

 

Notwithstanding the foregoing, in the event an Infringing Product is sold in a country as a component of a bona fide fixed dose Combination Product, Net Sales shall be calculated by multiplying the Net Sales of the Combination Product (calculated in the same manner as set forth above as if the Combination Product were an Infringing Product) in such country by the quotient m/n, where m equals the number of APIs in such Combination Product that would infringe a Patent included in the Licensed Intellectual Property and n equals the total number of APIs in such Combination Product.

 

“Patents” means all patents, patent applications, patent disclosures and inventions, including any reissues, reexaminations, replacements, continuations, continuations-in-part,

 

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divisionals, adjustments or extensions thereof or any other periods of exclusivity that extend the patent term (statutory or otherwise), including pediatric exclusivities and supplementary protection certificates, in any jurisdiction in the world.

 

“Patent Transfer Agreement” means the Patent Transfer Agreement between Aditech Pharma AG and Forward Pharma A/S, dated as of May 4, 2010.

 

“Permitted Lien” means such Liens as are set forth in Appendix G.

 

“Person” means any individual, partnership, association, corporation, limited liability company, trust, governmental authority or other legal person or legal entity.

 

“Released Matters” means any and all claims, demands, damages, debts, liabilities, obligations, costs, expenses (including attorneys’ and accountants’ fees and expenses), actions and causes of action of any nature whatsoever, both at law and in equity, known or unknown, suspected or unsuspected, arising from the beginning of time to the Effective Date, that any Licensee Releasing Party or Licensor Releasing Party has as of the Effective Date, or at any time previously had, relating to either the treatment of multiple sclerosis or dimethyl fumarate, including Appeal T 1773/16-3.3.02 regarding the Opposition against Licensee’s European patent EP 2 137 537 (Application No. 8 725 256.5) at the European Patent Office, the Litigation involving Licensor’s European patent EP 2 801 355 (Application No. 20140172398), the challenge to the validity of Licensor’s German Utility Model DE202005002112U1 by Licensee and the Litigation involving Licensor’s German Utility Model DE202005002112U1; provided that Released Matters shall not include any of the foregoing to the extent relating to or arising out of (i) the Interference Proceeding, (ii) the European Opposition Proceeding (notwithstanding the inclusion in Released Matters of the Litigation involving Licensor’s European patent EP 2 801 355 (Application No. 20140172398)) or (iii) any right, benefit or obligation of Licensor, the Additional Parties or Licensee under this Agreement.

 

“Relevant Patent” means, on a country-by-country basis, any Patent rights in force in such country that include at least one extant claim covering treatment of a human for multiple sclerosis by orally administering dimethyl fumarate, wherein the therapeutically effective amount of dimethyl fumarate is 480 mg per day.

 

“Royalty Consideration” means the Designated Countries Royalty Consideration and the U.S. Royalty Consideration.

 

“Royalty Term” means the Designated Countries Royalty Term and the U.S. Royalty Term.

 

“SEC” means the U.S. Securities and Exchange Commission, or any successor Governmental Entity.

 

“Shareholder Meeting Materials” means, collectively, (a) the cover letter to the Notice of Meeting to the shareholders; (b) the Notice of Meeting and Licensor’s Board of Directors’ full proposal for adoption at the Licensor Shareholders’ Meeting, (c) information about the total number of shares and voting rights on the date of the notice; (d) the documents to

 

8

 

be presented at the general meeting, including this Agreement and the Aditech Addendum, (e) the form to be used for request for admission to the general meeting; and (f) the forms to be used for voting by proxy or voting by correspondence.

 

“Subsidiary” of any Person means any other Person, if any, (a) more than 50% of whose outstanding shares of capital stock or other equity or voting securities or interests representing the right to vote for the election of directors or other managing authority of such other Person are, at the time of such determination, owned or controlled, directly or indirectly, by such first Person, but such other Person shall be deemed to be a Subsidiary only so long as such ownership or control exists, or (b) which does not have outstanding shares of capital stock or other equity or voting securities or interests with such right to vote, as may be the case in a partnership, joint venture or unincorporated association, but more than 50% of whose ownership interest representing the right to make the decisions for such other Person is, at the time of such determination, owned or controlled, directly or indirectly, by such first Person, but such other Person shall be deemed to be a Subsidiary only so long as such ownership or control exists.

 

“Tecfidera” means the product sold as of the Agreement Date by Licensee under Licensee’s tradename and marketing authorization for its oral formulation of dimethyl fumarate indicated for the treatment of multiple sclerosis at the recommended dose of 480 mg/day associated with NDA No. 204063 and equivalent approvals in Designated Countries.

 

“Territory” means, collectively, the United States and the Designated Countries. 

 

“Third Party” means any Person other than any Party or its Affiliates.

 

“Transactions” means the transactions contemplated by this Agreement, including the Licenses.

 

“TUPE Regulations” means the Danish Consolidation Act no. 710 of August 20, 2002, any other current or subsequent legislation based upon EU Directives 77/187 and 98/50 or any other applicable Law similar to any of the foregoing.

 

“United States” means all states and territories of the United States of America.

 

“Upfront Fee” means the Designated Countries Upfront Fee and the U.S. Upfront Fee.

 

“U.S. Combination Product” means any fixed dose U.S. Infringing Product that incorporates one or more APIs, at least one of which is not recited in a claim of a Patent included in the U.S. Licensed Intellectual Property and which is regulated by the FDA as either (i) a fixed-combination prescription drug as defined in 21 C.F.R. 300.5 (Fixed-combination prescription drugs for humans) (or any equivalent or replacement regulation) or (ii) a Combination Product as set forth in 21 CFR 3.2(e)(1) (or any equivalent or replacement definition).

 

“U.S. Generic Equivalent” means a product used, sold, offered for sale or imported in the United States (a) that is approved by the FDA pursuant to an ANDA filed under

 

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21 U.S.C. §355(j) using New Drug Application No. 204063 as the reference product and (b) that is not an Authorized Generic.

 

“U.S. Infringing Product” has the meaning set forth in Section 4.02.

 

“U.S. License Term” means the period beginning upon the date Licensor receives the U.S. Upfront Fee and continuing perpetually.

 

“U.S. Patents” means all Patents owned, registered or otherwise protected or enjoyable under the laws of the United States.

 

“U.S. Royalty Consideration” has the meaning set forth in Section 4.02.

 

“U.S. Royalty Term” means the period beginning upon the date Licensor receives the U.S. Upfront Fee and ending on the expiration of the last to expire (or be invalidated in entirety by a final court ruling, from which no appeal can be taken or is timely taken) of the U.S. Patents included in the Licensed Intellectual Property.

 

“U.S. Upfront Fee” means an amount equal to USD$1,042,250,000. 

 

“USPTO” means the United States Patent and Trademark Office. 

 

SECTION 1.02. Index of Defined Terms.

 

	
Term
    	
 
    	
Section
    
	
Additional Parties
    	
 
    	
Preamble
    
	
Additional Parties Authorized Agent
    	
 
    	
Section 8.11(b)
    
	
Additional Party Representative
    	
 
    	
Section 8.19(a)
    
	
Aditech
    	
 
    	
Section 1.01
    
	
Aditech Addendum
    	
 
    	
Section 1.01
    
	
Aditech Letter Agreement
    	
 
    	
Section 1.01
    
	
Affiliate
    	
 
    	
Section 1.01
    
	
Agents
    	
 
    	
Section 7.04
    
	
Agreement
    	
 
    	
Preamble
    
	
Agreement Date
    	
 
    	
Section 1.01
    
	
ANDA
    	
 
    	
Section 1.01
    
	
API
    	
 
    	
Section 1.01
    
	
Applicable Payer
    	
 
    	
Section 4.06(b)
    
	
Auditor
    	
 
    	
Section 4.07
    
	
Authorized Generic
    	
 
    	
Section 1.01
    
	
Bankruptcy Code
    	
 
    	
Section 8.15(a)
    
	
Biogen
    	
 
    	
Recitals
    
	
Burdensome Condition
    	
 
    	
Section 2.05(c)
    
	
Business Day
    	
 
    	
Section 1.01
    
	
Co-Exclusive
    	
 
    	
Section 3.01
    
	
Co-Exclusive U.S. License
    	
 
    	
Section 3.01
    

 

10

 

	
Combination Products
    	
 
    	
Section 1.01
    
	
Companies Act
    	
 
    	
Section 1.01
    
	
Confidential Information
    	
 
    	
Section 2.04(b)
    
	
Confidential Intellectual Property Information
    	
 
    	
Section 1.01
    
	
Consent
    	
 
    	
Section 2.05(a)
    
	
Contract
    	
 
    	
Section 1.01
    
	
Designated Countries
    	
 
    	
Section 1.01
    
	
Designated Countries Acquisition Option
    	
 
    	
Section 3.07(a)
    
	
Designated Countries Acquisition Option Closing
    	
 
    	
Section 3.07(c)
    
	
Designated Countries Acquisition Option Closing Date
    	
 
    	
Section 3.07(c)
    
	
Designated Countries Acquisition Option Exercise   Notice
    	
 
    	
Section 3.07(b)
    
	
Designated Countries License Term
    	
 
    	
Section 1.01
    
	
Designated Countries Licensed Intellectual Property
    	
 
    	
Section 3.03
    
	
Designated Countries Licensee
    	
 
    	
Preamble
    
	
Designated Countries Royalty Consideration
    	
 
    	
Section 4.03
    
	
Designated Countries Royalty Term
    	
 
    	
Section 1.01
    
	
Designated Countries Statement
    	
 
    	
Section 4.03(g)
    
	
Designated Countries Upfront Fee
    	
 
    	
Section 1.01
    
	
Designated Country Combination Product
    	
 
    	
Section 1.01
    
	
Designated Country Generic Entry Impact
    	
 
    	
Section 4.03(h)
    
	
Designated Country Generic Equivalent
    	
 
    	
Section 1.01
    
	
Designated Country Infringing Product
    	
 
    	
Section 4.03
    
	
Disclosing Parties
    	
 
    	
Section 2.04(b)
    
	
Disclosing Party
    	
 
    	
Section 2.04(b)
    
	
DOJ
    	
 
    	
Section 2.05(b)
    
	
Effective Date
    	
 
    	
Section 1.01
    
	
European Opposition Proceeding
    	
 
    	
Section 1.01
    
	
Exclusive Designated Countries License
    	
 
    	
Section 3.03
    
	
Exclusive U.S. License
    	
 
    	
Section 3.02(a)
    
	
Exclusive U.S. License Consideration
    	
 
    	
Section 1.01
    
	
Exclusive U.S. License Effective Date
    	
 
    	
Section 3.02(a)
    
	
Exclusive U.S. License Notice
    	
 
    	
Section 3.02(b)
    
	
FDA
    	
 
    	
Section 1.01
    
	
Filing Party
    	
 
    	
Section 8.15(a)
    
	
FTC
    	
 
    	
Section 2.05(b)
    
	
GAAP
    	
 
    	
Section 1.01
    
	
German Proceedings
    	
 
    	
Section 2.01(b)(ii)
    
	
Governmental Entity
    	
 
    	
Section 1.01
    
	
HSR Act
    	
 
    	
Section 1.01
    
	
Infringed Claim
    	
 
    	
Section 1.01
    

 

11

 

	
Infringing Products
    	
 
    	
Section 1.01
    
	
Intellectual Property
    	
 
    	
Section 1.01
    
	
Interference Proceeding
    	
 
    	
Section 1.01
    
	
IP Advisory Committee
    	
 
    	
Section 5.02
    
	
JAMS
    	
 
    	
Section 8.10(c)
    
	
Laws
    	
 
    	
Section 1.01
    
	
Legal Restraints
    	
 
    	
Section 6.01(b)
    
	
Letter Agreement
    	
 
    	
Section 1.01
    
	
License Term
    	
 
    	
Section 1.01
    
	
Licensed Intellectual Property
    	
 
    	
Section 1.01
    
	
Licensed Intellectual Property Rights
    	
 
    	
Section 1.01
    
	
Licensed Patents
    	
 
    	
Section 1.01
    
	
Licensed Product
    	
 
    	
Section 1.01
    
	
Licensee
    	
 
    	
Preamble
    
	
Licensee Released Parties
    	
 
    	
Section 2.01(b)(i)
    
	
Licensee Releasing Parties
    	
 
    	
Section 2.01(c)
    
	
Licenses
    	
 
    	
Section 1.01
    
	
Licensor
    	
 
    	
Preamble
    
	
Licensor Articles
    	
 
    	
Section 1.01
    
	
Licensor Authorized Agent
    	
 
    	
Section 8.11(a)
    
	
Licensor Ordinary Shares
    	
 
    	
Section 1.01
    
	
Licensor Released Parties
    	
 
    	
Section 2.01(c)(i)
    
	
Licensor Releasing Parties
    	
 
    	
Section 2.01(b)
    
	
Licensor Shareholder Approval
    	
 
    	
Section 7.01(b)(iii)
    
	
Licensor Shareholders’ Meeting
    	
 
    	
Section 7.01(b)(iii)
    
	
Lien
    	
 
    	
Section 1.01
    
	
Litigation
    	
 
    	
Section 1.01
    
	
Net Sales
    	
 
    	
Section 1.01
    
	
Non-Filing Party
    	
 
    	
Section 8.15(a)
    
	
Notice
    	
 
    	
Section 8.03
    
	
Notice of Meeting
    	
 
    	
Section 7.01(b)(ii)
    
	
Order
    	
 
    	
Section 7.01(b)(iv)
    
	
Parties
    	
 
    	
Preamble
    
	
Party
    	
 
    	
Preamble
    
	
Patent Transfer Agreement
    	
 
    	
Section 1.01
    
	
Patents
    	
 
    	
Section 1.01
    
	
Permitted Lien
    	
 
    	
Section 1.01
    
	
Person
    	
 
    	
Section 1.01
    
	
PTAB
    	
 
    	
Section 1.01
    
	
Receiving Parties
    	
 
    	
Section 2.04(b)
    
	
Receiving Party
    	
 
    	
Section 2.04(b)
    
	
Released Matters
    	
 
    	
Section 1.01
    
	
Released Parties
    	
 
    	
Section 2.01(d)
    
	
Releasing Parties
    	
 
    	
Section 2.01(f)
    

 

12

 

	
Relevant Patent
    	
 
    	
Section 1.01
    
	
Representatives
    	
 
    	
Section 2.04(a)
    
	
Royalty Consideration
    	
 
    	
Section 1.01
    
	
Royalty Term
    	
 
    	
Section 1.01
    
	
Sales Returns and Allowances
    	
 
    	
Section 1.01
    
	
SEC
    	
 
    	
Section 1.01
    
	
Section 2.05(b) Matters
    	
 
    	
Section 2.05(b)
    
	
Shareholder Meeting Materials
    	
 
    	
Section 1.01
    
	
Shareholders Commitment Agreement
    	
 
    	
Recitals
    
	
Specified IP
    	
 
    	
Section 8.15(b)
    
	
Specified Shareholders
    	
 
    	
Recitals
    
	
Subsidiary
    	
 
    	
Section 1.01
    
	
Tecfidera
    	
 
    	
Section 1.01
    
	
Territory
    	
 
    	
Section 1.01
    
	
the VAT Note
    	
 
    	
Section 4.06(a)(ii)
    
	
Third Party
    	
 
    	
Section 1.01
    
	
Transactions
    	
 
    	
Section 1.01
    
	
TUPE Regulations
    	
 
    	
Section 1.01
    
	
TUPE Related Liabilities
    	
 
    	
Section 2.10
    
	
U.S. Acquisition Option
    	
 
    	
Section 3.06(a)
    
	
U.S. Acquisition Option Closing
    	
 
    	
Section 3.06(c)
    
	
U.S. Acquisition Option Closing Date
    	
 
    	
Section 3.06(c)
    
	
U.S. Acquisition Option Exercise Notice
    	
 
    	
Section 3.06(b)
    
	
U.S. Combination Product
    	
 
    	
Section 1.01
    
	
U.S. Generic Entry Impact
    	
 
    	
Section 4.02(i)
    
	
U.S. Generic Equivalent
    	
 
    	
Section 1.01
    
	
U.S. Infringing Product
    	
 
    	
Section 4.02
    
	
U.S. License Term
    	
 
    	
Section 1.01
    
	
U.S. Licensed Intellectual Property
    	
 
    	
Section 3.01
    
	
U.S. Licensee
    	
 
    	
Preamble
    
	
U.S. Outside Date
    	
 
    	
Section 3.02(b)
    
	
U.S. Patents
    	
 
    	
Section 1.01
    
	
U.S. Royalty Consideration
    	
 
    	
Section 4.02
    
	
U.S. Royalty Term
    	
 
    	
Section 1.01
    
	
U.S. Statement
    	
 
    	
Section 4.02(h)
    
	
U.S. Upfront Fee
    	
 
    	
Section 1.01
    
	
United States
    	
 
    	
Section 1.01
    
	
Upfront Fee
    	
 
    	
Section 1.01
    
	
USPTO
    	
 
    	
Section 1.01
    
	
VAT
    	
 
    	
Section 4.06(a)
    
	
Verzichtsurteil
    	
 
    	
Section 2.01(b)(ii)
    

 

13

 

ARTICLE II 

  Covenants

 

SECTION 2.01. Release of Claims, Dismissal of Claims and Covenant Not To Sue. Effective from and after the Effective Date:

 

(a) Each Party hereby acknowledges and agrees that nothing herein shall be construed to be an admission of liability in connection with any Litigation. Each Party expressly denies any liability to any other Party related to any pending or ongoing Litigation between or among any of the Parties.

 

(b) Each of Licensor and the Additional Parties does for itself, its controlled Affiliates and its and its controlled Affiliates’ successors and assigns, as applicable, (the “Licensor Releasing Parties”),

 

(i) fully, finally, absolutely and forever, throughout the Territory, release, relinquish, acquit and discharge Licensee and each of its predecessors, successors, assigns, administrators, attorneys, agents, shareholders, representatives, officers, directors, employees, trustees, parents, Subsidiaries, customers, suppliers, distributors, importers, manufacturers and insurers and each of their respective Affiliates (collectively, the “Licensee Released Parties”) of, from and against any and all Released Matters, as applicable, anywhere in the Territory arising from the beginning of time to the Effective Date;

 

(ii) agree to undertake the necessary steps to withdraw with prejudice and no right to refile but with each party bearing its own costs and expenses in connection with the proceedings, promptly following the Effective Date, the (A) Litigation involving Licensor’s European patent EP 2 801 355 (Application No. 20140172398) and (B) Litigation involving Licensor’s German Utility Model DE202005002112U1 (the “German Proceedings”). The termination of such Litigation shall be effected by way of a waiver judgment (“Verzichtsurteil”) following Licensor’s waiver of all claims asserted and a subsequent “waiver judgment” of the court to be requested by Licensee. Licensor shall take, and shall cause each of its controlled Affiliates to take, any and all actions, including making any filings with any Governmental Entity, to effect such termination; and

 

(iii) covenant not to sue, not to assign to any other Person a right to sue and not to authorize any other Person to sue any Licensee Released Party for, any and all Released Matters, as applicable, anywhere in the Territory.

 

(c) Licensee does for itself, its controlled Affiliates and its and its controlled Affiliates’ successors and assigns (the “Licensee Releasing Parties”),

 

(i) fully, finally, absolutely and forever, throughout the Territory, release, relinquish, acquit and discharge Licensor and each of its predecessors, successors and assigns and each of their respective administrators, attorneys, agents, shareholders,

 

14

 

representatives, officers, directors, employees, trustees, parents, Subsidiaries, customers, suppliers, distributors, importers, manufacturers and insurers (collectively, the “Licensor Released Parties”) of, from and against any and all Released Matters, as applicable, anywhere in the Territory arising from the beginning of time to the Effective Date;

 

(ii) agree to consent to the withdrawal from the German Proceedings described in Section 2.01(b)(ii) above; and

 

(iii) covenant not to sue, not to assign to any other Person a right to sue and not to authorize any other Person to sue any Licensor Released Party for, any and all Released Matters, as applicable, anywhere in the Territory.

 

(d) It is the intention of the Parties in executing the releases contained in this Section 2.01 and in giving and receiving the consideration called for in this Agreement, that the release contained in this Section 2.01 shall be effective as a full and final accord and satisfaction and general release of and from all Released Matters and the final resolution by the Parties, the Licensee Released Parties and the Licensor Released Parties (collectively, the “Released Parties”) of all Released Matters. The invalidity or unenforceability of any part of this Section 2.01 shall not affect the validity or enforceability of the remainder of this Section 2.01 which shall remain in full force and effect. The releases granted in this Section 2.01 are ongoing, effective as of the Effective Date, and applicable to actions of any Released Party or occurring any time prior to or on the Effective Date.

 

(e) Each Party waives to the fullest extent permitted by Law the provisions and benefits of Section 1542 of the California Civil Code, which provides that: “A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement to the debtor,” and all similar provisions and benefits under the Laws of all countries, states, provinces, and other political subdivisions throughout the Territory.

 

(f) Each Party hereby represents, warrants and covenants to the other Parties that neither it nor any of its controlled Affiliates (collectively, the “Releasing Parties”) have, and Licensor hereby represents, warrants and covenants to the other Parties that none of the Additional Parties have, voluntarily or involuntarily assigned or transferred or purported to assign or transfer to any Person (other than a Subsidiary of such Person) any Released Matters and that no Person other than a Releasing Party has any interest in any Released Matter by Law or Contract or by virtue of any action or inaction by such Party or any of the Releasing Parties. Effective from and after the Effective Date, Licensor and the Additional Parties agree, severally but not jointly, to indemnify and hold harmless the Licensee Released Parties from and against all Litigation arising from any such alleged or actual assignment or transfer of such Released Matters by Licensor its controlled Affiliates or such Additional Party or its controlled Affiliates, respectively. Effective from and after the Effective Date, Licensee agrees to indemnify and hold harmless the Licensor Released Parties from and against all

 

15

 

Litigation arising from any such alleged or actual assignment or transfer of such Released Matters by a Licensee Releasing Party.

 

(g) Notwithstanding anything to the contrary in this Section 2.01, if Licensor has not received the Upfront Fee as required by Section 4.01, this Section 2.01 shall be null and void, nunc pro tunc.

 

SECTION 2.02. Intellectual Property Challenge or Contestation.

 

(a) Effective from and after the Agreement Date, the Parties hereby agree and covenant that, throughout the Territory, they shall not, and shall not agree or commit to, and shall cause their respective controlled Affiliates to not, and to not agree or commit to, (a) directly or indirectly challenge or contest in any Litigation, the validity or enforceability of any Intellectual Property owned or otherwise controlled by any of the Parties as of the Agreement Date relating to treating multiple sclerosis or of the Licensed Intellectual Property, or (b) assist any Third Party, directly or indirectly, to so challenge or contest in any such Litigation, except in each case (i) as the other Parties or such Affiliate may be compelled to respond to legal process in Litigation or proceedings initiated by a Third Party without any assistance or encouragement from any Party or any of their Affiliates or (ii) as related to the Interference Proceeding or the European Opposition Proceeding. In addition, Licensor and the Additional Parties shall not, and shall cause each of their respective controlled Affiliates not to, and shall not aid any Third Party to, oppose or object to any future amendments or supplements to NDA No. 204063.

 

(b) Notwithstanding anything to the contrary in this Section 2.02, if Licensor has not received the Upfront Fee as required by Section 4.01, this Section 2.02 shall be null and void, nunc pro tunc.

 

SECTION 2.03. Transfers of Intellectual Property; Liens. Effective from and after the Agreement Date, Licensor and the Additional Parties hereby agree and covenant that, throughout the Territory, they shall not, and shall cause each of their respective controlled Affiliates not to (i) sell, license, transfer, assign or otherwise dispose of, encumber or impair any Licensed Intellectual Property Rights except as permitted pursuant to and in accordance with Article III and/or Section 2.11, (ii) subject any Licensed Intellectual Property Rights to any Lien other than Permitted Liens (or authorize or allow any of the Licensed Intellectual Property Rights to become subject to any Lien other than Permitted Liens), (iii) enter into any Contract relating to the sale, licensing, transfer, disposition or assignment of any Licensed Intellectual Property Rights including any option related thereto; except, in the case of Licensor, to assign its Co-Exclusive rights pursuant to and in accordance with Section 3.01 or (iv) disclose to any Third Party, other than Representatives of Licensee under a confidentiality agreement or other legally binding duty of confidentiality, any Confidential Intellectual Property Information relating to the Licensed Intellectual Property in a way that results in a material loss of intellectual property protection for such Confidential Intellectual Property Information or any Licensed Intellectual Property. Licensor and the Additional Parties hereby agree and covenant that, throughout the Territory, they shall, and shall cause each of their respective controlled Affiliates to, comply in

 

16

 

all material respects with the terms of all third-party licenses and other obligations related to or included in the Licensed Intellectual Property.

 

SECTION 2.04. Access to Information; Confidentiality; Notification. Without limiting any other rights or obligations hereunder:

 

(a) Each of Licensor and the Additional Parties shall, and shall cause each of their respective controlled Affiliates to, give Licensee, and to Licensee’s Affiliates and its and their respective officers and employees and, solely when acting in their capacity as the following, attorneys and other advisors and representatives (collectively, “Representatives”),  reasonable access during normal business hours and on reasonable advance notice, from the Effective Date until the earliest of the end of the Royalty Term and the termination of this Agreement in accordance with its terms, to all of their respective Confidential Intellectual Property Information, books and records and Contracts relating to the ownership of or Licensee’s rights in, to or under the Licensed Intellectual Property, and directors, officers, employees, contractors, consultants, attorneys, other advisors and representatives, in each case, to the extent related to the Licensed Intellectual Property; provided that in no event shall Licensor or the Additional Parties be required to provide any information that is subject to attorney-client privilege or work product immunity, to the extent (but only to the extent) that such privilege or immunity would reasonably be expected to be lost or reduced by disclosure to Licensee, or any Confidential Intellectual Property Information, in either case that is related to (i) the negotiation of this Agreement or any enforcement hereof or disputes hereunder (including establishing that a product is an Infringing Product), (ii) the Interference Proceeding or (iii) the European Opposition Proceeding, in each case prior to the conclusion of such matters; except that (A) in each case Licensor and the Additional Parties shall, and shall cause each of their respective controlled Affiliates to, use commercially reasonable efforts to provide the applicable information in a way, if any, that would not reasonably be expected to violate such privilege, as applicable, or materially adversely affect Licensor or the Additional Parties, as applicable, in the Interference Proceeding or the European Opposition Proceeding, as applicable; and (B) no investigation by Licensee or its Representatives shall affect or be deemed to modify or waive the representations and warranties of Licensor or the Additional Parties set forth in this Agreement. The Parties shall, and shall cause any of their respective applicable controlled Affiliates to, enter into a Joint Defense and Common Interest Agreement substantially in the form agreed upon by Licensor and Licensee and such other agreements as may be required to effectuate the purposes of this Agreement.

 

(b) Each Party shall keep confidential, and shall instruct its Representatives to keep confidential, information relating to the other Parties and their Affiliates provided by such other Parties or any of their Affiliates (each a “Disclosing Party” and, collectively with its respective Affiliates, the “Disclosing Parties”) to such receiving Party or any of its Affiliates (a “Receiving Party” and, collectively with its respective Affiliates, the “Receiving Parties”) and its Representatives pursuant to or in connection with this Agreement (the “Confidential Information”), except as may otherwise be requested or required by (i) applicable Law or stock exchange requirements

 

17

 

or (ii) judicial or legal process or by any Governmental Entity, in which case the Receiving Party will, to the extent permitted by applicable Law, provide the Disclosing Parties with prompt written notice of such requirement so that the Disclosing Parties may seek an appropriate protective order (at the Disclosing Parties’ sole expense). For purposes hereof, “Confidential Information” shall not include any information that (A) was or becomes generally available to the public other than as a result of a disclosure by the Receiving Party or any of its Representatives in violation of this Section 2.04(b), (B) was or becomes available to the Receiving Party or any of its Representatives from a source other than a Disclosing Party; provided that the provision of such information from such source is reasonably believed by the Receiving Party or its Representatives, as applicable, not to be subject to an obligation of confidentiality (whether by agreement or otherwise) to a Disclosing Party, (C) at the time of disclosure is already in the possession of the Receiving Party or any of its Representatives; provided that such information is reasonably believed by the Receiving Party or its Representatives, as applicable, not to be subject to an obligation of confidentiality (whether by agreement or otherwise) to a Disclosing Party or (D) was independently developed by the Receiving Party or any of its Representatives on the Receiving Party’s behalf without reference to, incorporation of, or other use of any Confidential Information. The Parties acknowledge that Licensor will file this Agreement and the Aditech Addendum with the SEC promptly after the Agreement Date, and that Licensor will also on or after the Agreement Date make this Agreement and the Aditech Addendum publically available on its website as part of the Shareholder Meeting Materials.

 

SECTION 2.05. Commercially Reasonable Efforts; Notification. Effective from and after the Effective Date:

 

(a) Upon the terms and subject to the conditions set forth in this Agreement, each Party shall, and shall cause its controlled Affiliates to, use its commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other Parties in doing, all things necessary, proper or advisable to consummate and make effective, as promptly as practicable, the Transactions, including (i) the obtaining of all necessary or advisable actions or non-actions, waivers, approvals, licenses, permits, orders or other authorizations and consents (“Consent”) from, the making of all necessary registrations, declarations and filings with and the taking of all reasonable steps as may be necessary to avoid any Litigation by, any Governmental Entity or other Third Party with respect to this Agreement or the Transactions and (ii) the execution and delivery of any additional instruments necessary to consummate the Transactions and to fully carry out the purposes of this Agreement.

 

(b) Without limiting the generality of the Parties’ obligations under Section 2.05(a), and in furtherance thereof, each of the Parties shall, and shall cause their respective controlled Affiliates to, in consultation and cooperation with the other, file with the United States Federal Trade Commission (the “FTC”) and the United States Department of Justice (the “DOJ”), the notification and report form, if any, required under the HSR Act for any Transaction. Any such filings shall be in substantial

 

18

 

compliance with the requirements of the HSR Act. Each of the Parties shall, and shall cause each of their respective controlled Affiliates to, (i) furnish to the other Parties such necessary information and reasonable assistance as the other Parties may request in connection with its preparation of any filing or submission which is necessary under the HSR Act, (ii) give the other Parties reasonable prior notice of any such filings or submissions and, to the extent reasonably practicable, of any communication with, and any inquiries or requests for information from, the FTC, the DOJ or any other Governmental Entity regarding any of the Transactions, and permit the other Parties to review and discuss in advance, and consider in good faith the views of, and secure the participation of, the other Parties in connection with, any such filings, submissions, communications, inquiries or requests, (iii) unless prohibited by applicable Law or by the applicable Governmental Entity, and to the extent reasonably practicable, (A) not participate in or attend any meeting, or engage in any substantive conversation, with any Governmental Entity in respect of any of the Transactions without the other Parties,  (B) give the other Parties reasonable prior notice of any such meeting or conversation, (C) in the event a Party is prohibited by applicable Law or by the applicable Governmental Entity from participating in or attending any such meeting or engaging in any such conversation, keep such Party apprised with respect thereto, (D) cooperate in the filing of any substantive memoranda, white papers, filings, correspondence or other written communications explaining or defending this Agreement or the Transactions, articulating any regulatory or competitive argument or responding to requests or objections made by any Governmental Entity and (E) furnish the other Parties with copies of all filings, submissions, correspondence and communications (and memoranda setting forth the substance thereof) between it and its controlled Affiliates and their respective Representatives, on the one hand, and any Governmental Entity or members of any Governmental Entity’s staff, on the other hand, with respect to this Agreement or the Transactions, including promptly furnishing the other Parties with copies of notices or other communications received or provided by such Party, or any of its controlled Affiliates, from or to any Third Party and/or Governmental Entity and (iv) comply with any inquiry or request from the FTC, the DOJ or any other Governmental Entity as promptly as reasonably practicable; provided, however, that Licensee and its Affiliates shall not be obligated to comply with any requests for substantial additional information and documentary material from the FTC and/or DOJ (or any analogous request by any non-U.S. Governmental Entity), which, for the avoidance of doubt, includes any “second request” from the FTC and/or the DOJ. In addition, no Party shall, and each shall cause its respective controlled Affiliates not to, take any action with the intention to, or that could reasonably be expected to, hinder or delay the expiration or termination of any waiting period under the HSR Act or the obtaining of any approval required by applicable Law from any Governmental Entity. Notwithstanding the foregoing, (I) the Parties agree that it is Licensee’s sole right to devise and implement the strategy for all filings, submissions, notifications and communications subject to this Section 2.05(b) (“Section 2.05(b) Matters”), including, in each case, the timing thereof, and to direct all Section 2.05(b) Matters with any Governmental Entity consistent with Licensee’s obligations hereunder, provided, however, that, in the event the PTAB’s determination in the Interference Proceeding (notwithstanding any appeal therefrom) results in the subsistence and ownership by Licensee (or an Affiliate of Licensee) of Patent US 8,399,514 B2 (and,

 

19

 

for the avoidance of doubt, does not result in Licensor obtaining a Relevant Patent), Licensee shall, subsequent to the issuance of such PTAB determination, consult with and consider in good faith the views of Licensor regarding the strategy for all Section 2.05(b) Matters, including, in each case, the timing thereof, and (II) each Party may, as each deems advisable and necessary, reasonably designate any competitively sensitive material provided to the other or its Affiliates under this Section 2.05(b) as “Counsel Only Material”, which such material and the information included therein shall be given only to the in house and outside counsel of the recipient and will not be disclosed by such counsel to employees, officers or directors of the recipient unless express permission is obtained in advance from the source of the materials or its legal counsel. Notwithstanding anything to the contrary contained in this Section 2.05, materials provided pursuant to this Section 2.05 may be redacted to remove references concerning any Confidential Information, as necessary to comply with contractual arrangements and as necessary to address reasonable confidentiality concerns.

 

(c) Notwithstanding anything to the contrary set forth in this Agreement, neither Licensee nor any of its Affiliates shall be required to, and Licensor and the Additional Parties may not, and shall cause their respective controlled Affiliates not to, without the prior written consent of Licensee, consent to, or offer or agree to, or otherwise take any action with respect to, any requirement, condition, limitation, understanding or agreement or order to (i) sell, license, grant an option or similar right under, assign, transfer, divest, hold separate or otherwise dispose of (A) in the case of Licensee or any of its Affiliates, any assets, business or portion of business of Licensee or any of its Affiliates and (B) in the case of Licensor, the Additional Parties or any of their respective Affiliates, any Licensed Intellectual Property, (ii) conduct, restrict, operate, invest or otherwise change in any manner (A) in the case of Licensee or any of its Affiliates, any assets, business or portion of business of Licensee or any of its Affiliates and (B) in the case of Licensor, the Additional Parties or any of their respective Affiliates, any Licensed Intellectual Property, (iii) impose any restriction, requirement or limitation on the operation of the business or portion of the business of Licensee or any of its Affiliates or (iv) modify any provision or term of this Agreement, the Aditech Addendum, the Patent Transfer Agreement or any other Contract with respect to the Licensed Intellectual Property (any of the foregoing, a “Burdensome Condition”). In addition, notwithstanding anything to the contrary set forth in this Agreement, (x) neither Licensee nor any of its Affiliates shall be required to defend or contest any Litigation, whether judicial or administrative, challenging this Agreement or the consummation of the Transactions, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Entity vacated or reversed and (y) Licensor and the Additional Parties may not, and shall cause their respective controlled Affiliates not to, without the prior written consent of Licensee, defend or contest any Litigation whether judicial or administrative, challenging this Agreement or the consummation of the Transactions on antitrust or competition law grounds, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Entity vacated or reversed. If requested by Licensee (x) Licensor and the Additional Parties shall, and shall cause their respective controlled Affiliates to become subject to, consent to, or offer or agree to, or otherwise take any action with respect to, any such

 

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requirement, condition, limitation, understanding, agreement or order of any Governmental Entity so long as such requirement, condition, limitation, understanding, agreement or order is only binding on Licensor, the Additional Parties and their respective applicable controlled Affiliates if the Transactions are consummated and (y) prior to the U.S. Outside Date, Licensor and the Additional Parties shall, and shall cause each of their respective controlled Affiliates to, at each of their own respective cost and expense, defend or contest any Litigation referred to in clause (y) of the second sentence of this Section 2.05(c).

 

SECTION 2.06. Public Announcements. Effective from and after the Agreement Date, the Parties shall consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press release or other public statements with respect to this Agreement, the Aditech Addendum or the Transactions or the transactions contemplated by the Aditech Addendum, and shall not issue any such press release or make any such public statement without the prior consent of the other (which consent shall not be unreasonably withheld, delayed or conditioned), except (a) as required by applicable Law, judicial or legal process or by obligations pursuant to any listing agreement with any securities exchange or the SEC; or (b) for press releases or other public statements which only include information relating to this Agreement or the Transactions that has been previously made public in accordance with the terms of this Agreement or (c) announcement of the Notice of Meeting on Licensor’s website or otherwise in accordance with Licensor Articles. The Parties agree that the initial press release to be issued with respect to the Transactions shall be in the form heretofore agreed to by the Parties in writing.

 

SECTION 2.07. No Frustration. Effective from and after the Agreement Date, Licensor and the Additional Parties shall not take, and shall cause each of their respective controlled Affiliates not to take, any action that would, or would reasonably be expected to, (i) result in any condition set forth in Article VI not being promptly satisfied or (ii) impair the ability of Licensor or any of the Additional Parties or any of their respective Affiliates to perform its obligations under this Agreement or prevent or impede, interfere with, hinder or delay (A) the consummation of any of the Transactions, (B) the performance of any of the Transactions following the Agreement Date or (C) Licensee, its Affiliates or sublicensees from realizing the benefits of the Licenses. For the avoidance of doubt, Licensor and the Additional Parties shall not take, and shall cause each of their respective controlled Affiliates not to take, any action permitted under the terms of the Licenses if such action would, or would reasonably be expected to, impede, interfere with, hinder or delay Licensee, its Affiliates or sublicensees from realizing the benefits of the Licenses.

 

SECTION 2.08. Existence. Effective from and after the Agreement Date, Licensor and, for so long as they retain any right in any Licensed Intellectual Property, the Additional Parties, if any, having any right in any of the Licensed Intellectual Property shall, and shall cause each of their respective controlled Affiliates having any right in any of the Licensed Intellectual Property to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence. In addition, effective from and after the Agreement Date, Licensor and, for so long as they retain any right in any Licensed Intellectual Property, the Additional Parties, if any, having any right in any of the Licensed Intellectual Property, shall not,

 

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and shall cause each of their respective controlled Affiliates having any right in any of the Licensed Intellectual Property (for so long as such controlled Affiliates have any right in any of the Licensed Intellectual Property ) not to, commence or file any petition seeking (i) liquidation, reorganization or other relief in respect of any of Licensor, the Additional Parties, if any, having any right in any of the Licensed Intellectual Property or any of their respective Affiliates having any right in any of the Licensed Intellectual Property, or any of their respective debts, or of a substantial part of their respective assets, under any U.S. Federal, U.S. state, Danish or other bankruptcy, insolvency, receivership or similar Law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any of Licensor, any of its controlled Affiliates having any right in any of the Licensed Intellectual Property or, for so long as they retain any right in any Licensed Intellectual Property, the Additional Parties, if any, having any right in any of the Licensed Intellectual Property, in each case for a substantial part of their respective assets.

 

SECTION 2.09. Solvency.

 

(a)         During the period from the Agreement Date until the satisfaction of all of Licensor’s obligations under Section 2.10, Licensor shall not, and shall cause each of its controlled Affiliates not to, become insolvent or permit the cash and cash equivalents owned by Licensor and its Subsidiaries to be less than the amount required to satisfy its obligations as they come due, including its obligations under Section 2.10 plus any amounts required pursuant to Section 2.09(b) and any taxes thereon.

 

(b)         During the period from the Agreement Date until the earlier of (i) the end of the Royalty Term and (ii) the later of (x) the Designated Countries Acquisition Option Closing Date and (y) the US Acquisition Option Closing Date, as applicable, Licensor shall not, and shall cause each of its controlled Affiliates not to, permit the assets, cash and cash equivalents owned by Licensor and its Subsidiaries to be less than the amount required to maintain Licensor as a going concern and a solvent entity, including the amount required to satisfy all tax liabilities of Licensor. In addition, and notwithstanding anything in the immediately preceding sentence to the contrary, from the Agreement Date until the satisfaction of all of Licensor’s obligations under Section 2.11 required to be performed before 18 months following the Agreement Date, Licensor shall not, and shall cause each of its controlled Affiliates not to, permit the assets, cash and cash equivalents owned by Licensor and its Subsidiaries to be less than the amount required to maintain Licensor as a going concern and a solvent entity, including, for the avoidance of doubt, the amount required to satisfy all tax and other liabilities of Licensor plus an additional $5,000,000.

 

(c)          During the period from the Agreement Date until the end of the Royalty Term, as soon as reasonably practicable following the end of each Licensor fiscal year during such period, Licensor shall provide Licensee with a consolidated balance sheet of Licensor and its Subsidiaries as of the last day of the relevant fiscal year that has been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and audited by an internationally recognized independent accounting firm.

 

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(d) During the period from the Agreement Date until the end of the Royalty Term, for so long as it has any right in any of the Licensed Intellectual Property, each of the Additional Parties, if any, having any right in any of the Licensed Intellectual Property shall not, and shall cause each of their respective controlled Affiliates having any right in any of the Licensed Intellectual Property not to, permit their respective assets, cash and cash equivalents, or those of their respective Subsidiaries, to be less than the amount required to maintain each such Person and each of their respective Subsidiaries as a going concern and a solvent entity.

 

SECTION 2.10. TUPE Regulations; Indemnification. Effective from and after the Agreement Date, Licensor shall indemnify Licensee and its Affiliates for any and all losses, damages, liabilities, costs and expenses arising in connection with the transactions contemplated by this Agreement as a result of the application of the TUPE Regulations to any directors, employees or other service providers of Licensor and any of its Affiliates (including those relating to claims for employment with or compensation from Licensee or any of its Affiliates or with respect to warrants or other equity or equity-based compensation issued by Licensor or any of its Affiliates) (the “TUPE Related Liabilities”). Without limiting the generality of the foregoing, Licensor and Licensee shall cooperate and use commercially reasonable efforts to take actions to mitigate any such TUPE Related Liabilities, which actions shall include (a) the vesting by Licensor of warrants and other equity or equity-based compensation which vest as a result of the Transactions in accordance with the terms and conditions of the applicable Licensor plans or programs and (b) in the case of any director, employee or service provider of Licensor or any of its Affiliates who successfully asserts a claim to become employed by Licensee or any of its Affiliates, (i) prompt written notification to Licensor of any such claim directly received by Licensee or any of its Affiliates and (ii) the termination of such director, employee or service provider by Licensee or such Affiliate, as applicable, as soon as practicable following a written request from Licensor to take such action if, and effective at the earliest time, such action is permissible under applicable Law.

 

SECTION 2.11. Specified Actions. Effective from and after the Effective Date, Licensor shall use its commercially reasonable efforts to, and to cause each of its controlled Affiliates to, (i) take the actions set forth on Appendix D as soon as reasonably practicable following the Effective Date, and (ii) consummate the transactions contemplated by, and in the manner and subject to the conditions described in, Appendix D within 270 days following the Agreement Date. If the transactions contemplated in Step 1 of Appendix D are not consummated substantially in accordance with the immediately foregoing sentence, the P/S Sub Restructuring Alternative (as a defined in Appendix D) will be consummated. The Parties shall, and shall cause each of their respective controlled Affiliates to, cooperate to make any amendments to this Agreement that are reasonably necessary to give effect to such transactions. Notwithstanding anything in this Agreement to the contrary, the Parties’ obligations set forth in this Section 2.11 shall terminate upon the later of (a) the Designated Countries Acquisition Option Closing Date and (b) the US Acquisition Option Closing Date.

 

SECTION 2.12. Joinder. With respect to any Person that is not a Party to this Agreement as of the Effective Date, but is contemplated by the terms of Appendix D to become a party to this Agreement after the Effective Date, the Parties (a) acknowledge the intent to join

 

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such Person to this agreement in accordance with Appendix D, (b) shall execute and deliver or procure the execution and delivery of any instrument or agreement, and take such other action as may be necessary, to assure that the joinder to this Agreement of such Person in accordance with the terms of Appendix D occurs and is lawfully and validly carried out and (c) agree that upon the execution and delivery to the Parties of any such joinder agreement, each party thereto that was not a Party to this Agreement as of the Effective Date shall be deemed a Party to this Agreement from and after the date of such joinder agreement.

 

SECTION 2.13. Ixchel. Each of the Additional Parties and Licensor shall, and shall cause each of its respective controlled Affiliates to, terminate any and all existing, and not enter into any new, Contracts or obligations to Ixchel Pharma LLC, Dr. Gino Cortopassi and/or any other Person, to the extent related to the development by any of the Additional Parties, Licensor or any of their respective controlled Affiliates of any pharmaceutical product having dimethyl fumarate as an API for the treatment of a human for any indication, including Friedreich’s ataxia.

 

SECTION 2.14. Shareholder Litigation. Licensor shall give Licensee the opportunity to participate (at Licensee’s expense) in the defense or settlement of any shareholder litigation against Licensor or its officers and directors relating to this Agreement or the Transactions, and no such settlement involving any non-monetary damages shall be agreed to without Licensee’s prior written consent (such consent not to be unreasonably withheld, conditioned or delayed).

 

ARTICLE III

 

Licenses and Related Rights

 

SECTION 3.01. Co-Exclusive U.S. License. Effective upon U.S. Licensee’s payment of the U.S. Upfront Fee to Licensor pursuant to Section 4.01, each of Licensor and the Additional Parties, on behalf of itself and each of its respective controlled Affiliates, hereby grants to U.S. Licensee and its Affiliates, effective at all times during the U.S. License Term, a perpetual (until any grant of an Exclusive U.S. License (defined below) in accordance with Section 3.02), irrevocable, Co-Exclusive royalty-bearing (in accordance with Article IV) license, to make any and all use in the United States of the Licensed Intellectual Property owned, registered or otherwise protected or enjoyable under the Laws of the United States by Licensor, such Additional Party or such controlled Affiliate, as the case may be (it being understood that certain of such grantors (other than the Licensor) may not in fact own or hold or have any rights in or to any Licensed Intellectual Property) (such Licensed Intellectual Property, the “U.S. Licensed Intellectual Property”), with the right to sublicense, transfer or assign, (such Co-Exclusive license, the “Co-Exclusive U.S. License”). For the purpose of this Agreement, “Co-Exclusive” shall mean as to Licensor that Licensor has the limited license and right to itself (or through any of its wholly-owned Subsidiaries) make any and all use of the U.S. Licensed Intellectual Property in the United States, including by authorizing contractors to perform services for Licensor, including services to manufacture or import products and to perform wholesale and distribution services for Licensor and its wholly-owned Subsidiaries but shall not be permitted to otherwise directly or indirectly grant additional licenses under, sublicense, assign

 

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or transfer the U.S. Licensed Intellectual Property to any Third Party or otherwise encumber the U.S. Licensed Intellectual Property in any way or use, deploy or operate the U.S. Licensed Intellectual Property for the benefit of any party other than Licensor and its wholly-owned Subsidiaries; provided, however, that if, after the U.S. Outside Date, as defined below, U.S. Licensee has not obtained the Exclusive U.S. License, as defined below, Licensor shall have the right on one occasion to assign its Co-Exclusive rights, in whole, but not in part, to a single Third Party, who shall have no additional right to assign or sublicense such Co-Exclusive rights (except to its wholly owned Subsidiaries) but shall have the right to authorize contractors to perform services (as contemplated above) for such assignee. For the avoidance of doubt, if Licensor assigns its Co-Exclusive rights to any Third Party in accordance with this Section 3.01, Licensor and the Additional Parties and their respective controlled Affiliates shall not be permitted to make any use of the U.S. Licensed Intellectual Property thereafter. The Co-Exclusive U.S. License granted under this Section 3.01 shall be binding on Licensor’s and each of the Additional Parties’ successors and assigns.

 

SECTION 3.02. Exclusive U.S. License.

 

(a)         Subject to U.S. Licensee’s payment to Licensor of the U.S. Upfront Fee, (i) each of Licensor and the Additional Parties, on behalf of itself and each of its respective controlled Affiliates, hereby grants to U.S. Licensee and its Affiliates, a perpetual, irrevocable, exclusive (even as to Licensor, each of the Additional Parties and their respective Affiliates) royalty-bearing (in accordance with Article IV) license to the U.S. Licensed Intellectual Property, with the right to sublicense, transfer or assign, and to make any and all use thereof in the United States (such exclusive license, the “Exclusive U.S. License”), that shall be effective at all times during the period beginning on the date that is two Business Days following the later of (x) Licensee’s delivery of the Exclusive U.S. License Notice (as defined below) and (y) the satisfaction or waiver (by the Party or Parties entitled to the benefit thereof) of the conditions set forth in Article VI (the “Exclusive U.S. License Effective Date”) through the end of the U.S. License Term. U.S. Licensee shall pay, or cause to be paid, to Licensor, by wire transfer of immediately available funds to the account designated in writing by Licensor, the Exclusive U.S. License Consideration within five (5) Business Days after the Exclusive U.S. License Effective Date. The Exclusive U.S. License shall be binding on Licensor’s and each of the Additional Parties’ successors and assigns.

 

(b)         U.S. Licensee shall deliver to Licensor and the Additional Parties a notice specifying its intention to take the Exclusive U.S. License (the “Exclusive U.S.  License Notice”) on or prior to the date that is 75 days following the final decision in the Interference Proceeding, including any appeals therefrom to the Federal Circuit (including any en banc review); provided that U.S. Licensee may, at its option and upon written notice to Licensor and the Additional Parties, extend such date by an additional 140 days (such date, including such extension thereof, if exercised, the “U.S. Outside Date”); provided, further, that U.S. Licensee shall not be obligated to deliver an Exclusive U.S. License Notice if the conditions set forth in Section 6.01 have not been satisfied or waived (by the Party or Parties entitled to the benefit thereof) on or prior to the U.S. Outside Date. Notwithstanding the foregoing, U.S. Licensee may, at its option,

 

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elect to deliver the Exclusive U.S. License Notice at any time prior to the U.S. Outside Date.

 

SECTION 3.03. Exclusive Worldwide (other than U.S.) License. Effective upon payment of the Designated Countries Upfront Fee to Licensor pursuant to Section 4.01, each of Licensor and the Additional Parties, on behalf of itself and each of its respective controlled Affiliates, hereby grants to Designated Countries Licensee and its Affiliates, effective at all times during the Designated Countries License Term, a perpetual, irrevocable, exclusive (even as to Licensor, each of the Additional Parties and their respective Affiliates), royalty-bearing (in accordance with Article IV) license to all Licensed Intellectual Property owned, registered or otherwise protected or enjoyable under the Laws of any country in the world other than the United States (the “Designated Countries Licensed Intellectual Property”) with the right to sublicense, transfer or assign, and to make any and all use thereof in the Designated Countries (the “Exclusive Designated Countries License”).

 

SECTION 3.04. Restrictions on Transfer. To the extent Licensor, any of the Additional Parties or any of their respective Affiliates assigns or otherwise transfers or grants rights under (by any means) to any Third Party any right, title or interest in, to or under any Licensed Intellectual Property from and after the Agreement Date, Licensor or such Additional Party, as applicable, shall and shall cause its applicable controlled Affiliate to make such assignment, transfer or other grant only as permitted hereunder and subject to the licenses and other rights granted under this Agreement, as applicable.

 

SECTION 3.05. Use Through Affiliates. For the avoidance of doubt, Licensee may exercise any or all of its rights under this Article III itself and with or through one or more of its Affiliates, and Licensee and its Affiliates may subcontract with their service providers under the license granted pursuant to this Article III to manufacture or import products licensed hereunder and to perform wholesale and distribution services for Licensee and its Affiliates regarding the same, without limitation.

 

SECTION 3.06. U.S. Purchase Option.

 

(a)         If the Interference Proceeding (including any appeals therefrom to the Federal Circuit (including any en banc review)) results in the subsistence and ownership by Licensee (or an Affiliate of Licensee) of Patent US 8,399,514 B2 (and, for the avoidance of doubt, does not result in Licensor owning a Relevant Patent), then Licensee or its designated Affiliate shall have the option (but not the obligation) to acquire all of Licensor’s, the Additional Parties’ and their respective controlled Affiliates’ right, title and interest in, to and under the U.S. Licensed Intellectual Property (excluding any and all liabilities arising out of or in connection with the U.S. Licensed Intellectual Property) for the consideration set forth in Section 3.06(d) (the “U.S. Acquisition Option”).

 

(b)         Licensee may exercise the U.S. Acquisition Option by delivering written notice of such exercise to Licensor and the Additional Parties (a “U.S. Acquisition Option Exercise Notice”) at any time permitted by Section 3.06(a), but in any event not later than 6 months following the date on which such option first becomes exercisable.

 

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(c) Following the delivery of a U.S. Acquisition Option Exercise Notice, the U.S. Acquisition Option shall close on the later of (i) the date of delivery of the U.S. Acquisition Option Exercise Notice and (ii) the date on which the conditions to closing such U.S. Acquisition Option set forth in Section 3.06(g) have been satisfied or waived (by the Party or Parties entitled to the benefit thereof) (the “U.S. Acquisition Option Closing”). The date on which such U.S. Acquisition Option Closing shall occur is referred to herein as the “U.S. Acquisition Option Closing Date”.

 

(d) U.S. Licensee shall pay, or cause to be paid, to Licensor, by wire transfer of immediately available funds to the account designated in writing by Licensor, USD$50,000, on the U.S. Acquisition Option Closing Date.

 

(e) At all times from and after the U.S. Acquisition Option Closing Date, the acquisition of the U.S. Licensed Intellectual Property described in this Section 3.06 shall replace the licenses granted in Sections 3.01 and 3.02.

 

(f) Notwithstanding anything to the contrary in Article V, at all times from and after the U.S. Acquisition Option Closing Date, Licensee shall have sole control over the prosecution, maintenance, defense and assertion of the U.S. Licensed Intellectual Property and shall not be required to consult with Licensor regarding any of the foregoing.

 

(g) The U.S. Acquisition Option Closing shall be subject to the satisfaction or waiver of the following conditions:

 

(i) Payment of Upfront Fee. Timely payment in full by Licensee to Licensor of the Upfront Fee as contemplated by Section 4.01.

 

(ii) HSR Clearance. If Licensee reasonably determines in good faith that Licensee’s exercise of the U.S. Acquisition Option requires the filing of the notification and report form required by the HSR Act with the FTC and DOJ, any waiting period (and any extension thereof) applicable to the U.S. Acquisition Option shall have expired or been earlier terminated.

 

(iii) Legal Restraints. No Legal Restraints, whether temporary or permanent, restraining, enjoining, preventing, prohibiting or otherwise making illegal or ineffective Licensee’s acquisition of all of Licensor’s, the Additional Parties’ and their respective controlled Affiliates’ right, title and interest in, to or under the U.S. Licensed Intellectual Property pursuant to the U.S. Acquisition Option shall be in effect.

 

(h) At the U.S. Acquisition Option Closing, each of Licensor and the Additional Parties shall, and shall cause each of their respective controlled Affiliates to  (i) execute all assignments, transfer forms, endorsements and such other customary instruments of sale, transfer or assumption required by applicable Law to vest in Licensee all of Licensor’s, the Additional Parties’ and their respective controlled Affiliates’ right, title and interest in, to or under the U.S. Licensed Intellectual Property, in form and substance reasonably satisfactory to Licensee, (ii) execute such other agreements,

 

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documents and instruments as Licensee believes to be reasonably necessary to consummate its acquisition of all of Licensor’s, the Additional Parties’ and their respective controlled Affiliates’ right, title and interest in, to or under the U.S. Licensed Intellectual  Property and (iii) take all actions that Licensee deems reasonably necessary or advisable in order to record, or assist Licensee or any of its Affiliates in recording, with any relevant Governmental Entity including the USPTO, the assignment of the U.S. Licensed Intellectual Property to Licensee, so as to perfect Licensee’s or an Affiliate of Licensee’s ownership thereof (including authorizing Licensee or an Affiliate of Licensee to record the documents, or forms of the documents, contemplated by the foregoing clauses (i) and (ii) with any relevant Governmental Entity including the USPTO). For the avoidance of doubt, notwithstanding any other provision of this Agreement or any other agreement, document or instrument executed pursuant to this Section 3.06, Licensee and its Affiliates shall not assume or be liable for any liabilities, obligations or commitments of Licensor, the Additional Parties or any of their respective Affiliates, of any kind, whether express or implied, liquidated, absolute, accrued, contingent or otherwise, or known or unknown, existing on or occurring prior to the U.S. Acquisition Option Closing.

 

SECTION 3.07. Designated Countries Purchase Option.

 

(a) If the European Opposition Proceeding (including any appeals therefrom to the Technical Board of Appeal and/or the Enlarged Board of Appeal) does not result in the subsistence and ownership by Licensor of European patent EP 2801355 (Application No. 14172398.1), then Licensee or its designated Affiliate shall have the option (but not the obligation) to acquire all of Licensor’s, the Additional Parties’ and their respective controlled Affiliates’ right, title and interest in, to and under the Designated Countries Licensed Intellectual Property (excluding any and all liabilities arising out of or in connection with the Designated Countries Licensed Intellectual Property) for the consideration set forth in Section 3.07(d) (the “Designated Countries Acquisition Option”).

 

(b) Licensee may exercise the Designated Countries Acquisition Option by delivering written notice of such exercise to Licensor and the Additional Parties (a “Designated Countries Acquisition Option Exercise Notice”) at any time permitted by Section 3.07(a), but in any event not later than 6 months following the date on which such option first becomes exercisable.

 

(c) Following the delivery of a Designated Countries Acquisition Option Exercise Notice, the Designated Countries Acquisition Option shall close on the later of (i) the date of delivery of the Designated Countries Acquisition Option Exercise Notice and (ii) the date on which the conditions to closing such Designated Countries Acquisition Option set forth in Section 3.07(g) have been satisfied or waived (by the Party or Parties entitled to the benefit thereof) (the “Designated Countries Acquisition Option Closing”). The date on which such Designated Countries Acquisition Option Closing shall occur is referred to herein as the “Designated Countries Acquisition Option Closing Date”.

 

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(d) Designated Countries Licensee shall pay, or cause to be paid, to Licensor, by wire transfer of immediately available funds to the account designated in writing by Licensor, USD$50,000, on the Designated Countries Acquisition Option Closing Date.

 

(e) At all times from and after the Designated Countries Acquisition Option Closing Date, the acquisition of the Designated Countries Licensed Intellectual Property described in this Section 3.07 shall replace the license granted in Section 3.03.

 

(f) Notwithstanding anything to the contrary in Article V, at all times from and after the Designated Countries Acquisition Option Closing Date, Licensee shall have sole control over the prosecution, maintenance, defense and assertion of the Designated Countries Licensed Intellectual Property and shall not be required to consult with Licensor regarding any of the foregoing.

 

(g) The Designated Countries Acquisition Option Closing shall be subject to the satisfaction or waiver of the following condition:

 

(i) Payment of Upfront Fee. Timely payment in full by Licensee to Licensor of the Upfront Fee as contemplated by Section 4.01.

 

(ii) Legal Restraints. No Legal Restraints, whether temporary or permanent, restraining, enjoining, preventing, prohibiting or otherwise making illegal or ineffective Licensee’s acquisition of all of Licensor’s, the Additional Parties’ and their respective controlled Affiliates’ right, title and interest in, to or under the Designated Countries Licensed Intellectual Property pursuant to the Designated Countries Acquisition Option shall be in effect.

 

(h) At the Designated Countries Acquisition Option Closing, each of Licensor and the Additional Parties shall, and shall cause each of their respective controlled Affiliates to (i) execute all assignments, transfer forms, endorsements and such other customary instruments of sale, transfer or assumption required by applicable Law to vest in Licensee all of Licensor’s, the Additional Parties’ and their respective controlled Affiliates’ right, title and interest in, to or under the Designated Countries Licensed Intellectual Property, in form and substance reasonably satisfactory to Licensee, (ii) execute such other agreements, documents and instruments as Licensee believes to be reasonably necessary to consummate its acquisition of all of Licensor’s, the Additional Parties’ and their respective controlled Affiliates’ right, title and interest in, to or under the Designated Countries Licensed Intellectual Property and (iii) take all actions that Licensee reasonably deems necessary or advisable in order to record, or assist Licensee or any of its Affiliates in recording, with any relevant Governmental Entity, the assignment of the Designated Countries Licensed Intellectual Property to Licensee, so as to perfect Licensee’s or an Affiliate of Licensee’s ownership thereof (including authorizing Licensee or an Affiliate of Licensee to record the documents, or forms of the documents, contemplated by the foregoing clauses (i) and (ii) with any relevant Governmental Entity), in each case, in any country in the Territory. For the avoidance of doubt, notwithstanding any other provision of this Agreement or any other agreement,

 

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document or instrument executed pursuant to this Section 3.07, Licensee and its Affiliates shall not assume or be liable for any liabilities, obligations or commitments of Licensor, the Additional Parties or any of their respective Affiliates, of any kind, whether express or implied, liquidated, absolute, accrued, contingent or otherwise, or known or unknown, existing on or occurring prior to the Designated Countries Acquisition Option Closing.

 

ARTICLE IV 

Payment

 

SECTION 4.01. Upfront Fee. In consideration of the rights, licenses and releases granted by the Additional Parties and Licensor to Licensee pursuant to this Agreement, Designated Countries Licensee and U.S. Licensee, respectively, shall pay, or cause to be paid, to Licensor, by wire transfer of immediately available funds to the account designated in writing by Licensor, the Designated Countries Upfront Fee and the U.S. Upfront Fee, respectively, within five (5) Business Days after the Effective Date. The Parties acknowledge that the U.S. Upfront Fee and the Designated Countries Upfront Fee shall, once paid in full, be final and non-refundable.

 

SECTION 4.02. U.S. Royalty. If,

 

(a) the Interference Proceeding, which the Parties agree will be finally decided by exhausting, or failing to exhaust, any appeals to the Court of Appeals for the Federal Circuit without any petition for certiorari to the U.S. Supreme Court, results in Licensor obtaining a Relevant Patent in the United States, and

 

(b) the representations and warranties of Licensor set forth in Sections 7.01(a), 7.01(b) and 7.01(e)(i) and the representations of the Additional Parties set forth in Section 7.02 are true and correct in all material respects, and

 

(c) there is no Legal Restraint in effect, whether temporary or permanent, restraining, enjoining, preventing, prohibiting, revoking or otherwise making illegal or ineffective the grant of the Co-Exclusive U.S. License (during any time prior to the Exclusive U.S. License Effective Date) or the Exclusive U.S. License (during any time after the Exclusive U.S. License Effective Date), and

 

(d) the Aditech Addendum is in full force and effect.

 

(e) Each of Licensor and the Additional Parties have performed in all material respects all obligations required to be performed by it under Sections 2.01(b), 2.02, 2.03, 2.07, 2.08, 2.09 and 2.11;

 

then, U.S. Licensee shall pay Licensor royalties on Net Sales in the United States of (i) any product indicated for the treatment of multiple sclerosis that, but for the rights granted pursuant to this Agreement, would infringe a Relevant Patent arising out of the Interference Proceeding; and (ii) any product indicated for the treatment of multiple sclerosis having dimethyl fumarate as an API that, but for the rights granted pursuant to this Agreement, would infringe a Patent

 

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included in the U.S. Licensed Intellectual Property (the foregoing (i) and (ii) collectively, a “U.S.  Infringing Product”), according to the following terms (the royalty payments described in this Section 4.02, collectively, the “U.S. Royalty Consideration”):

 

(f) If U.S. Licensee is operating under the Exclusive U.S. License in accordance with Section 3.02, then (i) from January 1, 2021 to December 31, 2028, U.S. Licensee shall pay to Licensor a royalty of 10% on Net Sales in the United States of any U.S. Infringing Product; and (ii) from January 1, 2029 until the earlier of the expiration of the last to expire (or be invalidated by a final court ruling, from which no appeal can be taken or is timely taken) of the Infringed Claims included in the Patents included in the U.S. Licensed Intellectual Property, U.S. Licensee shall pay Licensor royalties of 20% on Net Sales in the United States of any U.S. Infringing Product; provided in the case of each of the foregoing clauses (i) and (ii) U.S. Licensee shall only be required to make any such payment if all conditions set forth in this Section 4.02 have been satisfied at all times throughout the calendar year prior to the time at which such payment is otherwise due and payable pursuant to the terms of this Section 4.02.

 

(g) If U.S. Licensee is operating under the Co-Exclusive U.S. License (and has not obtained the Exclusive U.S. License), then from January 1, 2023 until the earlier of the expiration of the last to expire (or be invalidated by a final court ruling, from which no appeal can be taken or is timely taken) of the Infringed Claims included in the Patents included in the U.S. Licensed Intellectual Property, U.S. Licensee shall pay to Licensor a 1% royalty on Net Sales in the United States of any U.S. Infringing Product; provided U.S. Licensee shall only be required to make any such payment if all conditions set forth in this Section 4.02 have been satisfied at all times throughout the calendar year prior to the time at which such payment is otherwise due and payable pursuant to the terms of this Section 4.02.

 

(h) Within 60 days after December 31 of each relevant year, Licensee shall submit a report to Licensor that sets forth, in reasonable detail, the calculation of Net Sales for such calendar year in the United States and the related U.S. Royalty Consideration owed by U.S. Licensee for such calendar year (such report, the “U.S. Statement”) and concurrently U.S. Licensee shall pay, or cause to be paid to, Licensor, in accordance with Section 4.04 of this Agreement, the amount of the U.S. Royalty Consideration owed to Licensor, pursuant to this Section 4.02 as set forth in such U.S. Statement.

 

(i) Notwithstanding anything to the contrary in this Section 4.02, (i) no U.S. Royalty Consideration shall be payable by U.S. Licensee with respect to Net Sales on any day on which any U.S. Generic Equivalent is offered for sale in the United States and (ii) in addition, if (A) there has been any U.S. Generic Equivalent offered for sale in the United States and (B) within two years following the last day of any such offer for sale of any U.S. Generic Equivalent, the average wholesale price of any branded U.S. Infringing Product, or product that is bioequivalent and therapeutically equivalent to and substitutable for a U.S. Infringing Product, sold, offered for sale or imported by Licensee or any other Person is 10% or more below the average wholesale price of Licensee’s U.S.

 

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Infringing Products immediately prior to the offering for sale of such U.S. Generic Equivalent (the occurrence of the foregoing (A) and (B), a “U.S. Generic Entry Impact”),  then U.S. Licensee will have no further obligation to pay any U.S.  Royalty Consideration for the remainder of the U.S. Royalty Term. For the avoidance of doubt, for a year in which a U.S. Generic Entry Impact occurs, (x) U.S. Licensee will pay U.S. Royalty Consideration to Licensor with respect to the portion of such year prior to the date of such U.S. Generic Entry Impact and (y) no U.S. Royalty Consideration will be due with respect to any date thereafter.

 

SECTION 4.03. Worldwide (other than U.S.) Royalties. If,

 

(a) in the European Opposition Proceeding, Licensor obtains a Relevant Patent (in Swiss form or otherwise),

 

(b) the representations and warranties of Licensor set forth in Sections 7.01(a), 7.01(b) and 7.01(e)(i) and the representations of the Additional Parties set forth in Section 7.02 are true and correct in all material respects,

 

(c) there is no Legal Restraint in effect, whether temporary or permanent, restraining, enjoining, preventing, prohibiting, revoking or otherwise making illegal or ineffective the grant of the Exclusive Designated Countries License, on a country-by-country basis,

 

(d) The Aditech Addendum is in full force, and

 

(e) Each of Licensor and the Additional Parties have performed in all material respects all obligations required to be performed by it under Sections 2.01(b), 2.02, 2.03, 2.07, 2.08, 2.09 and 2.11;

 

then, Designated Countries Licensee shall pay Licensor royalties on Net Sales in each Designated Country of (i) any product indicated for the treatment of multiple sclerosis that, but for the rights granted pursuant to this Agreement, would infringe a Relevant Patent included in the Designated Countries Licensed Intellectual Property and (ii) any product indicated for the treatment of multiple sclerosis having dimethyl fumarate as an API that, but for the rights granted pursuant to this Agreement, would infringe a Patent included in the Designated Countries Licensed Intellectual Property (any products that fulfill the criteria in (i) or in (ii) or in both (i) and (ii) are referred to herein as a “Designated Country Infringing Product”), according to the following terms (the royalty payments described in this Section 4.03, collectively, the “Designated Countries Royalty Consideration”):

 

(f) (i) From January 1, 2021 to December 31, 2028, Designated Countries Licensee shall pay Licensor, on a country-by-country basis, royalties of 10% on Net Sales, due and payable in U.S. dollars, of any Designated Country Infringing Product in each Designated Country; and (ii) from January 1, 2029 until the expiration of the last to expire (or be invalidated by a final court ruling, from which no appeal can be taken or is timely taken) of the Infringed Claims included in the Patents included in the Designated Countries Licensed Intellectual Property, Designated Countries Licensee shall pay

 

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Licensor, on a country-by-country basis, royalties of 20% on Net Sales, due and payable in U.S. dollars, of any Designated Country Infringing Product in each Designated Country; provided in the case of each of the foregoing clauses (i) and (ii) Designated Countries Licensee shall only be required to make any such payment if all conditions set forth in this Section 4.03(a)-(e) have been satisfied at all times throughout the calendar year prior to the time at which such payment is otherwise due and payable pursuant to the terms of this Section 4.03. For the avoidance of doubt, the condition set forth in Section 4.03(c) shall apply on a country by country basis and failure to satisfy such condition in an individual Designated Country shall not relieve Licensee of its obligation to pay royalties pursuant to this Section 4.03 in respect of other Designated Countries in which such condition has been satisfied.

 

(g) Within 60 days after December 31 of the relevant year, Licensee shall submit a report to Licensor that sets forth, in reasonable detail, the calculation of Net Sales on a country-by-country basis, converted to U.S. dollars calculated by converting the local currency to U.S. dollars using the average monthly foreign exchange rate for each applicable month used by Licensee for its external financial reporting, for such calendar year and the related Designated Countries Royalty Consideration owed by Designated Countries Licensee for such calendar year (such report, the “Designated Countries Statement”) and concurrently Designated Countries Licensee shall pay, or cause to be paid to, Licensor the amount of the Designated Countries Royalty Consideration owed to Licensor pursuant to this Section 4.03 in U.S. dollars as set forth in such Designated Countries Statement.

 

(h) Notwithstanding anything to the contrary in this Section 4.03, (i) no Designated Countries Royalty Consideration shall be payable by Designated Countries Licensee with respect to Net Sales of a Designated Country Infringing Product in a Designated Country on any day on which any Designated Country Generic Equivalent to such Designated Country Infringing Product is offered for sale in such Designated Country; and (ii) in addition, if (A) a Designated Country Generic Equivalent to a branded Designated Country Infringing Product is offered for sale in a Designated Country and (B) within two years following the last day of any such offer for sale of such Designated Country Generic Equivalent, the average wholesale price of such branded Designated Countries Infringing Product, or product that is bioequivalent and therapeutically equivalent to and substitutable for a Designated Countries Infringing Product, in such Designated Country, offered for sale by Licensee or any other Person, is 10% or more below the average wholesale price of such branded Designated Country Infringing Products in such Designated Country immediately prior to such last day (the occurrence of the foregoing (A) and (B), a “Designated Country Generic Entry Impact”),  then Designated Countries Licensee will have no further obligation to pay any Designated Countries Royalty Consideration with respect to sales of such Designated Country Infringing Products in such Designated Country for the remainder of the Designated Countries Royalty Term. For the avoidance of doubt, for a year in which a Designated Country Generic Entry Impact occurs in respect of a Designated Country Infringing Product in a Designated Country, (x) Designated Countries Licensee will pay Designated Countries Royalty Consideration to Licensor with respect to the portion of

 

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such year prior to the date of such Designated Country Generic Entry Impact, in such Designated Country and (y) no Designated Countries Royalty Consideration will be due with respect to any date thereafter in respect of such Designated Country Infringing Product in such Designated Country.

 

SECTION 4.04. Form of Payment. U.S. Licensee shall pay the U.S. Upfront Fee and the U.S. Royalty Consideration, and Designated Countries Licensee shall pay the Designated Countries Upfront Fee and the Designated Countries Royalty Consideration, in cash by wire transfer of immediately available funds (in U.S. dollars) to the account designated from time to time in writing by Licensor.

 

SECTION 4.05. Late Penalties. If U.S. Licensee or Designated Countries Licensee fails to pay Licensor within 15 Business Days of the relevant due dates set forth in this Article IV any amount otherwise due and payable to Licensor under this Agreement, U.S. Licensee or Designated Countries Licensee, as applicable, agrees to pay interest, calculated from the date such payment is due until such amount is paid in full, at the prime rate set by the Bank of America plus 1% per annum, or the maximum amount allowable by law, whichever is lower. U.S. Licensee or Designated Countries Licensee, as applicable, agrees to pay all reasonable, documented and out-of-pocket legal fees and costs incurred by Licensor in connection with Licensor’s collection efforts in the event U.S. Licensee or Designated Countries Licensee fails to make any payment under this Article IV that are due and payable and Licensor must take steps to collect the payments owed.

 

SECTION 4.06. Taxes.

 

(a) It is understood and agreed among the Parties hereto that any payments made by or for the benefit of Licensee or its Affiliates (or any assignee of Licensee) under this Agreement are exclusive of any value-added or similar tax (“VAT”) imposed upon such payments. Licensee represents that as of the date of payment of the Upfront Fee, Licensee will hold commercial licenses. Licensee shall promptly notify Licensor, if Licensee should cease to hold commercial licenses at any time prior to expiry of the Royalty Term. Licensor and Licensee agree that none of the payments under this Agreement are intended to be subject to VAT. Licensee and Licensor shall provide each other with any information and documentation reasonably requested to (i) mitigate the levying of any VAT on any payments made by or for the benefit of Licensee or its Affiliates (or any assignee of Licensee) under this Agreement and/or (ii) recover any VAT incurred on such payments.

 

(i) If any Party receives any claim or notice from a tax authority contending that a payment is or may be subject to VAT, then such Party shall promptly notify the other Party or Parties, as applicable. Licensor shall be entitled to control all audits or other proceedings in connection with such claim (provided that Licensee shall be entitled to participate at its own expense).

 

(ii) Licensor shall only be entitled to issue an invoice with the addition of VAT to Licensee when Licensor determines, based on a legal opinion received by Licensor and shared with Licensee, that Licensor is legally obliged to add VAT to its

 

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invoice in order to ensure compliance with the requirements under the applicable VAT legislation, in which case Licensor may issue such invoice and Licensee shall pay, or cause to be paid to, Licensor the amount with the addition of VAT, which payment may, at Licensee’s discretion, be made in the form of a non-interest bearing promissory note (“the VAT Note”). Each Party shall take any commercially reasonable measures requested by another Party to recover any VAT incurred on payments under this Agreement in accordance with Section 45(1) of the Danish VAT Act. Licensor shall indemnify and hold Licensee harmless from (A) any VAT that cannot be recovered pursuant to the immediately preceding sentence (which indemnity, for the avoidance of doubt, may be settled in part or whole by offset against the corresponding VAT Note issued by Licensee) and (B) any reasonable expenses incurred by Licensee in recovering VAT; provided that no such obligation shall apply in respect of any VAT that cannot be recovered as a consequence of the Licensee not holding commercial licenses.

 

(b) In the event any payments made by or for the benefit of Licensee (or any assignee of Licensee) pursuant to this Agreement are or become subject to withholding taxes under applicable Law, the Person making such payment pursuant to this Agreement (the “Applicable Payer”) shall deduct and withhold the amount of such taxes to the extent required by applicable Law; amounts otherwise payable to Licensor pursuant to this Agreement shall be reduced by the amount of taxes deducted and withheld; the Applicable Payer shall pay the amounts of such taxes to the proper Governmental Entity in a timely manner and promptly transmit to Licensor an official tax certificate or other evidence of such tax obligations reasonably satisfactory to Licensor together with proof of payment reasonably satisfactory to Licensor of all amounts deducted and withheld sufficient to enable Licensor to claim such payment of taxes; and the amount of any such taxes so withheld or deducted shall be treated for all other purposes of this Agreement as if paid to Licensor. Any such withholding taxes required under applicable Law to be paid, deducted or withheld shall be an expense of, and borne solely by, Licensor. The Applicable Payer will provide Licensor with reasonable assistance, at Licensor’s expense to enable Licensor to recover such taxes as permitted by applicable Law. Should any payment required to be made to Licensor in accordance with the provisions of this Agreement be subject to withholding of any taxes by Licensee or its Affiliates or any assignee of Licensee, such Person shall (i) inform Licensor of such withholding requirement in advance of the first payment to be made by the Applicable Payer to Licensor hereunder, so as to allow Licensor to obtain and provide the Applicable Payer with an appropriate certificate of exemption, if available, and (ii) shall consult in good faith with Licensor prior to withholding any amounts and use commercially reasonable efforts to minimize any such withholding if a certificate of exemption is not available. No withholding shall be made to the extent an exemption from such withholding is timely obtained, and for as long as such exemption is valid. Notwithstanding anything to the contrary in this Agreement, provided (i) that Licensor provides the Applicable Payer with an executed Form W-8BEN-E claiming a complete exemption from U.S. withholding tax otherwise imposed on payments under this Agreement, including any VAT Note, under the U.S.-Denmark income tax treaty, the Applicable Payer shall not withhold U.S. tax from any payment under this Agreement or any VAT Note and (ii) no payment to Licensor under this Agreement shall be reduced by,

 

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and Licensee, its Affiliates (and any assignee of Licensee) shall indemnify Licensor, its Affiliates (and any assignee of Licensor) and hold them harmless from, any taxes deducted or withheld which would not have been required to be deducted or withheld but for a sublicense or assignment by the U.S. Licensee or the Designated Countries Licensee of any or all of its rights under this Agreement or but for any other use of the Licensed Intellectual Property by a Person other than the Licensee. If any deduction or withholding described in clause (ii) of the prior sentence is required to be made under applicable Law, the payment otherwise due to Licensor under this agreement shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this  Section 4.06(b)) Licensor receives an amount equal to the sum it would have received had no such deduction or withholding been made. Upon the reasonable request of the Applicable Payer, Licensor shall update any Form W-8BEN-E or other form or certification previously delivered claiming an exemption from or reduction of withholding and, if such Form W-8BEN-E or any other such form or certification expires or becomes obsolete or inaccurate in any respect, or if any previously obtained exemption from withholding is otherwise no longer valid, Licensor shall promptly (and in any event within 10 days after such expiration, obsolescence, inaccuracy or invalidity) notify the Applicable Payor in writing of such expiration, obsolescence, inaccuracy or invalidity and, as applicable, update the form or certification if it is legally able to do so. Licensor shall indemnify and hold harmless any Applicable Payer from and against any taxes (together with any interest and penalties thereon) (I) that are U.S. withholding taxes due with respect to any such payments made pursuant to this Agreement or (II) that such Applicable Payer incurs as a result of the expiration, obsolescence or inaccuracy of any Form W-8BEN-E or other form, certification or documentation delivered by Licensor claiming an exemption from or reduction of withholding.

 

SECTION 4.07. Audit Rights. Licensee shall, and shall cause each of its controlled Affiliates to, from January 1, 2021 until the earlier of (a) the expiration of the last to expire of the Patents included in the Licensed Intellectual Property, or (b) a final court ruling, from which no appeal can be taken or from which no appeal is timely taken, that all otherwise extant claims of Patents included in the Licensed Intellectual Property are unenforceable or otherwise invalid in each jurisdiction in the Territory, keep and maintain books and records in accordance with its standard accounting procedures and in sufficient detail to verify the amount of any Royalty Consideration payable under this Agreement during such period. During the 45-day period following the later of (i) Licensee’s delivery of a U.S. Statement or Designated Countries Statement to Licensor pursuant to Section 4.02(h) or Section 4.03(g) and (ii) the mutual selection by Licensor and Licensee of an independent accounting firm as contemplated below, Licensor shall have the right on a reasonable period of notice to have an independent accounting firm that is mutually selected by Licensor and Licensee (the “Auditor”) examine such books and records of Licensee and its controlled Affiliates, in each case to the extent such books and records relate to the calculation of Net Sales and the related U.S. Royalty Consideration and Designated Countries Royalty Consideration for the preceding year set forth on such U.S. Statement or Designated Countries Statement, respectively, and solely for the purpose of verifying the related U.S. Royalty Consideration and Designated Countries Royalty Consideration set forth on such U.S. Statement or Designated Countries Statement and that the  

 

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Net Sales set forth on such U.S. Statement or Designated Countries Statement were calculated in accordance with the terms of this Agreement. For the avoidance of doubt, pursuant to this Section 4.07, the Auditor shall act as an expert and not an arbitrator and, in any event, shall not substitute its own accounting judgment for that of Licensee when auditing the accuracy of the calculation of Net Sales and related U.S. Royalty Consideration and Designated Countries Royalty Consideration set forth on a U.S. Statement or Designated Countries Statement. The Auditor may not be paid on a contingency or other basis related to the outcome of the audit, and shall execute a confidentiality agreement with Licensee and its Affiliates in a form reasonably satisfactory to Licensee that prohibits the Auditor from disclosing or using information obtained in connection with the audit (other than the disclosure to Licensor of the results and conclusions of such audit). Any such audit shall be conducted during normal business hours, in such a manner as not to materially interfere with the normal business activities, of Licensee and its Affiliates, and shall be at Licensor’s expense; provided, however, if such audit reveals an underpayment of more than 5% during the audited period, Licensee shall pay, or cause to be paid, all reasonable costs of the Auditor, but shall not be obligated to pay the fees, costs or expenses of any other Person in connection with such audit. Prompt adjustment and payment shall be made to correct for any underpayment or overpayment revealed by any such audit.

 

ARTICLE V

 

Maintenance, Prosecution and Litigation

 

SECTION 5.01. Submitting Agreement to PTAB. Immediately following the Effective Date, pursuant to 35 U.S.C. § 135(c) and 37 C.F.R. § 41.205, before termination of the Interference Proceeding, Licensor and Licensee agree to file, and/or to cause their relevant controlled Affiliates to file, a Joint Submission of Agreement in substantially the same form as that provided in Appendix E, or as otherwise directed by the PTAB, with the intention of providing a copy of this Agreement and all related agreements to be kept separate from the Interference file.

 

SECTION 5.02. IP Advisory Committee. Immediately following the Effective Date, Licensor and Licensee shall create an intellectual property advisory committee (the “IP Advisory Committee”) comprised of one or more individuals designated by Licensor and one or more individuals designated by Licensee, which IP Advisory Committee shall remain in effect from the Effective Date until (a) if the Exclusive U.S. License becomes effective, the later of the conclusion of the European Opposition Proceeding and the Exclusive U.S. License Effective Date or (b), if the Exclusive U.S. License does not become effective, the expiry of the last item to expire (or be invalidated in its entirety by a final court ruling, from which no appeal can be taken or is timely taken) of the Licensed Patents. The IP Advisory Committee shall cooperate and meet at regular intervals as agreed by Licensor and Licensee to discuss strategy and actions with respect to the filing, maintenance, prosecution and defense of the Licensed Intellectual Property and any Litigation related to the Licensed Intellectual Property (other than as set forth in this Section 5.02. Each of the Parties shall, and shall cause each of their respective controlled Affiliates to, take reasonable steps to make available to the members of the IP Advisory Committee documents reasonably related to, and keep the members of the IP Advisory Committee informed of, all maintenance, prosecution and defense activities related to the

 

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Licensed Intellectual Property, any Litigation related to the Licensed Intellectual Property and any other correspondence involving such maintenance, prosecution, defense and Litigation; provided that in no event shall Licensor be required to provide any information that is subject to attorney-client privilege, or work product immunity, which privilege or immunity would reasonably be expected to be lost or reduced by disclosure to Licensee, or any Confidential Intellectual Property Information, in either case that is related to (i) the negotiation of this Agreement or any enforcement hereof or disputes hereunder (including, establishing that a product is an Infringing Product), (ii) the Interference Proceeding or (iii) the European Opposition Proceeding, in each case prior to the conclusion of such matters; except that in each case Licensor shall, and shall cause each of its controlled Affiliates to, use its commercially reasonable efforts to provide the applicable information in a way, if any, that would not reasonably be expected to violate such privilege, as applicable, or materially adversely affect Licensor in the Interference Proceeding or the European Opposition Proceeding, as applicable. As applicable, no Party shall take, or omit to take (and each Party shall cause each of its controlled Affiliates to not take  or omit to take), any material action with respect to the filing, maintenance, prosecution or defense of the Licensed Intellectual Property (or any Litigation related to the Licensed Intellectual Property) without first consulting with and giving reasonable good faith consideration to the viewpoints of the IP Advisory Committee and its members. For the avoidance of doubt, (A) nothing contained in this Section 5.02 shall give Licensee or any of its Affiliates the right to direct or control the business operations of Licensor or any of the Additional Parties and (B) nothing contained in this Section 5.02 shall give any Party the right to information belonging to any other Party or its respective Affiliates related to the Interference Proceeding or the European Opposition Proceeding.

 

SECTION 5.03. Licensor Maintenance, Prosecution and Litigation. Except with respect to all Designated Countries Licensed Intellectual Property (other than Licensor’s European patent EP 2801355), effective from the Effective Date until the earlier of (a) the end of the Royalty Term or (b) (i) with respect to the U.S. Licensed Intellectual Property, the Exclusive U.S. License Effective Date and (ii) with respect to Licensor’s European patent EP 2801355 (Application No. 14172398.1), the date on which the European Opposition Proceeding has reached a final, unappealable conclusion:

 

(a) Costs and Expenses. Each of Licensor and the Additional Parties, if any, owning any Licensed Intellectual Property shall, and shall cause each of their respective controlled Affiliates to, at its or their sole cost and expense, take all reasonable measures to diligently file, prosecute and maintain the respective Licensed Patents. Each of Licensor and the Additional Parties, if any, owning any Licensed Intellectual Property shall, and shall cause each of their respective controlled Affiliates to, use commercially reasonable efforts not to decline to file, prosecute or maintain any Licensed Patents, elect to allow any Licensed Patents to lapse, or elect to terminate, abandon or otherwise impair any Licensed Patents, in each case without the prior written consent of Licensee, and Licensee shall have the right to assume the prosecution and/or maintenance of such Licensed Patents.

 

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(b) Litigation. The Parties shall notify each other promptly in writing if any infringement or potential infringement of the Licensed Intellectual Property by a Third Party is observed or suspected by the Parties or any of their controlled Affiliates.

 

(i)   Licensor shall have the initial right, but not the obligation, using counsel of its choice at its own cost, to enforce the Licensed Intellectual Property or defend any challenge with respect thereto. Licensor shall have sole control of any decisions or other aspects of any such Litigation. To the extent reasonably practicable, Licensor shall, and shall cause, where relevant, each of its controlled Affiliates to, keep Licensee informed of the status of, and shall consult with Licensee with respect to, any such Litigation (excepting the Interference Proceeding or the European Opposition Proceeding), including, for the avoidance of doubt, any defense, settlement, adjustment or compromise of any such Litigation. Upon request by Licensor, Licensee shall give to Licensor such reasonable assistance in the Litigation as Licensor may reasonably request, including by signing or executing any necessary documents and consenting to it being named as a party to the proceedings. Any and all recoveries from any such Litigation shall be solely and entirely for Licensor’s account.

 

(ii)   If Licensor does not exercise its right to institute any such action, Licensor shall, and shall cause each of its controlled Affiliates to timely provide Licensee with Notice such that Licensee may, at its sole option and discretion, and at Licensee’s expense, enforce the Licensed Intellectual Property or defend against any challenge with respect thereto. In such case, (A) Licensee shall have sole control of any decisions or other aspects of any such Litigation, (B) to the extent reasonably practicable, Licensee shall keep Licensor informed of the status of, and shall consult with Licensor with respect to, any such Litigation, including, for the avoidance of doubt, any defense, settlement, adjustment or compromise of any such Litigation, (C) upon request by Licensee, Licensor shall, and shall cause each of its controlled Affiliates to, give to Licensee such reasonable assistance in the Litigation as Licensee may reasonably request, including by signing or executing any necessary documents and consenting to it being named as a party to the proceedings and (D) any and all recoveries from any such Litigation shall be solely and entirely for Licensee’s account.

 

(c) ANDA Litigation. Notwithstanding any provision of this Article V to the contrary, Licensee shall, at all times from and after the Effective Date, have sole control over, and shall have full authority to defend, litigate and control (at its own cost and expense, including any attorneys’ fees), and shall have no obligation to consult with the IP Advisory Committee with respect to, any ANDA-related challenges such as, for example, a challenge pursuant to 21 U.S.C. § 355(j)(2)(A)(vii)(IV) or any challenge instituted in or by the USPTO, or any similar Litigation or challenges anywhere in the Territory, to any (i) product of Licensee or any of its Affiliates (including Tecfidera) or (ii) Licensed Intellectual Property.

 

SECTION 5.04. Licensee Maintenance, Prosecution and Litigation. Effective with respect to (i) the Designated Countries Licensed Intellectual Property (other than Licensor’s European patent EP 2801355), as of the Effective Date, (ii) the U.S. Licensed Intellectual

 

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Property, as of the Exclusive U.S. License Effective Date and (iii) Licensor’s European patent EP 2801355 (Application No. 14172398.1), as of the date on which the European Opposition Proceeding has reached a final, unappealable conclusion:

 

(a) Licensor Obligations. Each of Licensor and the Additional Parties shall provide, and shall cause each of their respective controlled Affiliates to provide, at Licensee’s cost and expense, any authorizations and powers of attorney as requested by Licensee in order for Licensee to take the actions contemplated by this Section 5.04(a), including to maintain the Licensed Patents, prosecute any applications included therein for registration and to opt-out from the exclusive competence of the European Unified Patent Court and to withdraw from any such opt-out.

 

(b) Licensee Prosecution Obligations. Licensee shall, at its sole cost and expense, take all reasonable measures to diligently file, prosecute and maintain the respective Licensed Intellectual Property and shall use commercially reasonable efforts not to decline to file, prosecute or maintain any Licensed Intellectual Property, elect to allow any Licensed Intellectual Property to lapse, or elect to terminate, abandon or otherwise impair any Licensed Intellectual Property, in each case without providing adequate advance notice to Licensor, and Licensor shall have the right to assume the prosecution and/or maintenance of such Licensed Intellectual Property.

 

(c)  Litigation.

 

(i)  Each of Licensor and the Additional Parties acknowledge and consent to Licensee’s sole right to institute Litigation under the applicable Licensed Intellectual Property, including the right to damages, equitable relief, and to settle without consent, royalty or consideration of any kind to Licensor, the Additional Parties or any of their respective Affiliates; provided that all costs and expenses associated with any of the foregoing activities will be paid by Licensee;

 

(ii) Each of Licensor and the Additional Parties shall, and shall cause each of their respective controlled Affiliates to, notify Licensee promptly in writing if any infringement or potential infringement of the Licensed Intellectual Property by a Third Party is observed or suspected by Licensor, the Additional Parties or any of their respective controlled Affiliates, whereupon (A) Licensee may, in its own sole discretion and at its own expense, institute Litigation against any infringer or alleged infringer and control and defend such Litigation and recover any damages, awards or settlements resulting therefrom; (B) Licensee shall have sole control over any such Litigation including any defense, settlement, adjustment or compromise of any such Litigation; and (C) any and all recoveries from any such Litigation shall be solely and entirely for Licensee’s account; and (D) if required by a Governmental Entity, applicable Law or Order to permit Licensee or any of its Affiliates to commence, pursue or defend any Litigation related to the Licensed Intellectual Property, each of Licensor and the Additional Parties shall, and shall cause each of their respective controlled Affiliates to, join as a party to any such Litigation if such joinder is reasonably necessary to advance Licensee’s position.

 

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(iii) If Licensee does not exercise its right to institute any such action, Licensee shall timely provide Licensor and the Additional Parties with Notice such that Licensor and the Additional Parties may, at their sole option, discretion, and expense, enforce the Licensed Intellectual Property or defend against any challenge with respect thereto. Upon request by Licensor, Licensee shall give to Licensor such reasonable assistance in the Litigation as Licensor may reasonably request, including by signing or executing any necessary documents and consenting to being named as a party to the proceedings. In such case, (A) Licensor and the Additional Parties may, in their own sole discretion and at their own expense, institute Litigation against any infringer or alleged infringer and control and defend such Litigation and recover any damages, awards or settlements resulting therefrom; (B) Licensor and the Additional Parties shall have sole control over any such Litigation including any defense, settlement, adjustment or compromise of any such Litigation; and (C) any and all recoveries from any such Litigation shall be solely and entirely for Licensor’s and the Additional Parties’ account; and (D) if required by a Governmental Entity, applicable Law or Order to permit Licensor, the Additional Parties or any of their respective Subsidiaries to commence, pursue or defend any Litigation related to the Licensed Intellectual Property, Licensee shall, and shall cause each of its controlled Affiliates to, join as a party to any such Litigation if such joinder is reasonably necessary to advance Licensor’s and the Additional Parties’ position.

 

(d)   Notwithstanding anything to the contrary in Section 5.03, if at any time prior to the Exclusive U.S. License Effective Date in respect of the U.S. Licensed Intellectual Property, or prior to the date on which the European Opposition Proceeding has reached a final, unappealable conclusion in respect of Licensor’s European patent EP 2801355 (Application No. 14172398.1), Licensor or any of the Additional Parties or any of their respective Affiliates has failed to, or notified Licensee that it does not intend to, diligently file, prosecute, and maintain the Licensed Intellectual Property and defend and pursue all Litigation against any infringer or alleged infringer of such Licensed Intellectual Property using its reasonable best efforts, Licensee shall have the right, but not the obligation, to file, prosecute, and maintain the Licensed Intellectual Property, and to defend and pursue Litigation, in which event, the foregoing Sections 5.04(a)-5.04(c) shall control.

 

(e)   Notwithstanding Sections 5.04(a) and (b), if, at any time, Licensee has failed to, or has notified Licensor and the Additional Parties that it does not intend to, diligently file, prosecute, and maintain the Licensed Intellectual Property using its reasonable best efforts, Licensor and the Additional Parties shall have the right, but not the obligation, to, at Licensor’s and the Additional Parties’ sole cost and expense, file, prosecute and maintain the Licensed Intellectual Property upon reasonable notice to Licensee.

 

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ARTICLE VI

 

Conditions Precedent

 

SECTION 6.01. Conditions for the Benefit of Each Party. The effectiveness of the Exclusive U.S. License is subject to the satisfaction or waiver (by each of the Parties) on or prior to the Exclusive U.S. License Effective Date of the following conditions:

 

(a) Governmental Approvals. Any waiting period under the HSR Act (including any extension thereof) applicable to the grant of the Exclusive U.S. License shall have expired or been earlier terminated and the authorizations, consents, orders or approvals of, or declarations or filings with, any Governmental Entity required by applicable Law, shall have occurred or been obtained (in each case, without the imposition of a Burdensome Condition).

 

(b) No Injunctions or Legal Restraints. No restraining order or injunction or other Order issued by any Governmental Entity of competent jurisdiction or Law or other legal restraint or prohibition (collectively, “Legal Restraints”), whether temporary or permanent, restraining, enjoining, preventing, prohibiting or otherwise making illegal or ineffective the grant of the Exclusive U.S. License shall be in effect.

 

SECTION 6.02. Frustration of Conditions to Effectiveness. None of Licensor, the Additional Parties or Licensee may rely on the failure of any condition set forth in this Article VI to be satisfied if such failure was caused by such Party’s failure to comply with the terms of this Agreement.

 

ARTICLE VII

 

Representations and Warranties

 

SECTION 7.01. Representations and Warranties Regarding Licensor. Licensor represents and warrants to Licensee as of the Effective Date:

 

(a) Organization, Standing and Corporate Power. Licensor is a Danish limited liability company duly organized and validly existing under the Laws of Denmark. Licensor has the requisite power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the Transactions.

 

(b) Authority; Noncontravention; Voting Requirements. (i) Subject to the receipt of the Licensor Shareholder Approval, Licensor has all necessary corporate power and corporate authority to execute and deliver this Agreement and the Aditech Addendum and to perform its obligations hereunder and thereunder and to consummate the Transactions and the transactions contemplated by the Aditech Addendum. As of the Effective Date, this Agreement and the Aditech Addendum have been duly authorized, executed and delivered by Licensor and constitute legal, valid and binding agreement of Licensor, enforceable in accordance with their terms, except to the extent that enforcement hereof or thereof may be limited by bankruptcy, insolvency, fraudulent

 

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conveyance, reorganization, moratorium or other Laws affecting enforcement of creditors’ rights or by general equitable principles. Except for obtaining the Licensor Shareholder Approval, no other corporate or shareholder action on the part of Licensor is necessary to authorize the execution, delivery and performance by Licensor (including any approval or action by the Board of Directors of Licensor and of this Agreement or the Aditech Addendum and the consummation by it of the Transactions or the transactions contemplated by the Aditech Addendum.

 

(ii)     At a meeting of the Board of Directors of Licensor duly called and held (A) the disinterested members of the Board of Directors of Licensor, which do not form a quorum, declared in the best interests of Licensor and its shareholders, and therefore recommended the holders of Licensor Ordinary Shares approve the  Transactions and the transactions contemplated by the Aditech Addendum and the execution, delivery and performance by Licensor of this Agreement and the Aditech Addendum and the consummation of the Transactions and the transactions contemplated by the Aditech Addendum, and (B) the Board of Directors of Licensor resolved to refer and submit the approval of this Agreement, the Aditech Addendum and the Transactions to a vote at a Licensor Shareholders’ Meeting in accordance with the terms of this Agreement. The Board of Directors of Licensor has taken all necessary actions in accordance with applicable Law and the Licensor Articles to duly call and give notice (such notice, a “Notice of Meeting”) of a meeting of holders of its Licensor Ordinary Shares for the purposes of obtaining Licensor Shareholder Approval.

 

(iii)    As of the Effective Date, at a duly called and convened meeting of Licensor’s holders of its Ordinary Shares (the “Licensor Shareholders’ Meeting”), holders of at least two-thirds of the outstanding Licensor Ordinary Shares entitled to vote thereon, voting together as a single class, affirmatively voted (in person or by proxy) to approve the Transactions and the execution and delivery and performance by Licensor of this Agreement and the Aditech Addendum and the consummation of the Transactions and the transactions contemplated by the Aditech Addendum (the “Licensor Shareholder Approval”), and such Licensor Shareholder Approval, is the only vote of the holders of any class or series of capital stock of Licensor necessary to adopt this Agreement, the Aditech Addendum and approve and consummate the Transactions and the transactions contemplated by the Aditech Addendum.

 

(iv)    The execution, delivery and performance by Licensor of this Agreement and the Aditech Addendum and the consummation of the Transactions and the transactions contemplated by the Aditech Addendum (in each case, alone or in combination with any other event) will not (A) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under any Contract to which Licensor or any of its Affiliates is a party or by which Licensor or any of its Affiliates is bound or to which any of the property or assets of Licensor or any of its Affiliates is subject, (B) impair or impose a Lien (other than the restrictions set forth in this Agreement or a Permitted Lien) on any of the Licensed Intellectual Property, (C) assuming the receipt of Licensor Shareholder Approval, violate any provision of the organizational documents of Licensor or any of its Affiliates, (D) violate any Law or

 

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judgment, order, writ, injunction, legally binding agreement with a Governmental Entity, stipulation or decree, including any binding decree of any arbitrator (each, an “Order”) applicable to Licensor or any of its Affiliates or any of their respective properties, or (E) grant any rights of appraisal to any holder of Licensor Ordinary Shares, except, in the case of clauses (A) and (D), as would not reasonably be expected to impair in any material respect the ability of Licensor or any of its Affiliates to perform their obligations under this Agreement or the Aditech Addendum or prevent or materially impede, interfere with, hinder or delay the consummation of any of the Transactions and the transactions contemplated by the Aditech Addendum; and no filing with or Consent, approval, authorization, Order, registration or qualification of or with any Governmental Entity is required for the execution, delivery and performance by Licensor of its obligations under this Agreement or the Aditech Addendum, except, (i) in the case of this Agreement, for the filing of a notification and report by Licensor under the HSR Act and where the failure to obtain or make any such filing, Consent, approval, authorization, Order, registration or qualification would not reasonably be expected to impair in any material respect the ability of Licensor to perform its obligations under this Agreement or the Aditech Addendum or prevent or materially impede, interfere with, hinder or delay the consummation of any of the Transactions or the transactions contemplated by the Aditech Addendum.

 

(c)   Shareholder Meeting Materials. As of the Effective Date and the time it or any amendment or supplement thereto was first published, sent or given to the shareholders of Licensor, or at the time of the Licensor Shareholders’ Meeting , the Shareholder Meeting Materials (including any amendment or supplement thereto) did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. As of the same times, the Shareholder Meeting Materials complied as to form in all material respects with applicable Law. Notwithstanding the foregoing, Licensor makes no representation or warranty with respect to statements made or incorporated by reference therein based on information supplied by or on behalf of Licensee or any Affiliates thereof for inclusion or incorporation by reference in the Shareholder Meeting Materials.

 

(d)   Legal Proceedings. Excepting the Litigation involving (i) the Interference; (ii) Licensor’s European patent EP 2 801 355 (Application  No. 20140172398); (iii) Licensor’s German Utility Model DE202005002112U1; (iv) the European Opposition Proceeding; (v) Appeal T 1537/16-3.3.07 regarding the opposition to Licensor’s European patent EP 2 379 063 (Application No. 10 700 730.4) at the European Patent Office; and (vi) Appeal T 1490/15-3.3.07 regarding the opposition to Licensor’s European patent EP 2 316 430 (Application No. 10 182 198.1) at the European Patent Office, as of the Agreement Date there is no Litigation pending or, to the knowledge of Licensor, threatened in writing, before or by any Governmental Entity against Licensor or any of its Affiliates that involves or that would reasonably be expected to involve the Licensed Intellectual Property or that, individually or in the aggregate, would reasonably be expected to impair in any material respect the ability of Licensor or any of its controlled Affiliates to perform their obligations under this

 

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Agreement or the Aditech Addendum or prevent or materially impede, interfere with, hinder or delay the consummation of any of the Transactions or any of the transactions contemplated by the Aditech Addendum, nor are there any Orders outstanding against Licensor or any of its Affiliates that involve or that would reasonably be expected to involve the Licensed Intellectual Property or that, individually or in the aggregate, would reasonably be expected to impair in any material respect the ability of Licensor or any of its controlled Affiliates to perform their obligations under this Agreement or the Aditech Addendum or prevent or materially impede, interfere with, hinder or delay the consummation of any of the Transactions or any of the transactions contemplated by the Aditech Addendum.

 

(e) Intellectual Property.

 

(i)   As of the Agreement Date, Licensor or a wholly-owned Subsidiary of Licensor (1) owns or controls, or has the right to grant a license in, to or under the Licensed Intellectual Property, free and clear of all Liens (other than Permitted Liens) including licenses granted in, to or under the Licensed Intellectual Property and (2) possesses all rights necessary to grant the licenses contemplated by this Agreement under the Licensed Intellectual Property, except (w) for any adverse effect the Interference Proceeding, the European Opposition Proceeding, the Litigation involving European patent EP 2 801 355 (Application No. 20140172398) and German Utility Model DE202005002112U1, Appeal T 1537/16-3.3.07 regarding the opposition to Licensor’s European patent EP 2 379 063 (Application No. 10 700 730.4) at the European Patent Office, and Appeal T 1490/15-3.3.07 regarding the opposition to Licensor’s European patent EP 2 316 430 (Application No. 10 182 198.1) at the European Patent Office or the terms of this Agreement have on the ownership, control or ability to license the Licensed Intellectual Property and (x) with respect to the Licensed Intellectual Property other than the Patents included in the Licensed Intellectual Property, as would not be expected to have a material effect on Licensor, Licensee, any of their respective Affiliates or the Transactions; provided that Licensor does not represent or warrant that Licensed Intellectual Property which is licensed by a Third Party to Licensor or a wholly-owned Subsidiary of Licensor is free and clear of all Liens.

 

(ii)   Other than the Additional Parties, none of Licensor’s Affiliates, has or has had at any time in the twelve (12) months prior to the Agreement Date, any right, title or interest in, to or under any Intellectual Property relating to the use of a fumaric acid ester to treat multiple sclerosis.

 

(iii)    As of the Agreement Date, there is no Litigation (A) pending or threatened by Licensor, Aditech or any Affiliate of Licensor having (at any time) any right in any of the Licensed Intellectual Property to enforce the Licensed Intellectual Property or (B) pending, threatened in writing or, to the knowledge of Licensor, threatened orally or otherwise asserted, that challenges or contests the legality, validity, enforceability, registrability, alienability, use or ownership of any of the Licensed Intellectual Property, in each of (A) and (B), (x) except the Interference Proceeding, Appeal T 1773/16-3.3.02 regarding the Opposition against Licensee’s European patent

 

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EP 2 137 537 (Application No. 8 725 256.5) at the European Patent Office, the Litigation involving Licensor’s European patent EP 2 801 355 (Application No. 20140172398) and the Litigation involving Licensor’s German Utility Model DE202005002112U1, Appeal T 1537/16-3.3.07 regarding the opposition to Licensor’s European patent EP 2 379 063 (Application No. 10 700 730.4) at the European Patent Office and Appeal T 1490/15-3.3.07 regarding the opposition to Licensor’s European patent EP 2 316 430 (Application No. 10 182 198.1) at the European Patent Office and (y) except, with respect to the Licensed Intellectual Property other than the Patents included in the Licensed Intellectual Property, the Licensor shall not be in breach of (A) and/or (B) above if the non compliance with (A) and/or (B) above does not have a material effect on Licensee, or any of its respective Affiliates or the Transactions.

 

(iv)    (A) Licensor and each of its Affiliates that holds or has held any Licensed Intellectual Property have taken all commercially reasonable steps to obtain, maintain and protect the extant Patents of the Licensed Intellectual Property in the U.S. and Europe, except as would not have a material effect on Licensee and (B) excepting those agreements listed in Appendix B, Licensor has not, since December 31, 2015 transferred, sold, conveyed or assigned any Intellectual Property to any other Person.

 

(v)     All Patents included in the Licensed Intellectual Property are lawfully held in Denmark. For avoidance of doubt, Patents are deemed to be lawfully held in Denmark where such Patents are owned by an entity organized under the laws of Denmark and having a principal place of business in Denmark.

 

(vi)    Licensor does not own or hold any rights in, to or under any trademarks, service marks, trade dress, logos, trade names, corporate names or Internet domain names except (A) the trademark rights in “FP-187” licensed to Licensee hereunder, including those trademark rights listed in Appendix A and (B) any such rights including or containing the words “Forward Pharma”.

 

(vii)   Licensor provides no warranty, express or implied, that any Patents of the Licensed Intellectual Property will issue after the Agreement Date or that any granted Patent which has issued or will issue from the Licensed Intellectual Property is or will be valid and enforceable, or that, after the date of this Agreement, the sale or distribution of any Licensed Product or Infringing Product will not infringe the patent or other proprietary rights of any Third Party.

 

(viii)     The licenses and other rights granted in this Agreement do not (A) materially conflict with any Contract to which Licensor, or any of its Affiliates having any right in any of the Licensed Intellectual Property, is subject or (B) create or bring into effect any material rights involving any Third Party.

 

(ix)    Licensor and each of its Affiliates having, on or at any time within the three years preceding the Agreement Date, any right in any of the Licensed Intellectual Property, are in material compliance with, and have at all times on and during the three years preceding the Agreement Date, been in material compliance with, the terms of all

 

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third-party licenses and other obligations related to or included in the Licensed Intellectual Property.

 

(f)    Shareholders’ Register. Licensor has delivered to Licensee an updated copy of its shareholders’ register which bears a notation indicating that the Specified Shareholders’ Licensor Ordinary Shares are subject to the provisions and restrictions of the Shareholders Commitment Agreement.

 

(g)   Employment Matters. No current or former employee, director or other service provider of Licensor or any of its Affiliates other than those set forth on Appendix H, is or shall be entitled to employment with, or any compensation or benefit from, Licensee or any of its Affiliates as a result of the consummation of the Transactions (alone or in combination with any other event).

 

(h)   Legal Matters. Licensor has delivered, or caused to be delivered to Licensee, the opinion of Danish counsel stating that Licensor, subject to the receipt of the Licensor Shareholder Approval, has the requisite power and authority to execute, deliver and perform its obligations under this Agreement.

 

(i)    Finders or Brokers; Fees. No agent, broker, investment banker or other firm or Person is or will be entitled to any broker’s or finder’s fee or any other commission or similar fee in connection with any of the Transactions as a result of any action taken by Licensor or any Additional Party.

 

(j)    Aditech Addendum. As of the Agreement Date, Licensor has made available to Licensee a true, complete and correct copy of the Patent Transfer Agreement and, as of the Effective Date, the Aditech Addendum between Licensor, on the one hand, and Aditech, on the other hand, and true, complete and correct copies of all other material Contracts, if any, between such parties and any of their respective Affiliates relating to the Licensed Intellectual Property.

 

(k)   Documents Provided. As of the Agreement Date, Licensor has made available to Licensee true, complete and correct copies of (i) all material Contracts of Licensor or its Affiliates related to the Licensed Intellectual Property, including all licenses and other agreements, arrangements or understandings granting any rights or options in, to or under any items included in the Licensed Intellectual Property, (ii) all material nonpublic assignment documents; (iii) schedules demonstrating that any annuity fees, maintenance fees and the like that have become due prior to the Agreement Date have been timely paid for all Patents extant as of the Agreement Date and included in the Licensed Intellectual Property; (iv) references relating to all Patents included in the Licensed Intellectual Property; (v) any judgments relating to the Licensed Intellectual Property and any material documentation regarding any litigation, oppositions, interferences or any other adversarial proceedings related to the Licensed Intellectual Property or to third party intellectual property, as filed or otherwise asserted by or against Licensor, excluding the Interference Proceeding, the European Opposition Proceeding, Appeal T 1773/16-3.3.02 regarding the Opposition against Licensee’s European patent EP 2 137 537 (Application No. 8 725 256.5) at the European Patent Office, the Litigation

 

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involving Licensor’s European patent EP 2 801 355 (Application No. 20140172398) and the Litigation involving Licensor’s German Utility Model DE202005002112U1, Appeal T 1537/16-3.3.07 regarding the opposition to Licensor’s European patent EP 2 379 063 (Application No. 10 700 730.4) at the European Patent Office and Appeal T 1490/15-3.3.07 regarding the opposition to Licensor’s European patent EP 2 316 430 (Application No. 10 182 198.1) at the European Patent Office and (vi) any assertions or claims of ownership, inventorship, or rights to practice any Patent included in the Licensed Intellectual Property by any party (other than Licensee and their Affiliates) not identified in the applicable Patent application as an owner or inventor.

 

(l) Maintenance Fees. Licensor has timely paid all maintenance fees and  annuities related to the Patents of the Licensed Intellectual Property extant as of the Agreement Date.

 

SECTION 7.02. Representations and Warranties Regarding the Additional  Parties. Each of the Additional Parties represents and warrants to Licensee as the Effective Date:

 

(a)   Organization, Standing and Corporate Power. Such Additional Party is duly organized and validly existing. Such Additional Party has the requisite power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the Transactions.

 

(b)   Authority. As of the Effective Date, this Agreement has been duly authorized, executed and delivered by the applicable Additional Party and constitutes a legal, valid and binding agreement of the applicable Additional Party, enforceable in accordance with its terms, except to the extent that enforcement hereof may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other Laws affecting enforcement of creditors’ rights or by general equitable principles.

 

(c)   Noncontravention. The execution, delivery and performance by such Additional Parties of this Agreement and the consummation of the Transactions (alone or in combination with any other event) will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under any Contract to which such Additional Party or any of its Affiliates is a party or by which such Additional Party or any of its Affiliates is bound or to which any of the property or assets of such Additional Party or any of its Affiliates is subject, (ii) violate any provision of  the organizational documents of such Additional Party or any of its Affiliates or (iii) violate any Law or Order applicable to such Additional Party or any of its Affiliates or their respective properties, except, in the case of clauses (i) and (iii), as would not reasonably be expected to impair in any material respect the ability of such Additional Party to perform its obligations under this Agreement or prevent or materially impede, interfere with, hinder or delay the consummation of any of the Transactions; and no filing with or Consent, approval, authorization, Order, registration or qualification of or with any Governmental Entity, is required for the execution, delivery and performance by such Additional Party of its obligations under this Agreement, except where the failure to obtain or make any such filing, Consent, approval, authorization, Order, registration or qualification would not reasonably be expected to impair in any material respect the

 

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ability of such Additional Party to perform its obligations under this Agreement or prevent or materially impede, interfere with, hinder or delay the consummation of any of the Transactions.

 

SECTION 7.03. Representations and Warranties Regarding Licensee. Licensee represents and warrants to Licensor as of the Agreement Date and the Effective Date:

 

(a)         Organization, Standing and Corporate Power. U.S. Licensee is a limited liability company duly organized, validly existing and in good standing under the Laws of Switzerland and Designated Countries Licensee is a limited company duly organized, validly existing and in good standing under the Laws of Bermuda. U.S. Licensee and Designated Countries Licensee have the requisite power and authority to execute, deliver and perform its obligations under this Agreement and the consummation of the Transactions.

 

(b)         Authority. As of the Effective Date, this Agreement has been duly authorized, executed and delivered by Licensee and constitutes a legal, valid and binding agreement of Licensee, enforceable in accordance with its terms, except to the extent that enforcement hereof may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other Laws affecting enforcement of creditors’ rights or by general equitable principles.

 

(c)          Noncontravention. The execution, delivery and performance by Licensee of this Agreement and the consummation of the Transactions (alone or in combination with any other event) will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under any Contract to which Licensee or any of its Affiliates is a party or by which Licensee or any of its Affiliates is bound or to which any of the property or assets of Licensee or any of its Affiliates is subject, (ii) violate any provision of the organizational documents of Licensee or any of its Affiliates or (iii) violate any Law or Order applicable to Licensee or any of its Affiliates or their respective properties, except, in the case of clauses (i) and (iii), as would not reasonably be expected to impair in any material respect the ability of Licensee to perform its obligations under this Agreement or prevent or materially impede, interfere with, hinder or delay the consummation of any of the Transactions; and no filing with or Consent, approval, authorization, Order, registration or qualification of or with any Governmental Entity, is required for the execution, delivery and performance by Licensor of its obligations under this Agreement, except for the filing of a notification and report under the HSR Act and where the failure to obtain or make any such filing, Consent, approval, authorization, Order, registration or qualification would not reasonably be expected to impair in any material respect the ability of Licensee to perform its obligations under this Agreement or prevent or materially impede, interfere with, hinder or delay the consummation of any of the Transactions.

 

SECTION 7.04. No Additional Representations. Each Party represents and acknowledges that (i) none of the Parties or any of the respective Affiliates, shareholders, directors, officers, employees, counsel, advisors, representatives or agents (collectively, “Agents”) or any other Person has made any representation or warranty, express or implied, as to

 

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any Licensed Intellectual Property, or the accuracy or completeness of any information regarding any Party or that any Party furnished or made available to any other Party or its Agents, except  as expressly set forth in this Agreement, (ii) such Party has not relied on any representation or warranty from any other Party or any other Person in determining to enter into this Agreement, except as expressly set forth in this Agreement, and (iii) none of the Parties or any other Person shall have or be subject to any liability, whether in law or in equity and whether sounding in contract, tort or otherwise, to any Party or any other Person resulting from the provision of any such information to any other Party or its Agents, or use by any other Party or its Agents of any such information, including any information, documents or material made available in the data room or management presentations in expectation of the Transactions.

 

ARTICLE VIII 

  General Provisions

 

SECTION 8.01. Amendment; Extension; Waiver. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the Parties; provided, however, there shall be no amendment or change to the provisions hereof which by applicable Law would require further approval by the shareholders of Licensor without such shareholder approval. Any agreement on the part of a Party to any extension or waiver with respect to this Agreement shall be valid only if set forth in an instrument in writing signed on behalf of such Party; provided, however, that there shall be no waiver of this Agreement which by applicable Law requires further approval by the shareholders of Licensor without such shareholder approval. The failure of any Party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights.

 

SECTION 8.02. Survival of Covenants, Agreements, Representations,  Warranties, Obligations and Undertakings. The representations, warranties, covenants, agreements, obligations and undertakings in this Agreement shall survive the Exclusive U.S. License Effective Date (unless otherwise indicated).

 

SECTION 8.03. Notices. All notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery by hand, by registered or certified mail (postage prepaid, return receipt requested) or by email with a copy by mail (postage prepaid, return receipt requested) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified by like notice) (each, a “Notice”):

 

if to Licensee, to:

 

Biogen Inc.

225 Binney Street

Cambridge, MA 02142

Attention:                                         General Counsel

Email:                                                            susan.alexander@biogen.com

 

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and

 

with a copy to (which copy does not constitute notice):

 

Cravath, Swaine & Moore LLP

Worldwide Plaza

825 Eighth Avenue

New York, NY 10019-7475

Attention:                                         Mark I. Greene

David J. Kappos

O. Keith Hallam, III

Email:                                                            mgreene@cravath.com

dkappos@cravath.com
 khallam@cravath.com

 

if to Licensor, to:

 

Forward Pharma FA ApS

Östergade 24A, 1st Floor

100 Copenhagen K,

Denmark

Attention: Florian Schönharting

Email: fs@nordicbiotech.com

 

with a copy to (which copy does not constitute notice):

 

Sidley Austin LLP 
 787 Seventh Avenue 
 New York, NY 10019

Attention:                                         Michael A. Gordon

Scott M. Freeman

Email:    mgordon@sidley.com

sfreeman@sidley.com

 

if to Licensor Authorized Agent, to:

 

Forward Pharma USA, LLC 
 7 Skyline Drive, Suite 350 
 Hawthorne, New York 10532 
 United States

Attention:                                         Florian Schönharting

Email:                                                            fs@nordicbiotech.com

 

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if to any or all of the Additional Parties, to:

 

The Representative 
 Forward Pharma A/S 
 Østergade 24A, 1 
 1100 Copenhagen K 
 Denmark

Attention:                                         Florian Schönharting

Email:                                                            fs@nordicbiotech.com

 

with a copy to (which copy does not constitute notice):

 

Sidley Austin LLP 
 787 Seventh Avenue 
 New York, NY 10019

Attention:                                         Michael A. Gordon

Scott M. Freeman

 

Email:                                                            mgordon@sidley.com

sfreeman@sidley.com

 

if to Additional Parties Authorized Agent, to:

 

Forward Pharma USA, LLC 
 7 Skyline Drive, Suite 350 
 Hawthorne, New York 10532 
 United States

Attention:                                         Florian Schönharting

Email:                                                            fs@nordicbiotech.com

 

with a copy to (which copy does not constitute notice):

 

Sidley Austin LLP 
 787 Seventh Avenue 
 New York, NY 10019

Attention:                                         Michael A. Gordon

Scott M. Freeman

 

Email:                                                            mgordon@sidley.com

sfreeman@sidley.com

 

SECTION 8.04. Interpretation. The headings contained in this Agreement and in the table of contents to this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require,

 

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any pronoun shall include the corresponding masculine, feminine and neuter forms. The word “will” shall be construed to have the same meaning as the word “shall”. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if”. The word “or” shall not be exclusive. The phrase “date of this Agreement” shall be deemed to refer to the Agreement Date. All references to “dollars” or “$” shall refer to the lawful money of the United States, and all references to “krone” or “DKK” shall refer to the lawful money of Denmark. Unless the context requires otherwise (i) any definition of or reference to any Contract, instrument or other document or any Law herein shall be construed as referring to such Contract, instrument or other document or Law as from time to time amended, supplemented or otherwise modified, (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof and (iv) all references herein to articles, sections and appendices shall be construed to refer to articles and sections of, and appendices to, this Agreement. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting or causing any instrument to be drafted.

 

SECTION 8.05. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic image scan transmission shall be effective as delivery of a manually executed counterpart of this Agreement.

 

SECTION 8.06. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law, or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Transactions contemplated hereby is not affected in any manner materially adverse to any Party or such Party waives its rights under this Section 8.06 with respect thereto. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the Transactions are fulfilled to the extent possible. Notwithstanding the foregoing, the Parties intend that this Section 8.06 be construed as an integral provision of this Agreement and that the provisions of this Agreement shall not be severable in any manner that diminishes a Party’s rights hereunder or increases a Party’s liability or obligations hereunder.

 

SECTION 8.07. Entire Agreement; Third-Party Beneficiaries; No Other  Representations or Warranties.

 

(a) This Agreement, the Aditech Addendum, the Aditech Letter Agreement and the Shareholders Commitment Agreement (i) constitute the entire agreement, and supersede all prior agreements and understandings, both written and oral, among the Parties and their Affiliates, or any of them, with respect to the subject matter

 

53

 

of this Agreement and the Shareholders Commitment Agreement and (ii) except as specified in Section 2.01, Section 2.10 and the Aditech Addendum, are not intended to confer upon any Person other than the Parties hereto or thereto and the Released Parties, as applicable, any rights or remedies.

 

(b)         Except for the representations and warranties contained in Article VII, or in any certificate delivered to Licensee in connection with the Transactions, Licensee acknowledges that (i) none of Licensor, the Additional Parties or any Person on behalf of Licensor or the Additional Parties makes any other express or implied representation or warranty with respect to Licensor, the Additional Parties or any of their respective Affiliates or with respect to any other information made available to Licensee in connection with the Transactions, and (ii) Licensee has not relied on any representation, warranty or other statement made by Licensor, the Additional Parties or any Representative of Licensor or the Additional Parties other than those set forth in Section 7.01.

 

(c)          Except for the representations and warranties contained in Article VII, each of Licensor and the Additional Parties acknowledges that (i) none of Licensee or any other Person on behalf of Licensee makes any other express or implied representation or warranty with respect to Licensee or with respect to any other information made available to Licensor in connection with the Transactions, and (ii) each of Licensor and the Additional Parties has not relied on any representation, warranty or other statement made by Licensee or any Representative of Licensee other than those set forth in Section 7.03.

 

SECTION 8.08. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS THEREOF, EXCEPT (A) THAT ANY CONTROVERSY, CLAIM OR DISPUTE INVOLVING INFRINGEMENT OR VALIDITY OF INTELLECTUAL PROPERTY SHALL BE DETERMINED ACCORDING TO THE LAWS UNDER WHICH SUCH INTELLECTUAL PROPERTY IS REGISTERED OR OTHERWISE PROTECTED OR ENJOYABLE, ON A COUNTRY-BY-COUNTRY BASIS AND (B) TO THE EXTENT DANISH LAW IS MANDATORILY APPLICABLE TO THIS AGREEMENT OR THE TRANSACTIONS.

 

SECTION 8.09. Assignment. Licensee may assign, in whole or in part, in its sole discretion and without the consent of Licensor, this Agreement and any or all of its rights, interests and obligations hereunder to any other Person, but no such assignment shall relieve Licensee of its obligations under this Agreement if such assignee does not perform such obligations. Licensor and the Additional Parties may not assign this Agreement or any of their respective rights, interests, or obligations hereunder, in whole or in part, by operation of Law or otherwise to any other Person without the prior written consent of Licensee; provided, however, that Licensor may assign its rights to receive royalty payments pursuant to Sections 4.02 and 4.03 of this Agreement, and other ancillary rights as reasonably necessary to assign its rights to receive royalty payments, to another Person without the prior written consent of Licensee.

 

54

 

Subject to the first two sentences of this Section 8.09, this Agreement will be binding upon, inure to the benefit of and be enforceable by, the Parties and their respective successors and assigns.

 

SECTION 8.10. Dispute Resolution.

 

(a)         Each of the Parties hereto irrevocably and unconditionally submits, for itself and its property, to the jurisdiction of the federal and state courts in the County of New York in the State of New York. Each of the Parties hereto further agrees that, to the fullest extent permitted by applicable Law, service of any process, summons, notice or document by U.S. registered mail to such Person’s respective address set forth in Section 8.03 shall be effective service of process for any such controversy, claim or dispute in New York with respect to any matters to which it has submitted to jurisdiction as set forth above in the immediately preceding sentence. Nothing in this Agreement will affect the right of any Party to this Agreement to serve process in any other manner permitted by applicable Law. Each of the Parties hereto irrevocably and unconditionally waives (and agrees not to plead or claim) any objection to the laying of venue of any such controversy, claim or dispute in the courts in the County of New York in the State of New York, or that any such controversy, claim or dispute brought in any court in the County of New York in the State of New York has been brought in an inconvenient forum.

 

(b)         Any controversy, claim or dispute brought by Licensor or any of its Affiliates against Licensee or any of its Affiliates arising out of or relating to this Agreement or any breach hereof by Licensee shall be brought in the courts in the County of New York in the State of New York.

 

(c)          Any controversy, claim or dispute brought by Licensee or any of its Affiliates against Licensor, the Additional Parties or any of their respective controlled Affiliates arising out of or relating to this Agreement or any breach hereof by Licensor or the Additional Parties may either be brought in the courts in the County of New York in the State of New York or resolved by confidential arbitration conducted and administered by JAMS or any successor entity thereto (“JAMS”), in accordance with its Comprehensive Rules and Procedures. The arbitration shall be conducted in the County of New York, in the State of New York.

 

(d)         In the event of an arbitration, an organizational meeting shall be held within 90 days of service of the initial arbitration demand. The arbitration shall be conducted by a panel of three arbitrators. Where there is a conflict between the JAMS rules and this clause, the provisions of this clause shall govern. Each Party shall select one arbitrator and the two arbitrators shall select a third arbitrator, who will chair the panel. The persons considered for selection as arbitrators shall not be limited to persons identified by JAMS. The arbitrator(s) shall be neutral and independent of each Party. There shall be no ex parte communications with the Party arbitrator(s) after the first organizational meeting. The confidentiality of all proceedings related to any arbitration shall be strictly maintained, as shall the confidentiality of any documents, deposition testimony, or other information exchanged in relation to the arbitration proceedings

 

55

 

(except as information may be required in any judicial proceeding brought to enforce these arbitration provisions or any award rendered hereunder).

 

(i)             The panel shall be requested to use reasonable efforts to render its decision and award within 30 days after the close of evidence and, in any event, within three months of the first organizational meeting. The panel shall allow reasonable discovery, relevant to the issues before it, subject to the goal of completing the proceedings within the specified time frame. Each Party shall be limited to a maximum total number of four depositions (each deposition not to exceed seven hours), except with respect to custodial depositions for purposes of authenticating documents and, in extraordinary cases, as approved by the panel.

 

(ii)          The panel shall render findings of fact and conclusions of Law and a written opinion setting forth the basis and reasons for any decision reached. In rendering an award, the panel shall determine the rights and obligations of the Parties according to the substantive Laws of the State of New York and of the United States, except (A) that any controversy, claim or dispute involving infringement or validity of Intellectual Property shall be determined according to the Laws under which such Intellectual Property is registered or otherwise protected or enjoyable, on a country-by-country basis and (B) to the extent Danish law is mandatorily applicable. The decision of the panel shall be final and binding.

 

(iii)       The panel shall have the authority to grant any equitable or legal relief that would be available in any judicial proceeding instituted to resolve the disputed matter, including interim relief, but the panel shall not have the authority to grant any remedies the Parties have waived in the Agreement or to award special, punitive or exemplary damages.

 

(iv)      Any decision or award of the panel shall be subject to the appeal by any Party in accordance with the Optional Appeal Procedure of JAMS.

 

(v)         Each of the Parties agrees that it will not bring any action relating to the interpretation, application or enforcement of the provisions of this Section 8.10(d) or seeking emergency or temporary relief prior to appointment of the panel, in any court other than (A) courts in the County of New York in the State of New York, or (B) the Danish Maritime and Commercial Court in Copenhagen, and the Laws of the State of New York shall apply to any such action, except (y) that any controversy, claim or dispute involving infringement or validity of Intellectual Property shall be determined according to the Laws under which such Intellectual Property is registered or otherwise protected or enjoyable, on a country-by-country basis and (z) to the extent Danish law is mandatorily applicable. With respect to any such action, each of the Parties hereby irrevocably consents to and submits itself to the personal jurisdiction of (1) the courts in the County of New York in the State of New York and (2) the Danish Maritime and Commercial Court in Copenhagen, and irrevocably waives any objection to the laying of venue of any such action in such court or that any such court is an inconvenient forum. Each of the Parties hereby waives any rights such Party may have to personal service of a summons, complaint or other process in connection with such an

 

56

 

action and agrees that service may be made by registered or certified mail addressed to such Party and sent in accordance with the provisions of this Agreement. The Parties acknowledge and agree that, upon appointment of the panel, it shall have the exclusive authority to grant relief.

 

(vi) The Parties hereby also consent to the personal jurisdiction of (A) the courts in the County of New York in the State of New York and (B) the Danish Maritime and Commercial Court in Copenhagen, for the purpose of confirming any award and entering judgment thereon and irrevocably waive any objection to the laying of venue of any such action in such court or that any such court is an inconvenient forum. Each of the Parties hereby waives any rights such Party may have to personal service of a summons, complaint or other process in connection with such an action and agrees that service may be made by registered or certified mail addressed to such Party and sent in accordance with the provisions of this Agreement.

 

(e) Each Party agrees that the losing party (as determined by the court or arbitral panel) in any Litigation or arbitration brought or held in accordance with this Section 8.10 shall promptly reimburse the other Parties for all their reasonable, documented, out-of-pocket attorneys’ fees and expenses incurred in connection with such Litigation or arbitration.

 

SECTION 8.11. Authorized Agent.

 

(a)         Licensor hereby designates Forward Pharma USA, LLC as its authorized agent (the “Licensor Authorized Agent”), upon whom process may be served to enforce this Agreement in connection with any Litigation that may be instituted in any court described in this Section 8.11. Licensor hereby agrees to take any and all action, including the filing of any and all documents that may be necessary to establish and continue such appointment in full force and effect as aforesaid. Licensor hereby agrees that service of process upon the Licensor Authorized Agent shall be, in every respect, effective service of process upon Licensor.

 

(b)         The Additional Parties hereby designate Forward Pharma USA, LLC as their authorized agent (the “Additional Parties Authorized Agent”), upon whom process may be served to enforce this Agreement in connection with any Litigation that may be instituted in any court described in this Section 8.11. The Additional Parties hereby agree to take any and all action, including the filing of any and all documents that may be necessary to establish and continue such appointment in full force and effect as aforesaid. The Additional Parties hereby agree that service of process upon the Additional Parties Authorized Agent shall be, in every respect, effective service of process upon the Additional Parties.

 

SECTION 8.12. Specific Enforcement. The Parties acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with its specific terms or were otherwise breached, and that monetary damages, even if available, would not be an adequate remedy therefor. It is accordingly agreed that the Parties shall be entitled to an injunction or injunctions, or any other

 

57

 

appropriate form of equitable relief, to prevent breaches of this Agreement and to enforce specifically the performance of the terms and provisions of this Agreement in any court or before any panel of arbitrators referred to in Section 8.10, without the necessity of proving the inadequacy of money damages as a remedy (and each Party hereby waives any requirement for the securing or posting of any bond in connection with such remedy), this being in addition to any other remedy to which they are entitled at law or in equity. Each of the Parties  acknowledges and agrees that the right of specific enforcement is an integral part of the Transactions and without such right, none of the Parties would have entered into this Agreement.

 

SECTION 8.13. Indirect Damages. In no event shall either Party have any liability under any provision of this Agreement for any special, punitive, incidental, consequential, special or indirect damages, including (i) loss of future revenue or income, (ii) loss of business reputation or opportunity relating to the breach or alleged breach of this Agreement, or (iii) diminution of value or any damages based on any type of multiple, whether based on statute, contract, tort or otherwise, and whether or not arising from the other Party’s sole, joint, or concurrent negligence, strict liability, criminal liability or other fault.

 

SECTION 8.14. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT OF ANY LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 8.14.

 

SECTION 8.15. Rights in Bankruptcy.

 

(a) All rights and licenses granted to Licensee or any of its Affiliates under or pursuant to this Agreement are intended to be, and will be deemed to be, for purposes of Title 11 of the United States Code, as amended from time to time (the “Bankruptcy  Code”), licenses of rights to “intellectual property” as defined under Section 101 of the Bankruptcy Code. The Parties agree that Licensee, any of its Affiliates or its or its Affiliates’ sublicensees will retain and may fully exercise all of their respective rights and elections as licensees of intellectual property in the event any case is commenced with respect to Licensor or any of its Affiliates under the Bankruptcy Code (whether a plenary case or an ancillary case under Chapter 15 of the Bankruptcy Code). The Parties further agree and acknowledge that enforcement by Licensee, any of its Affiliates or its or its Affiliates’ sublicensees of any of their respective rights under Section 365(n) of the Bankruptcy Code in connection with this Agreement shall not violate the automatic stay of Section 362 of the Bankruptcy Code and waive any right to object on such basis. If Licensor, the Additional Parties or any of their respective controlled Affiliates commence a case under the Bankruptcy Code after the Agreement Date or otherwise become the

 

58

 

subject of a case under the Bankruptcy Code commenced after the Agreement Date, voluntarily or involuntarily and whether a plenary case or an ancillary case under Chapter 15 of the Bankruptcy Code (such entity, a “Filing Party”), (i) Licensee, its Affiliates and its and its Affiliates’ sublicensees shall have all rights provided for under Section 365(n) of the Bankruptcy Code (and the Parties hereby agree and acknowledge that such rights are necessary to ensure that the interests of Licensee, and its Affiliates and its and its Affiliates’ sublicensees are “sufficiently protected” in the case of an ancillary case under Chapter 15 of the Bankruptcy Code) and (ii) in addition to and not in lieu of any other right or remedy Licensee or any of its Affiliates or their respective sublicensees (the “Non-Filing Party”) may have under this Agreement or Section 365(n) of the Bankruptcy Code, the Non-Filing Party shall have the right to obtain, and the Filing Party or any trustee for the Filing Party or its assets shall, at the Non-Filing Party’s written request to the Filing Party, deliver a copy of all embodiments held by the Filing Party of any Intellectual Property rights licensed to the Non-Filing Party under or pursuant to this Agreement, including such embodiments necessary for the Non-Filing Party to exercise its rights hereunder. In addition, the Filing Party shall take all steps reasonably requested by the Non-Filing Party to perfect, exercise and enforce its rights hereunder, including filings in the USPTO, U.S. Copyright Office or other similar Governmental Entity, and under the Uniform Commercial Code.

 

(b) To the extent any license of rights under or pursuant to this Agreement does not constitute a license to “intellectual property” as defined under Section 101 of the Bankruptcy Code (such licensed property, “Specified IP”), each of Licensor, the Additional Parties and their respective controlled Affiliates, in its position of licensor hereunder, hereby acknowledges and agrees that: (i) this Agreement is a material inducement to U.S. Licensee and Designated Countries Licensee paying Licensor their respective portions of the Upfront Fee and the Royalty Consideration pursuant to this Agreement and Licensee relying on this Agreement in connection with its business and investment planning; (ii) this Agreement is not an executory contract and does not contain any material, ongoing obligations on Licensee, any of its Affiliates or its or its Affiliates’ sublicensees relevant to the standard  governing executory contracts; (iii) the Parties hereby acknowledge and agree that (A) any Specified IP is closely related to the other Licensed Intellectual Property that constitutes “intellectual property” as defined under Section 101 of the Bankruptcy Code and (B) in the event Licensee, any of its Affiliates or its or its Affiliates’ sublicensees were to lose their rights in and to any Specified IP included in the Licensed Intellectual Property, irreparable damage would occur to Licensee or such Affiliate or sublicensee for which monetary damages alone could not provide sufficient remedy to Licensee or such Affiliate or sublicensee; accordingly, Licensor and the Additional Parties (and any debtor-in-possession or trustee or foreign representative of the business of Licensor or the Additional Parties, as applicable) cannot and shall not attempt to reject this Agreement pursuant to Section 365 of the Bankruptcy Code or any foreign equivalent; and (iv) in the event Licensor or any of the Additional Parties (or any debtor-in-possession or trustee or foreign representative of the business of Licensor or such Additional Party, as applicable) does seek to reject this Agreement and in the event such relief is granted, (A) the rejection shall be treated merely as breach of the contract and not its avoidance, rescission, or termination,

 

59

 

(B) such rejection shall not terminate Licensee’s right to use such license and shall have no effect upon the contract’s continued existence, (C) Licensee, any of its Affiliates or its or its Affiliates’ sublicensees may elect rights under Section 365(n) of the Bankruptcy Code or any foreign equivalent, and (D) Licensee, any of its Affiliates or its or its Affiliates’ sublicensees shall be entitled to seek other equitable treatment relating to such rejection.

 

SECTION 8.16. Further Assurances. Each of the Parties agree to execute and deliver (and to cause their respective controlled Affiliates to execute and deliver), upon the written request of any Party hereto, any and all such further documents, certificates, papers, schedules and instruments as reasonably appropriate for the purpose of obtaining the full benefits of this Agreement.

 

SECTION 8.17. Costs. Each Party shall bear its own costs, fees and expenses incurred in connection with this Agreement and the Transactions.

 

SECTION 8.18. Independent Contractors. Nothing contained herein shall be deemed to create any relationship, whether in the nature of agency, joint venture, partnership or otherwise, between the Parties. No Party shall be authorized to bind or obligate the other Parties in any manner.

 

SECTION 8.19. Representative of Additional Parties.

 

(a)   Each Additional Party hereby constitutes and appoints Forward Pharma A/S (the “Additional Party Representative”) as attorney-in-fact for such Additional Party with full power of substitution and authority, in its discretion, to enforce this Agreement against the parties hereto, and to execute any amendment or waiver of this Agreement and any other document or instrument necessary or advisable in order to carry out the provisions of this Agreement, to give and receive notices and communications relating to this Agreement and to agree to, negotiate, enter into settlements and compromises of, and to comply with Orders with respect to, any dispute relating to this Agreement and to take all actions necessary or appropriate in the judgment of the Additional Party Representative for the accomplishment of the foregoing.

 

(b)   All decisions of and actions by the Additional Party Representative may be relied upon by Licensee, Licensor, their respective Affiliates and any Third Party, and shall be binding and conclusive upon each Additional Party.

 

(c)   The Additional Parties may from time to time designate another Party hereto as the Additional Party Representative in substitution for the then Additional Party Representative, and upon written notice thereof to Licensee, such Party shall be the Additional Party Representative for all purposes hereof.

 

SECTION 8.20. Set Off. Notwithstanding anything in this Agreement to the contrary, the Parties hereby agree that each of the Parties shall have the right to set off any amounts owed by it to any other Party pursuant to this Agreement against any amounts otherwise concurrently due and payable to it pursuant to this Agreement.

 

60

 

SIGNATURE PAGES TO FOLLOW

 

61

 

IN WITNESS WHEREOF, each of the undersigned Parties has caused this Agreement to be signed by its signatories thereunto duly authorized as of the date first written above.

 

	
 
    	
BIOGEN   SWISS MANUFACTURING GMBH
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Fraderick Lawson
    
	
 
    	
 
    	
Name:   Fraderick Lawson
    
	
 
    	
 
    	
Title:     Managing Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Neil Sisak
    
	
 
    	
 
    	
Name:   Neil Sisak
    
	
 
    	
 
    	
Title:   Director
    
	
 
    	
 
    
	
 
    	
BIOGEN   INTERNATIONAL HOLDING LTD.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Sarah Demerling
    
	
 
    	
 
    	
Name:   Sarah Demerling
    
	
 
    	
 
    	
Title:   Director
    

 

[Signature Page to Settlement and License Agreement]

 

 

	
 
    	
FORWARD   PHARMA A/S
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Florian Schőnharting
    
	
 
    	
 
    	
Name:   Florian Schőnharting
    
	
 
    	
 
    	
Title:   Chairman of Board of Directors
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/   Grant Lawrence
    
	
 
    	
 
    	
Name:   Grant Lawrence
    
	
 
    	
 
    	
Title:   Member of Board of Directors
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/   Karen Smith
    
	
 
    	
 
    	
Name:   Karen Smith
    
	
 
    	
 
    	
Title:   Member of Board of Directors
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/   Jan van de Winkel
    
	
 
    	
 
    	
Name:   Jan van de Winkel
    
	
 
    	
 
    	
Title:   Member of Board of Directors
    

 

[Signature Page to Settlement and License Agreement]

 

 

	
 
    	
ADITECH   PHARMA AG
    
	
 
    	
 
    
	
 
    	
 
    	
/s/   Michael Forer
    
	
 
    	
 
    	
Name:   Michael Forer
    
	
 
    	
 
    	
Title:   Director
    
	
 
    	
 
    	
 
    
	
 
    	
NB   FP INVESTMENT SLP APS
    
	
 
    	
 
    
	
 
    	
 
    	
/s/   Florian Schönharting
    
	
 
    	
 
    	
Name:   Florian Schönharting
    
	
 
    	
 
    	
Title:   CEO
    
	
 
    	
 
    	
 
    
	
 
    	
NB   FP INVESTMENT GENERAL PARTNER APS
    
	
 
    	
 
    
	
 
    	
 
    	
/s/   Florian Schönharting
    
	
 
    	
 
    	
Name:   Florian Schönharting
    
	
 
    	
 
    	
Title:   CEO
    
	
 
    	
 
    	
 
    
	
 
    	
TECH   GROWTH INVEST APS
    
	
 
    	
 
    
	
 
    	
 
    	
/s/   Florian Schönharting
    
	
 
    	
 
    	
Name:   Florian Schönharting
    
	
 
    	
 
    	
Title:   CEO
    

 

[Signature Page to Settlement and License Agreement]

 

 

APPENDIX A 

 

Scheduled Patents and Patent Applications

 

EP 2 879 672 and Family Members (Based on WO 2014/020156)

 

(Title: Combination Therapy for Treatment of Multiple Sclerosis)

 

	
No.
    	
 
    	
Publication No.
    	
 
    	
Publication Date
    	
 
    	
Application No.
    	
 
    	
Application Date
    	
 
    	
Country
    
	
1
    	
 
    	
AU2013298517 (Al)
    	
 
    	
3/5/2015
    	
 
    	
AU20130298517
    	
 
    	
8/2/2013
    	
 
    	
Australia
    
	
2
    	
 
    	
CA2880742 (Al)
    	
 
    	
2/6/2014
    	
 
    	
CA20132880742
    	
 
    	
8/2/2013
    	
 
    	
Canada
    
	
3
    	
 
    	
CN104684553 (A)
    	
 
    	
6/3/2015
    	
 
    	
CN2013852107
    	
 
    	
8/2/2013
    	
 
    	
China
    
	
4
    	
 
    	
EA201590166 (Al);   EA201590166 (A8)
    	
 
    	
6/30/2015
    	
 
    	
EA20150090166
    	
 
    	
8/2/2013
    	
 
    	
Eurasia
    
	
5
    	
 
    	
EP1940382 (A2)
    	
 
    	
7/9/2008
    	
 
    	
EP20060791453
    	
 
    	
10/6/2006
    	
 
    	
European
    
	
6
    	
 
    	
EP2692343 (Al)
    	
 
    	
2/5/2014
    	
 
    	
EP20120179232
    	
 
    	
8/3/2012
    	
 
    	
European
    
	
7
    	
 
    	
EP2692344 (Al)
    	
 
    	
2/5/2014
    	
 
    	
EP20120187939
    	
 
    	
10/10/2012
    	
 
    	
European
    
	
8
    	
 
    	
EP2879672 (Al)
    	
 
    	
6/10/2015
    	
 
    	
EP20130745073
    	
 
    	
8/2/2013
    	
 
    	
European
    
	
9
    	
 
    	
HK1211210 (Al)
    	
 
    	
5/20/2016
    	
 
    	
HK20150112010
    	
 
    	
12/7/2015
    	
 
    	
Hong Kong
    
	
10
    	
 
    	
872/CHENP/2015 A
    	
 
    	
7/1/2016
    	
 
    	
872/CHENP/2015
    	
 
    	
2/12/2015
    	
 
    	
India
    
	
11
    	
 
    	
JP2015523407 (A)
    	
 
    	
8/13/2015
    	
 
    	
JP20150524803
    	
 
    	
8/2/2013
    	
 
    	
Japan
    
	
12
    	
 
    	
KR20150040338 (A)
    	
 
    	
4/14/2015
    	
 
    	
KR20157005612
    	
 
    	
8/2/2013
    	
 
    	
Korea
    
	
13
    	
 
    	
17588/3A/16
    	
 
    	
8/18/2016
    	
 
    	
UA201501066
    	
 
    	
8/2/2013
    	
 
    	
Ukraine
    
	
14
    	
 
    	
US20080300217 (Al)
    	
 
    	
12/4/2008
    	
 
    	
12/089,004
    	
 
    	
4/2/2008
    	
 
    	
United States
    
	
15
    	
 
    	
US20150164849 (Al)
    	
 
    	
6/18/2015
    	
 
    	
14/419,031
    	
 
    	
8/2/2013
    	
 
    	
United States
    
	
16
    	
 
    	
WO2007042035 (A2); WO2007042035   (A3)
    	
 
    	
4/19/2007
    	
 
    	
WO2006DK00563
    	
 
    	
10/6/2006
    	
 
    	
WIPO
    
	
17
    	
 
    	
WO2014020156 (Al)
    	
 
    	
2/6/2014
    	
 
    	
WO2013EP66285
    	
 
    	
8/2/2013
    	
 
    	
WIPO
    

 

[Appendix A to Settlement and License Agreement]

 

1

 

EP 2 379 063 and Family Members (Based on WO 2010/079222)

 

(Title: Pharmaceutical Formulation Comprising One or More Fumaric Acid Esters in an Erosion Matrix)

 

	
No.
    	
 
    	
Publication No.
    	
 
    	
Publication Date
    	
 
    	
Application No.
    	
 
    	
Application Date
    	
 
    	
Country
    
	
1
    	
 
    	
CN102369001 (A)
    	
 
    	
3/7/2012
    	
 
    	
CN2010811800
    	
 
    	
1/8/2010
    	
 
    	
China
    
	
2
    	
 
    	
DK2379063 (T3)
    	
 
    	
4/22/2013
    	
 
    	
DK20100700730T
    	
 
    	
1/8/2010
    	
 
    	
Denmark
    
	
3
    	
 
    	
DK2564839 (T3)
    	
 
    	
7/25/2016
    	
 
    	
DK20120193798T
    	
 
    	
1/8/2010
    	
 
    	
Denmark
    
	
4
    	
 
    	
EA201290596 (Al)
    	
 
    	
1/30/2013
    	
 
    	
EA20120090596
    	
 
    	
1/8/2010
    	
 
    	
Eurasia
    
	
5
    	
 
    	
EP2379063 (Al); EP2379063   (B1)
    	
 
    	
10/26/2011
    	
 
    	
EP20100700730
    	
 
    	
1/8/2010
    	
 
    	
European
    
	
6
    	
 
    	
EP2564839 (A2); EP2564839   (A3); EP2564839
    	
 
    	
3/6/2013
    	
 
    	
EP20120193798
    	
 
    	
1/8/2010
    	
 
    	
European
    
	
7
    	
 
    	
EP3090733 (Al)
    	
 
    	
11/9/2016
    	
 
    	
EP20160000993
    	
 
    	
1/8/2010
    	
 
    	
European
    
	
8
    	
 
    	
ES2411972 (T3)
    	
 
    	
7/9/2013
    	
 
    	
ES20100700730T
    	
 
    	
1/8/2010
    	
 
    	
Spain
    
	
9
    	
 
    	
ES2586761 (T3)
    	
 
    	
10/18/2016
    	
 
    	
ES20120193798T
    	
 
    	
1/8/2010
    	
 
    	
Spain
    
	
10
    	
 
    	
HK1180943A0
    	
 
    	
11/01/2013
    	
 
    	
HK2013108156A
    	
 
    	
7/11/2013
    	
 
    	
Hong Kong
    
	
11
    	
 
    	
HRP20130480 (T1)
    	
 
    	
6/30/2013
    	
 
    	
HR2013P000480T
    	
 
    	
5/31/2013
    	
 
    	
Croatia
    
	
12
    	
 
    	
HRP20160982 (T1)
    	
 
    	
11/4/2016
    	
 
    	
HR2016P000982T
    	
 
    	
8/1/2016
    	
 
    	
Croatia
    
	
13
    	
 
    	
P6543
    	
 
    	
11/2/2016
    	
 
    	
GE201012819
    	
 
    	
8/1/2010
    	
 
    	
Georgia
    
	
14
    	
 
    	
2814/KOLNP/2011 A
    	
 
    	
1/20/2012
    	
 
    	
IN 2814/KOLNP/2011
    	
 
    	
7/5/2011
    	
 
    	
India
    
	
15
    	
 
    	
JP2016006081 (A)
    	
 
    	
1/14/2016
    	
 
    	
JP20150149886
    	
 
    	
7/29/2015
    	
 
    	
Japan
    
	
16
    	
 
    	
JP5788331 (B2);   JP2012514624 (A)
    	
 
    	
6/28/2012
    	
 
    	
JP20110544876
    	
 
    	
1/8/2010
    	
 
    	
Japan
    
	
17
    	
 
    	
KR20110116027 (A)
    	
 
    	
10/24/2011
    	
 
    	
KR20117018595
    	
 
    	
1/8/2010
    	
 
    	
Korea
    
	
18
    	
 
    	
PL2564839T3
    	
 
    	
11/30/2016
    	
 
    	
PL2012193789T
    	
 
    	
1/8/2010
    	
 
    	
Poland
    
	
19
    	
 
    	
PT2379063 (E)
    	
 
    	
5/3/2013
    	
 
    	
PT20100700730T
    	
 
    	
1/8/2010
    	
 
    	
Portugal
    
	
20
    	
 
    	
RU2015113483 (A)
    	
 
    	
11/27/2015
    	
 
    	
RU20150113483
    	
 
    	
1/8/2010
    	
 
    	
Russia
    
	
21
    	
 
    	
RU2552951 (C2);   RU2011128785 (A)
    	
 
    	
2/20/2013
    	
 
    	
RU20110128785
    	
 
    	
1/8/2010
    	
 
    	
Russia
    

 

[Appendix A to Settlement and License Agreement]

 

2

 

	
No.
    	
 
    	
Publication No.
    	
 
    	
Publication Date
    	
 
    	
Application No.
    	
 
    	
Application Date
    	
 
    	
Country
    
	
22
    	
 
    	
SI2379063 (T1)
    	
 
    	
4/30/2013
    	
 
    	
SI20100030161T
    	
 
    	
1/8/2010
    	
 
    	
Slovenia
    
	
23
    	
 
    	
SI2564839 (T1)
    	
 
    	
9/30/2016
    	
 
    	
SI20100031248
    	
 
    	
1/8/2010
    	
 
    	
Slovenia
    
	
24
    	
 
    	
SMT201300065 (B)
    	
 
    	
9/6/2013
    	
 
    	
SM20130000065T
    	
 
    	
6/17/2013
    	
 
    	
San Marino
    
	
25
    	
 
    	
UA103844 (C2)
    	
 
    	
11/25/2013
    	
 
    	
UA20120009635
    	
 
    	
1/8/2010
    	
 
    	
Ukraine
    
	
26
    	
 
    	
1122975
    	
 
    	
11/25/2016
    	
 
    	
UA201307178/I
    	
 
    	
1/8/2010
    	
 
    	
Ukraine
    
	
27
    	
 
    	
Not known yet
    	
 
    	
Not known yet
    	
 
    	
UA201308182/I
    	
 
    	
1/8/2010
    	
 
    	
Ukraine
    
	
28
    	
 
    	
US20150272894 (A1)
    	
 
    	
10/1/2015
    	
 
    	
14/561,010
    	
 
    	
12/4/2014
    	
 
    	
United States
    
	
29
    	
 
    	
US8906420 (B2);   US20120034303 (A1)
    	
 
    	
2/9/2012
    	
 
    	
13/143,498
    	
 
    	
1/8/2010
    	
 
    	
United States
    
	
30
    	
 
    	
WO2010079222 (A1)
    	
 
    	
7/15/2010
    	
 
    	
WO2010EP50172
    	
 
    	
1/8/2010
    	
 
    	
WIPO
    

 

[Appendix A to Settlement and License Agreement]

 

3

 

Chart EP 2 801 355 and Family Members (Based on WO 2006/037342)

 

	
No.
    	
 
    	
Title
    	
 
    	
Publication No.
    	
 
    	
Publication Date
    	
 
    	
Application No.
    	
 
    	
Application Date
    	
 
    	
Country
    
	
1
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
CN101056624 (A)
    	
 
    	
10/17/2007
    	
 
    	
CN2005838572
    	
 
    	
10/7/2005
    	
 
    	
China
    
	
2
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
CN101304732 (A)
    	
 
    	
11/12/2008
    	
 
    	
CN2006841526
    	
 
    	
10/6/2006
    	
 
    	
China
    
	
3
    	
 
    	
Gesteuerte Freisetzung von   pharmazeutischen Zusammensetzungen mit Fumarinsäureester
    	
 
    	
DE14172390 (T1)
    	
 
    	
12/31/2014
    	
 
    	
DE14172390T
    	
 
    	
10/7/2005
    	
 
    	
Germany
    
	
4
    	
 
    	
Gesteuerte Freisetzung von   pharmazeutischen Zusammensetzungen mit Fumarinsäureester
    	
 
    	
DE14172396 (T1)
    	
 
    	
1/8/2015
    	
 
    	
DE14172396T
    	
 
    	
10/7/2005
    	
 
    	
Germany
    
	
5
    	
 
    	
Gesteuerte Freisetzung von   pharmazeutischen Zusammensetzungen mit Fumarinsäureester
    	
 
    	
DE14172398 (T1)
    	
 
    	
1/8/2015
    	
 
    	
DE14172398T
    	
 
    	
10/7/2005
    	
 
    	
Germany
    
	
6
    	
 
    	
Pharmazeutische   Zusammensetzungen mit kontrollierter Freisetzung, umfassend einen   Fumarinsäureester
    	
 
    	
DE202005022112 (U1)
    	
 
    	
4/24/2014
    	
 
    	
DE20052022112U
    	
 
    	
10/7/2005
    	
 
    	
Germany
    
	
7
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
DK1799196 (T3)
    	
 
    	
8/15/2016
    	
 
    	
DK20050789026T
    	
 
    	
10/7/2005
    	
 
    	
Denmark
    
	
8
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
DK2316430 (T3)
    	
 
    	
7/23/2012
    	
 
    	
DK20100182198T
    	
 
    	
10/7/2005
    	
 
    	
Denmark
    

 

[Appendix A to Settlement and License Agreement]

 

4

 

	
No.
    	
 
    	
Title
    	
 
    	
Publication No.
    	
 
    	
Publication Date
    	
 
    	
Application No.
    	
 
    	
Application Date
    	
 
    	
Country
    
	
9
    	
 
    	
Pharmazeutische   Zusammensetzungen mit kontrollierter Freisetzung, umfassend einen   Fumarinsäureester
    	
 
    	
DK2801355 (T3)
    	
 
    	
7/6/2015
    	
 
    	
DK20140172398T
    	
 
    	
10/7/2005
    	
 
    	
Denmark
    
	
10
    	
 
    	
Controlled release pharmaceutical   compositions comprising a fumaric acid ester
    	
 
    	
EP1799196 (A2);
   EP1799196 (B1)
    	
 
    	
6/27/2007
    	
 
    	
EP20050789026
    	
 
    	
10/7/2005
    	
 
    	
European
    
	
11
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
EP1951206 (Al)
    	
 
    	
8/6/2008
    	
 
    	
EP20060791451
    	
 
    	
10/6/2006
    	
 
    	
European
    
	
12
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
EP2316430 (B1);
   EP2316430 (Al);
   EP2316430 (B8)
    	
 
    	
5/4/2011
    	
 
    	
EP20100182198
    	
 
    	
10/7/2005
    	
 
    	
European
    
	
13
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
EP2792349 (A3);
   EP2792349 (A2)
    	
 
    	
10/22/2014
    	
 
    	
EP20140172396
    	
 
    	
10/7/2005
    	
 
    	
European
    
	
14
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
EP2801354 (Al)
    	
 
    	
11/12/2014
    	
 
    	
EP20140172390
    	
 
    	
10/7/2005
    	
 
    	
European
    
	
15
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
EP2801355 (B1);
   EP2801355 (Al)
    	
 
    	
11/12/2014
    	
 
    	
EP20140172398
    	
 
    	
10/7/2005
    	
 
    	
European
    
	
16
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
EP2965751 (Al)
    	
 
    	
1/13/2016
    	
 
    	
EP20150166243
    	
 
    	
10/7/2005
    	
 
    	
European
    
	
17
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
EP3093012 (Al)
    	
 
    	
11/16/16
    	
 
    	
EP20160001391
    	
 
    	
10/7/2005
    	
 
    	
European
    
	
18
    	
 
    	
Controlled release pharmaceutical   compositions comprising a fumaric acid ester
    	
 
    	
ES2387192 (T3)
    	
 
    	
9/17/2012
    	
 
    	
ES20100182198T
    	
 
    	
10/7/2005
    	
 
    	
Spain
    

 

[Appendix A to Settlement and License Agreement]

 

5

 

	
No.
    	
 
    	
Title
    	
 
    	
Publication No.
    	
 
    	
Publication Date
    	
 
    	
Application No.
    	
 
    	
Application Date
    	
 
    	
Country
    
	
19
    	
 
    	
Pharmazeutische   Zusammensetzungen mit kontrollierter Freisetzung, umfassend einen   Fumarinsäureester
    	
 
    	
ES2523796 (T1)
    	
 
    	
12/1/2014
    	
 
    	
ES20140172396T
    	
 
    	
10/7/2005
    	
 
    	
Spain
    
	
20
    	
 
    	
Pharmazeutische   Zusammensetzungen mit kontrollierter Freisetzung, umfassend einen   Fumarinsäureester
    	
 
    	
ES2525495 (T1)
    	
 
    	
12/23/2014
    	
 
    	
ES20140172390T
    	
 
    	
10/7/2005
    	
 
    	
Spain
    
	
21
    	
 
    	
Pharmazeutische   Zusammensetzungen mit kontrollierter Freisetzung, umfassend einen Fumarinsäureester
    	
 
    	
ES2525497 (T3);
   ES2525497 (T1)
    	
 
    	
12/23/2014
    	
 
    	
ES20140172398T
    	
 
    	
10/7/2005
    	
 
    	
Spain
    
	
22
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
ES2582942 (T3)
    	
 
    	
9/16/2016
    	
 
    	
ES20050789026T
    	
 
    	
10/7/2005
    	
 
    	
Spain
    
	
23
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
HK1108836A
    	
 
    	
5/23/2008
    	
 
    	
HK07114067.2
    	
 
    	
12/24/2007
    	
 
    	
Hong Kong
    
	
24
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
IN200701583P2
    	
 
    	
7/27/2007
    	
 
    	
IN2007KN1583A
    	
 
    	
5/3/2007
    	
 
    	
India
    
	
25
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
JP2008515822 (A)
    	
 
    	
5/15/2008
    	
 
    	
JP20070535023
    	
 
    	
10/7/2005
    	
 
    	
Japan
    
	
26
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
JP2009510137 (A)
    	
 
    	
3/12/2009
    	
 
    	
JP20080533870
    	
 
    	
10/6/2006
    	
 
    	
Japan
    
	
27
    	
 
    	
Controlled release   pharmaceutical composition comprising fumaric acid ester
    	
 
    	
JP2013064007 (A)
    	
 
    	
4/11/2013
    	
 
    	
JP20120267572
    	
 
    	
12/6/2012
    	
 
    	
Japan
    

 

[Appendix A to Settlement and License Agreement]

 

6

 

	
No.
    	
 
    	
Title
    	
 
    	
Publication No.
    	
 
    	
Publication Date
    	
 
    	
Application No.
    	
 
    	
Application Date
    	
 
    	
Country
    
	
28
    	
 
    	
Controlled release   pharmaceutical compositions comprising fumaric ester
    	
 
    	
JP2015227350 (A)
    	
 
    	
12/17/2015
    	
 
    	
JP20150139809
    	
 
    	
7/13/2015
    	
 
    	
Japan
    
	
29
    	
 
    	
Pharmazeutische   Zusammensetzungen mit kontrollierter Freisetzung, umfassend einen   Fumarinsäureester
    	
 
    	
LU92871 (I2)
    	
 
    	
1/13/2016
    	
 
    	
LU20150092871C
    	
 
    	
11/13/2015
    	
 
    	
Luxembourg
    
	
30
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
PL2316430 (T3)
    	
 
    	
11/30/2012
    	
 
    	
PL20100182198T
    	
 
    	
10/7/2005
    	
 
    	
Poland
    
	
31
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
PT2316430 (E)
    	
 
    	
6/26/2012
    	
 
    	
PT20100182198T
    	
 
    	
10/7/2005
    	
 
    	
Portugal
    
	
32
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
PT2801355 (E)
    	
 
    	
9/18/2015
    	
 
    	
PT20050172398T
    	
 
    	
10/7/2005
    	
 
    	
Portugal
    
	
33
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
RS54187 (B1)
    	
 
    	
12/31/2015
    	
 
    	
RS2015P000540
    	
 
    	
10/7/2005
    	
 
    	
Serbia
    
	
34
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
SI1799196 (T1)
    	
 
    	
10/28/2016
    	
 
    	
SI20050032086
    	
 
    	
10/7/2005
    	
 
    	
Slovenia
    
	
35
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
SI2316430 (T1)
    	
 
    	
9/28/2012
    	
 
    	
SI20050031565T
    	
 
    	
10/7/2005
    	
 
    	
Slovenia
    
	
36
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
SI2801355 (T1)
    	
 
    	
9/30/2015
    	
 
    	
SI20050031993T
    	
 
    	
10/7/2005
    	
 
    	
Slovenia
    
	
37
    	
 
    	
Controlled Release Pharmaceutical   Compositions Comprising a Fumaric Acid Ester
    	
 
    	
US20080299196 (A1)
    	
 
    	
12/04/2008
    	
 
    	
12/089,074
    	
 
    	
4/03/2008
    	
 
    	
United States
    

 

[Appendix A to Settlement and License Agreement]

 

7

 

	
No.
    	
 
    	
Title
    	
 
    	
Publication No.
    	
 
    	
Publication Date
    	
 
    	
Application No.
    	
 
    	
Application Date
    	
 
    	
Country
    
	
38
    	
 
    	
Controlled release   pharmaceutical compositions comprising fumaric acid ester
    	
 
    	
US20090304790 (Al);
   US20140099364 (A2)
    	
 
    	
12/10/2009
    	
 
    	
11/576,871
    	
 
    	
10/7/2005
    	
 
    	
United States
    
	
39
    	
 
    	
Controlled release   pharmaceutical compositions comprising a
    	
 
    	
US20130315993 (Al)
    	
 
    	
11/28/2013
    	
 
    	
13/957,147
    	
 
    	
8/01/2013
    	
 
    	
United States
    
	
40
    	
 
    	
CONTROLLED RELEASE   PHARMACEUTICAL COMPOSITIONS COMPRISING A FUMARIC ACID ESTER (“Cmax and 480 mg   per day dosing”)
    	
 
    	
US20130316003 (Al)
    	
 
    	
11/28/2013
    	
 
    	
13/957,220
    	
 
    	
8/01/2013
    	
 
    	
United States
    
	
41
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester (“uptitration   regimen including 480 mg per day dosing”)
    	
 
    	
US20140037720 (Al)
    	
 
    	
02/06/2014
    	
 
    	
13/957,117
    	
 
    	
8/01/2013
    	
 
    	
United States
    
	
42
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
US20140037740 (Al)
    	
 
    	
02/06/2014
    	
 
    	
13/957,250
    	
 
    	
8/01/2013
    	
 
    	
United States
    
	
43
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
US20140199386 (Al)
    	
 
    	
07/17/2014
    	
 
    	
14/209,712
    	
 
    	
3/13/2014
    	
 
    	
United States
    
	
44
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
US20140199387 (Al)
    	
 
    	
07/17/2014
    	
 
    	
14/213,321
    	
 
    	
3/14/2014
    	
 
    	
United States
    
	
45
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
US20140199388 (Al)
    	
 
    	
07/17/2014
    	
 
    	
14/213,673
    	
 
    	
3/14/2014
    	
 
    	
United States
    
	
46
    	
 
    	
Methods for treating   multiple sclerosis
    	
 
    	
US20140199390 (Al)
    	
 
    	
7/17/2014
    	
 
    	
14/212,503
    	
 
    	
3/14/2014
    	
 
    	
United States
    

 

[Appendix A to Settlement and License Agreement]

 

8

 

	
No.
    	
 
    	
Title
    	
 
    	
Publication No.
    	
 
    	
Publication Date
    	
 
    	
Application No.
    	
 
    	
Application Date
    	
 
    	
Country
    
	
47
    	
 
    	
Controlled release pharmaceutical   compositions comprising a fumaric acid ester
    	
 
    	
US20140199392 (Al)
    	
 
    	
7/17/2014
    	
 
    	
14/212,685
    	
 
    	
3/14/2014
    	
 
    	
United States
    
	
48
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
US20140199393 (Al)
    	
 
    	
7/17/2014
    	
 
    	
14/209,756
    	
 
    	
3/13/2014
    	
 
    	
United States
    
	
49
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
US20140200272 (Al)
    	
 
    	
7/17/2014
    	
 
    	
14/209,584
    	
 
    	
3/13/2014
    	
 
    	
United States
    
	
50
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
US20140200273 (Al)
    	
 
    	
7/17/2014
    	
 
    	
14/209,651
    	
 
    	
3/13/2014
    	
 
    	
United States
    
	
51
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
US20140205659 (Al)
    	
 
    	
7/24/2014
    	
 
    	
14/213,399
    	
 
    	
3/14/2014
    	
 
    	
United States
    
	
52
    	
 
    	
Controlled release pharmaceutical   compositions comprising a fumaric acid ester
    	
 
    	
US20150024049 (Al)
    	
 
    	
1/22/2015
    	
 
    	
14/209,823
    	
 
    	
3/13/2014
    	
 
    	
United States
    
	
53
    	
 
    	
Controlled release   pharmaceutical compositions comprising a fumaric acid ester
    	
 
    	
US20160271093 (A2);
   US20160136125 (A2);
   US20140193495 (Al)
    	
 
    	
7/10/2014
    	
 
    	
14/209,480
    	
 
    	
3/13/2014
    	
 
    	
United States
    
	
54
    	
 
    	
Controlled release   pharmaceutical compositions fumaric acid ester
    	
 
    	
WO2006037342 (A2);
   WO2006037342 (A3)
    	
 
    	
4/13/2006
    	
 
    	
WO2005DK00648
    	
 
    	
10/7/2005
    	
 
    	
WIPO
    
	
55
    	
 
    	
Controlled release pharmaceutical   compositions comprising a fumaric acid ester
    	
 
    	
WO2007042034 (Al)
    	
 
    	
4/19/2007
    	
 
    	
WO2006DK00561
    	
 
    	
10/6/2006
    	
 
    	
WIPO
    

 

[Appendix A to Settlement and License Agreement]

 

9

 

	
No.
    	
 
    	
Title
    	
 
    	
Publication No.
    	
 
    	
Publication Date
    	
 
    	
Application No.
    	
 
    	
Application Date
    	
 
    	
Country
    
	
 
    	
 
    	
Forward Pharma has applied for Supplementary   Protection Certificates based on EP 2 801 355 and the Marketing Authorisation   for Tecfidera (EU/1/13/837) in the following countries: Albania, Austria,   Belgium, Bosnia and Herzogovina, Cyprus, Denmark, Estonia, Finland, France,   Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania,   Luxembourg, Netherlands, Poland, Portugal, Serbia, Slovenia, Spain, Sweden,   Switzerland, United Kingdom. SPCs have so far been granted in Cyprus, France,   Greece, Luxembourg, Slovenia, Spain, and Sweden. The application in Serbia   has been refused (lack of a market authorisation).
    

 

[Appendix A to Settlement and License Agreement]

 

10

 

EP 3 038 606 and Family Members (Based on WO 2015/028472 or WO 2015/028473)

 

(Title: Pharmaceutical composition containing dimethyl fumarate for administration at a low daily dose)

 

	
No.
    	
 
    	
Publication No.
    	
 
    	
Publication Date
    	
 
    	
Application No.
    	
 
    	
Application Date
    	
 
    	
Country
    
	
1
    	
 
    	
AU2014314230 (Al)
    	
 
    	
4/7/2016
    	
 
    	
AU20140314230
    	
 
    	
8/26/2014
    	
 
    	
Australia
    
	
2
    	
 
    	
AU2014314231 (Al)
    	
 
    	
3/3/2016
    	
 
    	
AU20140314231
    	
 
    	
8/26/2014
    	
 
    	
Australia
    
	
3
    	
 
    	
CA2918846 (Al)
    	
 
    	
3/5/2015
    	
 
    	
CA20142918846
    	
 
    	
8/26/2014
    	
 
    	
Canada
    
	
4
    	
 
    	
CA2918852 (Al)
    	
 
    	
3/5/2015
    	
 
    	
CA20142918852
    	
 
    	
8/26/2014
    	
 
    	
Canada
    
	
5
    	
 
    	
CN105658207 (A)
    	
 
    	
6/8/2016
    	
 
    	
CN2014847436
    	
 
    	
8/26/2014
    	
 
    	
China
    
	
6
    	
 
    	
CN105682648 (A)
    	
 
    	
6/15/2016
    	
 
    	
CN2014847438
    	
 
    	
8/26/2014
    	
 
    	
China
    
	
7
    	
 
    	
EA201690102 (Al)
    	
 
    	
6/30/2016
    	
 
    	
EA20160090102
    	
 
    	
8/26/2014
    	
 
    	
Eurasia
    
	
8
    	
 
    	
EA201690107 (Al)
    	
 
    	
10/31/2016
    	
 
    	
EA20160090107
    	
 
    	
8/26/2014
    	
 
    	
Eurasia
    
	
9
    	
 
    	
EP3038605 (Al)
    	
 
    	
7/6/2016
    	
 
    	
EP20140755672
    	
 
    	
8/26/2014
    	
 
    	
European
    
	
10
    	
 
    	
EP3038606 (Al)
    	
 
    	
7/6/2016
    	
 
    	
EP20140755818
    	
 
    	
8/26/2014
    	
 
    	
European
    
	
11
    	
 
    	
Not known yet
    	
 
    	
Not known yet
    	
 
    	
IN201637008837
    	
 
    	
8/26/2014
    	
 
    	
India
    
	
12
    	
 
    	
Not published yet
    	
 
    	
Not published yet
    	
 
    	
IN201637008839
    	
 
    	
8/26/2014
    	
 
    	
India
    
	
13
    	
 
    	
Not published yet
    	
 
    	
Not published yet
    	
 
    	
IL243660
    	
 
    	
8/26/2014
    	
 
    	
Israel
    
	
14
    	
 
    	
Not known yet
    	
 
    	
Not known yet
    	
 
    	
IL243661
    	
 
    	
8/26/2014
    	
 
    	
Israel
    
	
15
    	
 
    	
JP2016528302 (A)
    	
 
    	
9/15/2016
    	
 
    	
JP20160537269
    	
 
    	
8/26/2014
    	
 
    	
Japan
    
	
16
    	
 
    	
JP2016531912 (A)
    	
 
    	
10/13/2016
    	
 
    	
JP20160537270
    	
 
    	
8/26/2014
    	
 
    	
Japan
    
	
17
    	
 
    	
KR20160045728 (A)
    	
 
    	
4/27/2016
    	
 
    	
KR20167004935
    	
 
    	
8/26/2014
    	
 
    	
Korea
    
	
18
    	
 
    	
KR20160046813 (A)
    	
 
    	
4/29/2016
    	
 
    	
KR20167004936
    	
 
    	
8/26/2014
    	
 
    	
Korea
    
	
19
    	
 
    	
Not published yet
    	
 
    	
Not published yet
    	
 
    	
NZ716118
    	
 
    	
8/26/2014
    	
 
    	
New Zealand
    
	
20
    	
 
    	
Not published yet
    	
 
    	
Not published yet
    	
 
    	
NZ716121
    	
 
    	
8/26/2014
    	
 
    	
New Zealand
    
	
21
    	
 
    	
Not published yet
    	
 
    	
Not published yet
    	
 
    	
UA201600686
    	
 
    	
8/26/2014
    	
 
    	
Ukraine
    
	
22
    	
 
    	
Not published yet
    	
 
    	
Not published yet
    	
 
    	
UA201600687
    	
 
    	
8/26/2014
    	
 
    	
Ukraine
    
	
23
    	
 
    	
US20160206586 (Al)
    	
 
    	
7/21/2016
    	
 
    	
14/914,025
    	
 
    	
8/26/2014
    	
 
    	
United States
    
	
24
    	
 
    	
US20160206587 (Al)
    	
 
    	
7/21/2016
    	
 
    	
14/914,031
    	
 
    	
8/26/2014
    	
 
    	
United States
    
	
25
    	
 
    	
WO2015028472 (Al)
    	
 
    	
3/5/2015
    	
 
    	
WO2014EP68094
    	
 
    	
8/26/2014
    	
 
    	
WIPO
    
	
26
    	
 
    	
WO2015028473 (Al)
    	
 
    	
3/5/2015
    	
 
    	
WO2014EP68095
    	
 
    	
8/26/2014
    	
 
    	
WIPO
    

 

[Appendix A to Settlement and License Agreement]

 

11

 

EP 2 379 062 and Family Members (Based on WO 2010/079221)

 

(Title: Pharmaceutical composition comprising one or more fumaric acid esters)

 

	
No.
    	
 
    	
Publication No.
    	
 
    	
Publication Date
    	
 
    	
Application No.
    	
 
    	
Application Date
    	
 
    	
Country
    
	
1
    	
 
    	
CN102369000
    	
 
    	
3/7/2012
    	
 
    	
CN2010811787
    	
 
    	
 
    	
 
    	
China
    
	
2
    	
 
    	
EP2379062
    	
 
    	
10/26/2011
    	
 
    	
EP20100700231
    	
 
    	
1/8/2010
    	
 
    	
European
    
	
3
    	
 
    	
JP2012514623
    	
 
    	
6/28/2012
    	
 
    	
JP2011544875
    	
 
    	
1/8/2010
    	
 
    	
Japanese
    
	
4
    	
 
    	
US20120034274
    	
 
    	
2/9/2012
    	
 
    	
13/143,465
    	
 
    	
10/26/2011
    	
 
    	
United States
    
	
5
    	
 
    	
US20130259906
    	
 
    	
10/3/2013
    	
 
    	
13/768,829
    	
 
    	
2/15/2013
    	
 
    	
United States
    
	
6
    	
 
    	
WO2010079221
    	
 
    	
7/15/2010
    	
 
    	
WO2010EP50171
    	
 
    	
1/8/2010
    	
 
    	
WIPO
    

 

(ii) Scheduled Trademark Rights

 

	
No.
    	
 
    	
Trademark
    	
 
    	
Serial Number
    	
 
    	
Filing Date
    	
 
    	
Registration Date
    	
 
    	
Country
    	
 
    	
Trademark Type
    	
 
    	
Status
    
	
1
    	
 
    	
FP187
    	
 
    	
86449799
    	
 
    	
11/10/2014
    	
 
    	
N/A
   (pending)
    	
 
    	
United States
    	
 
    	
Word
    	
 
    	
On Appeal
    
	
2
    	
 
    	
FP187
    	
 
    	
VR201500106
    	
 
    	
11/10/2014
    	
 
    	
1/14/2015
    	
 
    	
Denmark
    	
 
    	
Word
    	
 
    	
Registered
    

 

[Appendix A to Settlement and License Agreement]

 

12

 

APPENDIX B

 

Licensed Intellectual Property Contracts

 

1.     Patent License Agreement Aditech-FP 01 Jul 2005

 

2.     Patent License Agreement Assigment Aditech AB-Aditech AG 20 Aug 2009

 

3.     Patent Transfer Agreement Aditech-FP 04 May 2010

 

4.     Patent License Agreement FP AS-FP GmbH 23 May 2007

 

5.     Termination Agreement (License Agreement AS - GmbH)

 

6.     Consultancy Agreement (Kristian Reich) 18.01.2016

 

7.     Addendum to Consultancy Agreement (Kristian Reich) 03062016

 

8.     Addendum II to Consultancy Agreement (Prof. Dr. med. Kristian Reich)

 

9.     Collaboration Agreement Ixchel Pharma

 

10.  Consulting Agreement Ixchel Pharma

 

[Appendix B to Settlement and License Agreement]

 

1

 

APPENDIX C

 

List of Non-Affiliates

 

1) Genmab A/S

 

2) Jazz Pharmaceuticals plc

 

3) Thermo Fisher Scientific Inc.

 

[Appendix C to Settlement and License Agreement]

 

1

 

APPENDIX D

 

Specified Actions

 

[Appendix D to Settlement and License Agreement]

 

1

 

Step 1 –   Drop-down* 1. Following the Effective Date, (A) Licensor shall (i) establish   and form, as a wholly owned subsidiary of Licensor, a Danish limited   liability company (“New SubCo”) and (ii) take all actions necessary to apply   in a form and substance prepared by Licensor and approved by Licensee for   written approval (in Danish: “tilladelse”) from SKAT (the “Danish Tax   Authorities”) that Steps 1 and 2 can be carried out as a tax exempt drop down   (in Danish: “skattefri tilførsel af aktiver”) and a tax exempt demerger (in   Danish “skattefri spaltning”), respectively, under Danish tax Law, including   in light of the fact that Steps 3 and 4 will also be completed and (B)   Licensor in consultation with Licensee shall take all actions necessary to   apply for approval from the Danish Business Authority (the “Danish Business   Authority”) that the transactions contemplated by Steps 3 and 4 are   permissible under applicable Danish Law. For the avoidance of doubt, Licensor   shall not under any circumstances be required to carry out Step 1 and Step 2   unless the Danish Tax Authorities conclude that the transactions qualify for   tax exemption according to the Danish legislation on tax exempt   reorganizations; Shareholders 2. Following its receipt of the U.S. Upfront   Fee and Designated Countries Upfront Fee pursuant to and in accordance with   Section 4.01 of the License Agreement and approval of the Step 1 Contribution   (as defined below) as tax exempt by the Danish Tax Authorities, Licensor   shall contribute all of its assets (other than an amount of cash, if any,   that Licensor determines to be in excess of the amount of cash necessary to   satisfy the funding and operational requirements of New SubCo) and known   liabilities, including the License Agreement, by way of a tax exempt business   contribution to New SubCo (the “Step 1 Contribution”); and 3. Substantially   concurrently with the consummation of the Step 1 Contribution, Licensor shall   cause New SubCo to execute and deliver all instruments and agreements   necessary to consummate the joinder of New SubCo to the License Agreement   pursuant to and in accordance with Section 2.12 of the License Agreement (the   “New SubCo Joinder”). For the avoidance of doubt, upon the consummation of   the New SubCo Joinder, the parties to the License Agreement shall be   Licensee, New SubCo, the Additional Parties and Licensor (unless Licensee   consents to the removal of Licensor as a Party to the License Agreement); 4.   Provided, however, that if the Step 1 Contribution is (i) not approved by the   Danish Tax Authorities as tax exempt for any reason by May 1, 2017 (the “Step   1 Outside Date”), provided that Licensee may in its sole discretion elect to   extend the Step 1 Outside Date by up to an additional 60 days, or (ii)   approved by Danish Tax Authorities as tax exempt subject to the satisfaction   of certain conditions, Licensor shall, at Licensee’s election in its sole   discretion, (a) establish and form, as a wholly owned subsidiary of Licensor,   a Danish partnership limited by shares (the “P/S Sub”) that is structured in   a manner that would enable payments to the P/S Sub to qualify for benefits   under the U.S.-Danish income tax treaty, (b) contribute all of the Licensed   Intellectual Property by way of a tax exempt business contribution to the P/S   Sub (the “P/S Sub Contribution”) and (c) substantially concurrently with the   consummation of the P/S Sub Contribution, grant Licensee a pledge in all of   the issued and outstanding shares of P/S Sub to secure Licensee’s rights   under the License Agreement (the transactions contemplated by clauses (a)-(c)   above, the “P/S Sub Restructuring Alternative”). *Capitalized terms used but   not defined in this Appendix D shall have the meanings set forth in the   Settlement and License Agreement (the “License Agreement”). [Appendix D to   Settlement and License Agreement] 2 New SubCo Licensor 

    

 

Step 2 –   Demerger 1. In the event Licensor has received all necessary approvals of tax   exemption from the Danish Tax Authorities, Licensor shall cause New SubCo to   be demerged into two new Danish limited liability companies, SubCo 1 (“SubCo   1”) and (“SubCo 2”), which shall be wholly owned subsidiaries of Licensor   (the “Demerger”), and whereby the assets and liabilities of New SubCo (which   shall cease to exist upon consummation of the Demerger) will be allocated as   follows: SubCo 1 shall hold all legal and beneficial right, title and   interest to the Licensed Intellectual Property held by New SubCo prior to the   Demerger and the payment rights set forth in Sections 3.06 and 3.07 of the License   Agreement (but, for the avoidance of doubt, not including any other rights   under the License Agreement other than those rights set forth in Shareholders   o Sections 3.06 and 3.07 of the License Agreement) and shall hold and be   responsible for (i) the liability to protect and maintain the Licensed   Intellectual Property pursuant to the License Agreement held by New SubCo   prior to the Demerger and (ii) the obligations under Sections 3.06 and 3.07   of the License Agreement held by New SubCo prior to the Demerger; SubCo 2   shall hold all of the assets held by New SubCo prior to the Demerger (other   than such assets held by SubCo 1), including all payment rights under the   License Agreement, and hold all liabilities held by New SubCo prior the   Demerger (other than such liabilities held by SubCo 1). For the avoidance of   doubt, SubCo 2 shall hold and be responsible for the obligation under Article   V of the License Agreement to fund the protection and maintenance of the   Licensed Intellectual Property that was held by NewCo prior to the Demerger.   o 2. Licensor shall cause the corporate objects in the articles of   association of SubCo 1 (in Danish: “formål”) to (i) require SubCo 1 to comply   with its obligations under the License Agreement to maintain and protect the   Licensed Intellectual Property (and to take any such steps reasonably   requested by the Party to the License Agreement that, at the time of such   request, has control of or a right to maintain or protect such Licensed   Intellectual Property in connection with such maintenance and protection) and   (ii) prohibit SubCo 1 from engaging in any other activities. Substantially   concurrently with the consummation of the Demerger, SubCo 1 and SubCo 2 shall   execute and deliver: all necessary instruments and agreements to consummate   the joinder of SubCo 1 and SubCo 2, respectively, to the License Agreement   pursuant to and in accordance with Section 2.12 of the License Agreement (the   “SubCo Joinders”); for the avoidance of doubt, upon the consummation of the   SubCo Joinders, the parties to the License Agreement shall be Licensee, SubCo   1, SubCo 2, the Additional Parties and Licensor (unless Licensee consents to   the removal of Licensor as a Party to the License Agreement); and SubCo 2   SubCo 1 3. o o an agreement, reasonably satisfactory to Licensee, between   SubCo 1 and SubCo 2 pursuant to which SubCo 2 agrees to provide SubCo 1 with   the funds necessary for SubCo 1 to comply with its obligations under the   License Agreement to protect and maintain the Licensed Intellectual Property   to the extent such protection and maintenance is required by Article V of the   License Agreement. [Appendix D to Settlement and License Agreement] 3   Licensor 

    

 

Step 3 –   Establishment of a commercial foundation with a subsidiary 1. Following the   consummation of the transactions contemplated by Step 2 and approval from the   Danish Business Authority, a new Danish independent commercial foundation (in   Danish: “erhvervsdrivende fond”) (the “Foundation”) shall be established with   the Licensor as the founder by way of an irrevocable and unconditional   contribution of capital from the Licensor equal to DKK 5 million in cash (the   “Foundation Formation”) ”) and the Foundation shall be structured and   operated in a manner that would enable payments to the Foundation to qualify   for benefits under the U.S.-Danish income tax treaty; In connection with the   Foundation Formation, Licensor shall cooperate in good faith with Licensee to   prepare the articles of association of the Foundation, in form and substance   approved by Licensee, which in any event shall: (i) be compliant in all   respects with the Danish Act on Foundations Carrying on Business for Profit;   (ii) allow the Foundation to own (directly or indirectly through a   Subsidiary) the Licensed Intellectual Property; (iii) require the Foundation   to cause its Subsidiaries to comply with their obligations under the License   Agreement to the extent party thereto; (iv) provide detailed requirements on   the qualifications to serve as an “independent” member of the board of   directors of the Foundation (the “Foundation Board”); (v) provide that the   Foundation Board consist of five members comprised of (a) three “independent”   board members (the three initial “independent” board members shall be   mutually selected by Licensee and Licensor at the Foundation Formation and   any future vacancies shall be filled by the then remaining “independent”   board members), (b) one non-independent board member appointed by Licensor   and (c) one non-independent board member appointed by Licensee; (vi) require   that all Foundation actions require unanimous approval of the Foundation   Board; and (vii) provide that Licensor and Licensee shall each have the right   following the Foundation Formation to provide additional capital   contributions to the Foundation any time and from time to time as such Party   deems necessary or desirable. All contact and communication with the Danish   Business Authority regarding the establishment of the foundation shall be   made jointly by the Licensee and Licensor. Promptly following the   consummation of the Foundation Formation, the Foundation shall establish and   form, as a wholly owned subsidiary of the Foundation, a new Danish private   limited company (the “Holdco”), by cash subscription of DKK 50,000 (the   “Holdco Formation”); and Promptly following the consummation of the Holdco   Formation and prior to the consummation of the transactions set forth in Step   4, Licensor shall cause SubCo 1 and SubCo 2 (which, for the avoidance of   doubt, are both wholly owned Subsidiaries of Licensor at such point) to enter   into a trust agreement with Licensee and Licensor pursuant to which SubCo 1   agrees to hold, prosecute and maintain the Licensed Intellectual Property   consistent with the requirements set forth in Step 2 in exchange for an annual   fee of DKK 100,000 payable by SubCo 2; Provided, however, that if prior to   the consummation of the transactions contemplated under this Step 3, Licensor   and Licensee are informed (i) by the Danish Tax Authorities that Steps 1   and/or 2 (or modifications hereof proposed by the Licensee having no adverse   effect to the Licensee or the Licensor compared to the structures described   in Steps 1 and/or 2 in this Appendix D) will (a) not be approved as tax   exempt or (b) will only be approved as tax exempt subject to the satisfaction   of certain conditions or (ii) by the Danish Business Authority that the   transactions contemplated by either Step 3 or Step 4 cannot be consummated,   then Steps 3 and 4 shall automatically be abandoned (except in the case of   clause (i)(b), where Steps 3 and 4 shall only be abandoned upon Licensee’s   election in its sole discretion) and following any such abandonment of Steps   3 and 4 Licensor shall, at Licensee’s election in its sole discretion: grant   Licensee a pledge in all of the issued and outstanding shares of SubCo 1 to   secure the performance of its obligations under the License Agreement; allow   the subscription by Licensee of 50% of the issued and outstanding shares of   SubCo 1 at fair market value (as determined by a valuation report prepared by   an auditor mutually selected by Licensor and Licensee); or cause SubCo 1 to   consummate a P/S Sub Restructuring Alternative. 2. 3. 4. 5. o o o [Appendix D   to Settlement and License Agreement] 4 

    

 

Step 4 –   Transfer of shares 1. In the event Step 3 is consummated, Licensor shall then   promptly sell all of the issued and outstanding shares of SubCo 1 to Holdco   at fair market value (as determined by a valuation report prepared by an   auditor mutually selected by Licensor and Licensee). Shareholders For the   avoidance of doubt, following the consummation of this Step 4, SubCo 1 shall   be a wholly owned Subsidiary of HoldCo and HoldCo shall remain a wholly owned   Subsidiary of the Foundation. o Foundation Sale of shares [Appendix D to Settlement   and License Agreement] 5 SubCo 1 SubCo 2 HoldCo Licensor 

    

 

End structure   following the consummation of the transactions contemplated by Step 4 1.   Substantially concurrently with the consummation of Step 4, Holdco and   Licensee shall enter into an agreement pursuant to which (i) Licensee shall   receive the right to purchase all of the issued and outstanding shares of   SubCo 1 from Holdco at a price corresponding to the intrinsic value (equity   value) of SubCo 1 as per the most recent annual report for SubCo 1 at the   time of exercise in the event SubCo 1 materially breaches its obligations   under the License Agreement and Licensee shall be entitled to set off in the   purchase price any claim it may have against HoldCo and/or SubCo 1 resulting   from their breach of the License Agreement; and (ii) Holdco shall grant a   pledge of all of the issued and outstanding shares of SubCo 1 in favor of   Licensee as security for fulfilment of the purchase right described in clause   (i) above. For the avoidance of doubt, exercise of this purchase right shall   not affect Licensee’s obligations under Article IV of the License Agreement.   Shareholders 2. The agreement described in Step 2 between SubCo 1 and SubCo 2   obligating SubCo 2 to fund SubCo 1’s obligations under the License Agreement   to protect and maintain the Licensed Intellectual Property to the extent   required by Article V of the License Agreement shall remain in full force and   effect. Foundation 3. For the avoidance of doubt, if after the consummation   of Step 4, Licensee exercises the U.S. Acquisition Option and/or the   Designated Countries Acquisition Option, the Foundation shall cause SubCo 1   to (i) sell the applicable Licensed Intellectual Property to Licensee   pursuant to and in accordance with Section 3.06 and/or Section 3.07 of the   License Agreement, as applicable, and (ii) comply with all of its other   obligations thereunder. 4. Where a Party to the License Agreement is given   control of or a right to prosecute, maintain, defend and/or enforce any of   the Licensed Intellectual Property, SubCo 1 (or P/S Sub, as the case may be)   shall: • give such Party control of such actions; • give such Party an   irrevocable right to take such actions in the name of SubCo 1 (or P/S Sub, as   the case may be); • permit such Party to select attorneys to carry out such   actions; • promptly provide such assistance and information to such Party as   is reasonably necessary or desirable to enable such Party to carry out such   actions (including joining as a party to any applicable Litigation if such   joinder is reasonably necessary to advance such Party’s position) and such   Party shall reimburse SubCo 1 (or P/S Sub, as the case may be)for any   reasonable external costs reasonably incurred by it in providing such   assistance and information; and • promptly copy to the Licensor and Licensee   any correspondence or notifications received from a third party in relation   to Licensed Intellectual Property, provided that SubCo 1 (or P/S Sub, as the   case may be) shall not disclose to Licensee or its Affiliates such   correspondence or notifications concerning Licensor’s (i) U.S. Patent Application   11/576,871, until the final, unappealable conclusion of the Interference   Proceeding and (ii) European Patent Application EP 2801355, until the final,   unappealable conclusion of the European Opposition Proceeding. License to IP   Any sums or costs received by SubCo 1 (or P/S Sub, as the case may be)   arising out of such action shall be paid to the Party taking or controlling   such action. Any sums or costs awarded against SubCo 1 (or P/S Sub, as the   case may be) arising out of such action shall be paid by the Party taking or   controlling such action. [Appendix D to Settlement and License Agreement] 6   Licensee SubCo 1 HoldCo SubCo 2 Licensor 

    

 

 

APPENDIX E

 

Draft Joint Submission of Agreement

 

	
Filed   by: Junior Party BIOGEN MA INC.
    	
Paper   No.
    

 

By:                                                                            Michele C. Bosch

Barbara C. McCurdy

FINNEGAN, HENDERSON, FARABOW,

GARRETT & DUNNER, L.L.P.

901 New York Avenue, NW

Washington, DC 20001-4413

michele.bosch@finnegan.com

barbara.mccurdy@finnegan.com

202-408-4000 tel

202-408-4400 fax

 

UNITED STATES PATENT AND TRADEMARK OFFICE

 

 

BEFORE THE PATENT TRIAL AND APPEAL BOARD

 

 

BIOGEN MA INC. 
 Junior Party

Patent 8,399,514 B2,

 

v.

 

FORWARD PHARMA A/S 
 Senior Party

Application 11/576,871.

 

 

Interference No. 106,023 (RES)

Technology Center 1600

 

 

JOINT SUBMISSION OF AGREEMENT AND JOINT REQUEST TO MAINTAIN AGREEMENT UNDER SEAL AND SEPARATE FROM THE INTERFERENCE FILE (pursuant to 35 U.S.C. §135(c) and 37 C.F.R. §41.205)

 

[Appendix E to Settlement and License Agreement]

 

1

 

Board of Patent Appeals and Interferences

United States Patent and Trademark Office

600 Dulany Street, 9th Floor

Madison Building East

Alexandria, Virginia 22314

 

Pursuant to 35 U.S.C. § 135(c), 37 C.F.R. § 41.205, and ¶ 205 of the Standing Order (Paper 2), Junior Party Biogen MA Inc. and Senior Party Forward Pharma A/S hereby give notice that the parties have made a written agreement relating to the Interference.

 

The agreement does not resolve any of the issues pending before the Board in this interference.

 

With the advance permission of the Board, the agreement and all related agreements are hereby submitted concurrently this day via hand delivery to the Board in a separate sealed envelope.

 

Pursuant to 35 U.S.C. § 135(c) and 37 C.F.R. §§ 41.205(c) and (d), the parties hereby request that the sealed agreements be kept separate from the Interference file and that the contents thereof be made available only to Government agencies on written request, or to any person only upon petition and on a showing of good cause. The parties further request that should such a petition be filed, each party be given the opportunity to comment on or oppose the request before a decision is made with respect to whether it should be granted or denied. Any such notification should be sent to the attention of:

 

For Junior Party Biogen MA Inc.:

 

Michele C. Bosch

Barbara C. McCurdy

FINNEGAN, HENDERSON, FARABOW,

GARRETT & DUNNER, L.L.P.

901 New York Avenue, NW

Washington, DC 20001-4413

michele.bosch@finnegan.com

barbara.mccurdy@finnegan.com

 

[Appendix E to Settlement and License Agreement]

 

2

 

202-408-4000 tel 
 202-408-4400 fax

 

For Senior Party Forward Pharma A/S

 

Anthony M. Zupcic

Daniel S. Glueck

FITZPATRICK, CELLA, HARPER & SCINTO

1290 Avenue of the Americas

New York, NY 10104-3800

Tel: (212) 218-2100

Fax: (212) 218-2200

E-mail:  azupcic@fchs.com

 

The parties respectfully request acknowledgement of the filing of these agreements.

 

	
Dated:              , 2017
    	
Respectfully   submitted,
    

 

	
 
    	
 
    	
 
    
	
Anthony   M. Zupcic
    	
Michele   C. Bosch
    
	
Reg.   No. 27,276
    	
Reg.   No. 40,524
    
	
Lead   Attorney for Forward Pharma
    	
Barbara   C. McCurdy
    
	
FITZPATRICK,   CELLA, HARPER & SCINTO
    	
Reg.   No. 32,120
    
	
1290   Avenue of the Americas
    	
FINNEGAN,   HENDERSON,
    
	
New   York, New York 10104-3800
    	
FARABOW,   GARRETT & DUNNER,
    
	
Telephone:   (212) 218-2100
    	
L.L.P.
    
	
Facsimile:   (212) 218-2200
    	
901   New York Avenue, NW
    
	
 
    	
Washington,   DC 20001-4413
    
	
Of   Counsel:
    	
michele.bosch@finnegan.com
    
	
Brian   V. Slater (admitted pro hac vice)
    	
barbara.mccurdy@finnegan.com
    
	
KRAMER   LEVIN NAFTALIS &
    	
Telephone:   202-408-4000
    
	
FRANKEL   LLP
    	
Facsimile:   202-408-4400
    
	
1177   Avenue of the Americas
    	
 
    
	
New   York, New York
    	
Counsel   for Biogen MA, Inc.
    
	
Telephone:   (212) 715-9100
    	
 
    
	
 
    	
 
    
	
Counsel   for Forward Pharma A/S
    	
 
    

 

[Appendix E to Settlement and License Agreement]

 

3

 

APPENDIX F

 

Aditech Addendum

 

ADDENDUM TO PATENT TRANSFER AGREEMENT

 

	
between
    	
FORWARD   PHARMA A/S
    
	
 
    	
 
    
	
and
    	
ADITECH   PHARMA AG
    

 

[Appendix F to Settlement and License Agreement]

 

1

 

This addendum, dated as of January 17, 2017 (the “Addendum”), to the Patent Transfer Agreement, including all schedules thereto, dated as of May 4, 2010 (the “Patent Transfer Agreement”)

 

between                 FORWARD PHARMA A/S

Company registration no. (CVR) 28865880

Østergade 24 A, 1.

DK-1100 Copenhagen Denmark

(“Forward”)

 

and                                         ADITECH PHARMA AG

Company registration no. CHE-114.631.207

c/o Domanda Verwaltungs GmbH

Baarerstrasse 43

CH-6300 Zug

Switzerland

(“Aditech”)

 

1.                                      DEFINITIONS AND INTERPRETATIONS

 

1.1                              Incorporation of definitions from Patent Transfer Agreement

 

Terms defined in the Patent Transfer Agreement shall have the same meaning when used in this Addendum, unless otherwise set out in this Addendum or unless the context otherwise requires; provided that Clause 1.2 of the Patent Transfer Agreement is hereby amended and replaced in its entirety with the definition of “Affiliate” set forth in Clause 1.2 of this Addendum.

 

1.2                               Additional definitions

 

In addition to the definitions used in the Patent Transfer Agreement and the definitions set out in the header of this Addendum, the following definitions are used in this Addendum and shall have the following meanings in this Addendum (and, with respect to the definition of “Affiliate”, in the Patent Transfer Agreement):

 

“Addendum                                          shall have the meaning set out in Clause 3.1; 
  Effective Date”

 

“Additional                                           means each of the parties listed on Appendix I of the License Agreement (as

Parties”                                                               defined below);

 

[Appendix F to Settlement and License Agreement]

 

2

 

	
“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 first Person. For   purposes of this definition, “control” (including the terms “controlled by”   and “under common control with”), with respect to the relationship between or   among two or more Persons, means the possession, directly or indirectly, of   the power to direct or cause the direction of the affairs or management of a   Person, whether through the ownership of shares of share capital or other   equity or voting interests, by Contract or otherwise, including the   ownership, directly or indirectly, of shares of share capital or other equity   or voting interests having the power to elect a majority of the board of   directors or comparable body governing the affairs of such Person. Such other   Person shall be deemed to be an Affiliate only so long as such control   exists;
    
	
 
    	
 
    	
 
    
	
“Biogen
    	
 
    	
means Biogen Swiss Manufacturing GmbH and Biogen   International
    
	
Parties”
    	
 
    	
Holding Ltd.
    
	
 
    	
 
    	
 
    
	
“Consent”
    	
 
    	
means actions or non-actions, waivers, approvals,   licenses, permits, orders or other authorizations and consents;
    
	
 
    	
 
    	
 
    
	
“Contract”
    	
 
    	
means any contract, agreement, deed, lease or   similar instrument, and any legally binding obligation, commitment,   arrangement or understanding, whether written or oral;
    
	
 
    	
 
    	
 
    
	
“EU Relevant
    	
 
    	
shall have the meaning set out in Clause 2.3;
    
	
Patent”
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
“European
    	
 
    	
shall have the meaning set out in Clause 2.1;
    
	
Opposition”
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
“Final U.S.
    	
 
    	
shall have the meaning set out in Clause 2.1;
    
	
Interference
    	
 
    	
 
    
	
Ruling”
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
“Governmental
   Entity”
    	
 
    	
means (i) any legislative, judicial or   administrative authority, including any federal, state, local or foreign   government (including, in each case, any self-regulatory organization),   (ii) any court of competent jurisdiction, administrative agency or   commission or other governmental authority or instrumentality, domestic or   foreign or (iii) any officials of any of the entities set forth in   sub-Clauses (i) or (ii);
    

 

[Appendix F to Settlement and License Agreement]

 

3

 

	
“Intellectual
   Property”
    	
 
    	
means   (i) all Patents; (ii) all trademarks, service marks, trade dress,   logos, trade names, corporate names and Internet domain names, together with   all goodwill associated therewith (including all translations, adaptations,   derivations and combinations of the foregoing); (iii) copyrights and   copyrightable works; (iv) registrations, applications, renewals,   reissues, continuations, continuations in part, divisions, revisions,   extensions or reexaminations for any of the items set forth in Clause (i),   (ii) or (iii); (v) computer software; and (vi) trade secrets,   confidential information, know-how, regulatory, market and data clearance or   exclusivity information (including with respect to regulatory filings   relating to investigational or approved medicines), drug master files,   clinical data, models, assays, testing data and the like, in each of the   foregoing Clauses (i) through (vi), in any jurisdiction in the world;
    
	
 
    	
 
    	
 
    
	
“Laws”
    	
 
    	
means, collectively, any   applicable statute, law, ordinance, decree, order, rule, regulation, treaty,   principle of common law, directive, resolution, code, stock exchange rule,   judgment, ruling, injunction or requirement issued, enacted, adopted,   promulgated, implemented or otherwise put into effect by or under the   authority of any Governmental Entity;
    
	
 
    	
 
    	
 
    
	
“License
   Agreement”
    	
 
    	
means   the Settlement and License Agreement to be entered into by Biogen  Swiss Manufacturing GmbH, Biogen   International Holding LTD, Forward Pharma A/S and the Additional Parties;
    
	
 
    	
 
    	
 
    
	
“Net Sales”
    	
 
    	
shall   have the meaning set out in the License Agreement;
    
	
 
    	
 
    	
 
    
	
“Order”
    	
 
    	
means   any Law or judgment, order, writ, injunction, legally binding agreement with   a Governmental Entity, stipulation or decree, including any binding decree of   any arbitrator;
    
	
 
    	
 
    	
 
    
	
“Patents”
    	
 
    	
means   all patents, patent applications, patent disclosures and inventions,   including any reissues, reexaminations, replacements, continuations,   continuations-in-part, divisionals, adjustments or extensions thereof or any   other periods of exclusivity that extend the patent term (statutory or   otherwise), including pediatric exclusivities and supplementary protection   certificates, in any jurisdiction in the world;
    
	
 
    	
 
    	
 
    
	
“Parties”
    	
 
    	
means Forward and Aditech,   collectively; 
    
	
 
    	
 
    	
 
    
	
“Party”
    	
 
    	
means each of Forward and Aditech;
    
	
 
    	
 
    	
 
    
	
“Person”
    	
 
    	
means   any individual, partnership, association, corporation, limited liability   company, trust, governmental authority or other legal person or legal entity;   and
    
	
 
    	
 
    	
 
    
	
“US Relevant
   Patent”
    	
 
    	
shall   have the meaning set out in Clause 2.3.
    

 

[Appendix F to Settlement and License Agreement]

 

4

 

	
1.3
    	
 
    	
Interpretation
    
	
 
    	
 
    	
 
    
	
1.3.1
    	
 
    	
Unless the context   otherwise requires, references to the singular number shall include   references to the plural number and vice versa. References to Clauses are to   Clauses, including sub-Clauses, of this Addendum.
    
	
 
    	
 
    	
 
    
	
1.3.2
    	
 
    	
In   this Addendum Clause headings are for ease of reference only and shall not   affect in any way the meaning or interpretation of this Addendum.
    
	
 
    	
 
    	
 
    
	
2. 
    	
 
    	
BACKGROUND
    
	
 
    	
 
    	
 
    
	
2.1
    	
 
    	
Forward   is involved in various Patent-related disputes with the Biogen Parties and/or   their Affiliates both in Europe and in the United States concerning, among   other things, the European opposition proceeding currently pending against   Forward’s European Patent No. 2 801 355 (the “European   Opposition”) and U.S. Patent and Trademark Office Interference   No.106,023, or if such judgment is appealed, the judgment of the U.S. Court   of Appeals for the Federal Circuit on such appeal (“Final   U.S. Interference Ruling”).
    
	
 
    	
 
    	
 
    
	
2.2
    	
 
    	
Forward   and the Additional Parties are contemplating entering into the License Agreement   with the Biogen Parties, which entitles Forward to receive certain payments   from the Biogen Parties, as detailed in Clauses 2.3 and 2.4, as consideration   for Forward and the Additional Parties granting the Biogen Parties and their   Affiliates a license to certain of their Intellectual Property, including but   not limited to the Patent Rights.
    
	
 
    	
 
    	
 
    
	
2.3
    	
 
    	
The   consideration to be received by Forward under the License Agreement is likely   to consist of (i) a lump sum payment payable by the Biogen Parties to   Forward regardless of the outcome of the Final U.S. Interference Ruling and   the EU Opposition, so long as certain conditions are met, (ii) a royalty   payment on certain products if the Final U.S. Interference Ruling results in   Forward obtaining at least one issued U.S. Patent with at least one extant   claim covering treatment of a human for multiple sclerosis by orally   administering dimethyl fumarate, wherein the   therapeutically effective amount of dimethyl fumarate is   480 mg per day (a “US Relevant Patent”), and   (iii) a royalty payment on certain products if the final resolution of   the European Opposition results in Forward obtaining at least one issued   Patent with at least one extant claim covering treatment of a human for   multiple sclerosis by orally administering dimethyl   fumarate, wherein the therapeutically effective amount of dimethyl fumarate is 480 mg per day (a “EU Relevant Patent”).
    
	
 
    	
 
    	
 
    
	
2.4
    	
 
    	
Under   the License Agreement, subject to certain conditions, Forward and the   Additional Parties will grant the Biogen Parties a co-exclusive license to   the Patent Rights, the Fumaric Acid Products and/or the Fumaric Acid   Processes in the United
    

 

[Appendix F to Settlement and License Agreement]

 

5

 

	
 
    	
 
    	
States.   Forward may also, subject to certain conditions, including any necessary   antitrust clearance, grant an exclusive license to the Patent Rights to the   Biogen Parties, and if Forward does not obtain a US Relevant Patent, Forward   and the Additional Parties may at the Biogen Parties’ option transfer   ownership of the Fumaric Acid Products and/or the Fumaric Acid Processes to   the Biogen Parties. The size of the royalty payment referred to in Clause 2.3   (ii) if Forward obtains a US Relevant Patent will depend on whether the   license granted under the License Agreement is exclusive or co-exclusive in   the United States. The royalties payable for a co-exclusive license are lower   than the royalties payable for an exclusive license. Under the License   Agreement, subject to certain conditions, Forward and the Additional Parties   will grant an exclusive license to the Patent Rights outside the United   States. No royalties are payable under this exclusive license if Forward does   not obtain an EU Relevant Patent from the EU Opposition. The royalty payments   referred to Clause 2.3 may be suspended or terminated in the event of the   entry into the market of a generic product that is therapeutically equivalent   to and  substitutable   for certain products sold by or on behalf of either of the Biogen Parties.
    
	
 
    	
 
    	
 
    
	
2.5
    	
 
    	
The   purpose of this Addendum is (i) for the Parties to clarify, as set out   in Clause 5, certain ambiguities with respect to the construction of the   Patent Transfer Agreement in case Forward, the Additional Parties and the   Biogen Parties enter into the License Agreement, and (ii) for Aditech to   waive, as set out in Clause 6, certain rights under the Patent Transfer   Agreement.
    
	
 
    	
 
    	
 
    
	
3.
    	
 
    	
EFFECTIVENESS   OF THIS ADDENDUM
    
	
 
    	
 
    	
 
    
	
3.1
    	
 
    	
The   Parties hereby acknowledge and agree that this Addendum shall be effective as   of January 17, 2017 (the “Addendum Effective   Date”).
    
	
 
    	
 
    	
 
    
	
4.
    	
 
    	
REPRESENTATIONS   AND WARRANTIES
    
	
 
    	
 
    	
 
    
	
4.1
    	
 
    	
By   signing this Addendum, each Party represents and warrants to the other Party   as follows:
    
	
 
    	
 
    	
 
    
	
4.1.1
    	
 
    	
Organization. Such Party is duly organized, validly   existing and in good standing under   the Laws of its jurisdiction of organization and has the requisite power and   authority to execute, deliver and perform its obligations under this   Addendum.
    
	
 
    	
 
    	
 
    
	
4.2
    	
 
    	
Authority. This Addendum has been duly authorized,   executed and delivered by such Party and constitutes a legal, valid, binding   and enforceable agreement of such Party enforceable in accordance with its   terms, except to the extent that enforcement hereof may be limited by   bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or   other Laws affecting enforcement of creditors’ rights or by general equitable   principles.
    

 

[Appendix F to Settlement and License Agreement]

 

6

 

	
4.3
    	
 
    	
Noncontravention. The execution, delivery and performance by   such Party of this Addendum will not (i) conflict with or result in a   breach or violation of any of the terms or provisions of, or constitute a   default under any Contract to which such Party or any of its Affiliates is a   party or by which such Party or any of its Affiliates is bound or to which   any of the property or assets of such Party or any of its Affiliates is   subject, (ii) violate any provision of the organizational documents of   such Party or any of its Affiliates or (iii) violate any Law or Order   applicable to such Party or any of its Affiliates or their respective   properties, except, in the case of sub-Clauses (i) and (iii), as would   not reasonably be expected to impair in any material respect the ability of   such Party to perform its obligations under this Addendum; and no filing with   or Consent, registration or qualification of or with any Governmental Entity,   is required for the execution, delivery and performance by such Party of its   obligations under this Addendum, except for where the failure to obtain or   make any such filing, Consent, approval, authorization, Order, registration   or qualification would not reasonably be expected to impair in any material   respect the ability of such Party to perform its obligations under this   Addendum.
    
	
 
    	
 
    	
 
    
	
5.
    	
 
    	
CLARIFICATION   OF THE CONSTRUCTION OF CERTAIN CLAUSES UNDER THE PATENT TRANSFER AGREEMENT
    
	
 
    	
 
    	
 
    
	
5.1
    	
 
    	
The   Parties hereby agree to the clarifications set out in this Clause 5 relating   to the construction of the Patent Transfer Agreement in relation to the   License Agreement.
    
	
 
    	
 
    	
 
    
	
5.2
    	
 
    	
Notwithstanding   any other possible construction of the Patent Transfer Agreement, the Parties   hereby acknowledge and agree that any proceeds to be received by Forward from   the Biogen Parties under the License Agreement shall only result in   consideration being payable by Forward to Aditech under the Patent Transfer   Agreement, as amended hereby, in accordance with paragraphs   (a)-(d) below:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
a)             Aditech   shall be entitled to receive from Forward, and Forward shall pay to Aditech,   promptly following its receipt thereof, a cash payment equal to 2% of any   “lump sum” or “base consideration” consideration received by Forward from the   Biogen Parties under the License Agreement, (prior to taking into account   taxes, duties and VAT, if any) excluding, for the avoidance of doubt, any   consideration referred to in paragraphs (b) and (c) of this Clause   5.2. By way of example, if Forward receives $1.25 billion under the License   Agreement as an upfront fee, Forward shall pay $25 million to Aditech.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
b)             In   the event that Forward and the Additional Parties grant the Biogen Parties   and their Affiliates an exclusive license to the Patent Rights (on a   country-by-country basis) and Forward is entitled to receive royalty payments   with respect to such Patent Rights in a country, Aditech shall be entitled to   receive from Forward, and Forward shall pay to Aditech, promptly following   its receipt
    

 

[Appendix F to Settlement and License Agreement]

 

7

 

	
 
    	
 
    	
thereof,   a cash payment equal to 2% of the Net Sales with respect to which Forward’s   royalty percentage is calculated, accruing from the same period of time as   any royalty payment payable by the Biogen Parties to Forward under the   License Agreement (prior to taking into account taxes, duties and VAT, if   any). Under no circumstances shall Forward be required to pay to Aditech an   amount pursuant to this Clause 5.2(b) in excess of the royalty payment   it receives from the Biogen Parties. By way of example, if the Biogen Parties   pay Forward a royalty of 10% of the Biogen Parties’ Net Sales, then Forward   shall pay to Aditech 20% of the amount received by Forward.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
c)              In   the event that Forward and the Additional Parties grant (i) the Biogen   Parties and their Affiliates only a co-exclusive license to the Patent Rights   in the United States and Forward is entitled to receive royalty payments with   respect to such Patent Rights, and/or (ii) any other third party   co-exclusive rights under the Patent Rights in the United States, Aditech   shall be entitled to receive from Forward, and Forward shall pay to Aditech,   promptly following its receipt thereof, a cash payment equal to 20% of (a) any   royalty payment received by Forward from the Biogen Parties or (b) 20%   of any royalty payment or any “lump sum” replacing a royalty payment,   received by Forward from such other third party (prior to taking into account   taxes, duties and VAT, if any).
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
d)             The   Parties acknowledge and agree that any and all rights, title and interest in,   to and under the Aditech Patent Rights have been lawfully, validly, and   irrevocably transferred and assigned to Forward in accordance with Clause 2   of the Patent Transfer Agreement. If at any time from and after the date of   this Addendum, any aspect of the immediately preceding sentence is not, for   any reason, true and correct in all respects, Aditech agrees that it shall   execute and deliver or procure the execution and delivery of any such   instruments of transfer, conveyance, assignment and assumption, and take such other action as may be deemed   necessary or desirable by Forward or the Biogen Parties, to confirm and   assure that all rights, title and interest in, to and under the Aditech   Patent Rights are lawfully, validly, and irrevocably transferred and assigned   to Forward.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
e)              For   the avoidance of doubt, if Forward’s rights, including payment rights, with   Aditech’s acceptance, are transferred to any other entity than Forward,   including by means of merger, de-merger or similar, this Clause 5.2 shall be   interpreted to include any payments made by the Biogen Parties to any such   other entity. Hence, any such transfer shall in no event adversely affect   Aditech’s rights pursuant to this Addendum and the Patent Transfer Agreement.   Aditech irrevocably accepts and pre-approves the transfer of Forward’s   rights, including payment rights, to a wholly-owned subsidiary of Forward as   contemplated by Appendix D to the License Agreement.
    
	
 
    	
 
    	
 
    
	
5.3
    	
 
    	
Aside from the consideration payable by Forward   stipulated in Clause 5.2, the
    

 

[Appendix F to Settlement and License Agreement]

 

8

 

	
 
    	
 
    	
Parties   acknowledge and agree that Aditech shall not be entitled to receive any other   consideration, royalty, proceeds or other form of payment or compensation   from the Biogen Parties or Forward or any of their respective Affiliates   under the Patent Transfer Agreement, as amended hereby, as a result of or in   connection with (i) the License Agreement, and any licenses to be   granted under the License Agreement and (ii) any rights to be granted to   a third party (i.e., a permitted assignment   of Forward’s co-exclusive rights).
    
	
 
    	
 
    	
 
    
	
5.4
    	
 
    	
For   the avoidance of doubt, each Party shall be responsible for and incur the   full cost of paying any taxes, duties, VAT etc., which such Party itself may   be subject to (including any withholding tax required to be deducted and withheld   on a payment made to the other Party to such Party).
    
	
 
    	
 
    	
 
    
	
6.
    	
 
    	
WAIVER OF RIGHTS UNDER PATENT TRANSFER AGREEMENT
    
	
 
    	
 
    	
 
    
	
6.1
    	
 
    	
Aditech   hereby unconditionally and irrevocably waives all of its rights under the following   Clauses of the Patent Transfer Agreement: 3; 4; 7 (with respect to any   assignee or licensee of Forward); 8.1; 11.1; 11.3; 12.1; 12.3; 18.1; 18.2;   and 18.7 (with respect to Clauses 7 and 12.3).
    
	
 
    	
 
    	
 
    
	
6.2
    	
 
    	
For   the avoidance of doubt, the Parties acknowledge and agree that the provisions   of the Patent Transfer Agreement that are not amended, waived, terminated or   clarified by this Addendum shall continue to be in full force and effect.
    
	
 
    	
 
    	
 
    
	
6.3
    	
 
    	
For   the avoidance of doubt, Aditech acknowledges and agrees that, from and after the   date of this Addendum, it and its Affiliates shall have no rights in, to or   under any of the Intellectual Property owned or controlled by Forward or any   of its controlled Affiliates (including any Intellectual Property previously   assigned by Aditech to Forward and any Intellectual Property under which   Forward or any of its controlled Affiliates has the right to grant a   license), worldwide, other than the right to the payments set forth in   Clauses 5.2(a)-(c).
    
	
 
    	
 
    	
 
    
	
6.4
    	
 
    	
The   Parties unconditionally and irrevocably waive any breaches or other claims arising   out of or under the Patent Transfer Agreement prior to the date of this   Addendum.
    
	
 
    	
 
    	
 
    
	
7.
    	
 
    	
TERM AND TERMINATION
    
	
 
    	
 
    	
 
    
	
7.1
    	
 
    	
Notwithstanding   anything in the Patent Transfer Agreement to the contrary, the Parties hereby   acknowledge and agree that the Patent Transfer Agreement and this Addendum   shall remain in full force and effect indefinitely. The Parties further   acknowledge and agree that no Party shall have the right to terminate or   rescind, and shall not attempt to terminate or rescind, the Patent Transfer   Agreement or this Addendum.
    

 

[Appendix F to Settlement and License Agreement]

 

9

 

	
8.
    	
 
    	
CHANGES TO THE LICENSE AGREEMENT 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Forward   hereby agrees that it shall not amend the License Agreement if such amendment   would have an adverse effect on Aditech’s rights under the Patent Transfer   Agreement, as amended hereby, without Aditech’s prior written consent.
    
	
 
    	
 
    	
 
    
	
9.
    	
 
    	
OTHER   PROVISIONS REMAIN EFFECTIVE
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Subject   to the terms and conditions of this Addendum, the Patent Transfer Agreement   shall remain in full force and effect and from and after the Addendum   Effective Date, the Patent Transfer Agreement and this Addendum shall be read   and construed as one document.
    
	
 
    	
 
    	
 
    
	
10.
    	
 
    	
CONFIDENTIALITY
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Clause   9 of the Patent Transfer Agreement shall apply mutatis   mutandis to this Addendum and the Parties agree that the existence   and contents of this Addendum and any information relating thereto and to the   settlement negotiations with the Biogen Parties and their Affiliates shall be   deemed Confidential Information for purposes of the Amended Patent Transfer   Agreement.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Notwithstanding   Clause 9 of the Patent Transfer Agreement, the Parties agree that each Party   shall be entitled to disclose the existence and contents of the Patent   Transfer Agreement and this Addendum (i) as required by any applicable   law or regulation, (ii) in connection with the extraordinary general   meeting of Forward to be held in accordance with the License Agreement,   including, for the avoidance of doubt, in connection with convening such   general meeting, and (iii) as part of the negotiations of the License   Agreement, under the Confidential Disclosure Agreement executed on October 14,   2016 between Biogen Inc. and Forward.
    
	
 
    	
 
    	
 
    
	
11.
    	
 
    	
LAW AND VENUE
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Clause   19 of the Patent Transfer Agreement shall apply mutatis   mutandis to any dispute arising under this Addendum between the   Parties or between any Party and any of the Biogen Parties.
    
	
 
    	
 
    	
 
    
	
12.
    	
 
    	
COUNTERPARTS
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
This   Addendum may be executed in one or more counterparts, all of which shall be   considered one and the same agreement and shall become effective when one or   more counterparts have been signed by each of the Parties and delivered to   the other Parties. Delivery of an executed counterpart of a signature   page of this Addendum by facsimile or other electronic image scan   transmission shall be effective as delivery of a manually executed   counterpart of this Addendum.
    

 

[Appendix F to Settlement and License Agreement]

 

10

 

13.         OTHER ACKNOWLEDGEMENTS

 

13.1       Third Party Beneficiaries

 

The Parties hereby acknowledge and agree that the Biogen Parties and each of their respective Affiliates, successors and assigns shall be an express third party beneficiary of this Addendum and shall have the right to directly enforce the terms and provisions of this Addendum. No Party may amend, agree to amend or waive any of its rights under this Addendum without the prior written consent of the Biogen Parties.

 

13.2      No Rights Under License Agreement

 

Aditech acknowledges and agrees that it does not and shall not have any rights in, to, under or with respect to the License Agreement, and that this Addendum does not grant it any such rights.

 

[Signatures to follow on the next page]

 

[Appendix F to Settlement and License Agreement]

 

11

 

	
FOR   FORWARD PHARMA A/S
    	
 
    	
FOR   ADITECH PHARMA AG
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signature
    	
 
    	
Signature
    
	
 
    	
 
    	
 
    
	
Name:   Florian Schőnharting
    	
 
    	
Name:   Michael Forer
    
	
 
    	
 
    	
 
    
	
Position:   Chairman of Board of Directors
    	
 
    	
Position:   Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signature
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:   Grant Lawrence
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Position:   Member of Board of Directors
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signature
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:   Karen Smith
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Position:   Member of Board of Directors
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signature
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:   Jan van de Winkel
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Position:   Member of Board of Directors
    	
 
    	
 
    

 

[Appendix F to Settlement and License Agreement]

 

12

 

APPENDIX G

 

Schedule of Permitted Liens

 

None.

 

[Appendix G to Settlement and License Agreement]

 

1

 

APPENDIX H

 

Scheduled Employment Matters

 

It is possible that employees listed below who are employed in jurisdictions in which the TUPE Regulations apply may assert claims under such regulations as a result of the transactions contemplated by the Agreement. The parties do not acknowledge hereby that any such claims will be accepted or are legally valid. Finally, Licensor has agreed to indemnify Licensee for any such claims pursuant to Section 2.10.

 

	
1.
    	
Chris   Rundfeldt (employee)
    
	
 
    	
 
    
	
2.
    	
Christin   Galetzka (employee)
    
	
 
    	
 
    
	
3.
    	
Peder   Moller Andersen (CEO)
    
	
 
    	
 
    
	
4.
    	
Joel   Sendek (employee)
    
	
 
    	
 
    
	
5.
    	
Thomas   Carbone (employee)
    
	
 
    	
 
    
	
6.
    	
Sharon   Klahre (employee)
    
	
 
    	
 
    
	
7.
    	
Anders   R. Therkelsen (employee)
    
	
 
    	
 
    
	
8.
    	
Guillaume   de Sampaio (former employee)
    
	
 
    	
 
    
	
9.
    	
Kristin   Leye (employee)
    
	
 
    	
 
    
	
10.
    	
Claus   Bo Svendsen (employee)
    
	
 
    	
 
    
	
11.
    	
Andrzej   J. Stano (employee)
    
	
 
    	
 
    
	
12.
    	
Rupert   Sandbrink (employee)
    
	
 
    	
 
    
	
13.
    	
Anders   LivsØ (employee)
    
	
 
    	
 
    
	
14.
    	
Andrea   Ines Rudolph (employee)
    
	
 
    	
 
    
	
15.
    	
Torben   Tvermosegaard (employee)
    

 

[Appendix H to Settlement and License Agreement]

 

1

 

APPENDIX I 

 

Additional Parties

 

1.             Aditech Pharma AG

 

2.             NB FP Investment General Partner ApS

 

3.             NB FP Investment SLP ApS

 

4.             Tech Growth Invest ApS

 

[Appendix I to Settlement and License Agreement]

 

1ex4-1.htm

Exhibit 4.1

 

THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE AND, ACCORDINGLY, THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(iii) OF THIS NOTE.

 

INTERPACE DIAGNOSTICS GROUP, INC. 

 

SENIOR SECURED CONVERTIBLE NOTE

 

	
Original Issuance Date: October 31, 2014

Exchange Date: March 23, 2017

Second Exchange Date: April __, 2017
	
Original Principal Amount: U.S.$ [•]

 

FOR VALUE RECEIVED, Interpace Diagnostics Group, Inc., a Delaware corporation (the “Company”), hereby promises to pay to the order of      [     ] or its registered assigns (“Holder”) the amount set forth above as the Original Principal Amount (as reduced pursuant to the terms hereof pursuant to redemption, conversion or otherwise, the “Principal”) when due, whether upon the Maturity Date, or upon acceleration, redemption or otherwise (in each case in accordance with the terms hereof) and to pay interest (“Interest”) on any outstanding Principal at the applicable Interest Rate (as defined below) from the date set forth above as the Exchange Date until the same becomes due and payable, whether upon the Maturity Date or upon acceleration, conversion, redemption or otherwise (in each case in accordance with the terms hereof). This Senior Secured Convertible Note (including all Senior Secured Convertible Notes issued in exchange, transfer or replacement hereof, this “Note”) has been issued in exchange for a Senior Secured Note, dated March 23, 2017, with an aggregate principal amount outstanding of $[•] (the “Senior Note”), pursuant to that certain Amendment and Exchange Agreement, dated April __, 2017 (the “Second Exchange Date”), by and between the Company and the investor (the “Investor”) referred to therein, as amended from time to time, which Senior Note was issued in exchange for that certain Non-Negotiable Senior Secured Promissory Note, dated October 31, 2014, with an aggregate principal amount outstanding of $9,336,250.00 pursuant to that certain Exchange Agreement, dated as of March 22, 2017 (the “Exchange Agreement”), by and between the Company and the Investor. Certain capitalized terms used herein are defined in Section 31.

 

1.            PAYMENTS OF PRINCIPAL. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing 125% of all outstanding Principal, accrued and unpaid Interest and accrued and unpaid Late Charges (as defined in Section 24(c)) on such Principal and Interest. Other than as specifically permitted by this Note, the Company may not prepay any portion of the outstanding Principal, accrued and unpaid Interest or accrued and unpaid Late Charges on Principal and Interest, if any.

 

2.             INTEREST; INTEREST RATE. 

 

(a)     Interest on this Note shall commence accruing on the Exchange Date at the Interest Rate and shall be computed on the basis of a 360-day year and twelve 30-day months and shall be payable in arrears in cash on the Maturity Date and/or any applicable Redemption Date. 

 

 

 

 

  

(b)     Prior to the payment of Interest on the Maturity Date and/or any applicable Redemption Date, Interest on this Note shall be payable by way of inclusion of the Interest in the Conversion Amount on each Conversion Date in accordance with Section 3(b)(i) or upon any redemption in accordance with Section 10 or any required payment upon any Bankruptcy Event of Default. From and after the occurrence and during the continuance of any Event of Default, the Interest Rate shall automatically be increased to twelve percent (12.0%) per annum (the “Default Rate”). In the event that such Event of Default is subsequently cured (and no other Event of Default then exists (including, without limitation, for the Company’s failure to pay such Interest at the Default Rate on the Maturity Date), the adjustment referred to in the preceding sentence shall cease to be effective as of the calendar day immediately following the date of such cure; provided that the Interest as calculated and unpaid at such increased rate during the continuance of such Event of Default shall continue to apply to the extent relating to the days after the occurrence of such Event of Default through and including the date of such cure of such Event of Default.

 

3.           CONVERSION OF NOTES. At any time after the Exchange Date, this Note shall be convertible into validly issued, fully paid and non-assessable shares of Common Stock (as defined below), on the terms and conditions set forth in this Section 3.

 

(a)           Conversion Right. Subject to the provisions of Section 3(d), at any time or times on or after the Exchange Date, the Holder shall be entitled to convert any portion of the outstanding and unpaid Conversion Amount (as defined below) into validly issued, fully paid and non-assessable shares of Common Stock in accordance with Section 3(c), at the Conversion Rate (as defined below). The Company shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in the issuance of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up to the nearest whole share. The Company shall pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including, without limitation, fees and expenses of the Transfer Agent (as defined below)) that may be payable with respect to the issuance and delivery of Common Stock upon conversion of any Conversion Amount.

 

(b)          Conversion Rate. The number of shares of Common Stock issuable upon conversion of any Conversion Amount pursuant to Section 3(a) shall be determined by dividing (x) such Conversion Amount by (y) the Conversion Price (the “Conversion Rate”).

 

(i)      “Conversion Amount” means the sum of (x) portion of the Principal to be converted, redeemed or otherwise with respect to which this determination is being made and (y) all accrued and unpaid Interest with respect to such portion of the Principal amount and accrued and unpaid Late Charges with respect to such portion of such Principal and such Interest, if any.

 

 

 

 

  

(ii)     “Conversion Price” means, as of any Conversion Date or other date of determination, $[•], subject to adjustment as provided herein.

 

(c)           Mechanics of Conversion.

 

(i)     Optional Conversion. To convert any Conversion Amount into shares of Common Stock on any date (a “Conversion Date”), the Holder shall deliver (whether via facsimile, electronic mail or otherwise), for receipt on or prior to 11:59 p.m., New York time, on such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit I (the “Conversion Notice”) to the Company. If required by Section 3(c)(iii), within three (3) Trading Days following a conversion of this Note as aforesaid, the Holder shall surrender this Note to a nationally recognized overnight delivery service for delivery to the Company (or an indemnification undertaking with respect to this Note in the case of its loss, theft or destruction as contemplated by Section 18(b)). On or before the second (2nd) Trading Day following the date of receipt of a Conversion Notice, the Company shall transmit by facsimile or electronic mail an acknowledgment of confirmation and representation as to whether such shares of Common Stock may then be resold pursuant to Rule 144 or an effective and available registration statement, in the form attached hereto as Exhibit II, of receipt of such Conversion Notice to the Holder and the Company's transfer agent (the “Transfer Agent”) which confirmation shall constitute an instruction to the Transfer Agent to process such Conversion Notice in accordance with the terms herein. On or before the third (3rd) Trading Day following the date on which the Company has received a Conversion Notice (or such earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a trade initiated on the applicable Conversion Date of such shares of Common Stock issuable pursuant to such Conversion Notice) (the “Share Delivery Deadline”), the Company shall (1) provided that the Transfer Agent is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program, credit such aggregate number of shares of Common Stock to which the Holder shall be entitled pursuant to such conversion to the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system or (2) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, upon the request of the Holder, issue and deliver (via reputable overnight courier) to the address as specified in the Conversion Notice, a certificate, registered in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder shall be entitled pursuant to such conversion. If this Note is physically surrendered for conversion pursuant to Section 3(c)(iii) and the outstanding Principal of this Note is greater than the Principal portion of the Conversion Amount being converted, then the Company shall as soon as practicable and in no event later than ten (10) Business Days after receipt of this Note and at its own expense, issue and deliver to the Holder (or its designee) a new Note (in accordance with Section 18(d)) representing the outstanding Principal not converted; provided, that the Holder shall be permitted to convert such new Note at any time without regard to the date of the Holder’s receipt of such new physical certificate with respect to such new Note. The Person or Persons entitled to receive the shares of Common Stock issuable upon a conversion of this Note shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the Conversion Date.

 

 

 

 

  

(ii)     Company’s Failure to Timely Convert. If the Company shall fail, for any reason or for no reason, on or prior to the applicable Share Delivery Deadline, if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, to issue and deliver to the Holder (or its designee) a certificate for the number of shares of Common Stock to which the Holder is entitled and register such shares of Common Stock on the Company’s share register or, if the Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program, to credit the balance account of the Holder or the Holder’s designee with DTC for such number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion of this Note (as the case may be) (a “Conversion Failure”), and if on or after such Share Delivery Deadline the Holder purchases (in an open market transaction or otherwise) shares of Common Stock corresponding to all or any portion of the number of shares of Common Stock issuable upon such conversion that the Holder is entitled to receive from the Company and has not received from the Company in connection with such Conversion Failure (a “Buy-In”), then, in addition to all other remedies available to the Holder, the Company shall, within three (3) Business Days after receipt of the Holder’s request and in the Holder’s discretion, either: (I) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including, without limitation, by any other Person in respect, or on behalf, of the Holder) (the “Buy-In Price”), at which point the Company’s obligation to so issue and deliver such certificate (and to issue such shares of Common Stock) or credit the balance account of such Holder or such Holder’s designee, as applicable, with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion hereunder (as the case may be) (and to issue such shares of Common Stock) shall terminate, or (II) promptly honor its obligation to so issue and deliver to the Holder a certificate or certificates representing such shares of Common Stock or credit the balance account of such Holder or such Holder’s designee, as applicable, with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion hereunder (as the case may be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (x) such number of shares of Common Stock multiplied by (y) the lowest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date of the applicable Conversion Notice and ending on the date of such issuance and payment under this clause (II) (the “Buy-In Payment Amount”). Nothing shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock (or to electronically deliver such shares of Common Stock) upon the conversion of this Note as required pursuant to the terms hereof.

 

 

 

 

  

(iii)     Registration; Book-Entry. The Company shall maintain a register (the “Register”) for the recordation of the names and addresses of the holders of each Note and the principal amount of the Notes held by such holders (the “Registered Notes”). The entries in the Register shall be conclusive and binding for all purposes absent manifest error. The Company and the holders of the Notes shall treat each Person whose name is recorded in the Register as the owner of a Note for all purposes (including, without limitation, the right to receive payments of Principal and Interest hereunder) notwithstanding notice to the contrary. A Registered Note may be assigned, transferred or sold in whole or in part only by registration of such assignment or sale on the Register. Upon its receipt of a written request to assign, transfer or sell all or part of any Registered Note by the holder thereof, the Company shall record the information contained therein in the Register and issue one or more new Registered Notes in the same aggregate principal amount as the principal amount of the surrendered Registered Note to the designated assignee or transferee pursuant to Section 18, provided that if the Company does not so record an assignment, transfer or sale (as the case may be) of all or part of any Registered Note within two (2) Business Days of such a request, then the Register shall be automatically deemed updated to reflect such assignment, transfer or sale (as the case may be). Notwithstanding anything to the contrary set forth in this Section 3, following conversion of any portion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Company unless (A) the full Conversion Amount represented by this Note is being converted (in which event this Note shall be delivered to the Company following conversion thereof as contemplated by Section 3(c)(i)) or (B) the Holder has provided the Company with prior written notice (which notice may be included in a Conversion Notice) requesting reissuance of this Note upon physical surrender of this Note. The Holder and the Company shall maintain records showing the Principal, Interest and Late Charges converted and/or paid (as the case may be) and the dates of such conversions, and/or payments (as the case may be) or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Note upon conversion. If the Company does not update the Register to record such Principal, Interest and Late Charges converted and/or paid (as the case may be) and the dates of such conversions, and/or payments (as the case may be) within two (2) Business Days of such occurrence, then the Register shall be automatically deemed updated to reflect such occurrence.

 

(iv)     Disputes. In the event of a dispute as to the number of shares of Common Stock issuable to the Holder in connection with a conversion of this Note, the Company shall issue to the Holder the number of shares of Common Stock not in dispute and resolve such dispute in accordance with Section 23.

 

 

 

 

  

(d)           Limitations on Conversions. The Company shall not effect the conversion of any portion of this Note, and the Holder shall not have the right to convert any portion of this Note pursuant to the terms and conditions of this Note and any such conversion shall be null and void and treated as if never made, to the extent that after giving effect to such conversion, the Holder together with the other Attribution Parties collectively would beneficially own in excess of 9.99% (the “Maximum Percentage”) of the shares of Common Stock outstanding immediately after giving effect to such conversion. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder and the other Attribution Parties shall include the number of shares of Common Stock held by the Holder and all other Attribution Parties plus the number of shares of Common Stock issuable upon conversion of this Note with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be issuable upon (A) conversion of the remaining, nonconverted portion of this Note beneficially owned by the Holder or any of the other Attribution Parties and (B) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any convertible notes or convertible preferred stock or warrants) beneficially owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this Section 3(d). For purposes of this Section 3(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the 1934 Act. For purposes of determining the number of outstanding shares of Common Stock the Holder may acquire upon the conversion of this Note without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the SEC, as the case may be, (y) a more recent public announcement by the Company or (z) any other written notice by the Company or the Transfer Agent, if any, setting forth the number of shares of Common Stock outstanding (the “Reported Outstanding Share Number”). If the Company receives a Conversion Notice from the Holder at a time when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall notify the Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such Conversion Notice would otherwise cause the Holder’s beneficial ownership, as determined pursuant to this Section 3(d), to exceed the Maximum Percentage, the Holder must notify the Company of a reduced number of shares of Common Stock to be purchased pursuant to such Conversion Notice. For any reason at any time, upon the written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally and in writing or by electronic mail to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Note, by the Holder and any other Attribution Party since the date as of which the Reported Outstanding Share Number was reported. In the event that the issuance of shares of Common Stock to the Holder upon conversion of this Note results in the Holder and the other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which the Holder’s and the other Attribution Parties’ aggregate beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. Upon delivery of a written notice to the Company, the Holder may from time to time increase (with such increase not effective until the sixty-first (61st) day after delivery of such notice) or decrease the Maximum Percentage to any other percentage not in excess of 9.99% as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61st) day after such notice is delivered to the Company and (ii) any such increase or decrease will apply only to the Holder and the other Attribution Parties and not to any other Person that is not an Attribution Party of the Holder. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Note in excess of the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to convert this Note pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of convertibility. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 3(d) to the extent necessary to correct this paragraph (or any portion of this paragraph) which may be defective or inconsistent with the intended beneficial ownership limitation contained in this Section 3(d) or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor holder of this Note.

 

 

 

 

  

(e)           Right of Alternate Conversion.

 

(i)            General. 

 

(1)     Alternate Optional Conversion. At any time after the Company shall have obtained the Stockholder Approval, at the option of the Holder, the Holder may convert (each, an “Alternate Optional Conversion”, and the date of such Alternate Optional Conversion, an “Alternate Optional Conversion Date”) all, or any part, of the Principal amount of this Note then outstanding (together with any accrued and unpaid Interest thereon and accrued and unpaid Late Charges on such Principal and Interest through such Alternate Optional Conversion Date) into shares of Common Stock (such portion of the Conversion Amount subject to such Alternate Optional Conversion, the “Alternate Optional Conversion Amount”) at the Alternate Conversion Price. In the event that the Holder shall sell or otherwise transfer all or any portion of this Note, each transferee shall be allocated such portion of the Conversion Amount eligible to be an Alternate Optional Conversion Amount, if any, as specified in the documentation with respect to such transfer (or, if unspecified therein, pro rata based on the portion of this Note transferred).

 

(2)     Alternate Conversion Upon an Event of Default. At any time after the date the Company shall have obtained the Stockholder Approval and during any Event of Default Redemption Right Period (as defined in Section 4(b) below), the Holder may, at the Holder’s option, convert (each, an “Alternate Event of Default Conversion” and together with each Alternate Optional Conversion, each, an “Alternate Conversion”, and the date of such Alternate Event of Default Conversion, each, an “Alternate Event of Default Conversion Date”, and together with each Alternate Optional Conversion Date, each, an “Alternate Conversion Date”) all, or any part of, the Conversion Amount (such portion of the Conversion Amount subject to such Alternate Conversion, the “Alternate Event of Default Conversion Amount” and together with each Alternate Optional Conversion Amount, each, an “Alternate Conversion Amount”) into shares of Common Stock at the Alternate Conversion Price.

 

 

 

 

  

(ii)          Mechanics of Alternate Conversion. On any Alternate Conversion Date, the Holder may voluntarily convert any Alternate Conversion Amount pursuant to Section 3(c) (with “Alternate Conversion Price” replacing “Conversion Price” for all purposes hereunder with respect to such Alternate Conversion and, solely with respect to the calculation of the number of shares of Common Stock issuable upon conversion of any Conversion Amount in an Alternate Event of Default Conversion, with “Redemption Premium of the Conversion Amount” replacing “Conversion Amount” in clause (x) of the definition of Conversion Rate above with respect to such Alternate Conversion) by designating in the Conversion Notice delivered pursuant to this Section 3(e) of this Note that the Holder is electing to use the Alternate Conversion Price for such conversion. Notwithstanding anything to the contrary in this Section 3(e), but subject to Section 3(d), until the Company delivers shares of Common Stock representing the applicable Alternate Conversion Amount to the Holder, such Alternate Conversion Amount may be converted by the Holder into shares of Common Stock pursuant to Section 3(c) without regard to this Section 3(e).

 

(f)            Mandatory Conversion.

 

(i)            General. If at any time (x) the VWAP of the Common Stock listed on the Principal Market exceeds $[•] (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events)(the “Mandatory Conversion Minimum Price”) for five (5) consecutive Trading Days (each, a “Mandatory Conversion Measuring Period”), and (y) no Equity Conditions Failure then exists, the Company shall have the right to require the Holder to convert all, or any part, of the Conversion Amount of this Note (but in no event less than the lesser of (I) $500,000 in Conversion Amount of this Note and (II) all of the Conversion Amount then remaining under this Note), as designated in the Mandatory Conversion Notice (as defined below) into fully paid, validly issued and nonassessable shares of Common Stock in accordance with Section 3(c) hereof at the Conversion Rate as of the Mandatory Conversion Date (as defined below) (a “Mandatory Conversion”). The Company may exercise its right to require conversion under this Section 3(f) by delivering within two Trading Days following the end of such Mandatory Conversion Measuring Period a written notice thereof by facsimile and overnight courier to all, but not less than all, of the holders of Notes and the Transfer Agent (the “Mandatory Conversion Notice” and the date all of the holders received such notice by facsimile is referred to as the “Mandatory Conversion Notice Date”). The Mandatory Conversion Notice shall be irrevocable. The Mandatory Conversion Notice shall state (i) the Trading Day selected for the Mandatory Conversion in accordance with this Section 3(f), which Trading Day shall be no less than five (5) Trading Days and no more than fifteen (15) Trading Days following the Mandatory Conversion Notice Date (the “Mandatory Conversion Date”), (ii) the aggregate Conversion Amount, of the Notes subject to mandatory conversion from the Holder and all of the holders of the Notes pursuant to this Section 3(f) (the “Mandatory Conversion Amount”), (iii) the number of shares of Common Stock to be issued to the Holder on the Mandatory Conversion Date and (iv) that there has been no Equity Conditions Failure. Notwithstanding the foregoing, the Company may affect only one (1) Mandatory Conversion during any twenty (20) Trading Day period. Notwithstanding anything herein to the contrary, (i) if any trading price of the Common Stock listed on the Principal Market fails to exceed the Mandatory Conversion Minimum Price for each Trading Day commencing on the Mandatory Conversion Notice Date and ending and including the Trading Day immediately prior to the applicable Mandatory Conversion Date (a “Mandatory Conversion Price Failure”) or an Equity Conditions Failure occurs at any time prior to the Mandatory Conversion Date, (A) the Company shall provide the Holder a subsequent notice to that effect and (B) unless the Holder waives the applicable Equity Conditions Failure and/or Mandatory Conversion Price Failure, as applicable, the Mandatory Conversion shall be cancelled and the applicable Mandatory Conversion Notice shall be null and void and (ii) at any time prior to the date all of the shares of Common Stock to be delivered to the Holder (or its designee) in such Mandatory Conversion have been delivered in full in compliance with Section 3(c) above, the Mandatory Conversion Amount may be converted, in whole or in part, by the Holders into shares of Common Stock pursuant to Section 3 (including, without limitation, Section 3(e)). Notwithstanding the foregoing, any Conversion Amount subject to a Mandatory Conversion may be converted by the Holder hereunder prior to the applicable Mandatory Conversion Date and such aggregate Conversion Amount converted hereunder on or after the Mandatory Conversion Notice Date and prior to such Mandatory Conversion Date shall reduce the Mandatory Conversion Amount to be converted on such Mandatory Conversion Date. For the avoidance of doubt, the Company shall have no right to effect a Mandatory Conversion if any Event of Default has occurred and continuing, but any Event of Default shall have no effect upon the Holder’s right to convert this Note in its discretion.

 

 

 

 

  

4.            RIGHTS UPON EVENT OF DEFAULT.

 

(a)           Event of Default. Each of the following events shall constitute an “Event of Default” and each of the events in clauses (vii), (viii) and (ix) shall constitute a “Bankruptcy Event of Default”:

 

(i)            the suspension from trading or the failure of the Common Stock to be trading or listed (as applicable) on an Eligible Market for a period of five (5) consecutive Trading Days;

 

(ii)           the Company’s (A) failure to cure a Conversion Failure by delivery of the required number of shares of Common Stock within five (5) Trading Days after the applicable Conversion Date or exercise date (as the case may be) or (B) notice, written or oral, to any holder of the Notes, including, without limitation, by way of public announcement or through any of its agents, at any time, of its intention not to comply, as required, with a request for conversion of any Notes into shares of Common Stock that is requested in accordance with the provisions of the Notes, other than pursuant to Section 3(d);

 

 

 

 

  

(iii)         except to the extent the Company is in compliance with Section 9(b) below, at any time following the tenth (10th) consecutive day that the Holder’s Authorized Share Allocation (as defined in Section 9(a) below) is less than the number of shares of Common Stock that the Holder would be entitled to receive upon a conversion of the full Conversion Amount of this Note (without regard to any limitations on conversion set forth in Section 3(d) or otherwise),;

 

(iv)         the Company’s or any Subsidiary’s failure to pay to the Holder any amount of Principal, Interest, Late Charges or other amounts when and as due under this Note (including, without limitation, the Company’s or any Subsidiary’s failure to pay any redemption payments or amounts hereunder) or any other Exchange Document (as defined in the Exchange Agreement) or any other agreement, document, certificate or other instrument delivered in connection with the transactions contemplated hereby and thereby, except, in the case of a failure to pay Interest and Late Charges when and as due, in which case only if such failure remains uncured for a period of at least two (2) Trading Days;

 

(v)          the Company fails to remove any restrictive legend on any certificate or any shares of Common Stock issued to the Holder upon conversion of this Note, unless otherwise then prohibited by applicable federal securities laws, and any such failure remains uncured for at least five (5) days;

 

(vi)         the occurrence of any default under, redemption of or acceleration prior to maturity of at least an aggregate of $250,000 of Indebtedness of the Company or any of its Subsidiaries;

 

(vii)        bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted by or against the Company or any Subsidiary and, if instituted against the Company or any Subsidiary by a third party, shall not be dismissed within thirty (30) days of their initiation;

 

(viii)       the commencement by the Company or any Subsidiary of a voluntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree, order, judgment or other similar document in respect of the Company or any Subsidiary in an involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable federal, state or foreign law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any Subsidiary or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the execution of a composition of debts, or the occurrence of any other similar federal, state or foreign proceeding, or the admission by it in writing of its inability to pay its debts generally as they become due, the taking of corporate action by the Company or any Subsidiary in furtherance of any such action or the taking of any action by any Person to commence a Uniform Commercial Code foreclosure sale or any other similar action under federal, state or foreign law;

 

 

 

 

  

(ix)          the entry by a court of (i) a decree, order, judgment or other similar document in respect of the Company or any Subsidiary of a voluntary or involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or (ii) a decree, order, judgment or other similar document adjudging the Company or any Subsidiary as bankrupt or insolvent, or approving as properly filed a petition seeking liquidation, reorganization, arrangement, adjustment or composition of or in respect of the Company or any Subsidiary under any applicable federal, state or foreign law or (iii) a decree, order, judgment or other similar document appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any Subsidiary or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree, order, judgment or other similar document or any such other decree, order, judgment or other similar document unstayed and in effect for a period of thirty (30) consecutive days;

 

(x)           a final judgment or judgments for the payment of money aggregating in excess of $250,000 are rendered against the Company and/or any of its Subsidiaries and which judgments are not, within thirty (30) days after the entry thereof, bonded, discharged, settled or stayed pending appeal, or are not discharged within thirty (30) days after the expiration of such stay; provided, however, any judgment which is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $250,000 amount set forth above so long as the Company provides the Holder a written statement from such insurer or indemnity provider (which written statement shall be reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an indemnity and the Company or such Subsidiary (as the case may be) will receive the proceeds of such insurance or indemnity within thirty (30) days of the issuance of such judgment;

 

(xi)          the Company and/or any Subsidiary, individually or in the aggregate, either (i) fails to pay, when due, or within any applicable grace period, any payment with respect to any Indebtedness in excess of $250,000 due to any third party (other than, with respect to unsecured Indebtedness only, payments contested by the Company and/or such Subsidiary (as the case may be) in good faith by proper proceedings and with respect to which adequate reserves have been set aside for the payment thereof in accordance with GAAP) or is otherwise in breach or violation of any agreement for monies owed or owing in an amount in excess of $250,000, which breach or violation permits the other party thereto to declare a default or otherwise accelerate amounts due thereunder, or (ii) suffer to exist any other circumstance or event that would, with or without the passage of time or the giving of notice, result in a default or event of default under any agreement binding the Company or any Subsidiary, which default or event of default would or is likely to have a material adverse effect on the business, assets, operations (including results thereof), liabilities, properties, condition (including financial condition) or prospects of the Company or any of its Subsidiaries, individually or in the aggregate;

 

 

 

 

  

(xii)        other than as specifically set forth in another clause of this Section 4(a), the Company or any Subsidiary breaches any representation or warranty in any material respect (other than representations or warranties subject to material adverse effect or materiality, which may not be breached in any respect) or breaches any covenant or other term or condition of any Exchange Document, except, in the case of a breach of a covenant or other term or condition that is curable, only if such breach remains uncured for a period of seven (7) consecutive Trading Days;

 

(xiii)        a false or inaccurate certification (including a false or inaccurate deemed certification) by the Company that either (A) the Equity Conditions are satisfied, (B) there has been no Equity Conditions Failure, or (C) as to whether any Event of Default has occurred;

 

(xiv)        any breach or failure in any respect by the Company or any Subsidiary to comply with any provision of Section 13 of this Note;

 

(xv)         any provision of any Exchange Document (including, without limitation, the Security Documents (as defined in the Exchange Agreement) and the Guaranties (as defined in the Exchange Agreement)) shall at any time for any reason (other than pursuant to the express terms thereof) cease to be valid and binding on or enforceable against the parties thereto, or the validity or enforceability thereof shall be contested by any party thereto, or a proceeding shall be commenced by the Company or any Subsidiary or any governmental authority having jurisdiction over any of them, seeking to establish the invalidity or unenforceability thereof, or the Company or any Subsidiary shall deny in writing that it has any liability or obligation purported to be created under any Exchange Document (including, without limitation, the Security Documents and the Guaranties);

 

(xvi)        any Security Document shall for any reason fail or cease to create a separate valid and perfected and, except to the extent permitted by the terms hereof or thereof, Lien (as defined in the Exchange Agreement) on the Collateral (as defined in the Security Documents) in favor of the Holder (or any collateral agent appointed by the Holder, if applicable, on behalf of the Holder) or any material provision of any Security Document shall at any time for any reason cease to be valid and binding on or enforceable against the Company or the validity or enforceability thereof shall be contested by any party thereto, or a proceeding shall be commenced by the Company or any governmental authority having jurisdiction over the Company, seeking to establish the invalidity or unenforceability thereof;

 

 

 

 

  

(xvii)       any material damage to, or loss, theft or destruction of, any Collateral, whether or not insured, or any strike, lockout, labor dispute, embargo, condemnation, act of God or public enemy, or other casualty which causes, for more than fifteen (15) consecutive days, the cessation or substantial curtailment of revenue producing activities at any facility of the Company or any Subsidiary, if any such event or circumstance could have a Material Adverse Effect;

 

(xviii)      if on or prior to the thirtieth (30th) calendar day after the Issuance Date, the Company shall fail to be in compliance with Section 5(i) of the Security Agreement (including, without limitation, the Company obtaining Controlled Account Agreements (as defined in the Security Agreement) with respect to each Controlled Accounts of the Company and its Subsidiaries), in each case, executed by the applicable Controlled Account Bank (as defined in the Security Agreement) and the Company (or the applicable Subsidiary);

 

(xix)        any Material Adverse Effect (as defined in the Exchange Agreement) with an adverse impact to the Company and its Subsidiaries, determined on a consolidated basis, of at least $1 million occurs; or

 

(xx)         any Event of Default (as defined in the Exchanged Non-Convertible Note) occurs.

 

(b)          Notice of an Event of Default; Redemption Right. After the occurrence of an Event of Default with respect to this Note, the Company shall within one (1) Business Day of becoming aware of the occurrence of such Event of Default deliver written notice thereof via facsimile or electronic mail and overnight courier (with next day delivery specified) (an “Event of Default Notice”) to the Holder. At any time after the earlier of the Holder’s receipt of an Event of Default Notice and the Holder becoming aware of an Event of Default, (such earlier date, the “Event of Default Right Commencement Date”) and ending (such ending date, the “Event of Default Right Expiration Date”, and each such period, an “Event of Default Redemption Right Period”) on the later of (x) the date such Event of Default is cured and (y) the twentieth (20th) Trading Day after the Holder’s receipt of an Event of Default Notice that includes (I) a reasonable description of the applicable Event of Default, (II) a certification as to whether, in the opinion of the Company, such Event of Default is capable of being cured and, if applicable, a reasonable description of any existing plans of the Company to cure such Event of Default and (III) a certification as to the date the Event of Default occurred and, if cured on or prior to the date of such Event of Default Notice, the applicable Event of Default Right Expiration Date, the Holder may require the Company to redeem (regardless of whether such Event of Default has been cured on or prior to the Event of Default Right Expiration Date) all or any portion of this Note by delivering written notice thereof (the “Event of Default Redemption Notice”) to the Company, which Event of Default Redemption Notice shall indicate the portion of this Note the Holder is electing to redeem. Each portion of this Note subject to redemption by the Company pursuant to this Section 4(b) shall be redeemed by the Company at a price equal to the greater of (i) the product of (A) the Conversion Amount to be redeemed multiplied by (B) the Redemption Premium and (ii) solely if any Equity Conditions Failure exists during the twenty (20) Trading Days immediately prior to such date of determination, the product of (A) the Conversion Amount being redeemed multiplied by (B) the quotient determined by dividing (I) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date immediately preceding such Event of Default and ending on the date the Company makes the entire payment required to be made under this Section 4(b) by (II) the Conversion Price then in effect (the “Event of Default Redemption Price”). Redemptions required by this Section 4(b) shall be made in accordance with the provisions of Section 10. To the extent redemptions required by this Section 4(b) are deemed or determined by a court of competent jurisdiction to be prepayments of this Note by the Company, such redemptions shall be deemed to be voluntary prepayments. Notwithstanding anything to the contrary in this Section 3(e), but subject to Section 3(d), until the Event of Default Redemption Price (together with any Late Charges thereon) is paid in full, the Conversion Amount submitted for redemption under this Section 4(b) (together with any Late Charges thereon) may be converted, in whole or in part, by the Holder into Common Stock pursuant to the terms of this Note. In the event of the Company’s redemption of any portion of this Note under this Section 4(b), the Holder’s damages would be uncertain and difficult to estimate because of the parties’ inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any redemption premium due under this Section 4(b) is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder’s actual loss of its investment opportunity and not as a penalty. Any redemption upon an Event of Default shall not constitute an election of remedies by the Holder, and all other rights and remedies of the Holder shall be preserved.

 

 

 

 

  

(c)          Mandatory Redemption upon Bankruptcy Event of Default. Notwithstanding anything to the contrary herein, and notwithstanding any conversion that is then required or in process, upon any Bankruptcy Event of Default, whether occurring prior to or following the Maturity Date, the Company shall immediately pay to the Holder an amount in cash representing (i) all outstanding Principal, accrued and unpaid Interest and accrued and unpaid Late Charges on such Principal and Interest, multiplied by (ii) the Redemption Premium, in addition to any and all other amounts due hereunder, without the requirement for any notice or demand or other action by the Holder or any other person or entity, provided that the Holder may, in its sole discretion, waive such right to receive payment upon a Bankruptcy Event of Default, in whole or in part, and any such waiver shall not affect any other rights of the Holder hereunder, including any other rights in respect of such Bankruptcy Event of Default, any right to conversion, and any right to payment of the Event of Default Redemption Price or any other Redemption Price, as applicable. 

 

5.            RIGHTS UPON FUNDAMENTAL TRANSACTION.

 

(a)          Assumption. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes in writing all of the obligations of the Company under this Note and the other Exchange Documents in accordance with the provisions of this Section 5(a) pursuant to written agreements in form and substance satisfactory to the Holder and approved by the Holder prior to such Fundamental Transaction, including agreements to deliver to each holder of Notes in exchange for such Notes a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to the Notes, including, without limitation, having a principal amount and interest rate equal to the principal amounts then outstanding and the interest rates of the Notes held by such holder, having similar conversion rights as this Note and having similar ranking and security to the Notes, and satisfactory to the Holder and (ii) the Successor Entity (including its Parent Entity) is a publicly traded corporation whose common stock is quoted on or listed for trading on an Eligible Market. Upon the occurrence of any Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Note and the other Exchange Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Note and the other Exchange Documents with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation of a Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon conversion or redemption of this Note at any time after the consummation of such Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 6 and 14, which shall continue to be receivable thereafter) issuable upon the conversion or redemption of the Notes prior to such Fundamental Transaction, such shares of the publicly traded common stock (or their equivalent) of the Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of such Fundamental Transaction had this Note been converted immediately prior to such Fundamental Transaction (without regard to any limitations on the conversion of this Note), as adjusted in accordance with the provisions of this Note. Notwithstanding the foregoing, the Holder may elect, at its sole option, by delivery of written notice to the Company to waive this Section 5(a) to permit the Fundamental Transaction without the assumption of this Note. The provisions of this Section 5 shall apply similarly and equally to successive Fundamental Transactions and shall be applied without regard to any limitations on the conversion of this Note.

 

 

 

 

  

(b)          Notice of a Change of Control; Redemption Right. No sooner than twenty (20) Trading Days nor later than ten (10) Trading Days prior to the consummation of a Change of Control (the “Change of Control Date”), but not prior to the public announcement of such Change of Control, the Company shall deliver written notice thereof via facsimile or electronic mail and overnight courier to the Holder (a “Change of Control Notice”). At any time during the period (the “Change of Control Redemption Period”) beginning after the Holder’s receipt of a Change of Control Notice or the Holder becoming aware of a Change of Control if a Change of Control Notice is not delivered to the Holder in accordance with the immediately preceding sentence (as applicable) (such date, the “Change of Control Notice Date”) and ending on the later of twenty (20) Trading Days after (A) consummation of such Change of Control or (B) the date of receipt of such Change of Control Notice, the Holder may require the Company to redeem all or any portion of this Note by delivering written notice thereof (“Change of Control Redemption Notice”) to the Company, which Change of Control Redemption Notice shall indicate the Conversion Amount the Holder is electing to redeem. The portion of this Note subject to redemption pursuant to this Section 5 shall be redeemed by the Company in cash at a price equal to the greatest of (i) the product of (w) the Change of Control Redemption Premium multiplied by (y) the Conversion Amount being redeemed, (ii) solely if either (X) any Equity Conditions Failure exists during the twenty (20) Trading Days immediately prior to such date of determination or (Y) less than twenty (20) Trading Days exists between the date of the Change of Control Notice and the Change of Control Date (either, a “Change of Control Parity Failure”), the product of (A) the Conversion Amount being redeemed multiplied by (B) the quotient determined by dividing (I) the greatest Closing Sale Price of the shares of Common Stock during the period beginning on the date immediately preceding the earlier to occur of (1) the consummation of the applicable Change of Control and (2) the public announcement of such Change of Control and ending on the date the Holder delivers the Change of Control Redemption Notice by (II) the Conversion Price then in effect and (iii) solely if a Change of Control Parity Failure then exists, the product of (A) the Conversion Amount being redeemed multiplied by (B) the quotient of (I) the aggregate cash consideration and the aggregate cash value of any non-cash consideration per share of Common Stock to be paid to the holders of the shares of Common Stock upon consummation of such Change of Control (any such non-cash consideration constituting publicly-traded securities shall be valued at the highest of the Closing Sale Price of such securities as of the Trading Day immediately prior to the consummation of such Change of Control, the Closing Sale Price of such securities on the Trading Day immediately following the public announcement of such proposed Change of Control and the Closing Sale Price of such securities on the Trading Day immediately prior to the public announcement of such proposed Change of Control) divided by (II) the Conversion Price then in effect (the “Change of Control Redemption Price”). Redemptions required by this Section 5 shall be made in accordance with the provisions of Section 10 and shall have priority to payments to stockholders in connection with such Change of Control. To the extent redemptions required by this Section 5(b) are deemed or determined by a court of competent jurisdiction to be prepayments of this Note by the Company, such redemptions shall be deemed to be voluntary prepayments. Notwithstanding anything to the contrary in this Section 5, but subject to Section 3(d), until the Change of Control Redemption Price (together with any Late Charges thereon) is paid in full, the Conversion Amount submitted for redemption under this Section 5(b) (together with any Late Charges thereon) may be converted, in whole or in part, by the Holder into Common Stock pursuant to Section 3. In the event of the Company’s redemption of any portion of this Note under this Section 5(b), the Holder’s damages would be uncertain and difficult to estimate because of the parties’ inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any redemption premium due under this Section 5(b) is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder’s actual loss of its investment opportunity and not as a penalty.

 

 

 

 

  

6.             RIGHTS UPON ISSUANCE OF PURCHASE RIGHTS AND OTHER CORPORATE EVENTS.

 

(a)          Purchase Rights. In addition to any adjustments pursuant to Section 7 below, if at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to all or substantially all of the record holders of any class of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without taking into account any limitations or restrictions on the convertibility of this Note and assuming for such purpose that the Note was converted at the Alternate Conversion Price as of the applicable record date) immediately prior to the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Purchase Right (and beneficial ownership) to the extent of any such excess) and such Purchase Right to such extent shall be held in abeyance (and, if such Purchase Right has an expiration date, maturity date or other similar provision, such term shall be extended by such number of days held in abeyance, if applicable) for the benefit of the Holder until such time or times, if ever, as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase Right held similarly in abeyance (and, if such Purchase Right has an expiration date, maturity date or other similar provision, such term shall be extended by such number of days held in abeyance, if applicable)) to the same extent as if there had been no such limitation).

   

(b)          Other Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision to ensure that the Holder will thereafter have the right to receive upon a conversion of this Note, at the Holder’s option (i) in addition to the shares of Common Stock receivable upon such conversion, such securities or other assets to which the Holder would have been entitled with respect to such shares of Common Stock had such shares of Common Stock been held by the Holder upon the consummation of such Corporate Event (without taking into account any limitations or restrictions on the convertibility of this Note) or (ii) in lieu of the shares of Common Stock otherwise receivable upon such conversion, such securities or other assets received by the holders of shares of Common Stock in connection with the consummation of such Corporate Event in such amounts as the Holder would have been entitled to receive had this Note initially been issued with conversion rights for the form of such consideration (as opposed to shares of Common Stock) at a conversion rate for such consideration commensurate with the Conversion Rate. Provision made pursuant to the preceding sentence shall be in a form and substance satisfactory to the Holder. The provisions of this Section 6 shall apply similarly and equally to successive Corporate Events and shall be applied without regard to any limitations on the conversion or redemption of this Note.

 

 

 

 

  

7.            RIGHTS UPON ISSUANCE OF OTHER SECURITIES.

 

(a)          Adjustment of Conversion Price upon Subdivision or Combination of Common Stock. Without limiting any provision of Sections 6 or 7, if the Company at any time on or after the Exchange Date subdivides (by any stock split, stock dividend, stock combination, recapitalization or other similar transaction) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced. Without limiting any provision of Sections 6 or 7, if the Company at any time on or after the Exchange Date combines (by any stock split, stock dividend, stock combination, recapitalization or other similar transaction) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately increased. Any adjustment pursuant to this Section 7(a) shall become effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under this Section 7(a) occurs during the period that a Conversion Price is calculated hereunder, then the calculation of such Conversion Price shall be adjusted appropriately to reflect such event.

 

(b)          Holder’s Right of Adjusted Conversion Price. In addition to and not in limitation of the other provisions of this Section 7, at any time after the Company shall have obtained the Stockholder Approval, if the Company in any manner issues or sells or enters into any agreement to issue or sell, any Common Stock, Options or Convertible Securities (any such securities, “Variable Price Securities”), after the Exchange Date that are issuable pursuant to such agreement or convertible into or exchangeable or exercisable for shares of Common Stock at a price which varies or may vary with the market price of the shares of Common Stock, including by way of one or more reset(s) to a fixed price, but exclusive of such formulations reflecting customary anti-dilution provisions (such as share splits, share combinations, share dividends and similar transactions) (each of the formulations for such variable price being herein referred to as, the “Variable Price”), the Company shall provide written notice thereof via facsimile and overnight courier to the Holder on the date of such agreement and the issuance of such Convertible Securities or Options. From and after the date the Company enters into such agreement or issues any such Variable Price Securities, but solely if the Company shall have obtained the Stockholder Approval, the Holder shall have the right, but not the obligation, in its sole discretion to substitute the Variable Price for the Conversion Price upon conversion of this Note by designating in the Conversion Notice delivered upon any conversion of this Note that solely for purposes of such conversion the Holder is relying on the Variable Price rather than the Conversion Price then in effect. The Holder’s election to rely on a Variable Price for a particular conversion of this Note shall not obligate the Holder to rely on a Variable Price for any future conversion of this Note. 

 

(c)           Stock Combination Event Adjustments. If at any time and from time to time on or after the Exchange Date there occurs any stock split, stock dividend, stock combination recapitalization or other similar transaction involving the Common Stock (each, a “Stock Combination Event”, and such date thereof, the “Stock Combination Event Date”) and the Event Market Price is less than the Conversion Price then in effect (after giving effect to the adjustment in Section 7(a) above), then on the sixteenth (16th) Trading Day immediately following such Stock Combination Event Date, the Conversion Price then in effect on such sixteenth (16th) Trading Day (after giving effect to the adjustment in Section 7(a) above) shall be reduced (but in no event increased) to the Event Market Price. For the avoidance of doubt, if the adjustment in the immediately preceding sentence would otherwise result in an increase in the Conversion Price hereunder, no adjustment shall be made.

 

 

 

 

  

(d)         Other Events. In the event that the Company (or any Subsidiary) shall take any action to which the provisions hereof are not strictly applicable, or, if applicable, would not operate to protect the Holder from dilution or if any event occurs of the type contemplated by the provisions of this Section 7 but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company’s board of directors shall in good faith determine and implement an appropriate adjustment in the Conversion Price so as to protect the rights of the Holder, provided that no such adjustment pursuant to this Section 7(d) will increase the Conversion Price as otherwise determined pursuant to this Section 7, provided further that if the Holder does not accept such adjustments as appropriately protecting its interests hereunder against such dilution, then the Company’s board of directors and the Holder shall agree, in good faith, upon an independent investment bank of nationally recognized standing to make such appropriate adjustments, whose determination shall be final and binding absent manifest error and whose fees and expenses shall be borne by the Company.

 

(e)         Calculations. All calculations under this Section 7 shall be made by rounding to the nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.

 

(f)           Voluntary Adjustment by Company. At any time after the Company shall have obtained the Stockholder Approval, the Company may, with the prior written consent of the Required Holders, reduce the then current Conversion Price of each of the Notes to any amount and for any period of time deemed appropriate by the board of directors of the Company.

 

8.           NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation (as defined in the Exchange Agreement), Bylaws (as defined in the Exchange Agreement) or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Note, and will at all times in good faith carry out all of the provisions of this Note and take all action as may be required to protect the rights of the Holder of this Note. Without limiting the generality of the foregoing or any other provision of this Note or the other Exchange Documents, the Company (a) shall not increase the par value of any shares of Common Stock receivable upon conversion of this Note above the Conversion Price then in effect, and (b) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the conversion of this Note. Notwithstanding anything herein to the contrary, if after the sixty (60) calendar day anniversary of the Exchange Date, the Holder is not permitted to convert this Note in full for any reason (other than pursuant to restrictions set forth in Section 3(d) hereof), the Company shall use its best efforts to promptly remedy such failure, including, without limitation, obtaining such consents or approvals as necessary to permit such conversion into shares of Common Stock. 

 

 

 

 

  

9.             RESERVATION OF AUTHORIZED SHARES.

 

(a)          Reservation. So long as any Notes remain outstanding, the Company shall at all times reserve at least 300% of the number of shares of Common Stock as shall from time to time be necessary to effect the conversion, including without limitation, Alternate Conversions, of all of the Notes then outstanding (without regard to any limitations on conversions and assuming such Notes remain outstanding until the Maturity Date) (the “Required Reserve Amount”). The Required Reserve Amount (including, without limitation, each increase in the number of shares so reserved) shall be allocated pro rata among the holders of the Notes based on the original principal amount of the Notes held by each holder on the Exchange Date or increase in the number of reserved shares, as the case may be (the “Authorized Share Allocation”). In the event that a holder shall sell or otherwise transfer any of such holder’s Notes, each transferee shall be allocated a pro rata portion of such holder’s Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any Person which ceases to hold any Notes shall be allocated to the remaining holders of Notes, pro rata based on the principal amount of the Notes then held by such holders.

 

(b)          Insufficient Authorized Shares. If, notwithstanding Section 8(a), and not in limitation thereof, at any time while any of the Notes remain outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon conversion of the Notes at least a number of shares of Common Stock equal to the Required Reserve Amount (an “Authorized Share Failure”), then the Company shall immediately take all action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for the Notes then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit its stockholders’ approval of such increase in authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders that they approve such proposal. In the event that the Company is prohibited from issuing shares of Common Stock pursuant to the terms of this Note due to the failure by the Company to have sufficient shares of Common Stock available out of the authorized but unissued shares of Common Stock (such unavailable number of shares of Common Stock, the “Authorized Failure Shares”), in lieu of delivering such Authorized Failure Shares to the Holder, the Company shall pay cash in exchange for the redemption of such portion of the Conversion Amount convertible into such Authorized Failure Shares at a price equal to the sum of (i) the product of (x) such number of Authorized Failure Shares and (y) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date the Holder delivers the applicable Conversion Notice with respect to such Authorized Failure Shares to the Company and ending on the date of such issuance and payment under this Section 9(a); and (ii) to the extent the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of Authorized Failure Shares, any brokerage commissions and other out-of-pocket expenses, if any, of the Holder incurred in connection therewith. Nothing contained in Section 9(a) or this Section 9(b) shall limit any obligations of the Company under any provision of the Exchange Agreement.

 

 

 

 

  

10.           REDEMPTIONS AT THE COMPANY’S ELECTION. 

 

(a)          Company Optional Redemption. At any time after the Exchange Date (other than during a Change of Control Redemption Period), the Company shall have the right to redeem all, or any part (but no less than the lesser of (x) $500,000 in Conversion Amount of this Note and (y) all of the Conversion Amount then remaining under this Note), of the Conversion Amount then remaining under this Note (each, a“Company Optional Redemption Amount”) on the Company Optional Redemption Date (each as defined below) (each, a “Company Optional Redemption”). The portion of this Note subject to redemption pursuant to this Section 10(a) shall be redeemed by the Company in cash at a price (each, a “Company Optional Redemption Price”) equal to the greater of (i) the Company Optional Redemption Percentage of the Conversion Amount being redeemed as of the Company Optional Redemption Date and (ii) solely if any Equity Conditions Failure exists during the twenty (20) Trading Days immediately prior to such date of determination, the product of (x) the Conversion Amount being redeemed as of the Company Optional Redemption Date multiplied by (y) the quotient determined by dividing (A) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date immediately preceding such Company Optional Redemption Notice Date and ending on the Trading Day immediately prior to the date the Company makes the entire payment required to be made under this Section 10(a), by (B) the Conversion Price then in effect. The Company may exercise its right to require redemption under this Section 10(a) by delivering a written notice thereof by facsimile or electronic mail and overnight courier to all, but not less than all, of the holders of Notes (each, a “Company Optional Redemption Notice” and the date all of the holders of Notes received such notice is referred to as a “Company Optional Redemption Notice Date”). The Company may deliver only one Company Optional Redemption Notice in any three (3) Trading Day period and each Company Optional Redemption Notice shall be irrevocable. The Company Optional Redemption Notice shall (x) state the date on which the Company Optional Redemption shall occur (each, a “Company Optional Redemption Date”) which date shall not be less than five (5) Trading Days nor more than ten (10) Trading Days following the Company Optional Redemption Notice Date, and (y) state the aggregate Conversion Amount of the Notes which is being redeemed in such Company Optional Redemption from the Holder and all of the other holders of the Notes pursuant to this Section 10(a) on the Company Optional Redemption Date. All Conversion Amounts converted by the Holder after the Company Optional Redemption Notice Date shall reduce the Company Optional Redemption Amount of this Note required to be redeemed on the Company Optional Redemption Date. Redemptions made pursuant to this Section 10(a) shall be made in accordance with Section 10. In the event of the Company’s redemption of any portion of this Note under this Section 10, the Holder’s damages would be uncertain and difficult to estimate because of the parties’ inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any redemption premium due under this Section 10 is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder’s actual loss of its investment opportunity and not as a penalty. For the avoidance of doubt, the Company shall have no right to effect a Company Optional Redemption if any Event of Default has occurred and continuing, but any Event of Default shall have no effect upon the Holder’s right to convert this Note in its discretion. 

 

 

 

 

  

11.           REDEMPTIONS.

 

(a)          Mechanics. The Company shall deliver the applicable Event of Default Redemption Price to the Holder in cash within five (5) Business Days after the Company’s receipt of the Holder’s Event of Default Redemption Notice. If the Holder has submitted a Change of Control Redemption Notice in accordance with Section 5(b), the Company shall deliver the applicable Change of Control Redemption Price to the Holder in cash concurrently with the consummation of such Change of Control if such notice is received prior to the consummation of such Change of Control and within five (5) Business Days after the Company’s receipt of such notice otherwise. The Company shall deliver the applicable Company Optional Redemption Price to the Holder in cash on the applicable Company Optional Redemption Date. Notwithstanding anything herein to the contrary, in connection with any redemption hereunder at a time the Holder is entitled to receive a cash payment under any of the other Exchange Documents, at the option of the Holder delivered in writing to the Company, the applicable Redemption Price hereunder shall be increased by the amount of such cash payment owed to the Holder under such other Exchange Document and, upon payment in full or conversion in accordance herewith, shall satisfy the Company’s payment obligation under such other Exchange Document. In the event of a redemption of less than all of the Conversion Amount of this Note, the Company shall promptly cause to be issued and delivered to the Holder a new Note (in accordance with Section 18(d)) representing the outstanding Principal which has not been redeemed. In the event that the Company does not pay the applicable Redemption Price to the Holder within the time period required, at any time thereafter and until the Company pays such unpaid Redemption Price in full, the Holder shall have the option, in lieu of redemption, to require the Company to promptly return to the Holder all or any portion of this Note representing the Conversion Amount that was submitted for redemption and for which the applicable Redemption Price (together with any Late Charges thereon) has not been paid. Upon the Company’s receipt of such notice, (x) the applicable Redemption Notice shall be null and void with respect to such Conversion Amount, (y) the Company shall immediately return this Note, or issue a new Note (in accordance with Section 18(d)), to the Holder, and, solely if the Company shall have obtained the Stockholder Approval on or prior thereto, in each case the principal amount of this Note or such new Note (as the case may be) shall be increased by an amount equal to the difference between (1) the applicable Redemption Price (as the case may be, and as adjusted pursuant to this Section 10, if applicable) minus (2) the Principal portion of the Conversion Amount submitted for redemption and (z) the Conversion Price of this Note or such new Notes (as the case may be) shall be automatically adjusted with respect to each conversion effected thereafter by the Holder to the lowest of (A) the Conversion Price as in effect on the date on which the applicable Redemption Notice is voided, (B) 75% of the lowest Closing Bid Price of the Common Stock during the period beginning on and including the date on which the applicable Redemption Notice is delivered to the Company and ending on and including the date on which the applicable Redemption Notice is voided and (C) 75% of the quotient of (I) the sum of the five (5) lowest VWAPs of the Common Stock during the twenty (20) consecutive Trading Day period ending and including the Trading Day immediately preceding the applicable Conversion Date divided by (II) five (5) (it being understood and agreed that all such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period). The Holder’s delivery of a notice voiding a Redemption Notice and exercise of its rights following such notice shall not affect the Company’s obligations to make any payments of Late Charges which have accrued prior to the date of such notice with respect to the Conversion Amount subject to such notice.

 

 

 

 

  

12.          VOTING RIGHTS. The Holder shall have no voting rights as the holder of this Note, except as required by law (including, without limitation, the Delaware General Corporation Law) and as expressly provided in this Note.

 

13.           COVENANTS. Until all of the Notes have been converted, redeemed or otherwise satisfied in accordance with their terms:

 

(a)          Rank. All payments due under this Note shall be senior to all other Indebtedness of the Company and its Subsidiaries (other than Permitted Senior Indebtedness).

 

(b)         Incurrence of Indebtedness. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, incur or guarantee, assume or suffer to exist any Indebtedness (other than (i) the Indebtedness evidenced by this Note and (ii) other Permitted Indebtedness).

 

(c)          Existence of Liens. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, allow or suffer to exist any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts and contract rights) owned by the Company or any of its Subsidiaries (collectively, “Liens”) other than Permitted Liens.

 

(d)         Restricted Payments. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, redeem, defease, repurchase, repay or make any payments in respect of, by the payment of cash or cash equivalents (in whole or in part, whether by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of any Indebtedness (other than the Notes) whether by way of payment in respect of principal of (or premium, if any) or interest on, such Indebtedness if at the time such payment is due or is otherwise made or, after giving effect to such payment, (i) an event constituting an Event of Default has occurred and is continuing or (ii) an event that with the passage of time and without being cured would constitute an Event of Default has occurred and is continuing.

 

 

 

 

  

(e)         Restriction on Redemption and Cash Dividends. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, redeem, repurchase or declare or pay any cash dividend or distribution on any of its capital stock.

 

(f)           Restriction on Transfer of Assets. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, sell, lease, license, assign, transfer, spin-off, split-off, close, convey or otherwise dispose of any assets or rights of the Company or any Subsidiary owned or hereafter acquired whether in a single transaction or a series of related transactions, other than (i) sales, leases, licenses, assignments, transfers, conveyances and other dispositions of such assets or rights by the Company and its Subsidiaries in the ordinary course of business consistent with its past practice, (ii) sales of inventory and product in the ordinary course of business and (iii) sales, leases, licenses, assignments, transfers, conveyances and other dispositions of such assets or rights by the Company and its Subsidiaries in connection with joint ventures, strategic transactions and similar development arrangements on arms length business terms and conditions.

 

(g)          Maturity of Indebtedness. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, permit any Indebtedness of the Company or any of its Subsidiaries to mature or accelerate prior to the Maturity Date.

 

(h)          Change in Nature of Business. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, engage in any material line of business substantially different from those lines of business conducted by or publicly contemplated to be conducted by the Company and each of its Subsidiaries on the Exchange Date or any business substantially related or incidental thereto. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, modify its or their corporate structure or purpose.

 

(i)           Preservation of Existence, Etc. Except for the dissolution of any Inactive Subsidiary (as defined in the Exchange Agreement), the Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its existence, rights and privileges, and become or remain, and cause each of its Subsidiaries to become or remain, duly qualified and in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary.

 

(j)          Maintenance of Properties, Etc. Except as provided on Schedule 13(j), the Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, all of its properties which are necessary or useful in the proper conduct of its business in good working order and condition, ordinary wear and tear excepted, and comply, and cause each of its Subsidiaries to comply, at all times with the provisions of all leases to which it is a party as lessee or under which it occupies property, so as to prevent any loss or forfeiture thereof or thereunder.

 

 

 

 

  

(k)          Maintenance of Intellectual Property. Except as provided on Schedule 13(k), the Company will, and will cause each of its Subsidiaries to, take all action necessary or advisable to maintain all of the intellectual property of the Company and/or any of its Subsidiaries that are necessary or material to the conduct of its business in full force and effect.

 

(l)          Maintenance of Insurance. The Company shall maintain, and cause each of its Subsidiaries to maintain, insurance with responsible and reputable insurance companies or associations (including, without limitation, comprehensive general liability, hazard, rent and business interruption insurance) with respect to its properties (including all real properties leased or owned by it) and business, in such amounts and covering such risks as is required by any governmental authority having jurisdiction with respect thereto or as is carried generally in accordance with sound business practice by companies in similar businesses similarly situated.

 

(m)         Transactions with Affiliates. The Company shall not, nor shall it permit any of its Subsidiaries to, enter into, renew, extend or be a party to, any transaction or series of related transactions (including, without limitation, the purchase, sale, lease, transfer or exchange of property or assets of any kind or the rendering of services of any kind) with any affiliate, except in the ordinary course of business in a manner and to an extent consistent with past practice and necessary or desirable for the prudent operation of its business, for fair consideration and on terms no less favorable to it or its Subsidiaries than would be obtainable in a comparable arm’s length transaction with a Person that is not an affiliate thereof.

 

(n)         Restricted Issuances. The Company shall not, directly or indirectly, without the prior written consent of the holders of a majority in aggregate principal amount of the Notes then outstanding, (i) issue any Notes (other than as contemplated by the Exchange Agreement and the Notes), (ii) issue any other securities that would cause a breach or default under the Notes or (iii) until the Release Date (as defined in the Exchange Agreement), have any outstanding Indebtedness under the Permitted Senior Indebtedness or borrow any additional amounts under the Permitted Senior Indebtedness. 

 

(o)          Independent Investigation. At the request of the Holder either (x) at any time when an Event of Default has occurred and is continuing, (y) upon the occurrence of an event that with the passage of time or giving of notice would constitute an Event of Default or (z) at any time the Holder reasonably believes an Event of Default may have occurred or be continuing, the Company shall hire an independent, reputable investment bank selected by the Company and approved by the Holder to investigate as to whether any breach of this Note has occurred (the “Independent Investigator”). If the Independent Investigator determines that such breach of this Note has occurred, the Independent Investigator shall notify the Company of such breach and the Company shall deliver written notice to each holder of a Note of such breach. In connection with such investigation, the Independent Investigator may, during reasonable business hours and upon reasonable notice, inspect all contracts, books, records, personnel, offices and other facilities and properties of the Company and its Subsidiaries and, to the extent available to the Company after the Company uses reasonable efforts to obtain them, the records of its legal advisors and accountants (including the accountants’ work papers) and any books of account, records, reports and other papers not contractually required of the Company to be confidential or secret, or subject to attorney-client or other evidentiary privilege, and the Independent Investigator may make such copies and inspections thereof as the Independent Investigator may reasonably request. The Company shall furnish the Independent Investigator with such financial and operating data and other information with respect to the business and properties of the Company as the Independent Investigator may reasonably request. The Company shall permit the Independent Investigator to discuss the affairs, finances and accounts of the Company with, and to make proposals and furnish advice with respect thereto to, the Company’s officers, directors, key employees and independent public accountants or any of them (and by this provision the Company authorizes said accountants to discuss with such Independent Investigator the finances and affairs of the Company and any Subsidiaries), all at such reasonable times, upon reasonable notice, and as often as may be reasonably requested.

 

 

 

 

  

14.           SECURITY. This Note is secured to the extent and in the manner set forth in the Exchange Documents (including, without limitation, the Security Agreement, the other Security Documents and the Guaranties).

 

15.           DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 7, if the Company shall declare or make any dividend or other distributions of its assets (or rights to acquire its assets) to any or all holders of shares of Common Stock, by way of return of capital or otherwise (including without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (the “Distributions”), then the Holder will be entitled to such Distributions as if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without taking into account any limitations or restrictions on the convertibility of this Note and assuming for such purpose that the Note was converted at the Alternate Conversion Price as of the applicable record date) immediately prior to the date on which a record is taken for such Distribution or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for such Distributions (provided, however, that to the extent that the Holder’s right to participate in any such Distribution would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution to the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Distribution (and beneficial ownership) to the extent of any such excess) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such Distribution (and any Distributions declared or made on such initial Distribution or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had been no such limitation).

 

 

 

 

  

16.          AMENDING THE TERMS OF THIS NOTE. The prior written consent of the Company and the Holder shall be required for any change, waiver or amendment to this Note.

 

17.           TRANSFER. This Note and any shares of Common Stock issued upon conversion of this Note may be offered, sold, assigned or transferred by the Holder without the consent of the Company

 

18.           REISSUANCE OF THIS NOTE.

 

(a)          Transfer. If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Note (in accordance with Section 18(d)), registered as the Holder may request, representing the outstanding Principal being transferred by the Holder and, if less than the entire outstanding Principal is being transferred, a new Note (in accordance with Section 18(d)) to the Holder representing the outstanding Principal not being transferred. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of Section 3(c)(iii) following conversion or redemption of any portion of this Note, the outstanding Principal represented by this Note may be less than the Principal stated on the face of this Note.

 

(b)         Lost, Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Note (as to which a written certification and the indemnification contemplated below shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall execute and deliver to the Holder a new Note (in accordance with Section 18(d)) representing the outstanding Principal.

 

(c)          Note Exchangeable for Different Denominations. This Note is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Note or Notes (in accordance with Section 18(d) and in principal amounts of at least $1,000) representing in the aggregate the outstanding Principal of this Note, and each such new Note will represent such portion of such outstanding Principal as is designated by the Holder at the time of such surrender.

 

(d)          Issuance of New Notes. Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new Note (i) shall be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding (or in the case of a new Note being issued pursuant to Section 18(a) or Section 18(c), the Principal designated by the Holder which, when added to the principal represented by the other new Notes issued in connection with such issuance, does not exceed the Principal remaining outstanding under this Note immediately prior to such issuance of new Notes), (iii) shall have an issuance date, as indicated on the face of such new Note, which is the same as the Original Issuance Date (as set forth on the face of this Note), (iv) shall have the same rights and conditions as this Note, (v) shall have an exchange date, as indicated on the face of such new Note, which is the same as the Exchange Date of this Note, (vi) shall have a second exchange date, as indicated on the face of such new Note, which is the same as the Second Exchange Date of this Note and (vii) shall represent accrued and unpaid Interest and Late Charges on the Principal and Interest of this Note, from the Exchange Date.

 

 

 

 

  

19.           REMEDIES, CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note and any of the other Exchange Documents at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to specific performance and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such case without the necessity of proving actual damages and without posting a bond or other security. The Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Note (including, without limitation, compliance with Section 7).

 

20.          PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this Note or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership of the Company or other proceedings affecting Company creditors’ rights and involving a claim under this Note, then the Company shall pay the costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, without limitation, attorneys’ fees and disbursements. 

 

21.           CONSTRUCTION; HEADINGS. This Note shall be deemed to be jointly drafted by the Company and the initial Holder and shall not be construed against any such Person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect the interpretation of, this Note. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include” and words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,” “hereunder,” “hereof” and words of like import refer to this entire Note instead of just the provision in which they are found. Unless expressly indicated otherwise, all section references are to sections of this Note. Terms used in this Note and not otherwise defined herein, but defined in the other Exchange Documents, shall have the meanings ascribed to such terms on the Exchange Date in such other Exchange Documents unless otherwise consented to in writing by the Holder.

 

 

 

 

  

22.          FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party. Notwithstanding the foregoing, nothing contained in this Section 22 shall permit any waiver of any provision of Section 3(d).

 

23.           DISPUTE RESOLUTION. 

 

(a)           Submission to Dispute Resolution.

 

(i)     In the case of a dispute relating to a Closing Bid Price, a Closing Sale Price, a Conversion Price, an Alternate Conversion Price, a VWAP or a fair market value or the arithmetic calculation of a Conversion Rate, or the applicable Redemption Price (as the case may be) (including, without limitation, a dispute relating to the determination of any of the foregoing), the Company or the Holder (as the case may be) shall submit the dispute to the other party via facsimile or electronic mail (A) if by the Company, within two (2) Business Days after the occurrence of the circumstances giving rise to such dispute or (B) if by the Holder at any time after the Holder learned of the circumstances giving rise to such dispute. If the Holder and the Company are unable to promptly resolve such dispute relating to such Closing Bid Price, such Closing Sale Price, such Conversion Price, such Alternate Conversion Price, such VWAP or such fair market value, or the arithmetic calculation of such Conversion Rate or such applicable Redemption Price (as the case may be), at any time after the second (2nd) Business Day following such initial notice by the Company or the Holder (as the case may be) of such dispute to the Company or the Holder (as the case may be), then the Holder may, with the consent of the Company (not to be unreasonably withheld), select an independent, reputable investment bank to resolve such dispute.

 

(ii)     The Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered in accordance with the first sentence of this Section 23 and (B) written documentation supporting its position with respect to such dispute, in each case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following the date on which the Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents referred to in the immediately preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute Documentation”) (it being understood and agreed that if either the Holder or the Company fails to so deliver all of the Required Dispute Documentation by the Dispute Submission Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer be entitled to (and hereby waives its right to) deliver or submit any written documentation or other support to such investment bank with respect to such dispute and such investment bank shall resolve such dispute based solely on the Required Dispute Documentation that was delivered to such investment bank prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Company and the Holder or otherwise requested by such investment bank, neither the Company nor the Holder shall be entitled to deliver or submit any written documentation or other support to such investment bank in connection with such dispute (other than the Required Dispute Documentation).

 

 

 

 

  

(iii)     The Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company and the Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The fees and expenses of such investment bank shall be borne solely by the Company, and such investment bank’s resolution of such dispute shall be final and binding upon all parties absent manifest error.

 

(b)          Miscellaneous. The Company expressly acknowledges and agrees that (i) this Section 23 constitutes an agreement to arbitrate between the Company and the Holder (and constitutes an arbitration agreement) under § 7501, et seq. of the New York Civil Practice Law and Rules (“CPLR”) and that the Holder is authorized to apply for an order to compel arbitration pursuant to CPLR § 7503(a) in order to compel compliance with this Section 23, (ii) the terms of this Note and each other applicable Exchange Document shall serve as the basis for the selected investment bank’s resolution of the applicable dispute, such investment bank shall be entitled (and is hereby expressly authorized) to make all findings, determinations and the like that such investment bank determines are required to be made by such investment bank in connection with its resolution of such dispute and in resolving such dispute such investment bank shall apply such findings, determinations and the like to the terms of this Note and any other applicable Exchange Documents, (iii) the Holder (and only the Holder), in its sole discretion, shall have the right to submit any dispute described in this Section 23 to any state or federal court sitting in The City of New York, Borough of Manhattan in lieu of utilizing the procedures set forth in this Section 23 and (iv) nothing in this Section 23 shall limit the Holder from obtaining any injunctive relief or other equitable remedies (including, without limitation, with respect to any matters described in this Section 23).

 

24.           NOTICES; CURRENCY; PAYMENTS.

 

(a)          Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in accordance with Section 8.4 of the Exchange Agreement. The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Note, including in reasonable detail a description of such action and the reason therefor. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon any adjustment of the Conversion Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock, (B) with respect to any grant, issuances, or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder.

 

 

 

 

  

(b)          Currency. All dollar amounts referred to in this Note are in United States Dollars (“U.S. Dollars”), and all amounts owing under this Note shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be converted into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate” means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Note, the U.S. Dollar exchange rate as published in the Wall Street Journal on the relevant date of calculation (it being understood and agreed that where an amount is calculated with reference to, or over, a period of time, the date of calculation shall be the final date of such period of time).

 

(c)          Payments. Whenever any payment of cash is to be made by the Company to any Person pursuant to this Note, unless otherwise expressly set forth herein, such payment shall be made in lawful money of the United States of America by a certified check drawn on the account of the Company and sent via overnight courier service to such Person at such address as previously provided to the Company in writing, provided that the Holder may elect to receive a payment of cash via wire transfer of immediately available funds by providing the Company with prior written notice setting out such request and the Holder’s wire transfer instructions. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a Business Day, the same shall instead be due on the next succeeding day which is a Business Day. Any amount of Principal and/or other amounts due under the Exchange Documents which is not paid when due (except to the extent such Principal and/or other amounts are then accruing Interest at the Default Rate) shall result in a late charge being incurred and payable by the Company in an amount equal to interest on such amount at the rate of twelve percent (12%) per annum from the date such amount was due until the same is paid in full (“Late Charge”). 

 

25.          CANCELLATION. After all Principal, accrued Interest, Late Charges and other amounts at any time owed on this Note have been paid in full, this Note shall automatically be deemed canceled, shall be surrendered to the Company for cancellation and shall not be reissued.

 

26.          WAIVER OF NOTICE. To the extent permitted by law, the Company hereby irrevocably waives demand, notice, presentment, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note and the Exchange Agreement.

 

 

 

 

  

27.           GOVERNING LAW. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Note shall be governed by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Except as otherwise required by Section 23 above, the Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein (i) shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder or (ii) shall limit, or shall be deemed or construed to limit, any provision of Section 23. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

28.     JUDGMENT CURRENCY.

 

(a)           If for the purpose of obtaining or enforcing judgment against the Company in any court in any jurisdiction it becomes necessary to convert into any other currency (such other currency being hereinafter in this Section 28 referred to as the “Judgment Currency”) an amount due in U.S. dollars under this Note, the conversion shall be made at the Exchange Rate prevailing on the Trading Day immediately preceding:

 

(i)     the date actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any other jurisdiction that will give effect to such conversion being made on such date: or 

 

(ii)     the date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as of which such conversion is made pursuant to this Section 28(a)(ii) being hereinafter referred to as the “Judgment Conversion Date”).

 

(b)           If in the case of any proceeding in the court of any jurisdiction referred to in Section 28(a)(ii) above, there is a change in the Exchange Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable party shall pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the Exchange Rate prevailing on the date of payment, will produce the amount of US dollars which could have been purchased with the amount of Judgment Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion Date.

 

 

 

 

  

(c)           Any amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained for any other amounts due under or in respect of this Note.

 

29.          SEVERABILITY. If any provision of this Note is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Note so long as this Note as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

30.          MAXIMUM PAYMENTS. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Company to the Holder and thus refunded to the Company.

 

31.          CERTAIN DEFINITIONS. For purposes of this Note, the following terms shall have the following meanings:

 

(a)           “1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.

 

(b)           “1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

 

(c)          “Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person, it being understood for purposes of this definition that “control” of a Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

 

(d)           “Alternate Conversion Price” means, with respect to any Alternate Conversion that price which shall be the greater of (i) the Floor Price and (ii) lowest of (x) the applicable Conversion Price as in effect on the applicable Conversion Date of the applicable Alternate Conversion, (y) 88% of the lowest VWAPs of the Common Stock during the ten (10) consecutive Trading Day period ending and including the date of delivery or deemed delivery of the applicable Conversion Notice (such period, the “Alternate Conversion Measuring Period”). All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction that proportionately decreases or increases the Common Stock during such Alternate Conversion Measuring Period.

 

 

 

 

  

(e)           “Attribution Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder funds or managed accounts, currently, or from time to time after the Exchange Date, directly or indirectly managed or advised by the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could be aggregated with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For clarity, the purpose of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage. 

 

(f)            “Bloomberg” means Bloomberg, L.P.

 

(g)         “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed.

 

(h)           “Change of Control” means any Fundamental Transaction other than (i) any merger of the Company or any of its, direct or indirect, wholly-owned Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization or reclassification of the shares of Common Stock in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization or reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and, directly or indirectly, are, in all material respects, the holders of the voting power of the surviving entity (or entities with the authority or voting power to elect the members of the board of directors (or their equivalent if other than a corporation) of such entity or entities) after such reorganization, recapitalization or reclassification, or (iii) pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company or any of its Subsidiaries.

 

(i)            “Change of Control Redemption Premium” means 125%.

 

(j)            “Closing Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price (as the case may be) then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price (as the case may be) of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 23. All such determinations shall be appropriately adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions during such period.

 

 

 

 

  

(k)           “Common Stock” means (i) the Company’s shares of common stock, $0.01 par value per share, and (ii) any capital stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.

 

(l)            “Company Optional Redemption Percentage” means, as of any date of determination, as applicable: (i) from the Exchange Date through and including the 179th day anniversary of the Exchange Date, 115%, (ii) from the 180th day anniversary of the Exchange Date through and including the 269th day anniversary of the Exchange Date, 120% or (iii) from and after the 270th day anniversary of the Exchange Date, 125%.

 

(m)          “Contingent Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any Indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto. 

 

(n)          “Convertible Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares of Common Stock.

 

(o)        “Current Information Failure” means, as of any date of determination, either (x) the Company fails for any reason to satisfy the requirements of Rule 144(c)(1), including, without limitation, the failure to satisfy the current public information requirement under Rule 144(c), as of such date of determination or (y) if the Company has ever been an issuer described in Rule 144(i)(1)(i) or becomes such an issuer in the future, the Company fails to satisfy any condition set forth in Rule 144(i)(2) as of such date of determination.

 

 

 

 

  

(p)         “Current Subsidiary” means any Person in which the Company on the Exchange Date, directly or indirectly, (i) owns any of the outstanding capital stock or holds any equity or similar interest of such Person or (ii) controls or operates all or any part of the business, operations or administration of such Person, and all of the foregoing, collectively, “Current Subsidiaries”.

 

(q)           “Eligible Market” means The New York Stock Exchange, the NYSE MKT, the Nasdaq Global Select Market, the Nasdaq Global Market, the OTCQB, the OTCQX or the Principal Market.

 

(r)            “Equity Conditions” means, with respect to any given date of determination: (i) all Registrable Securities shall be eligible for resale by the Holder pursuant to Rule 144 (as defined in the Exchange Agreement) without restriction or the need for registration under any applicable federal or state securities laws (in each case, disregarding any limitation on conversion of the Notes, other issuance of securities with respect to the Notes); (ii) on each day during the period beginning thirty calendar days prior to the applicable date of determination and ending on and including the applicable date of determination (the “Equity Conditions Measuring Period”), the Common Stock (including all Registrable Securities) is listed or designated for quotation (as applicable) on an Eligible Market and shall not have been suspended from trading on an Eligible Market (other than suspensions of not more than two (2) days and occurring prior to the applicable date of determination due to business announcements by the Company) nor shall delisting or suspension by an Eligible Market have been threatened (with a reasonable prospect of delisting occurring after giving effect to all applicable notice, appeal, compliance and hearing periods) or reasonably likely to occur or pending as evidenced by (A) a writing by such Eligible Market or (B) the Company falling below the minimum listing maintenance requirements of the Eligible Market on which the Common Stock is then listed or designated for quotation (as applicable); (iii) during the Equity Conditions Measuring Period, the Company shall have delivered all shares of Common Stock issuable upon conversion of this Note on a timely basis as set forth in Section 3 hereof and all other shares of capital stock required to be delivered by the Company on a timely basis as set forth in the other Exchange Documents; (iv) any shares of Common Stock to be issued in connection with the event requiring determination (or issuable upon conversion of the Conversion Amount being redeemed in the event requiring this determination) may be issued in full without violating Section 3(d) hereof; (v) any shares of Common Stock to be issued in connection with the event requiring determination (or issuable upon conversion of the Conversion Amount being redeemed in the event requiring this determination (without regards to any limitations on conversion set forth herein)) may be issued in full without violating the rules or regulations of the Eligible Market on which the Common Stock is then listed or designated for quotation (as applicable); (vi) the Company shall have no knowledge of any fact that would reasonably be expected to cause any Registrable Securities to not be eligible for resale by the Holder pursuant to Rule 144 without restriction or the need for registration under any applicable federal or state securities laws (in each case, disregarding any limitation on conversion of the Notes, other issuance of securities with respect to the Notes) and no Current Information Failure exists or is continuing; (vii) the Holder shall not be in possession of any material, non-public information provided to any of them by the Company, any of its Subsidiaries or any of their respective affiliates, employees, officers, representatives, agents or the like; (viii) the Company otherwise shall have been in compliance with each, and shall not have breached any representation or warranty in any material respect (other than representations or warranties subject to material adverse effect or materiality, which may not be breached in any respect) or breached any covenant or other term or condition of any Exchange Document, including, without limitation, the Company shall not have failed to timely make any payment pursuant to any Exchange Document; (ix) there shall not have occurred any Volume Failure as of such applicable date of determination; (x) on the applicable date of determination (A) no Authorized Share Failure shall exist or be continuing and the applicable Required Minimum Securities Amount of shares of Common Stock are available under the certificate of incorporation of the Company and reserved by the Company to be issued pursuant to the Notes and (B) all shares of Common Stock to be issued in connection with the event requiring this determination (or issuable upon conversion of the Conversion Amount being redeemed in the event requiring this determination (without regards to any limitations on conversion set forth herein)) may be issued in full without resulting in an Authorized Share Failure; (xi) on each day during the Equity Conditions Measuring Period, there shall not have occurred and there shall not exist an Event of Default or an event that with the passage of time or giving of notice would constitute an Event of Default; and (xii) the shares of Common Stock issuable pursuant the event requiring the satisfaction of the Equity Conditions are duly authorized and listed and eligible for trading without restriction on an Eligible Market.

 

 

 

 

  

(s)          “Equity Conditions Failure” means that on any day during the period commencing fifteen (15) Trading Days prior to (i) the applicable Mandatory Conversion Notice Date through, and including, the applicable Mandatory Conversion Date, (ii) the applicable Company Optional Redemption Notice Date through, and including, the applicable Company Optional Redemption Date or (iii) the applicable Change of Control Notice Date through, and including, the applicable Change of Control Redemption Date or (iv) the applicable Event of Default Right Commencement Date through, and including, the applicable Event of Default Redemption Date, the Equity Conditions have not been satisfied (or waived in writing by the Holder).

 

(t)           “Event Market Price” means, with respect to any Stock Combination Event Date, the quotient determined by dividing (x) the sum of the VWAP of the Common Stock for each of the five (5) Trading Days with the lowest VWAP of the Common Stock during the fifteen (15) consecutive Trading Day period ending and including the Trading Day immediately preceding the sixteenth (16th) Trading Day after such Stock Combination Event Date, divided by (y) five (5).

 

(u)           “Exchange Date” means March 23, 2017.

 

(v)           “Exchanged Non-Convertible Note” shall have the meaning as set forth in the Exchange Agreement.

 

 

 

 

  

(w)          “Floor Price” means $0.40.

 

(x)            “Fundamental Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate, acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common Stock, (B) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such Subject Entities as of the date of this Note calculated as if any shares of Common Stock held by all such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction requiring other shareholders of the Company to surrender their shares of Common Stock without approval of the shareholders of the Company or (C) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of or the entering into any other instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct this definition or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument or transaction.

 

 

 

 

  

(y)           “GAAP” means United States generally accepted accounting principles, consistently applied.

 

(z)            “Group” means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5 thereunder.

 

(aa)         “Indebtedness” of any Person means, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (including, without limitation, “capital leases” in accordance with GAAP) (other than trade payables entered into in the ordinary course of business consistent with past practice), (C) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (E) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property), (F) all monetary obligations under any leasing or similar arrangement which, in connection with GAAP, consistently applied for the periods covered thereby, is classified as a capital lease, (G) all indebtedness referred to in clauses (A) through (F) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (A) through (G) above.

 

(bb)         “Interest Rate” means one and one hundredth percent (1.01%) per annum, as may be adjusted from time to time in accordance with Section 2.

 

(cc)         “Maturity Date” shall mean June 23, 2018; provided, however, the Maturity Date may be extended at the option of the Holder (i) in the event that, and for so long as, an Event of Default shall have occurred and be continuing or any event shall have occurred and be continuing that with the passage of time and the failure to cure would result in an Event of Default or (ii) through the date that is twenty (20) Business Days after the consummation of a Fundamental Transaction in the event that a Fundamental Transaction is publicly announced or a Change of Control Notice is delivered prior to the Maturity Date, provided further that if a Holder elects to convert some or all of this Note pursuant to Section 3 hereof, and the Conversion Amount would be limited pursuant to Section 3(d) hereunder, the Maturity Date shall automatically be extended until such time as such provision shall not limit the conversion of this Note.

 

 

 

 

  

(dd)        “New Subsidiary” means, as of any date of determination, any Person in which the Company after the Exchange Date, directly or indirectly, (i) owns or acquires any of the outstanding capital stock or holds any equity or similar interest of such Person or (ii) controls or operates all or any part of the business, operations or administration of such Person, and all of the foregoing, collectively, “New Subsidiaries”.

 

(ee)         “Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.

 

(ff)        “Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.

 

(gg)         “Permitted Indebtedness” means (i) Indebtedness evidenced by this Note, (ii) Indebtedness secured by Permitted Liens or unsecured but as described in clauses (iv) and (v) of the definition of Permitted Liens, (iii) Permitted Senior Indebtedness and (iv) Indebtedness set forth on Schedule 2.15(iii) to the Exchange Agreement.

 

(hh)        “Permitted Liens” means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by appropriate proceedings for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in the ordinary course of business by operation of law with respect to a liability that is not yet due or delinquent, (iii) any Lien created by operation of law, such as materialmen’s liens, mechanics’ liens and other similar liens, arising in the ordinary course of business with respect to a liability that is not yet due or delinquent or that are being contested in good faith by appropriate proceedings, (iv) Liens (A) upon or in any equipment acquired or held by the Company or any of its Subsidiaries to secure the purchase price of such equipment or Indebtedness incurred solely for the purpose of financing the acquisition or lease of such equipment, or (B) existing on such equipment at the time of its acquisition, provided that the Lien is confined solely to the property so acquired and improvements thereon, and the proceeds of such equipment, in either case, with respect to Indebtedness in an aggregate amount not to exceed $250,000, (v) Liens incurred in connection with the extension, renewal or refinancing of the Indebtedness secured by Liens of the type described in clause (iv) above, provided that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the Indebtedness being extended, renewed or refinanced does not increase, (vi) Liens in favor of customs and revenue authorities arising as a matter of law to secure payments of custom duties in connection with the importation of goods, (vii) Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Section 4(a)(x), (viii) Liens with respect to the Permitted Senior Indebtedness Collateral, and (ix) Liens set forth on Schedule 2.15(iii) to the Exchange Agreement..

 

 

 

 

  

(ii)         “Permitted Senior Indebtedness” means that certain Credit and Security Agreement dated as of September 28, 2016, by and between Interpace Diagnostic Group, Inc., Interpace Diagnostics Corporation, Interpace Diagnostics LLC, as borrowers, and SCM Specialty Finance Opportunities Fund, L.P., as lender as in effect as of the Subscription Date, provided, however, that the aggregate outstanding principal amount of such Indebtedness permitted hereunder does not at any time exceed (x) if prior to the Release Date, $0.00 or (y) from and after the Release Date, $1.2 million. 

 

(jj)           “Permitted Senior Indebtedness Collateral” means any Collateral (as defined in the Security Agreement) secured by Permitted Liens by the holders of Permitted Senior Indebtedness as in effect as of the Subscription Date.

 

(kk)       “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity or a government or any department or agency thereof.

 

(ll)           “Principal Market” means the Nasdaq Capital Market.

 

(mm)       “Redemption Notices” means, collectively, the Event of Default Redemption Notices, the Company Optional Redemption Notices, and the Change of Control Redemption Notices, and each of the foregoing, individually, a “Redemption Notice.”

 

(nn)        “Redemption Premium” means 125%.

 

(oo)        “Redemption Prices” means, collectively, Event of Default Redemption Prices, the Company Optional Redemption Prices, and the Change of Control Redemption Prices, and each of the foregoing, individually, a “Redemption Price.”

 

(pp)        “SEC” means the United States Securities and Exchange Commission or the successor thereto.

 

(qq)        “Second Exchange Date” means April [18], 2017.

 

(rr)         “Stockholder Approval” means the approval by the requisite number of stockholders of the Company, in accordance with the rules and regulations of the Principal Market (including, without limitation, Nasdaq Listing Rule 5635(d)), to issue Common Stock upon conversion on this Note in accordance with terms set forth herein.

 

(ss)        “Subsidiaries” means, as of any date of determination, collectively, all Current Subsidiaries and all New Subsidiaries, and each of the foregoing, individually, a “Subsidiary.”

 

(tt)          “Subject Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.

 

 

 

 

  

(uu)      “Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction shall have been entered into.

 

(vv)        “Trading Day” means, as applicable, (x) with respect to all price or trading volume determinations relating to the Common Stock, any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded, provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the Holder or (y) with respect to all determinations other than price determinations relating to the Common Stock, any day on which The New York Stock Exchange (or any successor thereto) is open for trading of securities.

 

(ww)       “Volume Failure” means, with respect to a particular date of determination, the aggregate daily dollar trading volume (as reported on Bloomberg) of the Common Stock on the Principal Market on any Trading Days during the fifteen (15) Trading Day period ending on the Trading Day immediately preceding such date of determination (such period, the “Volume Failure Measuring Period”), is less than $100,000 (as adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions occurring after the Exchange Date). All such determinations to be appropriately adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions during such Volume Failure Measuring Period.

 

(xx)          “VWAP” means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market (or, if the Principal Market is not the principal trading market for such security, then on the principal securities exchange or securities market on which such security is then traded) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “HP” function (set to weighted average) or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the VWAP cannot be calculated for such security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 23. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction during such period.

 

 

 

 

  

32.          DISCLOSURE. Upon receipt or delivery by the Company of any notice in accordance with the terms of this Note, unless the Company has in good faith determined that the matters relating to such notice do not constitute material, non-public information relating to the Company or any of its Subsidiaries, the Company shall within one (1) Business Day after any such receipt or delivery publicly disclose such material, non-public information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, non-public information relating to the Company or any of its Subsidiaries, the Company so shall indicate to the Holder contemporaneously with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed to presume that all matters relating to such notice do not constitute material, non-public information relating to the Company or any of its Subsidiaries. If the Company or any of its Subsidiaries provides material non-public information to the Holder that is not simultaneously filed in a Current Report on Form 8-K and the Holder has not agreed to receive such material non-public information, the Company hereby covenants and agrees that the Holder shall not have any duty of confidentiality to the Company, any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agents with respect to, or a duty to any of the foregoing not to trade on the basis of, such material non-public information. Nothing contained in this Section 32 shall limit any obligations of the Company, or any rights of the Holder, under the Exchange Agreement.

 

[signature page follows]

 

 

 

 

  

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed as of the Second Exchange Date set out above.

 

 

	
 
	
INTERPACE DIAGNOSTICS GROUP, INC.
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
 
	
 

	
 
	
 
	
Name:
	
 

	
 
	
 
	
Title:
	
 

  

 

Senior Convertible Note - Signature Page 

 

  

EXHIBIT I

 

INTERPACE DIAGNOSTICS GROUP, INC. 
CONVERSION NOTICE

 

Reference is made to the Senior Secured Convertible Note (the “Note”) issued to the undersigned by Interpace Diagnostics Group, Inc., a Delaware corporation (the “Company”). In accordance with and pursuant to the Note, the undersigned hereby elects to convert the Conversion Amount (as defined in the Note) of the Note indicated below into shares of Common Stock, $0.01 par value per share (the “Common Stock”), of the Company, as of the date specified below. Capitalized terms not defined herein shall have the meaning as set forth in the Note.

 

 

	
Date of Conversion:
	  
	 	 
	
Aggregate Principal to be converted:
	  
	 	 
	
Aggregate accrued and unpaid Interest and accrued and unpaid Late Charges with respect to such portion of the Aggregate Principal and such Aggregate Interest to be converted:
	  
	 	 
	
AGGREGATE CONVERSION AMOUNT
TO BE CONVERTED:
	  
	 
	
Please confirm the following information:

	 
	
Conversion Price:
	  
	 	 
	
Number of shares of Common Stock to be issued:
	  
	 
	
☐           If this Conversion Notice is being delivered with respect to an Alternate Conversion, check here if Holder is electing to use the following Alternate Conversion Price:____________

 

Please issue the Common Stock into which the Note is being converted to Holder, or for its benefit, as follows:

 

☐        Check here if requesting delivery as a certificate to the following name and to the following address:

	 
	
Issue to:
	  
	  	  
	  	  

  

 

 

 

 

	
☐       Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows: 

	 	 
	
DTC Participant:
	  
	 	 
	
DTC Number:
	  
	 	 
	
Account Number:
	  

 

 

	
Date: _____________ __,          
	 
	 	 
	_______________________	 
	Name of Registered Holder	 
	 	 
	 	 
	
By: _______________________Name: 
Title:

 

 

	Tax ID:_____________________
	 
	Facsimile:___________________
	 
	E-mail Address: 

 

 

 

 

 

Exhibit II

 

ACKNOWLEDGMENT

 

The Company hereby (a) acknowledges this Conversion Notice, (b) certifies that the above indicated number of shares of Common Stock [are][are not] eligible to be resold by the Holder either (i) pursuant to Rule 144 (subject to the Holder’s execution and delivery to the Company of a customary 144 representation letter) or (ii) an effective and available registration statement and (c) hereby directs _________________ to issue the above indicated number of shares of Common Stock in accordance with the Transfer Agent Instructions dated _____________, 20__ from the Company and acknowledged and agreed to by ________________________.

 

 

	
 
	
INTERPACE DIAGNOSTICS GROUP, INC. 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
 
	
 

	
 
	
 
	
Name:
	
 

	
 
	
 
	
Title:

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