Document:

Exhibit

Exhibit 10.12

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into effective as of November 5, 2018 between the FEDERAL HOME LOAN BANK OF CINCINNATI, a Federally chartered corporation (the “Bank”), and _____________________, a director or senior officer of the Bank (“Indemnitee”).
RECITALS
A.The Bank recognizes that competent and experienced persons are increasingly reluctant to serve or to continue to serve as directors and senior officers (as defined in Section 1) of corporations unless they are protected by comprehensive liability insurance or indemnification, or both, due to increased exposure to litigation costs and risks resulting from their service to such corporations and due to the fact that the exposure to liability frequently bears no reasonable relationship to their compensation;
B.The statutes and judicial decisions regarding the duties of directors and senior officers are often difficult to apply, ambiguous or conflicting, and therefore fail to provide such directors and senior officers with adequate, reliable knowledge of legal risks to which they are exposed or information regarding the proper course of action to take; 
C.The Bank recognizes that plaintiffs often seek damages in large amounts and the costs of litigation may be so enormous (whether or not the case is meritorious) that the defense and/or settlement of such litigation is often beyond the personal resources of directors and senior officers;
D.It is critically important to the Bank that it be able to attract and retain the most capable persons reasonably available to serve as directors and senior officers of the Bank;
E.Indemnitee is a director or senior officer of the Bank and Indemnitee’s willingness to continue to serve in such capacity is predicated, in substantial part, upon the Bank’s willingness to indemnify Indemnitee in accordance with the principles reflected above, to the fullest extent permitted by the laws of the state of Ohio, and upon other undertakings set forth in this Agreement;
F.The Bank, after reasonable review, believes that the interests of the Bank and its member-stockholders are best served by a combination of liability insurance and personal indemnification by the Bank of its directors and senior officers;
G.Subject to the applicable provisions of the Federal Home Loan Bank Act (the “Act”) and the rules and regulations of the Federal Housing Finance Agency (the “Agency”), both as amended currently and from time to time in the future (the “Regulations”), the Bank’s bylaws (the “Bylaws”) require the Bank to indemnify its directors and officers.  The Bylaws 

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expressly provide that the indemnification provisions set forth therein are not exclusive, and contemplate that contracts such as this Agreement may be entered into between the Bank and its directors and senior officers with respect to indemnification;
H. In recognition of the need to provide Indemnitee with contractual protection against personal liability, in order to procure Indemnitee’s continued service as a director or senior officer of the Bank and to enhance Indemnitee’s ability to serve the Bank in an effective manner, and in order to provide such protection pursuant to express contract rights (intended to be enforceable irrespective of, among other things, any amendment to the Bank’s charter or Bylaws, any change in the composition of the Bank’s Board of Directors (the “Board”) or any change in the director’s or senior officer’s status through retirement or resignation, the Bank wishes to provide in this Agreement for the indemnification of and the advancement of Expenses (as defined in Section 1.2) to Indemnitee as set forth in this Agreement and for the continued coverage of Indemnitee under the Bank’s directors’ and senior officers’ liability insurance policies; 
I.In light of the considerations referred to in the preceding recitals, it is the Bank’s intention and desire that the provisions of this Agreement be construed liberally, subject to their express terms, to maximize the protections to be provided to Indemnitee hereunder; and
J.Indemnitee is willing to continue to serve as a director and/or senior officer on the condition that he or she is furnished the indemnity provided for herein.
NOW, THEREFORE, the parties hereto agree as follows:
1.Definitions.  For purposes of this Agreement:
1.1    “Claim” means (i) any threatened, asserted, pending, or completed claim, demand, action, suit, or proceeding, whether civil, criminal, administrative, arbitrative, investigative, or other, and whether made pursuant to federal, state, or other law; and (ii) any threatened, pending, or completed inquiry or investigation, whether made, instituted or conducted by the Bank or any other person, including without limitation any federal, state, or other governmental entity, that Indemnitee determines might lead to the institution of any such claim, demand, action, suit or proceeding.
1.2    “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with defending, preparing to defend, investigating, participating, or being or preparing to be a witness in a proceeding.  Expenses also shall include expenses incurred in connection with any appeal resulting from any proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent.  Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

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1.3    “Indemnifiable Claim” means any Claim based upon, arising out of or resulting from (i) any actual, alleged, or suspected act or failure to act by Indemnitee in his or her capacity as a director or senior officer of the Bank, and/or (ii) any actual, alleged, or suspected act or failure to act by Indemnitee in respect of any business, transaction, communication, filing, disclosure or other activity of the Bank, and/or (iii) Indemnitee’s status as a current or former director or senior officer of the Bank or any actual, alleged or suspected act or failure to act by Indemnitee in connection with any obligation or restriction imposed upon Indemnitee by reason of such status.
1.4    “Indemnifiable Losses” means any and all Losses relating to, arising out of, or resulting from any Indemnifiable Claim. 
1.5    “Losses” means any and all Expenses, damages, losses, liabilities, judgments, fines, penalties (whether civil, criminal or other) and amounts paid in settlement following a final, nonappealable judgment or conviction, including without limitation all interest, assessments and other charges paid or payable in connection with or in respect of any of the foregoing.
1.6    A “proceeding” includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of the Bank or otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is or will be involved as a party, by reason of the fact that Indemnitee is or was a director of the Bank, or by reason of any action or inaction on Indemnitee’s part while acting as a director of the Bank; in each case whether or not Indemnitee is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement.
1.7    A “senior officer” includes the President, Executive Vice President, and all Senior Vice Presidents of the Bank. 
2.    Indemnification.  
2.1    Subject to and except as limited by Sections 7 and 8 hereof, the Bank shall indemnify, defend, and hold harmless Indemnitee, to the fullest extent permitted by the laws of the State of Ohio in effect on the date hereof or as such laws may from time to time hereafter be amended to increase the scope of such permitted indemnification, against any and all Indemnifiable Losses.
2.2    If Indemnitee is entitled under any provision of this Agreement to indemnification by the Bank for some or a portion of any Losses, but not for the entire amount thereof, the Bank shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.
3.    Advancement of Expenses.  Subject to and except as limited by Sections 7 and 8 hereof, Indemnitee will have the right to advancement by the Bank prior to the final disposition of any Indemnifiable Claim of any and all Expenses relating to, arising out of or resulting from any Indemnifiable Claim paid or incurred by Indemnitee upon receipt of undertakings  by or on 

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behalf of Indemnitee: (i) to repay such amount if it shall be proved by clear and convincing evidence in a court of competent jurisdiction that Indemnitee’s action or failure to act involved an act or omission undertaken with deliberate intent to cause injury to the Bank or undertaken with reckless disregard for the best interests of the Bank and (ii) to cooperate reasonably with the Bank concerning the action, suit or proceeding.
4.    Purchase of Insurance.  For the duration of Indemnitee’s service as a director or officer of the Bank, and thereafter for so long as Indemnitee shall be subject to any pending or possible Indemnifiable Claim, the Bank shall use commercially reasonable efforts (taking into account the scope and amount of coverage available relative to the cost thereof) to cause to be maintained in effect policies of directors’ and officers’ liability insurance providing coverage for directors and/or officers of the Bank that is at least substantially comparable in scope and amount to that provided by the Bank’s current policies of directors’ and officers’ liability insurance.  In all policies of directors’ and officers’ liability insurance obtained by the Bank, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee the same rights and benefits, subject to the same limitations, as are accorded to the Bank’s directors and officers most favorably insured by such policy.  Upon written request of an Indemnitee, the Bank shall provide Indemnitee with a copy of all directors’ and officers’ liability insurance policies, as they may be amended and/or supplemented from time to time.  Without limiting the generality or effect of the three immediately preceding sentences, the Bank shall not discontinue or significantly reduce the scope or amount of coverage under any such policy without the approval of a majority of the members of the Board.  The Indemnitee’s expenses (including attorneys’ fees) incurred in connection with successfully establishing Indemnitee’s right to recovery under any such policy of directors’ and officers’ liability insurance shall be indemnified by the Bank.
5.    Non-Exclusivity. 
5.1    The indemnification and advancement of expenses provided by or granted pursuant to this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may be entitled under applicable law, the charter of the Bank, the Bylaws, any indemnity or other agreement, a resolution of the directors, in connection with any court proceedings brought, or otherwise, both as to action in Indemnitee’s official capacity and as to action in another capacity while holding such office.
5.2    To the extent that a change in the law governing the Federal Home Loan Banks, whether by statute, judicial decision, or regulatory action, permits greater indemnification than is afforded under this Agreement without adverse impact on or materially increased cost to the Bank, then the Bank shall indemnify Indemnitee hereunder to the fullest extent so permitted.  
6.    Notification and Defense of Claim.
6.1    Promptly after receipt by Indemnitee of notice of the commencement of any action, suit or proceeding, Indemnitee shall, if a claim thereof is to be made against the Bank hereunder, notify the Bank of the commencement thereof.  The failure to promptly notify the Bank of the commencement of the action, suit, or proceeding, or Indemnitee’s request for indemnification, will not relieve the Bank from any liability that it may have to Indemnitee 

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hereunder, except to the extent the Bank is prejudiced in its defense of such action, suit or proceeding as a result of such failure.
6.2    In the event the Bank shall be obligated to pay the expenses of Indemnitee with respect to an action, suit or proceeding, as provided in this Agreement, the Bank, if appropriate, shall be entitled to assume the defense of such action, suit or proceeding, with counsel reasonably acceptable to Indemnitee, upon the delivery to Indemnitee of written notice of its election to do so.  After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Bank, the Bank will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same action, suit or proceeding, provided that (1) Indemnitee shall have the right to employ Indemnitee’s own counsel in such action, suit or proceeding at Indemnitee’s own expense and (2) if (i) the employment of counsel by Indemnitee has been previously authorized in writing by the Bank, (ii) counsel to the Bank or Indemnitee shall have reasonably concluded that there may be a conflict of interest or position, or reasonably believes that a conflict is likely to arise, on any significant issue between the Bank and Indemnitee in the conduct of any such defense, or (iii) the Bank shall not, in fact, have employed counsel to assume the defense of such action, suit or proceeding, then the fees and expenses of Indemnitee’s counsel shall be at the expense of the Bank, except as otherwise expressly provided by this Agreement.  The Bank shall not be entitled, without the consent of Indemnitee, to assume the defense of any claim brought by or in the right of the Bank or as to which counsel for the Bank or Indemnitee shall have reasonably made the conclusion provided for in clause (ii) above.
6.3    Notwithstanding any other provision of this Agreement to the contrary, to the extent that Indemnitee is, by reason of Indemnitee’s corporate status with respect to the Bank, a witness or otherwise participates in any action, suit or proceeding at a time when Indemnitee is not a party to the action, suit or proceeding, the Bank shall indemnify Indemnitee against all expenses (including attorneys’ fees) actually and reasonable incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.
7.    Procedure for Indemnification.
7.1    To obtain indemnification, Indemnitee shall promptly submit to the Bank a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification.  The Bank shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.
7.2    To the extent that Indemnitee has been successful on the merits or otherwise in connection with any Indemnifiable Claim or any portion thereof or in defense of any claim, issue or matter therein, Indemnitee shall be indemnified against all Indemnifiable Losses relating to, arising out of or resulting from such Indemnifiable Claim in accordance with Section 2 and no Standard of Conduct Determination (as defined in Section 7.3) will be required.  In the event that a matter as to which there has been a dismissal without prejudice is later revived in the same or similar form, the matter will be treated as a new Claim for all purposes of this Agreement.

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7.3    To the extent that the provisions of Section 7.2 are inapplicable to an Indemnifiable Claim that will have been finally disposed of, any determination of whether Indemnitee has satisfied any applicable standard of conduct under Ohio law that is a legally required condition precedent to indemnification of Indemnitee hereunder (a “Standard of Conduct Determination”) will be made as follows: (1) by the Board by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding; or (2) if such quorum is not obtainable, or, even if obtainable, if a quorum of disinterested directors so directs, by independent legal counsel in a written opinion addressed to the Board, a copy of which shall be delivered to Indemnitee.  Indemnitee will cooperate with the person or persons making such Standard of Conduct Determination, including providing to such person or persons, upon reasonable advance request, any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination.  
7.4    The Bank shall use its reasonable best efforts to cause any Standard of Conduct Determination required under Section 7.3 to be made as promptly as practicable.  If (i) the person or persons empowered or selected under Section 7.3 to make the Standard of Conduct Determination shall not have made a determination within 60 days after the later of (A) receipt by the Bank of written notice from Indemnitee advising the Bank of the final disposition of the applicable Indemnifiable Claim (the date of such receipt being the “Notification Date”) and (B) the selection of an independent counsel, if such determination is to be made by independent counsel that is permitted under the provisions of Section 7.3 to make such determination, and (ii) Indemnitee shall have fulfilled his/her obligations set forth in the last sentence of Section 7.3, then Indemnitee shall be deemed to have satisfied the applicable standard of conduct; provided that such 60-day period may be extended for a reasonable time, not to exceed an additional 30 days, if the person or persons making such determination in good faith requires such additional time for the obtaining or evaluation of documentation and/or information relating thereto. 
7.5    If (i) Indemnitee shall be entitled to indemnification hereunder against any Indemnifiable Losses pursuant to Section 7.2, or (ii) Indemnitee has been determined or deemed pursuant to Section 7.3 or 7.4 to have satisfied any applicable standard of conduct under Ohio law that is a legally required condition precedent to indemnification of Indemnitee hereunder, then the Bank shall pay to Indemnitee, within 30 days after the later of (x) the Notification Date in respect of the Indemnifiable Claim or portion thereof to which such Indemnifiable Losses resulted and (y) the earliest date on which the applicable criterion specified in clause (i) or (ii) above shall have been satisfied, an amount equal to the amount of such Indemnifiable Losses.
7.6    If a Standard of Conduct Determination is to be made by independent legal counsel pursuant to Section 7.3, such counsel shall be selected by the Board and the Bank shall give written notice to Indemnitee advising him or her of the identity of the independent legal counsel so selected.  Indemnitee may, within 5 business days after receiving the written notice of selection from the Board, deliver to the Board a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the independent legal counsel so selected is then, or in the five years preceding such date has been, retained to represent: (i) the Bank in any matter material to the Bank or (ii) any other named (or, as to a threatened matter, reasonably likely to be named) party to the Indemnifiable Claim giving rise to 

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the claim for indemnification hereunder.  Absent a proper and timely objection, the person or firm so selected will act as independent legal counsel.  If such written objection is properly and timely made and substantiated, (i) the independent legal counsel so selected may not serve as independent legal counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit and (ii) the Bank may, at its option, select an alternative independent legal counsel and give written notice to Indemnitee advising Indemnitee of the identity of the alternative independent legal counsel, in which case the provisions of the two immediately preceding sentences and clause (i) of this sentence shall apply to such subsequent selection and notice.  The date of the selection of independent legal counsel for purposes of clause (B) in Section 7.4 shall be the fifth business day after the date upon which the Bank has provided notice to Indemnitee of the Bank’s selected independent legal counsel for whom no objection is both made and sustained by Indemnitee pursuant to this Section 7.6.
7.7    The Bank shall indemnify Indemnitee against any expenses (including attorneys’ fees) incurred in connection with successfully establishing Indemnitee’s right to indemnification, in whole or in part, in any proceeding or otherwise.
7.8    In making any Standard of Conduct Determination, the person or persons making such determination shall presume that Indemnitee has satisfied the applicable standard of conduct, and the Bank may overcome such presumption only by its adducing clear and convincing evidence to the contrary.  Any Standard of Conduct Determination that is adverse to Indemnitee may be challenged by the Indemnitee in Federal courts in Ohio specified in Section 20 below.  
8.    Limitations on Indemnification.  Notwithstanding any other provision herein to the contrary, the Bank shall not be obligated pursuant to this Agreement:
8.1    To indemnify or advance expenses to Indemnitee with respect to an action, suit or proceeding (or part thereof) initiated by Indemnitee, except with respect to an action, suit or proceeding brought to establish or enforce a right to indemnification (which shall be governed by the provisions of Section 8.2 of this Agreement), unless such action, suit or proceeding (or part thereof) was authorized or consented to by the Board.
8.2    To indemnify Indemnitee for any expenses incurred by Indemnitee with respect to any action, suit or proceeding instituted by Indemnitee to enforce or interpret this Agreement, unless Indemnitee is successful in establishing Indemnitee’s right to indemnification in such action, suit or proceeding, in whole or in part, or unless and to the extent that the court in such action, suit or proceeding shall determine that, despite Indemnitee’s failure to establish Indemnitee’s right to indemnification, Indemnitee is entitled to indemnity for such expenses; provided, however, that nothing in this Section 8.2 is intended to limit the Bank’s obligation with respect to the advancement of expenses to Indemnitee in connection with any such action, suit or proceeding instituted by Indemnitee to enforce or interpret this Agreement.
8.3    To indemnify, or advance or reimburse expenses to Indemnitee if any payment is prohibited by the Act or the Regulations.

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9.    Subrogation.  In the event of payment under this Agreement, the Bank shall be subrogated to the extent of such payment to all of the related rights of recovery of Indemnitee against other persons or entities.  
10.    No Duplication of Payment.  The Bank shall not be liable under this Agreement to make any payment to Indemnitee in respect of any Indemnifiable Loss to the extent Indemnitee has otherwise actually received payment under any insurance policy or otherwise in respect of such Indemnifiable Loss.
11.    Certain Settlement Provisions.  The Bank shall have no obligation to indemnify Indemnitee under this Agreement for amounts paid in settlement of any action, suit or proceeding without the Bank’s prior written consent, which shall not be unreasonably withheld.  The Bank shall not settle any action, suit or proceeding in any manner that would impose any fine or other obligation on Indemnitee without Indemnitee’s prior written consent, which shall not be unreasonably withheld.
12.    Survival of Rights; Modification and Amendment.  
12.1    The Bank expressly acknowledges that the rights conferred upon Indemnitee pursuant to this Agreement are contract rights which vested immediately upon the execution of this Agreement by the parties hereto and, as to proceedings within the scope of this Agreement, shall survive indefinitely Indemnitee’s termination of service as a director or officer of the Bank.  
12.2    No supplement, modification, termination or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.
13.    Enforcement.  The Bank agrees that its execution of this Agreement shall constitute a stipulation by which it shall be irrevocably bound in any court of competent jurisdiction in which a proceeding by Indemnitee for enforcement of Indemnitee’s rights hereunder shall have been commenced, continued or appealed, that its obligations set forth in this Agreement are unique and special, and that failure of the Bank to comply with the provisions of this Agreement will cause irreparable and irremediable injury to Indemnitee, for which a remedy at law will be inadequate.  As a result, in addition to any other right or remedy Indemnitee may have at law or in equity with respect to breach of this Agreement, Indemnitee shall be entitled to injunctive or mandatory relief directing specific performance by the Bank of its obligations under this Agreement.
14.    Severability.  The provisions of this Agreement are intended to be severable.  If any provision of this Agreement is found by a court to be unenforceable or invalid due to conflict with public or regulatory policy or otherwise (including, without limitation, any law permitting the Director of the Federal Housing Finance Agency to prohibit or limit indemnification payments by the Bank), the remaining provisions shall remain in full force and effect notwithstanding such finding.  

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15.    Successors and Assigns.  All of the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto and their respective successors, assigns, heirs, executors, administrators and legal representatives.  The Bank shall require and cause any direct or indirect successor (whether by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Bank, by written agreement in form and substance reasonably satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Bank would be required to perform if no such succession had taken place.
16.    Entire Agreement.  This Agreement constitutes the entire agreement, and supersedes any prior agreement or understanding, oral, written or implied, between the parties hereto with respect to the subject matter hereof.
17.    Notices.  All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given:  (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day, (c) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt.  All communications shall be sent:  

(a)    To Indemnitee at the address set forth below Indemnitee’s signature hereto.
		
	(b)
	    To the Bank at:

221 E. Fourth Street, Suite 600
Cincinnati, OH  45202 
Attention:    Andrew S. Howell
President
Phone:  (513) 852-7511
Fax:      (513) 852-5747
E-mail: howellas@fhlbcin.com
    
or to such other address as may have been furnished to Indemnitee by the Bank or to the Bank by Indemnitee, as the case may be.
18.    Counterparts.  This Agreement may be executed in two counterparts, each of which shall be deemed an original, and which together shall constitute one and the same Agreement.  This Agreement may also be executed and delivered by facsimile signature.  
19.    Headings.  The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
20.    Governing Law and Consent to Jurisdiction.  This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Ohio, without regard to 

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conflict of laws rules. Each of the Bank and Indemnitee hereby irrevocably and unconditionally (i) agrees that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the District Court of the United States for the Southern District of Ohio (the “District Court”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consents to submit to the exclusive jurisdiction of the District Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) waives any objection to the laying of venue of any such action or proceeding in the District Court, and (iv) waives, and agree not to plead or to make, any claim that any such action or proceeding brought in the District Court has been brought in an improper or inconvenient forum.
SIGNATURE PAGE FOLLOWS

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the date first above written.
FEDERAL HOME LOAN BANK OF CINCINNATI

By:________________________________
Andrew S. Howell
President

INDEMNITEE

        
[Name]
Address:  

Signature Page To Indemnification AgreementExhibit
4.14

 

 

CONFIDENTIAL
TREATMENT REQUESTED UNDER RULE 24B-2

UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

[*****]
INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED
MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

 

 

 

 

 

 

LICENSE
AGREEMENT

 

between

 

AC
Immune SA

 

and

 

ELI
LILLY and Company

 

Dated
as of December 11, 2018

 

 

 

 

 

 

     

     

    

 

TABLE
OF CONTENTS

 

	ARTICLE
    1	DEFINITIONS	1
	 	 	 
	ARTICLE
    2	GRANT
    OF RIGHTS	19
	 	 	 
	 	2.1	Grants
    to Lilly.	19
	 	2.2	Grants
    to ACI.	19
	 	2.3	Sublicenses.	20
	 	2.4	Retention
    of Rights.	21
	 	2.5	Disclosure
    of Know-How and Regulatory Documentation.	21
	 	2.6	Confirmatory
    Patent License; License Registration.	22
	 	2.7	Exclusivity;
    Change of Control of ACI.	22
	 	 	 
	ARTICLE
    3	DEVELOPMENT
    AND REGULATORY ACTIVITIES	23
	 	 	 
	 	3.1	Development.	23
	 	3.2	Unilateral
    Clinical Development Option.	26
	 	3.3	Regulatory
    Activities.	29
	 	 	 
	ARTICLE
    4	COMMERCIALIZATION	30
	 	 	 
	 	4.1	In
    General.	30
	 	4.2	Diligence.	30
	 	4.3	Booking
    of Sales; Distribution.	31
	 	4.4	Statements
    and Compliance with Applicable Law.	31
	 	4.5	Markings.	31
	 	4.6	Subcontracting;
    Distributors.	31
	 	4.7	Co-Promotion
    Option.	31
	 	 	 
	ARTICLE
    5	COLLABORATION
    MANAGEMENT	31
	 	 	 
	 	5.1	Joint
    Steering Committee.	31
	 	5.2	General
    Provisions Applicable to the JSC.	32
	 	 	 
	ARTICLE
    6	SUPPLY	35
	 	 	 
	 	6.1	Supply
    of Licensed Products	35
	 	6.2	Manufacturing
    Technology Transfer.	36
	 	 	 
	ARTICLE
    7	PAYMENTS
    AND RECORDS	36
	 	 	 
	 	7.1	Upfront
    Payment	36
	 	7.2	Milestones	36
	 	7.3	Royalties	39
	 	7.4	Estimated
    Sales Levels.	40
	 	7.5	Royalty
    Payments and Reports.	41
	 	7.6	Development
    Costs.	41
	 	7.7	Mode
    of Payment.	42
	 	7.8	Taxes.	43
	 	7.9	Interest
    on Late Payments.	44
	 	7.1	Financial
    Records.	44
	 	7.11	Audit.	44
	 	7.12	Right
    to Offset.	45

 

     i

     

    

 

	ARTICLE
    8	INTELLECTUAL
    PROPERTY	45
	 	 	 
	 	8.1	Ownership
    of Intellectual Property.	45
	 	8.2	Maintenance
    and Prosecution of Patents.	47
	 	8.3	Enforcement
    of Patents.	49
	 	8.4	Infringement
    Claims by Third Parties.	51
	 	8.5	Invalidity
    or Unenforceability Defenses or Actions.	51
	 	8.6	Third
    Party Rights.	52
	 	8.7	Product
    Trademarks.	52
	 	8.8	ACI’s
    Corporate Names.	53
	 	 	 
	ARTICLE
    9	CONFIDENTIALITY
    AND NON-DISCLOSURE	53
	 	 	 
	 	9.1	Confidentiality
    Obligations	53
	 	9.2	Permitted
    Disclosures	55
	 	9.3	Additional
    Permitted Disclosures by Lilly	55
	 	9.4	Additional
    Permitted Disclosures by ACI	55
	 	9.5	Use
    of Name	55
	 	9.6	Public
    Announcements	56
	 	9.7	Publications	56
	 	9.8	Return
    of Confidential Information.	57
	 	 	 
	ARTICLE
    10	REPRESENTATIONS
    AND WARRANTIES	57
	 	 	 
	 	10.1	Mutual
    Representations and Warranties	57
	 	10.2	Additional
    Representations and Warranties of ACI	58
	 	10.3	DISCLAIMER
    OF WARRANTIES.	61
	 	10.4	Anti-Bribery
    and Anti-Corruption Compliance	61
	 	 	 
	ARTICLE
    11	INDEMNITY	62
	 	 	 
	 	11.1	Indemnification
    of ACI.	62
	 	11.2	Indemnification
    of Lilly.	62
	 	11.3	Indemnification
    Procedures.	63
	 	11.4	Special,
    Indirect and Other Losses	65
	 	11.5	Insurance.	65
	 	 	 

 

     ii

     

    

 

	ARTICLE
    12	TERM
    AND TERMINATION	65
	 	 	 
	 	12.1	Term
    and Expiration.	65
	 	12.2	Termination.	66
	 	12.3	Rights
    in Bankruptcy.	67
	 	12.4	Consequences
    of Termination.	67
	 	12.5	Remedies.	68
	 	12.6	Accrued
    Rights; Surviving Obligations.	68
	 	 	 
	ARTICLE
    13	MISCELLANEOUS	69
	 	 	 
	 	13.1	Force
    Majeure.	69
	 	13.2	Export
    Control.	70
	 	13.3	Assignment.	70
	 	13.4	Severability.	71
	 	13.5	Dispute
    Resolution.	71
	 	13.6	Governing
    Law.	72
	 	13.7	Notices.	73
	 	13.8	Entire
    Agreement; Amendments.	73
	 	13.9	English
    Language.	73
	 	13.1	Equitable
    Relief.	74
	 	13.11	Waiver
    and Non-Exclusion of Remedies.	74
	 	13.12	No
    Benefit to Third Parties.	74
	 	13.13	Further
    Assurance.	74
	 	13.14	Relationship
    of the Parties.	75
	 	13.15	HSR
    Act Compliance	75
	 	13.16	References.	75
	 	13.17	Construction.	76
	 	13.18	Counterparts.	76

 

SCHEDULES

 

	Schedule 1.65	Licensed Compounds
	Schedule 1.93	Second Category Indications
	Schedule 3.1.2(i)	Development Plan
	Schedule 3.1.2(ii)	Lilly Pre-Clinical Activities
	Schedule 9.6	Press Releases
	Schedule 10.2.2	Existing Patents

 

     

     

    

CONFIDENTIAL
TREATMENT REQUESTED UNDER RULE 24B-2

UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

[*****]
INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED
MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

 

 

LICENSE
AGREEMENT

 

This License
Agreement (the “Agreement”) is made and entered into effective as of December 11, 2018 (the “Execution
Date”) by and between AC Immune SA, a Swiss company (“ACI”) and Eli Lilly and Company, an
Indiana corporation (“Lilly”). ACI and Lilly are sometimes referred to herein individually as a “Party”
and collectively as the “Parties.”

 

Recitals

 

WHEREAS,
ACI owns and controls certain intellectual property rights with respect to the Licensed Compounds (as defined herein) and Licensed
Products (as defined herein) in the Territory (as defined herein); and

 

WHEREAS,
ACI wishes to grant to Lilly, and Lilly wishes to take, an exclusive license under such intellectual property rights to develop
and commercialize Licensed Products in the Territory, in each case in accordance with the terms and conditions set forth below.

 

NOW, THEREFORE,
in consideration of the premises and the mutual promises and conditions set forth herein and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, do hereby agree as follows:

 

ARTICLE
1

DEFINITIONS

 

Unless otherwise
specifically provided herein, the following terms shall have the following meanings:

 

1.1.       “ACI
Know-How” means all Information Controlled by ACI or any of its Affiliates as of the Effective Date or at any time during
the Term that claim or cover or otherwise relate to any Licensed Compound or Licensed Product or the Exploitation of any of the
foregoing, including all Information within the ACI Program IP, but excluding any Joint Know-How or any Information to the extent
covered or claimed by any published ACI Patents or Joint Patents.

 

1.2.       “ACI
Patents” means all of the Patents Controlled by ACI or any of its Affiliates as of the Effective Date or at any time
during the Term that claim or cover or otherwise relate to any Licensed Compound or Licensed Product or the Exploitation of any
of the foregoing, including the Existing Patents and all Patents within the ACI Program IP and Tau Patents, but excluding any
Joint Patents.

 

     1

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

1.3.       “ACI
Pre-Clinical and Phase 1 Activities” means those certain Development activities to be conducted and funded by ACI, as
set forth in the Development Plan as such Development Plan exists as of the Execution Date or as otherwise agreed by the Parties
in writing or through other documentation (including electronic communications).

 

1.4.       
“Additional Indication Triggering Event” means [*****].

 

1.5.       “Adverse
Event” means any untoward medical occurrence in a patient or human clinical investigation subject administered a Licensed
Product pursuant to this Agreement, including occurrences which do not necessarily have a causal relationship with any Licensed
Product.

 

1.6.       “Affiliate”
means, with respect to a Party, any Person that, directly or indirectly, through one (1) or more intermediaries, controls, is
controlled by or is under common control with such Party, whether now or in the future. For purposes of this definition, “control”
and, with correlative meanings, the terms “controlled by” and “under common control with” means: (i) the
possession, directly or indirectly, of the power to direct the management or policies of a business entity, whether through the
ownership of voting securities, by contract relating to voting rights or corporate governance or otherwise; or (ii) the ownership,
directly or indirectly, of more than fifty percent (50%) of the voting securities or other ownership interest of a business entity
(or, with respect to a limited partnership or other similar entity, its general partner or controlling entity).

 

1.7.       “Applicable
Law” means with respect to any Person, any transnational, domestic or foreign federal, state or local law (statutory,
common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree,
ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority that is binding upon
or applicable to such Person, as amended unless expressly specified otherwise, including all applicable regulations and guidances
of any Regulatory Authorities (e.g., with respect to Good Laboratory Practices, Good Manufacturing Practices and Good Clinical
Practices and, if and as appropriate under the circumstances, International Conference on Harmonization (ICH) guidance).

 

1.8.       “Background
Technology” means, with respect to a Party, all Patents, Information and other intellectual property rights (i) Controlled
by such Party as of immediately prior to the Effective Date or (ii) that becomes Controlled by such Party at any time during
the Term outside the scope of any of such Party’s activities under this Agreement.

 

1.9.       “Backups”
mean [*****] identified by or on behalf of ACI in conjunction with its performance of [*****] or at any time on or before [*****],
or such later date as the Parties may mutually agree.

 

     2

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

1.10.       “Business
Day” means a day other than (i) a Saturday or Sunday or (ii) a day on which banking institutions in New York, New York
or Lausanne, Switzerland are required to be closed.

 

1.11.       “Calendar
Quarter” means each successive period of three (3) calendar months commencing on January 1, April 1, July 1 and October
1, except that the first Calendar Quarter of the Term shall commence on the Effective Date and end on the day immediately prior
to the first to occur of January 1, April 1, July 1 or October 1 after the Effective Date and the last Calendar Quarter shall
end on the last day of the Term.

 

1.12.       
“Calendar Year” means each successive period of twelve (12) calendar
months commencing on January 1 and ending on December 31, except that the first Calendar Year of the Term shall commence on the
Effective Date and end on December 31 of the year in which the Effective Date occurs and the last Calendar Year of the Term shall
commence on January 1 of the year in which the Term ends and end on the last day of the Term.

 

1.13.       “Change
of Control,” with respect to a Party, shall be deemed to have occurred if any of the following occurs after the Effective
Date:

 

1.13.1.       any
“person” or “group” (as such terms are defined below) (i) is or becomes the “beneficial owner”
(as defined below, except that a “person” or “group” shall be deemed to have “beneficial ownership”
of all shares of capital stock or other equity interests if such person or group has the right to acquire, whether such right
is exercisable immediately or only after the passage of time), directly or indirectly, of shares of capital stock or other interests
(including partnership interests) of such Party then outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of the directors, managers or similar supervisory positions (“Voting Stock”)
of such Party representing fifty percent (50%) or more of the total voting power of all outstanding classes of Voting Stock of
such Party or (ii) has the power, directly or indirectly, to elect a majority of the members of the Party’s board of
directors or similar governing body (“Board of Directors”);

 

1.13.2.       such
Party enters into a merger, consolidation or similar transaction with another Person (whether or not such Party is the surviving
entity) and as a result of such merger, consolidation or similar transaction (i) the members of the Board of Directors of
such Party immediately prior to such transaction constitute less than a majority of the members of the Board of Directors of such
Party or such surviving Person immediately following such transaction or (ii) the Persons that beneficially owned, directly
or indirectly, the shares of Voting Stock of such Party immediately prior to such transaction cease to beneficially own, directly
or indirectly, shares of Voting Stock of such Party representing at least a majority of the total voting power of all outstanding
classes of Voting Stock of the surviving Person in substantially the same proportions as their ownership of Voting Stock of such
Party immediately prior to such transaction;

 

     3

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

1.13.3.       such
Party sells or transfers to any Third Party, in one or more related transactions, properties or assets representing all or substantially
all of such Party’s consolidated total assets; or

 

For the purpose
of this definition of Change of Control: (i) “person” and “group” have the meanings given such terms
under Section 13(d) and 14(d) of the United States Securities Exchange Act of 1934 and the term “group” includes any
group acting for the purpose of acquiring, holding or disposing of securities within the meaning of Rule 13d-5(b)(1) under the
aforesaid Act; (ii) a “beneficial owner” shall be determined in accordance with Rule 13d-3 under the aforesaid
Act; and (iii) the terms “beneficially owned” and “beneficially own” shall have meanings correlative
to that of “beneficial owner.”

 

1.14.       “CHF”
means Swiss Francs.

 

1.15.       
“Clinical Trial” means a human clinical trial designed to evaluate
the safety, efficacy, tolerability or appropriate dosage of a Licensed Product, as the context requires, including Phase 1 Clinical
Trials, Phase 2 Clinical Trials or Phase 3 Clinical Trials.

 

1.16.       “CMC”
means, chemistry, Manufacturing and controls with respect to a product, which includes (i) Manufacturing process development records
for such product, (ii) all chemistry, Manufacturing and control procedures necessary for the Manufacture of such product, and
(iii) sourcing and testing of all raw materials and components used in the Manufacture of such product.

 

1.17.       “Commercialization”
means, with respect to any product, any and all activities directed to the preparation for sale of, offering for sale of or sale
of such product, including activities related to marketing, promoting, distributing and importing such product, and interacting
with Regulatory Authorities regarding any of the foregoing. When used as a verb, “to Commercialize” and “Commercializing”
mean to engage in Commercialization and “Commercialized” has a corresponding meaning.

 

1.18.       “Commercially
Reasonable Efforts” means with respect to the performance of activities with respect to any Licensed Compound or Licensed
Product by a Party, [*****].

 

1.19.       “Complaint”
means a customer's written, oral or electronic communication that alleges deficiencies related to the identity, quality, purity,
durability, reliability, safety, or effectiveness or performance of a distributed drug product, drug/device combination product,
medical device, animal health premix, API (active pharmaceutical ingredient), process intermediate or fermentation product. Complaints
include: Adverse Events, adverse drug experiences, adverse drug reactions, company identified reportable malfunctions (CIRM),
lack of drug effect (LODE) and product complaints.

 

     4

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

1.20.       “Compliance”
means the adherence by the Parties in all material respects to all Applicable Law and Party Specific Regulations, in each case
with respect to the activities to be conducted under this Agreement.

 

1.21.       “Compliance
Audit” means an assessment or inspection conducted to verify compliance with applicable regulatory standards (GxPs)
and guidances.

 

1.22.       “Control”
means, with respect to any item of Information, Regulatory Documentation, material, Patent or other intellectual property right,
and subject to Section ‎13.3.2, possession of the right, whether
directly or indirectly and whether by ownership, license or otherwise (other than by operation of the license and other grants
in Section ‎2.1 or ‎2.2), to grant a license, sublicense or other right (including the right to reference Regulatory Documentation)
to or under such Information, Regulatory Documentation, material, Patent or other intellectual property right as provided for
herein without (i) violating the terms of any agreement with any Third Party, and (ii) paying any consideration to any Third Party.

 

1.23.       “Convertible
Note Agreement” means that certain Convertible Note Agreement dated as of the date hereof between Lilly and ACI.

 

1.24.       “Co-Promote”
or “Co-Promotion” means the detailing, through a face-to-face contact between a sales representative and a
physician or other medical professional licensed or authorized to prescribe drugs, of the applicable Licensed Product by ACI or
any of its Affiliates in the applicable Indication under the relevant Regulatory Approval and the Product Trademarks, but excluding
the sale or distribution of such Licensed Product by ACI or any of its Affiliates.

 

1.25.       “Corporate
Names” means [*****].

 

1.26.       “Development”
means, with respect to any compound or product, all activities related to research, pre-clinical and other non-clinical testing,
test method development and stability testing, toxicology, formulation, process development, manufacturing scale-up, qualification
and validation, quality assurance/quality control, clinical studies of such compound or product, including Manufacturing in support
thereof, statistical analysis and report writing, the preparation and submission of Drug Approval Applications and regulatory
affairs with respect to the foregoing and all other activities necessary or reasonably useful or otherwise requested or required
by a Regulatory Authority as a condition or in support of obtaining or maintaining a Regulatory Approval for such compound or
product. When used as a verb, “Develop” means to engage in Development.

 

     5

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

1.27.       “Development
Costs” means [*****].

 

1.28.       “Dollars”
or “$” means United States Dollars.

 

1.29.       “Drug
Approval Application” means a New Drug Application as defined in the FFDCA or any corresponding foreign application
in the Territory, including, with respect to the European Union, a Marketing Authorization Application filed with the EMA pursuant
to the centralized approval procedure or with the applicable Regulatory Authority of a country in the European Union with respect
to the mutual recognition or any other national approval.

 

1.30.       “Effective
Date” the Business Day following the date on which HSR Clearance occurs.

 

1.31.       “EMA”
means the European Medicines Agency and any successor agency thereto.

 

1.32.       “European
Union” or “EU” means the economic, scientific and political organization of member states of the
European Union, as it is constituted from time to time throughout the Term.

 

1.33.       “Exclusive
Co-Promotion Option Term” means, [*****].

 

1.34.       “Existing
Regulatory Documentation” means the Regulatory Documentation Controlled by ACI or any of its Affiliates as of the Effective
Date.

 

1.35.       “Exploit”
means to make, have made, import, use, sell or offer for sale, including to research, Develop, Commercialize, register, Manufacture,
have Manufactured, hold or keep (whether for disposal or otherwise), have used, export, transport, distribute, promote, market
or have sold or otherwise dispose of. “Exploitation” means the act of Exploiting a compound, product or process.

 

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

 

1.37.       “FFDCA”
means the United States Federal Food, Drug, and Cosmetic Act, as amended from time to time, together with any rules, regulations
and requirements promulgated thereunder (including all additions, supplements, extensions and modifications thereto).

 

1.38.       “Field”
means all Indications and all uses, including the prevention, cure, amelioration or treatment in the First Category, Second Category,
and Third Category[*****].

 

     6

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

1.39.       “First
Category” means [*****].

 

1.40.       “First
Commercial Sale” means, [*****].

 

1.41.       “First
Indication” means [*****].

 

1.42.       “FTE”
means the equivalent of the work of one (1) employee full time for one (1) Calendar Year [*****] of work directly related to the
Development of a Licensed Product. No additional payment shall be made with respect to any person who works [*****] and any person
who devotes [*****] (or such other number as may be agreed by the JSC) shall be treated as an FTE on a pro rata basis based upon
[*****].

 

1.43.       “FTE
Costs” means [*****].

 

1.44.       “FTE
Rate” means [*****].

 

1.45.       “GAAP”
means, with respect to a Party or its Affiliates or its or their Sublicensees, United States generally accepted accounting principles,
International Financial Reporting Standards or such other similar national standards as such Party, Affiliate or its or their
Sublicensee adopts, in each case, consistently applied.

 

1.46.       “Generic
Product” means, with respect to a Licensed Product, any pharmaceutical product that (i) contains an active ingredient
the same as or similar to the Licensed Compound in such Licensed Product, (ii) is distributed by a Third Party which is not a
Sublicensee or Affiliate thereof under a Drug Approval Application approved by a Regulatory Authority (a) in the U.S. pursuant
to Section 505(b)(2) or Section 505(j) of the FFDCA (21 U.S.C. 355(b)(2) and 21 U.S.C. 355(j), respectively), (b) in
the EU pursuant to a provision of Articles 10, 10a or 10b of Parliament and Council Directive 2001/83/EC as amended (including
an application under Article 6.1 of Parliament and Council Regulation (EC) No 726/2004 that relies for its content on any such
provision) or (c) in any other country or jurisdiction pursuant to all equivalents of such provisions based on a demonstration
of bioequivalence or similarity to such Licensed Product and in reliance, in whole or in part, on the prior approval (or on safety
or efficacy data submitted in support of the prior approval) of such Licensed Product, and (iii) may be substituted under Applicable
Law as a therapeutic equivalent to such Licensed Product when dispensed without the intervention of a physician or other health
care provider with prescribing authority.

 

1.47.       “Good
Clinical Practices” or “cGCP” means the then-current standards for
clinical trials for pharmaceuticals, as set forth in the FFDCA or other Applicable Law, and such standards of good clinical practice
as are required by the Regulatory Authorities of the United States and European Union and other organizations and Governmental
Authorities in countries for which any Licensed Product is intended to be Developed, to the extent such standards are not less
stringent than United States Good Clinical Practices.

 

     7

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

1.48.       “Good
Laboratory Practices” or “cGLP” means the then-current standards
for laboratory activities for pharmaceuticals, as set forth in the FDA’s Good Laboratory Practice regulations as defined
in 21 C.F.R. Part 58 or the Good Laboratory Practice principles of the Organization for Economic Co-Operation and Development,
and such standards of good laboratory practice as are required by the European Union and other organizations and governmental
agencies in countries in which any Licensed Product is intended to be sold, to the extent such standards are not less stringent
than United States Good Laboratory Practice.

 

1.49.       “Good
Manufacturing Practices” or “cGMP” means all applicable current Good Manufacturing Practices including,
as applicable, (a) the principles detailed in the U.S. Current Good Manufacturing Practices, 21 C.F.R. Parts 4, 210, 211 (b) European
Directive 2003/94/EC and Eudralex 4, (c) the principles detailed in the ICH Q7 guidelines, and (d) the equivalent Applicable Law
in any relevant country, each as may be amended and applicable from time to time.

 

1.50.       “Governmental
Authority” means any United States federal, state, or local, or any foreign, government, or political subdivision thereof,
or any multinational organization or authority, or any authority, agency, or commission entitled to exercise any administrative,
executive, judicial, legislative, police, regulatory, or taxing authority or power, any court or tribunal (or any department,
bureau, or division thereof), or any governmental arbitrator or arbitral body.

 

1.51.       “GxP”
means compliance with all relevant Regulatory Authority requirements or guidance for Good Clinical Practices, Good Laboratory
Practices and Good Manufacturing Practices.

 

1.52.       “Hatch-Waxman
Act” means the U.S. “Drug Price Competition and Patent Term Restoration Act” of 1984, as set forth at 21
U.S.C. §355(b)(2)(A)(iv) or (j)(2)(A)(vii)(IV).

 

1.53.       “HSR
Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated
thereunder, or foreign equivalent thereof under Applicable Law.

 

1.54.       
“HSR Clearance” means, with respect to this Agreement, the expiration
or termination of all applicable waiting periods and requests for information (and any extensions thereof) under the HSR Act.

 

1.55.       
“HSR Filing” means (i) filings by Lilly and ACI with the United States
Federal Trade Commission (the “FTC”) and the Antitrust Division of the United States Department of Justice
(the “DOJ”) of a Notification and Report Form for Certain Mergers and Acquisitions (as that term is defined
in the HSR Act) with respect to the matters set forth in this Agreement, together with all required documentary attachments thereto,
or (ii) equivalent filings, if any, with applicable Governmental Authorities where such filings are required.

 

     8

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

1.56.       “Improvements”
means with respect to any compound or product, any invention, discovery, development or modification of such compound or product
or relating to the Exploitation thereof, whether or not patented or patentable, including any enhancement in the efficiency, operation,
Manufacture, ingredients, preparation, presentation, formulation, means of delivery (including the development of any delivery
device or enhancement thereto) or dosage of such compound or product, any discovery or development of any new or expanded Indications
for such compound or product, or any discovery or development that improves the stability, safety or efficacy of such compound
or product.

 

1.57.       “IND”
means (i) an investigational new drug application filed with the FDA for authorization to commence clinical studies and its
equivalent in other countries or regulatory jurisdictions and (ii) all supplements and amendments that may be filed with
respect to the foregoing.

 

1.58.       “Indication”
means any human disease or condition that can be treated, prevented, cured or the progression of which can be delayed.

 

1.59.       “Information”
means all technical, scientific and other know-how and information, trade secrets, knowledge, technology, means, methods, processes,
practices, formulae, instructions, skills, techniques, procedures, experiences, ideas, technical assistance, designs, drawings,
assembly procedures, computer programs, apparatuses, specifications, data, results and other material, including: biological,
chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, pre-clinical, clinical, safety, manufacturing
and quality control data and information, including study designs and protocols, assays and biological methodology, in each case
(whether or not confidential, proprietary, patented or patentable) in written, electronic or any other form now known or hereafter
developed.

 

1.60.       “Insolvency
Event” means an event in which either Party (i) files for protection under bankruptcy or insolvency laws, including
a request for the postponement of the opening of bankruptcy proceedings (Antrag auf Konkursaufschub), (ii) makes an assignment
for the benefit of creditors, (iii) appoints or suffers appointment of a receiver or trustee over substantially all of its property
that is not discharged within thirty (30) days after such filing, (iv) proposes a written agreement of composition or extension
of its debts, (v) is declared bankrupt (Konkurs/faillite) or has been granted a moratorium (Nachlassstundung/sursis
concordataire) in each case not discharged within thirty (30) days, (vi) is over-indebted (überschuldet) within
the meaning of art. 725 para. 2 CO or (vii) is unable to pay its debts as they fall due (zahlungsunfähig) within the
meaning of art. 190 para. 1sub-para. 2 of the Swiss Federal Act on Debt Enforcement and Bankruptcy.

 

1.61.       
“Internal Compliance Codes” means
a Party’s internal policies and procedures intended to ensure that a Party complies with Applicable Law, Party Specific
Regulations, and such Party’s internal ethical, medical and similar standards.

 

1.62.       “Joint
Know-How” means all Information within the Joint Program IP, but excluding any Tau Patents and any such Information
to the extent covered or claimed by any published Joint Patents.

 

     9

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

1.63.       “Joint
Patents” means all Patents within the Joint Program IP.

 

1.64.       “Knowledge”
means the actual knowledge after performing a diligent investigation with respect to such facts and information of Chief Executive
Officer or Chief Scientific Officer of a Party or any personnel holding positions equivalent to such job titles.

 

1.65.       “Licensed
Compounds” means [*****].

 

1.66.       “Licensed
Party” means (i) with respect to the licenses granted in Section ‎2.1,
Lilly and (ii) with respect to the license granted in the proviso to Section 12.4.1‎(ii),
ACI.

 

1.67.       “Licensed
Product” means any pharmaceutical product that is comprised of or contains [*****].

 

1.68.       “Lilly
Compound” means [*****].

 

1.69.       “Lilly
Development Costs” means, with respect to a Licensed Compound or Licensed Product, [*****].

 

1.70.       “Lilly
Grantback Know-How” means, as used in connection with any grant back license provided in Article 12, all [*****].

 

1.71.       “Lilly
Grantback Patent Rights” means, as used in connection with any grant back license provided in Article 12, all Patents
that [*****].

 

1.72.       “Lilly
Know-How” means all [*****].

 

1.73.       “Lilly
Patents” means all of the Patents [*****].

 

1.74.       “Major
Pharmaceutical Company” means a company that, together with its Affiliates, on a worldwide basis, [*****].

 

1.75.       “Manufacture”
and “Manufacturing” means with respect to any compound or product, all activities related to the production,
manufacture, processing, filling, finishing, packaging, labeling, shipping and holding of such compound or product or any intermediate
thereof, including process development, process qualification and validation, scale-up, pre-clinical, clinical and commercial
manufacture and analytic development, product characterization, stability testing, quality assurance and quality control.

 

     10

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

1.76.       “Net
Sales” means, with respect to a Licensed Product, [*****]:

 

1.76.1.       [*****]

 

1.76.2.       [*****]

 

1.76.3.       [*****]

 

1.76.4.       [*****]

 

1.76.5.       [*****]

 

1.76.6.       [*****]

 

1.76.7.       [*****]

 

1.77.       “Party
Specific Regulations” shall mean all judgments, decrees, orders or similar decisions issued by any Governmental Authority
specific to a Party, and all consent decrees, corporate integrity agreements, or other agreements or undertakings of any kind
by a Party with any Governmental Authority, in each case as the same may be in effect from time to time and applicable to a Party’s
activities contemplated by this Agreement.

 

1.78.       “Patents”
means: (i) all national, regional and international patents and patent applications, including provisional patent applications;
(ii) all patent applications filed either from such patents, patent applications or provisional applications or from an application
claiming priority from either of these, including divisionals, continuations, continuations-in-part, provisionals, converted provisionals
and continued prosecution applications; (iii) any and all patents that have issued or in the future issue from the foregoing
patent applications ((i) and (ii)), including utility models, petty patents, innovation patents and design patents and certificates
of invention; (iv) any and all extensions or restorations by existing or future extension or restoration mechanisms, including
revalidations, reissues, re-examinations and extensions (including any supplementary protection certificates and the like) of
the foregoing patents or patent applications ((i), (ii) and (iii)); and (v) any similar rights, including so-called pipeline
protection or any importation, revalidation, confirmation or introduction patent or registration patent or patent of additions
to any of such foregoing patent applications and patents.

 

1.79.       “Person”
means an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated association, joint venture or other similar entity
or organization, including a Governmental Authority.

 

1.80.       “Phase
1 Clinical Trial” means a human clinical trial of a pharmaceutical product candidate, in healthy volunteers or patients,
that generally provides for the first introduction into humans of such product candidate, with the principal purpose of obtaining
data regarding any or all of the safety, metabolism, pharmacokinetic properties and clinical pharmacology, and potentially early
evidence on effectiveness, of such product candidate, as described or contemplated by 21 C.F.R. §312.21(a).

 

     11

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

1.81.       “Phase
2 Clinical Trial” means a human clinical trial of a pharmaceutical product candidate in subjects with a particular disease
or condition, with a principal purpose of evaluating the effectiveness, safety, and acceptable dose range for such product candidate
for a particular use, as described or contemplated by 21 C.F.R. §312.21(b).

 

1.82.       “Phase
3 Clinical Trial” means a human clinical trial of a pharmaceutical product candidate in subjects with a particular disease
or condition that is designed to establish that such product candidate is safe and efficacious for its intended use so as to support
Regulatory Approval of such product candidate, as described or contemplated by 21 C.F.R. §312.21(c); provided that it is
not intended that a human clinical trial must, by itself, support Regulatory Approval of a product candidate (including, for clarity,
itself establish that such product candidate is safe and efficacious for its intended use) in order to be a Phase 3 Clinical Trial.

 

1.83.       “PMDA”
means the Pharmaceuticals and Medical Devices Agency of Japan and any successor agency thereto.

 

1.84.       “Product
Labeling” means, with respect to a Licensed Product in a country in the Territory, (i) the Regulatory Authority-approved
full prescribing information for such Licensed Product for such country, including any required patient information and (ii) all
labels and other written, printed or graphic matter upon a container, wrapper or any package insert utilized with or for such
Licensed Product in such country.

 

1.85.       “Product
Trademarks” means the Trademark(s) used or to be used by Lilly or its Sublicensees for the Commercialization of Licensed
Products in the Territory and any registrations thereof or any pending applications relating thereto in the Territory (excluding,
in any event, any of ACI’s Corporate Names, any other Trademarks Controlled by ACI or any of its Affiliates and anything
confusingly similar to any of ACI’s Corporate Names or such Trademarks).

 

1.86.       “Quality
Agreement” means the document developed, approved, and updated by the Parties that sets forth the quality expectations,
responsibilities, rights (including, as applicable and agreed upon, audit requirements) and requirements relating to the Manufacture
and supply of Licensed Product as executed hereunder, or relating to supply of Licensed Product for Clinical Trials or Commercialization.

 

1.87.       “Regulatory
Approval” means, with respect to a country in the Territory, any and all approvals (including Drug Approval Applications),
licenses, registrations or authorizations of any Regulatory Authority necessary to commercially distribute, sell or market a Licensed
Product in such country, including, where applicable, (i) pricing or reimbursement approval in such country, (ii) pre-
and post-approval marketing authorizations (including any prerequisite Manufacturing approval or authorization related thereto)
and (iii) labeling approval.

 

     12

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

1.88.       “Regulatory
Authority” means any applicable Governmental Authority regulating or otherwise exercising authority with respect to
the Exploitation of Licensed Compounds or Licensed Products in the Territory, including the FDA in the United States and the EMA
in the European Union.

 

1.89.       “Regulatory
Documentation” means: all (i) applications (including all INDs and Drug Approval Applications), registrations,
licenses, authorizations and approvals (including Regulatory Approvals); (ii) correspondence and reports submitted to or
received from Regulatory Authorities (including minutes and official contact reports relating to any communications with any Regulatory
Authority) and all supporting documents with respect thereto, including all Adverse Event files and Complaint files; and (iii) clinical
and other data contained or relied upon in any of the foregoing; in each case ((i), (ii) and (iii)) relating to a Licensed Compound
or a Licensed Product.

 

1.90.       “Regulatory
Exclusivity Period” means, with respect to each Licensed Product in any country in the Territory, a period of exclusivity
(other than Patent exclusivity) granted or afforded by Applicable Law or by a Regulatory Authority in such country that confers
exclusive marketing rights with respect to such Licensed Product in such country, such as new chemical entity exclusivity, new
use or Indication exclusivity, new formulation exclusivity, orphan drug exclusivity, non-patent related pediatric exclusivity
or any other applicable marketing or data exclusivity, including any such periods listed in the FDA’s Orange Book or any
such periods under national implementations in the EU of Article 10 of Directive 2001/83/ED, Article 14(11) of Parliament and
Council Regulation (EC) No. 726/2004, Parliament and Council Regulation (ED) No. 141/2000 on orphan medicines, Parliament and
Council Regulation (ED) No. 1901/2006 on medicinal products for pediatric use and all international equivalents of any of the
foregoing.

 

1.91.       “Royalty
Term” means, with respect to each Licensed Product and each country in the Territory, [*****].

 

1.92.       “Safety-Regulatory
Agreement” means a document that will outline the responsibilities for safety and regulatory management for the Licensed
Product(s) including the exchange of safety information, labeling responsibilities, safety surveillance and signal detection and
reporting to Regulatory Authorities in the Territory.

 

1.93.       “Second
Category” means (a) those certain Indications set forth on Schedule 1.93, [*****].

 

1.94.       “Second
Indication” means [*****].

 

1.95.       “Senior
Officer” means, with respect to ACI, its Chief Executive Officer and with respect to Lilly, its Vice-President of Research,
Neurodegeneration business unit.

 

1.96.       “Specified
Limitation” means, [*****].

 

     13

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

1.97.       “Standards
of Quality” means, with respect to each of ACI’s Corporate Names, the reasonable standards prescribed from time
to time by ACI or any of its Affiliates, as set forth through reasonable advance written notice by ACI to Lilly, including, without
limitation, standards relative to the quality, size, position, marking and appearance of such Corporate Name, and the manner,
disposition and use of such Corporate Name and accompanying designations, on any document or other media.

 

1.98.       “Sublicensee”
means (i) with respect to the license granted to Lilly under Section ‎2.1,
(ii) with respect to the license granted to ACI under Section ‎2.2, or (iii) with respect to the licenses granted to either
Party under Section ‎12.4.1, in each case ((i) through (iii)), any Person in its capacity as a sublicensee of such license
and any further sublicensee of such license (regardless of the number of tiers, layers or levels of sublicenses of such rights).

 

1.99.       “Tau
Aggregation Inhibitor” means [*****].

 

1.100.       “Territory”
means the entire world.

 

1.101.       “Third
Category” means all [*****].

 

1.102.       “Third
Party” means any Person other than ACI, Lilly and their respective Affiliates.

 

1.103.       
“Trademark” means any word, name, symbol, color, shape, designation
or any combination thereof, including any trademark, service mark, trade name, brand name, sub-brand name, trade dress, product
configuration, program name, delivery form name, certification mark, collective mark, logo, tagline, slogan, design or business
symbol, that functions as an identifier of source or origin, whether or not registered and all statutory and common law rights
therein and all registrations and applications therefor, together with all goodwill associated with, or symbolized by, any of
the foregoing.

 

1.104.       “Unilateral
Indication” means an Eligible Indication for which ACI exercises the Unilateral Clinical Development Option.

 

1.105.       “United
States” or “U.S.” means the United States of America and its territories and possessions (including
the District of Columbia and Puerto Rico).

 

1.106.       “Valid
Claim” means (i) a claim of any issued and unexpired Patent whose validity, enforceability or patentability has not
been affected by (a) irretrievable lapse, abandonment, revocation, dedication to the public or disclaimer or (b) a holding,
finding or decision of invalidity, unenforceability or non-patentability by a court, national or regional patent office, or other
Governmental Authority that has competent jurisdiction, such holding, finding or decision being final and unappealable or unappealed
within the time allowed for appeal or (ii) a claim of a pending Patent application that was filed and is being prosecuted in good
faith and has not been abandoned or finally disallowed without the possibility of appeal or re-filing of the application[*****].

 

     14

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    
 

	Capitalized
    terms not defined above have the meaning set forth in the sections below.
	“ACI”	Preamble
	“ACI
    Program IP”	Section ‎8.1.3
	“ACI
    Proposed Budget”	Section ‎3.2.2
	“ACI
    Unilateral Clinical Development Proposal” 	Section 3.2.2
	“Additional
    Indication”	Section
    ‎7.6.4
	“Additional
    Indication Clinical Funding Option”	Section
    ‎‎7.6.4
	“Agreement”	Preamble
	“Arbitration
    Notice”	Section
    ‎13.5.1
	“Arbitrators”	Section
    ‎13.5.2
	“Assigned
    Regulatory Approvals”	Section
    3.3.1‎(iii)
	“Assigned
    Regulatory Documentation”	Section
    3.3.1‎(iii)
	“Auditor”	Section
    ‎‎7.11.1
	“Board
    of Directors”	Section
    ‎1.13.1
	“Breaching
    Party”	Section
    ‎12.2.1
	“Combination
    Product”	Section ‎1.76
	“Competitive
    Change of Control”	Section ‎2.7.2
	“Competitive
    Change of Control Cure”	Section 2.7.2
	“Competitive
    Change of Control Cure Period”	Section 2.7.2
	“Confidential
    Information”	Section
    ‎9.1

 

     15

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    
 

	“Co-Promotion
    Agreement”	Section
    ‎4.7.3
	“Co-Promotion
    Indication”	Section
    ‎4.7.1
	“Co-Promotion
    Option”	Section
    ‎4.7.1
	“Development
    Plan”	Section
    ‎3.1.2
	“Diligence
    Products”	Section ‎3.1.3
	“Dispute”	Section
    ‎13.5
	“DOJ”	Section
    ‎1.55
	“Elected
    Percentage”	Section ‎7.6.4
	“Eligible
    Indication”	Section
    ‎3.2.1
	“Eligible
    Product”	Section
    ‎3.2.1
	“Exclusion
    Percentage”	Section ‎1.96
	“Exclusive
    Co-Promotion Indication”	Section ‎4.7.1
	“Execution
    Date”	Preamble
	“Existing
    Patents”	Section
    ‎10.2.2
	“FTC”	Section
    ‎1.55
	“Government
    Official”	Section
    ‎10.4.2
	“Indemnification
    Claim Notice”	Section
    ‎11.3.1
	“Indemnified
    Party”	Section
    ‎11.3.1
	“Infringement”	Section
    ‎8.3.1

 

     16

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    
 

	“Joint
    Development Activities”	Section
    ‎3.1.2
	“Joint
    Program IP”	Section ‎8.1.4
	“Joint
    Steering Committee” or “JSC”	Section ‎5.1
	“Lilly”	Preamble
	“Lilly
    Pre-Clinical Activities”	Section 3.1.2‎(ii)
	“Lilly
    Pre-Clinical Activity Period”	Section 3.1.2‎0(ii)
	“Lilly
    Program IP”	Section ‎8.1.3
	“Lilly
    Rejection Notice”	Section ‎3.2.3
	“Lilly
    Response Notice”	Section ‎3.2.3
	“Losses”	Section ‎11.1
	“Manufacturing
    Process”	Section ‎6.4
	“Non-Breaching
    Party”	Section ‎12.2.1
	“Notice
    Period”	Section ‎12.2.1
	“Opt-In
    Fee”	Section 3.2.7‎(ii)
	“Opt-In
    Premium”	Section 3.2.7‎(ii)
	“Other
    Product(s)”	Section ‎1.76
	“Party”
    and “Parties”	Preamble
	“Patent
    Strategy Decision”	Section 5.2.6‎(ii)
	“Patent
    Subcommittee”	Section 5.2.6‎(ii)

 

     17

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    
 

	“Payment”	Section
    ‎7.8.1
	“Prosecution”	Section ‎8.2.1
	“Statement
    Cut-Off Date”	Section ‎3.2.7
	“Tau
    Patents”	Section ‎8.1.2
	“Tech
    Transfer Date”	Section ‎2.5.1
	“Term”	Section ‎12.1
	“Termination
    Notice”	Section ‎12.2.1
	“Termination
    Royalty Product”	Section 12.4.1‎(v)
	“Third
    Party Claims”	Section ‎11.1
	“Third
    Party Infringement Claim”	Section ‎‎8.4
	“Transferred
    Materials”	Section ‎2.5.1
	“Unilateral
    Activities”	Section ‎3.2.4
	“Unilateral
    Activity Cost Statement”	Section 3.2.7‎(i)
	“Unilateral
    Clinical Development Option”	Section ‎3.2.1
	“Unilateral
    Data Package”	Section 3.2.7‎(i)
	“Unilateral
    Data Package Trigger”	Section 3.2.7‎(i)
	“Unilateral
    Development Option Period”	Section ‎3.2.1
	“Unilateral
    Development Triggering Event”	Section ‎3.2.1
	“Unilateral
    Opt-In”	Section 3.2.7‎(ii)
	“VAT”	Section
    ‎7.8.2

 

     18

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

ARTICLE
2

GRANT OF RIGHTS

 

2.1.       Grants
to Lilly. Subject to the terms and conditions of this Agreement, effective as of the
Effective Date, ACI (on behalf of itself and its Affiliates) hereby grants to Lilly:

 

2.1.1.       an
exclusive (including with regard to ACI and its Affiliates) and non-transferable (except in accordance with Section ‎13.3)
license (or sublicense), with the right to grant sublicenses in accordance with Section ‎2.3.1, under the ACI Patents, the
ACI Know-How, and ACI’s interests in the Joint Patents and the Joint Know-How, in each case to Exploit the Licensed Compound
and Licensed Products in the Field in the Territory[*****]; and

 

2.1.2.       a
non-exclusive license, with the right to grant sublicenses in accordance with Section ‎2.3.1, to use ACI’s Corporate
Names to the extent required under Section ‎4.5.

 

2.2.       Grants
to ACI. Subject to the terms and conditions of this Agreement, effective as of the Effective
Date, Lilly hereby grants to ACI:

 

2.2.1.       a
non-exclusive, royalty-free, non-transferable (except in accordance with Section ‎13.3) license, with the right to grant sublicenses
in accordance with Section ‎2.3.2, under the Lilly Patents, the Lilly Know-How, and Lilly’s interests in the Joint Patents
and the Joint Know-How, to (i) Develop Licensed Products in the Territory in accordance with the ACI Pre-Clinical and Phase
1 Activities and any other obligations set forth in the Development Plan, (ii) conduct the Unilateral Activities and (iii) Manufacture
(or have Manufactured) Licensed Products in the Territory in accordance with the ACI Pre-Clinical and Phase 1 Activities and any
of its other obligations as set forth in the Development Plan and Article 6; and

 

    19 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

2.2.2.       a
non-exclusive “Right of Reference,” as that term is defined in 21 C.F.R. § 314.3(b) (or any Applicable
Law recognized outside of the United States), to, and a right to copy, access, and otherwise use, all information and data (including
all CMC information as well as data made, collected or otherwise generated in the conduct of any Clinical Trials or early access/named
patient programs for the Licensed Products) included in or used in support of any Regulatory Approval, drug master file or other
Regulatory Documentation (including Assigned Regulatory Documentation, Assigned Regulatory Approvals and orphan drug applications
and designations) maintained on behalf of, or Controlled by, Lilly (or its Sublicensees) that relates to any Licensed Product,
in each case to the extent necessary to perform ACI’s Development obligations under this Agreement, including in connection
with any conduct of any Unilateral Activities (it being understood that (i) Lilly will provide a signed statement to this
effect, if requested in writing by ACI, in accordance with 21 C.F.R. § 314.50(g)(3) (or any Applicable Law
outside of the United States) and (ii) upon the reasonable written request of ACI, Lilly will, and will cause its Sublicensees
to, obtain and provide to ACI certificates or other formal or official attestations concerning the regulatory status of the Licensed
Products (e.g., Certificates of Free Sale, Certificates for Export, Certificates to Foreign Governments) to the extent
that such attestations are reasonably necessary to exercise its rights under this Section ‎2.2.2.

 

2.3.       Sublicenses.

 

2.3.1.       Lilly
shall have the right to grant sublicenses, through multiple tiers, under the licenses granted in Section ‎2.1, to its
Affiliates and any Third Party. With respect to each such sublicense, [*****]. Notwithstanding the foregoing, Lilly shall not
grant any sublicense to any Third Party of all or substantially all of Lilly’s rights under this Agreement without ACI’s
prior written consent. For the avoidance of doubt, Lilly shall remain directly responsible for all of its respective obligations
under this Agreement, notwithstanding the grant of any sublicense hereunder and no such sublicense shall alter, reduce or otherwise
modify Lilly’s obligations hereunder.

 

2.3.2.       Subject
to the requirements of this Section ‎2.3.2, ACI shall have the right to grant sublicenses (or further rights of reference),
through multiple tiers, under the licenses and rights of reference granted in Section ‎2.2, to its Affiliates and, with Lilly’s
prior written consent, to Third Parties, which consent shall not be unreasonably withheld, conditioned or delayed. With respect
to each such sublicense, [*****]. For the avoidance of doubt, ACI shall remain directly responsible for all of its respective
obligations under this Agreement, notwithstanding the grant of any sublicense hereunder and no such sublicense shall alter, reduce
or otherwise modify ACI’s obligations hereunder.

 

    20 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

2.4.       Retention
of Rights.

 

2.4.1.       ACI
retains the right under the ACI Patents, the ACI Know-How, and ACI’s interests in the Joint Patents and the Joint Know-How,
[*****]. Except as expressly provided herein, ACI grants no other right or license, including any rights or licenses to the ACI
Patents, the ACI Know-How, ACI’s interests in the Joint Patents and Joint Know-How, the ACI Corporate Names or any other
Patent or intellectual property rights not otherwise expressly granted herein.

 

2.4.2.       Except
as expressly provided herein, Lilly grants no other right or license, including any rights or licenses to the Lilly Patents (including
the Lilly Grantback Patent Rights), the Lilly Know-How (including the Lilly Grantback Know-How), Lilly’s interests in the
Joint Patents and Joint Know-How, the Assigned Regulatory Approvals, Assigned Regulatory Documentation or any other Patent or
intellectual property rights not otherwise expressly granted herein.

 

2.5.       Disclosure
of Know-How and Regulatory Documentation.

 

2.5.1.       As
soon as reasonably practicable after each of [*****], ACI shall, and shall cause its Affiliates to, without additional compensation,
disclose and make available to Lilly, in such form as Lilly may reasonably request (including by providing copies thereof) Regulatory
Documentation, ACI Know-How, Joint Know-How and any other Information claimed or covered by any ACI Patent or Joint Patent or
otherwise relating, directly or indirectly, to the Licensed Compound, any Licensed Product, or the Exploitation thereof (collectively,
the “Transferred Materials”) that is in existence as of the applicable Tech Transfer Date, in the possession
of ACI or its Affiliates.

 

2.5.2.       If
requested by Lilly in writing, ACI, at its cost and expense, will provide Lilly with reasonable assistance, in a timely manner,
in understanding and using any Transferred Materials. Without limitation of the foregoing, ACI shall make available to Lilly,
including at Lilly’s facilities, those of ACI’s representatives as Lilly may reasonably request for purposes of effecting
the disclosure and transfer of the Transferred Materials or for purposes of acquiring expertise on the practical application of
the Information associated therewith.

 

    21 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

2.5.3.       Without
limitation of the foregoing, ACI shall promptly disclose to Lilly any Improvements with respect to Licensed Compounds and Licensed
Products made or otherwise Controlled by ACI or its Affiliates during the Term and provide Lilly with all relevant Information
and materials with respect to such Improvements. Lilly shall have the right, at any time, to reject any such Improvement on written
notice to ACI, in which event, such Improvement shall be automatically excluded from the rights and licenses granted to Lilly
under this Agreement.

 

2.6.       Confirmatory
Patent License; License Registration.  From and after the Effective Date, ACI shall if
requested to do so by Lilly, at Lilly’s cost and expense, (i) immediately enter into confirmatory license agreements in
such form as may be reasonably requested in writing by Lilly for purposes of recording or registering the licenses granted under
this Agreement with such patent offices or other patent registries in the Territory as Lilly considers appropriate and (ii) grant
to Lilly all necessary or useful authorizations and shall execute and sign all necessary or useful documents for the perfection
of such recordings and registrations upon Lilly’s first request. Lilly is entitled to request the registration and to register
the license granted under this Agreement at its own expense in the Patent registers of any and all jurisdictions in the Territory;
provided that, notwithstanding anything herein to the contrary, no such confirmatory license agreements shall be publicly
filed, disclosed, registered or recorded without the prior written consent of ACI, such consent not to be unreasonably withheld,
conditioned or delayed. Until the execution of any such confirmatory licenses, so far as may be legally possible, ACI and Lilly
shall have the same rights in respect of the ACI Patents and be under the same obligations to each other in all respects as if
the said confirmatory licenses had been executed.

 

2.7.       Exclusivity;
Change of Control of ACI.

 

2.7.1.       Exclusivity.

 

(i)       In
any country in the Territory, [*****].

 

(ii)      The
foregoing restrictions in Section ‎2.7.1 shall not apply to [*****].

 

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(iii)     Each
Party acknowledges and agrees that (a) Section ‎2.7.1 has been negotiated by the Parties, (b) the geographical and time limitations
on activities set forth in this Section ‎2.7.1 are reasonable, valid and necessary in light of the Parties’ circumstances
and necessary for the adequate protection of the business of the Licensed Compounds and the Licensed Products and (c) the other
Party would not have entered into this Agreement without the protection afforded it by this Section ‎2.7.1. If, notwithstanding
the foregoing, a court of competent jurisdiction determines that the restrictions set forth in this Section ‎2.7.1 are too
broad or otherwise unreasonable under Applicable Law, including with respect to duration, geographic scope or space, the court
is hereby requested and authorized by the Parties to revise this Section ‎2.7.1 to include the maximum restrictions allowable
under Applicable Law.

 

2.7.2.       Change
of Control of ACI. [*****].

 

ARTICLE
3

DEVELOPMENT AND REGULATORY ACTIVITIES

 

3.1.       Development.

 

3.1.1.       In
General. Except as provided in Section ‎3.1.2 and Section ‎3.2, as between the
Parties, from and after the Effective Date, Lilly shall have the sole right and responsibility, at its sole cost and expense,
for all aspects of the Development of each Licensed Compound and Licensed Product. Without limiting the generality of the foregoing,
from and after the Effective Date, except as provided in Section ‎3.2, Lilly shall have the sole right and responsibility,
at its sole cost and expense, to (i) file all Drug Approval Applications and make all other filings with the Regulatory Authorities,
and to otherwise seek all Regulatory Approvals for Licensed Products, in the Territory, as well as to conduct all correspondence
and communications with Regulatory Authorities regarding such matters and (ii) report all Adverse Events to Regulatory Authorities
if and to the extent required by Applicable Law.

 

3.1.2.       Joint
Development.

 

(i)       Attached
hereto as Schedule 3.1.2(i) is the initial plan for the Development of the Licensed Product (the “Development
Plan”) in the First Indication and Second Indication, which plan shall assign responsibility for Development activities
between the Parties (such activities, “Joint Development Activities”).

 

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(ii)       As
between the Parties, Lilly shall have the sole right for performing the Lilly Pre-Clinical Activities. “Lilly Pre-Clinical
Activities” means the activities set forth on Schedule 3.1.2(ii). Lilly may, in its sole discretion, conduct
the Lilly Pre-Clinical Activities during the period beginning on the Effective Date and ending [*****] thereafter; [*****]. ACI
shall provide reasonable assistance to Lilly in conducting the Lilly Pre-Clinical Activities, including by providing, upon Lilly’s
request, such commercially reasonable quantities of the Licensed Compound as Lilly may require (but in no case more than [*****]
Licensed Compound).

 

(iii)     As
between the Parties, ACI shall have the sole right and responsibility, in accordance with the terms of this Section 3.1.2‎(iii),
for performing the ACI Pre-Clinical and Phase 1 Activities; [*****]. ACI shall perform the ACI Pre-Clinical and Phase 1 Activities
in accordance with the Development Plan and such protocol as applicable and, in the case of any Phase 1 Clinical Trial that is
part of the ACI Pre-Clinical and Phase 1 Activities, conduct such Phase 1 Clinical Trial at clinical trial sites approved by Lilly,
which approval will not be unreasonably withheld, conditioned or delayed; provided, that Lilly may perform a GCP compliance
audit/assessment of the Clinical Trial site prior to approval. [*****]. In the event that ACI identifies any Backups, ACI shall
notify Lilly in writing of such identification within thirty (30) days thereof.

 

(iv)     The
JSC shall review the Development Plan at least annually for the purpose of considering appropriate amendments thereto. In addition,
either Party, through its representatives on the JSC, may propose amendments to the Development Plan for Joint Development Activities
at any time. All internal personnel and resources shall be expressed in terms of FTEs and the budgeted cost shall be calculated
using the relevant FTE Rates. Notwithstanding any other provision of this Section ‎3.1.2 or any provisions of Article 5 the
Development Plan shall not be amended to extend ACI’s conduct of any pre-clinical studies and activities beyond the date
that is [*****] (or such later date as the Parties may agree) or expand ACI’s obligations in any manner that would require
ACI to incur any additional costs and expenses without the prior written agreement of the Parties.

 

(v)      Under
the direction and supervision of the JSC, each Party shall perform the responsibilities assigned to it under the applicable Development
Plan and shall use Commercially Reasonable Efforts to do so in accordance with the timelines set forth in the Development Plan.
Each Party shall perform or cause to be performed, any and all of its Joint Development Activities in accordance with the Development
Plan (including with respect to ACI, the budget set forth therein) and in good scientific manner and in compliance with all GxPs
and Applicable Law by allocating sufficient time, effort, equipment, and skilled personnel to complete such Joint Development
Activities.

 

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3.1.3.       Diligence.
 From and after the Effective Date, ACI shall use Commercially Reasonable Efforts to
conduct the ACI Pre-Clinical and Phase 1 Activities (subject to Lilly’s right to assume responsibility for the ACI Pre-Clinical
and Phase 1 Activities in accordance with Section 3.1.2‎(iii)). From and after the Effective Date, Lilly shall use Commercially
Reasonable Efforts to Develop (i) a Licensed Product in the First Indication and Second Indication in the Field in the Territory,
(ii) such Licensed Products as are approved by the JSC for Development, and (iii) all Licensed Products for which the JSC requests
ACI to, and ACI agrees in writing to, conduct Development activities (such Licensed Products in clauses (i), (ii) and (iii), collectively,
the “Diligence Products”).

 

3.1.4.       Subcontracting.
Subject to Section ‎2.3, (i) ACI shall have the right to subcontract its Joint Development
Activities to a Third Party and (ii) Lilly shall have the right, in its discretion, to subcontract any Development activities
to a Third Party. For the avoidance of doubt, each Party shall remain directly responsible for all of its respective obligations
under this Agreement, notwithstanding any subcontracting arrangement hereunder.

 

3.1.5.       Development
Records.

 

(i)       Each
Party shall maintain, in good scientific manner, complete and accurate books and records (paper or electronic) pertaining to Development
of Licensed Products hereunder, in sufficient detail to verify compliance with its obligations under this Agreement and which
shall be appropriate for Patent and regulatory purposes, in compliance with Applicable Law and properly reflect all work done
and results achieved in the performance of its Development activities hereunder, which books and records shall record only such
activities and shall not include or be commingled with records of activities outside the scope of this Agreement. Such books and
records shall be retained by ACI or Lilly, as the case may be, for at least [*****] after the expiration or termination of this
Agreement or for such longer period as may be required by Applicable Law.

 

(ii)       Subject
to the terms and conditions herein, not more than [*****], each Party shall have the right, either itself or through an independent
auditor reasonably acceptable to the other Party (and who has executed a confidentiality agreement reasonably acceptable to such
Party), during normal business hours and upon reasonable notice, to inspect and copy all records of the other Party maintained
pursuant to this Section ‎3.1.5 solely to the extent necessary to confirm such Party’s compliance with the terms and
conditions herein; provided that the inspecting Party shall maintain such records and the information disclosed therein
in confidence in accordance with Article ‎9. Any inspection shall be limited to the relevant records from any Calendar Year
ending not more than [*****].

 

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3.1.6.       Development
Reporting. At each meeting of the JSC, Lilly shall provide the JSC a reasonably detailed
update regarding all material Development activities conducted by or on behalf of Lilly or any of its Affiliates or Sublicensees
with respect to the Licensed Products. At each meeting of the JSC, ACI shall provide the JSC a reasonably detailed update regarding
all material Development activities conducted by or on behalf of ACI or any of its Affiliates with respect to the Licensed Product
for ACI Pre-Clinical and Phase 1 Activities and Unilateral Activities. Additionally, ACI shall provide directly to Lilly, on the
date that is ninety (90) days after Effective Date and at such other times as Lilly may reasonably request during Lilly Pre-Clinical
Activities Period, a reasonably detailed report regarding all material Development activities conducted by or on behalf of ACI
or any of its Affiliates with respect to the Licensed Product for ACI Pre-Clinical and Phase 1 Activities.

 

3.2.       Unilateral
Clinical Development Option.

 

3.2.1.       Lilly
shall notify ACI in writing of the occurrence of the Unilateral Development Triggering Event. At any time during the Unilateral
Development Option Period, ACI shall have the option to elect to independently pursue clinical Development of the Licensed Product
that was the subject of such Unilateral Development Triggering Event (“Eligible Product”) for one Eligible
Indication, subject to the remainder of the terms of this Section ‎3.2 and any other applicable terms of this Agreement (such
option, the “Unilateral Clinical Development Option”). “Eligible Indication” means [*****].
The “Unilateral Development Triggering Event” means [*****]. “Unilateral Development Option Period”
means [*****].

 

3.2.2.       In
the event that ACI desires to exercise the Unilateral Clinical Development Option, then, at least sixty (60) days prior to the
date on which ACI desires to exercise such option, ACI shall provide to Lilly written notice thereof, together with [*****].

 

3.2.3.       Lilly
shall notify ACI in writing (“Lilly Response Notice”) within ninety (90) days after receipt of such ACI Unilateral
Clinical Development Proposal whether Lilly (i) accepts the exercise of the Unilateral Clinical Development Option, in which
case such Unilateral Clinical Development Option shall be deemed to have been exercised as of the date of such Lilly Response
Notice, or (ii) rejects the exercise of the Unilateral Clinical Development Option because: [*****].

 

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3.2.4.       For
the avoidance of doubt, if the exercise of the Unilateral Clinical Development Option is finally rejected in accordance with Section
‎3.2.3, then ACI may make future proposals to Lilly in accordance with Section ‎3.2. Once the Unilateral Clinical Development
Option has been exercised in accordance with Section ‎3.2.3, the Development activities with respect to the Eligible Indication
and the applicable Licensed Product prior to the exercise of the Unilateral Opt-In pursuant to Section ‎3.2.7‎(i) or Section
‎3.2.8 shall constitute “Unilateral Activities”.

 

3.2.5.       Provisions
relating to Unilateral Activities.

 

(i)       Subject
to Section ‎3.2.4, in the event that Lilly has a good faith belief that any Unilateral Activities would reasonably be expected
to have a material adverse effect on a Licensed Product for the First Indication or for any other Indication that is being Developed
or Commercialized by Lilly, Lilly may so notify ACI of such good faith belief along with a reasonably adequate basis for such
good faith belief and, upon receiving such notice, ACI shall not and shall cause its Affiliates not to conduct the Unilateral
Activities.

 

(ii)       ACI
may conduct any Unilateral Activities (a) using only such forms and formulations of the applicable Licensed Product as are
then being Manufactured and (b) using only such dose ranges as may be approved in writing by Lilly, which approval shall
not be unreasonably withheld, conditioned or delayed.

 

(iii)       [*****].

 

(iv)       For
the avoidance of doubt, in the event that ACI exercises its Unilateral Clinical Development Option and Lilly does not reject such
exercise in accordance with the terms and conditions herein, ACI shall have the sole and exclusive right and responsibility, at
its sole cost and expense, (a) for the Development of the applicable Licensed Product in the applicable Unilateral Indication
and (b) to prepare, obtain and maintain Drug Approval Applications, other Regulatory Approvals and other submissions and
to conduct communications with the Regulatory Authorities for such Licensed Product in such Unilateral Indication, in each case
of clauses (a) and (b) until Lilly exercises, or is deemed to have exercised, its Unilateral Opt-In right.

 

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3.2.6.       Costs
of Unilateral Activities; External Development Costs. Unless and until there is a Unilateral
Opt-In by Lilly, ACI shall bear the sole cost and expense of such Unilateral Activities, and Lilly shall have no financial obligation
to fund any efforts in respect of such Unilateral Activities. During any Calendar Quarter in which ACI conducts Unilateral Activities,
ACI shall report to Lilly, within forty-five (45) days after the end of such Calendar Quarter the costs and expenses incurred
by ACI during such Calendar Quarter in connection with such Unilateral Activities. Each such report shall [*****]. The Parties
shall seek to resolve any questions related to such accounting statements within fifteen (15) days following receipt by Lilly
of ACI’s report hereunder.

 

3.2.7.       Lilly
Opt-In to Unilateral Development.

 

(i)       To
the extent that ACI completes a Clinical Trial as part of the Unilateral Activities, within ninety (90) days of the Unilateral
Data Package Trigger with respect to such Clinical Trial, ACI shall provide to Lilly the Unilateral Data Package and the “Unilateral
Activity Cost Statement”, which means [*****]. The “Unilateral Data Package” shall consist of [*****].
“Unilateral Data Package Trigger” means, [*****].

 

(ii)       Following
receipt of the Unilateral Activity Cost Statement and Unilateral Data Package described in clause (i) above, if Lilly desires
to exercise its right to opt-in (“Unilateral Opt-In”) to the joint Development of the Unilateral Indication,
then Lilly shall notify ACI in writing within sixty (60) days of receipt of the Unilateral Data Package and shall pay to ACI an
amount equal to the Opt-In Fee. The “Opt-In Fee” means [*****].

 

3.2.8.       No
Opt-In During Opt-In Period. If Lilly does not exercise its Unilateral Opt-In right and
Regulatory Approval for the applicable Licensed Product for the Unilateral Indication is obtained in the United States or within
the European Union, then, unless Lilly has opted to not exercise its Unilateral Opt-In pursuant to Section ‎3.2.5‎(iii),
Lilly shall be deemed to have exercised its Unilateral Opt-In right as of the date of such occurrence and Lilly shall make a payment
to ACI equal to [*****].

 

3.2.9.       Diligence
Following Unilateral Opt-In. Notwithstanding anything to the contrary herein, and without
limiting Lilly’s diligence obligations in Sections ‎3.1.3, ‎3.3.1 and ‎4.2, in the event Lilly exercises its
Unilateral Opt-In right with respect to an applicable Licensed Product for the Unilateral Indication pursuant to Section ‎3.2.7
or ‎3.2.8, Lilly shall use Commercially Reasonable Efforts to (i) Develop such Licensed Product in such Unilateral Indication,
(ii) obtain Regulatory Approval for such Licensed Product in such Unilateral Indication and (iii) Commercialize such Licensed
Product in such Unilateral Indication.

 

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3.3.       Regulatory
Activities.

 

3.3.1.       Regulatory
Approvals.

 

(i)       Following
the successful completion by the Parties of the Joint Development Activities with respect to any Diligence Product in any Indication
in accordance with the applicable Development Plan, Lilly shall use Commercially Reasonable Efforts to obtain Regulatory Approval
for such Diligence Product in such Indication in the Territory.

 

(ii)       As
between the Parties, subject to Section ‎3.2.5‎(iv), Lilly shall have the sole right to prepare, obtain and maintain Drug
Approval Applications (including the setting of the overall regulatory strategy therefor), other Regulatory Approvals and other
submissions and to conduct communications with the Regulatory Authorities, for Licensed Products in the Territory (which shall
include filings of or with respect to INDs and other filings or communications with the Regulatory Authorities with respect to
Joint Development Activities). ACI shall support Lilly, as may be reasonably necessary, in obtaining Regulatory Approvals for
the Licensed Products and in the activities in support thereof, including providing any documents or other materials in the possession
or control or ACI or any of its Affiliates as may be reasonably necessary or useful for Lilly or any of its Sublicensees to obtain
Regulatory Approvals for the Licensed Products.

 

(iii)       Except
to the extent prohibited by Applicable Law, all Regulatory Documentation (including all Regulatory Approvals) relating to the
Licensed Products with respect to the Territory developed or granted after the Effective Date shall be owned by and shall be the
sole property and held in the name of, Lilly or its designated Affiliate, Sublicensee or designee and ACI hereby assigns to Lilly
all of its right, title, and interest in and to all such Regulatory Documentation (including such Regulatory Approvals) and all
Existing Regulatory Documentation (including any existing Regulatory Approvals) (collectively, the “Assigned Regulatory
Documentation” and “Assigned Regulatory Approvals”), [*****]. ACI shall duly execute and deliver
or cause to be duly executed and delivered, such instruments and shall do and cause to be done such acts and things, including
the filing of such assignments, agreements, documents and instruments, as may be necessary to confirm unto Lilly its rights under,
this Section ‎3.3.1‎(iii).

 

3.3.2.       Regulatory
Reporting. At each meeting of the JSC, Lilly shall provide the JSC a reasonably detailed
update regarding material regulatory activities conducted by or on behalf of Lilly or any of its Affiliates or Sublicensees with
respect to the Licensed Products. At each meeting of the JSC, ACI shall provide the JSC a reasonably detailed update regarding
material regulatory activities conducted by or on behalf of ACI or any of its Affiliates with respect to the Licensed Product
for ACI Pre-Clinical and Phase 1 Activities and Unilateral Activities.

 

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3.3.3.       Recalls,
Suspensions or Withdrawals. Lilly shall make reasonable efforts to notify ACI in writing
promptly following its determination that any event, incident or circumstance has occurred that may result in the need for a recall,
market suspension or market withdrawal of a Licensed Product in the Territory and shall include in such notice the reasoning behind
such determination and any supporting facts. As between the Parties, Lilly shall have the right to make the final determination
whether to voluntarily implement any such recall, market suspension or market withdrawal in the Territory. If a recall, market
suspension or market withdrawal is mandated by a Regulatory Authority in the Territory, as between the Parties, Lilly shall initiate
such a recall, market suspension or market withdrawal in compliance with Applicable Law. For all recalls, market suspensions or
market withdrawals undertaken pursuant to this Section ‎3.3.3, as between the Parties, Lilly shall be solely responsible for
the execution and ACI shall reasonably cooperate in all such efforts. Subject to Article 11, Lilly shall be solely responsible
for all costs of any such recall, market suspension or market withdrawal, except in the event and to the extent that a recall,
market suspension or market withdrawal resulted from ACI’s or its Affiliate’s breach of its obligations hereunder
or from ACI’s or its Affiliate’s fraud, negligence or willful misconduct, in which case, ACI shall bear the expense
of such recall, market suspension or market withdrawal.

 

3.3.4.       Global
Safety Database. At the time Lilly submits a Drug Approval Application, Lilly shall establish,
hold and maintain (at Lilly’s cost and expense) the global safety database for Licensed Products. ACI shall provide Lilly
with all information necessary or desirable for Lilly to comply with its pharmacovigilance responsibilities under Applicable Law
in the Territory, including, as applicable, any adverse drug experiences (including those events or experiences that are required
to be reported to the FDA under 21 C.F.R. sections 312.32 or 314.80 or to foreign Regulatory Authorities under corresponding Applicable
Law outside the United States), from pre-clinical or clinical laboratory, animal toxicology and pharmacology studies, clinical
studies and commercial experiences with a Licensed Product, in each case in the form reasonably requested by Lilly. As needed,
the Parties shall negotiate in good faith and enter into a Safety-Regulatory Agreement to outline safety and regulatory responsibilities.
The Safety-Regulatory Agreement shall be in place prior to the start of parallel Joint Development Activities under this Agreement
by both Parties.

 

ARTICLE
4

COMMERCIALIZATION

 

4.1.       In
General. As between the Parties, Lilly shall have the sole right to Commercialize Licensed
Products in the Territory at Lilly’s sole cost and expense, subject to ACI’s Co-Promotion Option pursuant to Section
‎4.7.

 

4.2.       Diligence.
With respect to each Diligence Product that obtains Regulatory Approval in any country
within the Territory, Lilly shall use Commercially Reasonable Efforts to Commercialize such Diligence Product in the Field in
the Territory.

 

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4.3.       Booking
of Sales; Distribution. As between the Parties, Lilly shall have the sole right to invoice
and book sales, establish all terms of sale (including pricing and discounts) and warehouse and distribute the Licensed Products
in the Territory and perform or cause to be performed all related services.

 

4.4.       Compliance
with Applicable Law.  Lilly shall and shall cause its Sublicensees to, comply with all
Applicable Law with respect to the Commercialization of Licensed Products hereunder.

 

4.5.       Markings.
 Solely to the extent required by Applicable Law, the promotional materials, packaging,
and Product Labeling for the Licensed Products (and any other promotional materials or packaging where such Product Labeling appears)
used by Lilly in the Territory shall contain a statement that the Licensed Products are distributed under license from ACI and
as part of such statement, Lilly shall have the right to use the Corporate Name of ACI.

 

4.6.       Subcontracting.
 Subject to Section ‎2.3, Lilly shall have the right to subcontract any of its
Commercialization activities to a Third Party (including by appointing one or more contract sales forces, co-promotion partners
or distributors). For the avoidance of doubt, Lilly shall remain directly responsible for all of its respective obligations under
this Agreement, notwithstanding any subcontracting arrangement hereunder.

 

4.7.       Co-Promotion
Option.

 

4.7.1.       Option.
ACI shall have the [*****] right to elect to Co-Promote the Licensed Product [*****].

 

4.7.2.       [*****].

 

4.7.3.       [*****].

 

ARTICLE
5

COLLABORATION MANAGEMENT

 

5.1.       Joint
Steering Committee. Within thirty (30) days after the Effective Date, the Parties shall
establish a joint executive committee (the “Joint Steering Committee” or “JSC”), which shall
consist of three (3) representatives from each of the Parties, each with the requisite experience and seniority to enable such
person to make decisions on behalf of the Parties with respect to the issues falling within the jurisdiction of the JSC. From
time to time, each Party may substitute one or more of its representatives to the JSC on written notice to the other Party. The
JSC shall:

 

5.1.1.       [*****].

 

5.1.2.       [*****].

 

5.1.3.       [*****].

 

5.1.4.       [*****].

 

5.1.5.       [*****].

 

5.1.6.       [*****].

 

5.1.7.       [*****].

 

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5.2.       General
Provisions Applicable to the JSC.

 

5.2.1.       Meetings
and Minutes. The JSC shall meet on a Calendar Quarter basis or as otherwise agreed to
by the Parties in writing. The JSC may meet in person or by telephone, video conference or similar means in which each participant
can hear what is said by and be heard by, the other participants; provided that at least two (2) meetings of the JSC per
Calendar Year shall be in person. In-person meetings of the JSC will be held at locations in the United States and Switzerland
alternately selected by Lilly and ACI (with Lilly selecting the location of the first JSC meeting). The chairperson for each JSC
meeting shall be alternately selected by Lilly and ACI from their respective representatives on the JSC (with Lilly selecting
the chairperson for the first JSC meeting). The chairperson of the JSC shall be responsible for calling meetings on no less than
thirty (30) Business Days’ notice unless exigent circumstances require shorter notice. Each Party shall make all proposals
for agenda items at least fifteen (15) Business Days in advance of the applicable meeting and shall provide all appropriate information
with respect to such proposed items at least fifteen (15) Business Days in advance of the applicable meeting; provided
that under exigent circumstances requiring input by the JSC, a Party may provide its agenda items to the other Party within a
shorter period of time in advance of the meeting or may propose that there not be a specific agenda for a particular meeting,
so long as the other Party consents to such later addition of such agenda items or the absence of a specific agenda for such meeting.
The chairperson of the JSC shall prepare and circulate for review and approval of the Parties minutes of each meeting within thirty
(30) days after the meeting. The Parties shall agree on the minutes of each meeting promptly, but in no event later than the next
meeting of the JSC.

 

5.2.2.       Procedural
Rules. The JSC shall have the right to adopt such standing rules as shall be necessary
for its work, to the extent that such rules are not inconsistent with this Agreement. A quorum of the JSC shall exist whenever
there is present at a meeting at least one (1) representative appointed by each Party. Representation by proxy shall be allowed.
Subject to Section ‎5.2.3, the JSC shall take action by consensus of the representatives present at a meeting at which a quorum
exists, with each Party having a single vote irrespective of the number of representatives of such Party in attendance or by a
written resolution signed by at least one (1) representative appointed by each Party. Employees or consultants of a Party who
are not representatives of the Parties on the JSC may attend meetings of the JSC; provided, however, that such attendees
(i) shall not vote or otherwise participate in the decision-making process of the JSC and (ii) are bound by obligations
of confidentiality and non-disclosure at least as protective of the other Party as those set forth in Article 9.

 

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5.2.3.       Decision-Making.
Except for matters outside the jurisdiction and authority of the JSC (including as set
forth in Section ‎5.2.4), if the JSC cannot, or does not, reach consensus on an issue, then either Party shall have the right
to refer such Dispute to the Senior Officers for attempted resolution by good faith negotiations during a period of ten (10) Business
Days. Any final decision mutually agreed to by the Senior Officers shall be conclusive and binding on the Parties. If such Senior
Officers are unable to resolve any such Dispute within such ten (10)-Business Day period despite good faith negotiations, Lilly
shall have the right to finally and definitively resolve such Dispute in good faith, in a manner consistent with this Agreement;
provided, that Lilly shall not, pursuant to its final decision-making authority, unilaterally impose additional Development obligations
upon ACI beyond the completion of the ACI Pre-Clinical and Phase 1 Activities or any other obligations upon ACI that would require
ACI to incur any additional costs and expenses that are not otherwise specified herein or in the Development Plan.

 

5.2.4.       Limitations
on Authority. Without limitation to the foregoing, the Parties hereby agree that matters
explicitly reserved to the consent, approval or other decision-making authority of one or both Parties, as expressly provided
in this Agreement, are outside the jurisdiction and authority of the JSC, including [*****].

 

5.2.5.       Alliance
Managers. Each Party shall appoint a person(s) who shall oversee contact between the
Parties for all matters between meetings of the JSC and shall have such other responsibilities as the Parties may agree in writing
after the Effective Date, which person(s) may be replaced at any time by notice in writing to the other Party. The Alliance Managers
shall work together to manage and facilitate the communication between the Parties under this Agreement, including the resolution
(in accordance with the terms of this Agreement) of issues between the Parties that arise in connection with this Agreement. The
Alliance Managers shall not have final decision-making authority with respect to any matter under this Agreement.

 

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    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

5.2.6.       Subcommittees.

 

(i)       Right
to Establish Subcommittees. The JSC may, from time to time, establish one or more subcommittees to (i) resolve particular
matters appropriately within the authority of the JSC and delegated by the JSC to such subcommittee, and (ii) inform and support
decisions of the JSC. Except with respect to the Patent Subcommittee (the procedures for which are set forth in Section 5.2.6‎(ii)),
each subcommittee shall resolve any matters delegated to it by the JSC through consensus, and if the subcommittee is unable to
reach consensus shall refer such matter back to the JSC for resolution (and if any such matter is not resolved by the JSC, such
matter may be further escalated pursuant to Section ‎5.2.3). In the case of the Patent Subcommittee, if either Party refers
a matter to the JSC for resolution (and if any such matter is not resolved by the JSC, such matter may be further escalated pursuant
to Section ‎ ‎5.2.3). The provisions of Sections ‎‎5.2.1 and ‎5.2.2 shall apply to each subcommittee to the
same extent applicable to the JSC.

 

(ii)      Patent
Subcommittee. Within thirty (30) days following the Effective Date, the JSC shall establish a subcommittee (the “Patent
Subcommittee”) to serve as a forum for discussion, review, and approval of all intellectual property matters related
to the Licensed Compounds and the Licensed Products (including the Parties’ publications regarding Licensed Compounds or
Licensed Products, which shall be in accordance with Section ‎9.7), the Prosecution, maintenance and defense of the ACI Patents
and Joint Patents and recommending strategies with respect to any of the foregoing. On an annual basis, no later than thirty (30)
days following the beginning of each Calendar Year, the Patent Subcommittee shall meet to discuss and establish (or amend) [*****].
The Patent Subcommittee shall consist of an equal number of representatives from each of the Parties, each with the requisite
experience and seniority to enable such person to make decisions on behalf of the Parties with respect to the issues falling within
the jurisdiction of the Patent Subcommittee. From time to time, each Party may substitute one or more of its representatives to
the Patent Subcommittee upon written notice to the other Party. The Patent Subcommittee shall meet either in person or via phone
conference at least once per Calendar Quarter or as frequently as the Parties may mutually agree. The Patent Subcommittee shall
attempt to reach consensus regarding all decisions that come before the Patent Subcommittee; [*****].

 

5.2.7.       Submitted
Materials. Subject to Article 9, each Party acknowledges and agrees that the other Party
may retain a copy of all materials, reports, Regulatory Documentation or other Information submitted to the JSC or any subcommittee
thereunder by such Party.

 

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    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

ARTICLE
6

SUPPLY

 

6.1.       Supply
of Licensed Products.

 

6.1.1.       Subject
to Section 3.1.2(ii) and the last sentence of this Section ‎6.1.1, Lilly shall have the sole right and responsibility,
at its own cost and expense, for the Manufacture and supply of pre-clinical, clinical, and commercial quantities of the Licensed
Compounds, Licensed Products and placebo for use by ACI and Lilly in Development and Commercialization. ACI shall supply to Lilly
such commercially reasonable quantities of non-cGMP grade Licensed Compounds (other than Lilly Compounds) to the extent necessary
to conduct the pre-clinical Development of the Licensed Compounds and Licensed Product(s) in accordance with the Development Plan
(it being understood that (i) ACI is not required to supply Lilly any precursors or intermediates of Licensed Compounds and (ii)
such supply obligation shall terminate upon the completion of the ACI Pre-Clinical and Phase 1 Activities). Without limiting the
foregoing sentence, (a) upon completion by ACI of all of its activities that constitute ACI Pre-Clinical and Phase 1 Activities
with respect to the Licensed Compounds, ACI shall deliver to Lilly, upon Lilly’s request, all of the non-cGMP grade Licensed
Compounds (other than Lilly Compounds) then in ACI’s possession, and (b) upon completion by ACI of all of its activities
that constitute ACI Pre-Clinical and Phase 1 Activities with respect to any Backups, ACI shall deliver to Lilly, upon Lilly’s
request, all of the non-GMP grade Backups then in ACI’s possession; provided, that, with respect to each of the foregoing
clauses (a) and (b), (x) ACI shall not be required to manufacture new Licensed Compounds or Backups, as applicable, to satisfy
the foregoing obligation and (y) ACI’s obligations shall be at Lilly’s direct out-of-pocket cost and ACI shall not
be required to pay for any indirect costs incurred by Lilly.

 

    35 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

6.1.2.       Promptly
following the Effective Date, the Parties shall negotiate in good faith to establish a commercially reasonable clinical supply
agreement and Quality Agreement pursuant to which Lilly would supply ACI with quantities of Licensed Product and placebo for ACI
to perform the ACI Pre-Clinical and Phase 1 Activities, provided that Lilly shall supply ACI Licensed Product and placebo
at Lilly’s direct out-of-pocket costs and ACI shall not be required to pay for any indirect costs incurred by Lilly, including
FTE-related and infrastructure costs. Further, in the event that ACI elects (and Lilly has not finally rejected) to exercise the
Unilateral Clinical Development Option, promptly following such election (but in any event within ninety (90) days of such election),
the Parties shall enter into a commercially reasonable clinical supply agreement and Quality Agreement pursuant to which Lilly
would supply ACI with quantities of Licensed Product and placebo for use by ACI in conducting the applicable Unilateral Activities.
Any clinical supply agreement with respect to the Unilateral Clinical Development Option pursuant to the foregoing sentence shall
include terms providing for a mutually agreed upon supply price for the supply of Licensed Product and placebo. Any Quality Agreement
pursuant to this Section ‎6.1.2 shall set forth the responsibilities and procedures associated with Licensed Compounds
or Licensed Products regarding Complaint handling, quality-specific audit rights with respect to compliance with cGMP, and other
quality-related matters; provided that, for clarity, to the extent there is any conflict between the terms and conditions of any
Quality Agreement and this Agreement with respect to the matters covered by such Quality Agreement, the Quality Agreement shall
control.

 

6.2.       Visits
to Facilities. Prior to ACI’s completion of the transition of Manufacturing activities
from ACI to Lilly, Lilly may conduct a Compliance Audit of ACI or its subcontractors to ensure compliance with applicable GxPs
during normal business hours no more than [*****] and upon reasonable advance written notice by Lilly and the mutual written agreement
of the Parties as to the specific date and time for such audit.

 

6.3.       Notice
of Inspections. Each Party shall provide notice to the other Party within one (1) Business
Day of any requested or commenced governmental or regulatory review, audit or inspection of any of its facilities or processes
that relate to this Agreement, including any ACI Know-How, ACI Patents, Licensed Compounds or Licensed Products. The Party that
is the subject of any such review, audit or inspection shall provide the other Party with the results thereof and provide the
other Party with an opportunity to provide assistance to the Party that is the subject of any such review, audit or inspection
in responding thereto.

 

6.4.       Manufacturing
Technology Transfer. Without limiting the generality of the obligations in Section ‎2.5,
ACI shall, promptly following the Effective Date (but in no event later than forty-five (45) days thereafter), transfer to Lilly
or its designee (which designee may be an Affiliate, Sublicensee or a Third Party manufacturer) the ACI Know-How relating to the
Manufacture of the Licensed Compound, including, for clarity, the then-current process for the Manufacture of the Licensed Compound
(the “Manufacturing Process”) and provide such support as may be necessary or reasonably useful to Lilly or
its designee to facilitate the practice of Manufacturing Process.

 

ARTICLE
7

PAYMENTS AND RECORDS

 

7.1.       Upfront
Payment. In partial consideration of the rights granted by ACI to Lilly hereunder and
subject to the terms and conditions of this Agreement, no later than thirty (30) days following the Effective Date, Lilly shall
pay ACI a nonrefundable, noncreditable upfront amount equal to eighty million Swiss Francs (CHF 80,000,000).

 

7.2.       Milestones.

 

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    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

7.2.1.       Development
and Regulatory Milestones. In partial consideration of the rights granted by ACI to Lilly
hereunder, and subject to the terms and conditions of this Agreement, Lilly shall pay to ACI a nonrefundable, noncreditable milestone
payment after the achievement of each of the following milestones, calculated as follows:

 

(i)     within
ten (10) Business Days after the end of the Lilly Pre-Clinical Activities Period, sixty million Swiss Francs (CHF 60,000,000)[*****]

 

(ii)      within
sixty (60) days after [*****] of any Licensed Product in the United States or European Union, [*****];

 

(iii)     within
sixty (60) days after Regulatory Approval by the FDA for any Licensed Product in the First Indication in the United States, [*****];
provided that if such Regulatory Approval by the FDA for such Licensed Product contains a Specified Limitation with respect
to the First Indication and [*****] the milestone payment in this clause (iii) shall equal [*****];

 

(iv)    within
sixty (60) days after Regulatory Approval by the EMA for any Licensed Product in the First Indication in the European Union, [*****];
provided that if such Regulatory Approval by the EMA for such Licensed Product contains a Specified Limitation with respect
to the First Indication and [*****], the milestone payment in this clause (iv) shall equal [*****];

 

(v)      within
sixty (60) days after Regulatory Approval by the PMDA for any Licensed Product in the First Indication in Japan, [*****]; provided
that if such Regulatory Approval by the PMDA for such Licensed Product contains a Specified Limitation with respect to the
First Indication [*****], the milestone payment in this clause (v) shall equal [*****];

 

(vi)     within
sixty (60) days after Regulatory Approval by the FDA for any Licensed Product in each of the first three (3) Indications in the
Second Category in the United States, [*****]; provided that if such Regulatory Approval by the FDA for such Licensed Product
contains a Specified Limitation with respect to such Indication [*****], the milestone payment in this clause (vi) shall equal
[*****];

 

(vii)    within
sixty (60) days after Regulatory Approval by the EMA for any Licensed Product in each of the first three (3) Indications in the
Second Category in the European Union, [*****]; provided that if such Regulatory Approval by the EMA for such Licensed
Product contains a Specified Limitation with respect to such Indication [*****], the milestone payment in this clause (vii)
shall equal [*****];

 

    37 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

(viii)   within
sixty (60) days after Regulatory Approval by the PMDA for any Licensed Product in each of the first three (3) Indications in the
Second Category in Japan, [*****]; provided that if such Regulatory Approval by the PMDA for such Licensed Product contains
a Specified Limitation with respect to such Indication [*****], the milestone payment in this clause (viii) shall equal [*****];

 

(ix)     within
sixty (60) days after the first Regulatory Approval by the FDA for any Licensed Product in an Indication in the Third Category
in the United States, [*****]; provided that if such Regulatory Approval by the FDA for such Licensed Product contains
a Specified Limitation with respect to such Indication [*****], the milestone payment in this clause (ix) shall equal [*****];

 

(x)      within
sixty (60) days after the first Regulatory Approval by the EMA for any Licensed Product in an Indication in the Third Category
in the European Union, [*****]; provided that if such Regulatory Approval by the EMA for such Licensed Product contains
a Specified Limitation with respect to such Indication [*****], the milestone payment in this clause [*****]; and

 

(xi)     within
sixty (60) days after the first Regulatory Approval by the PMDA for any Licensed Product in an Indication in the Third Category
in Japan, [*****]; provided that if such Regulatory Approval by the PMDA for such Licensed Product contains a Specified
Limitation with respect to such Indication [*****], the milestone payment in this clause (xi) shall equal [*****].

Except with respect to the milestones payments in clauses (vi), (vii) and (viii) (each of which shall be payable up to three (3)
times in accordance with their terms), each milestone payment in this Section ‎7.2.1 shall be payable only upon the first
achievement of such milestone and no amounts shall be due for subsequent or repeated achievements of such milestone, whether for
the same or a different Licensed Product. The maximum aggregate amount payable by Lilly pursuant to this Section ‎7.2.1 is
[*****].

 

7.2.2.       Commercial
Milestones. In partial consideration of the license rights granted by ACI to Lilly hereunder,
and subject to the terms and conditions of this Agreement, Lilly shall pay to ACI nonrefundable, noncreditable milestone payments,
as follows:

 

(i)       in
the event that the aggregate of all Net Sales of all Licensed Product(s) in any given Calendar Year equals or exceeds [*****],
Lilly shall pay to ACI [*****];

 

(ii)      in
the event that the aggregate of all Net Sales of all Licensed Product(s) in any given Calendar Year equals or exceeds [*****],
Lilly shall pay to ACI [*****];

 

    38 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

(iii)     in
the event that the aggregate of all Net Sales of all Licensed Product(s) in any given Calendar Year equals or exceeds [*****],
Lilly shall pay to ACI [*****]; and

 

(iv)     in
the event that the aggregate of all Net Sales of all Licensed Product(s) in any given Calendar Year equals or exceeds [*****],
Lilly shall pay to ACI [*****];

 

(v)      In
the event that in any given Calendar Year more than one (1) of the foregoing thresholds set forth in clauses (i) through (iv)
of this Section ‎‎7.2.2 is exceeded, Lilly shall pay to ACI a separate milestone payment with respect to each such threshold
that is exceeded in such Calendar Year. Each such milestone payment shall be due within sixty (60) days of the end of the Calendar
Quarter in such Calendar Year (or, if applicable, within seventy-five (75) days after the end of the last Calendar Quarter in
a Calendar Year) in which such milestone was achieved. Each milestone payment in this Section ‎7.2.2 shall be payable
only upon the first achievement of such milestone in any given Calendar Year and no amounts shall be due for subsequent or repeated
achievements of such milestone in subsequent Calendar Years. The maximum aggregate amount payable by Lilly pursuant to this Section
‎7.2.2 is [*****].

 

7.3.       Royalties.

 

7.3.1.       Royalty
Rates. As further consideration for the rights granted to Lilly hereunder, and subject
to the terms and conditions of this Agreement, commencing upon the First Commercial Sale of any Licensed Product in the Territory,
Lilly shall pay to ACI a nonrefundable, noncreditable royalty on Net Sales of all Licensed Products in the Territory (excluding
Net Sales of each Licensed Product in any country for which the Royalty Term for such Licensed Product in such country has expired)
during each Calendar Year at the following rates:

 

(i)       for
that portion of aggregate Net Sales of all Licensed Products in the Territory during any Calendar Year equal to or less than [*****],
a royalty rate of [*****];

 

(ii)      for
that portion of aggregate Net Sales of all Licensed Products in the Territory during any Calendar Year greater than [*****], but
equal to or less than [*****], a royalty rate of [*****];

 

(iii)     for
that portion of aggregate Net Sales of all Licensed Products in the Territory during any Calendar Year greater than [*****], but
equal to or less than [*****], a royalty rate of [*****]; and

 

    39 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

(iv)     for
that portion of aggregate Net Sales of all Licensed Products in the Territory during any Calendar Year greater than [*****], a
royalty rate of [*****].

 

With respect
to each Licensed Product in each country in the Territory, from and after the expiration of the Royalty Term for such Licensed
Product in such country, Net Sales of such Licensed Product in such country shall be excluded for purposes of calculating the
Net Sales thresholds and ceilings set forth in this Section ‎7.3.1.

 

7.3.2.       Royalty
Term. Following the expiration of the Royalty Term for any Licensed Product in any country,
Lilly shall have no obligation to pay any royalty with respect to Net Sales of such Licensed Product in such country.

 

7.3.3.       Reductions.
Notwithstanding the foregoing, in the event that:

 

(i)       in
any country in the Territory during the Royalty Term for any Licensed Product, a Generic Product is launched in such country, Lilly
shall, for such Licensed Product in such country, thereafter pay to ACI a royalty rate reduced by [*****] with respect to Net
Sales of such Licensed Product in such country (as compared to the rates set forth in Section ‎7.3.1); provided that
[*****];

 

(ii)      in
any country in the Territory during the Royalty Term for any Licensed Product, Lilly enters into an agreement with a Third Party
pursuant to which Lilly obtains a license or other right to any Patent Controlled by such Third Party that [*****], Lilly shall
be entitled to deduct from any royalties payable hereunder with respect to such Licensed Product in such country [*****] of all
milestone payments and royalties paid to such Third Party in respect of such agreement[*****]; and

 

(iii)     subject
to Section ‎7.3.2, from and after the date on which any Licensed Product is Exploited in any country and is not covered by
Valid Claim(s) of ACI Patent(s) and Joint Patent(s), the royalty rate for such Licensed Product set forth in Section 7.3.1 with
respect to such country, shall be reduced by [*****].

 

Any reductions
set forth in this Section ‎7.3.3 shall be applied to the royalty rate payable to ACI under Section ‎7.3.1 in the order
in which the event triggering such reduction occurs.

 

7.4.       Estimated
Sales Levels. ACI acknowledges and agrees that the sales levels set forth in Section
‎7.2 and Section ‎7.3 shall not be construed as representing an estimate or projection of anticipated sales of the Licensed
Products or implying any level of diligence or Commercially Reasonable Efforts, in the Territory and that the sales levels set
forth in those Sections are merely intended to define Lilly’s royalty and other payment obligations, as applicable, in the
event such sales levels are achieved.

 

    40 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

7.5.       Royalty
Payments and Reports. Lilly shall calculate all amounts payable to ACI pursuant to Section ‎7.2
and Section ‎7.3 at the end of each Calendar Quarter. Lilly shall pay to ACI the royalty amounts due with respect to
a given Calendar Quarter within sixty (60) days after the end of such Calendar Quarter. Each payment of royalties due to ACI shall
be accompanied by a statement of the amount of Net Sales of each Licensed Product in each country in the Territory during the
applicable Calendar Quarter and a calculation of the amount of royalty payment due on such Net Sales for such Calendar Quarter.

 

7.6.       Development
Costs.

 

7.6.1.       Subject
to Section ‎3.2 and this Section ‎7.6, Lilly shall reimburse ACI for its Development Costs incurred after the Effective
Date in connection with the performance of Joint Development Activities in accordance with the applicable Development Plan, (i)
except for the ACI Pre-Clinical and Phase 1 Activities, for which ACI shall bear all Development Costs (subject to Lilly’s
assumption of responsibility for the ACI Pre-Clinical and Phase 1 Activities in accordance with Section 3.1.2‎(iii), in which
case Lilly shall bear such Development Costs), or (ii) unless otherwise agreed by the Parties and set forth in the applicable
Development Plan. ACI shall record and account for its FTE efforts with respect to each Licensed Product to the extent that such
FTE efforts are included in Development Costs in accordance with the applicable Development Plan and shall report such FTE efforts
to the JSC [*****]. ACI shall calculate and maintain records of FTE efforts incurred by it consistent with past practice and in
the same manner as used for other products developed by ACI, unless otherwise agreed by the Parties in writing. [*****].

 

7.6.2.       ACI
shall promptly inform Lilly upon ACI determining that it is likely to overspend or underspend by more than [*****] of its Development
Costs for an activity versus the amount agreed upon by the Parties as the budget for such activity (in the Development Plan or
otherwise in writing). If ACI exceeds its budgeted costs and expenses by more than [*****] for an activity, it shall provide to
Lilly an explanation for such overspend. Any overspend of ACI beyond the Development Costs allocated to ACI under the Development
Plan shall be borne by ACI and shall be excluded from Development Costs hereunder, except to the extent such overspend (i) is
less than or equal to [*****] of the budgeted costs and expenses for such activity, as set forth in the applicable Development
Plan, or (ii) (a) was outside the reasonable control of ACI and not caused by the negligence or willful misconduct of, or breach
of this Agreement by, ACI or a failure of ACI to adequately supervise a Third Party performing such activities, (b) was the subject
of a timely notice to Lilly pursuant to this first sentence of this Section ‎7.6.2 and (c) is the subject of reasonable efforts
by ACI to mitigate the size of such overspend.

 

    41 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

7.6.3.       ACI
shall report to Lilly, within forty-five (45) days after the end of each Calendar Quarter (and within forty-five (45) days after
receipt of each such report, Lilly shall reimburse ACI for) the Development Costs incurred by ACI during such Calendar Quarter
and the Joint Development Activities performed by ACI during such Calendar Quarter. Each such report shall (i) allocate the Development
Costs to the extent reasonably possible to a specific Joint Development Activity, (ii) specify in reasonable detail all amounts
included in Development Costs during such Calendar Quarter (broken down by activity), (iii) if requested by Lilly, include copies
of any invoices or other supporting documentation for any payments to a Third Party that individually exceed [*****] (or such
other amount approved by the JSC). The Parties shall seek to resolve any questions related to such accounting statements within
fifteen (15) days following receipt by Lilly of ACI’s report hereunder.

 

7.6.4.       Additional
Indication Clinical Funding Option. In the event that the JSC determines to pursue clinical
development in any Indication other than the First Indication or the Indications in the Third Category (such Indication, an “Additional
Indication”), ACI shall have an option (the “Additional Indication Clinical Funding Option”) to contribute
up to [*****] of Lilly Development Costs during Phase 2 Clinical Trials and Phase 3 Clinical Trials for such Additional Indication.
In the event that ACI desires to exercise the Additional Indication Clinical Funding Option with respect to a given Additional
Indication, then ACI shall provide Lilly written notice within ninety (90) days after the applicable Additional Indication Triggering
Event, specifying the percentage of Lilly Development Costs that ACI elects to bear (the “Elected Percentage”),
which percentage shall be equal to or less than [*****]. With respect to each Indication for which ACI exercises its Additional
Indication Clinical Funding Option, Lilly shall report to ACI, within forty-five (45) days after the end of each Calendar Quarter
(and within forty-five (45) days after receipt of each such report, ACI shall reimburse Lilly for) the Elected Percentage of the
Lilly Development Costs incurred by Lilly during such Calendar Quarter for any Phase 2 Clinical Trial or Phase 3 Clinical Trial
conducted for such Indication. Each such report shall (i) allocate the Lilly Development Costs to the extent reasonably possible
to specific development activities, (ii) specify in reasonable detail all amounts included in Lilly Development Costs during such
Calendar Quarter (broken down by activity), and (iii) if requested by ACI, include copies any invoices or other supporting documentation
for any payments to a Third Party that individually exceed [*****]. The Parties shall seek to resolve any questions related to
such accounting statements within fifteen (15) days following receipt by ACI of Lilly’s report hereunder. If ACI exercises
the Additional Indication Clinical Funding Option, within sixty (60) days after Regulatory Approval for the Licensed Product in
the applicable Additional Indication, Lilly shall pay to ACI a payment equal to [*****].

 

7.7.       Mode
of Payment. All payments to either Party under this Agreement shall be made by deposit
in the requisite amount to such bank account as the receiving Party may from time to time designate by written notice to the paying
Party and all such payments shall be made in the local currency of the Party receiving such payments.  For the purpose of
calculating any sums due under, or otherwise reimbursable pursuant to, this Agreement, a Party shall convert any amount expressed
in a foreign currency using its, its Affiliate’s or Sublicensee’s standard conversion methodology consistent with
GAAP. 

 

    42 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

7.8.       Taxes.

 

7.8.1.       General.
The milestones, royalties and other amounts payable by Lilly to ACI pursuant to this
Agreement (each, a “Payment”) shall be paid free and clear of any and all taxes, except for any withholding
taxes required by Applicable Law. Except as provided in this Section ‎7.8, ACI shall be solely responsible for paying any
and all taxes (other than withholding taxes required by Applicable Law to be deducted from Payments and remitted by Lilly) levied
on account of, or measured in whole or in part by reference to, any Payments it receives. Lilly shall deduct or withhold from
the Payments any taxes that it is required by Applicable Law to deduct or withhold. Notwithstanding the foregoing, if ACI is entitled
under any applicable tax treaty to a reduction of rate of, or the elimination of, applicable withholding tax, it may deliver to
Lilly or the appropriate Governmental Authority (with the assistance of Lilly to the extent that this is reasonably required and
is expressly requested in writing) the prescribed forms necessary to reduce the applicable rate of withholding or to relieve Lilly
of its obligation to withhold such tax and Lilly shall apply the reduced rate of withholding or dispense with withholding as the
case may be; provided that Lilly has received evidence, in a form satisfactory to Lilly, of ACI’s delivery of all
applicable forms (and, if necessary, its receipt of appropriate governmental authorization) at least fifteen (15) days prior to
the time Payments are due. If in accordance with the foregoing, Lilly withholds any amounts of tax, it shall pay to ACI the balance
when due, make timely payment to the proper tax authority of the withheld amount and send to ACI proof of such payment within
forty-five (45) days following such payments. Furthermore, if Lilly were to make a payment from any jurisdiction other than the
United States, then the Parties shall negotiate in good faith the procedure and ultimate allocation of any deduction or withholding
resulting from such change. In the event that Lilly is notified by the appropriate Governmental Authority that deduction or withholding
will be different than set forth in the prescribed forms submitted to Lilly by ACI, Lilly shall provide written notice to ACI
of such deduction or withholding at least thirty (30) days prior to any Payment from which Lilly contemplates to make any such
deduction or withholding.

 

7.8.2.       Value
Added Tax. Notwithstanding anything contained in Section ‎7.8.1, this Section ‎7.8.2
shall apply with respect to value added tax (“VAT”). All Payments are exclusive of VAT. If any VAT is chargeable
in respect of any Payments, Lilly shall pay VAT at the applicable rate in respect of any such Payments following the receipt of
a VAT invoice in the appropriate form issued by ACI in respect of those Payments, such VAT to be payable on the due date of the
payment of the Payments to which such VAT relates.

 

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 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

7.9.       Interest
on Late Payments. If any payment due to either Party under this Agreement is not paid
when due, then such paying Party shall pay interest thereon (before and after any judgment) at an annual rate (but with interest
accruing on a daily basis) of [*****] the Applicable Rate, and such interest to run from the date on which payment of such sum
became due until payment thereof in full together with such interest. For the purposes of this Agreement, “Applicable
Rate” means the London Interbank Offered Rate for deposits in CHF having a maturity of one (1) month published by the
British Bankers’ Association, as adjusted from time to time on the first London business day of each month; provided
that, as of and following the cessation of such publication of such London Interbank Offered Rate, Applicable Rate means the
Swiss Average Rate Overnight for deposits in CHF having a maturity of one (1) month published by the SIX Swiss Exchange, as adjusted
from time to time on the first Lausanne, Switzerland business day of each month.

 

7.10.       Financial
Records. Each Party shall and shall cause its Affiliates and its and their Sublicensees
to, keep complete and accurate financial books and records pertaining to the Development and Commercialization of Licensed Products
hereunder (including (i) with respect to ACI, Development Costs, including actual expenditures with respect to the budgets set
forth in the Development Plan and (ii) with respect to Lilly, Net Sales of Licensed Products) to the extent required to calculate
and verify all amounts payable hereunder. Each Party shall, and shall cause its Affiliates and its and their Sublicensees to,
retain such books and records until the later of [*****].

 

7.11.       Financial
Audit.

 

7.11.1.       Audit
of Records.  Not more than [*****], each Party shall have the right to have an internationally
recognized independent certified public accountant (the “Auditor”) reasonably acceptable to the other Party
inspect the other Party’s records for the [*****] occurring during the Term for the purpose of determining whether any amounts
are owed under this Agreement and the accuracy of such amounts. The Auditor shall keep confidential any information obtained during
such inspection and shall report to each Party only the applicable amounts due and payable. If determined that additional amounts
are owed, or that amounts were overpaid, during such period, such amounts will be paid within thirty (30) days of the date the
Auditor’s written report is received by the paying Party. Fees charged by such Auditor shall be borne by auditing Party,
unless any additional amounts owed to the auditing Party exceed [*****], in which case the audited Party will pay the reasonable
fees of the Auditor. No Calendar Year period shall be audited more than once.

 

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    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

7.11.2.       Audit
Dispute. In the event of a dispute with respect to any audit conducted pursuant to Section ‎7.11,
ACI and Lilly shall work in good faith to resolve the dispute. If the Parties are unable to reach a mutually acceptable resolution
of any such dispute within thirty (30) days, the dispute shall be submitted to arbitration in accordance with Section ‎13.5.

 

7.11.3.       Confidentiality.
The receiving Party shall treat all information subject to review under this Article 7
in accordance with the confidentiality provisions of Article 9 and the Parties shall cause the Auditor to enter into a reasonably
acceptable confidentiality agreement with the audited Party obligating such firm to retain all such financial information in confidence
pursuant to such confidentiality agreement.

 

7.12.       Right
to Offset. Each Party shall have the right to offset any amount owed by the other Party
to such first Party under or in connection with the Convertible Note Agreement or this Agreement, including pursuant to Article
11 or in connection with any breach, against any payments owed by such first Party to such other Party under this Agreement. Such
offsets shall be in addition to any other rights or remedies available under this Agreement and Applicable Law.

 

ARTICLE
8

INTELLECTUAL PROPERTY

 

8.1.       Ownership
of Intellectual Property.

 

8.1.1.       Ownership
of Background Technology. Except as expressly stated otherwise herein, as between the
Parties, each Party shall solely and exclusively own and retain all right, title and interest in and to its Background Technology.

 

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    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

8.1.2.       Ownership
of Tau Patents. For the purposes of this Agreement, “Tau Patents”
means any and all Information, Improvements and other inventions that are conceived, discovered, developed or otherwise made solely
by or on behalf of either Party, its Affiliates or Sublicensees or jointly by or on behalf of the Parties or any of their respective
Affiliates or Sublicensees, in connection with the performance of and during the Term of this Agreement, that claim composition
of matter, utility or method of manufacture of any Tau Aggregation Inhibitors, which are patented or patentable and any and all
Patents with respect to any of the foregoing; provided, that all Lilly Compounds that are not Tau Aggregation Inhibitors and all
Improvements related exclusively thereto, shall be excluded from the definition of Tau Patents. As between the Parties, ACI shall
solely and exclusively own all right, title and interest in and to any and all Tau Patents. Each Party shall, and shall cause
its Affiliates and its Sublicensees to, promptly disclose in writing to the other Party any and all Tau Patents. Lilly hereby
assigns, and shall cause its Affiliates and Sublicensees to so assign, to ACI, without additional compensation, all right, title
and interest in and to any and all Tau Patents.

 

8.1.3.       Lilly
and ACI Program IP. As between the Parties, [*****] shall solely and exclusively own
all right, title and interest in and to any and all Information, Improvements and other inventions that are conceived, discovered,
developed or otherwise made solely by or on behalf of [*****] in connection with the performance of this Agreement, whether or
not patented or patentable, and any and all Patents and other intellectual property rights with respect to any of the foregoing[*****].
[*****] to, promptly disclose in writing to [*****]. As between the Parties, [*****] shall solely and exclusively own all right,
title and interest in and to any and all Information, Improvements and other inventions that are conceived, discovered, developed
or otherwise made solely by or on behalf of [*****] in connection with the performance of this Agreement, whether or not patented
or patentable, and any and all Patents and other intellectual property rights with respect to any of the foregoing [*****]. [*****]
to, promptly disclose in writing to [*****].

 

8.1.4.       Joint
Program IP. As between the Parties, each Party shall own an equal, undivided joint ownership
interest in and to any and all Information, Improvements and other inventions that are conceived, discovered, developed or otherwise
made jointly by or on behalf of Lilly, its Affiliates or Sublicensees on the one hand and ACI, its Affiliates or Sublicensees
on the other hand, in connection with the performance of this Agreement, whether or not patented or patentable, and any and all
Patents and other intellectual property rights with respect to any of the foregoing, but in each case, excluding all Tau Patents
(the “Joint Program IP”). Each Party shall, and shall cause its Affiliates and its Sublicensees to, promptly
disclose in writing to the other Party any and all Joint Program IP.  Each Party hereby assigns, and shall cause its Affiliates
and Sublicensees to so assign, to the other Party an equal and undivided joint ownership interest in and to all Joint Program
IP, to be held in accordance with this Section ‎8.1.4.  Subject the terms and conditions of this Agreement, including
the payment obligations of Lilly under Article ‎7, the licenses and rights of reference granted under Sections ‎2.1 and
‎‎2.2 and, in the case of each Party, such Party’s exclusivity obligations hereunder, each Party shall have the
right to Exploit the Joint Program IP without a duty of seeking consent or accounting to the other Party.

 

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    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

8.1.5.       United
States Law.  The determination of whether Information, Improvements and inventions are
conceived, discovered, developed or otherwise made by a Person for the purpose of allocating proprietary rights (including Patent,
copyright or other intellectual property rights) therein, shall, for purposes of this Agreement, be made in accordance with Applicable
Law in the United States irrespective of where such conception, discovery, development or making occurs. In the event that United
States law does not apply to the conception, discovery, development or making of any Information, Improvements or other inventions
hereunder, each Party shall, and does hereby, assign, and shall cause its Affiliates and its and their licensees and Sublicensees
to so assign, to the other Party, without additional compensation, such right, title and interest in and to any Information, Improvements
and other inventions as well as any intellectual property rights with respect thereto, as is necessary to fully effect, as applicable,
(i) the sole ownership provided for in Section ‎8.1.1, ‎8.1.2, and ‎8.1.3 and (ii) the joint ownership provided
for in Section ‎8.1.4.

 

8.1.6.       Assignment
Obligation.  Each Party shall cause all Persons who perform Development activities, Manufacturing
activities or regulatory activities for such Party under this Agreement or who conceive, discover, develop or otherwise make any
Information, Improvement or inventions by or on behalf of either Party or its Affiliates or its or their Sublicensees under or
in connection with this Agreement to be under an obligation to assign (or, if such Party is unable to cause such Person to agree
to such assignment obligation despite such Party’s using commercially reasonable efforts to negotiate such assignment obligation,
provide a license under) their rights in any Information, Improvement and inventions resulting therefrom to such Party, except
where Applicable Law requires otherwise.

 

8.1.7.       Ownership
of Product Trademarks.  As between the Parties, Lilly shall have the sole right to determine
and shall own all right, title and interest in and to the Product Trademarks on a worldwide basis. ACI shall not and shall not
permit its Affiliates to, (i) use in their respective businesses, any Trademark that is confusingly similar to, misleading
or deceptive with respect to or that dilutes any (or any part) of the Product Trademarks and (ii) do any act that endangers,
destroys, or similarly adversely affects, in any material respect, the value of the goodwill pertaining to the Product Trademarks.
ACI shall not and shall not permit its Affiliates to, attack, dispute or contest the validity of or ownership of any Product Trademark
anywhere in the Territory or any registrations issued or issuing with respect thereto.

 

8.2.       Maintenance
and Prosecution of Patents.

 

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    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
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8.2.1.       Patent
Prosecution and Maintenance of ACI Patents and Joint Patents. Subject to the provisions
of Sections ‎5.2.3, ‎0‎5.2.6, and this Section ‎8.2.1, Lilly, after consultation with ACI, shall, at Lilly’s
option, select outside counsel or internal counsel (“Patent Counsel”) to be responsible for the preparation,
filing, prosecution and maintenance of the ACI Patents and Joint Patents worldwide and to be responsible for any related interference,
re-issuance, re-examination, opposition and other similar proceedings, applications for extensions pursuant to 35 U.S.C. §156
et. seq. and in other jurisdictions pursuant to supplementary protection certificates, and applications for any other extension
in all jurisdictions that are now or become available in the future, wherever applicable (collectively, “Prosecution”).
In accordance with Sections ‎5.2.3 and ‎0‎5.2.6, Lilly shall have final decision-making authority with respect to
all Prosecution-related matters; provided, that with respect to the ACI Patents and Joint Patents, the Parties shall cooperate
and assist each other through the Patent Subcommittee in the Prosecution of such Patents in accordance with the following:

 

(i)       As
soon as either Party determines that it wishes to file a Patent application covering any invention within the ACI Patents or Joint
Patents, it shall promptly inform the Patent Subcommittee thereof. With respect thereto, Lilly shall, in consultation with ACI,
either (1) draft a patent application for such invention or (2) promptly engage outside Patent Counsel to draft a patent application
for such invention and provide a copy of such patent application to ACI.

 

(ii)      Lilly
shall keep the Patent Subcommittee informed as to the filing and Prosecution of the ACI Patents and the Joint Patents.

 

(iii)     If
Lilly elects to use outside Patent Counsel, the outside Patent Counsel shall be instructed to keep the Patent Subcommittee informed
as to the filing and Prosecution of the ACI Patents and the Joint Patents.

 

(iv)     With
respect to Patents within the ACI Patents and Joint Patents, if Lilly elects not to participate in the Prosecution of any such
Patents (whether worldwide or with respect to any particular country), including electing not to file a Patent application with
respect thereto or electing to allow any such Patents to lapse or become abandoned or unenforceable, then Lilly shall promptly
notify ACI in writing and thereafter, ACI may, but is not required to, undertake, at ACI’s sole expense and in its sole
discretion, the Prosecution of such Patents; [*****].

 

(v)      Unless
otherwise mutually agreed by the Parties in writing and except to the extent Lilly elects not to Prosecute any ACI Patents or
Joint Patents pursuant to Section ‎8.2.1‎(iv), Lilly shall bear [*****].

 

8.2.2.       Patent
Prosecution and Maintenance of Lilly Patents. As between the Parties, Lilly shall have
the sole right, but not the obligation, to prepare, file, prosecute and maintain the Lilly Patents worldwide, and to be responsible
for any related interference, re-issuance, re-examination and opposition proceedings, in each case, at its sole cost and expense.
All costs of Prosecuting the Lilly Patents shall be Lilly’s sole responsibility.

 

    48 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

8.2.3.       Patent
Term Extension and Supplementary Protection Certificate. Subject to Sections 5.2.3 and
5.2.6, Lilly shall have the right to make decisions regarding, and to apply for, patent term extensions in the Territory, including
the United States with respect to extensions pursuant to 35 U.S.C. §156 et. seq. and in other jurisdictions pursuant to supplementary
protection certificates, and in all jurisdictions with respect to any other extensions that are now or become available in the
future, wherever applicable, for the Lilly Patents, ACI Patents and any Joint Patents and with respect to the Licensed Compounds
and the Licensed Products, in each case including whether or not to do so; provided, that in the event ACI disagrees with
any such decision of Lilly, ACI shall have the right to escalate such dispute to the JSC for resolution in accordance with Section
‎5.2.3; provided further, that if the JSC resolves such dispute in favor of Lilly, then Lilly may proceed accordingly.
ACI shall provide prompt and reasonable assistance, as requested by Lilly, including by taking such action as patent holder as
is required under any Applicable Law to obtain such extension or supplementary protection certificate.

 

8.2.4.       Common
Ownership Under Joint Development Research Agreements. Notwithstanding anything to the
contrary in this Article ‎8, neither Party shall have the right to make an election under 35 U.S.C. 102(c) when exercising
its rights under this Article ‎8 without the prior written consent of the other Party. With respect to any such permitted
election, the Parties shall coordinate their activities with respect to any submissions, filings or other activities in support
thereof. The Parties acknowledge and agree that this Agreement is a “joint research agreement” as defined in 35 U.S.C.
100(h).

 

8.2.5.       Patent
Listings. The Parties shall, through the Patent Subcommittee, cooperate in good faith
and mutually agree upon all filings with Regulatory Authorities in the Territory with respect to the Lilly Patents, ACI Patents
and Joint Patents, including as required or allowed (i) in the United States, in the FDA’s Orange Book and (ii) in
the European Union, under the national implementations of Article 10.1(a)(iii) of Directive 2001/EC/83 or other international
equivalents. As between the Parties, Lilly shall have the sole right to make all filings with Regulatory Authorities in the Territory
with respect to the Lilly Patents, including as required or allowed (a) in the United States, in the FDA’s Orange Book and
(b) in the European Union, under the national implementations of Article 10.1(a)(iii) of Directive 2001/EC/83 or other international
equivalents.

 

8.3.       Enforcement
of Patents.

 

8.3.1.       Notice.
Each Party shall promptly notify the other Party in writing of (i) any alleged or threatened
infringement of the ACI Patents, Lilly Patents or Joint Patents in the Field in any jurisdiction in the Territory or (ii) any
certification filed under the Hatch-Waxman Act claiming that any ACI Patents, Lilly Patents or Joint Patents are invalid or unenforceable
or claiming that any ACI Patents, Lilly Patents or Joint Patents would not be infringed by the making, use, offer for sale, sale
or import of a product for which an application under the Hatch-Waxman Act is filed or any equivalent or similar certification
or notice in any other jurisdiction in the Territory, in each case ((i) and (ii)) of which such Party becomes aware (an “Infringement”).

 

    49 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
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8.3.2.       Enforcement
of ACI Patents and Joint Patents. As between the Parties, Lilly shall have the first
right, but not the obligation, to prosecute any Infringement with respect to the ACI Patents and Joint Patents, including as a
defense or counterclaim in connection with any Third Party Infringement Claim, at Lilly’s sole cost and expense, using counsel
of its own choice. In the event Lilly prosecutes any such Infringement, ACI shall have the right to join as a party to such claim,
suit or proceeding in the Territory and participate with its own counsel at its sole cost and expense; provided that Lilly
shall retain control of the prosecution of such claim, suit or proceeding, including the response to any defense or defense of
any counterclaim raised in connection therewith. If Lilly or its designee does not take commercially reasonable steps to prosecute
an Infringement (i) within ninety (90) days following the first notice provided above with respect to such Infringement or
(ii) provided such date occurs after the first such notice of such Infringement is provided, ten (10) Business Days
before the time limit, if any, set forth in appropriate laws and regulations for filing of such actions, whichever comes first,
then ACI may prosecute such alleged or threatened Infringement at its sole cost and expense, [*****].

 

8.3.3.       Enforcement
of Lilly Patents. As between the Parties, Lilly shall have the sole right, but not the
obligation, to prosecute Infringement with respect to the Lilly Patents, including as a defense or counterclaim in connection
with any Third Party Infringement Claim, at Lilly’s sole cost and expense, using counsel of its own choice, and Lilly shall
retain control of the prosecution of such suit.

 

8.3.4.       Cooperation.
The Parties agree to cooperate fully in any Infringement action pursuant to this Section
‎8.3, including in the case of ACI, by making the inventors, applicable records and documents (including laboratory notebooks)
of the relevant Patents available to Lilly upon Lilly’s reasonable request. Where a Party controls such an action, the other
Party shall, and shall cause its Affiliates to, assist and cooperate with the controlling Party, as such controlling Party may
reasonably request from time to time, in connection with its activities set forth in this Section, including where necessary,
being named as a necessary party to such action, providing reasonable access to relevant documents and other evidence and making
its employees available at reasonable business hours.

 

8.3.5.       Settlement.
[*****].

 

8.3.6.       Recovery.
Except as otherwise agreed by the Parties in connection with a written cost sharing arrangement,
any recovery realized as a result of such litigation described above in this Section ‎8.3 (whether by way of settlement or
otherwise) shall be first allocated to [*****]. Any remainder after such reimbursement is made shall be retained by [*****].

 

    50 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
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8.4.       Infringement
Claims by Third Parties. If the Exploitation of a Licensed Product in the Territory pursuant
to this Agreement results in, or is reasonably expected to result in, any claim, suit or proceeding by a Third Party alleging
infringement by Lilly or any of its Affiliates or its or their Sublicensees, distributors or customers (a “Third Party
Infringement Claim”), including any defense or counterclaim in connection with an Infringement action initiated pursuant
to Section ‎8.3, the Party first becoming aware of such alleged infringement shall promptly notify the other Party thereof
in writing. As between the Parties, Lilly shall have the first right, but not the obligation, to defend and control the defense
of any such claim, suit or proceeding at its sole cost and expense, using counsel of its own choice. ACI may participate in any
such claim, suit or proceeding with counsel of its choice at its sole cost and expense. If Lilly or its designee elects (in a
written communication submitted to ACI within a reasonable amount of time after notice of the alleged patent infringement) not
to defend or control the defense of, or otherwise fails to initiate and maintain the defense of, any such claim, suit or proceeding,
within such time periods so that ACI is not prejudiced by any delays, ACI may conduct and control the defense of any such claim,
suit or proceeding at its sole cost and expense. Where a Party controls such an action, the other Party shall, and shall cause
its Affiliates to, assist and cooperate with the controlling Party, as such controlling Party may reasonably request from time
to time, in connection with its activities set forth in this Section, including where necessary, being named as a necessary party
to such action, providing reasonable access to relevant documents and other evidence and making its employees available at reasonable
business hours. Each Party shall keep the other Party reasonably informed of all material developments in connection with any
such claim, suit or proceeding. Each Party agrees to provide the other Party with copies of all material pleadings filed in such
action and to allow the other Party reasonable opportunity to participate in the defense of the claims. Any recoveries awarded
to a Party in connection with any Third Party Infringement Claim defended under this Section ‎8.4 shall be [*****].

 

8.5.       Invalidity
or Unenforceability Defenses or Actions. Each Party shall promptly notify the other Party
in writing of any alleged or threatened assertion of invalidity or unenforceability of any of the ACI Patents, Lilly Patents or
Joint Patents by a Third Party of which such Party becomes aware. Subject to Sections 5.2.3 and 5.2.6, Lilly shall have (i) the
first right, but not the obligation, to defend and control the defense of the validity and enforceability of the ACI Patents and
the Joint Patents and (ii) the sole right, but not the obligation, to defend and control the defense of the validity and enforceability
of the Lilly Patents, in each case ((i) and (ii)), at its sole cost and expense in the Territory and using counsel of its own
choice, including when such invalidity or unenforceability is raised as a defense or counterclaim in connection with an Infringement
action initiated pursuant to Section ‎8.4. ACI may participate in any such claim, suit or proceeding in the Territory with
counsel of its choice at its sole cost and expense; provided that Lilly shall retain control of the defense in such claim,
suit or proceeding. If Lilly or its designee elects not to defend or control the defense of the ACI Patents or Joint Patents in
a suit brought in the Territory or otherwise fails to initiate and maintain the defense of any such claim, suit or proceeding,
then ACI may conduct and control the defense of any such claim, suit or proceeding at its sole cost and expense, [*****]. Where
a Party controls such an action, the other Party shall, and shall cause its Affiliates to, assist and cooperate with the controlling
Party, as such controlling Party may reasonably request from time to time in connection with its activities set forth in this
Section ‎8.5, including where necessary, furnishing a power of attorney solely for such purpose or joining in, or being named
as a necessary party to, such action, providing reasonable access to relevant documents and other

 

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    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

evidence
and making its employees available at reasonable business hours. In connection with any activities with respect to a defense,
claim or counterclaim relating to the ACI Patents or the Joint Patents pursuant to this Section ‎8.5, the controlling Party
shall (a) consult with the other Party as to the strategy for such activities, (b) consider in good faith any comments from the
other Party and (c) keep the other Party reasonably informed of any material steps taken and provide copies of all material documents
filed, in connection with such defense, claim or counterclaim.

 

8.6.       Third
Party Rights. If in the reasonable opinion of Lilly, the Exploitation of a Licensed Compound
or Licensed Product by Lilly or any of its Affiliates or any of its or their Sublicensees, distributors or customers infringes
or misappropriates or is reasonably expected to infringe or misappropriate any Patent, trade secret or other intellectual property
right of a Third Party in any country in the Territory (such right, a “Third Party Right”), then, as between
the Parties, Lilly shall have the first right, but not the obligation, to negotiate and obtain a license or other rights from
such Third Party to such Third Party Right as necessary or desirable for Lilly or its Affiliates or its and their Sublicensees
to Exploit Licensed Compounds and Licensed Products in such country. In the event that Lilly negotiates and obtains any such license
from a Third Party, [*****].

 

8.7.       Product
Trademarks.

 

8.7.1.       Notice.
Each Party shall provide to the other Party prompt written notice of any actual or threatened
infringement of the Product Trademarks in the Territory and of any actual or threatened claim that the use of the Product Trademarks
in the Territory violates the rights of any Third Party, in each case, of which such Party becomes aware.

 

8.7.2.       Prosecution
of Product Trademarks. Lilly shall have the sole right to register, prosecute and maintain
the Product Trademarks using counsel of its own choice. All costs and expenses of registering, prosecuting and maintaining the
Product Trademarks shall be borne solely by Lilly.

 

8.7.3.       Enforcement
of Product Trademarks. Lilly shall have the sole right to take such action as Lilly deems
necessary against a Third Party based on any alleged, threatened or actual infringement, dilution, misappropriation or other violation
of or unfair trade practices or any other like offense relating to, the Product Trademarks by a Third Party in the Territory at
its sole cost and expense and using counsel of its own choice. [*****].

 

8.7.4.       Third
Party Claims. Lilly shall have the sole right to defend against and settle any alleged,
threatened or actual claim by a Third Party that the use or registration of the Product Trademarks in the Territory infringes,
dilutes, misappropriates or otherwise violates any Trademark or other right of that Third Party or constitutes unfair trade practices
or any other like offense or any other claims as may be brought by a Third Party against a Party in connection with the use of
the Product Trademarks with respect to a Licensed Product in the Territory at its sole cost and expense and using counsel of its
own choice. [*****].

 

    52 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

8.7.5.       Cooperation.
ACI shall, and shall cause its Affiliates and its and their Sublicensees to, assist and cooperate with Lilly, as Lilly may reasonably
request from time to time and at Lilly’s sole cost and expense, in connection with its activities set forth in this Section
‎8.7, including where necessary, joining in, or being named as a necessary party to such action, providing reasonable access
to relevant documents and other evidence and making its employees available at reasonable business hours.

 

8.8.       ACI’s
Corporate Names.

 

8.8.1.       Standards
of Use. Any and all use of ACI’s Corporate Names by Lilly under this Agreement
shall be in accordance with Applicable Law and the applicable Standards of Quality. All goodwill generated by Lilly’s (and
its Sublicensees’) use of ACI’s Corporate Names shall inure to the benefit of ACI.

 

8.8.2.       Covenants.
Lilly shall not, and Lilly shall cause its Affiliates not to, register (or attempt to
register) any of ACI’s Corporate Names, or any Trademark confusingly similar to any of ACI’s Corporate Names, in any
jurisdiction as a Trademark, domain name, business or company name or otherwise, and Lilly shall not, and Lilly shall cause its
Affiliates not to, challenge the validity or enforceability of any of ACI’s Corporate Names.

 

ARTICLE
9

CONFIDENTIALITY AND NON-DISCLOSURE

 

9.1.       Confidentiality
Obligations. At all times during the Term and for a period of [*****] following termination
or expiration of this Agreement, each Party shall and shall cause its officers, directors, employees and agents to, keep confidential
and not publish or otherwise disclose to any Third Party and not use, directly or indirectly, for any purpose, any Confidential
Information furnished or otherwise made known to it, directly or indirectly, by the other Party, except to the extent such disclosure
or use is expressly permitted by the terms of this Agreement. “Confidential Information” means any technical,
business or other information provided by or on behalf of one Party to the other Party in connection with this Agreement, whether
prior to, on or after the Effective Date, including the terms of this Agreement, information relating to any Licensed Compound
or any Licensed Product (including the Regulatory Documentation), any Development or Commercialization of a Licensed Compound
or any Licensed Product, any Information with respect thereto developed by or on behalf of the disclosing Party or its Affiliates
or, in the case of Lilly, its Affiliates or Sublicensees (including Lilly Know-How and ACI Know-How, as applicable) or the scientific,
regulatory or business affairs or other activities of either Party.

 

    53 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

Notwithstanding
the foregoing, Confidential Information constituting (i) Regulatory Documentation owned by Lilly pursuant to Section ‎3.3.1,
any Joint Know-How and any other Information developed, owned or Controlled by ACI or any of its Affiliates relating to any Licensed
Compound or Licensed Product or the Exploitation of any of the foregoing in the Field shall be deemed the Confidential Information
of Lilly (and Lilly shall be deemed the disclosing Party and ACI shall be deemed the receiving Party with respect thereto) and
(ii) the terms of this Agreement shall be deemed to be the Confidential Information of both Parties (and both Parties shall be
deemed to be the receiving Party and the disclosing Party with respect thereto). Notwithstanding the foregoing, the confidentiality
and non-use obligations under this Section ‎9.1 with respect to any Confidential Information shall not apply to any information
that:

 

9.1.1.       is
or hereafter becomes part of the public domain by public use, publication, general knowledge or the like through no breach of
this Agreement by the receiving Party;

 

9.1.2.       can
be demonstrated by documentation or other competent proof to have been in the receiving Party’s possession prior to disclosure
by the disclosing Party without any obligation of confidentiality with respect to such information; provided that the foregoing
exception shall not apply with respect to Confidential Information described in the immediately preceding sentence;

 

9.1.3.       is
subsequently received by the receiving Party from a Third Party who is not bound by any obligation of confidentiality with respect
to such information;

 

9.1.4.       has
been published by a Third Party or otherwise enters the public domain through no fault of the receiving Party in breach of this
Agreement; or

 

9.1.5.       can
be demonstrated by documentation or other competent evidence to have been independently developed by or for the receiving Party
without reference to the disclosing Party’s Confidential Information; provided that the foregoing exception shall
not apply with respect to Confidential Information described in the immediately preceding sentence.

 

Specific aspects or details of
Confidential Information shall not be deemed to be within the public domain or in the possession of the receiving Party merely
because the Confidential Information is embraced by more general information in the public domain or in the possession of the
receiving Party. Further, any combination of Confidential Information shall not be considered in the public domain or in the possession
of the receiving Party merely because individual elements of such Confidential Information are in the public domain or in the
possession of the receiving Party unless the combination and its principles are in the public domain or in the possession of the
receiving Party.

 

    54 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

9.2.       Permitted
Disclosures. Notwithstanding anything to the contrary in Section ‎9.1, each
Party may disclose Confidential Information to the extent that such disclosure is:

 

9.2.1.       made
in response to a valid order of a court of competent jurisdiction or Governmental Authority of competent jurisdiction or, if in
the reasonable opinion of the receiving Party’s legal counsel, such disclosure is otherwise required by Applicable Law,
including by reason of filing with securities regulators; provided, however, that the receiving Party shall first have
given written notice to the disclosing Party and given the disclosing Party a reasonable opportunity to quash such order or to
obtain a protective order or confidential treatment requiring that the Confidential Information and documents that are the subject
of such order or required to be disclosed be held in confidence by such court or Governmental Authority or, if disclosed, be used
only for the purposes for which the order was issued or such disclosure was required by Applicable Law; and provided, further,
that the Confidential Information disclosed in response to such order of a court or Governmental Authority or as required
by Applicable Law shall be limited to the information that is legally required to be disclosed in response to such order or by
such Applicable Law; or

 

9.2.2.       made
by or on behalf of the receiving Party to a Patent authority as may be reasonably necessary or useful for purposes of obtaining
or enforcing a Patent; provided, however, that reasonable measures shall be taken to assure confidential treatment of such
information, to the extent such protection is available.

 

9.2.3.       For
clarity, either Party may disclose without limitation a copy of this Agreement, including any exhibits, schedules, ancillary agreements,
and amendments thereto in response to a valid request by a U.S., foreign, state, provincial, or local tax authority.

 

9.3.       Additional
Permitted Disclosures by Lilly. [*****].

 

9.4.       Additional
Permitted Disclosures by ACI. [*****].

 

9.5.       Use
of Name. [*****].

 

    55 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

9.6.       Public
Announcements. The Parties have agreed upon the content of one (1) or more press releases
which shall be issued substantially in the form(s) attached hereto as Schedule ‎9.6, the release of which the Parties
shall coordinate in order to accomplish such release promptly upon execution of this Agreement. Neither Party shall issue any
other public announcement, press release or other public disclosure regarding this Agreement or its subject matter without the
other Party’s prior written consent, except for any such disclosure that is, in the opinion of the disclosing Party’s
counsel, required by Applicable Law or the rules of a stock exchange on which the securities of the disclosing Party are listed
(or to which an application for listing has been submitted). In the event a Party is, in the opinion of its counsel, required
by Applicable Law or the rules of a stock exchange on which its securities are listed (or to which an application for listing
has been submitted) to make such a public disclosure, such Party shall submit the proposed disclosure in writing to the other
Party as far in advance as reasonably practicable (and in no event less than three (3) Business Days prior to the anticipated
date of disclosure) so as to provide a reasonable opportunity to comment thereon. Notwithstanding the foregoing Lilly and its
Affiliates and its and their Sublicensees shall have the right to publicly disclose research, development and commercial information
(including with respect to regulatory matters) regarding the Licensed Compounds and Licensed Products; provided such disclosure
is subject to the provisions of Article 9 with respect to ACI’s Confidential Information. Neither Party shall be required
to seek the permission of the other Party to repeat any information regarding the terms of this Agreement or any amendment hereto
that has already been publicly disclosed by such Party or by the other Party, in accordance with this Section ‎9.6, provided
that such information remains accurate as of such time and provided the frequency and form of such disclosure are reasonable.

 

9.7.       Publications.
The Parties recognize the desirability of publishing and publicly disclosing the results
of and information regarding, activities under this Agreement. Accordingly, Lilly shall be free to publicly disclose the results
of and information regarding, activities under this Agreement, subject to prior review by ACI of any disclosure of ACI Confidential
Information for issues of patentability and protection of such Confidential Information, in a manner consistent with Applicable
Law and industry practices, as provided in this Section ‎9.7. Accordingly, prior to publishing or disclosing any ACI Confidential
Information, Lilly shall provide ACI with drafts of proposed abstracts, manuscripts or summaries of presentations that cover such
Confidential Information at least thirty (30) days prior to submission for publication or presentation. ACI shall respond promptly
through its designated representative and in any event no later than fifteen (15) days after receipt of such proposed publication
or presentation or such shorter period as may be required by the publication or presentation. If ACI requests a delay in publication
or presentation, Lilly shall delay such submission or presentation for a period not to exceed ninety (90) days to permit filings
for Patent protection and to otherwise address issues of Confidential Information or related competitive harm to the reasonable
satisfaction of ACI. In addition, Lilly will give due regard to comments furnished by ACI and such comments shall not be unreasonably
rejected. ACI shall not and shall cause each of its Affiliates and its and their licensees and Sublicensees not to, make any publications
or public disclosures regarding the Licensed Compounds or Licensed Products or any Confidential Information of Lilly without Lilly’s
prior written consent, except to the extent expressly permitted hereunder.

 

    56 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

9.8.       Return
of Confidential Information. Upon the written request of a Party, the non-requesting
Party following the termination of this Agreement shall either, at the requesting Party’s election: (i) promptly destroy
all copies of such Confidential Information in the possession or control of the non-requesting Party and confirm such destruction
in writing to the requesting Party; or (ii) promptly deliver to the requesting Party, at the non-requesting Party’s
sole cost and expense, all copies of such Confidential Information in the possession or control of the non-requesting Party. Notwithstanding
the foregoing, the non-requesting Party shall be permitted to retain such Confidential Information (a) to the extent necessary
or useful for purposes of performing any continuing obligations or exercising any ongoing rights hereunder and, in any event,
a single copy of such Confidential Information for archival purposes and (b) any computer records or files containing such Confidential
Information that have been created solely by such non-requesting Party’s automatic archiving and back-up procedures, to
the extent created and retained in a manner consistent with such non-requesting Party’s standard archiving and back-up procedures,
but not for any other uses or purposes. All Confidential Information shall continue to be subject to the terms of this Agreement
for the period set forth in Section ‎9.1.

 

ARTICLE
10

REPRESENTATIONS AND WARRANTIES

 

10.1.       Mutual
Representations and Warranties. ACI and Lilly each represents and warrants to the other,
as of the Effective Date, and covenants, that:

 

10.1.1.       It
is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization
and has all requisite power and authority, corporate or otherwise, to execute, deliver and perform this Agreement;

 

10.1.2.       The
execution and delivery of this Agreement and the performance by it of the transactions contemplated hereby have been duly authorized
by all necessary corporate action and do not violate: (i) such Party’s charter documents, bylaws or other organizational
documents; (ii) in any material respect, any agreement, instrument or contractual obligation to which such Party is bound;
(iii) any requirement of any Applicable Law; or (iv) any order, writ, judgment, injunction, decree, determination or
award of any court or governmental agency presently in effect applicable to such Party;

 

10.1.3.       This
Agreement is a legal, valid and binding obligation of such Party enforceable against it in accordance with its terms and conditions,
subject to the effects of bankruptcy, insolvency or other laws of general application affecting the enforcement of creditor rights,
judicial principles affecting the availability of specific performance and general principles of equity (whether enforceability
is considered a proceeding at law or equity);

 

    57 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

10.1.4.       It
is not under any obligation, contractual or otherwise, to any Person that conflicts with or is inconsistent in any material respect
with the terms of this Agreement or that would impede the diligent and complete fulfillment of its obligations hereunder;

 

10.1.5.       Neither
it nor any of its Affiliates has been debarred or is subject to debarment and neither it nor any of its Affiliates will use in
any capacity, in connection with the services to be performed under this Agreement, any Person who has been debarred pursuant
to Section 306 of the FFDCA or who is the subject of a conviction described in such section. It agrees to inform the other Party
in writing promptly if it or any such Person who is performing services hereunder is debarred or is the subject of a conviction
described in Section 306 or if any action, suit, claim, investigation or legal or administrative proceeding is pending or, to
the best of its or its Affiliates’ Knowledge, is threatened, relating to the debarment or conviction of it or any such Person
performing services hereunder;

 

10.1.6.       Neither
it nor any of its Affiliates, nor any of its or their respective officers, employees or agents has (i) committed an act, (ii)
made (or after the Effective Date, will make) a statement or (iii) failed (or after the Effective Date, will fail) to act or make
a statement that, in any case ((i), (ii) (iii)), that (x) would be or create an untrue statement of material fact or fraudulent
statement to the FDA or any other Regulatory Authority with respect to the Exploitation of the Licensed Compounds or the Licensed
Products or (y) could reasonably be expected to provide a basis for the FDA to invoke its policy respecting “Fraud, Untrue
Statements of Material Facts, Bribery and Illegal Gratuities”, set forth in 56 Fed. Reg. 46191 (September 10, 1991) and
any amendments thereto or any analogous laws or policies in the Territory, with respect the Exploitation of the Licensed Compounds
or the Licensed Products; and

 

10.1.7.       It
and its Affiliates have conducted, and their respective contractors and consultants have conducted, (and, with respect to Development
occurring after the Effective Date, will conduct) the Development of the Licensed Compounds in accordance with Good Laboratory
Practices, Good Clinical Practice and Applicable Law.

 

10.2.       Additional
Representations and Warranties of ACI. ACI further represents and warrants to Lilly,
as of the Effective Date, as follows:

 

10.2.1.       ACI
is entitled to grant the licenses specified herein and during the Term;

 

    58 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

10.2.2.       All
ACI Patents existing as of the Effective Date (the “Existing Patents”) are listed on Schedule 10.2.2
and all Existing Patents existing as of the Effective Date are (i) subsisting and to ACI’s Knowledge, are not invalid
or unenforceable, in whole or in part, (ii) solely and exclusively owned or exclusively licensed by ACI, free of any encumbrance,
lien or claim of ownership by any Third Party, (iii) the pending applications included in Existing Patents are being diligently
prosecuted in the respective patent offices in the Territory in accordance with Applicable Law and ACI and its Affiliates have
presented all relevant references, documents and information of which it and the inventors are aware to the relevant patent examiner
at the relevant patent office and (iv) filed and maintained properly and correctly and all applicable fees have been paid on or
before the due date for payment;

 

10.2.3.       True,
complete and correct copies of the file wrappers and other documents and materials relating to the prosecution, defense, maintenance,
validity and enforceability of the Existing Patents have been provided to Lilly prior to the Effective Date;

 

10.2.4.       There
are no license or other agreements regarding any intellectual property rights that are owned by a Third Party and licensed hereunder,
including the Existing Patents, as amended to the date hereof;

 

10.2.5.       The
Existing Patents represent all Patents that ACI or its Affiliates own, Control or otherwise have rights to relating to the Licensed
Compounds or the Licensed Products or the Exploitation thereof, as of the Effective Date. To ACI’s Knowledge, there is no
Information owned by or otherwise in the possession or control of ACI or any of its Affiliates as of the Effective Date that relates
to the Licensed Compounds or the Licensed Products existing as of the Effective Date that is not within the ACI Know-How that
exists as of the Effective Date;

 

10.2.6.       Neither
ACI nor any of its Affiliates has previously entered into any agreement, whether written or oral, with respect to or otherwise
assigned, transferred, licensed, conveyed or otherwise encumbered its right, title or interest in or to the Existing Patents,
ACI Know-How, Regulatory Documentation, the Licensed Compounds or the Licensed Products (including by granting any covenant not
to sue with respect thereto) or any Patent or other intellectual property or proprietary right or Information that would be Existing
Patents, ACI Know-How or Regulatory Documentation but for such assignment, transfer, license, conveyance or encumbrance;

 

10.2.7.       No
claim or litigation has been brought or asserted (and ACI has no Knowledge of any claim, whether or not brought or asserted) by
any Person alleging that (i) the Existing Patents or the ACI Know-How are invalid or unenforceable or (ii)  the conception,
development, reduction to practice, disclosing, copying, making, assigning or licensing of the Existing Regulatory Documentation,
the Existing Patents or the ACI Know-How existing as of the Effective Date or the Exploitation of the Licensed Compounds or Licensed
Products as contemplated herein, violates, infringes, constitutes misappropriation or otherwise conflicts or interferes with or
would violate, infringe or otherwise conflict or interfere with, any intellectual property or proprietary right of any Person;

 

10.2.8.       ACI
has obtained from its Affiliates the licenses and other rights necessary for ACI to grant to Lilly the rights and licenses provided
herein and for Lilly to perform its obligations hereunder;

 

    59 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

10.2.9.       
The Exploitation of the Licensed Compounds or the Licensed Products as contemplated herein
will not be subject to any other license or agreement to which ACI or any of its Affiliates is a party;

 

10.2.10.       There
are no amounts that will be required to be paid to a Third Party as a result of the Exploitation of the Licensed Compounds or
Licensed Products that arise out of any agreement to which ACI or any of its Affiliates is a party;

 

10.2.11.       To
ACI’s Knowledge, no Person is infringing or threatening to infringe or misappropriating or threatening to misappropriate
the Existing Patents or the ACI Know-How;

 

10.2.12.       Each
of the Existing Patents properly identifies each inventor of the claims thereof as determined in accordance with the laws of the
jurisdiction in which such Existing Patent is issued or such application is pending;

 

10.2.13.       All
current and former officers, employees, agents and consultants of ACI or any of its Affiliates who are inventors of or have otherwise
contributed in a material manner to the creation or development of any Existing Patent or ACI Know-How or who are or will be performing
ACI’s Development activities hereunder or who otherwise have access to any Confidential Information of Lilly have executed
and delivered to ACI or such Affiliate an assignment or other agreement regarding the protection of proprietary information and
the assignment to ACI or such Affiliate of any ACI Patents, ACI Know-How and any and all other Information that relates to the
Licensed Compounds or Licensed Products. To ACI’s Knowledge, no current officer, employee, agent or consultant of ACI or
any of its Affiliates is in violation of any term of any assignment or other agreement regarding the protection of Patents or
other intellectual property or proprietary information of ACI or such Affiliate or of any employment contract or any other contractual
obligation relating to the relationship of any such Person with ACI;

 

10.2.14.       The
inventions claimed or covered by the Existing Patents (i) were not conceived, discovered, developed or otherwise made in
connection with any research activities funded, in whole or in part, by the federal government of the United States or any agency
thereof, (ii) are not a “subject invention” as that term is described in 35 U.S.C. Section 201(e) and (iii) are
not otherwise subject to the provisions of the Patent and Trademark Law Amendments Act of 1980, as amended, codified at 35 U.S.C.
§§ 200-212, as amended, as well as any regulations promulgated pursuant thereto, including in 37 C.F.R. Part 401;

 

10.2.15.       ACI
and its Affiliates have generated, prepared, maintained and retained all Regulatory Documentation that is required to be maintained
or retained pursuant to and in accordance with Good Laboratory Practices, Good Clinical Practice and Applicable Law and all such
information is true, complete and correct and what it purports to be.

 

    60 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

10.3.       
DISCLAIMER OF WARRANTIES. EXCEPT FOR THE
EXPRESS REPRESENTATIONS AND WARRANTIES SET FORTH HEREIN, NEITHER PARTY MAKES ANY REPRESENTATIONS OR GRANTS ANY WARRANTIES, EXPRESS
OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE AND EACH PARTY SPECIFICALLY DISCLAIMS ANY OTHER REPRESENTATIONS
AND WARRANTIES, WHETHER WRITTEN OR ORAL OR EXPRESS OR IMPLIED, INCLUDING ANY REPRESENTATION OR WARRANTY OF QUALITY, MERCHANTABILITY
OR FITNESS FOR A PARTICULAR USE OR PURPOSE OR ANY REPRESENTATION OR WARRANTY AS TO THE VALIDITY OR ENFORCEABILITY OF ANY PATENTS
OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

 

10.4.       Anti-Bribery
and Anti-Corruption Compliance. 

 

10.4.1.       In
connection with this Agreement, the Parties shall comply with all applicable local, national, and international laws, regulations,
and industry codes dealing with government procurement, conflicts of interest, corruption or bribery, including, if applicable,
the U.S. Foreign Corrupt Practices Act of 1977, as amended, and any laws enacted to implement the Organisation of Economic Cooperation
and Development Convention on Combating Bribery of Foreign Officials in International Business Transactions.

 

10.4.2.       Without
limiting the other obligations of the Parties set forth in this Section, in connection with any activities of the Parties under
this Agreement, the Parties confirm that they have not made, offered, given, promised to give, or authorized, and will not make,
offer, give, promise to give, or authorize, any bribe, kickback, payment or transfer of anything of value, directly or indirectly,
to any person or to any Government Official for the purpose of: (i) improperly influencing any act or decision of the person or
Government Official; (ii) inducing the person or Government Official to do or omit to do an act in violation of a lawful or otherwise
required duty; (iii) securing any improper advantage; or (iv) inducing the person or Government Official to improperly influence
the act or decision of any organization, including any government or government instrumentality, to assist any Party in obtaining
or retaining business. For the purposes of this Section “Government Official” means: (i) any officer or employee
of: (a) a government, or any department or agency thereof; (b) a government-owned or controlled company, institution, or other
entity, including a government-owned hospital or university; or (c) a public international organization (such as the United Nations,
the International Monetary Fund, the International Committee of the Red Cross, and the World Health Organization), or any department
or agency thereof; (ii) any political party or party official or candidate for public or political party office; and (iii) any
person acting in an official capacity on behalf of any of the foregoing.

 

    61 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

10.4.3.       The
Parties agree to cooperate with each other as may reasonably be required to ensure that each is able to fully meet its obligations
with respect to the Party Specific Regulations applicable to it. Neither Party shall be obligated to pursue any course of conduct
that would result in such Party being in material breach of any Party Specific Regulation applicable to it. All Party Specific
Regulations are binding only in accordance with their terms and only upon the Party to which they relate.

 

10.4.4.       All
Internal Compliance Codes shall apply only to the Party to which they relate. The Parties agree to cooperate with each other to
insure that each Party is able to comply with the substance of its respective Internal Compliance Codes and, to the extent practicable,
to operate in a manner consist with its usual Compliance related processes.

 

ARTICLE
11

INDEMNITY

 

11.1.       Indemnification
of ACI. Lilly shall indemnify ACI, its Affiliates and its and their respective directors,
officers, employees and agents and defend and save each of them harmless, from and against any and all losses, damages, liabilities,
costs and expenses (including reasonable attorneys’ fees and expenses) (collectively, “Losses”) in connection
with any and all suits, investigations, claims or demands of Third Parties (collectively, “Third Party Claims”)
(including, for clarity, claims by Lilly’s Sublicensees) arising from or occurring as a result of: (i) the breach by
Lilly of this Agreement; (ii) the gross negligence or willful misconduct on the part of Lilly or its Affiliates or its or
their respective directors, officers, employees or agents in performing its or their obligations under this Agreement; or (iii) the
Exploitation by Lilly or any of its Affiliates or Sublicensees of any Licensed Product or Licensed Compound in or for the Territory,
except, in each case ((i), (ii) and (iii)), for those Losses for which ACI has an obligation to indemnify Lilly pursuant to Section ‎11.2
hereof, as to which Losses each Party shall indemnify the other to the extent of their respective liability.

 

11.2.       Indemnification
of Lilly. ACI shall indemnify Lilly, its Affiliates, and its and their respective directors,
officers, employees and agents and defend and save each of them harmless, from and against any and all Losses in connection with
any and all Third Party Claims (including, for clarity, claims by Lilly’s Sublicensees) arising from or occurring as a result
of: (i) the breach by ACI of this Agreement; (ii) the gross negligence or willful misconduct on the part of ACI or its
Affiliates or its or their respective directors, officers, employees or agents in performing its obligations under this Agreement;
or (iii) the Exploitation by ACI or any of its Affiliates or Sublicensees of any Licensed Product or Licensed Compound in
or for the Territory, except, in each case ((i), (ii) and (iii)), for those Losses for which Lilly has an obligation to indemnify
ACI pursuant to Section ‎11.1 hereof, as to which Losses each Party shall indemnify the other to the extent of their
respective liability.

 

    62 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

11.3.       Indemnification
Procedures. 

 

11.3.1.       Notice
of Claim.  All indemnification claims in respect of a Party, its Affiliates or its or
their respective directors, officers, employees and agents shall be made solely by such Party to this Agreement (the “Indemnified
Party”). The Indemnified Party shall give the indemnifying Party written notice as soon as reasonably practicable (an
“Indemnification Claim Notice”) of any Losses or discovery of fact upon which such Indemnified Party intends
to base a request for indemnification under this Article ‎11, but in no event shall the indemnifying Party be liable for any
Losses that result from any delay in providing such notice. Each Indemnification Claim Notice must contain a description of the
claim and the nature and amount of such Loss (to the extent that the nature and amount of such Loss is known at such time). The
Indemnified Party shall furnish promptly to the indemnifying Party copies of all papers and official documents received in respect
of any Losses and Third Party Claims.

 

11.3.2.       Control
of Defense. At its option, the indemnifying Party may assume the defense of any Third
Party Claim by giving written notice to the Indemnified Party within thirty (30) days after the indemnifying Party’s receipt
of an Indemnification Claim Notice. The assumption of the defense of a Third Party Claim by the indemnifying Party shall not be
construed as an acknowledgment that the indemnifying Party is liable to indemnify the Indemnified Party in respect of the Third
Party Claim, nor shall it constitute a waiver by the indemnifying Party of any defenses it may assert against the Indemnified
Party’s claim for indemnification. Upon assuming the defense of a Third Party Claim, the indemnifying Party may appoint
as lead counsel in the defense of the Third Party Claim any legal counsel selected by the indemnifying Party; provided
that it obtains the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld, conditioned
or delayed). In the event the indemnifying Party assumes the defense of a Third Party Claim, the Indemnified Party shall immediately
deliver to the indemnifying Party all original notices and documents (including court papers) received by the Indemnified Party
in connection with the Third Party Claim. Should the indemnifying Party assume the defense of a Third Party Claim, except as provided
in Section ‎11.3.3, the indemnifying Party shall not be liable to the Indemnified Party for any legal expenses subsequently
incurred by such Indemnified Party in connection with the analysis, defense or settlement of the Third Party Claim unless specifically
requested in writing by the indemnifying Party. In the event that it is ultimately determined that the indemnifying Party is not
obligated to indemnify, defend or hold harmless the Indemnified Party from and against the Third Party Claim, the Indemnified
Party shall reimburse the indemnifying Party for any and all costs and expenses (including attorneys’ fees and costs of
suit) and any Losses incurred by the indemnifying Party in its defense of the Third Party Claim.

 

    63 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

11.3.3.       Right
to Participate in Defense. Any Indemnified Party shall be entitled to participate in,
but not control, the defense of such Third Party Claim and to employ counsel of its choice for such purpose; provided, however,
that such employment shall be at the Indemnified Party’s sole cost and expense unless (i) the employment thereof has
been specifically authorized in writing by the indemnifying Party in writing, (ii) the indemnifying Party has failed to assume
the defense and employ counsel in accordance with Section ‎11.3.2 (in which case the Indemnified Party shall control
the defense) or (iii) the interests of the indemnitee and the indemnifying Party with respect to such Third Party Claim are
sufficiently adverse to prohibit the representation by the same counsel of both Parties under Applicable Law, ethical rules or
equitable principles.

 

11.3.4.       Settlement.
With respect to any Losses relating solely to the payment of money damages in connection
with a Third Party Claim and that shall not result in the applicable indemnitee’s becoming subject to injunctive or other
relief or otherwise adversely affecting the business of the Indemnified Party in any manner and as to which the indemnifying Party
shall have acknowledged in writing the obligation to indemnify the applicable indemnitee hereunder, the indemnifying Party shall
have the sole right to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss, on such
terms as the indemnifying Party, in its sole discretion, shall deem appropriate. With respect to all other Losses in connection
with Third Party Claims, where the indemnifying Party has assumed the defense of the Third Party Claim in accordance with Section
11.3.2, the indemnifying Party shall have authority to consent to the entry of any judgment, enter into any settlement or otherwise
dispose of such Loss; provided it obtains the prior written consent of the Indemnified Party (which consent shall not be
unreasonably withheld, conditioned or delayed). If the indemnifying Party does not assume and conduct the defense of a Third Party
Claim as provided above, the Indemnified Party may defend against such Third Party Claim; provided that the Indemnified
Party shall not settle any Third Party Claim without the prior written consent of the indemnifying Party (which consent shall
not be unreasonably withheld, conditioned or delayed).

 

11.3.5.       Cooperation.
Regardless of whether the indemnifying Party chooses to defend or prosecute any Third
Party Claim, the Indemnified Party shall and shall cause each indemnitee to, cooperate in the defense or prosecution thereof and
shall furnish such records, information and testimony, provide such witnesses and attend such conferences, discovery proceedings,
hearings, trials and appeals as may be reasonably requested in connection therewith. Such cooperation shall include access during
normal business hours afforded to the indemnifying Party to, and reasonable retention by the Indemnified Party of, records and
information that are reasonably relevant to such Third Party Claim and making Indemnified Parties and other employees and agents
available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder
and the indemnifying Party shall reimburse the Indemnified Party for all its reasonable and verifiable out-of-pocket expenses
in connection therewith.

 

    64 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

11.3.6.       Expenses.
Except as provided above, the costs and expenses, including fees and disbursements of
counsel, incurred by the Indemnified Party in connection with any claim shall [*****].

 

11.4.       Special,
Indirect and Other Losses. EXCEPT (I) IN THE EVENT OF THE WILLFUL MISCONDUCT OR FRAUD
OF A PARTY OR A PARTY’S BREACH OF ITS OBLIGATIONS UNDER ‎ARTICLE 9 OR SECTION ‎2.7, (II) AS PROVIDED UNDER SECTION
‎13.10, AND (III) TO THE EXTENT ANY SUCH DAMAGES ARE REQUIRED TO BE PAID TO A THIRD PARTY AS PART OF A CLAIM FOR WHICH A PARTY
PROVIDES INDEMNIFICATION UNDER THIS ARTICLE 11, NEITHER PARTY NOR ANY OF ITS AFFILIATES SHALL BE LIABLE IN CONTRACT, TORT, NEGLIGENCE,
BREACH OF STATUTORY DUTY OR OTHERWISE FOR ANY SPECIAL, INDIRECT OR PUNITIVE DAMAGES, OR FOR LOSS OF PROFITS SUFFERED BY THE OTHER
PARTY.

 

11.5.       Insurance.
Each Party shall have and maintain such types and amounts of insurance covering its Exploitation
of the Licensed Compounds and Licensed Products as is (i) normal and customary in the pharmaceutical industry generally for
parties similarly situated and (ii) otherwise required by Applicable Law. Upon request by the other Party, each Party shall
provide to the other Party evidence of its insurance coverage. The insurance policies shall be under an occurrence form, but if
only a claims-made form is available to a Party, then such Party shall continue to maintain such insurance after the expiration
or termination of this Agreement for a period of [*****]. Notwithstanding the foregoing, Lilly may self-insure in whole or in
part the insurance requirements described above.

 

ARTICLE
12

TERM AND TERMINATION

 

12.1.       Term
and Expiration. This Agreement shall commence on the Effective Date and, unless earlier
terminated in accordance herewith, shall continue in force and effect until the date of expiration of the last Royalty Term for
the last Licensed Product (such period, the “Term”). Following the expiration of the Royalty Term for a Licensed
Product in a country, the license granted in Section ‎2.1 shall become fully-paid, royalty-free, perpetual and irrevocable
for such Licensed Product in such country.

 

    65 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

12.2.       Termination.

 

12.2.1.       Material
Breach. In the event that either Party (the “Breaching Party”) shall
be in material breach in the performance of any of its obligations under this Agreement, in addition to any other right and remedy
the other Party (the “Non-Breaching Party”) may have, the Non-Breaching Party may terminate this Agreement
by providing ninety (90) days (the “Notice Period”) prior written notice (the “Termination Notice”)
to the Breaching Party and specifying the breach and its claim of right to terminate; provided that (i) to the extent that
such material breach involves a failure to make a payment when due, the Notice Period shall be, and such breach must be cured
within, sixty (60) days after the Termination Notice is given to the Breaching Party, (ii) the termination shall not become effective
at the end of the Notice Period if the Breaching Party cures the breach specified in the Termination Notice during the Notice
Period (or, if such default cannot be cured within the Notice Period, if the Breaching Party commences actions to cure such breach
within the Notice Period and thereafter diligently continues such actions) and (iii) if either Party initiates a dispute resolution
procedure under Section ‎13.5 within thirty (30) days after delivery of a Termination Notice to resolve the dispute for which
termination is being sought and is diligently pursuing such procedure, the cure period set forth in this Section ‎12.2.1 shall
be tolled and the termination shall become effective (a) with respect to any breach that is capable of being cured, if the Breaching
Party does not implement the remedy for such breach determined by the Arbitrators through such dispute resolution procedure within
the timeframe established by the Arbitrators or (b) with respect to any breach that is not capable of being cured, upon the final
resolution of the dispute if the Arbitrators grant the terminating Party’s request to terminate.

 

12.2.2.       Termination
by Lilly. [*****], Lilly may terminate this Agreement for any or no reason, upon three
(3) months’ prior written notice to ACI.

 

12.2.3.       Termination
for Patent Challenge. ACI may terminate this Agreement immediately upon written notice
to Lilly if Lilly or any of its Affiliates or Sublicensees, directly or indirectly, makes, files or maintains any claim, demand,
lawsuit or cause of action to challenge the ownership, validity or enforceability of, or oppose any extension of or the grant
of a supplementary protection certificate, in each case, with respect to any ACI Patents or any interest of ACI in any Joint Patents.

 

12.2.4.       Termination
for Insolvency. In the event of an Insolvency Event with respect to a Party, then the
other Party may terminate this Agreement effective immediately upon written notice to such Party.

 

12.2.5.       Termination
for HSR. In the event that HSR Clearance is not obtained within nine (9) months following
the Execution Date, this Agreement shall automatically terminate.

 

12.2.6.       Termination
After Lilly Pre-Clinical Activity Period. At any time on or before the ninth (9th) Business
Day after the end of the Lilly Pre-Clinical Activity Period, Lilly may terminate this Agreement immediately upon written notice
to ACI. For clarity, if Lilly terminates this Agreement in accordance with this Section ‎12.2.6, [*****].

 

    66 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

12.3.       
Rights in Bankruptcy.  In the event of any
Insolvency Event of ACI, Lilly, in addition to the rights, power and remedies expressly provided herein, shall be entitled to
exercise all other such rights and powers and resort to all other such remedies as may now or hereafter exist at law or in equity
in Applicable Law. In the event of any Insolvency Event of Lilly, ACI, in addition to the rights, power and remedies expressly
provided herein, shall be entitled to exercise all other such rights and powers and resort to all other such remedies as may now
or hereafter exist at law or in equity in Applicable Law.

 

12.4.       Consequences
of Termination.

 

12.4.1.       Termination.
In the event of any termination of this Agreement for any reason:

 

(i)       all
rights and licenses granted by either Party hereunder shall immediately terminate (it being understood that all rights and licenses
granted to Lilly hereunder shall immediately revert to ACI);

 

(ii)      except
in connection with a termination of this Agreement by ACI pursuant to Sections ‎12.2.1, ‎‎12.2.3, or ‎12.2.4 or
a termination of this Agreement by Lilly pursuant to Sections ‎‎12.2.2 or ‎12.2.6, the Parties shall negotiate in
good faith a non-exclusive, royalty-bearing license grant and right of reference from Lilly to ACI under the Lilly Grantback Patent
Rights, Lilly Grantback Know-How, the Product Trademarks, and Regulatory Documentation then Controlled by Lilly that, in each
case, are necessary for ACI to Develop or Commercialize the Licensed Products (it being understood that in the event that ACI
terminates this Agreement pursuant to Sections ‎12.2.1, ‎‎12.2.3, or ‎12.2.4 or Lilly terminates this Agreement
pursuant to Sections ‎‎12.2.2 or ‎12.2.6, effective upon the effective date of such termination, Lilly, on behalf
of itself and its Affiliates, hereby grants to ACI an exclusive, fully transferable, fully sublicensable, fully paid-up (except
as provided in Section 12.4.1(v)) license under the Lilly Grantback Patent Rights and Lilly Grantback Know-How, and Lilly’s
interests in the Joint Patents and the Joint Know-How to Exploit in the Field in the Territory the Licensed Products that are
or have been the subject of Development or Commercialization as of the effective date of such termination);

 

(iii)     except
in connection with a termination pursuant to Section ‎‎12.2.2 and unless expressly prohibited by any Regulatory Authority,
at ACI’s written request, Lilly shall transfer ownership and control to ACI of all clinical studies involving Licensed Products
being conducted by Lilly as of the effective date of termination and continue to conduct such clinical studies, at ACI’s
cost, for up to [*****] to enable such transfer to be completed without interruption of any such clinical study;

 

    67 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

(iv)     in
the event that ACI terminates this Agreement pursuant to Sections ‎12.2.1, ‎‎12.2.3, or ‎12.2.4 or Lilly terminates
this Agreement pursuant to Sections ‎‎12.2.2 or ‎12.2.6, upon request by ACI within the first six (6) months following
the effective date of such termination, (a) Lilly shall assign and provide to ACI (1) copies of all data and materials Controlled
by Lilly or any of its Affiliates or Sublicensees as were made or developed in the course of developing the Licensed Products
to the extent relating thereto (including Information regarding safety, efficacy, toxicity and potential side effects); (2) all
of Lilly’s right, title and interest in and to all agreements between Lilly and Third Parties as are freely assignable by
Lilly and relate solely to the Development or Manufacture of any and all Licensed Products and for which such Third Party agrees
to release Lilly for obligations and liabilities arising from and after such assignment; (3) all of Lilly’s or any of its
Affiliate’s or Sublicensee’s rights, title and interest in and to the Product Trademarks (including any and all domain
name registrations, social media handles, and goodwill to the extent related thereto); and (4) all of Lilly’s or any of
its Affiliate’s or Sublicensee’s right, title and interest in and to any and all Regulatory Documentation (including
all Regulatory Approvals) Controlled by Lilly or any of its Affiliates or Sublicensees that relate solely to any and all Licensed
Products (it being understood that, notwithstanding anything to the contrary in Section ‎9.1, as of and following the effective
date of such termination, all such Regulatory Documentation (including all Regulatory Approvals) shall be deemed the Confidential
Information of ACI (and ACI shall be deemed the disclosing Party and Lilly shall be deemed the receiving Party with respect thereto);
provided, that Lilly, its Affiliates and Sublicensees may retain a copy for its and their regulatory compliance purposes);
and (b) if the effective date of termination is as of or following the commencement of Lilly’s obligations to Manufacture
Licensed Products under this Agreement, then Lilly shall Manufacture and supply to ACI for a period of [*****] after such effective
date of termination all Termination Royalty Products (provided that Lilly shall not be obligated to supply to ACI more
than [*****] worth of ACI’s commercially reasonable demand for Licensed Product based on ACI’s forecasts set forth
in the applicable supply agreement) and ACI shall reimburse Lilly for [*****] in connection with such Manufacture and supply pursuant
to a supply agreement and Quality Agreement which the Parties will negotiate to be on commercially reasonable terms, provided
that, if the Parties are unable to enter into such Supply Agreement and Quality Agreement within thirty (30) days of such
termination, the terms of such supply agreement and Quality Agreement shall be decided by final and binding arbitration by the
Arbitrators;

 

(v)      in
the event that ACI terminates this Agreement pursuant to Sections ‎12.2.1, ‎‎12.2.3 or ‎12.2.4, or Lilly terminates
this Agreement pursuant to Section ‎12.2.2, in consideration for the exclusive license granted in clause (ii) above, with
respect to each Licensed Product that is or has been the subject of Development or Commercialization as of the effective date
of the applicable termination of this Agreement (each, a “Termination Royalty Product”) in any country, until
the expiration of the last-to-expire Tau Patent assigned by Lilly to ACI pursuant to the last sentence of Section ‎8.1.2 in
such country that contains a Valid Claim that claims or covers such Termination Royalty Product (or any element thereof) or any
Exploitation of such Termination Royalty Product (or any element thereof), ACI shall pay to Lilly a royalty on Net Sales of such
Termination Royalty Product in the Field in such country by ACI or its Affiliates or Sublicensees (a) in the event that such termination
occurs prior to First Commercial Sale of such Termination Royalty Product hereunder, at a rate of [*****] of such Net Sales or
(b) in the event that such termination occurs after the First Commercial Sale of such Termination Royalty Product hereunder, at
a rate of [*****] of such Net Sales, in each case ((a) and (b)), with Net Sales being determined by applying the Net Sales definition
to ACI mutatis mutandis (it being understood that if as of the effective date of any such termination of this Agreement,
no Tau Patent containing a Valid Claim claiming or covering any such Termination Royalty Product in such country has been assigned
to ACI pursuant to the last sentence of Section ‎8.1.2, no royalty shall be payable by ACI in respect of such Termination
Royalty Product pursuant to this Section ‎12.4.1‎(v)).

 

12.5.       Remedies.
Except as otherwise expressly provided herein, termination of this Agreement in accordance
with the provisions hereof shall not limit remedies that may otherwise be available in law or equity.

 

12.6.       Accrued
Rights; Surviving Obligations.

 

    68 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

12.6.1.       Termination
or expiration of this Agreement for any reason shall be without prejudice to any rights that shall have accrued to the benefit
of a Party prior to such termination or expiration. Such termination or expiration shall not relieve a Party from obligations
that are expressly indicated to survive the termination or expiration of this Agreement. Without limiting the foregoing, Sections
‎2.4, ‎7.3 (solely with respect to Net Sales of any Licensed Product pursuant to Section ‎12.6.2), ‎7.5, ‎7.7,
‎7.8, ‎7.9, ‎7.10, ‎7.11, ‎7.12, ‎8.1.1, ‎8.1.2, ‎8.1.3 (except for the second and fourth sentences),
‎8.1.4 (except for the second sentence), ‎10.3, ‎12.3, ‎12.4, ‎12.5, ‎12.6 (including this Section ‎12.6.1)
and Articles ‎1, ‎9 (for the period specified therein), ‎11 and ‎13 (other than Section ‎13.15) of this Agreement
shall survive the termination or expiration of this Agreement for any reason.

 

12.6.2.       Notwithstanding
the termination of Lilly’s licenses and other rights under this Agreement, Lilly shall have the right for [*****] after
the effective date of such termination to sell or otherwise dispose of all Licensed Product then in its inventory and any in-progress
inventory, in each case that is intended for sale or disposition in such country(ies), as though this Agreement had not terminated
and such sale or disposition shall not constitute infringement of ACI’s or its Affiliates’ Patent or other intellectual
property or other proprietary rights, provided that any such sales shall be included in the Net Sales for purposes of this
Agreement and subject to Lilly’s payment obligations in Article 7.

 

ARTICLE
13

MISCELLANEOUS

 

13.1.       Force
Majeure. Neither Party shall be held liable or responsible to the other Party or be deemed
to have defaulted under or breached this Agreement for failure or delay in fulfilling or performing any term of this Agreement
(other than an obligation to make payments) when such failure or delay is caused by or results from events beyond the reasonable
control of the non-performing Party, including fires, floods, earthquakes, hurricanes, embargoes, shortages, epidemics, quarantines,
war, acts of war (whether war be declared or not), terrorist acts, insurrections, riots, civil commotion, strikes, lockouts or
other labor disturbances (whether involving the workforce of the non-performing Party or of any other Person), acts of God or
acts, omissions or delays in acting by any Governmental Authority (except to the extent such delay results from the breach by
the non-performing Party or any of its Affiliates of any term or condition of this Agreement). The non-performing Party shall
notify the other Party of such force majeure within thirty (30) days after such occurrence by giving written notice to the other
Party stating the nature of the event, its anticipated duration and any action being taken to avoid or minimize its effect. The
suspension of performance shall be of no greater scope and no longer duration than is necessary and the non-performing Party shall
use commercially reasonable efforts to remedy its inability to perform. In the event that ACI is the non-performing Party and
the force majeure continues for more than ninety (90) days, Lilly shall have the right, at Lilly’s sole election, and without
limitation to any other right or remedy available to Lilly, to assume and complete some or all of the activities that ACI is not
performing as a result of such force majeure.

 

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    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

13.2.       Export
Control. This Agreement is made subject to any restrictions concerning the export of
products or technical information from the United States or other countries that may be imposed on the Parties from time to time.
Each Party agrees that it will not export, directly or indirectly, any technical information acquired from the other Party under
this Agreement or any products using such technical information to a location or in a manner that at the time of export requires
an export license or other governmental approval, without first obtaining the written consent to do so from the appropriate agency
or other Governmental Authority in accordance with Applicable Law.

 

13.3.       Assignment.

 

13.3.1.       Neither
Party may, directly or indirectly, assign or otherwise transfer this Agreement or its rights or obligations under this Agreement,
in whole or in part, without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned
or delayed, provided, however, that:

 

(i)       ACI
may assign or otherwise transfer this Agreement or its rights or obligations under this Agreement, in whole or in part, without
Lilly’s consent (a) in connection with the transfer or sale of all or substantially all of the assets of ACI to a Third
Party, whether by merger, sale of stock, sale of assets or otherwise, provided that such Third Party agrees to be bound
by, and assumes and succeeds to, all of the obligations of ACI under this Agreement or (b) to an Affiliate, provided that
ACI shall remain liable and responsible to Lilly for the performance and observance of all such obligations by such Affiliate;
and

 

(ii)       Lilly
may, upon prior written notice to ACI, assign or otherwise transfer this Agreement or its rights or obligations under this Agreement,
in whole or in part, without ACI’s consent, (a) in connection with the transfer or sale of all or substantially all of the
neurodegenerative business of Lilly to any Major Pharmaceutical Company, (b) to an Affiliate, provided that Lilly
shall remain liable and responsible to ACI for the performance and observance of all such obligations by such Affiliate.

 

Notwithstanding
anything in this Agreement to the contrary, in the event that either Party assigns or otherwise transfers this Agreement to any
of such Party’s Affiliates, any Change of Control of any such Affiliate shall be deemed to be an assignment of this Agreement
for the purposes of, and subject to, this Section ‎13.3.1. This Agreement will be binding upon and inure to the benefit of
the Parties and their successors and permitted assigns. Any attempted assignment or delegation in violation of this Section 13.3.1
shall be void and of no effect.

 

    70 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

13.3.2.       The
rights to Information, materials and intellectual property: (i) controlled by a Third Party permitted assignee of a Party
that were controlled by such assignee (and not such Party) immediately prior to such assignment (other than as a result of a license
or other grant of rights, covenant or assignment by such Party or its Affiliates to, or for the benefit of, such Third Party);
or (ii) controlled by an Affiliate of a Party that becomes an Affiliate through any Change of Control of such Party, that
were controlled by such Affiliate (and not such Party) immediately prior to such Change of Control (other than as a result of
a license or other grant of rights, covenant or assignment by such Party or its other Affiliates to, or for the benefit of, such
Affiliate), in each case ((i) and (ii)), shall be automatically excluded from the rights licensed or granted to the other Party
under this Agreement.

 

13.4.       Severability.
If any provision of this Agreement is held to be illegal, invalid or unenforceable under
any present or future law and if the rights or obligations of either Party under this Agreement will not be materially and adversely
affected thereby, (a) such provision shall be fully severable, (b) this Agreement shall be construed and enforced as
if such illegal, invalid or unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or
by its severance herefrom and (d) in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically
as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible and reasonably acceptable to the Parties. To the fullest extent permitted by Applicable Law, each
Party hereby waives any provision of law that would render any provision hereof illegal, invalid or unenforceable in any respect.

 

13.5.       Dispute
Resolution.

 

13.5.1.       Except
as provided in Sections 5.2.3, 7.11.1 or 13.10, if a dispute arises between the Parties in connection with or relating to this
Agreement or any document or instrument delivered in connection herewith (a “Dispute”), then either Party shall
have the right to refer such Dispute to the Senior Officers for attempted resolution by good faith negotiations during a period
of ten (10) Business Days. Any final decision mutually agreed to by the Senior Officers shall be conclusive and binding on the
Parties. If such Senior Officers are unable to resolve any such Dispute within such ten (10)-Business Day period, either Party
shall be free to institute binding arbitration in accordance with Section ‎13.5.2 upon written notice to the other Party (an
“Arbitration Notice”) and seek such remedies as may be available.

 

    71 

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

13.5.2.       Upon
receipt of an Arbitration Notice by a Party, the applicable Dispute shall be resolved by final and binding arbitration before
a panel of [*****] with relevant industry experience (the “Arbitrators”). Each of ACI and Lilly shall promptly
select [*****] each, which selections shall in no event be made later than thirty (30) days after the notice of initiation of
arbitration. [*****] shall be chosen promptly by mutual agreement of the Arbitrator chosen by ACI and the Arbitrator chosen by
Lilly, but in no event later than thirty (30) days after the date that the last of such Arbitrators was appointed. The Arbitrators
shall determine what discovery will be permitted, consistent with the goal of reasonably controlling the cost and time that the
Parties must expend for discovery; provided that the Arbitrators shall permit such discovery as they deem necessary to
permit an equitable resolution of the dispute. The arbitration shall be administered by the London Centre for International Arbitration
(or its successor entity) by one or more arbitrators appointed in accordance with the Rules of Arbitration, except as modified
in this Agreement. The arbitration shall be held in London, England, and the Parties shall use reasonable efforts to expedite
the arbitration if requested by either Party. The Arbitrators shall, within fifteen (15) days after the conclusion of the arbitration
hearing, issue a written award and statement of decision describing the essential findings and conclusions on which the award
is based, including the calculation of any damages awarded. The decision or award rendered by the Arbitrators shall be final and
non-appealable, and judgment may be entered upon it in accordance with Applicable Law in Switzerland, or any other court of competent
jurisdiction. The Arbitrators shall be authorized to award compensatory damages, but shall not be authorized to reform, modify
or materially change this Agreement or any other agreements contemplated hereunder. Each Party shall bear [*****]. Unless the
Parties otherwise agree in writing, during the period of time that any arbitration proceeding is pending under this Agreement,
the Parties shall continue to comply with all those terms and provisions of this Agreement that are not the subject of the pending
arbitration proceeding. Nothing contained in this Agreement shall deny any Party the right to seek injunctive or other equitable
relief from a court of competent jurisdiction in the context of a bona fide emergency or prospective irreparable harm, and such
an action may be filed and maintained notwithstanding any ongoing arbitration proceeding. All arbitration proceedings and decisions
of the Arbitrator under this Section 13.5.2 shall be deemed Confidential Information of both Parties under Article 9.

 

13.6.       Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of
Switzerland, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation
of this Agreement to the substantive law of another jurisdiction. The Parties agree to exclude the application to this Agreement
of the United Nations Convention on Contracts for the International Sale of Goods.

 

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13.7.       Notices.

 

13.7.1.       Notice
Requirements. Any notice, request, demand, waiver, consent, approval or other communication
permitted or required under this Agreement shall be in writing, shall refer specifically to this Agreement and shall be deemed
given only if delivered by hand or sent by facsimile transmission (with transmission confirmed) or by internationally recognized
overnight delivery service that maintains records of delivery, addressed to the Parties at their respective addresses specified
in Section ‎13.7.2 or to such other address as the Party to whom notice is to be given may have provided to the other
Party in accordance with this Section ‎13.7.1. Such notice shall be deemed to have been given as of the date delivered by
hand or transmitted by facsimile (with transmission confirmed) or on the second Business Day (at the place of delivery) after
deposit with an internationally recognized overnight delivery service. Any notice delivered by facsimile shall be confirmed by
a hard copy delivered as soon as practicable thereafter. This Section ‎13.7.1 is not intended to govern the day-to-day business
communications necessary between the Parties in performing their obligations under the terms of this Agreement.

 

13.7.2.       Address
for Notice.

 

If
to Lilly, to:

 

[*****]

 

with
copies to (which shall not constitute notice) to:

 

[*****]

 

and

 

[*****]

 

If
to ACI, to:

 

[*****]

 

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

 

[*****]

 

13.8.       Entire
Agreement; Amendments. This Agreement, together with the Schedules attached hereto, sets
forth and constitutes the entire agreement and understanding between the Parties with respect to the subject matter hereof and
all prior agreements, understandings, promises and representations, whether written or oral, with respect thereto are superseded
hereby. Each Party confirms that it is not relying on any representations or warranties of the other Party except as specifically
set forth in this Agreement. No amendment, modification, release or discharge shall be binding upon the Parties unless in writing
and duly executed by authorized representatives of both Parties. In the event of any inconsistencies between this Agreement and
any Schedules or other attachments hereto, the terms of this Agreement shall control.

 

13.9.       English
Language. This Agreement shall be written and executed in and all other communications
under or in connection with this Agreement shall be in, the English language. Any translation into any other language shall not
be an official version thereof and in the event of any conflict in interpretation between the English version and such translation,
the English version shall control.

 

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13.10.       Equitable
Relief. Each Party acknowledges and agrees that the restrictions set forth in Section
‎2.7 and Articles ‎8 and ‎9 are reasonable and necessary to protect the legitimate interests of the other Party
and that such other Party would not have entered into this Agreement in the absence of such restrictions and that any breach or
threatened breach of any provision of such Section or Articles may result in irreparable injury to such other Party for which
there will be no adequate remedy at law. In the event of a breach or threatened breach of any provision of such Section or Articles,
the non-breaching Party shall be authorized and entitled to obtain from any court of competent jurisdiction injunctive relief,
whether preliminary or permanent, specific performance and an equitable accounting of all earnings, profits and other benefits
arising from such breach, which rights shall be cumulative and in addition to any other rights or remedies to which such non-breaching
Party may be entitled in law or equity. Both Parties agree to waive any requirement that the other (i) post a bond or other
security as a condition for obtaining any such relief and (ii) show irreparable harm, balancing of harms, consideration of
the public interest or inadequacy of monetary damages as a remedy. Nothing in this Section ‎13.10 is intended or should
be construed, to limit either Party’s right to equitable relief or any other remedy for a breach of any other provision
of this Agreement.

 

13.11.       Waiver
and Non-Exclusion of Remedies. Any term or condition of this Agreement may be waived
at any time by the Party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a
written instrument duly executed by or on behalf of the Party waiving such term or condition. The waiver by either Party hereto
of any right hereunder or of the failure to perform or of a breach by the other Party shall not be deemed a waiver of any other
right hereunder or of any other breach or failure by such other Party whether of a similar nature or otherwise. The rights and
remedies provided herein are cumulative and do not exclude any other right or remedy provided by Applicable Law or otherwise available
except as expressly set forth herein.

 

13.12.       No
Benefit to Third Parties. Except as provided in Article 11, the covenants and agreements
set forth in this Agreement are for the sole benefit of the Parties hereto and their successors and permitted assigns and they
shall not be construed as conferring any rights on any other Persons.

 

13.13.       Further
Assurance. Each Party shall duly execute and deliver or cause to be duly executed and
delivered, such further instruments and do and cause to be done such further acts and things, including the filing of such assignments,
agreements, documents and instruments, as may be necessary or as the other Party may reasonably request in connection with this
Agreement or to carry out more effectively the provisions and purposes hereof or to better assure and confirm unto such other
Party its rights and remedies under this Agreement.

 

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13.14.       Relationship
of the Parties. It is expressly agreed that ACI, on the one hand, and Lilly, on the other
hand, shall be independent contractors and that the relationship between the two Parties shall not constitute a partnership, joint
venture or agency. Neither ACI, on the one hand, nor Lilly, on the other hand, shall have the authority to make any statements,
representations or commitments of any kind, or to take any action that will be binding on the other, without the prior written
consent of the other Party to do so. All persons employed by a Party shall be employees of such Party and not of the other Party
and all costs and obligations incurred by reason of any such employment shall be for the account and expense of such first Party.

 

13.15.       HSR
Act Compliance.

 

13.15.1.       HSR
Filing. Each of Lilly and ACI shall make an HSR Filing within ten (10) Business Days
after the Execution Date, unless the Parties together determine that no HSR Filing is required for the activities and licenses
contemplated under the Agreement. The Parties shall cooperate with one another to the extent necessary in the preparation of any
such filings. Each Party shall be responsible for its own costs and expenses associated with any such filings.

 

13.15.2.       HSR
Clearance. In connection with obtaining HSR Clearance, Lilly and ACI shall use their
respective commercially reasonable efforts to resolve as promptly as practicable any objections that may be asserted by the FTC
or the Antitrust Division of the DOJ with respect to the transactions notified in the HSR Filing. The term “commercially
reasonable efforts” as used in this Section ‎13.15 [*****].

 

13.15.3.       Cooperation.
In connection with obtaining HSR Clearance, each of Lilly and ACI shall (i) cooperate with each other in connection with
any investigation or other inquiry relating to an HSR Filing and the transactions contemplated by this Agreement; (ii) keep
the other Party or its counsel informed of any communication received from or given to the FTC or DOJ relating to the HSR Filing
and the transactions contemplated by this Agreement (and provide a copy to the other Party if such communication is in writing);
(iii) reasonably consult with each other in advance of any meeting or conference with the FTC or DOJ, and, to the extent
permitted by the FTC or DOJ, give the other Party or its counsel the opportunity to attend and participate in such meetings and
conferences; and (iv) permit the other Party or its counsel to review in advance, and in good faith consider the views of
the other Party or its counsel concerning, any submission, filing or communication (and documents submitted therewith) intended
to be given to the FTC or DOJ.

 

13.16.       References.
Unless otherwise specified, (i) references in this Agreement to any Article, Section
or Schedule shall mean references to such Article, Section or Schedule of this Agreement, (ii) references in any Section
to any clause are references to such clause of such Section and (iii) references to any agreement, instrument or other document
in this Agreement refer to such agreement, instrument or other document as originally executed or, if subsequently amended, replaced
or supplemented from time to time, as so amended, replaced or supplemented and in effect at the relevant time of reference thereto.

 

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13.17.       Construction.
Except where the context otherwise requires, wherever used, the singular shall include
the plural, the plural the singular, the use of any gender shall be applicable to all genders and the word “or” is
used in the inclusive sense (and/or). Whenever this Agreement refers to a number of days, unless otherwise specified, such number
refers to calendar days. The captions of this Agreement are for convenience of reference only and in no way define, describe,
extend or limit the scope or intent of this Agreement or the intent of any provision contained in this Agreement. The term “including,”
“include,” or “includes” as used herein shall mean including, without limiting the generality of any description
preceding such term. The language of this Agreement shall be deemed to be the language mutually chosen by the Parties and no rule
of strict construction shall be applied against either Party.

 

13.18.       Counterparts.
This Agreement may be executed in two (2) or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may be executed by
facsimile, PDF format via email or other electronically transmitted signatures and such signatures shall be deemed to bind each
Party hereto as if they were original signatures.

 

[SIGNATURE
PAGE FOLLOWS.]

 

 

 

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THIS AGREEMENT IS EXECUTED by
the authorized representatives of the Parties as of the date first written above.

 

	ELI LILLY
    AND COMPANY	AC IMMUNE SA
	 	 
	 	 
	By:
        /s/ David A. Ricks 

        Name:
David A. Ricks

        Title: Chairman, President
and Chief Executive Officer
	By: /s/ Andrea Pfeifer

        Name:
Andrea Pfeifer

        Title:
Chief Executive Officer

	 	 
	 	 
	 	AC
IMMUNE SA

	 	 
	 	 
	 	By: /s/ Martin Velasco

        Name:
Martin Velasco

        Title:
Chairman

 

     

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Schedule
1.65

ACI-2627 and ACI-3024

 

The compounds
[*****] have the capability to [*****]. The chemical structures for [*****] are as follows:

 

[*****].

 

 

 

     

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Schedule
1.93

 

Second Category
Indications

 

[*****].

 

 

 

 

     

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Schedule
3.1.2(i)

Development Plan

 

[*****].

 

 

 

 

     

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Schedule
3.1.2(ii)

Lilly Pre-Clinical Activities

 

[*****].

 

 

 

 

     

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Schedule
9.6

Press Releases

 

ACI Press
Release

 

AC Immune
and Lilly Announce License and Collaboration Agreement

 

		·	Multi-year
                                         agreement focuses on Morphomer tau aggregation inhibitors, for the potential treatment
                                         of Alzheimer’s disease and other neurodegenerative diseases.

 

		·	AC
                                         Immune to receive an initial upfront payment of CHF80 million and will be eligible for
                                         CHF60 million in potential near-term development milestones, up to approximately CHF1.7
                                         billion in other potential development, regulatory and commercial milestones, and low
                                         double-digit royalties. 

 

		·	Lilly
                                         to purchase $50 million note, convertible to equity position in AC Immune.

 

Lausanne,
Switzerland, and Indianapolis, IN, USA, December 12, 2018 – AC Immune SA (NASDAQ: ACIU) and Eli Lilly and Company (NYSE:LLY)
today announced that the two companies have signed a license and collaboration agreement to research and develop tau aggregation
inhibitor small molecules for the potential treatment of Alzheimer’s disease (AD) and other neurodegenerative diseases.
The collaboration combines AC Immune’s proprietary MorphomerTM platform technology with Lilly’s clinical
development expertise and commercial capabilities in central nervous system disorders. The collaboration will focus primarily
on AC Immune’s lead molecule, ACI-3024, which has demonstrated tau aggregation inhibition in preclinical models.

 

Under the
terms of the agreement, AC Immune will receive an upfront payment of CHF80 million as well $50 million in exchange for a note,
convertible to equity at a premium. AC Immune is also eligible to receive CHF60 million in potential near-term development milestones,
as well as other potential development, regulatory and commercial milestones up to approximately CHF1.7 billion, and tiered royalty
payments in the low double digits.

 

AC Immune
will conduct the initial Phase 1 development of the Morphomer tau aggregation inhibitors, while Lilly will fund and conduct further
clinical development. Lilly will receive worldwide commercialization rights for the tau aggregation inhibitors in the area of
Alzheimer’s disease. AC Immune has retained certain development rights in orphan indications and co-development and co-promotion
options in certain indications outside AD.

 

Prof. Andrea
Pfeifer, CEO of AC Immune, said: “This landmark partnership with Lilly is transformational for the future of AC Immune.
Lilly’s substantial experience in neurology, and particularly in Alzheimer’s disease, is a major validation of our
small molecule platform for CNS therapeutics. It also demonstrates the potential of our pre-clinical assets and adds substantial
value to our pipeline. We look forward to working closely with Lilly in this exciting field over the coming years.”

 

     

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“Lilly
is an industry leader in Alzheimer’s research, with numerous ongoing scientific programs that target suspected causes of
the disease, including amyloid plaques and tau tangles,” said Mark Mintun, M.D., vice president of neurodegeneration and
pain research at Lilly. “This agreement with AC Immune represents another opportunity to hopefully make progress against
this devastating disease, and we look forward to together bringing tau aggregation inhibitors into clinical development.”

 

This transaction
will be reflected in Lilly's reported results and financial guidance according to Generally Accepted Accounting Principles (GAAP).
There will be no change to Lilly's 2018 non-GAAP earnings per share guidance as a result of this transaction. This transaction
is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions.

 

About
AC Immune’s Tau MorphomersTM

 

Several
chemical series of small molecules (MorphomersTM) have been identified which selectively and potently reduce toxic
intracellular misfolded and aggregated tau. Targeting intracellular misfolded and aggregated tau is widely recognized as an important
and attractive potential approach for interfering with the spread of tau pathology throughout the brain. In some proof-of-concept
tauopathy models, reduction of tau pathology was also accompanied by a reduction of associated neuroinflammatory markers –
another key pathologic feature of Alzheimer’s disease (AD).

 

About
AC Immune 

 

AC Immune
is a clinical-stage Swiss-based biopharmaceutical company, listed on NASDAQ, which aims to become a global leader in precision
medicine for neurodegenerative diseases. The Company designs, discovers and develops therapeutic as well as diagnostic products
intended to prevent and modify diseases caused by misfolding proteins. AC Immune’s two proprietary technology platforms
create antibodies, small molecules and vaccines designed to address a broad spectrum of neurodegenerative indications, such as
Alzheimer’s disease (AD). The Company’s pipeline features nine therapeutic and three diagnostic product candidates
– with five product candidates currently in clinical trials.

 

About
Eli Lilly and Company 

 

Lilly is
a global healthcare leader that unites caring with discovery to create medicines that make life better for people around the world.
We were founded more than a century ago by a man committed to creating high-quality medicines that meet real needs, and today
we remain true to that mission in all our work. Across the globe, Lilly employees work to discover and bring life-changing medicines
to those who need them, improve the understanding and management of disease, and give back to communities through philanthropy
and volunteerism. To learn more about Lilly, please visit us at www.lilly.com and http://newsroom.lilly.com/social-channels.

 

AC Immune
Forward-Looking Statement

 

This press
release contains statements that constitute “forward-looking statements” within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements other
than historical fact and may include statements that address future operating, financial or business performance or AC Immune’s
strategies or expectations. In some cases, you can identify these statements by forward-looking words such as “may,”
“might,” “will,” “should,” “expects,” “plans,” “anticipates,”
“believes,” “estimates,” “predicts,” “projects,” “potential,” “outlook”
or “continue,” and other comparable terminology. Forward-looking statements are based on management’s current
expectations and beliefs and involve significant risks and uncertainties that could cause actual results, developments and business
decisions to differ materially from those contemplated by these statements. These risks and uncertainties include those described
under the captions “Item 3. Key Information – Risk Factors” and “Item 5. Operating and Financial Review
and Prospects” in AC Immune’s Annual Report on Form 20-F and other filings with the Securities and Exchange Commission.
Forward-looking statements speak only as of the date they are made, and AC Immune does not undertake any obligation to update
them in light of new information, future developments or otherwise, except as may be required under applicable law. All forward-looking
statements are qualified in their entirety by this cautionary statement.

 

     

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Lilly
Forward-Looking Statement

 

This
press release contains forward-looking statements (as that term is defined in the Private Securities Litigation Reform Act of
1995) about the benefits of the license and collaboration with AC Immune, and reflects Lilly's current beliefs. However, as with
any such undertaking, there are substantial risks and uncertainties in the process of drug development and commercialization.
Among other things, there can be no guarantee that Lilly will realize the expected benefits of the license and collaboration,
or that the license and collaboration will yield a commercially successful product. For a further discussion of these and other
risks and uncertainties that could cause actual results to differ from Lilly's expectations, please see Lilly's most recent Forms
10-K and 10-Q filed with the U.S. Securities and Exchange Commission. Lilly undertakes no duty to update forward-looking statements.

 

For further
information, please contact:

 

AC Immune
Corporate – Europe

David A.
Lowe, PhD

Phone: +41
79 281 6494

E-mail:
david.lowe@acimmune.com

 

AC Immune Media Relations
– US

LaVoieHealthScience

Katie Gallagher

Phone: +1 617-792-3937

E-mail:
kgallagher@lavoiehealthscience.com

 

AC Immune
Investor Relations

Lisa Sher

Phone: +1
970 987 26 54

E-mail:
lisa.sher@acimmune.com

 

Lilly Media Relations

Mark Taylor

Phone: +1 317 276 5795

E-mail:
mark.taylor@lilly.com

 

Lilly Investor Relations

Kevin Hern

Phone: +1 317 277 1838

E-mail:
hern_kevin_r@lilly.com

Source:
AC Immune SA

 

     

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Lilly
Press Release

 

 

December 12, 2018

 

For Release:Immediately

 

Refer
to: Mark Taylor; mark.taylor@lilly.com; (317) 276-5795 (Lilly Media)

Kevin
Hern; hern_kevin_r@lilly.com; (317) 277-1838 (Lilly Investors)

Katie
Gallagher; kgallagher@lavoiehealthscience.com; 312-792-3937 (ACI Media US)

Dr. David Lowe; david.lowe@acimmune.com;
+41 79 281 6494 (ACI Corporate-EU)

Lisa
Sher; lisa.sher@acimmune.com; (970) 987-2654 (ACI Investors)

 

Lilly
and AC Immune Announce License and Collaboration Agreement

 

		·	Multi-year
                                         agreement focuses on Morphomer tau aggregation inhibitors, for the potential treatment
                                         of Alzheimer’s disease and other neurodegenerative diseases.

 

		·	AC
                                         Immune to receive an initial upfront payment of CHF80 million and will be eligible for
                                         CHF60 million in potential near-term development milestones, up to approximately CHF1.7
                                         billion in other potential development, regulatory and commercial milestones, and low
                                         double-digit royalties. 

 

		·	Lilly
                                         to purchase $50 million note, convertible to equity position in AC Immune.

 

INDIANAPOLIS, IN and LAUSANNE,
SWITZERLAND — Eli Lilly and Company (NYSE:LLY) and AC Immune SA (NASDAQ: ACIU) today announced that the two companies have
signed a license and collaboration agreement to research and develop tau aggregation inhibitor small molecules for the potential
treatment of Alzheimer’s disease (AD) and other neurodegenerative diseases. The collaboration combines AC Immune’s
proprietary MorphomerTM platform technology with Lilly’s clinical development expertise and commercial capabilities
in central nervous system disorders. The collaboration will focus primarily on AC Immune’s lead molecule, ACI-3024, which
has demonstrated tau aggregation inhibition in preclinical models.

 

Under the terms of the agreement,
AC Immune will receive an upfront payment of CHF80 million as well $50 million in exchange for a note, convertible to equity at
a premium. AC Immune is also eligible to receive CHF60 million in potential near-term development milestones, as well as other
potential development, regulatory and commercial milestones up to approximately CHF1.7 billion, and tiered royalty payments in
the low double digits.

 

AC Immune will conduct the initial
Phase 1 development of the Morphomer tau aggregation inhibitors, while Lilly will fund and conduct further clinical development.
Lilly will receive worldwide commercialization rights
for the tau aggregation inhibitors in the area of Alzheimer’s disease. AC Immune has retained certain development rights
in orphan indications and co-development and co-promotion options in certain indications outside AD.

 

     

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
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“Lilly is an industry leader
in Alzheimer’s research, with numerous ongoing scientific programs that target suspected causes of the disease, including
amyloid plaques and tau tangles,” said Mark Mintun, M.D., vice president of neurodegeneration and pain research at Lilly.
“This agreement with AC Immune represents another opportunity to hopefully make progress against this devastating disease,
and we look forward to together bringing tau aggregation inhibitors into clinical development.”

 

Prof. Andrea Pfeifer, CEO of
AC Immune, said: “This landmark partnership with Lilly is transformational for the future of AC Immune. Lilly’s substantial
experience in neurology, and particularly in Alzheimer’s disease, is a major validation of our small molecule platform for
CNS therapeutics. It also demonstrates the potential of our pre-clinical assets and adds substantial value to our pipeline. We
look forward to working closely with Lilly in this exciting field over the coming years.”

 

This transaction will be reflected
in Lilly's reported results and financial guidance according to Generally Accepted Accounting Principles (GAAP). There will be
no change to Lilly's 2018 non-GAAP earnings per share guidance as a result of this transaction. This transaction is subject to
clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions.

 

About AC Immune’s Tau
Morphomers

 

Several chemical series of small
molecules (MorphomersTM) have been identified which selectively and potently reduce toxic intracellular misfolded and
aggregated tau. Targeting intracellular misfolded and aggregated tau is widely recognized as an important and attractive potential
approach for interfering with the spread of tau pathology throughout the brain. In some proof-of-concept tauopathy models, reduction
of tau pathology was also accompanied by a reduction of associated neuroinflammatory markers – another key pathologic feature
of Alzheimer’s disease (AD).

 

About AC Immune

 

AC Immune is a clinical-stage
Swiss-based biopharmaceutical company, listed on NASDAQ, which aims to become a global leader in precision medicine for neurodegenerative
diseases. The Company designs, discovers and develops therapeutic as well as diagnostic products intended to prevent and modify
diseases caused by misfolding proteins. AC Immune’s two proprietary technology platforms create antibodies, small molecules
and vaccines designed to address a broad spectrum of neurodegenerative indications, such as Alzheimer’s disease (AD). The
Company’s pipeline features nine therapeutic and three diagnostic product candidates – with five product candidates
currently in clinical trials.

 

     

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

About Eli Lilly and Company

 

Lilly is a global healthcare leader that unites caring with discovery to create medicines that make life better for people around
the world. We were founded more than a century ago by a man committed to creating high-quality medicines that meet real needs,
and today we remain true to that mission in all our work. Across the globe, Lilly employees work to discover and bring life-changing
medicines to those who need them, improve the understanding and management of disease, and give back to communities through philanthropy
and volunteerism. To learn more about Lilly, please visit us at www.lilly.com and http://newsroom.lilly.com/social-channels.
C-LLY

 

AC
Immune Forward-Looking Statement

 

This
press release contains statements that constitute “forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements other
than historical fact and may include statements that address future operating, financial or business performance or AC Immune’s
strategies or expectations. In some cases, you can identify these statements by forward-looking words such as “may,”
“might,” “will,” “should,” “expects,” “plans,” “anticipates,”
“believes,” “estimates,” “predicts,” “projects,” “potential,” “outlook”
or “continue,” and other comparable terminology. Forward-looking statements are based on management’s current
expectations and beliefs and involve significant risks and uncertainties that could cause actual results, developments and business
decisions to differ materially from those contemplated by these statements. These risks and uncertainties include those described
under the captions “Item 3. Key Information – Risk Factors” and “Item 5. Operating and Financial Review
and Prospects” in AC Immune’s Annual Report on Form 20-F and other filings with the Securities and Exchange Commission.
Forward-looking statements speak only as of the date they are made, and AC Immune does not undertake any obligation to update
them in light of new information, future developments or otherwise, except as may be required under applicable law. All forward-looking
statements are qualified in their entirety by this cautionary statement.

 

Lilly
Forward-Looking Statement

 

This press release contains forward-looking statements (as that term is defined in the Private Securities Litigation Reform Act
of 1995) about the benefits of the license and collaboration with AC Immune, and reflects Lilly's current beliefs. However, as
with any such undertaking, there are substantial risks and uncertainties in the process of drug development and commercialization.
Among other things, there can be no guarantee that Lilly will realize the expected benefits of the license and collaboration,
or that the license and collaboration will yield a commercially successful 

 

product.
For a further discussion of these and other risks and uncertainties that could cause actual results to differ from Lilly's expectations,
please see Lilly's most recent Forms 10-K and 10-Q filed with the U.S. Securities and Exchange Commission. Lilly undertakes no
duty to update forward-looking statements.

 

###

 

     

    CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 24B-2
 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

    

 

 

Schedule
10.2.2

Existing Patents

 

	Application
    Number	Priority
    Date	Filing
    Date	Inventors	Title	Status
    Information
	[*****]	[*****]	[*****]	 	[*****]	[*****]
	[*****]	[*****]	[*****]	[*****]	[*****]	[*****]
	[*****]	[*****]	[*****]	[*****]	[*****]	[*****]
	[*****]	[*****]	[*****]	[*****]	[*****]	[*****]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00293-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00293-of-00352.parquet"}]]