Document:

License Agreement

 Exhibit 4.6 

 

	 	*	Confidential Treatment has been requested for the marked portions of this exhibit pursuant to Rule 24B-2 of the Securities Exchange Act of 1934, as amended.

 LICENSE AGREEMENT 
 BETWEEN 
 INEX PHARMACEUTICALS CORPORATION 

AND 

ARADIGM CORPORATION 

 License Agreement 

Table of Contents 
  

									
	 Article 1 Interpretation
	  	 	1	  
		 	 1.1
	  	Definitions	  	 	1	  
		 	 1.2
	  	Entire Agreement	  	 	7	  
		 	 1.3
	  	Governing Law	  	 	7	  
		 	 1.4
	  	Headings	  	 	7	  
		 	 1.5
	  	Severability	  	 	7	  
		
	 Article 2 Patent and Know-How Licenses
	  	 	8	  
		 	 2.1
	  	Licenses	  	 	8	  
		 	 2.2
	  	Exclusive License Term	  	 	8	  
		 	 2.3
	  	Reservation of Rights	  	 	8	  
		 	 2.4
	  	Sublicenses	  	 	8	  
		
	 Article 3 Milestone Payments and Sublicense Fees
	  	 	9	  
		 	 3.1
	  	License Fee	  	 	9	  
		 	 3.2
	  	Milestone Payments	  	 	9	  
		 	 3.3
	  	Independent Consideration	  	 	10	  
		
	 Article 4 Patent and Know-How Royalties
	  	 	10	  
		 	 4.1
	  	Royalty Rate	  	 	10	  
		 	 4.2
	  	Royalty Term and Rate Modification	  	 	11	  
		 	 4.3
	  	Combination Products	  	 	11	  
		 	 4.4
	  	Stacking	  	 	11	  
		 	 4.5
	  	Reports and Payment	  	 	12	  
		 	 4.6
	  	Withholding Taxes	  	 	12	  
		 	 4.7
	  	Late Payments	  	 	13	  
		 	 4.8
	  	Foreign Royalties	  	 	13	  
		 	 4.9
	  	Records, Audit	  	 	13	  
		
	 Article 5 Technology Transfer
	  	 	13	  
		 	 5.1
	  	Initial Technology Transfer	  	 	13	  
		 	 5.2
	  	Subsequent Consultations	  	 	14	  
		 	 5.3
	  	Cost Recovery for Technology Transfer Services	  	 	14	  
		
	 Article 6 Diligence and Annual Reports
	  	 	14	  
		 	 6.1
	  	Aradigm’s Diligence	  	 	14	  
		 	 6.2
	  	Subcontractors	  	 	14	  
		 	 6.3
	  	Consequence of No Sales	  	 	15	  
		 	 6.4
	  	Reports	  	 	15	  
		
	 Article 7 Representations and Warranties
	  	 	15	  
		 	 7.1
	  	By Aradigm	  	 	15	  
		 	 7.2
	  	By INEX	  	 	16	  
		 	 7.3
	  	Survival of Representations and Warranties	  	 	17	  
		 	 7.4
	  	DISCLAIMER	  	 
	17
	  

									
	 Article 8 Intellectual Property Rights
	  	 	18	  
		 	 8.1
	  	Ownership of Pre-Existing Intellectual Property Rights	  	 	18	  
		 	 8.2
	  	Ownership of Intellectual Property Rights from Development	  	 	18	  
		 	 8.3
	  	INEX Inventions and Aradigm Inventions	  	 	18	  
		 	 8.4
	  	Incorporation of INEX Inventions into License	  	 	18	  
		 	 8.5
	  	Prosecution and Maintenance of Licensed Patents	  	 	19	  
		 	 8.6
	  	Co-operation	  	 	19	  
		 	 8.7
	  	Trademarks	  	 	19	  
		 	 8.8
	  	Labeling and Patent Marking	  	 	19	  
		
	 Article 9 Allocation of Risk
	  	 	19	  
		 	 9.1
	  	Limits	  	 	19	  
		 	 9.2
	  	Conduct of Infringement Proceedings	  	 	20	  
		 	 9.3
	  	Breach of Confidence Proceedings	  	 	21	  
		 	 9.4
	  	Defense of Infringement Proceedings	  	 	21	  
		 	 9.5
	  	Co-operation with Other Licensees	  	 	22	  
		
	 Article 10 Confidential Information and Publication
	  	 	23	  
		 	 10.1
	  	Treatment of Confidential Information	  	 	23	  
		 	 10.2
	  	Permitted Disclosures	  	 	23	  
		 	 10.3
	  	Publications Generally	  	 	23	  
		 	 10.4
	  	Publication by UBC	  	 	23	  
		 	 10.5
	  	Objection to UBC Publication	  	 	24	  
		 	 10.6
	  	Removal of Objectionable Material	  	 	24	  
		 	 10.7
	  	Protecting Objectionable Material	  	 	24	  
		
	 Article 11 Termination
	  	 	25	  
		 	 11.1
	  	Term	  	 	25	  
		 	 11.2
	  	Voluntary Termination	  	 	25	  
		 	 11.3
	  	Termination for Breach	  	 	25	  
		 	 11.4
	  	Termination upon Bankruptcy	  	 	25	  
		 	 11.5
	  	Continuing Obligations/No Limitation on Remedies	  	 	26	  
		 	 11.6
	  	Disposition of Licensed Product	  	 	26	  
		 	 11.7
	  	Survival of Obligations; Return of Confidential Information	  	 	26	  
		 	 11.8
	  	Delivery of Data and Materials and License	  	 	26	  
		
	 Article 12 Indemnification and Liability Limitations
	  	 	27	  
		 	 12.1
	  	Indemnification by Aradigm	  	 	27	  
		 	 12.2
	  	Indemnification by INEX	  	 	28	  
		 	 12.3
	  	Notice of Claims	  	 	29	  
		 	 12.4
	  	Consequential Losses	  	 	29	  
		 	 12.5
	  	Actions Between the Parties	  	 	29	  
		 	 12.6
	  	Insurance	  	 	30	  
		
	 Article 13 Dispute Resolution
	  	 	30	  
		 	 13.1
	  	Negotiation	  	 	30	  
		 	 13.2
	  	Arbitration	  	 	31	  
		
	 Article 14 Miscellaneous
	  	 	31	  
		 	 14.1
	  	Assignment	  	 	31	  
		 	 14.2
	  	Counterparts	  	 	31	  

  
 ii 

									
		 	 14.3
	  	Force Majeure	  	 	31	  
		 	 14.4
	  	Further Assurances	  	 	31	  
		 	 14.5
	  	International Sale of Goods Act	  	 	32	  
		 	 14.6
	  	Modification	  	 	32	  
		 	 14.7
	  	No Agency	  	 	32	  
		 	 14.8
	  	Non-Use of Names	  	 	32	  
		 	 14.9
	  	Notices	  	 	32	  
		 	 14.10
	  	Publicity	  	 	33	  
		 	 14.11
	  	Third Parties	  	 	33	  
		 	 14.12
	  	Waiver	  	 	33	  

  
 iii

 License Agreement 
 This LICENSE AGREEMENT dated as of the 8th day of December, 2004 between INEX PHARMACEUTICALS CORPORATION, a corporation duly incorporated pursuant to the laws of British Columbia, CANADA, having
its principal place of business at 100 – 8900 Glenlyon Parkway, Burnaby, B.C. Canada V5J 5J8 (hereinafter referred to as “INEX”), and ARADIGM CORPORATION, a corporation duly incorporated pursuant to the laws of the State of
California, USA, having its principal place of business at 3929 Point Eden Way, Hayward, CA 94545 USA. (hereinafter referred to as “Aradigm”). 
 INTRODUCTION 
 A. The Canadian Department of National Defence has identified a requirement for the
development of countermeasures for protection from, and/or treatment of personnel exposed to certain biological warfare infectious agents such as inhalation anthrax. Defence Research and Development Canada (DRDC), an agency of the Canadian
Department of National Defence, has a requirement for industry to formulate liposome-encapsulated Ciprofloxacin into a stable product for delivery by a portable aerosol inhaler device. 
 B. The end product of the work for the DRDC will be a pre-clinical data package capable of supporting the submission of a Clinical Trials Application (CTA) package or its equivalent i.e. Investigational
New Drug submission, to the appropriate Regulatory Authorities. 
 C. Aradigm is a drug delivery company and the owner of certain patents and
know-how related to the AERx Device (as further defined in this Agreement); 
 D. INEX is a pharmaceutical company and the owner of certain
patents and know-how related to liposomal drug delivery systems; 
 E. INEX and Aradigm desire to set out in this Agreement the terms which will
govern the development and licensing of the INEX Liposome Technology (as further defined in this Agreement) for delivering Ciprofloxacin (as further defined in this Agreement) with the AERx Device, meeting the requirements of the DRDC, and the
making, use and sale of product by Aradigm in Field in the Territory (as further defined in this Agreement); 
 In consideration of the mutual
covenants and promises contained in this Agreement and other good and valuable consideration, and intending to be legally bound, INEX and Aradigm agree as follows: 
 Article 1 Interpretation 
  

	1.1	Definitions 

 As used in this Agreement,
the following terms, whether used in the singular or plural, shall have the following meanings: 
  

	 	1.1.1	“AERx Device” means the durable hand-held device developed by Aradigm for the delivery of Ciprofloxacin by inhalation and known as the “AERx
Device”, as such device may be modified pursuant to the Agreement. 

	 	1.1.2	“Affiliate” means any corporation, company, partnership, joint venture or other person or entity which controls, is controlled by or is under common control
with a Party. For purposes of this Section 1.1.2, “control” shall mean (a) in the case of corporate entities, direct or indirect ownership of at least 50% of the stock or shares (or such lesser percentage which is the maximum
allowed to be owned by a foreign corporation in a particular jurisdiction) entitled to vote for the election of directors or otherwise having the power to vote on or direct the affairs of such Party; and (b) in the case of non-corporate
entities, direct or indirect ownership of at least 50% of the equity interest or the power to direct the management and policies of such non-corporate entities. 

 

	 	1.1.3	“Agreement” means this License Agreement including all exhibits attached to this Agreement. 

 

	 	1.1.4	“Aradigm Invention” has the meaning set out in Article 8. 

  

	 	1.1.5	“Business Day” means any day other than a day which is a Saturday, a Sunday or a statutory holiday in British Columbia or California.

  

	 	1.1.6	“Ciprofloxacin” means the chemical compound known as ciprofloxacin, whose more specified chemical name is
1-cyclopropyl-6-fluoro-1,4-dihydro-4-oxo-7-(1-piperazinyl)-3-quinolinecarboxylic acid and all pharmaceutically active salts thereof. 

  

	 	1.1.7	“Commercially Reasonable Efforts” means reasonable efforts, and in any event efforts which are not less than those efforts a Party makes with respect to other
pharmaceutical products of comparable commercial potential, stage of development, medical/scientific, technical and regulatory profile, and patent protection. 

 

	 	1.1.8	“Confidential Information” means: 

  

	 	(a)	all proprietary information and materials, patentable or otherwise, of a Party which is disclosed in writing by or on behalf of such Party to the other Party and marked
as confidential or proprietary, including DNA sequences, vectors, cells, substances, formulations, techniques, methodology, equipment, data, reports, know-how (including the Know-How), preclinical and clinical trials and the results thereof, sources
of supply, patent positioning and business plans, including any negative developments, and 

  

	 	(b)	any other information, oral or written, designated in writing by the disclosing Party to the other Party as confidential or proprietary within ten (10) days after
such disclosure, whether or not related to the making, use, importing or selling of Licensed Product. 

 provided
that Confidential Information shall not include such information which: 
  

	 	(c)	was known or used by the receiving Party or its Affiliates prior to its date of disclosure to the receiving Party, as evidenced by the prior written records of the
receiving Party or its Affiliates; or 

  

	 	(d)	either before or after the date of the disclosure to the receiving Party is lawfully disclosed to the receiving Party or its Affiliates by an independent, unaffiliated
Third Party rightfully in possession of the Confidential Information; or 

  
 2 

	 	(e)	either before or after the date of the disclosure to the receiving Party becomes published or generally known to the public through no fault or omission on the part of
the receiving Party or its Affiliates; or 

  

	 	(f)	the receiving Party can verify by written documentation results from research and development by the receiving Party or any of its Affiliates independent and in advance
of disclosure by the other Party thereof; or 

  

	 	(g)	is disclosed by the receiving Party to its attorneys, accountants or other advisors, actual or potential lenders, investors or purchasers, each of whom shall be subject
to a confidentiality restriction; or 

  

	 	(h)	is required to be disclosed by the receiving Party to comply with applicable laws, to defend or prosecute litigation or to comply with governmental regulations,
provided that the receiving Party provides prior written notice of such disclosure to the other Party and takes reasonable and lawful actions to avoid and/or minimize the degree of such disclosure. 

 

	 	1.1.9	“Crown Identified Patents” means the Patents identified in Exhibit 1.1.9. 

 

	 	1.1.10	“Dollar” and “$” means United States Dollars. 

  

	 	1.1.11	“DRDC” means Defence Research and Development Canada, an agency of the Canadian Department of National Defence. 

 

	 	1.1.12	“Effective Date” means the date shown on page one of this Agreement. 

 

	 	1.1.13	“FDA” means the United States Food and Drug Administration. 

  

	 	1.1.14	“Field” means the pulmonary delivery of Ciprofloxacin. 

  

	 	1.1.15	“IND” means an Investigational New Drug application in accordance with the rules and regulations of the FDA. 

 

	 	1.1.16	“Indication” means an indication pursued by Aradigm in a clinical program for the use of a Licensed Product. 

 

	 	1.1.17	“INEX Invention” has the meaning set out in Article 8. 

  

	 	1.1.18	“INEX Liposome Technology” means INEX’s proprietary liposomal drug delivery system that encapsulates drugs in sphingomyelin/cholesterol liposomes using a
proton gradient generated by either an ionophore or methylammonium sulfate. 

  

	 	1.1.19	“Intellectual Property Rights” means rights to any patent, copyright, trademark, trade name or domain name rights, registrations and applications for
registration of all of the foregoing rights, and rights in trade secrets, confidential information, moral rights and goodwill. 

  
 3 

	 	1.1.20	“Know-How” means all technical information and know-how owned or controlled by INEX which relates to Licensed Product as of the Effective Date, to the extent
that INEX is legally able to grant Aradigm the license rights outlined in Section 2.1, which are necessary or useful for the development and commercialization of Licensed Product and shall include, without limitation, all biological, chemical,
pharmacological, toxicological, clinical, assay, control and manufacturing data and any other information necessary or useful for the development and commercialization of Licensed Product. 

 

	 	1.1.21	“Licensed Patents” means the Loading Patents and the Sphingosome Patents. 

 

	 	1.1.22	“Licensed Product” means Ciprofloxacin encapsulated in the INEX Liposome Technology and which is intended for pulmonary delivery. 

 

	 	1.1.23	“Loading Patents” means the patents owned by UBC and exclusively licensed to INEX and set out in Exhibit 1.1.23. 

 

	 	1.1.24	“Major European Countries” means the United Kingdom, France, Germany, Italy and Spain. 

 

	 	1.1.25	“NDA” means a New Drug Application in accordance with the rules and regulations of the FDA. 

 

	 	1.1.26	“Net Sales” means the aggregate United States dollar equivalent of gross revenues invoiced by Aradigm and its Affiliates and its Sublicensees from or on
account of the sale of Licensed Product to Third Parties, less deductions actually allowed or specifically allocated and actually incurred to Licensed Product by Aradigm using generally accepted accounting standards and reasonable practices with
respect to sales of all Aradigm’s products, consistently applied, for the following: 

  

	 	(a)	trade, cash, and quantity discounts off the invoiced price and similar promotional discounts or rebates (such as management fees required by hospital buying groups or
granted to managed care organizations) off the invoiced price, 

  

	 	(b)	credits or allowances, if any, actually granted for spoiled, damaged, out-dated and returned or recalled Licensed Product, 

 

	 	(c)	excise taxes, sales taxes, value added taxes, consumption taxes, customs and other duties or other taxes or other governmental charges imposed upon and paid or allowed
with respect to the production, importation, use or sale of Licensed Product (excluding income or franchise taxes of any kind), and 

  

	 	(d)	if separately itemized in Aradigm’s invoice for Licensed Product, insurance, freight or other transportation costs incurred in shipping such Licensed Product to
such Third Parties, 

 (collectively, the “Permitted Deductions”), all of the foregoing to the extent
consistent with the normal practice in the industry, and provided that any and all of the foregoing are calculated in accordance with USA Generally Accepted Accounting Principles consistently applied. The foregoing definition is subject to the
following: 
  

	 	(e)	No deduction shall be made for any item of cost incurred by Aradigm, its Affiliates or Sublicensees in preparing, manufacturing, shipping or selling Licensed Product
except as permitted pursuant to Sections 1.1.26(a) through 1.1.26(d) inclusive. 

  
 4 

	 	(f)	Net Sales shall not include any transfer among any of Aradigm, its Affiliates and Sublicensees for resale, but Net Sales shall include the subsequent final sales to
Third Parties by such Affiliates or Sublicensees. 

  

	 	(g)	Notwithstanding the foregoing, in the event that a governmental agency requires a sublicense of the INEX Liposome Technology as a condition of sales of Licensed Product
by Aradigm to such agency, then sales of Licensed Product to such agency shall be deemed to be sales to a Third Party for the purposes of calculating Net Sales. If such governmental agency makes or has made Licensed Product for its own use and such
manufacture or use does not generate direct or indirect remuneration for Aradigm, then such Licensed Product so manufactured and used shall not be included in Net Sales for the purposes of calculating remuneration to INEX under this Agreement.

  

	 	(h)	Fair market value shall be assigned to any and all non-cash consideration such as but not limited to any credit, barter, benefit, advantage or concession received by
Aradigm or its Affiliates or Sublicensees in payment for sale of Licensed Product. 

  

	 	(i)	As used in this definition, a “sale” shall have occurred when Licensed Products are billed out or invoiced. 

 

	 	(j)	Notwithstanding anything herein to the contrary, the following shall not be considered a sale of a Licensed Product under this Agreement: (i) the transfer of a
Licensed Product to a Third Party without consideration to Aradigm in connection with the development or testing of a Licensed Product; or (ii) the transfer of a Licensed Product to a Third Party without consideration in connection with the
marketing or promotion of the Licensed Product (e.g., pharmaceutical samples). 

  

	 	1.1.27	“Party” means INEX or Aradigm and “Parties” means INEX and Aradigm. 

 

	 	1.1.28	“Patent” means (a) all patent applications filed or having legal force in any country owned or controlled by INEX as of the Effective Date; (b) all
patents that have issued or in the future issue therefrom owned or controlled by INEX as of the Effective Date, including without limitation utility, model and design patents and certificates of invention; and (c) all divisionals,
continuations, continuations-in-part, reissues, renewals, extensions (including supplemental protection certificates), additions, registrations or confirmations to or of any such patent applications and patents. 

 

	 	1.1.29	“Person” means and includes any individual, corporation, partnership, firm, joint venture, syndicate, association, trust, government body, and any other form
of entity or organization. 

  

	 	1.1.30	 “Phase II Trial” means that portion of the clinical development program that provides for additional assessment of safety and preliminary
assessment of efficacy at 

  
 5 

	 	 
particular dosage levels of a Licensed Product in human volunteers or patients, which is intended to gather information to support the pivotal human clinical trials using the Licensed Product,
performed in accordance with the U.S.A. Federal Food, Drug and Cosmetic Act and applicable regulations promulgated thereunder (including without limitation 21 CFR Part 312), as amended from time to time. 

 

	 	1.1.31	“Phase III Trial” means that portion of the clinical development program that provides for human clinical trials, performed after preliminary evidence
suggesting dose and effectiveness of a Licensed Product has been obtained, which is intended to gather the additional information about the effectiveness and safety that is needed to evaluate the overall benefit-risk relationship of the Licensed
Product and to provide adequate basis for labeling, performed in accordance with the U.S.A. Federal Food, Drug and Cosmetic Act and applicable regulations promulgated thereunder (including without limitation 21 CFR Part 312), as amended from
time to time. 

  

	 	1.1.32	“Prime Rate” means the prime or equivalent rate quoted by Citibank, N.A. from time to time. 

 

	 	1.1.33	“Project Bioshield” means any program pursuant to which the FDA or any other Regulatory Authority may make medical treatments quickly available, including the
program contemplated by the Project Bioshield Act of 2004, and any counterpart, successor or alternative to such legislation, or any legislation of similar effect. 

 

	 	1.1.34	“Regulatory Approval” means, with respect to a country, all approvals (including price and reimbursement approvals), licenses, registrations, or
authorizations of any federal, state or local regulatory agency, department, bureau or other government entity, necessary for the use, storage, import, transport, marketing and sale of Licensed Product, in such country for use in the Field.

  

	 	1.1.35	“Representatives” means, in respect of a Person, that Person’s Affiliates and their respective directors, officers, employees, consultants,
subcontractors, Sublicensees, agents, representatives and other persons acting under their authority. 

  

	 	1.1.36	“Sphingosome Patents” means the Patents owned by INEX and set out in Exhibit 1.1.36. 

 

	 	1.1.37	“Sublicensee” means a Third Party to whom Aradigm has granted a sublicense to make, have made, use, import, offer for sale or sell Licensed Product in one or
more countries of the Territory. Without limiting the generality of the foregoing, a Sublicensee shall be deemed to include any Third Party who is granted a sublicense hereunder by Aradigm pursuant to the terms of the outcome or settlement of any
infringement or threatened infringement action. 

  

	 	1.1.38	“Territory” means all of the countries and territories of the world. 

 

	 	1.1.39	“Third Party(ies)” means any Person other than INEX or Aradigm or an Affiliate of either of them. 

 

	 	1.1.40	“UBC” means the University of British Columbia, a corporation continued under the University Act of British Columbia and having its administrative offices at
2075 Wesbrook Mall, in the City of Vancouver, in the Province of British Columbia. 

  
 6 

	 	1.1.41	“UBC License Agreement” means the license agreement between INEX and UBC executed July 30, 2001 and effective July 1, 1998 that grants INEX rights
to the Loading Patents. 

  

	 	1.1.42	“USA” means the United States of America, including its territories, possessions and the Commonwealth of Puerto Rico. 

 

	 	1.1.43	“Valid Claim” means either: 

  

	 	(a)	a claim of an issued and unexpired patent which has not been held unenforceable, unpatentable or invalid by a court or other governmental agency of competent
jurisdiction, and which has not been admitted to be invalid or unenforceable through reissue, disclaimer or otherwise; or 

  

	 	(b)	a claim in a patent application, provided that if such pending claim has not issued as a claim of an issued patent within seven (7) years after the filing date of
such patent application, such pending claim shall not be a Valid Claim for purposes of this Agreement. 

 In the
event that a claim of an issued patent is held by a court or other governmental agency of competent jurisdiction to be unenforceable, unpatentable or invalid, and such holding is reversed on appeal by a higher court or agency of competition
jurisdiction, such claim shall be reinstated as a Valid Claim hereunder. 
  

	1.2	Entire Agreement 

 This Agreement
constitutes the entire agreement between the Parties concerning the subject matter hereof. 
  

	1.3	Governing Law 

 This Agreement shall be
deemed to have been made in the Province of British Columbia and its form, execution, validity, construction and effect shall be determined in accordance with the laws thereof. 

 

	1.4	Headings 

 The headings contained in this
Agreement are for convenience of reference only and shall not be considered in construing this Agreement. References to Articles are references to Articles of this Agreement and the Sections contained therein, and references to Sections are
references to Sections of this Agreement. 
  

	1.5	Severability 

 If a court or other
tribunal of competent jurisdiction should hold any term or provision of this agreement to be excessive, or invalid, void or unenforceable, the offending term or provision shall be deemed inoperative to the extent that they may conflict therewith and
shall be deemed to be modified to the extent necessary to conform with such statute or rule of law, while still preserving, to the extent practicable, the legitimate aims of the Parties, provided that the remaining portions hereof shall remain in
full force and effect. In the event that the terms and conditions of this Agreement are materially altered as a result of the above, the Parties will renegotiate the terms and conditions of this Agreement to resolve any inequities. 

  
 7 

 Article 2 Patent and Know-How Licenses 

 

	2.1	Licenses 

 Subject to the reservation set
forth in Section 2.3, INEX hereby grants to Aradigm: 
  

	 	2.1.1	an exclusive license for the Field in the Territory under the Licensed Patents; and 

 

	 	2.1.2	an exclusive license for the Field in the Territory under the Know-How; 

 for the sole purpose of developing, making, having made, importing, using, offering for sale and selling Licensed Product in the Territory, including the right to grant sublicenses under these rights as
set out in Section 2.4. 
  

	2.2	Exclusive License Term 

 In respect of
each Licensed Product, on a country-by-country basis, the licenses granted pursuant to: 
  

	 	2.2.1	Section 2.1.1 shall continue in effect until the expiration of the last Valid Claim of the Licensed Patents which covers such Licensed Product licensed to Aradigm
hereunder; and 

  

	 	2.2.2	Section 2.1.2 shall continue in effect until the expiry of ten years from the first commercial sale of such Licensed Product; 

unless earlier terminated in accordance with this Agreement. 
  

	2.3	Reservation of Rights 

 INEX retains the
right under the Licensed Patents and the Know-How to practice the inventions in the Field solely for internal research purposes and for any purpose outside the Field. Aradigm and INEX acknowledge and agree that UBC may use the Loading Patents and
associated Know-How without charge in any manner whatsoever solely for non-commercial research, scholarly publication, educational or other non-commercial use. 
  

	2.4	Sublicenses 

  

	 	2.4.1	Aradigm shall have the right to sublicense rights granted in Section 2.1 to its Affiliates, subject to the following: 

 

	 	(a)	Aradigm hereby unconditionally guarantees the performance of any such Affiliates hereunder as if they were signatories to this Agreement. 

 

	 	(b)	Such sublicenses shall terminate upon the termination of Aradigm’s rights granted herein. 

 

	 	(c)	Each sublicense shall contain covenants by the Affiliate for the benefit of INEX and Aradigm to observe and perform similar terms and conditions to those in the UBC
License Agreement and in this Agreement. 

  

	 	(d)	A breach by any such Affiliate of any such obligation shall constitute a breach by Aradigm of this Agreement and shall entitle INEX to exercise its rights hereunder, in
addition to any other rights and remedies to which INEX may be entitled. 

  
 8 

	 	2.4.2	Aradigm shall also have the right to sublicense rights granted in Section 2.1 to Third Parties, subject to the following: 

 

	 	(a)	Within ten (10) calendar days after execution of a sublicensing agreement, Aradigm shall provide INEX with a copy thereof (provided that Aradigm shall be permitted
to redact the financial terms of such agreement). 

  

	 	(b)	Such sublicenses shall terminate upon the termination of Aradigm’s rights granted herein unless events of default are cured by Aradigm or Sublicensee within the
period for the cure of default after notification by INEX as provided by the terms of this Agreement. 

  

	 	(c)	Each sublicense shall contain covenants by the Sublicensee for the benefit of INEX and Aradigm to observe and perform similar terms and conditions to those in the UBC
License Agreement and in this Agreement. 

  

	 	(d)	In the event that Aradigm becomes aware of a material breach of any such sublicense by the Sublicensee, Aradigm shall promptly notify INEX of the particulars of same
and take all reasonable steps to enforce the terms of such sublicense. Upon the request of INEX, Aradigm shall act reasonably in considering any request of INEX for Aradigm to terminate such sublicense. 

 

	 	2.4.3	In the event Aradigm grants sublicenses to others to make or sell Licensed Product, such sublicenses shall include an obligation for the Sublicensee to account for and
report its Net Sales of such Licensed Product on the same basis as if such sales were Net Sales by Aradigm, and INEX shall receive royalties in the same amounts as if the Net Sales of the Sublicensee were Net Sales of Aradigm.

 Article 3 Milestone Payments and Sublicense Fees 

 

	3.1	License Fee 

 Upon execution of this
Agreement by both Parties, Aradigm shall forthwith pay to INEX [*]. 
  

	3.2	Milestone Payments 

 In consideration of
the licenses granted by INEX to Aradigm under this Agreement, Aradigm shall make the following milestone payments to INEX: 
  

					
	 Milestones Per Indication (each payable
twice)
	 
	 [*]
	  	 	[	*] 
	 [*]
	  	 	[	*] 
	 [*]
	  	 	[	*] 
	 [*]
	  	 	[	*] 

  
 *Confidential Treatment Requested. 

  
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 Provided that: 
  

	 	3.2.1	Each milestone payment shall be made no more than [*] per Indication, regardless of how many times such milestone is achieved for such Indication. Each milestone
payment shall be made no more than [*] in the aggregate, regardless of how many Indications are pursued. 

  

	 	3.2.2	The Parties anticipate that the first Indication to be pursued by Aradigm for the Licensed Product shall be [*], and the second Indication will be [*]. Notwithstanding
the foregoing, Aradigm may pursue any Indication in priority to either or both of these Indications. 

  

	 	3.2.3	In respect of any Indication, if Aradigm is able to achieve any milestone set out in this Section without first achieving one or more of the earlier milestones for such
Indication, including, without limitation, if such an occurrence is facilitated as a result of Project Bioshield, then the milestone payments corresponding to the unachieved milestone(s) shall be payable upon occurrence of any subsequent milestone.

  

	 	3.2.4	Aradigm shall make the milestone payments to INEX within [*] days after achievement of each milestone. Aradigm shall make the milestone payments to INEX whether the
milestone is achieved by Aradigm itself, or by an Affiliate or a Sublicensee. 

  

	 	3.2.5	Subject to Section 3.2.3, payment shall not be owed for a milestone which is not reached. 

 

	 	3.2.6	[*]. 

  

	 	3.2.7	[*]. 

  

	 	3.2.8	[*]. 

  

	3.3	Independent Consideration 

 The amounts
payable to INEX pursuant to Sections 3.1 and 3.2 are non-refundable and shall be in addition to, and not in lieu of, the royalties payable to INEX pursuant to Article 4. 
 Article 4 Patent and Know-How Royalties 
  

	4.1	Royalty Rate 

 Subject to the rest of this
Article 4, Aradigm shall pay to INEX earned royalties on all Net Sales in the Territory of Licensed Product by Aradigm, its Affiliates and Sublicensees at the following rates, on a country-by-country basis: 

 

					
	 Royalty
	 
	 [*]
	  	 	[	*] 
	 [*]
	  	 	[	*] 

  
 *Confidential Treatment Requested. 

  
 10 

	4.2	Royalty Term and Rate Modification 

  

	 	4.2.1	The royalty obligations set forth in Section 4.1 with respect to any Licensed Product in any country in the Territory shall continue until the expiry of the
licenses respecting same in accordance with Section 2.2. 

  

	 	4.2.2	In respect of any country in the Territory, upon expiry of the last Valid Claim of the Licensed Patents which covers the Licensed Product, or in the event that there is
no Valid Claim of the Licensed Patents which covers such Licensed Product, Aradigm shall pay to INEX [*] of the earned royalty specified in Section 4.1 until the license in Section 2.1.2 is no longer in effect in accordance with
Section 2.2. 

  

	 	4.2.3	Upon the expiration in accordance with Section 2.2 of the last to expire of the licenses granted under Section 2.1 with respect to Licensed Product in a
country in the Territory, such license shall become a fully paid, non-exclusive license with respect to Know-How for such Licensed Product in such country of the Territory. 

 

	4.3	Combination Products 

  

	 	4.3.1	In the event a Licensed Product is sold in combination with one or more other elements, including with [*] or related accessories intended for use with such [*], the
Net Sales from the Licensed Product, for the purposes of determining royalty payments under this Agreement, shall be determined by [*] the Net Sales of such combination (as if the combination were the Licensed Product for the purposes of the
definition of Net Sales), during the applicable royalty reporting period, by [*] excluding the Licensed Product when sold separately in the country in which the combination is sold, in each case during the applicable royalty reporting period or, if
sales of the Licensed Product alone did not occur in such period, then in the most recent royalty reporting period in which arms length fair market sales of such Licensed Product occurred. In the event that such average sale price cannot be
determined for both the Licensed Product and all other elements of such combination, Net Sales for the purposes of determining royalty payments shall be mutually agreed upon by the Parties acting reasonably, based on the relative value contributed
by each component. 

  

	 	4.3.2	If the parties are unable to come to agreement on any disputes arising out of the determinations to be made under this Article, the issue will be determined pursuant to
Article 13. 

  

	4.4	Stacking 

 If, in respect of any country
in the Territory: 
  

	 	4.4.1	if it is necessary to seek a license from any Third Party in order to avoid infringement by elements of the Licensed Product other than the [*] or dosage forms; or

  
 *Confidential Treatment Requested.

  
 11 

	 	4.4.2	if a court of competent jurisdiction determines that such a license is required; 

 then [*] of any royalties or other fees paid to such Third Party under such license in respect of such country may be credited against payments otherwise due INEX under Section 4.1 in respect of such
country, provided that in no event shall such credits, together with the royalty reduction contemplated by Section 4.2.2 cause the payments set forth in Section 4.1 in respect of such country to be reduced to less than [*] of the
applicable payments set forth in Section 4.1, and any such royalties or other fees paid to such Third Party and not deducted in any calendar year may not be deducted in any subsequent year. Nothing in this Section 4.4 shall reduce
Aradigm’s obligation to pay milestones in accordance with Section 3.2. This Section shall not relieve any Party of its obligations arising for breach of a warranty contained in Article 7, and therefore this Section shall not be applied in
respect of any infringement which would not have arisen if the warranties in Article 7 were true. Notwithstanding the foregoing, Aradigm shall have no right to deduct any royalties or other fees paid or otherwise have the advantage of this
Section 4.4 in respect of the Crown Identified Patents. 
  

	4.5	Reports and Payment 

 Aradigm shall
deliver to INEX within sixty (60) days after the end of each calendar quarter a written report showing its computation of royalties due under this Agreement upon Net Sales by Aradigm and its Affiliates and its Sublicensees during such calendar
quarter. All Net Sales shall be segmented in each such report according to sales by Aradigm, each Affiliate and each Sublicensee, as well as on a country-by-country basis, including the rates of exchange used to convert such royalties to United
States dollars from the currency in which such sales were made. For the purposes hereof, the rates of exchange to be used for converting royalties hereunder to United States dollars shall be those in effect for the purchase of dollars as certified
by CitiBank, N.A., New York, New York, U.S.A., on the last Business Day of the quarter with respect to which the payment is due. Aradigm, simultaneously with the delivery of each such report, shall tender payment in United States dollars of all
royalties shown to be due thereon. 
  

	4.6	Withholding Taxes 

 Any tax which Aradigm
is required to pay or withhold with respect of license fees, royalty payments and milestone payments to be made to INEX hereunder shall be deducted from the amount otherwise due provided that, in regard to any such deduction, Aradigm shall give INEX
such assistance, which shall include the provision of such documentation as may be required by the US Internal Revenue Service and other revenue services, as may reasonably be necessary to enable INEX to evidence such payment, claim exemption
therefrom or obtain a repayment thereof or a reduction thereof and shall upon request provide such additional documentation from time to time as is needed to confirm the payment of tax. The Parties agree that: 

 

	 	4.6.1	Aradigm shall be deemed to be the sole payor of payments owed to INEX under this Agreement and shall not have the right to substitute any domestic or foreign Affiliate
for that purpose, and 

  

	 	4.6.2	in the event that Aradigm takes any action, including, without limitation, the assignment of this Agreement, any sublicensing permitted hereby, any change of
jurisdiction of residence or any reorganization or change in its business or structure so that, after such action, the withholding tax on the payments under this Agreement would be substantially more than those in effect on the Effective Date,
Aradigm shall either: 

  

	 	(a)	with the co-operation of INEX, arrange its affairs so that the withholding tax consequences to INEX are not materially worse than those in effect prior to such action;
or 

  
 *Confidential Treatment
Requested. 

  
 12 

	 	(b)	gross up the payments otherwise owed to INEX so that INEX receives net of withholding taxes the amount INEX would have received but for such action.

  

	4.7	Late Payments 

 Any payment by Aradigm
that is not paid on or before the date such payment is due under this Agreement shall bear interest at a rate equal to the lesser of (i) [*], or (ii) the maximum rate permitted by law, calculated based on the number of days that payment is
delinquent. 
  

	4.8	Foreign Royalties 

 Where royalties are
due INEX hereunder for sales of Licensed Product in a country in the Territory where, by reason of currency regulations or taxes of any kind, it is impossible or illegal for Aradigm, any Affiliate or Sublicensee to transfer royalty payments to INEX
for Net Sales in that country in the Territory, such royalties shall be deposited in whatever currency is allowable by the Person not able to make the transfer for the benefit or credit of INEX in an accredited bank in that country in the Territory
that is reasonably acceptable to INEX. 
  

	4.9	Records, Audit 

 Aradigm shall keep, and
shall require all Affiliates and Sublicensees to keep, full, true and accurate books of accounts and other records containing all information and data which may be necessary to ascertain and verify the royalties payable hereunder for a period of
three (3) years after the date such royalties became payable. During the term of this Agreement after the first commercial sale of Licensed Product and for a period of one year following termination of this Agreement, INEX shall have the right
from time to time (not to exceed once during each calendar year) to have either its internal financial audit personnel or an independent firm of accountants (i.e., a certified public accountant or like person reasonably acceptable to Aradigm)
inspect such books, records and supporting data, provided such shall not cover such records for more than the preceding five years. Such independent firm of accountants shall perform these audits at INEX’s expense upon reasonable prior notice
and during Aradigm’s regular business hours, and shall agree as a condition to such audit to maintain the confidentiality of all information of Aradigm disclosed or observed in connection with such audit and to disclose to INEX only whether
Aradigm has complied with its obligations under this Agreement with respect to the accuracy of the royalty statements and payments. If the result of such audit demonstrates an underpayment to INEX of 5% or more, Aradigm shall pay for the reasonable
costs of such audit. 
 Article 5 Technology Transfer 

 

	5.1	Initial Technology Transfer 

 INEX shall,
upon Aradigm’s request, for a period of six months from the Effective Date, transfer to or make available to Aradigm the then most-current version of all relevant Know-How to enable Aradigm’s reasonably capable Representatives to
understand such Know-How as reasonably necessary to encapsulate Ciprofloxacin using the INEX Liposome Technology, with a goal of delivering the resulting Licensed Product with the AERx Device. 
  
 *Confidential Treatment Requested. 

  
 13 

	5.2	Subsequent Consultations 

 After the first
six months from the Effective Date, INEX shall provide to Aradigm technical advice and consultation by phone and by meetings in person respecting the Know-How as reasonably requested by Aradigm, provided that, in providing such advice and
consultation, INEX shall not be obliged: 
  

	 	5.2.1	to provide INEX Representatives for travel away from Vancouver more than once per calendar quarter; and 

 

	 	5.2.2	in addition to the travel contemplated in Section 5.2.1, to make available to Aradigm INEX Representatives for more than 12 hours per calendar quarter.

  

	5.3	Cost Recovery for Technology Transfer Services 

 Aradigm shall pay to INEX all INEX’s reasonable, documented out-of-pocket costs of providing technology transfer services pursuant to this Article 5, including travel and associated accommodation
expenses of INEX Representatives who, at Aradigm’s request, travel to provide technology transfer services pursuant to this Article 5. 
 Article 6 Diligence and Annual Reports 
  

	6.1	Aradigm’s Diligence 

 In respect of
each Licensed Product, Aradigm shall use Commercially Reasonable Efforts to: 
  

	 	6.1.1	conduct the necessary and appropriate preclinical and clinical trials and prepare, file and prosecute the governmental applications necessary to obtain Regulatory
Approval for the Licensed Product in the Territory where appropriate to do so, and in any event in all of the following countries: USA, each of the Major European Countries and Japan; 

 

	 	6.1.2	market the Licensed Product in the Territory; and 

  

	 	6.1.3	launch sales of such Licensed Product and sell such Licensed Product in each such country where Regulatory Approval has been granted. 

 

	6.2	Subcontractors 

 Aradigm may subcontract
to any of its Representatives any of its obligations in respect of the development of the Licensed Product without the consent of INEX; provided however, that: 
  

	 	6.2.1	each Representative must enter into an agreement with Aradigm which shall contain covenants by the Representative respecting Intellectual Property Rights (Article 8)
and Confidential Information (Article 10) for the benefit of INEX and Aradigm to observe and perform similar terms and conditions to those set out in this Agreement; and 

  
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	 	6.2.2	Aradigm shall be responsible to INEX for the performance of each of Aradigm’s Representative’s obligations under such agreement and all activities undertaken
by its Representatives as contemplated by this Agreement. 

  

	6.3	Consequence of No Sales 

 In addition to
the terms of Section 6.1, Aradigm shall be deemed to have breached its obligation to use Commercially Reasonable Efforts in conducting marketing of a Licensed Product in the USA, the Major European Countries and Japan if, for a continuous
period of one hundred and eighty (180) days at any time following launch of commercial sales of such Licensed Product in any such country, no sales of the Licensed Product are made in the ordinary course of business in such country, unless
Aradigm is prevented, restricted, interfered with or delayed in making such sales by reason of a cause beyond Aradigm’s reasonable control and can demonstrate same to INEX, in which event such period shall be extended by the period of
Aradigm’s inability, provided that Aradigm uses Commercially Reasonable Efforts to avoid or remove the cause of such inability. 
  

	6.4	Reports 

 Aradigm shall report to INEX on
the status and progress of Aradigm’s efforts to develop and commercialize Licensed Product as follows: 
  

	 	6.4.1	Aradigm shall make annual reports, due on each anniversary of the Effective Date, to INEX setting forth in general terms, reasonably sufficient for evaluation of the
diligence obligations contained herein, the efforts it made to develop and commercialize all Licensed Products during the previous year, including the achievement of any milestone, the planning, starting, completing or stopping of any trials, the
preparation of an application for, or the submission or obtaining of any regulatory approval, any significant adverse developments, and any plans for or occurrences of any commercial sales of Licensed Product in any jurisdiction and, manufacturing
and process development efforts as well as a summary of the efforts it intends to make in the upcoming year(s) on these matters. Aradigm agrees to appropriately consider any INEX input and comments related to Aradigm’s plan for the upcoming
year(s), provided that it is understood that Aradigm shall have final decision making responsibility for such plans. 

  

	 	6.4.2	To the extent that such could not be appropriately communicated to INEX in accordance with Section 6.4.1, Aradigm shall keep INEX informed in a timely manner of
significant developments in Aradigm’s (and its Affiliates and Sublicensees where relevant) progress of its efforts to develop and commercialize Licensed Product, including without limitation, the achievement of any milestone, the planning,
starting, completing or stopping of any trials, the preparation of an application for, or the submission or obtaining of any regulatory approval, any significant adverse developments, and any plans for or occurrences of any commercial sales of
Licensed Product in any jurisdiction. 

 Article 7 Representations and Warranties 

 

	7.1	By Aradigm 

 Aradigm hereby represents and
warrants to INEX that, as of the Effective Date: 
  

	 	7.1.1	Aradigm has full legal right, power and authority to execute, deliver and perform its obligations under this Agreement; 

  
 15 

	 	7.1.2	the execution, delivery and performance by Aradigm of this Agreement do not contravene or constitute a default under any provision of applicable law or its articles or
by-laws (or equivalent documents) or of any judgment, injunction, order, decree or other instrument binding upon Aradigm; 

  

	 	7.1.3	all consents, authorizations and approvals, if any, required by a governmental authority for the execution, delivery and performance by Aradigm of this Agreement have
been obtained and are in full force and effect and all conditions thereof have been complied with, and no other action by or with respect to, or filing with, any governmental authority or any other person or entity is required in connection with the
execution, delivery and performance by Aradigm of this Agreement; 

  

	 	7.1.4	this Agreement constitutes a valid and binding agreement of Aradigm, enforceable against Aradigm in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, moratorium or creditors’ rights generally; 

  

	 	7.1.5	the execution, delivery and performance by Aradigm of this Agreement do not and will not conflict with or result in a material breach of any of the terms and provisions
of any Third Party agreement of Aradigm entered into as of the Effective Date; 

  

	 	7.1.6	except for the Crown Identified Patents, to the knowledge of Aradigm (without further duty of inquiry), the exploitation by Aradigm of the rights granted to Aradigm
hereunder in pursuit of the developing, making, having made, importing, using, offering for sale and selling of the Licensed Product does not infringe the Intellectual Property Rights of any Third Party; 

 

	 	7.1.7	Aradigm is not aware of any impediment, including without limitation any Third Party agreement of Aradigm, which would prevent Aradigm from performing its obligations
under this Agreement; and 

  

	 	7.1.8	Aradigm will not enter into any Third Party agreement after the Effective Date which, in any way, will limit its ability to perform all of the obligations undertaken by
Aradigm hereunder. 

  

	7.2	By INEX 

 INEX hereby represents and
warrants to Aradigm that, as of the Effective Date: 
  

	 	7.2.1	INEX has full legal right, power and authority to execute, deliver and perform its obligations under this Agreement; 

 

	 	7.2.2	the execution, delivery and performance by INEX of this Agreement do not contravene or constitute a default under any provision of applicable law or its articles or
by-laws (or equivalent documents) or of any judgment, injunction, order, decree or other instrument binding upon INEX; 

  

	 	7.2.3	 except for the consent of UBC, all consents, authorizations and approvals, if any, required by a governmental authority for the execution, delivery and
performance by 

  
 16 

	 	 
INEX of this Agreement have been obtained and are in full force and effect and all conditions thereof have been complied with, and no other action by or with respect to, or filing with, any
governmental authority or any other person or entity is required in connection with the execution, delivery and performance by INEX of this Agreement; 

  

	 	7.2.4	except for UBC’s reserved rights and rights granted by INEX outside the Field, INEX is the exclusive licensee of all legal and beneficial right, title and interest
in and to the [*]; 

  

	 	7.2.5	except for rights granted by INEX outside the Field, INEX is the exclusive owner of all legal and beneficial right, title and interest in and to the [*];

  

	 	7.2.6	except for UBC’s reserved rights and rights granted by INEX outside the Field, INEX is the sole and exclusive owner or licensee of the Know-How, free and clear of
any lien, claim or encumbrance or rights of any other person or entity; 

  

	 	7.2.7	the UBC License Agreement is in full force and effect and has not been breached by INEX or, to the knowledge of INEX (without further duty of inquiry), UBC, and the
representations and warranties made by INEX and, to the knowledge of INEX (without further duty of inquiry), UBC in the UBC License Agreement are sufficient to permit the granting by INEX of the license in Section 2.1 on the Effective Date;

  

	 	7.2.8	this Agreement constitutes a valid and binding agreement of INEX, enforceable against it in accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, moratorium or creditors’ rights generally; 

  

	 	7.2.9	the execution, delivery and performance by INEX of this Agreement do not and will not conflict with or result in a material breach of any of the terms and provisions of
any Third Party agreement of INEX entered into as of the Effective Date; 

  

	 	7.2.10	INEX is not aware of any impediment, including without limitation any Third Party agreement of INEX, which would prevent INEX from performing its obligations under this
Agreement or that would conflict with or prevent the grant of the licenses and other rights in this Agreement to Aradigm; and 

  

	 	7.2.11	INEX will not enter into any Third Party agreement after the Effective Date which, in any way, will limit its ability to perform all of the obligations undertaken by
INEX hereunder or that would conflict with or prevent the grant of the licenses and other rights in this Agreement to Aradigm. 

  

	7.3	Survival of Representations and Warranties 

The representations and warranties contained herein shall survive the execution, delivery and performance of this Agreement by the Parties,
notwithstanding any investigation at any time made by or on behalf of any Party or Parties, subject to any necessary changes which do not affect the enjoyment by the Parties of the rights granted in this Agreement. 

 

	7.4	DISCLAIMER 

 EXCEPT FOR THE EXPRESS
WARRANTIES AND REPRESENTATIONS CONTAINED IN THIS AGREEMENT, NEITHER INEX NOR ARADIGM MAKES, AND EACH HEREBY EXPRESSLY 

 
 *Confidential Treatment Requested. 

  
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DISCLAIMS, ANY WARRANTIES OR REPRESENTATIONS, EITHER EXPRESS OR IMPLIED, WHETHER IN FACT OR IN LAW, INCLUDING WITHOUT LIMITATION IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR NON-INFRINGEMENT. 
 Article 8 Intellectual Property Rights 

 

	8.1	Ownership of Pre-Existing Intellectual Property Rights 

 Any Intellectual Property Rights owned by either Party prior to the Effective Date shall remain solely owned by such Party. 

 

	8.2	Ownership of Intellectual Property Rights from Development 

 Intellectual Property Rights arising from the development of Licensed Product or the activities of Aradigm or its Representatives contemplated by this Agreement relating to: 

 

	 	8.2.1	liposomal drug delivery systems and all improvements, modifications and derivatives thereof (but not related to the AERx Device, dosage forms or formulations of drugs
for use with such AERx Device) shall be solely owned by INEX regardless of which Party or Party’s Representatives created or invented such intellectual property (hereinafter “INEX Invention”); and 

 

	 	8.2.2	the AERx Device, dosage forms or formulations of drugs for use with such AERx Device and/or anything else other than an INEX Invention, shall be solely owned by Aradigm
regardless of which Party or Party’s Representatives created or invented such intellectual property (hereinafter “Aradigm Invention”). 

  

	8.3	INEX Inventions and Aradigm Inventions 

  

	 	8.3.1	Each Party will report to the other Party in a timely manner any INEX Inventions or Aradigm Inventions that belong to the other Party pursuant to Section 8.2.

  

	 	8.3.2	INEX shall have the right and responsibility to decide whether or not to seek or continue to seek or maintain patent protection on any INEX Invention in any country,
and shall have the right to file for, prosecute and maintain patents on any INEX Invention in any country. 

  

	 	8.3.3	Aradigm shall have the right and responsibility to decide whether or not to seek or continue to seek or maintain patent protection on any Aradigm Invention in any
country, and shall have the right to file for, procure and maintain patents on any Aradigm Invention in any country. 

  

	8.4	Incorporation of INEX Inventions into License 

 All INEX Inventions shall be licensed to Aradigm on the terms hereof as if such INEX Inventions were Licensed Patents and Know-How hereunder. 

  
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	8.5	Prosecution and Maintenance of Licensed Patents 

 INEX shall be responsible for and pay all future costs of prosecuting and maintaining the Licensed Patents. 
  

	8.6	Co-operation 

 Each Party agrees to obtain
the co-operation of its Representatives in the assignment of any Intellectual Property Rights addressed by this Agreement and the preparation, filing, and prosecution of any applications for registration of same which may arise under this Agreement.
Such co-operation shall include: 
  

	 	8.6.1	making available to the other Party or such other Party’s Representatives whom the other Party in its reasonable judgment deems necessary in order to assist it in
obtaining patent protection of the Licensed Patents, INEX Inventions and Aradigm Inventions and any applications therefor; and 

  

	 	8.6.2	executing and causing its Representatives to execute all legal documents reasonably necessary to support the assignment, filing, prosecution and maintenance of said
Patents. 

  

	 	8.6.3	Aradigm shall, at the request of INEX and, in the case of the Loading Patents, UBC, enter into such further agreements and execute any and all documents as may
reasonably be required to ensure that ownership of the Licensed Patents remains with the legal owner. 

  

	8.7	Trademarks 

 Aradigm, at its expense,
shall be responsible for the selection, registration and maintenance of all trademarks which it employs in connection with Licensed Product in the Territory and shall own and control such trademarks during the term of this Agreement and following
its termination or expiration. Nothing in this Agreement shall be construed as a grant of rights, by license or otherwise, to INEX to use such trademarks for any purpose. 

 

	8.8	Labeling and Patent Marking 

 The Licensed
Product shall be packaged by Aradigm and labeled consistent with the requirements of the regulatory authorities in the country in which it will be sold, and where legally permissible, shall identify any applicable Licensed Patents consistent with
any patent marking requirements. 
 Article 9 Allocation of Risk 

 

	9.1	Limits 

 Except as expressly set out in
this Agreement, nothing in this Agreement shall be construed as: 
  

	 	9.1.1	a warranty or representation by UBC or INEX as to title to the Licensed Patents and Know-How or that anything made, used, sold or otherwise disposed of under the
license granted in this Agreement is or will be free from infringement of patents, copyrights, trade-marks, industrial design or other intellectual property rights; 

  
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	 	9.1.2	a warranty or representation by UBC or INEX that any patents covered by this Agreement are valid or enforceable; 

 

	 	9.1.3	an obligation by UBC or INEX to bring or prosecute or defend actions or suits against Third Parties for infringement of patents, copyrights, trade-marks, industrial
designs or other intellectual property or contractual rights; or 

  

	 	9.1.4	the conferring by UBC or INEX of the right to use in advertising or publicity the name of INEX or UBC or their respective trade marks. 

 

	9.2	Conduct of Infringement Proceedings 

Notwithstanding Section 9.1, in the event of: 
  

	 	9.2.1	an alleged infringement by a Third Party of the Licensed Patents or Know-How or any right with respect to the Licensed Patents or Know-How by the manufacture, sale or
use of products or services in the Field; or 

  

	 	9.2.2	any complaint by Aradigm alleging any infringement by a Third Party with respect to the Licensed Patents or Know-How or any right with respect to the Licensed Patents
or Know-How by the manufacture, sale or use of products or services in the Field; 

 subject to the consent of UBC under the UBC
License Agreement granting INEX the right to prosecute such litigation, the following shall apply: 
  

	 	9.2.3	INEX shall have the first right, in its sole discretion, and at its sole expense, to prosecute or defend such litigation; 

 

	 	9.2.4	if INEX does not take steps to prosecute or defend such litigation within 90 days after receipt of notice thereof, Aradigm may take such legally permissible action as
it deems necessary or appropriate to prosecute such litigation in the Field or defend such litigation at its own expense, but shall not be obligated to do so; 

 

	 	9.2.5	the Party prosecuting or defending such litigation (in this Article, the “Litigating Party”) shall have the right to control such litigation and shall bear
all legal expenses (including court costs and legal fees), including settlement thereof provided however that no settlement or consent judgment or other voluntary final disposition of any suit defended or action brought by a Party pursuant to this
Section 9.2 may be entered into without the consent of the other Party if such settlement would require the other Party to be subject to an injunction or to make a monetary payment or would restrict the claims in or admit any invalidity of any
Licensed Patent(s) or significantly adversely affect the rights of the other Party to this Agreement (the “Non-litigating Party”). By way of example and not by way of limitation, there shall be no right of the Litigating Party to stipulate
or admit to the invalidity or unenforceability of any Licensed Patent. Before any action is taken by the Litigating Party which could abridge the rights of the Non-litigating Party hereunder, the Parties agree to, in good faith, consult with a goal
of adopting a mutually satisfactory position; 

  

	 	9.2.6	the Parties further acknowledge that solely to the extent that any final disposition of the litigation that will restrict the claims in or admit any invalidity of any
Loading Patent(s) or significantly adversely affect UBC’s rights, any such disposition of the litigation requires the full consultation with and approval by UBC under the UBC License Agreement; 

  
 20 

	 	9.2.7	the Non-litigating Party agrees to co-operate reasonably in any such litigation to the extent of executing all necessary documents, supplying essential documentary
evidence and making essential witnesses then in its employment available and to vest in the Litigating Party the right to institute any such suits, so long as all the direct or indirect costs and expenses of bringing and conducting any such
litigation or settlement shall be borne by the Litigating Party, provided that INEX and Aradigm shall recover their respective actual out-of-pocket expenses, or equitable proportions thereof, associated with any litigation or settlement thereof from
any recovery made by any Party. Any excess amount shall be shared equally between Aradigm and INEX. 

  

	 	9.2.8	the Litigating Party shall keep the Non-litigating Party fully informed of the actions and positions taken or proposed to be taken by the Litigating Party (on behalf of
itself or a sublicensee) and actions and positions taken by all other parties to such litigation; 

  

	 	9.2.9	in the event that INEX prosecutes or defends such litigation, Aradigm may elect to participate formally in the litigation to the extent that the court may permit, but
any additional expenses generated by such formal participation shall be paid by Aradigm (subject to the possibility of recovery of some or all of such additional expenses from such other parties to the litigation); and 

 

	 	9.2.10	in the event that Aradigm prosecutes or defends such litigation, Aradigm acknowledges that UBC may elect to participate formally in the litigation to the extent that
the court may permit, but any additional expenses generated by such formal participation shall be paid by UBC (subject to the possibility of recovery of some or all of such additional expenses from such other parties to the litigation).

  

	9.3	Breach of Confidence Proceedings 

 In the
event of an alleged breach of confidentiality respecting Confidential Information or any Third Party use of Confidential Information, Aradigm and INEX agree that they shall reasonably cooperate to enjoin such Third Party’s use of such
Confidential Information. 
  

	9.4	Defense of Infringement Proceedings 

  

	 	9.4.1	If any complaint alleging infringement or violation of any patent or other proprietary rights is made against Aradigm, its Affiliate or a Sublicensee with respect to
the manufacture, use or sale of a Licensed Product, the following procedure shall be adopted: 

  

	 	(a)	Aradigm shall promptly notify INEX upon receipt of any such complaint and shall keep INEX fully informed of the actions and positions taken by the complainant and taken
or proposed to be taken by Aradigm (on behalf of itself, its Affiliate or a Sublicensee), provided that it is understood that Aradigm shall have the right but not the obligation to defend such suit, and 

 

	 	(b)	all costs and expenses incurred by Aradigm (its Affiliate or any Sublicensee) in investigating, resisting, litigating and settling such a complaint, including the
payment of any award of damages and/or costs to any Third Party, shall be paid by Aradigm (its Affiliate or any Sublicensee, as the case may be). 

  
 21 

	 	(c)	In any event, INEX and Aradigm shall assist one another and cooperate in any such litigation at the other’s request at the expense of the requesting Party.

  

	 	9.4.2	If any complaint alleging infringement or violation of any patent or other proprietary rights is made against INEX or its Affiliate with respect to the manufacture, use
or sale of a Licensed Product, the following procedure shall be adopted: 

  

	 	(a)	INEX shall promptly notify Aradigm in writing. INEX shall have the right but not the obligation to defend such suit at its own expense. 

 

	 	(b)	In any event, INEX and Aradigm shall assist one another and cooperate in any such litigation at the other’s request at the expense of the requesting Party.

  

	 	9.4.3	In the event a complaint is made under either of Sections 9.4.1 or 9.4.2, no settlement or consent judgment or other voluntary final disposition may be entered into
without the consent of the other Party if such settlement would require the other Party to be subject to an injunction or to make a monetary payment or would restrict the claims in or admit any invalidity of any Licensed Patent(s) or significantly
adversely affect the rights of the other Party. The Parties further acknowledge that solely to the extent that any final disposition of the litigation that will restrict the claims in or admit any invalidity of any Loading Patent(s) or significantly
adversely affect UBC’s rights, any such disposition of the litigation requires the full consultation with and approval by UBC under the UBC License Agreement. 

 

	9.5	Co-operation with Other Licensees 

Aradigm acknowledges that INEX has granted rights in respect of fields outside the Field, and may grant to its other sublicensees in respect of fields
outside of the Field rights similar to those granted to Aradigm under Sections 9.2, 9.3, 9.4 and this Section 9.5. If INEX grants such rights to its other sublicensees, in the event of any litigation in respect of: 

 

	 	9.5.1	fields outside of the Field of the kind described in Sections 9.2, 9.3 and 9.4 that may reasonably affect Aradigm’s use of the Licensed Patents or Know-How in the
Field or the manufacture, use or sale of Licensed Product by Aradigm; or 

  

	 	9.5.2	the Field that may reasonably affect INEX or one or more of INEX’s sublicensee’s use of the Licensed Patents or Know-How outside the Field or the manufacture,
use or sale of products outside the Field by INEX or one or more other such sublicensee(s); 

 then INEX, Aradigm and such other
sublicensees will use good faith efforts to determine jointly the course of action, if any, necessary or appropriate to prosecute or defend the litigation. INEX will use reasonable efforts to include in its sublicense agreements, provisions that
allow the participation of Aradigm as contemplated herein. 

  
 22 

 Article 10 Confidential Information and Publication 

 

	10.1	Treatment of Confidential Information 

Each Party hereto shall maintain the Confidential Information of the other Party in confidence, and shall not disclose, divulge or otherwise communicate
such Confidential Information to others, or use it for any purpose, except pursuant to, and in order to carry out, the terms and objectives of this Agreement, and hereby agrees to exercise every reasonable precaution to prevent and restrain the
unauthorized disclosure of such Confidential Information by any of its Representatives. 
  

	10.2	Permitted Disclosures 

 Either Party may
disclose the Confidential Information of the other Party to Third Party contractors or collaborators to facilitate or carry out research activities under this Agreement provided that such Third Parties enter into an agreement with such Party which
contains confidentiality provisions substantially the same as those set forth herein. 
  

	10.3	Publications Generally 

 The following
restrictions shall apply with respect to the disclosure in scientific journals or publications by any Party or Representative of any Party relating to the inventions contained in the Licensed Patents and the Know-How or to the activities or results
of the development of Licensed Product: 
  

	 	10.3.1	a Party (the “Publishing Party”) shall provide the other Party with an advance copy of any proposed publication before any other disclosure of same and such
other Party shall have a reasonable opportunity to recommend any changes it reasonably believes are necessary to preserve Intellectual Property Rights or Confidential Information belonging in whole or in part to INEX or Aradigm, and the
incorporation of such recommended changes shall not be unreasonably refused; and 

  

	 	10.3.2	if such other Party informs the Publishing Party, within thirty (30) days after receipt of an advance copy of a proposed publication, that such publication in its
reasonable judgment could be expected to have a material adverse effect on any Intellectual Property Rights or Confidential Information belonging in whole or in part to INEX or Aradigm, the Publishing Party shall delay or prevent such publication as
proposed. In the case of inventions, the delay shall be sufficiently long to permit the timely preparation and filing of a patent application(s) or application(s) for a certificate of invention on the information involved but not less than ninety
(90) days. 

  

	 	10.3.3	Nothing in this Agreement shall be construed as preventing or in any way inhibiting Aradigm from complying with statutory and regulatory requirements governing the
development, manufacture, use and sale or other distribution of Licensed Product in the Territory in any manner which it reasonably deems appropriate, including, for example, by disclosing to regulatory authorities confidential or other information
received from INEX. 

  

	10.4	Publication by UBC 

 Aradigm acknowledges
that the policies of UBC require that the results of UBC’s research be publishable, subject to the UBC License Agreement. INEX and Aradigm therefore agree that the inventors of the Loading Patents or associated Know-How shall not be restricted
from presenting at 

  
 23 

 
symposia, national, or regional professional meetings, or from publishing in abstracts, journals, theses, or dissertations, or otherwise, whether in printed or in electronic media, methods and
results of UBC’s research, provided however that: 
  

	 	10.4.1	INEX provides to Aradigm within five (5) days after receipt from UBC, copies of any proposed publication or presentation provided to it by UBC; and

  

	 	10.4.2	Aradigm has not, within 21 days after receipt of said copies, objected to INEX in writing to such proposed presentation or proposed publication in accordance with
Section 10.5 of this Agreement. 

  

	10.5	Objection to UBC Publication 

 Aradigm may
object to a proposed presentation or proposed publication by UBC on the grounds that: 
  

	 	10.5.1	it contains Confidential Information that was disclosed to UBC by INEX or Aradigm; or 

 

	 	10.5.2	it discloses patentable subject matter which needs protection. 

  

	10.6	Removal of Objectionable Material 

 If
Aradigm makes an objection under Section 10.5.1, Aradigm shall specify the portions of the presentation or publication considered objectionable (the “Objectionable Material”). INEX shall forward Aradigm’s objections to UBC within
four (4) days after receipt thereof. Upon receipt of notification from Aradigm that any proposed publication or disclosure contains Objectionable Material, UBC and INEX shall work together to revise the proposed publication or presentation to
remove or alter the Objectionable Material in a manner acceptable to Aradigm, in which case Aradigm shall withdraw its objection. INEX shall co-operate in all reasonable respects in making revisions to any proposed disclosures if considered by
Aradigm to contain Objectionable Material. Aradigm acknowledges that UBC shall not be restricted from publishing or presenting the proposed disclosure as long as the Objectionable Material has been removed. In respect of any disclosures by UBC
pursuant to Section 9.7 of the UBC License Agreement, upon Aradigm’s request, INEX shall request that Aradigm’s Confidential Information shall be deleted therefrom prior to disclosure by UBC. 

 

	10.7	Protecting Objectionable Material 

 If
Aradigm makes an objection under Section 10.5.2, thereafter INEX and/or Aradigm may file a patent application in accordance with Article 8 and the Parties acknowledge that UBC is obligated under the UBC License Agreement to ensure that its
researchers refrain from making such publication or presentation until one or more patent applications have been filed with one or more patent offices directed to such patentable subject matter, or until three (3) months have elapsed from date
of receipt of the written objection by UBC, whichever is sooner, after which UBC and its researchers may proceed with said presentation or publication. For greater certainty, a provisional patent application shall be considered to be a patent
application in the USA for the purposes of this Agreement. 

  
 24 

 Article 11 Termination 

 

	11.1	Term 

 This Agreement shall expire, on a
country-by-country basis, upon the expiration of Aradigm’s royalty obligations in each country in accordance with Section 4.2. 
  

	11.2	Voluntary Termination 

 Aradigm may
terminate the licenses under this Agreement at any time by providing thirty (30) days prior written notice to INEX. 
  

	11.3	Termination for Breach 

 Each Party shall
be entitled to terminate this Agreement and the licenses granted hereunder to the other Party by written notice to the other Party in the event that the other Party shall be in material default of any of its obligations hereunder, and shall fail to
remedy any such default within sixty (60) days after notice thereof by the non-breaching Party. Any such notice shall specifically state that the non-breaching Party intends to terminate this Agreement in the event that the breaching Party
shall fail to remedy the default. Any such notice shall set out expressly the actions required of the breaching Party to remedy the default. If such default is not corrected, the non-breaching Party shall have the right to terminate this Agreement
by giving written notice to the Party in default provided the notice of termination is given within six (6) months of the default and prior to correction of the default. 

 

	11.4	Termination upon Bankruptcy 

  

	 	11.4.1	This Agreement shall automatically and immediately terminate without notice to Aradigm upon (a) the bankruptcy, liquidation or dissolution of Aradigm; (b) the
filing of any voluntary petition for bankruptcy, dissolution, liquidation or winding-up of the affairs of Aradigm; or (c) the filing of any involuntary petition for bankruptcy, dissolution, liquidation or winding-up of the affairs of Aradigm
which is not dismissed within one hundred twenty (120) days after the date on which it is filed or commenced. 

  

	 	11.4.2	This Agreement may be terminated by Aradigm by providing written notice to INEX upon (a) the bankruptcy, liquidation or dissolution of INEX; (b) the filing of
any voluntary petition for bankruptcy, dissolution, liquidation or winding-up of the affairs of INEX; or (c) the filing of any involuntary petition for bankruptcy, dissolution, liquidation or winding-up of the affairs of INEX which is not
dismissed within one hundred twenty (120) days after the date on which it is filed or commenced. Notwithstanding the bankruptcy of INEX, or the impairment of performance by INEX of its obligations under this Agreement as a result of bankruptcy
of INEX, to the extent that INEX retains the rights necessary to grant the licenses granted in this Agreement, Aradigm shall be entitled to retain the licenses granted herein, subject to INEX’s rights to terminate this Agreement as provided in
this Agreement. Nothing in this Section shall limit Aradigm’s rights arising under the consent by UBC to this Agreement. 

  
 25 

	11.5	Continuing Obligations/No Limitation on Remedies 

 Upon any termination of this Agreement pursuant to this Article 11, neither Party shall be relieved of any obligations incurred prior to such termination. Termination of the Agreement in accordance with
the provisions hereof shall not limit remedies that may be otherwise available in law or equity. 
  

	11.6	Disposition of Licensed Product 

 Upon any
termination of this Agreement pursuant to Sections 11.1, 11.2, 11.3 or 11.4, Aradigm shall within thirty (30) days after the effective date of such termination notify INEX in writing of the amount of Licensed Product which Aradigm, its
Affiliates and Sublicensees then have completed on hand, the sale of which would, but for the termination, be subject to royalty, and Aradigm, its Affiliates and Sublicensees shall thereupon be permitted during the one (1) year following such
termination to sell that amount of Licensed Product, provided that Aradigm shall pay the aggregate royalty thereon at the conclusion of the earlier of the last such sale or such one (1) year period. Except as otherwise agreed between the
Parties in writing, all sublicenses granted by Aradigm shall forthwith terminate upon the termination of this Agreement. 
  

	11.7	Survival of Obligations; Return of Confidential Information 

 Notwithstanding any termination of this Agreement, the obligations of the Parties under Article 1, Sections 2.4.1(a), 2.4.2(b), 2.4.2(c), 2.4.2(d), 2.4.3, Article 7, Article 8, Article 9, Article 10,
Article 11, Article 12, Article 13 and Article 14, as well as under any other provisions which by their nature are intended to survive any such termination, shall survive and continue to be enforceable. Upon any termination of this Agreement
pursuant to Article 11, except as contemplated hereby, each Party shall promptly return to the other Party all written Confidential Information, and all copies thereof (except for one archival copy to be retained by a person designated by such Party
(who shall not make such Confidential Information generally available to Representatives of such Party) for the purpose of confirming which information to hold in confidence hereunder), of the other Party which is not covered by a license surviving
such termination. Aradigm shall deliver to INEX patent prosecution records related to the Licensed Patents in Aradigm’s possession or control, if any. 
  

	11.8	Delivery of Data and Materials and License 

Upon termination of this Agreement under Section 11.2, Section 11.3 by INEX for Aradigm’s uncured material default, or Section 11.4.1:

  

	 	11.8.1	Provided that INEX shall be responsible for any reasonable associated out-of-pocket costs associated with the following activities, Aradigm shall deliver to INEX a copy
of the animal and human data and such other information, materials (including biological materials but excluding any AERx Devices or dosage forms) and documents in Aradigm’s possession or control arising from the development of Licensed Product
under this Agreement that INEX may reasonably require in order to obtain approval of applicable government regulatory agencies to market Licensed Product, except to the extent that such are related to the AERx Device or dosage forms. INEX may,
directly or through a licensee, exploit such data, other information, materials (including biological materials) and documents to develop, make, have made, import, use, offer for sale and sell Licensed Product. 

 

	 	11.8.2	 Aradigm shall also, within thirty (30) days after the effective date of such termination, use all reasonable endeavors to take all steps and
execute all documents reasonably 

  
 26 

	 	 
necessary to assign and/or transfer or permit reference to (to the extent legally permissible in the relevant country) all regulatory filings and approvals arising from the development of
Licensed Product under this Agreement in Aradigm’s name or in the name of Aradigm’s Representatives to INEX or its designee except to the extent that such regulatory filings are related to the AERx Device or dosage forms, provided that
INEX shall be responsible for any reasonable associated out-of-pocket costs of transfer. 

  

	 	11.8.3	In the event that no such assignment and/or transfer and/or reference pursuant to 11.8.2 may legally be made, then Aradigm shall forthwith surrender such regulatory
filings and approvals for cancellation. 

  

	 	11.8.4	Upon INEX’s request, Aradigm shall within thirty (30) days after the effective date of such termination, deliver to INEX or its designee any and all documents
relating to applications, regulatory filings and approvals in its possession or control arising from the development of Licensed Product that are reasonably required in order to obtain approval of applicable government regulatory agencies to market
Licensed Product, except to the extent that such are related to the AERx Device or dosage forms, provided that INEX shall be responsible for any reasonable associated out-of-pocket costs of transfer. 

 

	 	11.8.5	Except to the extent set out in the last sentence of Section 11.8.1, Aradigm’s transfer to INEX of any data, other information, materials (including
biological materials) or documents shall not grant INEX any license or right (whether express, implied or by estoppel) in any Intellectual Property Rights owned or controlled by Aradigm. 

Article 12 Indemnification and Liability Limitations 

 

	12.1	Indemnification by Aradigm 

 Aradigm
hereby agrees that it shall be responsible for, indemnify, hold harmless and defend INEX and its Affiliates, and their respective Representatives, invitees, shareholders, partners, attorneys and accountants and their respective heirs, successors and
assigns (collectively, the “INEX Indemnitees”), and UBC and its Affiliates and their respective Representatives, Board of Governors, faculty, students, invitees, managing members, partners, attorneys and accountants and their respective
heirs, successors and assigns (collectively, the “UBC Indemnitees”) from and against any and all claims, demands, losses, liabilities, damages, costs and expenses (including reasonable legal fees) (collectively, “Losses”)
suffered or incurred by any INEX Indemnitee or UBC Indemnitee arising out of, relating to, resulting from or in connection with any Third Party claims arising out of or relating to: 

 

	 	12.1.1	the breach of any representation or warranty made by Aradigm herein; 

  

	 	12.1.2	the default by Aradigm in the performance or observance of any of its obligations to be performed or observed hereunder; 

 

	 	12.1.3	the breach by Aradigm, its Affiliates or Sublicensees of any applicable laws, regulations and guidelines in connection with any Licensed Product or in the performance
or observance of any of its obligations to be performed or observed hereunder; 

  
 27 

	 	12.1.4	the infringement of the Crown Identified Patents or any Intellectual Property Rights of any Third Party; and 

 

	 	12.1.5	any injury or death to any person or damage to any property caused by any Licensed Product provided by Aradigm, its Affiliates or Sublicensees, whether claimed by
reason of breach of warranty, negligence, product defect or otherwise, and regardless of the form in which any such claim is made. 

 The foregoing shall not apply to the extent that such Losses are due to: 
  

	 	12.1.6	the breach of any representation or warranty made by INEX herein; 

  

	 	12.1.7	the default by INEX in the performance or observance of any of its obligations to be performed or observed hereunder; and 

 

	 	12.1.8	the breach by INEX of any applicable laws, regulations and guidelines in connection with any Licensed Product or in the performance or observance of any of its
obligations to be performed or observed hereunder. 

  

	12.2	Indemnification by INEX 

 INEX hereby
agrees that it shall be responsible for, indemnify, hold harmless and defend Aradigm and Aradigm’s Affiliates, and their respective Representatives, invitees, shareholders, partners, attorneys and accountants and their respective heirs,
successors and assigns (collectively, the “Aradigm Indemnitees”), and the UBC Indemnitees from and against any and all Losses suffered or incurred by any Aradigm Indemnitee or UBC Indemnitee arising out of, relating to, resulting from or
in connection with any Third Party claims arising out of or relating to: 
  

	 	12.2.1	the breach of any representation or warranty made by INEX herein; 

  

	 	12.2.2	the default by INEX in the performance or observance of any of its obligations to be performed or observed hereunder; and 

 

	 	12.2.3	the breach by INEX of any applicable laws, regulations and guidelines in connection with any Licensed Product or in the performance or observance of any of its
obligations to be performed or observed hereunder. 

 The foregoing shall not apply to the extent that such Losses are due to:

  

	 	12.2.4	the breach of any representation or warranty made by Aradigm herein; 

  

	 	12.2.5	the default by Aradigm in the performance or observance of any of its obligations to be performed or observed hereunder; 

 

	 	12.2.6	the breach by Aradigm, its Affiliates or Sublicensees of any applicable laws, regulations and guidelines in connection with any Licensed Product or in the performance
or observance of any of its obligations to be performed or observed hereunder; and 

  

	 	12.2.7	any injury or death to any person or damage to any property caused by any Licensed Product provided by Aradigm, its Affiliates or Sublicensees, whether claimed by
reason of breach of warranty, negligence, product defect or otherwise, and regardless of the form in which any such claim is made. 

  
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	12.3	Notice of Claims 

 In the event that a
claim is made pursuant to Section 12.1 or 12.2 above against any person or entity which seeks indemnification hereunder (the “Indemnitee”), the Indemnitee shall give the indemnifying Party (the “Indemnitor”) prompt notice of
any claim or lawsuit or other action for which it seeks to be indemnified under this Agreement and agrees that the Indemnitor shall not have any obligation under the relevant Section unless: 

 

	 	12.3.1	the Indemnitor is granted, subject to the provisions of this Section 12.3 and the relevant provisions of Article 9, full authority and control over the defense,
including settlement, against such claim or law suit or other action, and 

  

	 	12.3.2	the Indemnitee cooperates fully with the Indemnitor and its agents in defense of the claims or law suit or other action. 

The Indemnitee shall have the right to participate in the defense of any such claim, complaint, suit, proceeding or cause of action referred to in this
Section utilizing attorneys of its choice, at its own expense, provided however, that the Indemnitor shall, subject to the provisions of this Section 12.3 and the relevant provisions of Article 9, have full authority and control to handle any such
claim, complaint, suit proceeding, or cause of action, including any settlement or other disposition thereof, for which the Indemnitee seeks indemnification under this Section, provided however, subject to the following sentence, that no settlement
or consent judgment or other voluntary final disposition may be entered into without the consent of the Indemnitee if such settlement would require the Indemnitee to be subject to an injunction or to make a monetary payment or would restrict the
claims in or admit any invalidity of any Licensed Patent(s) or significantly adversely affect the rights of the Indemnitee. The Parties further acknowledge that, where any final disposition of the litigation that will restrict the claims in or admit
any invalidity of any Licensed Patent(s), any such disposition of the litigation requires the full consultation with and approval of UBC under the UBC License Agreement solely in respect of the Loading Patent(s). 

 

	12.4	Consequential Losses 

 EXCEPT FOR
LIABILITY FOR INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS OR BREACH OF THE OBLIGATIONS RESPECTING CONFIDENTIAL INFORMATION, NO PARTY WILL BE LIABLE FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES OF ANY NATURE ARISING FROM SUCH PARTY’S ACTIVITIES
UNDER THIS AGREEMENT; PROVIDED, HOWEVER, THAT THIS LIMITATION SHALL NOT LIMIT THE INDEMNIFICATION OBLIGATION OF SUCH PARTY UNDER SECTIONS 12.1 OR 12.2 FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES RECOVERED BY A THIRD PARTY. 

 

	12.5	Actions Between the Parties 

 For the
avoidance of doubt, in connection with actions brought by one Party hereto against the other (whether for breach of any provisions hereof, any representation or warranty made herein or otherwise), each Party expressly reserves all of its rights and
remedies under applicable law, including, without limitation, the right to sue for breach of contract. 

  
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	12.6	Insurance 

  

	 	12.6.1	Prior to or immediately upon the start of any human clinical trials or other Licensed Product testing involving human subjects by Aradigm, its Affiliates or any
Sublicensee (“Human Clinical Trials”) and for a period of five (5) years after the expiration of this Agreement or the earlier termination thereof, Aradigm shall obtain and/or maintain, respectively, at its sole cost and expense,
public liability, product liability and errors and omissions insurance in reasonable amounts, with a reputable and financially secure insurance carrier. Such product liability insurance shall insure against all liability, including personal injury,
physical injury, or property damage arising out of the manufacture, sale, distribution, or marketing of Licensed Product in the Territory. Aradigm shall use reasonable efforts to ensure that any and all such policies of insurance required pursuant
to this Section 12.6.1 shall contain a waiver of subrogation against the UBC Indemnitees. Aradigm shall provide written proof of the existence of such insurance to INEX upon request. 

 

	 	12.6.2	Aradigm shall require that each Sublicensee under this Agreement shall either: 

 

	 	(a)	demonstrate to Aradigm’s reasonable satisfaction that such Sublicensee has a program of self insurance no less adequate than that which a reasonable and prudent
businessperson carrying on a similar line of business would require; or 

  

	 	(b)	sixty (60) days prior to the earlier of the start of Human Clinical Trials or the first sale of any Licensed Product by such Sublicensee, procure and maintain
public liability, product liability and errors and omissions insurance in reasonable amounts, with a reputable and financially secure insurance carrier. Aradigm shall use reasonable efforts to ensure that any and all such policies of insurance
required pursuant to this Section 12.6.2(b) shall contain a waiver of subrogation against the UBC Indemnitees. 

 Article 13 Dispute Resolution 
  

	13.1	Negotiation 

 If a dispute or controversy
regarding any right or obligation under this Agreement arises between the Parties, the Parties will seek to resolve such dispute or controversy or failure to agree by good faith negotiation between senior management representatives of the Parties,
to be commenced promptly after such dispute or controversy or failure to agree arises. If such dispute or controversy or failure to agree is not resolved by such negotiation within thirty (30) days after written notice by one Party to the
other, and at least one Party requires such resolution, then the Parties shall proceed as follows. Any unresolved dispute, controversy, action, claim or proceeding initiated by either Party (other than a Third Party action, claim or other proceeding
in a bona fide action, claim or other proceeding initiated by a Third Party against a Party) relating to, arising out of or resulting from this Agreement, or the performance by either Party of its obligations hereunder, or any alleged breach,
termination or invalidity of this Agreement, whether before or after termination or expiration of this Agreement, shall be finally resolved by binding arbitration pursuant to Section 13.2. 

  
 30 

	13.2	Arbitration 

 In the event of any
unresolvable dispute, difference, or question arising between the Parties in connection with this Agreement or any clause or the construction thereof, or the rights, duties or liabilities of either Party, or the scope or validity of any patent
licensed hereunder, the matter shall be submitted for arbitration in accordance with the rules of the American Arbitration Association. Arbitration shall take place in Seattle, Washington or as otherwise agreed by the Parties. A single arbitrator
shall be appointed by agreement of the Parties to resolve all such disputes, differences or questions. The arbitrator shall be guided by the contents of this Agreement in arriving at a decision to resolve the dispute, but may rely on extrinsic
evidence where appropriate and/or necessary. The Parties shall share the cost of the arbitration unless, in the arbitrator’s opinion, the position advanced by one of the Parties, or the nature or manner of presenting it, is such that it would
be unfair to so apportion such expenses, in which case the arbitrator may apportion such expenses differently. In cases where validity or scope of a patent is in issue, either Party shall have the right to elect to have the arbitration conducted by
three arbitrators, each Party selecting one and those arbitrators selecting the third. 
 Article 14 Miscellaneous

  

	14.1	Assignment 

 This Agreement and the
licenses herein granted shall be binding upon and inure to the benefit of the successors in interest of the respective parties. Except as otherwise provided in this Agreement, neither this Agreement nor any of the rights or obligations hereunder may
be assigned by either Party without the prior written consent of the other Party, except either Party may assign this Agreement or any of the rights or obligations hereunder to an Affiliate or to a Third Party with which a Party may merge or
consolidate, or to which it may transfer all or substantially all of its assets to which this Agreement relates, without obtaining the prior written consent of the other Party. 

 

	14.2	Counterparts 

 This Agreement may be
executed in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. 
  

	14.3	Force Majeure 

 In the event that either
Party is prevented from performing or is unable to perform any of its obligations under this Agreement due to any act of God; fire; casualty; flood; war; strike; lockout; failure of public utilities; injunction or any act, exercise, assertion or
requirement of governmental authority; epidemic; destruction of production facilities; riots; insurrection; inability to procure or use materials, labor, equipment, transportation or energy; or any other cause beyond the reasonable control of the
Party invoking this Section 14.3 if such Party shall have used its reasonable efforts to avoid such occurrence, such Party shall give notice to the other Party in writing promptly, and thereupon the affected Party’s performance shall be
excused and the time for performance shall be extended for the period of delay or inability to perform due to such occurrence. 
  

	14.4	Further Assurances 

 Each Party hereto
agrees to execute, acknowledge and deliver such further instruments and do all such further acts as may be necessary or appropriate to carry out the purposes and intent of this Agreement. 

  
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	14.5	International Sale of Goods Act 

 The
Parties acknowledge and agree that the International Sale of Goods Act and the United Nations Convention on Contracts for the International Sale of Goods have no application to this Agreement. 

 

	14.6	Modification 

 No waiver, alteration or
modification of any of the provisions hereof shall be binding unless made in writing and signed by the Parties by their respective officers thereunto duly authorized. 
  

	14.7	No Agency 

 Nothing herein shall be deemed
to constitute either Party as the agent or representative of the other Party, or both Parties as joint venturers or partners for any purpose. INEX shall be an independent contractor, not an employee or partner of Aradigm, and the manner in which
INEX renders its services under this Agreement shall be within INEX’s sole discretion. Neither Party shall be responsible for the acts or omissions of the other Party, and neither Party will have authority to speak for, represent or obligate
the other Party in any way without prior written authority from the other Party. 
  

	14.8	Non-Use of Names 

 Neither Party shall use
the name of the other Party, nor any adaptation thereof, in any advertising, promotional or sales literature without prior written consent obtained from such other Party in each case (which consent shall not be unreasonably withheld or delayed).

  

	14.9	Notices 

 Any notice or other
communication in connection with this Agreement must be in writing and if by mail, by registered mail, return receipt requested, and shall be effective when delivered to the addressee at the address listed below or such other address as the
addressee shall have specified in a notice actually received by the addressor. 
 If to INEX: 

INEX Pharmaceuticals Corporation 
 100-8900
Glenlyon Parkway 
 Burnaby, B.C. V5J 5J8 
 Canada 
  

			
	Fax:	  	(604) 419-3202
	Attention:	  	Director, Business Development

 If to Aradigm: 

Aradigm Corporation 
 3929 Point Eden Way

 Hayward, CA 94545 
 USA 

 

			
	Fax:	  	(510) 265-9217
	Attention:	  	Chief Financial Officer

  
 32 

	14.10	Publicity 

 Except as required by law,
stock exchange or regulatory authority: 
  

	 	14.10.1	neither Party, nor any of its Affiliates, shall originate any publicity, news release or other public announcement, written or oral, relating to this Agreement or the
existence of an arrangement between the Parties, without the prior written approval of the other Party and agreement upon the nature and text of such announcement or disclosure, which approval shall not be unreasonably withheld; and

  

	 	14.10.2	the Party desiring to make any such public announcement or other disclosure shall inform the other Party of the proposed announcement or disclosure in reasonably
sufficient time prior to public release, and shall provide the other Party with a written copy thereof, in order to allow such other Party to comment upon such announcement or disclosure. 

 

	14.11	Third Parties 

 None of the provisions of
this Agreement shall be for the benefit of or enforceable by any Third Party. 
  

	14.12	Waiver 

 The waiver by either Party of a
breach or a default of any provision of this Agreement by the other Party shall not be construed as a waiver of any succeeding breach of the same or any other provision, nor shall any delay or omission on the part of either Party to exercise or
avail itself of any right, power or privilege that it has or may have hereunder operate as a waiver of any right, power or privilege by such Party. 
 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as a sealed instrument in their names by their properly and duly authorized officers or representatives. 

 

			
	INEX PHARMACEUTICALS CORPORATION
		
	By:	 	 /s/ D.J. Main

		
	Name:	 	 D.J. Main

		
	Title:	 	 CEO

	
	ARADIGM CORPORATION
		
	By:	 	 /s/ V. Bryan Lawlis

		
	Name:	 	 V. Bryan Lawlis

		
	Title:	 	 President & CEO

  
 33 

 Exhibit 1.1.9: [*] 
  

					
	 Country
	  	Patent No.	 	 Title

	[*]	  	[*]	 	[*]

  

*Confidential Treatment Requested. 

 Exhibit 1.1.23: [*] 

  

*Confidential Treatment Requested. 

 Exhibit 1.1.36: [*] 

  

*Confidential Treatment Requested.Settlement Agreement

 Exhibit 4.7 

 

	 	*	Confidential Treatment has been requested for the marked portions of this exhibit pursuant to Rule 24B-2 of the Securities Exchange Act of 1934, as amended.

 SETTLEMENT AGREEMENT 
 This Settlement Agreement (“Settlement Agreement” or “Agreement”) sets forth the terms upon which Sirna Therapeutics, Inc. (SIRNA) and Merck & Co., Inc.
(“MERCK & CO”) and Protiva Biotherapeutics Inc. and Protiva Biotherapeutics (USA), Inc. (collectively “PROTIVA”) agree to settle the litigations pending both before the Superior Court of California, San Francisco County,
captioned Protiva Biotherapeutics, Inc. et. al. v. Sirna Therapeutics, Inc., Case No. CGC-06-450694 and before the United States District Court For The Northern District of California, captioned Sirna Therapeutics, Inc. v. Protiva
Biotherapeutics, Inc. and Mark J. Murray, Case No. C-06-1361 (MMC) (collectively the “Litigation”). SIRNA, MERCK & CO and PROTIVA are individually referred to in this Agreement as a “Party” and collectively as the
“Parties”. This Agreement shall be effective as of October 9, 2007 (“Effective Date”). 
 BACKGROUND

 SIRNA and PROTIVA entered into a Strategic Alliance Agreement (“SAA”) dated February 1, 2005 and a Materials Transfer
Agreement dated April 6, 2004 which was modified in an Amended and Restated Materials Transfer Agreement (“MTA”) dated October 1, 2004 (collectively the “Prior Agreements”). The disputes that resulted in the Litigation
arose from the relationships established and the activities undertaken by the Parties since the inception of these agreements. The Parties wish to completely settle their disputes and the Litigation with this Settlement Agreement. 

In consideration of the mutual promises contained herein and any other good and valuable consideration, the adequacy of which is hereby acknowledged, the
Parties hereto agree: 
 1. DEFINITIONS 
  

	1.1	“Additional Contested Claims” shall have the meaning set forth in Section 6.4.3. 

 

	1.2	“Affiliate” shall mean (i) any corporation or business entity of which fifty percent (50%) or more of the securities or other ownership
interests representing the equity, the voting stock or general partnership interest are owned, controlled or held, directly or indirectly, by a Party; or (ii) any corporation or business entity which, directly or indirectly, owns, controls or
holds fifty percent (50%) (or the maximum ownership interest permitted by law) or more of the securities or other ownership interests representing the equity, the voting stock or, if applicable, the general partnership interest, of a Party; or
(iii) any corporation or business entity of which fifty percent (50%) or more of the securities or other ownership interests representing the equity, the voting stock or general partnership interest are owned, controlled or held, directly
or indirectly, by a corporation or business entity described in (i) or (ii). 

  

	1.3	“Anniversary Date” shall mean the date that is one year after the Effective Date. 

  
 1 

	1.4	[*]. 

  

	1.5	“Collaboration Patent Rights” shall mean any claims of any patents and patent applications that as a result of the inventorship determination in
Section 6 become either PROTIVA Patent Rights, PROTIVA Designated Patent Rights or Joint Patent Rights. 

  

	1.6	“Compound” shall mean a nucleic acid molecule whether now known or hereafter discovered or created including but not limited to short interfering
nucleic acid (siNA), short interfering RNA (siRNA), double-stranded RNA (dsRNA), micro-RNA (miRNA), and short hairpin RNA (shRNA) molecules. 

  

	1.7	“Contested Claims” shall mean the Additional Contested Claims, Initial Contested Claims and the Other Contested Claims. 

 

	1.8	“Control”, “Controls” or “Controlled by” shall mean with respect to any item of or right under PROTIVA Patent Rights
or PROTIVA Know-How, the possession of (whether by ownership or license, other than pursuant to this Agreement) or the ability of PROTIVA to grant access to, or a license or sublicense of, such items or right as provided for herein without violating
the terms of any agreement or other arrangement with any third party existing at the time PROTIVA would be required hereunder to grant to MERCK such access or license or sublicense. 

 

	1.9	“Covered Product” shall mean a Product which the manufacture, use or sale of would infringe a Valid Patent Claim in the country where the use or sale
occurs but for (i) the licenses granted herein, (ii) their being conducted by a co-owner of the relevant patent in such country, and/or (iii) any statutory exemptions from infringement such as 35 USC § 271 (e).

  

	1.10	“ Disputed Applications” shall mean the [*]. 

  

	1.11	“Field” shall mean any therapeutic, diagnostic, prophylactic or other commercial use or commercial application of any LNP Formulation, Compound or
Product that is directed against any target outside of the Restricted Field; provided however, that Field shall not include any therapeutic, diagnostic, prophylactic or other commercial use or commercial application of LNP Formulations to deliver
[*]. 

  

	1.12	“IND” shall mean shall mean an Investigational New Drug application for approval to conduct human clinical investigations filed with or submitted to
the US Food and Drug Administration (“FDA”), or any equivalent filing or application made with the European Medicines Evaluation Agency or any successor agency or any similar regulatory authority in a Major Market Country.

  

	1.13	“INEX Litigation” shall mean the case pending before the Supreme Court of British Columbia filed on or about March 24, 2006 and captioned
Protiva Biotherapeutics Inc. v. Inex Pharmaceuticals Corporation, Timothy Ruane, David Main, Dr. Pieter Cullis and Darrell Elliot (No. S061992 Vancouver Registry) and any litigation in any other forum at anytime based on the same or
similar legal grounds. 

  

*Confidential Treatment Requested. 

  
 2 

	1.14	“Initial Contested Claims” shall mean any patent claims identified by PROTIVA under Section 6.1.6 in the Disputed Applications.

  

	1.15	“Joint Patent Rights” shall have the meaning set forth in Section 6.2.3 herein. 

 

	1.16	“LNP Formulation” shall mean a delivery formulation that has one or more lipid components. 

 

	1.17	“Major Market Country” shall mean any of the United Kingdom, France, Germany, Italy, Spain or Japan. 

 

	1.18	“MERCK” shall mean MERCK & CO and SIRNA collectively. 

 

	1.19	“MERCK Patent Rights” shall mean any patents or patent applications to the extent containing Initial Contested Claims and/or Other Contested Claims
that: 

  

	 	(i)	are determined in accordance with Sections 6.1.1 through 6.1.12 to be invented solely by persons obligated to assign inventions to MERCK and/or its Affiliates; and

  

	 	(ii)	relate solely to delivery vehicles or formulations, whether or not such claims relate to delivery vehicles or formulations in the general context of delivering
compounds. 

 For avoidance of doubt, MERCK Patent Rights shall not include: 

(x) any patents or patent applications to the extent containing any Additional Contested Claims; or 

(y) any patents or patent applications to the extent containing Initial Contested Claims and/or Other Contested Claims so determined to be
invented solely by persons who were, at the time such invention was made, obligated to assign inventions to MERCK and/or its Affiliates which are directed to nucleic acids alone and/or delivery vehicles or formulations together with nucleic acids
other than in the general context of delivering compounds. 
  

	1.20	“NDA” shall mean a New Drug Application or Biologics License Application filing pursuant to the United States Federal Food, Drug and Cosmetic Act, 21
U.S.C. §§ 301 et seq., and/or the Public Health Service Act, 42 U.S.C. §§ 262 et seq., as such may be amended from time to time, or any equivalent filing or application seeking marketing approval for a Product made with the
European Medicines Evaluation Agency or any successor agency or any similar regulatory authority in a Major Market Country. 

  

	1.21	“Net Sales” shall mean the gross invoice price (not including value added taxes, sales taxes, or similar taxes) of Product sold by MERCK or its
Affiliates to the first third party after deducting, if not previously deducted, from the amount invoiced or received: 

  

	 	1.21.1	trade and quantity discounts other than early payment cash discounts; 

  
 3 

	 	1.21.2	returns, rebates, chargebacks and other allowances; 

  

	 	1.21.3	retroactive price reductions that are actually allowed or granted; 

  

	 	1.21.4	sales commissions paid to third party distributors and/or selling agents; 

  

	 	1.21.5	a fixed amount equal to [*] of the amount invoiced to cover bad debt, early payment cash discounts, transportation and insurance and custom duties; and

  

	 	1.21.6	the standard inventory cost of delivery devices used for dispensing or administering Product. 

 

	1.22	“Other Contested Claims” shall have the meaning set forth in Section 6.4.2. 

 

	1.23	“Phase II Clinical Trial” shall mean a human clinical trial in any country intended to satisfy standards that would meet the requirements of 21 CFR
312.21(b). 

  

	1.24	“Phase III Clinical Trial” shall mean a human clinical trial in any country intended to satisfy standards that would meet the requirements of 21 CFR
312.21(c). 

  

	1.25	“Product” shall mean a pharmaceutical composition containing Compound, or containing Compound and a LNP Formulation; whether or not including any other
active ingredients or excipients. 

  

	1.26	“PROTIVA Designated Patent Rights” shall mean any and all claims in patents and patent applications in PROTIVA Patent Rights but specifically excluding
any claims in those patents or patent applications that meet any one or more of the following criteria: 

  

	 	(i)	such claim requires as an element of the claim a cationic lipid described in Schedule 1.26(i); 

 

	 	(ii)	such claim requires as an element of the claim a PEG-lipid described in Schedule 1.26(ii); 

 

	 	(iii)	such claim requires a specific Compound against a PROTIVA Reserved Target; or 

 

	 	(iv)	the subject matter of such claim was first contained in an application with a filing date after the Effective Date. 

 

	1.27	“PROTIVA IP” shall mean PROTIVA Patent Rights and PROTIVA Know-how. 

 

	1.28	“PROTIVA Know-how” shall mean all information and material which is or ever was Controlled by PROTIVA up to the Effective Date including but not
limited to, discoveries, improvements, processes, methods, protocols, formulas, data, inventions, know-how and trade secrets, patentable or otherwise and specifically including but not limited to the alleged trade secrets and information at issue in
the Litigation. 

  
 *Confidential
Treatment Requested. 

  
 4 

	1.29	“PROTIVA Patent Rights” shall mean any and all claims in patents and patent applications (which for the purpose of this Agreement shall be deemed to
include certificates of invention and applications for certificates of invention) in the Territory which claims meet all of the following criteria: 

  

	 	(i)	they are Controlled by PROTIVA; and 

  

	 	(ii)	they are in patents or patent applications which were filed on or before, or claim priority back to a date on or before, the Anniversary Date, including divisionals,
continuations, continuations-in-part, reissues, renewals, substitutions, registrations, re-examinations, revalidations, extensions, supplementary protection certificates, and the like of any such patents and patent applications, and foreign
equivalents of the foregoing, 

 including, but not limited to, those listed on Schedule 1.29; provided, however,
that the PROTIVA Patent Rights will not include any claims in patents or patent applications, or rights with respect thereto, that are: 
 (x) both (a) not listed on Schedule 1.29 and (b) Controlled by PROTIVA by reason of a license or other right granted to PROTIVA by Alnylam Pharmaceuticals, Inc., under any agreement or
agreements, whether dated prior to, on, or following the Effective Date or by reason of a license or other right granted to PROTIVA by Tekmira Pharmaceutical Corporation after the Effective Date; or 

(y) to a specific Compound against a target and the subject matter of the claim(s) was first contained in an application with a filing
date after the Effective Date; or 
 (z) claims that were first contained in, or that are derived from and claim priority to [*].

  

	1.30	“PROTIVA Reserved Target” shall mean [*] and any PROTIVA Potential Reserved Target chosen in accordance with Section 4.4. More detailed
information about the respective genes is attached as Schedule 1.30. 

  

	1.31	“PROTIVA Potential Reserved Target” shall mean [*]. More detailed information about the respective genes is attached as Schedule 1.31.

  

	1.32	“Retained Litigation Documents” shall mean and include: (i) any deposition testimony taken in the Litigation and any documents marked as exhibits
in such depositions; and (ii) any testimony by declaration or sworn affidavit including any documents identified as exhibits to such declarations or affidavits. 

 

	1.33	“Restricted Field” shall mean any therapeutic, diagnostic, prophylactic or other commercial use or commercial application of any LNP Formulation,
Compound or Product that is specifically directed against any PROTIVA Reserved Target; provided however, that Restricted Field shall not include any therapeutic, diagnostic, prophylactic or other commercial use or commercial application of LNP
Formulations to deliver [*]. 

  

*Confidential Treatment Requested. 

  
 5 

	1.34	“SIRNA Patent Rights” shall mean any patent or patent application in the Territory that claims a right of priority to a Disputed Application.

  

	1.35	“Territory” shall mean all countries of the world. 

  

	1.36	“Valid Patent Claim” shall mean any claim in an issued and unexpired patent within the PROTIVA Patent Rights or Collaboration Patent Rights, which has
not been held unenforceable, unpatentable or invalid by a decision of a court or other governmental agency of competent jurisdiction, which decision is unappealable or unappealed within the time allowed for appeal, and which has not been abandoned,
disclaimed, dedicated to the public or otherwise been admitted by the holder of the patent to be invalid or no longer enforceable through reissue, reexamination, or disclaimer or otherwise. 

2. DISMISSAL 
 PROTIVA, with the
intention of binding itself, its successors, assigns, and Affiliates does hereby irrevocably release MERCK from any obligation to comply with the preliminary injunction order issued by the Superior Court of California, San Francisco County on
March 20, 2007 and shall take immediate steps to have the injunction order dissolved. Within three (3) business days of the Effective Date of this Settlement Agreement and simultaneously with receipt of payment from MERCK & CO
under Section 5.1, the Parties shall file with the respective courts a Request For Dismissal with prejudice of all claims and counterclaims in the Litigation by filing a Stipulation And Order Of Dismissal in the form attached hereto as
Schedules 2-A and 2-B. Each Party will appear in court, perform all acts, sign all necessary documents and cooperate with each other as necessary to facilitate such dismissal of the claims. 

3. RELEASES 
  

	3.1	PROTIVA, with the intention of binding itself, its successors, assigns and Affiliates, does hereby irrevocably release and forever discharge, and agrees not to assert
or to assist any third party in asserting any action, claim, liability or demand against, MERCK and its Affiliates, successors, predecessors, directors, officers, partners, employees, customers, agents, and all those acting in privity or concert
with any of them, from and with respect to any and all claims PROTIVA had or may have had against MERCK, on or before the Effective Date, whether those causes of action are known or unknown to PROTIVA, arising out of or relating to the receipt, use
or disclosure of PROTIVA IP or MERCK’s representations, warranties or performance under, or breach of, the Prior Agreements, including any and all claims and counterclaims that were or could have been asserted by PROTIVA in the Litigation or
that could have been asserted by PROTIVA based upon the allegations of the Complaints and Amended Complaints or Counterclaims of PROTIVA in the Litigation. 

 

	3.2	 MERCK, with the intention of binding itself, its successors, assigns and its majority-owned Affiliates does hereby irrevocably release and forever
discharge, and agrees not to assert or to assist any third party in asserting any action, claim, liability or demand against, PROTIVA and its Affiliates, successors, predecessors, directors, officers, partners, employees, customers, agents all those
acting in privity or concert with any of 

  
 6 

	 	 
them, from and with respect to any and all claims that MERCK had or may have had on or before the Effective Date arising out of or relating to PROTIVA’s representations, warranties or
performance under, or breach of, the Prior Agreements, including any and all claims and counterclaims that were or could have been asserted by MERCK in the Litigation or that could have been asserted by MERCK based upon the allegations of the
Complaints and Amended Complaints or Counterclaims of MERCK in the Litigation. 

  

	3.3	With respect to PROTIVA Know-how, PROTIVA covenants not to sue MERCK, its Affiliates, successors, predecessors, directors, officers, partners, employees, customers,
agents, and all those acting in privity or concert with any of them for any past or future use of PROTIVA Know-how for any purpose. 

  

	3.4	With respect to PROTIVA Patent Rights, PROTIVA covenants not to sue MERCK, its Affiliates (or any of their bona fide collaborators, with respect only to research and/or
development within the scope of such collaboration) for any research and/or development activity in the Territory after the Effective Date. 

  

	3.5	For the avoidance of doubt, subject to Section 6.1.1, the Parties acknowledge that none of them intend hereby to waive any existing protective order issued in
connection with the Litigation or to release any right (i) to raise any matter, fact, theory, or argument on inventorship to the Patent Expert in connection with the process described in Section 6 or (ii) to claim or assert in any
forum that any patent claim Controlled by the other Party is invalid or unenforceable. 

  

	3.6	The Parties hereto specifically understand, acknowledge, and agree that this is a full and final release of all claims described herein, whether known or unknown, and
whether or not included in the pleadings of the Litigation. Each Party therefore hereby expressly and voluntarily waives all rights or benefits which such Party might otherwise have under California Civil Code Section 1542, which provides:

 “A general release does not extend to claims which the creditor does not know or suspect to exist in his
favor at the time of executing the release, which if known by him must have materially affected the settlement with the debtor.” 
 Each of the Parties further expressly and voluntarily waive any substantially similar or equivalent statutory, common law, or equitable rights or benefits arising under the laws of any other jurisdiction.

 4. LICENSES 
  

	4.1	PROTIVA grants MERCK a non-exclusive license in the Territory under PROTIVA Patent Rights and Collaboration Patent Rights for any and all purposes in the Field,
including but not limited to: to make, have made, use, offer to sell, sell or import LNP Formulations, Compound and Product(s) (subject to the exclusions stated in Section 1.11 with respect to [*]. MERCK shall have the right to grant
sublicenses under the license in this Section 4.1 to MERCK’s Affiliates but not otherwise. 

  

*Confidential Treatment Requested. 

  
 7 

	4.2	PROTIVA grants MERCK a non-exclusive license in the Territory under PROTIVA Designated Patent Rights and Collaboration Patent Rights for any and all purposes in the
Restricted Field, including but not limited to: to make, have made, use, offer to sell, sell or import LNP Formulations, Compound and Product(s) (subject to the exclusions stated in Section 1.33 with respect to [*]. MERCK shall have the right
to grant sublicenses under the license in this Section 4.2 to MERCK’s Affiliates but not otherwise. 

  

	4.3	With respect to PROTIVA Patent Rights which PROTIVA either (i) first obtains Control over during the period between the Effective Date and the Anniversary Date or
(ii) is a patent application that was filed during the period between the Effective Date and the Anniversary Date and does not claim priority to an application filed before the Effective Date, PROTIVA will promptly disclose such patent or
patent application to MERCK in writing following the publication of such patent or patent applications in the Territory and MERCK shall have the option to decline a license under such PROTIVA Patent Rights. MERCK shall notify PROTIVA in writing of
its election within sixty (60) days of receipt of PROTIVA’s notice. 

  

	4.4	At any time or times during the period between the Effective Date and the Anniversary Date, PROTIVA may designate, by written notice to MERCK, a PROTIVA Potential
Reserved Target to be a PROTIVA Reserved Target, provided however, that PROTIVA may designate no more than a total of [*] PROTIVA Potential Reserved Targets during this Agreement. 

 

	4.5	MERCK grants to PROTIVA a non-exclusive, perpetual, royalty-free, paid-up license, with right to grant sublicenses in one or more tiers, in the Territory under MERCK
Patent Rights to make, have made, use, offer to sell, sell or import LNP Formulations, alone or combined with one or more active ingredients and/or inert ingredients. 

 

	4.6	No Party is granting rights by implication or otherwise to any other patents owned or Controlled by that Party. Each Party reserves the right to enforce against the
other Parties any patents not expressly included in the license grants under this Section 4. 

 5. PAYMENTS

  

	5.1	Payments in Settlement. In consideration of PROTIVA’s agreement to grant the releases provided for in this Agreement and other valuable consideration, MERCK
shall pay up to [*] to Protiva Biotherapeutics Inc., as follows: 

  

	 	(i)	MERCK will, within [*] of the Effective Date of this Settlement Agreement, pay Protiva Biotherapeutics Inc. on a [*] (the “Initial Payment”), and

  

	 	(ii)	contingent on the occurrence of the events described in Section 5.1.1 and 5.1.2, MERCK will be obligated to pay Protiva Biotherapeutics Inc. up to an additional
[*]. 

  
 *Confidential Treatment
Requested. 

  
 8 

	 	5.1.1	Conditional Payments. Subject to the terms and conditions of this Agreement and Section 5.4 below, MERCK shall pay to Protiva Biotherapeutics Inc. the
following conditional payments: 

  

	 	(a)	[*]; and 

  

	 	(b)	[*]. 

  

	 	5.1.2	Each of the conditional payments set forth in Sections 5.1.1(a) and (b) shall be paid, if ever, only once under this Settlement Agreement. MERCK shall notify
PROTIVA in writing within [*] days following the satisfaction of the respective event described, and shall make the appropriate conditional payment within [*] days after the occurrence of such event. 

 

	5.2	License Payments. In consideration of PROTIVA’s agreement to grant the licenses provided for in Section 4 and subject to the terms and conditions of
this Agreement, MERCK will pay Protiva Biotherapeutics Inc. the following milestone payments and the royalties provided for in Section 5.5: 

  

	 	5.2.1	[*]; 

  

	 	5.2.2	[*]; 

  

	 	5.2.3	[*]; 

  

	 	5.2.4	[*]. 

  

	5.3	In the event that a Product activity does not trigger a conditional payment or a milestone payment under Section 5.1.1 or 5.2 because at the time the activity
occurred such Product did not meet the definition of a “Covered Product,” but, at a later date, (i) due to the issuance of a patent, such Product does meet the definition of a “Covered Product,” and (ii) MERCK is
continuing the clinical development of or is selling the Product, then MERCK shall pay the corresponding conditional payment or milestone payment within thirty (30) days of notice by PROTIVA that the patent has issued. 

 

	5.4	For the purposes of Sections 5.1.1 and 5.2, any activity or event anywhere in the world with respect to a Product shall be deemed to be such an activity or event with
respect to a Covered Product if such Product is then (or thereafter becomes, as described in Section 5.3) a Covered Product in the United States. 

  

	5.5	Royalties. 

  

	 	5.5.1	Royalties Payable By MERCK. Subject to the terms and conditions of this Agreement, MERCK shall pay Protiva Biotherapeutics Inc. royalties, calculated on a
Product-by-Product basis, as set forth in this Section 5.5. 

 MERCK shall pay Protiva Biotherapeutics Inc.
royalties in an amount equal to [*] of Net Sales of Covered Products by MERCK or its Affiliates. 
  
 *Confidential Treatment Requested. 

  
 9 

 All royalties are subject to the following conditions: 

 

	 	(i)	that only one royalty shall be due with respect to the same unit of Covered Product; 

 

	 	(ii)	that no royalties shall be due upon the sale or other transfer among MERCK or its Affiliates, but in such cases the royalty shall be due and calculated upon
MERCK’s or its Affiliate’s Net Sales to the first independent third party; 

  

	 	(iii)	no royalties shall accrue on the sale or other disposition of Covered Product by MERCK or its Affiliates for use in a clinical trial; and 

 

	 	(iv)	no royalties shall accrue on the disposition of Covered Product in reasonable quantities by MERCK or its Affiliates as samples (promotional or otherwise) or as
donations (for example, to non-profit institutions or government agencies for a non-commercial purpose). 

  

	 	5.5.2	Change in Sales Practices. The Parties acknowledge that during the term of this Agreement, MERCK’s sales practices for the marketing and distribution of its
products generally may change to the extent that the calculation of the payment for royalties on Net Sales may become impractical or even impossible. In such event the Parties agree to meet and discuss in good faith new ways of compensating PROTIVA
to the extent currently contemplated under Section 5.5.1. 

  

	 	5.5.3	Royalties for Bulk Goods. In those cases in which MERCK sells bulk LNP Formulation containing a Compound rather than Covered Product in packaged form to an
independent third party, the royalty obligations of this Section 5.5 shall be applicable to the bulk LNP Formulation containing Compound. 

  

	5.6	Reports; Payment of Royalty. During the term of this Agreement following the first commercial sale of a Product, MERCK shall furnish to PROTIVA a quarterly
written report for the calendar quarter showing the Net Sales of all Products subject to royalty payments sold by MERCK and its Affiliates in the Territory during the reporting period and the royalties payable under this Agreement. Reports shall be
due on the [*] day following the close of each calendar quarter. Royalties shown to have accrued by each royalty report shall be due and payable on the date such royalty report is due. MERCK shall keep complete and accurate records in sufficient
detail to enable the royalties payable hereunder to be determined. 

  

	5.7	Late Payments. MERCK will be liable to Protiva Biotherapeutics Inc. for interest on overdue royalties or other amounts payable hereunder, commencing on the date
such amounts become due and ending upon payment of such amounts, at an annual rate of [*] as quoted from time to time during such period by the head office of the Royal Bank of Canada, or the maximum legal rate, whichever is less.

  
 *Confidential Treatment Requested.

  
 10 

	5.8	Audits. 

  

	 	5.8.1	Upon the written request of PROTIVA and not more than once in each calendar year, MERCK shall permit, and shall cause its sublicensed Affiliates to permit, an
independent certified public accounting firm of nationally recognized standing selected by PROTIVA and reasonably acceptable to MERCK, at PROTIVA’s expense, to have access during normal business hours to such of the records of MERCK and its
sublicensed Affiliates as may be reasonably necessary to verify the accuracy of the royalty reports hereunder for any calendar year ending not more than [*] months prior to the date of such request. The accounting firm shall disclose to PROTIVA only
whether the royalty reports are correct or incorrect and the amount of any discrepancy. No other information shall be provided to PROTIVA. 

  

	 	5.8.2	If such accounting firm correctly identifies a discrepancy made during such period, the appropriate Party shall pay the other Party the amount of the discrepancy within
[*] days of the date PROTIVA delivers to MERCK such accounting firm’s written report so correctly concluding, or as otherwise agreed upon by the Parties. The fees and expenses charged by such accounting firm shall be paid by PROTIVA, unless
there was a discrepancy in MERCK’s favor of more than [*], in which case MERCK shall pay, or reimburse PROTIVA for, all such fees and expenses. 

  

	 	5.8.3	MERCK shall include in each sublicense granted by it pursuant to this Agreement a provision requiring the sublicensee to make reports to MERCK, to keep and maintain
records of sales made pursuant to such sublicense and to grant access to such records by PROTIVA’s independent accountant to the same extent required of MERCK under this Agreement. 

 

	 	5.8.4	Upon the expiration of [*] months following the end of any calendar year, the calculation of royalties payable with respect to such calendar year shall be binding and
conclusive upon PROTIVA, and MERCK and its Affiliates shall be released from any liability or accountability with respect to royalties for such calendar year, unless PROTIVA shall have, prior to that time, made a timely request for an audit of such
calculations for that period pursuant to this Section 5.8. 

  

	 	5.8.5	PROTIVA shall treat all financial information subject to review under this Section 5.8 or under any sublicense agreement in accordance with the confidentiality and
non-use provisions of this Agreement, and shall cause its accounting firm to enter into an acceptable confidentiality agreement with MERCK and/or its Affiliates obligating it to retain all such information in confidence pursuant to such
confidentiality agreement. 

  

	5.9	Payment Method and Exchange Rate. All payments to be made by MERCK to PROTIVA under this Agreement shall be made in United States dollars and unless otherwise
directed by Protiva Biotherapeutics Inc. in writing, all payments under this Section 5 shall be made by wire transfer using the following payment information: 

[*] 
  

*Confidential Treatment Requested. 

  
 11 

 All payments made under this Section 5 shall be made in the amounts specified herein
without any deduction for bank fees or other bank charges. In the case of sales outside the United States, the rate of exchange to be used in computing the monthly amount of currency equivalent in United States dollars due PROTIVA shall be made at
the monthly rate of exchange utilized by MERCK in its worldwide accounting system, prevailing on the third to the last business day of the month preceding the month in which such sales are recorded by MERCK. 

 

	5.10	Income Tax Withholding. If applicable laws, rules or regulations require withholding of income or other taxes imposed upon any payments made by MERCK to PROTIVA
under Section 5 of the Settlement Agreement, MERCK shall make such withholding payments as may be required and shall subtract such withholding payments from such payments. MERCK shall submit appropriate proof of payment of the withholding taxes
to PROTIVA within a reasonable period of time. MERCK shall promptly provide PROTIVA with the official receipts. MERCK shall render PROTIVA reasonable assistance in order to allow PROTIVA to obtain the benefit of any present or future treaty against
double taxation which may apply to such payments. If MERCK had a duty to withhold taxes in connection with any payment it made to PROTIVA under the Agreement but MERCK failed to withhold, and such taxes were assessed against and paid by MERCK, then
PROTIVA will reimburse MERCK for such taxes (including interest). If MERCK makes a claim under this section, it will comply with the obligations imposed by this section as if MERCK had withheld taxes from a payment to PROTIVA.

  

	5.11	Certain Defaults. If MERCK is at any time in default of any of MERCK’s payment or reporting obligations under this Section 5 and MERCK fails to cure
all of such defaults within [*] days after notice from PROTIVA specifying the default, PROTIVA will be entitled to sue MERCK in any court of competent jurisdiction for PROTIVA’s damages and interest, and, should PROTIVA prevail, to seek from
the court its costs and expenses of collection (including reasonable attorneys’ and experts’ fees and other expenses of litigation or preparation) to which it may be entitled, but, in such situations, except where MERCK has failed to pay
the Initial Payment as and when required in Section 5.1. PROTIVA’s remedy shall be limited to monetary compensation and/or specific performance and, subject to Section 5.12, shall in no event include termination of any of MERCK’s
license rights under Section 4. 

  

	5.12	Patent Challenges. PROTIVA shall have the right, upon written notice to MERCK, to terminate MERCK’s license under Sections 4.1 and 4.2 to the extent
applicable to any PROTIVA Patent Right, PROTIVA Designated Patent Right, or Collaboration Patent Right if MERCK or any of its Affiliates shall (a) commence or participate in any action or proceeding (including, without limitation, any patent
opposition or re-examination proceeding), or otherwise assert in writing any claim, challenging or denying the validity of such PROTIVA Patent Right, PROTIVA Designated Patent Right, or Collaboration Patent Right or any claim thereof or
(b) actively assist any other person or entity in bringing or prosecuting any action or proceeding (including, without limitation, any patent opposition or re-examination proceeding) challenging or denying the validity of any of such PROTIVA
Patent Right, PROTIVA Designated Patent Right, or Collaboration Patent Right or any claim thereof. 

  

*Confidential Treatment Requested. 

  
 12 

 6. INVENTORSHIP DETERMINATION 

 

	6.1	[*]. The Parties will submit to the following procedure for the determination of proper inventorship: 

 

	 	6.1.1	[*]. The Parties will meet and confer as needed within the sixty (60) day period following the Effective Date to attempt to resolve the inventorship of the
Disputed Applications. MERCK shall undertake a good faith review of the Disputed Applications and other SIRNA Patent Rights and may abandon an application(s) or amend the specification(s) and/or amend, delete and/or introduce new claims in such
applications. Prior to the meeting, MERCK shall provide PROTIVA with copies of the then existing claims of the Disputed Applications and at its discretion a description of any other relevant changes that MERCK has made in other relevant MERCK
patents or patent applications including identifying any subject matter it proposes not to pursue in future patent claims. Any agreed resolution of the inventorship of claims in either or both of the Disputed Applications shall be in a writing
signed by the Parties as an addendum to this Agreement. 

  

	 	6.1.2	In the event that after the sixty (60) day period, the Parties do not agree on resolution of the inventorship of the then existing claims of the Disputed
Applications then either Party may provide the other Party with written notice (“Trigger Notice”) that it will submit those claims to a Patent Expert (“PE”) for an inventorship determination under this Section 6.

  

	 	6.1.3	Within sixty (60) days of the Trigger Notice the Parties shall either agree on the appointment of a mutually acceptable experienced patent expert or if no
agreement can be reached, the Parties shall, within ten (10) days thereafter, simultaneously exchange nominations of patent experts in groups of five until a common nominee is encountered. Where multiple such exchanges of nominations are
required, each such exchange shall occur within ten days after the preceding exchange. If multiple common nominees are encountered in the same exchange, and the parties are not able to agree within five (5) days thereafter upon a single nominee
from such common nominees, the nominee will be selected within a further five days by the drawing of lots in a manner mutually acceptable to the Parties. The nominee shall be referred to herein as the Patent Expert or “PE”. Any submission
under Section 6 by a Party to the PE shall be simultaneously served on all other opposing Parties. In the event, as described above, that multiple common nominees are encountered in an exchange, those of such common nominees that are not
initially selected as the Patent Expert shall be designated as alternate(s), to become the Patent Expert if the selected Patent Expert is unable or unwilling to serve or to continue to serve. In all other cases in which the Patent Expert is unable
or unwilling to serve or to continue to serve, a replacement Patent Expert shall be selected as described in this Section 6.1.3 with respect to the initial Patent Expert. 

  
 *Confidential Treatment Requested. 

  
 13 

	 	6.1.4	Within ten (10) days of the appointment of the PE, MERCK shall provide both the PE and PROTIVA with copies of the Disputed Applications and a copy of
Section 6 of this Agreement. 

  

	 	6.1.5	Within fifteen (15) days of receipt of the applications referred to in Section 6.1.4, the PE will conduct a meeting with the Parties to establish a schedule
and terms of reference for conducting the inventorship determination. An appropriate confidentiality agreement will govern the PE’s access to the Retained Litigation Documents and any other documents submitted by a Party to the PE. Unless
otherwise agreed between the Parties and the PE as part of the terms of reference, following the exchange of information described in Sections 6.1.6 and 6.1.7, each Party shall simultaneously serve on the other Parties and the PE, a briefing
document for each Disputed Application not to exceed 20 pages (not including supporting attachments) describing the facts and law supporting its position on who is an appropriate inventor of each claim of the Disputed Applications. The Parties and
the PE shall agree and execute an appropriate engagement agreement including customary confidentiality provisions. It is the Parties’ express desire to conduct the proceedings in a focused, efficient and timely manner. The Parties and the PE
shall conduct the proceedings in accordance with the procedures set forth in this Section 6, provided however, the Parties may alter such proceedings by mutual agreement in writing. To the extent that it does not conflict with the procedures
set forth herein, the PE shall have the discretion to request additional proceedings or information from the Parties as necessary, by way of example and not limitation, the PE may request additional briefing and/or argument from the Parties. No
Party may require document production, written or oral discovery of any other Party except on mutual consent. 

  

	 	6.1.6	Within thirty (30) days of receipt of the applications referred to in Section 6.1.4, PROTIVA shall identify to MERCK and the PE [*]. At the same time, PROTIVA
shall provide the PE and MERCK with any documents or information supporting its proposed inventorship. 

  

	 	6.1.7	Within ten (10) days of receiving PROTIVA’s list of claims, MERCK shall provide to PROTIVA and the PE the [*] any documents or information supporting its
proposed inventorship. 

  

	 	6.1.8	[*]. 

  

	 	6.1.9	Each Party shall make available to the PE for personal interview, those individuals it identified as potential inventors or who may corroborate the inventive
contributions of the potential inventors. Each Party shall have the opportunity to attend any such interviews. The Parties shall promptly respond to any requests for information or testimony as may be requested by the PE. 

 
 *Confidential Treatment Requested. 

  
 14 

	 	6.1.10	The PE will determine the proper inventors of each of the Initial Contested Claims in accordance with US law on inventorship. The PE shall provide the Parties with a
written determination of inventorship for each Initial Contested Claims including supporting reasons for that determination. 

  

	 	6.1.11	[*]. 

  

	 	6.1.12	MERCK shall pay the expenses and fees of the PE for the inventorship determination of the Initial Contested Claims. The Parties shall bear the expenses for presenting
their information and their proposed inventors to the Patent Expert for the inventorship determination proceeding in accordance with this Section 6, provided however, [*]. 

 

	6.2	The ownership of an invention represented by a Contested Claim shall follow from the inventorship determination by the PE. 

 

	 	6.2.1	Contested Claims determined to be invented solely by persons obligated at the time the invention was made, to assign inventions to PROTIVA shall be owned by PROTIVA and
patents and patent applications containing them shall be part of PROTIVA Patent Rights. 

  

	 	6.2.2	Contested Claims determined to be invented solely by persons obligated at the time the invention was made, to assign inventions to MERCK shall be owned by MERCK.

  

	 	6.2.3	Contested Claims determined to be invented by persons obligated at the time the invention was made, to assign to PROTIVA jointly with persons obligated at the time the
invention was made, to assign inventions to MERCK shall be jointly owned by PROTIVA and MERCK (“Joint Patent Rights”). 

  

	6.3	Prosecution and Maintenance of patent applications containing Contested Claims. 

 

	 	6.3.1	In any country in the Territory where possible the Parties shall pursue separate patent applications with Contested Claims in a manner that all claims in a single
application are owned by either a single party or both parties jointly. 

  

	 	6.3.2	Each Party shall have the right to prosecute patent applications containing only Contested Claims for which it is determined to be the sole owner in accordance with
Section 6.2 without consulting with the other Parties. 

  

	 	6.3.3	The Parties will cooperate on the prosecution and maintenance of any Joint Patent Rights and will share equally the costs and expenses related to the prosecution and
maintenance of the Joint Patent Rights in the Territory and agree to hold each other harmless for any activity in the prosecution or maintenance of Joint Patent Rights by a Party or a third party handling such matters on their behalf.

  
 *Confidential Treatment Requested.

  
 15 

	6.4	Other [*] Applications. 

  

	 	6.4.1	In the event that the PE determines that PROTIVA is either a sole or joint inventor of any Initial Contested Claim, MERCK shall conduct a review all [*] Patent Rights
in light of the PE’s reasoning in the decision and make a good faith determination of whether person(s) obligated, at the time the invention was made, to assign inventions to PROTIVA is/were either sole or joint inventor(s) of any claim in any
other [*] Patent Rights. [*]. 

  

	 	6.4.2	[*], PROTIVA shall have the right, at its election, to bring this to the attention of MERCK for determination of inventorship under this Section 6. PROTIVA shall
pursue an inventorship determination of claims in [*] Patent Rights in accordance with the procedures of this Section 6 and in no other forum. In that event, PROTIVA and MERCK shall have good faith discussions regarding such claims. If after
such good faith discussions the Parties do not agree as to proper inventorship, PROTIVA shall have the right to refer all such claims (which, together with any claims identified by MERCK pursuant to Section 6.4.1 as being invented either solely
or jointly by person(s) obligated, at the time the invention was made, to assign inventions to PROTIVA, are referred to herein as the “Other Contested Claims”) to the PE for determination of inventorship in accordance with the procedures
established in Sections 6.1.3 to 6.1.11 mutatis mutandis, provided however, each Party shall bear its own costs in any inventorship determination in accordance with this Section 6.4.2 and PROTIVA and MERCK shall share equally the
PE’s fees and expenses. 

  

	 	6.4.3	[*] that is not a SIRNA Patent Rights, [*]. 

  

	6.5	The Parties do hereby release, and intend that their releases under Section 3 shall apply to, any claim or assertion of invalidity or unenforceability that is
based in whole or in part upon a claim of inventorship that is contrary to a determination of inventorship of the same patent claim made by the Patent Expert(s) in accordance with this Section 6. 

7. CONFIDENTIALITY 
  

	7.1	All the terms of this Agreement, including the amount of the payment made or to be made pursuant to Section 4 hereof and the fact that payment has been made, is
being made, or is to be made, shall be maintained by the Parties and their counsel in strict confidence and shall not be disclosed to any third party or to the public without the written consent of all of the Parties; provided, however, that the
foregoing will not apply to the subject matter of any license right granted herein; and provided further, however, that the Parties shall have the right to disclose the terms of this Agreement to the extent required by law subject to
Section 7.2. The Parties may disclose in confidence, without consent of all other Parties, the terms of the Agreement to its current and prospective shareholders, investors, lenders, or acquirers; provided, however, that the specific amount
paid or payable under Sections 5.1, 5.1.1 and 5.1.2, may be disclosed to such Party’s shareholders to extent required under applicable law. The Parties agree that a press release with mutually agreed text of the form attached as Schedule 7.1
may be issued by PROTIVA within ten (10) business days of the Effective Date. 

  
 *Confidential Treatment Requested. 

  
 16 

	7.2	Should the terms of this Agreement be requested in discovery in any litigation or other proceeding now pending or that the Parties may become involved in after the
Effective Date, the Parties shall not reveal the terms of this Agreement unless (i) so ordered by the Court or other tribunal presiding over that litigation; and (ii) every effort is made to make the disclosure subject to a Confidentiality
Order limiting disclosure of the terms of this Agreement to the parties, their attorneys and the Court or other tribunal in that litigation. 

  

	7.3	Any Party receiving a demand to reveal the terms of the Agreement in any such litigation shall promptly inform the other Party to this Agreement.

 8. REPRESENTATIONS AND WARRANTIES 

 

	8.1	Each Party represents and warrants to the other Party that as of the Effective Date: 

 

	 	8.1.1	it has the full right, power and authority to enter into this Agreement and to perform its obligations hereunder; provided, however, that MERCK acknowledges that it is
aware of claims to the contrary made in the INEX Litigation; and 

  

	 	8.1.2	this Agreement has been duly executed by it and is legally binding upon it, enforceable in accordance with its terms, and does not conflict with any agreement,
instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material law or regulation of any court, governmental body or administrative or other agency having jurisdiction over it.

  

	8.2	PROTIVA represents and warrants that Schedule 1.29 identifies all of the PROTIVA Patent Rights that exist as of the Effective Date. 

 

	8.3	PROTIVA covenants, represents and warrants that it will not settle any disputes with Tekmira Pharmaceuticals Corporation or its successors-in-interest including but not
limited to the INEX Litigation in any manner that will compromise or reduce the licenses, rights and releases granted to MERCK in this Settlement Agreement. 

 

	8.4	PROTIVA represents and warrants to the best of its knowledge that other than SIRNA it has had no interaction with any MERCK Affiliate that would have given rise to a
cause of action described in Section 3.2. 

  

	8.5	MERCK represents and warrants to the best of its knowledge that other than SIRNA, no MERCK Affiliate has any claims described in Section 3.2 against PROTIVA.

  

	8.6	NO PARTY MAKES ANY EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY TO ANY OTHER PARTY THAT ANY PATENTS REFERENCED HEREIN WILL ISSUE OR THAT ANY OF THE SAME ARE VALID
WHETHER DUE TO A PARTY’S ACTIONS OR INACTIONS OR THAT ANY OF THE RIGHTS LICENSED OR TO BE LICENSED HEREUNDER WILL BE USEFUL OR VALUABLE. EACH PARTY SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES, INCLUDING ANY AND ALL WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT. 

  
 17 

 9. INDEMNIFICATION 

 

	9.1	PROTIVA agrees to indemnify and hold harmless MERCK and its Affiliates, and their respective agents, directors, officers and employees and their respective successors
and assigns (the “MERCK Indemnitees”) from and against any and all losses, costs, damages, fees or expenses (“Losses”) incurred by a MERCK Indemnitee arising out of or in connection with any claim, suit, demand, investigation or
proceeding brought by a third party based on (a) the development, use, manufacture, distribution or sale of any product by PROTIVA or any of its Affiliates, under or pursuant to the licenses granted by MERCK under this Agreement, including, but
not limited to, any claims made against MERCK by third parties or a PROTIVA Affiliate alleging infringement, injury, damage, death or other consequence occurring to any person claimed to result, directly or indirectly, from the possession, use or
consumption of, or treatment with, any such product, whether claimed by reason of breach of warranty, negligence, product defect or otherwise, and regardless of the form or forum in which any such claim is made, or (b) any breach of any
representation, warranty or covenant of PROTIVA in this Agreement. 

  

	9.2	The above indemnification shall not apply to the extent that any Losses are due to a material breach of any of MERCK’s representations, warranties, covenants
and/or obligations under this Agreement. 

  

	9.3	MERCK agrees to indemnify and hold harmless PROTIVA and its Affiliates and sublicensees, and their respective agents, directors, officers and employees and their
respective successors and assigns (the “PROTIVA Indemnitees”) from and against any and all losses, costs, damages, fees or expenses (“Losses”) incurred by a PROTIVA Indemnitee arising out of or in connection with any claim, suit,
demand, investigation or proceeding brought by a third party or a MERCK Affiliate (“Claim”) based on (a) the development, use, manufacture, distribution or sale of any product by MERCK or any of its Affiliates, under or pursuant to
the licenses granted by PROTIVA under this Agreement, including, but not limited to, any claims made against PROTIVA by third parties or a MERCK Affiliate alleging infringement, injury, damage, death or other consequence occurring to any person
claimed to result, directly or indirectly, from the possession, use or consumption of, or treatment with, any such product, whether claimed by reason of breach of warranty, negligence, product defect or otherwise, and regardless of the form or forum
in which any such claim is made, or (b) any breach of any representation, warranty or covenant of MERCK in this Agreement. 

  

	9.4	The above indemnification shall not apply to the extent that any Losses are due to a material breach of any of PROTIVA’s representations, warranties, covenants
and/or obligations under this Agreement. 

  

	9.5	 The obligation to indemnify pursuant to this Section 9 shall be contingent upon timely notification by the indemnitee to the indemnitor of any
claims, suits or service of process; the tender by the indemnitee to the indemnitor of full control over the conduct and 

  
 18 

	 	 
disposition of any claim, demand or suit; and reasonable cooperation by the indemnitee in the defense of the claim, demand or suit. No indemnitor will be bound by or liable with respect to any
settlement or admission entered or made by any indemnitee without the prior written consent of the indemnitor. The indemnitee will have the right to retain its own counsel to participate in its defense in any proceeding hereunder. The indemnitee
shall pay for its own counsel except to the extent it is determined that (i) one or more legal defenses may be available to it which are different from or additional to those available to the indemnitor, or (ii) representation of two
Parties by the same counsel would be inappropriate due to actual or potential differing interests between them. In any such case and to such extent, the indemnitor shall be responsible to pay for the reasonable costs and expenses of the separate
counsel retained to participate in the defense of the indemnitee, provided that such expenses are otherwise among those covered by the indemnitor’s indemnity agreement hereunder. 

10. MISCELLANEOUS 
  

	10.1	Notices 

 All notices
which are required or permitted hereunder shall be in writing and sufficient if delivered personally, sent by facsimile (and promptly confirmed by personal delivery, registered or certified mail or overnight courier), sent by nationally-recognized
overnight courier or sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows: 

Notices to PROTIVA will be addressed to: 
 PROTIVA Biotherapeutics Inc. 
 100-3480 Gilmore Way 

Burnaby, B.C., Canada 
 Attention: President & CEO 
 Facsimile No.: (604) 630-5103

 With copy to: 
 Orrick, Herrington & Sutcliffe LLP 
 719 Second Ave., Suite 900

 Seattle, WA 98104 
 Attention: Roger M. Tolbert, Esq. 
 Facsimile No.: (206) 839-4301 

Notices to MERCK will be addressed to: 
 Merck & Co., Inc. 
 One Merck Drive 

P.O. Box 100, WS3A-65 
 Whitehouse Station, NJ 08889-0100 
 Attention: Office of Secretary 

Facsimile No.: (908) 735-1246 

  
 19 

 With copy to: 

Merck & Co., Inc. 
 One Merck Drive 
 Attention: Chief Licensing Officer 

P.O. Box 100, WS2A-30 
 Whitehouse Station, NJ 08889-0100 
 Facsimile: (908) 735-1214 

 

	10.2	Governing Law 

 This
Agreement will be construed in accordance with and governed in all respects by the laws of the State of New York without regard to any conflicts of law principles which would result in application of laws of any other jurisdiction. 

 

	10.3	Costs and Attorney’s fees 

 The Parties agree to bear their own costs and attorney’s fees in connection with the Litigation and the negotiation of this Settlement Agreement. 

 

	10.4	Entire Agreement 

 This
Settlement Agreement constitutes the entire agreement and understanding between the Parties with respect to the subject matter hereof and supersedes all prior negotiations and agreements, whether written or oral. This Settlement Agreement may not be
altered or amended except by an instrument in writing executed by both Parties. 
  

	10.5	Termination of Prior Agreements 

 The Parties agree that the Prior Agreements have been terminated or are terminated as of the Effective Date of this Settlement Agreement and that no rights or obligations of the Prior Agreements have
survived or survive termination. 
  

	10.6	Severability 

 If any
provision of this Agreement is unenforceable, such provision will be changed and interpreted to accomplish the objectives of such provision to the greatest extent possible under applicable law and the remaining provisions will continue in full force
and effect. 
  

	10.7	Assignment 

 Except as
provided in this Section 10.7, this Agreement may not be assigned or otherwise transferred, nor may any right or obligation hereunder be assigned or transferred, by any Party without the consent of the other Parties; provided, however, that a
Party may, without such consent, assign this Agreement and its rights and obligations hereunder to an Affiliate or in connection with the transfer or sale of all or substantially all of its assets related to the subject matter of this Agreement, or
in the event of its merger or consolidation or change in control or similar transaction. Any attempted assignment not in accordance with this Section 10.7 shall be void. Any permitted assignee shall assume all assigned obligations of its
assignor under this Agreement. 

  
 20 

	10.8	Non-Solicitation 

 Each
Party agrees that from the Effective Date until the fifth anniversary of the Effective Date, neither such Party nor any of its Affiliates will, except upon the express prior written consent of the other Party in each instance, directly or indirectly
solicit for employment in any capacity (whether as a full or part time employee or as a consultant or contractor) any person who is then employed by such other Party or its Affiliates in any capacity related to this Agreement. This provision will
not apply to or prohibit general solicitations such as job postings through public media, not focused on or directed specifically to the personnel of the other Party. 
  

	10.9	Compromise 

 The parties
expressly deny any liability with respect to the claims and counterclaims made against them in the Litigation. It is expressly understood and agreed between the Parties that this Agreement is a compromise and shall not be interpreted to be an
admission of liability or non-liability or an acknowledgement of the validity or invalidity of any claims, counterclaims or defenses that were asserted in the Litigation. 

 

	10.10	Schedules 

 The appended
Schedules form an integral part of this Settlement Agreement. 
  

	10.11	Construction 

 The Parties
agree they have had ample opportunity to influence the choice of language and terms in this Settlement Agreement. No provision of this Settlement Agreement shall be presumed to be construed against its drafter. 

 

	10.12	Counterparts 

 This
Agreement may be executed in multiple counterparts, each of which shall be considered and shall have the force and effect of an original and all of which together shall constitute one and the same document. 

SIGNATURE PAGE FOLLOWS 

  
 21 

 IN WITNESS WHEREOF, each Party has executed this Settlement Agreement as of the date indicated below by its
authorized representative. 
  

			
	PROTIVA BIOTHERAPEUTICS INC.
		
	By:	 	 /s/ Mark J. Murray

	Name:	 	Mark J. Murray
		
	Title:	 	 President & CEO

		
	Date:	 	October 9, 2007
	
	PROTIVA BIOTHERAPEUTICS (USA), INC.
		
	By:	 	 /s/ Mark J. Murray

	Name:	 	Mark J. Murray
		
	Title:	 	 President & CEO

		
	Date:	 	October 9, 2007
	
	MERCK & CO., INC.
		
	By:	 	 /s/ Paul Matukaitis

	Name:	 	Paul Matukaitis
		
	Title:	 	 Vice President & Assistant General Counsel

		
	Date:	 	October 9, 2007
	
	SIRNA THERAPEUTICS, INC.
		
	By:	 	 /s/ Debra A. Bollwage

	Name:	 	Debra A. Bollwage
		
	Title:	 	 Assistant Secretary

		
	Date:	 	October 9, 2007

  
 22 

 SCHEDULE 1.26(i) 
 [*] 
  

*Confidential Treatment Requested. 

  
 23 

 SCHEDULE 1.26(ii) 
 [*] 
  

*Confidential Treatment Requested. 

  
 24 

 SCHEDULE 1.29 
 PROTIVA Patent Rights 
  

									
	 TTC Ref

Country

ATTY(s) Handling
	 	 Title
	 	 Inventor
	 	 Application

No.

Filing Date
	 	 Status

Remarks

	 [*]
	 	[*]	 	[*]	 	[*]	 	[*]

  
 *Confidential Treatment Requested. 

  
 25 

 SCHEDULE 1.30 
 PROTIVA Reserved Targets 
 [*] 
  
 *Confidential Treatment Requested. 

  
 26 

 SCHEDULE 1.31 
 PROTIVA Potential Reserved Targets 
 [*] 
  
 *Confidential Treatment Requested. 

  
 27 

 SCHEDULE 2-A 
 Form of Dismissal – State Action 
 [Execution Copy contains one page
form] 

  
 28 

 

 

 SCHEDULE 2-B 
 Form of Dismissal – Federal Action 
 [Execution Copy contains four
page form] 

  
 30 

 MEREDITH N. LANDY (State Bar No. 136489) 
 DHAIVAT H. SHAH (State Bar No. 196382) 
 ROBERTA L. HARTING (State Bar No. 225067) 

O’MELVENY & MYERS LLP 
 2765 Sand Hill
Road 
 Menlo Park, California 94025-7019 

	Telephone:	(650) 473-2600 

	Facsimile:	(650) 473-2601 

	E-Mail:	mlandy@omm.com 

	  	dshah@omm.com 

	  	rharting@omm.com 

 Attorneys for Plaintiff

 SIRNA THERAPEUTICS, INC. 
 ELIZABETH
A. HOWARD (State Bar No. 173185) 
 JAN E. ELLARD (State Bar No. 171947) 
 ORRICK, HERRINGTON & SUTCLIFFE LLP 
 1000 Marsh Road 

Menlo Park, California 94025-1015 

	Telephone:	(650) 614-7400 

	Facsimile:	(650) 614-7401 

	E-Mail:	ehoward@orrick.com 

	  	jellard@orrick.com 

 Attorneys for Defendants

 PROTIVA BIOTHERAPEUTICS, INC. 
 and
MARK J. MURRAY 
 IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF CALIFORNIA 
  

					
	 SIRNA THERAPEUTICS, INC.,

 
 Plaintiff,

 
 v.

 
 PROTIVA BIOTHERAPEUTICS, INC.,

and MARK J. MURRAY,
  

Defendants.
  
	 		  	 Case No. C 06-01361 MMC
  

STIPULATION AND ORDER OF
 DISMISSAL
WITH PREJUDICE

  
  

STIPULATION AND ORDER OF DISMISSAL WITH PREJUDICE – C 06-01361 MMC 

 The parties herein, by and through their counsel of record, hereby stipulate and agree as
follows: 
 WHEREAS, the Plaintiff and Defendants have entered into a Settlement Agreement and General Release which fully
settles all contested issues in this case; 
 IT IS HEREBY STIPULATED, pursuant to Fed. R. Civ. P. 41(a)(1)(A)(ii), that all
claims asserted in this case by Plaintiff are hereby dismissed with prejudice and, further, that all parties shall bear their own costs and fees. 
 SO STIPULATED. 
  

							
	Dated: October     , 2007	 		 	O’MELVENY & MYERS LLP
				
		 		 	By:	 	  

		 		 		 	Meredith N. Landy
			
		 		 	Attorneys for Plaintiff
		 		 	SIRNA THERAPEUTICS, INC.
			
	Dated: October     , 2007	 		 	ORRICK, HERRINGTON & SUTCLIFFE LLP
				
		 		 	By:	 	  

		 		 		 	Elizabeth A. Howard
			
		 		 	Attorneys for Defendants
		 		 	PROTIVA BIOTHERAPEUTICS, INC.
		 		 	and MARK J. MURRAY

  

 
 STIPULATION AND ORDER OF DISMISSAL
WITH PREJUDICE – C 06-01361 MMC 

  
 - 2 -

 CERTIFICATE OF CONCURRENCE 

I hereby attest that concurrence in the filing of this document has been obtained from counsel for defendants, Elizabeth A. Howard.

  

							
	Dated: October     , 2007	 		 	O’MELVENY & MYERS LLP
				
		 		 	By:	 	  

		 		 		 	Meredith N. Landy
			
		 		 	Attorneys for Plaintiff
		 		 	SIRNA THERAPEUTICS, INC.

  

 
 STIPULATION AND ORDER OF DISMISSAL
WITH PREJUDICE – C 06-01361 MMC 

  
 - 3 -

 ORDER 
 IT IS SO ORDERED. 
 Dated: October     , 2007 

 

	
	  

	 The Honorable Maxine M. Chesney
 United States District Judge

  

 
 STIPULATION AND ORDER OF DISMISSAL
WITH PREJUDICE – C 06-01361 MMC 

  
 - 4 -

 SCHEDULE 7.1 
 Form of Press Release 
 FOR IMMEDIATE RELEASE 

MERCK & CO., INC. LICENSES SNALP TECHNOLOGY FROM PROTIVA 

— Protiva to Receive One-Time Payment with Potential Milestone and Royalty Payments as 

Part of Broader Agreement — 
 Vancouver, BC, October xx, 2007 – Protiva Biotherapeutics Inc. today reported that it has granted Merck & Co., Inc. a non-exclusive license to Protiva’s SNALP (Stable Nucleic
Acid-Lipid Particles) technology for ongoing research and development of therapeutics in the emerging field of RNA interference (RNAi). 
 Under
the terms of the agreement Protiva will receive a one-time payment from Merck with the potential for milestone and royalty payments based upon the developmental progress of future RNAi-based product candidates. In addition, Protiva has agreed to
cease all litigation between Protiva and Sirna Therapeutics Inc, a wholly owned subsidiary of Merck, including the removal of a preliminary injunction granted by the Superior Court of California in March 2007. Financial details were not disclosed

 Protiva’s President and CEO Dr. Mark Murray said, “Merck’s licensing of our ‘SNALP’ technology is an important
validation of the skill of our scientific team and our leadership position in the siRNA delivery space. Protiva is moving forward with financial strength and a continued focus on the development of new therapeutic products and business
alliances.” 
 “We are pleased to have licensed Protiva’s SNALP technology,” said Alan Sachs M.D. Ph.D., vice president of
RNA Therapeutics for Merck. “This technology can now be used to advance Merck’s RNAi-based therapeutic development programs.” 

RNAi, which relies on the use of specifically designed short interfering RNA (siRNA) molecules, is a technology with the potential to fundamentally
change how we treat serious human diseases such as cancer, HIV, influenza, Ebola virus infections and metabolic conditions such as high cholesterol. Dr. Andrew Fire and Dr. Craig Mello, the pioneers of RNAi, were awarded the Nobel Prize
for Physiology or Medicine in 2006 for their discovery about how genes are controlled within living cells. Today, RNAi represents one of the most promising and rapidly advancing fields in biology and drug development. 

About Protiva 
 Founded in 2001, Protiva
Biotherapeutics Inc. is focused on the development of nucleic acid based pharmaceutical products to fight serious human diseases, such as cancer, influenza (including H5N1), Ebola, inflammatory diseases and other chronic viral infections.
Protiva’s proprietary Stable Nucleic-Acid Lipid Particle (SNALP) technology is an encapsulation and delivery system for nucleic acid payloads, such as short interfering RNA (siRNA), to target cells. It represents a breakthrough in the field of
RNA interference. 

 Protiva is headquartered in Vancouver, B.C. with offices in Seattle, Washington. For more information, visit
www.protivabio.com. 
 For more information about Protiva, contact: 
 Mark J. Murray, Ph.D. 
 President and Chief Executive Officer 

Protiva Biotherapeutics Inc. 
 Vancouver:
(604) 630-5063 
 Media contact: 

David Ryan 
 Longview Communications Inc.

 (604) 694 6031 

dryan@longviewcomms.ca 

 AGREEMENT TO EXTEND TIME PERIOD 

Sirna Therapeutics, Inc. and Merck & Co., Inc. (collectively “MERCK”) and Protiva Biotherapeutics Inc. and Protiva Biotherapeutics
(USA), Inc. (collectively “PROTIVA”) are parties to that certain Settlement Agreement (“Settlement Agreement”) dated as of October 9, 2007 (the “Effective Date”). MERCK and PROTIVA hereby agree that [*]. Except as
agreed in this instrument, the remainder of the Settlement Agreement remains in full force and effect in accordance with its terms. 
  

									
	PROTIVA BIOTHERAPEUTICS INC.	 		 	MERCK & CO., INC.
					
	By:	 	 /s/ Mark Murray
	 		 	By:	 	 /s/ Paul Matukaitis

	Name:	 	Mark Murray	 		 	Name:	 	Paul Matukaitis
					
	Title:	 	 President & CEO
	 		 	Title:	 	 Vice President & Assistant General Counsel

					
	Date:	 	December 4, 2007	 		 	Date:	 	December 6, 2007
			
	PROTIVA BIOTHERAPEUTICS (USA), INC.	 		 	SIRNA THERAPEUTICS, INC.
					
	By:	 	 /s/ Mark Murray
	 		 	By:	 	 /s/ Debra A. Bollwage

	Name:	 	Mark Murray	 		 	Name:	 	Debra A. Bollwage
					
	Title:	 	 President & CEO
	 		 	Title:	 	 Assistant Secretary

					
	Date:	 	December 4, 2007	 		 	Date:	 	December 6, 2007

  

*Confidential Treatment Requested. 

 AGREEMENT TO EXTEND TIME PERIOD 

Sirna Therapeutics, Inc. and Merck & Co., Inc. (collectively “MERCK”) and Protiva Biotherapeutics Inc. and Protiva Biotherapeutics
(USA), Inc. (collectively “PROTIVA”) are parties to that certain Settlement Agreement (“Settlement Agreement”) dated as of October 9, 2007 (the “Effective Date”). MERCK and PROTIVA hereby agree that [*]. Except as
agreed in this instrument, the remainder of the Settlement Agreement remains in full force and effect in accordance with its terms. 
  

									
	PROTIVA BIOTHERAPEUTICS INC.	 		 	MERCK & CO., INC.
					
	By:	 	 /s/ Mark J. Murray
	 		 	By:	 	 /s/ Paul Matukaitis

	Name:	 	Mark J. Murray	 		 	Name:	 	Paul Matukaitis
					
	Title:	 	 President & CEO
	 		 	Title:	 	 Vice President & Assistant General Counsel

					
	Date:	 	February 7, 2008	 		 	Date:	 	February 7, 2008
			
	PROTIVA BIOTHERAPEUTICS (USA), INC.	 		 	SIRNA THERAPEUTICS, INC.
					
	By:	 	 /s/ Mark J. Murray
	 		 	By:	 	 /s/ Debra A. Bollwage

	Name:	 	Mark J. Murray	 		 	Name:	 	Debra A. Bollwage
					
	Title:	 	 President & CEO
	 		 	Title:	 	 Assistant Secretary

					
	Date:	 	February 7, 2008	 		 	Date:	 	February     , 2008

  

*Confidential Treatment Requested. 

 AGREEMENT TO EXTEND TIME PERIOD 

Sirna Therapeutics, Inc. and Merck & Co., Inc. (collectively “MERCK”) and Protiva Biotherapeutics Inc. and Protiva Biotherapeutics
(USA), Inc. (collectively “PROTIVA”) are parties to that certain Settlement Agreement (“Settlement Agreement”) dated as of October 9, 2007 (the “Effective Date”). MERCK and PROTIVA hereby agree that [*]. Except as
agreed in this instrument, the remainder of the Settlement Agreement remains in full force and effect in accordance with its terms. 
  

									
	PROTIVA BIOTHERAPEUTICS INC.	 		 	MERCK & CO., INC.
					
	By:	 	 /s/ Mark J. Murray
	 		 	By:	 	 /s/ Paul D. Matukaitis

	Name:	 	Mark J. Murray	 		 	Name:	 	Paul D. Matukaitis
					
	Title:	 	 President & CEO
	 		 	Title:	 	 Vice President & Assistant General Counsel

					
	Date:	 	March 28, 2008	 		 	Date:	 	March 24, 2008
			
	PROTIVA BIOTHERAPEUTICS (USA), INC.	 		 	SIRNA THERAPEUTICS, INC.
					
	By:	 	 /s/ Mark J. Murray
	 		 	By:	 	 /s/ Debra A. Bollwage

	Name:	 	Mark J. Murray	 		 	Name:	 	Debra A. Bollwage
					
	Title:	 	 President & CEO
	 		 	Title:	 	 Assistant Secretary

					
	Date:	 	March 28, 2008	 		 	Date:	 	March 24, 2008

  

*Confidential Treatment Requested. 

 AGREEMENT TO EXTEND TIME PERIOD 

Sirna Therapeutics, Inc. and Merck & Co., Inc. (collectively “MERCK”) and Protiva Biotherapeutics Inc. and Protiva Biotherapeutics
(USA), Inc. (collectively “PROTIVA”) are parties to that certain Settlement Agreement (“Settlement Agreement”) dated as of October 9, 2007 (the “Effective Date”). MERCK and PROTIVA hereby agree that [*]. Except as
agreed in this instrument, the remainder of the Settlement Agreement remains in full force and effect in accordance with its terms. 
  

									
	PROTIVA BIOTHERAPEUTICS INC.	 		 	MERCK & CO., INC.
					
	By:	 	 /s/ Mark J. Murray
	 		 	By:	 	 /s/ Paul D. Matukaitis

	Name:	 	Mark J. Murray	 		 	Name:	 	Paul D. Matukaitis
					
	Title:	 	 President & CEO
	 		 	Title:	 	 Vice President & Assistant General Counsel

					
	Date:	 	July 31, 2008	 		 	Date:	 	July 29, 2008
			
	PROTIVA BIOTHERAPEUTICS (USA), INC.	 		 	SIRNA THERAPEUTICS, INC.
					
	By:	 	 /s/ Mark J. Murray
	 		 	By:	 	 /s/ Jon Filderman

	Name:	 	Mark J. Murray	 		 	Name:	 	Jon Filderman
					
	Title:	 	 President & CEO
	 		 	Title:	 	 Secretary

					
	Date:	 	July 31, 2008	 		 	Date:	 	July 29, 2008

  

*Confidential Treatment Requested. 

 AGREEMENT TO EXTEND TIME PERIOD 

Sirna Therapeutics, Inc. and Merck & Co., Inc. (collectively “MERCK”) and Protiva Biotherapeutics Inc. and Protiva Biotherapeutics
(USA), Inc. (collectively “PROTIVA”) are parties to that certain Settlement Agreement (“Settlement Agreement”) dated as of October 9, 2007 (the “Effective Date”). MERCK and PROTIVA hereby agree that [*]. Except as
agreed in this instrument, the remainder of the Settlement Agreement remains in full force and effect in accordance with its terms. 
  

									
	PROTIVA BIOTHERAPEUTICS INC.	 		 	MERCK & CO., INC.
					
	By:	 	 /s/ Mark J. Murray
	 		 	By:	 	 /s/ Paul D. Matukaitis

	Name:	 	Mark J. Murray	 		 	Name:	 	Paul D. Matukaitis
					
	Title:	 	 President & CEO
	 		 	Title:	 	 Vice President & Assistant General Counsel

					
	Date:	 	September 3, 2008	 		 	Date:	 	September 3, 2008
			
	PROTIVA BIOTHERAPEUTICS (USA), INC.	 		 	SIRNA THERAPEUTICS, INC.
					
	By:	 	 /s/ Mark J. Murray
	 		 	By:	 	 /s/ Jon Filderman

	Name:	 	Mark J. Murray	 		 	Name:	 	Jon Filderman
					
	Title:	 	 President & CEO
	 		 	Title:	 	 Counsel

					
	Date:	 	September 3, 2008	 		 	Date:	 	September 3, 2008

  

*Confidential Treatment Requested.

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