Document:

EX-10.2

 Exhibit 10.2 

EXECUTION VERSION 
 PLEDGE AND
SECURITY AGREEMENT 
 THIS PLEDGE AND SECURITY AGREEMENT (as it may be amended or modified from time to time, the
“Security Agreement”) is entered into as of November 3, 2014 by and between Rand Worldwide, Inc., a Delaware corporation (the “Borrower”), Rand Worldwide Foreign Holdings, Inc., a
Delaware corporation (“Rand Holdings”) and Rand Worldwide Subsidiary, Inc., a Delaware corporation (“Rand Worldwide”) (the Borrower, Rand Holdings and Rand Worldwide each a
“Grantor”, and collectively, the “Grantors”), and JPMorgan Chase Bank, N.A. (the “Lender”). 

PRELIMINARY STATEMENT 
 The
Grantors and the Lender are entering into a Credit Agreement of even date herewith (as it may be amended or modified from time to time, the “Credit Agreement”). Each Grantor is entering into this Security Agreement in order
to induce the Lender to enter into and extend credit to the Borrower under the Credit Agreement. 
 ACCORDINGLY, the Grantors and the Lender
hereby agree as follows: 
 ARTICLE I 

DEFINITIONS 
 1.1. Terms
Defined in Credit Agreement. All capitalized terms used in this Security Agreement and not otherwise defined in this Security Agreement shall have the meanings assigned to such terms in the Credit Agreement. 

1.2. Terms Defined in UCC. Terms defined in the UCC which are not otherwise defined in this Security Agreement are used in this
Security Agreement as defined in the UCC. 
 1.3. Definitions of Certain Terms Used Herein. As used in this Security Agreement, in
addition to the terms defined in the preamble and Preliminary Statement of this Security Agreement, the following terms shall have the following meanings: 

“Account” shall have the meaning set forth in Article 9 of the UCC. 

“Article” means a numbered article of this Security Agreement, unless another document is specifically referenced.

 “Assignment of Claims Act” means, collectively, the Assignment of Claims Act of 1940, as amended, any applicable
rules, regulations and interpretations issued pursuant thereto and any amendments to any of the foregoing. 

“Borrower” shall have the meaning set forth in the preamble of this Security Agreement. 

“Chattel Paper” shall have the meaning set forth in Article 9 of the UCC. 

“Closing Date” means the date of the Credit Agreement. 

“Collateral” shall have the meaning set forth in Article II of this Security Agreement. 

“Collateral Support” shall mean all property (real or personal) assigned, hypothecated or otherwise securing any
Collateral and shall include any security agreement or other agreement granting a lien or security interest in such real or personal property. 

  
 1 

 “Collateral Access Agreement” means any landlord waiver or other
agreement, in form and substance reasonably satisfactory to the Lender, between the Lender and any third party (including any bailee, consignee, customs broker, or other similar Person) in possession of any Collateral or any landlord of any real
property where any Collateral is located, as such landlord waiver or other agreement may be amended, restated, or otherwise modified from time to time. 

“Commercial Tort Claim” means all “commercial tort claims” (as defined in Article 9 of the UCC) of any
Grantor. 
 “Control” shall have the meaning set forth in Article 8 or, as applicable, in Section 9-104, 9-105,
9-106 or 9-107 of Article 9 of the UCC, and, with respect to any “transferable record” (as that term is defined in Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or in Section 16 of the
Uniform Electronic Transactions Act as in effect in any relevant jurisdiction), shall have the meaning of Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or in Section 16 of the Uniform Electronic
Transactions Act as in effect in the jurisdiction relevant to such transferable record. 
 “Copyright” means, with
respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all copyrights, rights and interests in copyrights, works protectable by copyright, copyright registrations, and copyright applications;
(b) all renewals of any of the foregoing; (c) all moral rights in any of the foregoing; (d) all income, royalties, damages, and payments now or hereafter due and/or payable under any of the foregoing, including, without limitation,
damages or payments for past or future infringements for any of the foregoing; (e) the right to sue for past, present, and future infringements of any of the foregoing; and (f) all rights corresponding to any of the foregoing throughout
the world. 
 “Credit Agreement” shall have the meaning set forth in the Preliminary Statement of this Security
Agreement. 
 “Default” means any event or condition which constitutes an Event of Default or which upon notice,
lapse of time or both would, unless cured or waived, become an Event of Default. 
 “Deposit Account Control
Agreement” means an agreement, in form and substance reasonably satisfactory to the Lender, among any Loan Party, a banking or other financial institution holding such Loan Party’s funds, and the Lender with respect to collection
and control of all deposits and balances held in a deposit account maintained by such Loan Party with such banking or other financial institution. 

“Deposit Account” shall have the meaning set forth in Article 9 of the UCC. 

“Document” shall have the meaning set forth in Article 9 of the UCC. 

“Domestic Subsidiary” means all Subsidiaries incorporated or organized under the laws of the United States of America,
any state thereof or the District of Columbia. 
 “Equipment” shall have the meaning set forth in Article 9 of the
UCC. 
 “Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited
liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest. 

“Event of Default” means an event described in Section 5.1 of this Security Agreement. 

  
 2 

 “Excluded Account” means any Deposit Account of a Loan Party which is
used exclusively for the payment of payroll, payroll taxes or employee benefits. 
 “Excluded Assets” means the
following: (i) pledges and security interests prohibited by applicable law, rule or regulation or which would require governmental (including regulatory) consent, approval, license or authorization with respect to such pledge unless such
consent, approval, license or authorization has been received; (ii) any lease, license or other agreement or any property subject to a purchase money security interest, capital lease obligation or similar arrangements, in each case, to the
extent permitted under the Credit Agreement, or to the extent that a grant of a security interest in such lease, license or other agreement would require a third party consent that would violate or invalidate such lease, license or agreement,
purchase money, capital lease or a similar arrangement or create a right of termination in favor of any other party thereto (other than Borrower or any subsidiary); (iii) the Excluded Equity Interests; (iv) the Excluded Accounts, and
(v) assets of any Foreign Subsidiary. 
 “Excluded Equity Interests” shall mean (i) more than sixty-five
percent (65%) of the issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) of any Foreign Subsidiary and any Domestic Subsidiary that holds no substantial assets other than stock
in one or more foreign corporations so long as the Grantors represent, warrant and certify to Lender to its reasonable satisfaction that such Domestic Subsidiary owns no substantial assets other than stock in one or more foreign corporations; and
(ii) any issued and outstanding Equity Interests of an Insignificant Subsidiary. 
 “Excluded Payments” shall
have the meaning set forth in Section 4.6(d)(iii) of this Security Agreement. 
 “Exhibit” refers to a
specific exhibit to this Security Agreement, unless another agreement, certificate or document is specifically referenced. 

“Fixtures” shall have the meaning set forth in Article 9 of the UCC. 

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary. 

“General Intangibles” shall have the meaning set forth in Article 9 of the UCC. 

“Goods” shall have the meaning set forth in Article 9 of the UCC. 

“Government Account” shall mean any Account owing directly by the United States of America or any department, agency
or instrumentality of the United States of America to a Loan Party under a Government Contract. 
 “Government
Contract” means any prime contract between the United States of America or any department, agency or instrumentality of the United States of America and a Loan Party. 

“Grantor” shall have the meaning set forth in the Preamble of this Security Agreement. 

“Instruments” shall have the meaning set forth in Article 9 of the UCC. 

“Inventory” shall have the meaning set forth in Article 9 of the UCC. 

“Investment Property” shall have the meaning set forth in Article 9 of the UCC. 

  
 3 

 “Lender” shall have the meaning set forth in the Preamble of this
Security Agreement. 
 “Letter-of-Credit Rights” shall have the meaning set forth in Article 9 of the UCC. 

“Licenses” means, with respect to any Person, all of such Person’s right, title, and interest in and to
(a) any and all licensing agreements or similar arrangements in and to its Patents, Copyrights, or Trademarks, (b) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto,
including, without limitation, damages and payments for past and future breaches thereof, and (c) all rights to sue for past, present, and future breaches thereof. 

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation,
encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same
economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities. 

“Patents” means, with respect to any Person, all of such Person’s right, title, and interest in and to:
(a) any and all patents and patent applications; (b) all inventions and improvements described and claimed therein; (c) all reissues, divisions, continuations, renewals, extensions, and continuations-in-part thereof; (d) all
income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future infringements thereof; (e) all rights to sue for past,
present, and future infringements thereof; and (f) all rights corresponding to any of the foregoing throughout the world. 

“Pledged Collateral” means all Instruments, Securities and other Investment Property of the Grantors, whether or not
physically delivered to the Lender pursuant to this Security Agreement, other than the Excluded Equity Interests. 

“Receivables” means the Accounts, Chattel Paper, Documents, Investment Property, Instruments and any other rights or
claims to receive money which are General Intangibles or which are otherwise included as Collateral. 
 “Section”
means a numbered section of this Security Agreement, unless another agreement, certificate or document is specifically referenced. 

“Security” shall have the meaning set forth in Article 8 of the UCC. 

“Security Agreement” shall have the meaning set forth in the Preamble of this Security Agreement. 

“Stock Rights” means all dividends, instruments or other distributions and any other right or property which the
Grantors shall receive or shall become entitled to receive for any reason whatsoever with respect to, in substitution for or in exchange for any Equity Interest constituting Collateral, any right to receive an Equity Interest and any right to
receive earnings, in which the Grantors now have or hereafter acquire any right, issued by an issuer of such Equity Interest. 

“Subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation,
limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance
with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than fifty

  
 4 

 
percent (50%) of the equity or more than fifty percent (50%) of the ordinary voting power or, in the case of a partnership, more than fifty percent (50%) of the general partnership
interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. As used in
this definition, “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise,
and the terms “Controlling” and “Controlled” shall have meanings correlative thereto. 
 “Supporting
Obligations” shall have the meaning set forth in Article 9 of the UCC. 
 “Trademarks” means, with
respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all trademarks (including service marks), trade names, trade dress, and trade styles and the registrations and applications for
registration thereof and the goodwill of the business symbolized by the foregoing; (b) all licenses of the foregoing, whether as licensee or licensor; (c) all renewals of the foregoing; (d) all income, royalties, damages, and payments
now or hereafter due or payable with respect thereto, including, without limitation, damages, claims, and payments for past and future infringements thereof; (e) all rights to sue for past, present, and future infringements of the foregoing,
including the right to settle suits involving claims and demands for royalties owing; and (f) all rights corresponding to any of the foregoing throughout the world. 

“UCC” means the Uniform Commercial Code, as in effect from time to time, of the State of New York or of any other
state the laws of which are required as a result thereof to be applied in connection with the attachment, perfection or priority of, or remedies with respect to, Lender’s Lien on any Collateral. 

The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms. 

ARTICLE II 
 GRANT OF
SECURITY INTEREST 
 Each Grantor hereby pledges, assigns and grants to the Lender a security interest in all of its right, title and
interest in, to and under all personal property and other assets, whether now owned by or owing to, or hereafter acquired by or arising in favor of such Grantor (including under any trade name or derivations thereof), and whether owned or consigned
by or to, or leased from or to, such Grantor, and regardless of where located (all of which will be collectively referred to as the “Collateral”), including: 

 

	 	(i)	all Accounts; 

  

	 	(ii)	all Chattel Paper; 

  

	 	(iii)	all Copyrights, Patents and Trademarks; 

  

	 	(iv)	all Documents; 

  

	 	(v)	all Equipment; 

  

	 	(vi)	all Fixtures; 

  

	 	(vii)	all General Intangibles; 

  

	 	(viii)	all Goods; 

  

	 	(ix)	all Instruments; 

  

	 	(x)	all Inventory; 

  
 5 

	 	(xi)	all Investment Property; 

  

	 	(xii)	all cash or cash equivalents; 

  

	 	(xiii)	all letters of credit, Letter-of-Credit Rights and Supporting Obligations; 

  

	 	(xiv)	all cash and Deposit Accounts with any bank or other financial institution; 

  

	 	(xv)	all Commercial Tort Claims; and 

  

	 	(xvi)	all accessions to, substitutions for and replacements, proceeds (including Stock Rights), insurance proceeds and products of the foregoing, together with all books and records, customer lists, credit files, computer
files, programs, printouts and other computer materials and records at any time evidencing or relating to any of the foregoing; 

 to secure
the prompt and complete payment and performance of the Secured Obligations. Notwithstanding anything herein to the contrary, the term “Collateral” shall not include the Excluded Assets. None of the covenants of this Security Agreement
shall apply, and the Grantors make no representations or warranties at the Closing Date or upon any credit event under the Credit Agreement within the meaning of Section 4.02 of the Credit Agreement, in respect of the Excluded Assets other than
to represent and warrant at such times that no Excluded Asset (other than any Excluded Equity Interests, any Excluded Account, any assets of a Foreign Subsidiary, or anything described in clause (ii) of the definition of “Excluded
Assets”) is material to the business of such Grantor. 
 ARTICLE III 

REPRESENTATIONS AND WARRANTIES 

Each Grantor represents and warrants to the Lender on the Closing Date and on the date of each extension of credit under the Credit Agreement
that: 
 3.1. Title, Perfection, Priority and Type. Such Grantor has good and valid title or rights in, or the power to transfer, the
Collateral with respect to which it has purported to grant a security interest hereunder, free and clear of all Liens except for Liens permitted under Section 4.1(e), and has full power and authority to grant to the Lender the security
interest in such Collateral pursuant hereto. When financing statements have been filed in the appropriate offices against such Grantor in the locations listed on Exhibit H, the Lender will have a valid, fully perfected first priority security
interest in that Collateral of such Grantor in which a security interest may be perfected by such filing, subject only to Liens permitted under Section 4.1(e). None of the Collateral constitutes, or is proceeds of, (1) Farm
Products, (2) As-Extracted Collateral, (3) Manufactured Homes, (4) Health-Care-Insurance Receivables; (5) timber to be cut, or (6) aircraft, aircraft engines, satellites, ships or railroad rolling stock. No material portion
of the Collateral consists of motor vehicles or other goods subject to a certificate of title statute of any jurisdiction. 
 3.2. Type
and Jurisdiction of Organization, Organizational and Identification Numbers. The type of entity of such Grantor, its full legal name, its state of organization, the organizational number issued to it by its state of organization, and its federal
employer identification number are set forth on Exhibit A. 
 3.3. Principal Location. Such Grantor’s mailing address and
the location of its place of business (if it has only one) or its chief executive office (if it has more than one place of business), are disclosed in Exhibit A; such Grantor has no other places of business except those set forth in
Exhibit A. 
 3.4. Collateral Locations. All of such Grantor’s locations where Collateral is located are listed on
Exhibit A. All of said locations are owned by such Grantor except for locations (i) which are leased by the Grantor as lessee and designated in Part VII(b) of Exhibit A and (ii) at which Inventory is held in
a public warehouse or is otherwise held by a bailee or on consignment as designated in Part VII(c) of Exhibit A. 

  
 6 

 3.5. Deposit Accounts. All of such Grantor’s Deposit Accounts are listed on
Exhibit B. 
 3.6. Exact Names. Such Grantor’s name in which it has executed this Security Agreement is the exact name as
it appears in such Grantor’s organizational documents, as amended, as filed with such Grantor’s jurisdiction of organization. Except as set forth on Exhibit A, such Grantor has not, during the past five (5) years, been
known by or used any other corporate or fictitious name, or been a party to any merger or consolidation, or been a party to any acquisition. Such Grantor has not filed any certificates of dissolution or liquidation, any certificates of
domestication, transfer or continuance in any other jurisdiction. 
 3.7. Letter-of-Credit Rights and Chattel Paper. Exhibit C
lists all Letter-of-Credit Rights and Chattel Paper of such Grantor. All action by such Grantor necessary or desirable to protect and perfect the Lender’s Lien on each item listed on Exhibit C (including the delivery of all
originals and the placement of a legend on all Chattel Paper as required hereunder) has been duly taken. The Lender will have a fully perfected first priority security interest in the Collateral listed on Exhibit C, subject only to Liens
permitted under Section 4.1(e). 
 3.8. Accounts and Chattel Paper. 

(a) The names of the obligors, amounts owing, due dates and other information with respect to its Accounts and Chattel Paper are and will be
correctly stated in all material respects in all records of such Grantor relating thereto. As of the time when each Account or each item of Chattel Paper arises, such Grantor shall be deemed to have represented and warranted that such Account or
Chattel Paper, as the case may be, and all records relating thereto, are genuine and in all respects what they purport to be. 
 (b) Except
as could not reasonably be expected to have a Material Adverse Effect, with respect to its Accounts, (i) all Accounts represent bona fide sales of Inventory or rendering of services to Account Debtors in the ordinary course of such
Grantor’s business and are not evidenced by a judgment, Instrument or Chattel Paper; (ii) there are no setoffs, claims or disputes existing or asserted with respect thereto and such Grantor has not made any agreement with any Account
Debtor for any extension of time for the payment thereof, any compromise or settlement for less than the full amount thereof, any release of any Account Debtor from liability therefor, or any deduction therefrom except a discount or allowance
allowed by such Grantor in the ordinary course of its business for prompt payment consistent with past practice; (iii) to such Grantor’s knowledge, there are no facts, events or occurrences which in any way impair the validity or
enforceability thereof or could reasonably be expected to reduce the amount payable thereunder as shown on such Grantor’s books and records and any invoices or statements with respect thereto; (iv) such Grantor has not received any notice
of proceedings or actions which are threatened or pending against any Account Debtor which might result in any adverse change in such Account Debtor’s financial condition; and (v) such Grantor has no knowledge that any Account Debtor has
become insolvent or is generally unable to pay its debts as they become due. 
 (c) In addition, with respect to all of its Accounts,
(i) the amounts shown on all invoices and statements with respect thereto are actually and absolutely owing to such Grantor as indicated thereon and are not in any way contingent; and (ii) to such Grantor’s knowledge, all Account
Debtors have the capacity to contract. 

  
 7 

 (d) To the extent permitted by the Assignment of Claims Act, the payments due to a Grantor under
each Government Contract can be assigned to Lender by complying with the provisions of the Assignment of Claims Act. 
 3.9.
Inventory. With respect to any of its Inventory (a) such Inventory (other than Inventory in transit and Inventory in any one lot with a book value equal to or less than $25,000 and any Inventory in the aggregate with a book value equal
to or less than $100,000) is located at one of such Grantor’s locations set forth on Exhibit A, (b) no Inventory (other than Inventory in transit) is now, or shall at any time or times hereafter be stored at any other location
except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the
security interest granted to the Lender hereunder and other Liens permitted under Section 6.02 of the Credit Agreement, (d) such Inventory is of good and merchantable quality, free from any defects, (e) such Inventory is not subject
to any licensing, patent, royalty, trademark, trade name or copyright agreements with any third parties which would require any consent of any third party upon sale or disposition of that Inventory or the payment of any monies to any third party
upon such sale or other disposition, (f) such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunder, and (g) the completion of manufacture,
sale or other disposition of such Inventory by the Lender following an Event of Default shall not require the consent of any Person and shall not constitute a breach or default under any contract or agreement to which such Grantor is a party or to
which such property is subject. 
 3.10. Intellectual Property. Such Grantor does not have any interest in, or title to, any Patent,
Trademark or Copyright except as set forth in Exhibit D. This Security Agreement is effective to create a valid and continuing Lien and, upon filing of appropriate financing statements in the offices listed on Exhibit H and this
Security Agreement with the United States Copyright Office and the United States Patent and Trademark Office, valid, fully perfected first priority security interests in favor of the Lender on such Grantor’s Patents, Trademarks and Copyrights,
such perfected security interests are enforceable as such as against any and all creditors of and purchasers from such Grantor; and all action necessary or desirable to protect and perfect the Lender’s Lien on such Grantor’s Patents,
Trademarks or Copyrights shall have been duly taken. 
 3.11. Filing Requirements. None of the Equipment is covered by any
certificate of title, except for the vehicles described in Part I of Exhibit E. None of the Collateral owned by it is of a type for which security interests or liens may be perfected by filing under any federal statute except for
(a) the vehicles described in Part II of Exhibit E and (b) Patents, Trademarks and Copyrights held by such Grantor and described in Exhibit D. The legal description, county and street address of each property on which any
Fixtures are located is set forth in Exhibit F together with the name and address of the record owner of each such property. 
 3.12.
No Financing Statements, Security Agreements. No financing statement or security agreement describing all or any portion of the Collateral which has not lapsed or been terminated naming such Grantor as debtor has been filed or is of record in
any jurisdiction except for financing statements or security agreements (a) naming the Lender as the secured party and (b) in respect to other Liens permitted under Section 6.02 of the Credit Agreement. Other than Lender, no Person is
in Control of any Collateral. Each Grantor is in compliance with its obligations set forth in Article IV. 
 3.13. Pledged
Collateral. 
 (a) Exhibit G sets forth a complete and accurate list of all of the Pledged Collateral owned by such Grantor. Such
Grantor is the direct, sole beneficial owner and sole holder of record of the Pledged Collateral listed on Exhibit G as being owned by it, free and clear of any Liens, except for the security interest granted to the Lender hereunder and other
Liens permitted under Section 6.02 of the Credit Agreement. Such 

  
 8 

 
Grantor further represents and warrants that (i) all Pledged Collateral owned by it constituting an Equity Interest has been (to the extent such concepts are relevant with respect to such
Pledged Collateral) duly authorized, validly issued, are fully paid and non-assessable, (ii) with respect to any certificates delivered to the Lender representing an Equity Interest, either such certificates are Securities as defined in Article
8 of the UCC as a result of actions by the issuer or otherwise, or, if such certificates are not Securities, such Grantor has so informed the Lender so that the Lender may take steps to perfect its security interest therein as a General Intangible,
(iii) all Pledged Collateral held by a securities intermediary is covered by a control agreement among such Grantor, the securities intermediary and the Lender pursuant to which the Lender has Control and (iv) all Pledged Collateral which
represents Indebtedness owed to such Grantor has been duly authorized, authenticated or issued and delivered by the issuer of such Indebtedness, is the legal, valid and binding obligation of such issuer and such issuer is not in default thereunder.

 (b) In addition, (i) none of the Pledged Collateral owned by it has been issued or transferred in violation of the securities
registration, securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject, (ii) no options, warrants, calls or commitments of any character whatsoever (A) exist relating to such Pledged
Collateral or (B) obligate the issuer of any Equity Interest included in the Pledged Collateral to issue additional Equity Interests, and (iii) no consent, approval, authorization, or other action by, and no giving of notice, filing with,
any governmental authority or any other Person is required for the pledge by such Grantor of such Pledged Collateral pursuant to this Security Agreement or for the execution, delivery and performance of this Security Agreement by such Grantor, or
for the exercise by the Lender of the voting or other rights provided for in this Security Agreement or for the remedies in respect of the Pledged Collateral pursuant to this Security Agreement, except as may be required in connection with such
disposition by laws affecting the offering and sale of securities generally. 
 (c) Except as set forth in Exhibit G, such Grantor
owns 100% of the issued and outstanding Equity Interests which constitute Pledged Collateral owned by it and none of the Pledged Collateral which represents Indebtedness owed to such Grantor is subordinated in right of payment to other Indebtedness
or subject to the terms of an indenture. 
 3.14. No Approvals, Consents, Filings and other Actions. No authorization, consent,
approval or other action by, and no notice to or filing with, any Governmental Authority or regulatory body or any other Person is required for either (i) the pledge or grant by any Grantor of the Liens purported to be created in favor of the
Lender hereunder or (ii) the exercise by the Lender of any rights or remedies in respect of any Collateral in the United States (whether specifically granted or created hereunder or created or provided for by applicable law), except
(A) for filings of financing statements with a Governmental Authority to perfect a Lien which can be perfected by filing, (B) with respect to the ability of the Lender to obtain direct payment from a Governmental Authority, compliance with
the Assignment of Claims Act, and (C) as may be required, in connection with the disposition of any Investment Property, by laws generally affecting the offering and sale of securities. 

  
 9 

 ARTICLE IV 

COVENANTS 
 From the date
of this Security Agreement, and thereafter until this Security Agreement is terminated, each Grantor agrees that: 
 4.1. General.

 (a) Collateral Records. Such Grantor will maintain books and records with respect to the Collateral owned by it that are complete
and accurate in all material respects, and furnish, subject to Section 4.1(c), to the Lender such reports relating to such Collateral as the Lender shall from time to time reasonably request. 

(b) Authorization to File Financing Statements; Ratification. Such Grantor hereby authorizes the Lender to file, and if requested will
deliver to the Lender, all financing statements and other documents and take such other actions as may from time to time be requested by the Lender in order to maintain a first perfected security interest in and, if applicable, Control of, the
Collateral owned by such Grantor. Any financing statement filed by the Lender may be filed in any filing office in any UCC jurisdiction and may (i) indicate such Grantor’s Collateral (1) as all assets of the Grantor or words of
similar effect, regardless of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the UCC of such jurisdiction, or (2) by any other description which reasonably approximates the description contained
in this Security Agreement, and (ii) contain any other information required by part 5 of Article 9 of the UCC for the sufficiency or filing office acceptance of any financing statement or amendment, including (A) whether such Grantor is an
organization, the type of organization and any organization identification number issued to such Grantor, and (B) in the case of a financing statement filed as a fixture filing, a sufficient description of real property to which the Collateral
relates. Such Grantor also agrees to furnish any such information described in the foregoing sentence to the Lender promptly upon request. Such Grantor also ratifies its authorization for the Lender to have filed in any UCC jurisdiction any initial
financing statements or amendments thereto if filed prior to the date hereof. 
 (c) Further Assurances. Such Grantor will, if so
requested by the Lender, furnish to the Lender, as often as Lender shall reasonably request at such time as no Event of Default has occurred and is continuing and at any time when an Event of Default has occurred and is continuing, statements and
schedules reasonably identifying and describing the Collateral owned by such Grantor and such other reports and information in connection with such Collateral as the Lender may reasonably request, all in such detail as the Lender may reasonably
specify. Such Grantor also agrees to take any and all actions reasonably necessary to defend title to the Collateral against all persons and to defend the security interest of the Lender in its Collateral and the priority thereof against any Lien
not expressly permitted hereunder. 
 (d) Disposition of Collateral. Such Grantor will not sell, lease or otherwise dispose of the
Collateral except for dispositions specifically permitted pursuant to Section 6.05 of the Credit Agreement. 
 (e) Liens. Such
Grantor will not create, incur, or suffer to exist any Lien on the Collateral except (i) the security interest created by this Security Agreement, and (ii) other Liens permitted under Section 6.02 of the Credit Agreement. Except as
otherwise provided by this Agreement or the Credit Agreement, each Grantor shall maintain at its sole cost and expense the security interest of the Lender under this Security Agreement in all Collateral as a valid, perfected, first priority security
interest and Lien. 
 (f) Other Financing Statements. Such Grantor will not authorize the filing of any financing statement naming it
as debtor covering all or any portion of the Collateral owned by it, except for financing statements (i) naming the Lender as the secured party, and (ii) in respect of other Liens permitted under Section 6.02 of the Credit Agreement.
Such Grantor acknowledges that it is not authorized to file any financing statement or amendment or termination statement with respect to any financing statement without the prior written consent of the Lender, subject to such Grantor’s rights
under Section 9-509(d)(2) of the UCC. 
 (g) Locations. Such Grantor will not (i) maintain any Collateral other than
Inventory in transit and any one asset with a book value equal to or less than $25,000 and any assets in the aggregate with a book value equal to or less than $100,000 at any location other than those locations listed on Exhibit A or

  
 10 

 
disclosed to Lender pursuant to clause (ii) of this Section 4.1(g), (ii) otherwise change, or add to, such locations without the Lender’s prior written consent
as required by the Credit Agreement (and if the Lender gives such consent, such Grantor will concurrently therewith obtain a Collateral Access Agreement for each such location to the extent required by the Credit Agreement), or (iii) change its
principal place of business or chief executive office from the location identified on Exhibit A, other than as permitted by the Credit Agreement. 

(h) Compliance with Terms. Such Grantor will perform and comply with all obligations in respect of the Collateral owned by it and all
agreements to which it is a party or by which it is bound relating to such Collateral. 
 4.2. Receivables. 

(a) Certain Agreements on Receivables. Such Grantor will not make or agree to make any discount, credit, rebate or other reduction in
the original amount owing on a Receivable or accept in satisfaction of a Receivable less than the original amount thereof, except that, prior to the occurrence of an Event of Default, such Grantor may reduce the amount of Accounts arising from the
sale of Inventory in the ordinary course of business consistent with past practice. 
 (b) Collection of Receivables. Except as
otherwise provided in this Security Agreement, such Grantor will collect and enforce, at such Grantor’s sole expense, all amounts due or hereafter due to such Grantor under the Receivables owned by it. At any time following the occurrence and
during the continuation of an Event of Default, Lender may: (i) notify, or require any Grantor to notify, any Account Debtor of the Lender’s security interest in the Receivables and any Supporting Obligation; (ii) direct the Account
Debtors under any Receivables to make payment of all amounts due or to become due to such Grantor thereunder directly to the Lender (or its agent); (ii) notify, or require any Grantor to notify, each Person to which Account Debtors under any
Receivables have been directed to make payment to remit all amounts representing collections on checks and other payment items from time to time directly to the Lender; and (iii) enforce, at the expense of such Grantor, collection of any such
Receivables and to adjust, settle or compromise the amount or payment thereof, in the same manner and to the same extent as such Grantor might have done. Upon Lender’s notification to such Grantor that the Lender has elected to collect the
Receivables in accordance with the preceding sentence, any payments of Receivables received by such Grantor shall be forthwith (and in any event within two (2) Business Days) deposited by such Grantor in the exact form received, duly indorsed
by such Grantor to Lender, and until so turned over, all amounts and proceeds (including checks and other Instruments) received by such Grantor in respect of the Receivables, any Supporting Obligation or Collateral Support shall be received in trust
for the benefit of Lender hereunder and shall be segregated from other funds of such Grantor and such Grantor shall not adjust, settle or compromise the amount or payment of any Receivable, or release wholly or partly any Account Debtor or obligor
thereof, or allow any credit or discount thereon. 
 (c) Delivery of Invoices. Such Grantor will deliver to the Lender promptly, and
in any event within two (2) Business Days, upon its request after the occurrence and during the continuation of an Event of Default duplicate invoices with respect to each Account owned by it bearing such language of assignment as the Lender
shall specify. 
 (d) Disclosure of Counterclaims on Receivables. If (i) any material discount, credit or agreement to make a
rebate or to otherwise reduce the amount owing on any Receivable owned by such Grantor exists or (ii) if, to the knowledge of such Grantor, any material dispute, setoff, claim, counterclaim or defense exists or has been asserted or threatened
with respect to any such Receivable, such Grantor will promptly disclose such fact to and notify the Lender in writing. Such Grantor shall promptly report each credit memorandum and each of the facts required to be disclosed to the Lender in
accordance with this Section 4.2(d) on the Borrowing Base Certificates submitted by it. 

  
 11 

 (e) Electronic Chattel Paper. To the extent requested by the Lender, such Grantor shall
take all steps necessary to grant the Lender Control of each item of electronic chattel paper in excess of $5,000, and all items in excess of $50,000, in the aggregate that constitutes part of the Collateral in accordance with the UCC and all
“transferable records” related thereto as defined in each of the Uniform Electronic Transactions Act and the Electronic Signatures in Global and National Commerce Act. 

4.3. Inventory and Equipment. 

(a) Maintenance of Goods. Such Grantor will do all things reasonably necessary to maintain, preserve, protect and keep its Inventory and
the Equipment in good repair and working and saleable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business and except for ordinary wear and tear in respect of the Equipment. 

(b) Returned Inventory. If an Account Debtor returns any Inventory in excess of $25,000 in any one lot and $50,000 in the aggregate in
any one fiscal year to such Grantor when no Event of Default exists, then such Grantor shall promptly determine the reason for such return and shall issue a credit memorandum to the Account Debtor in the appropriate amount. In the event any Account
Debtor returns Inventory in excess of $50,000 to such Grantor when an Event of Default exists, such Grantor, upon the request of the Lender, shall: (i) hold the returned Inventory in trust for the Lender; (ii) segregate all returned
Inventory from all of its other property; (iii) dispose of the returned Inventory solely according to the Lender’s reasonable written instructions; and (iv) not issue any credits or allowances with respect thereto without the
Lender’s prior written consent. All returned Inventory shall be subject to the Lender’s Liens thereon. Whenever any Inventory is returned, the related Account shall be deemed ineligible to the extent of the amount owing by the Account
Debtor with respect to such returned Inventory. 
 (c) Equipment. Such Grantor shall promptly inform the Lender of any additions to
exceeding $100,000 in book value or deletions from its Equipment exceeding $25,000 in book value. Such Grantor shall not permit any Equipment to become a fixture with respect to real property or to become an accession with respect to other personal
property with respect to which real or personal property the Lender does not have a Lien. Such Grantor will not, without the Lender’s prior written consent, alter or remove any identifying symbol or number on any of such Grantor’s
Equipment constituting Collateral. 
 (d) Titled Vehicles. Such Grantor will give the Lender notice of its acquisition of any vehicle
covered by a certificate of title and deliver to the Lender, upon request, the original of any vehicle title certificate and provide and/or file all other documents or instruments necessary to have the Lien of the Lender noted on any such
certificate or with the appropriate state office. 
 4.4. Delivery of Instruments, Securities, Chattel Paper and Documents. Such
Grantor will (a) deliver to the Lender immediately upon execution of this Security Agreement the originals of any Chattel Paper, or Instrument constituting Collateral owned by it (if any then exist) that has a value, in each case, in excess of
$5,000 and all Securities as and in the manner required by this Security Agreement, (b) hold in trust for the Lender upon receipt and immediately thereafter deliver to the Lender any such Chattel Paper or Instrument constituting Collateral that
has a value, in each case, in excess of $5,000 and any Security and (c) upon the Lender’s request, deliver to the Lender (and thereafter hold in trust for the Lender upon receipt and immediately deliver to the Lender) any Document
evidencing or constituting Collateral. 

  
 12 

 4.5. Uncertificated Pledged Collateral. Such Grantor will permit the Lender from time to
time to cause the appropriate issuers (and, if held with a securities intermediary, such securities intermediary) of uncertificated securities or other types of Pledged Collateral owned by it not represented by certificates to mark their books and
records with the numbers and face amounts of all such uncertificated securities or other types of Pledged Collateral not represented by certificates and all rollovers and replacements therefor to reflect the Lien of the Lender granted pursuant to
this Security Agreement. With respect to any Pledged Collateral owned by it, such Grantor will take any actions necessary to cause (a) the issuers of uncertificated securities which are Pledged Collateral and (b) any securities
intermediary which is the holder of any Pledged Collateral, to cause the Lender to have and retain Control over such Pledged Collateral. Without limiting the foregoing, such Grantor will, with respect to any such Pledged Collateral held with a
securities intermediary, cause such securities intermediary to enter into a control agreement with the Lender, in form and substance reasonably satisfactory to the Lender, giving the Lender Control. 

4.6. Pledged Collateral. 

(a) Registration of Pledged Collateral. Such Grantor will permit any registerable Pledged Collateral to be registered in the name of the
Lender or its nominee at any time at the option of the Lender. 
 (b) Exercise of Rights in Pledged Collateral. 

(i) Without in any way limiting the foregoing and subject to clause (ii) below, except during the continuance of an
Event of Default, such Grantor shall have the right to exercise all voting rights or other rights relating to the Pledged Collateral owned by it for all purposes not inconsistent with this Security Agreement, the Credit Agreement or any other Loan
Document; provided however, that no vote or other right shall be exercised or action taken which would have the effect of impairing the rights of the Lender in respect of such Pledged Collateral or be inconsistent with the terms and
conditions of this Security Agreement or the Credit Agreement. 
 (ii) Such Grantor will permit the Lender or its nominee at
any time during the continuance of an Event of Default, without notice, to exercise all voting rights or other rights relating to the Pledged Collateral owned by it, including, without limitation, exchange, subscription or any other rights,
privileges, or options pertaining to any Equity Interest or Investment Property constituting Pledged Collateral as if it were the absolute owner thereof. 

(iii) Except during the continuance of an Event of Default, such Grantor shall be entitled to collect and receive for its own
use all cash dividends and interest paid in respect of the Pledged Collateral owned by it to the extent not in violation of the Credit Agreement; provided that at no time shall Grantor be entitled to collect and receive any of the following
distributions and payments (collectively referred to as the “Excluded Payments”): (A) dividends and interest paid or payable other than in cash in respect of such Pledged Collateral, and instruments and other property
received, receivable or otherwise distributed in respect of, or in exchange for, any Pledged Collateral; (B) dividends and other distributions paid or payable in cash in respect of such Pledged Collateral in connection with a partial or total
liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in capital of an issuer; and (C) cash paid, payable or otherwise distributed, in respect of principal of, or in redemption of, or in exchange for,
such Pledged Collateral; provided however, that until actually paid, all rights to such distributions shall remain subject to the Lien created by this Security Agreement; 

(iv) All Excluded Payments and all other distributions in respect of any of the Pledged Collateral owned by such Grantor,
whenever paid or made, shall be delivered to the Lender to 

  
 13 

 
hold as Pledged Collateral and shall, if received by such Grantor, be received in trust for the benefit of the Lender, be segregated from the other property or funds of such Grantor, and be
forthwith delivered to the Lender as Pledged Collateral in the same form as so received (with any necessary endorsement); and 

(v) Upon the occurrence and during the continuation of an Event of Default, (X) all rights of such Grantor to exercise or
refrain from exercising the voting and other consensual rights which it would otherwise be entitled to exercise pursuant hereto shall cease and all such rights shall thereupon become vested in Lender who shall thereupon have the sole right to
exercise such voting and other consensual rights; and (Y) in order to permit Lender to exercise the voting and other consensual rights which it may be entitled to exercise pursuant hereto and to receive all dividends and other distributions
which it may be entitled to receive hereunder: (1) each Grantor shall promptly execute and deliver (or cause to be executed and delivered) to Lender all proxies, dividend payment orders and other instruments as Lender may from time to time
reasonably request and (2) each Grantor acknowledges that Lender may utilize the power of attorney set forth in Article VI of this Security Agreement. 

(c) Non-U.S. Pledged Equity. If any issuer of an Equity Interest which forms a part of the Collateral is organized under a jurisdiction
outside of the United States, upon the request of Lender, each Grantor shall take such additional actions, including, without limitation, causing the issuer to register the pledge on its books and records or making such filings or recordings, in
each case as may be necessary or advisable under the laws of such issuer’s jurisdiction to ensure the validity, perfection and priority of the first priority security interest and Lien of Lender. 

(d) Partnership Interests. With respect to any Equity Interest included in the Collateral of an issuer which is a partnership or a
limited liability company, if the Grantors own less than 100% of the Equity Interests in any such issuer, Grantors shall use their commercially reasonable efforts to obtain the consent of each other holder of partnership interest or limited
liability company interests in such issuer to the security interest of Lender. 
 4.7. Intellectual Property. 

(a) Such Grantor will use its best efforts to secure all consents and approvals necessary or appropriate for the assignment to or benefit of
the Lender of any License held by such Grantor and to enforce the security interests granted hereunder. 
 (b) Such Grantor shall notify the
Lender immediately if it knows or has reason to know that any application or registration relating to any Patent, Trademark or Copyright (now or hereafter existing) may become abandoned or dedicated, or of any adverse determination or development
(including the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, the United States Copyright Office or any court) regarding such Grantor’s ownership of any such Patent,
Trademark or Copyright, its right to register the same, or to keep and maintain the same, and Grantor shall not do any act or omit to do any act whereby any such material intellectual property lapses or becomes abandoned, cancelled, dedicated to the
public or unenforceable. Such Grantor shall take commercially reasonable steps to protect the secrecy of its trade secrets and collect all license payments owed to it pursuant to any permitted license of its intellectual property. 

(c) In no event shall such Grantor, either directly or through any agent, employee, licensee or designee, file an application for the
registration of any Patent, Trademark or Copyright with the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency without giving 

  
 14 

 
the Lender prior written notice thereof, and, upon request of the Lender, such Grantor shall execute and deliver any and all security agreements as the Lender may request to evidence the
Lender’s first priority security interest on such Patent, Trademark or Copyright, and the General Intangibles of such Grantor relating thereto or represented thereby. 

(d) In the event that any Patent, Trademark or Copyright owned by such Grantor is infringed, misappropriated, diluted or otherwise violated by
a third party, upon learning of such, such Grantor shall take commercially reasonable actions to stop such infringement, misappropriation, dilution or other violation and protect its rights in the same. 

4.8 Commercial Tort Claims. Such Grantor shall promptly, and in any event within five (5) Business Days after the same is acquired
by it, notify the Lender of any commercial tort claim (as defined in the UCC) acquired by it with a value in excess of $100,000 and, unless the Lender otherwise consents, such Grantor shall enter into an amendment to this Security Agreement, in the
form of Exhibit I hereto, granting to Lender a first priority security interest in such commercial tort claim. 
 4.9.
Letter-of-Credit Rights. If such Grantor is or becomes the beneficiary of a Letter-of-Credit Right with a value in excess of $25,000, it shall promptly, and in any event within five (5) Business Days after becoming a beneficiary, notify
the Lender thereof and, upon the request of Lender, cause the issuer and/or confirmation bank to (i) consent to the assignment of any Letter-of-Credit Rights to the Lender and (ii) agree to direct all payments thereunder to a Deposit
Account at the Lender or subject to a Deposit Account Control Agreement for application to the Secured Obligations, in accordance with Section 2.18 of the Credit Agreement, all in form and substance reasonably satisfactory to the Lender. 

4.10. Federal, State or Municipal Claims. Such Grantor will promptly notify the Lender of any Collateral which constitutes a claim
against the United States government or any state or local government or any instrumentality or agency thereof, the assignment of which claim is restricted by federal, state or municipal law. Grantor will, upon Lender’s reasonable request,
(i) with respect to Government Accounts, comply in all respects, to the reasonable satisfaction of Lender, with the Assignment of Claims Act, and (ii) execute and deliver to Lender all documentation reasonably requested by Lender for
compliance with the Assignment of Claims Act in connection with each Government Account. 
 4.11. No Interference. Such Grantor
agrees that it will not interfere with any right, power and remedy of the Lender provided for in this Security Agreement or now or hereafter existing at law or in equity or by statute or otherwise, or the exercise or beginning of the exercise by the
Lender of any one or more of such rights, powers or remedies. 
 4.12. Insurance. (a) In the event any Collateral is located in
any area that has been designated by the Federal Emergency Management Agency as a “Special Flood Hazard Area”, such Grantor shall purchase and maintain flood insurance on such Collateral (including any personal property which is located on
any real property leased by such Loan Party within a “Special Flood Hazard Area”). The amount of flood insurance required by this Section shall at a minimum comply with applicable law, including the Flood Disaster Protection Act of 1973,
as amended. 
 (b) All insurance policies required hereunder and under Section 5.10 of the Credit Agreement shall name the Lender as an
additional insured or as lender’s loss payee, as applicable, and shall contain loss payable clauses or mortgagee clauses, through endorsements in form and substance reasonably satisfactory to the Lender, which provide that: (i) all
proceeds thereunder with respect to any Collateral shall be payable to the Lender; (ii) no such insurance shall be affected by any act or neglect of the insured or owner of the property described in such policy; and (iii) such policy and
loss payable or mortgagee clauses may be canceled, amended, or terminated only upon at least thirty (30) days prior written notice given to the Lender. 

  
 15 

 (c) All premiums on such insurance shall be paid when due by such Grantor, and copies of the
policies delivered to the Lender upon request. If such Grantor fails to obtain or maintain any insurance as required by this Section, the Lender may, upon five (5) days’ notice, obtain such insurance at the Borrower’s expense. By
purchasing such insurance, the Lender shall not be deemed to have waived any Default arising from the Grantor’s failure to maintain such insurance or pay any premiums therefor. 

4.13. Collateral Access Agreements. Such Grantor shall use commercially reasonable efforts to obtain a Collateral Access Agreement from
the lessor of each leased property, mortgagee of owned property or bailee or consignee with respect to any warehouse, processor or converter facility or other location where Collateral with an aggregate value in excess of $100,000 is stored or
located, which agreement or letter shall provide access rights, contain a waiver or subordination of all Liens or claims that the landlord, mortgagee, bailee or consignee may assert against the Collateral at that location, and shall otherwise be
reasonably satisfactory in form and substance to the Lender. 
 4.14. Deposit Account Control Agreements. Such Grantor will provide
to the Lender upon the Lender’s request, a Deposit Account Control Agreement duly executed on behalf of each financial institution holding a Deposit Account (other than an Excluded Account) of such Grantor as set forth in this Security
Agreement. 
 4.15. Change of Name or Location; Change of Fiscal Year. Such Grantor shall not (a) change its name as it appears
in official filings in the state of its incorporation or organization whether by merger, consolidation or otherwise, (b) change its chief executive office, principal place of business, mailing address, corporate offices or warehouses or
locations at which Collateral (other than Inventory in transit) with an aggregate value in excess of $100,000 is held or stored, or the location of its records concerning the Collateral as set forth in this Security Agreement, (c) change the
type of entity that it is, (d) change its organization identification number, if any, issued by its state of incorporation or other organization, (e) change its state of incorporation or organization, or (f) change its fiscal year, in
each case, unless the Lender shall have received at least thirty (30) days prior written notice thereof of such change and the Lender shall have acknowledged in writing that either (1) such change would not reasonably be expected to
adversely affect the validity, perfection or priority of the Lender’s security interest in the Collateral, or (2) any reasonable action requested by the Lender in connection therewith has been completed or taken (including any action to
continue the perfection of any Liens in favor of the Lender in any Collateral); provided that, any new location shall be in the continental U.S. 

4.16 Notices. Upon any Grantor obtaining knowledge thereof, it shall promptly notify the Lender of any event that is reasonably likely
to have a Material Adverse Effect on the value of the Collateral or any material portion thereof, the ability of any Grantor or the Lender to dispose of the Collateral or any material portion thereof, or on the rights and remedies of the Lender in
relation thereto, including, without limitation, the levy of any legal process against the Collateral or any material portion thereof. Each Grantor shall notify the Lender if at any time any warehouseman, bailee, or other third party shall have
possession of any Collateral with a value in excess of $250,000 in the aggregate. 
 4.17 Perfection Requirements. 

(i) With respect to any tangible Instruments or Tangible Chattel Paper included in the Collateral with a value in excess of $5,000, and with
respect to any certificated security included in the Collateral, each Grantor shall deliver to the Lender the certificates evidencing such certificated securities, 

  
 16 

 
tangible Instruments or Tangible Chattel Paper duly indorsed by an effective indorsement (within the meaning of Section 8-107 of the New York UCC), or accompanied by share transfer powers or
other instruments of transfer duly endorsed by such an effective endorsement, in each case, to Lender or in blank. 
 (ii) With respect to
any uncertificated security included in the Collateral and issued by an issuer formed under the laws of the United States or any political subdivision thereof (other than any uncertificated securities credited to a Securities Account), each Grantor
shall cause the issuer of such uncertificated security to either (i) register Lender as the registered owner thereof on the books and records of the issuer or (ii) execute an agreement in form and substance reasonably satisfactory to
Lender pursuant to which such issuer agrees to comply with Lender’s instructions with respect to such uncertificated security without further consent by such Grantor; provided, however, that Lender shall only issue instructions with
respect to such uncertificated security without the consent of such Grantor upon the occurrence and during the continuance of an Event of Default. 

(iii) With respect to any Deposit Accounts, Securities Accounts, Security Entitlements, Commodity Accounts and Commodity Contracts included in
the Collateral, each Grantor shall ensure that Lender has Control thereof including through the entry into of one or more control agreements in form and substance reasonably satisfactory to Lender. 

(iv) With respect to any Letter-of-Credit Rights with respect to a letter of credit included in the Collateral (other than any
Letter-of-Credit Rights constituting a Supporting Obligation for a Receivable in which Lender has a valid and perfected security interest), upon request by Lender, Grantor shall ensure that Lender has Control thereof by obtaining the written consent
of each issuer of each related letter of credit to the assignment of the proceeds of such letter of credit to Lender; provided, however, that Lender shall only issue instructions with respect to such Letter of Credit Rights without the
consent of such Grantor upon the occurrence and during the continuance of an Event of Default. 
 (v) With respect to any Electronic Chattel
Paper or “transferable record” (as that term is defined in Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or in Section 16 of the Uniform Electronic Transactions Act as in effect in any
relevant jurisdiction) included in the Collateral with a value in excess of $5,000 in any one record and $50,000 in the aggregate, Grantor shall ensure that Lender has Control thereof. 

(vi) In the case of any Collateral (whether now owned or hereafter acquired) consisting of issued U.S. Patents or applications therefor,
registered Trademarks or applications therefor, or registered Copyrights or applications therefor, each Grantor that is an owner or assignee of such intellectual property shall upon the Closing or within thirty (30) days of acquisition thereof
execute and deliver to Lender a short form security agreement in substantially the form of Exhibit J-1 or Exhibit J-2 hereto, as applicable, (or a supplement thereto) covering all such intellectual property in appropriate form for recordation with
the U.S. Patent and Trademark Office or the U.S. Copyright Office, as the case may be, with respect to the first priority security interest and Lien of Lender. 

(vii) Without limiting the generality of Section 4.1(c), concurrent with the delivery of the Financial Statements required by
Sections 5.01(a), (b) and (c) of the Credit Agreement, Grantors shall deliver to Lender any updated, supplemental or additional information responsive to all of the Exhibits to this Security Agreement in an annual perfection certificate
supplement, which supplement shall be reasonably satisfactory to the Lender in form and substance. 

  
 17 

 ARTICLE V 

EVENTS OF DEFAULT AND REMEDIES 

5.1. Events of Default. The occurrence of any one or more of the following events shall constitute an Event of Default hereunder: 

(a) Any representation or warranty made by or on behalf of any Grantor under or in connection with this Security Agreement shall be materially
false as of the date on which made. 
 (b) The breach by any Grantor of any of the terms or provisions of Article IV. 

(c) The breach by any Grantor (other than a breach which constitutes an Event of Default under any other Section of this Article V) of any of
the terms or provisions of this Security Agreement which is not remedied within fifteen (15) days. 
 (d) The occurrence of any
“Event of Default” under, and as defined in, the Credit Agreement (beyond any applicable notice or grace periods as set forth therein). 

(e) Any Equity Interest which is included within the Collateral shall at any time constitute a Security or the issuer of any such Equity
Interest shall take any action to have such interests treated as a Security unless, upon five (5) Business Days’ written notice from the Lender to the applicable Grantor, (i) all certificates or other documents constituting such
Security have been delivered to the Lender and such Security is properly defined as such under Article 8 of the UCC of the applicable jurisdiction, whether as a result of actions by the issuer thereof or otherwise, or (ii) the Lender has
entered into a control agreement with the issuer of such Security or with a securities intermediary relating to such Security and such Security is defined as such under Article 8 of the UCC of the applicable jurisdiction, whether as a result of
actions by the issuer thereof or otherwise. 
 5.2. Remedies. 

(a) Upon the occurrence of an Event of Default, the Lender may exercise any or all of the following rights and remedies: 

(i) those rights and remedies provided in this Security Agreement, the Credit Agreement, or any other Loan Document;
provided that, this Section 5.2(a) shall not be understood to limit any rights or remedies available to the Lender prior to an Event of Default; 

(ii) those rights and remedies available to a secured party under the UCC (whether or not the UCC applies to the affected
Collateral) or under any other applicable law (including, without limitation, any law governing the exercise of a bank’s right of setoff or bankers’ lien) when a debtor is in default under a security agreement; 

(iii) give notice of sole control or any other instruction under any Deposit Account Control Agreement or other control
agreement with any securities intermediary and take any action therein with respect to such Collateral; 
 (iv) without
notice (except as specifically provided in a Collateral Access Agreement, Section 8.1 or elsewhere herein), demand or advertisement of any kind to any Grantor or any other Person, enter the premises of any Grantor where any Collateral is
located (through self-help and without judicial process) to collect, receive, assemble, process, appropriate, sell, lease, assign, grant 

  
 18 

 
an option or options to purchase or otherwise dispose of, deliver, or realize upon, the Collateral or any part thereof in one or more parcels at public or private sale or sales (which sales may
be adjourned or continued from time to time with or without notice and may take place at any Grantor’s premises or elsewhere), for cash, on credit or for future delivery without assumption of any credit risk, and upon such other terms as the
Lender may deem commercially reasonable; and 
 (v) concurrently with written notice to the applicable Grantor, transfer and
register in its name or in the name of its nominee the whole or any part of the Pledged Collateral, to exchange certificates or instruments representing or evidencing Pledged Collateral for certificates or instruments of smaller or larger
denominations, to exercise the voting and all other rights as a holder with respect thereto, to collect and receive all cash dividends, interest, principal and other distributions made thereon and to otherwise act with respect to the Pledged
Collateral as though the Lender was the outright owner thereof. 
 (vi) except with regard to Excluded Accounts, Lender may
apply the balance from any Deposit Account or instruct the bank at which any Deposit Account is maintained to pay the balance of any Deposit Account to or for the benefit of Lender. 

(vii) Lender may comply with any applicable state or federal law requirements in connection with a disposition of the
Collateral and compliance will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral. Lender may sell the Collateral without giving any warranties as to the Collateral. Lender may specifically disclaim or
modify any warranties of title or the like. This procedure will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral. 

(b) The Lender shall have the right upon any such public sale or sales and, to the extent permitted by law, upon any such private sale or
sales, to purchase for the benefit of the Lender, the whole or any part of the Collateral so sold, free of any right of equity redemption, which equity redemption the Grantor hereby expressly releases. 

(c) Until the Lender is able to effect a sale, lease, or other disposition of Collateral, the Lender shall have the right to hold or use
Collateral, or any part thereof, to the extent that it deems appropriate for the purpose of preserving Collateral or its value or for any other purpose deemed appropriate by the Lender. The Lender may, if it so elects, seek the appointment of a
receiver or keeper to take possession of Collateral and to enforce any of the Lender’s remedies, with respect to such appointment without prior notice or hearing as to such appointment. If Lender sells any of the Collateral upon credit, Grantor
will be credited only with payments actually made by purchaser and received by Lender and applied to indebtedness of the purchaser. In the event the purchaser fails to pay for the Collateral, Lender may resell the Collateral and Grantor shall be
credited with proceeds of the sale accordingly. 
 (d) If, after the Credit Agreement has terminated by its terms and all of the Obligations
have been paid in full, there remain Swap Obligations outstanding, the Lender may exercise the remedies provided in this Section 5.2 upon the occurrence of any event which would allow or require the termination or acceleration of any
Swap Obligations pursuant to the terms of the Swap Agreement. 
 (e) Notwithstanding the foregoing, the Lender shall not be required to
(i) make any demand upon, or pursue or exhaust any of its rights or remedies against, any Grantor, any other obligor, guarantor, pledgor or any other Person with respect to the payment of the Secured Obligations or to pursue or exhaust any of
its rights or remedies with respect to any Collateral therefor or any direct or indirect guarantee thereof, (ii) marshal the Collateral or any guarantee of the Secured Obligations or to resort to the Collateral or any such guarantee in any
particular order, or (iii) effect a public sale of any Collateral. 

  
 19 

 (f) Each Grantor recognizes that the Lender may be unable to effect a public sale of any or all
the Pledged Collateral and may be compelled to resort to one or more private sales thereof in accordance with clause (a) above. Each Grantor also acknowledges that any private sale may result in prices and other terms less favorable to
the seller than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall not be deemed to have been made in a commercially unreasonable manner solely by virtue of such sale being private. The
Lender shall be under no obligation to delay a sale of any of the Pledged Collateral for the period of time necessary to permit any Grantor or the issuer of the Pledged Collateral to register such securities for public sale under the Securities Act
of 1933, as amended, or under applicable state securities laws, even if the applicable Grantor and the issuer would agree to do so. 
 5.3.
Grantor’s Obligations Upon Event of Default. Upon the request of the Lender after the occurrence and during the continuation of an Event of Default, each Grantor will: 

(a) assemble and make available to the Lender the Collateral and all books and records relating thereto at any place or places specified by
the Lender, whether at a Grantor’s premises or elsewhere; 
 (b) permit the Lender, by the Lender’s representatives and agents, to
enter, occupy and use any premises where all or any part of the Collateral, or the books and records relating thereto, or both, are located, to take possession of all or any part of the Collateral or the books and records relating thereto, or both,
to remove all or any part of the Collateral or the books and records relating thereto, or both, and to conduct sales of the Collateral, without any obligation to pay the Grantor for such use and occupancy; 

(c) prepare and file, or cause an issuer of Pledged Collateral to prepare and file, with the Securities and Exchange Commission or any other
applicable government agency, registration statements, a prospectus and such other documentation in connection with the Pledged Collateral as the Lender may request, all in form and substance reasonably satisfactory to the Lender, and furnish to the
Lender, or cause an issuer of Pledged Collateral to furnish to the Lender, any information regarding the Pledged Collateral in such detail as the Lender may specify; 

(d) take, or cause an issuer of Pledged Collateral to take, any and all actions necessary to register or qualify the Pledged Collateral to
enable the Lender to consummate a public sale or other disposition of the Pledged Collateral; and 
 (e) at its own expense, cause the
independent certified public accountants then engaged by each Grantor to prepare and deliver to the Lender, at any time, and from time to time, promptly upon the Lender’s request, the following reports with respect to the applicable Grantor:
(i) a reconciliation of all Accounts; (ii) an aging of all Accounts; (iii) trial balances; and (iv) a test verification of such Accounts. 

5.4. Grant of Intellectual Property License. For the purpose of enabling the Lender to exercise the rights and remedies under this
Article V at such time as the Lender shall be lawfully entitled to exercise such rights and remedies, each Grantor hereby (a) grants to the Lender an irrevocable, nonexclusive license (exercisable without payment of royalty or other
compensation to any Grantor) to use, license or sublicense any intellectual property rights now owned or hereafter acquired by such Grantor, and wherever the same may be located, and including in such license access to all media in which any of the
licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof and (b) irrevocably agrees that the Lender may sell any of such Grantor’s Inventory directly to any person,
including without limitation persons who have previously purchased the Grantor’s Inventory from such Grantor and in connection with any such sale or other enforcement of the Lender’s rights under this Security Agreement, may sell Inventory
which bears any Trademark owned by or licensed to such Grantor and any Inventory that is covered by any Copyright owned by or licensed to such Grantor and the Lender may finish any work in process and affix any Trademark owned by or licensed to such
Grantor and sell such Inventory as provided herein. 

  
 20 

 5.5 Intellectual Property Rights. Notwithstanding anything to the contrary in this
Security Agreement, in addition to the other rights and remedies provided herein, upon the occurrence and during the continuation of an Event of Default: 

(i) Lender shall have the right (but not the obligation) to bring suit or otherwise commence any action or proceeding in the
name of any Grantor, Lender or otherwise, in Lender’s reasonable discretion, to enforce any intellectual property rights owned by such Grantor, in which event such Grantor shall, at the request of Lender, at such Grantor’s sole cost and
expense, do any and all lawful acts and execute any and all documents reasonably required by Lender in aid of such enforcement, and such Grantor shall promptly, upon demand, reimburse and indemnify Lender as provided in Section 7.19 of
this Security Agreement and as set forth in the Credit Agreement. 
 (ii) upon Lender’s request, each Grantor shall
grant, assign, convey or otherwise transfer to Lender all of such Grantor’s right, title and interest in and to any intellectual property that is Collateral and shall execute and deliver to Lender such documents as are necessary or appropriate
to carry out the intent and purposes of this Security Agreement; 
 (iii) each Grantor agrees that such an assignment
and/or recording shall be applied to reduce the Secured Obligations outstanding only to the extent that Lender receives cash proceeds in respect of the sale of, or other realization upon, any such intellectual property; 

ARTICLE VI 
 ACCOUNT
VERIFICATION; ATTORNEY IN FACT; PROXY 
 6.1. Account Verification. The Lender may at any time after the occurrence and during
the continuation of an Event of Default, in the Lender’s own name, in the name of a nominee of the Lender, or in the name of any Grantor communicate (by mail, telephone, facsimile or otherwise) with the Account Debtors of any such Grantor,
parties to contracts with any such Grantor and obligors in respect of Instruments of any such Grantor to verify with such Persons, to the Lender’s satisfaction, the existence, amount, terms of, and any other matter relating to, Accounts,
Instruments, Chattel Paper, payment intangibles and/or other Receivables. 
 6.2. Authorization for Lender to Take Certain Action.

 (a) Each Grantor irrevocably authorizes the Lender and appoints the Lender as its attorney-in-fact, at any time upon the occurrence and
during the continuance of any Event of Default, (i) to endorse and collect any cash proceeds of the Collateral, (ii) to file any financing statement with respect to the Collateral and to file any other financing statement or amendment of a
financing statement (which does not add new collateral or add a debtor) in such offices as the Lender in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the Lender’s security interest
in the Collateral, (iii) to contact and enter into one or more agreements with the issuers of uncertificated securities which are Pledged Collateral or with securities intermediaries holding Pledged Collateral as may be necessary or advisable
to give the Lender Control over such Pledged Collateral, (iv) to discharge past due taxes, assessments, charges, fees or Liens on the Collateral (except for such Liens that are permitted under Section 6.02 of the Credit Agreement),
(v) to contact Account Debtors for any reason provided in, and subject to the requirements of, Section 6.1, (vi) to demand payment or enforce payment of the Receivables in the name of the Lender or such Grantor and to endorse
any 

  
 21 

 
and all checks, drafts, and other instruments for the payment of money relating to the Receivables, (vii) to sign such Grantor’s name on any invoice or bill of lading relating to the
Receivables, drafts against any Account Debtor of the Grantor, assignments and verifications of Receivables, (viii) to exercise all of such Grantor’s rights and remedies with respect to the collection of the Receivables and any other
Collateral, (ix) to settle, adjust, compromise, extend or renew the Receivables, (x) to settle, adjust or compromise any legal proceedings brought to collect Receivables, (xi) to prepare, file and sign such Grantor’s name on a
proof of claim in bankruptcy or similar document against any Account Debtor of such Grantor, (xii) to prepare, file and sign such Grantor’s name on any notice of Lien, assignment or satisfaction of Lien or similar document in connection
with the Receivables, (xiii) to change the address for delivery of mail addressed to such Grantor to such address as the Lender may designate and to receive, open and dispose of all mail addressed to such Grantor, and (xiv) to do all other
reasonable acts and things necessary to carry out this Security Agreement; and such Grantor agrees to reimburse the Lender on demand for any payment made or any expense incurred by the Lender in connection with any of the foregoing; provided
that, this authorization shall not relieve such Grantor of any of its obligations under this Security Agreement or under the Credit Agreement. 

(b) All acts of said attorney or designee are hereby ratified and approved. The powers conferred on the Lender under this
Section 6.2 are solely to protect the Lender’s interests in the Collateral and shall not impose any duty upon the Lender to exercise any such powers. The Lender agrees that it shall not exercise any power or authority granted to it
unless an Event of Default has occurred and is continuing. 
 6.3. Proxy. EACH GRANTOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS
THE LENDER AS ITS PROXY AND ATTORNEY-IN-FACT (AS SET FORTH IN SECTION 6.2 ABOVE) OF THE GRANTOR WITH RESPECT TO ITS PLEDGED COLLATERAL, INCLUDING THE RIGHT, UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF ANY EVENT OF DEFAULT, TO VOTE SUCH
PLEDGED COLLATERAL, WITH FULL POWER OF SUBSTITUTION TO DO SO. IN ADDITION TO SUCH RIGHT TO VOTE ANY SUCH PLEDGED COLLATERAL, THE APPOINTMENT OF THE LENDER AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT, UPON THE OCCURRENCE AND DURING THE
CONTINUANCE OF ANY EVENT OF DEFAULT, TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF SUCH PLEDGED COLLATERAL WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL
MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY SUCH PLEDGED COLLATERAL ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY
PERSON (INCLUDING THE ISSUER OF SUCH PLEDGED COLLATERAL OR ANY OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF ANY EVENT OF DEFAULT. 

6.4. Nature of Appointment; Limitation of Duty. THE APPOINTMENT OF THE LENDER AS PROXY AND ATTORNEY-IN-FACT IN THIS ARTICLE VI
IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE DATE ON WHICH THIS SECURITY AGREEMENT IS TERMINATED IN ACCORDANCE WITH SECTION 7.14. NOTWITHSTANDING ANYTHING CONTAINED HEREIN, NEITHER THE LENDER, NOR ANY OF ITS AFFILIATES, NOR
ANY OF THEIR OR THEIR AFFILIATES’ RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL HAVE ANY DUTY TO EXERCISE ANY RIGHT OR POWER GRANTED HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY
FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO, EXCEPT IN RESPECT OF DAMAGES ATTRIBUTABLE SOLELY TO ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION; PROVIDED THAT, IN NO EVENT SHALL THEY BE
LIABLE FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES. 

  
 22 

 ARTICLE VII 

GENERAL PROVISIONS 
 7.1
Waivers. Each Grantor hereby waives notice of the time and place of any public sale or the time after which any private sale or other disposition of all or any part of the Collateral may be made. To the extent such notice may not be waived
under applicable law, any notice made shall be deemed reasonable if sent to Grantors, addressed as set forth in Article IX, at least ten (10) days prior to (i) the date of any such public sale or (ii) the time after which any
such private sale or other disposition may be made. To the maximum extent permitted by applicable law, each Grantor waives all claims, damages, and demands against the Lender arising out of the repossession, retention or sale of the Collateral,
except such as arise solely out of the gross negligence or willful misconduct of the Lender as finally determined by a court of competent jurisdiction. To the extent it may lawfully do so, each Grantor absolutely and irrevocably waives and
relinquishes the benefit and advantage of, and covenants not to assert against the Lender, any valuation, stay, appraisal, extension, moratorium, redemption or similar laws and any and all rights or defenses it may have as a surety now or hereafter
existing which, but for this provision, might be applicable to the sale of any Collateral made under the judgment, order or decree of any court, or privately under the power of sale conferred by this Security Agreement, or otherwise. Except as
otherwise specifically provided herein, each Grantor hereby waives presentment, demand, protest or any notice (to the maximum extent permitted by applicable law) of any kind in connection with this Security Agreement or any Collateral. 

7.2. Limitation on the Lender’s Duty with Respect to the Collateral. The Lender shall have no obligation to clean-up or otherwise
prepare the Collateral for sale. The Lender shall use reasonable care with respect to the Collateral in its possession or under its control. The Lender shall not have any other duty as to any Collateral in its possession or control or in the
possession or control of any agent or nominee of the Lender, or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. To the extent that applicable law imposes duties on the Lender to
exercise remedies in a commercially reasonable manner, each Grantor acknowledges and agrees that it is commercially reasonable for the Lender (i) to fail to incur expenses deemed significant by the Lender to prepare Collateral for disposition
or otherwise to transform raw material or work in process into finished goods or other finished products for disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required
by other law, to fail to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against Account Debtors or other Persons
obligated on Collateral or to remove Liens on or any adverse claims against Collateral, (iv) to exercise collection remedies against Account Debtors and other Persons obligated on Collateral directly or through the use of collection agencies
and other collection specialists, (v) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other Persons, whether or not in
the same business as such Grantor, for expressions of interest in acquiring all or any portion of such Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the Collateral is
of a specialized nature, (viii) to dispose of Collateral by utilizing internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match buyers and
sellers of assets, (ix) to dispose of assets in wholesale rather than retail markets, (x) to disclaim disposition warranties, such as title, possession or quiet enjoyment, (xi) to purchase insurance or credit enhancements to insure
the Lender against risks of loss, collection or disposition of Collateral or to provide to the Lender a guaranteed return from the collection or disposition of Collateral, or (xii) to the extent deemed appropriate by the Lender, to obtain the
services of other brokers, investment bankers, consultants and other professionals to assist the Lender in the collection or disposition of any of the Collateral. The Grantor acknowledges that the purpose of this Section 7.2 is to
provide 

  
 23 

 
non-exhaustive indications of what actions or omissions by the Lender would be commercially reasonable in the Lender’s exercise of remedies against the Collateral and that other actions or
omissions by the Lender shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 7.2. Without limitation upon the foregoing, nothing contained in this Section 7.2 shall be
construed to grant any rights to the Grantor or to impose any duties on the Lender that would not have been granted or imposed by this Security Agreement or by applicable law in the absence of this Section 7.2. 

7.3. Compromises and Collection of Collateral. The Grantors and the Lender recognize that setoffs, counterclaims, defenses and other
claims may be asserted by obligors with respect to certain of the Receivables, that certain of the Receivables may be or become uncollectible in whole or in part and that the expense and probability of success in litigating a disputed Receivable may
exceed the amount that reasonably may be expected to be recovered with respect to a Receivable. In view of the foregoing, each Grantor agrees that the Lender may at any time and from time to time, if an Event of Default has occurred and is
continuing, compromise with the obligor on any Receivable, accept in full payment of any Receivable such amount as the Lender in its sole discretion shall determine or abandon any Receivable, and any such action by the Lender shall be commercially
reasonable so long as the Lender acts in good faith based on information known to it at the time it takes any such action. 
 7.4.
Secured Party Performance of Debtor Obligations. Without having any obligation to do so, upon five (5) Business Days’ notice, the Lender may perform or pay any obligation which any Grantor has agreed to perform or pay in this
Security Agreement and the Grantors shall reimburse the Lender for any amounts paid by the Lender pursuant to this Section 7.4. The Grantors’ obligation to reimburse the Lender pursuant to the preceding sentence shall be a Secured
Obligation payable on demand. 
 7.5 Specific Performance of Certain Covenants. Each Grantor acknowledges and agrees that a breach of
any of the covenants contained in Sections 4.1(d), 4.1(e), 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.12, 4.13, 4.14, 4.15, 4.17, 5.3, 5.4,
5.5, or 7.7 will cause irreparable injury to the Lender, that the Lender has no adequate remedy at law in respect of such breaches and therefore agrees, without limiting the right of the Lender to seek and obtain specific performance
of other obligations of the Grantors contained in this Security Agreement, that the covenants of the Grantors contained in the Sections referred to in this Section 7.5 shall be specifically enforceable against the Grantors. 

7.6. Dispositions Not Authorized. No Grantor is authorized to sell or otherwise dispose of the Collateral except as set forth in
Section 4.1(d) and notwithstanding any course of dealing between any Grantor and the Lender or other conduct of the Lender, no authorization to sell or otherwise dispose of the Collateral (except as set forth in
Section 4.1(d)) shall be binding upon the Lender unless such authorization is in writing signed by the Lender. 
 7.7. No
Waiver; Amendments; Cumulative Remedies. No failure or delay by the Lender to exercise any right or power under this Security Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Lender hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Security Agreement or consent to any departure by the Grantor therefrom shall in any event be effective unless in writing signed by the Lender and
then only to the extent in such writing specifically set forth. 
 7.8. Limitation by Law; Severability of Provisions. All rights,
remedies and powers provided in this Security Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law, and all the provisions of this Security Agreement are intended to be subject to
all applicable 

  
 24 

 
mandatory provisions of law that may be controlling and to be limited to the extent necessary so that they shall not render this Security Agreement invalid, unenforceable or not entitled to be
recorded or registered, in whole or in part. Any provision in this Security Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction, and to this end the provisions of this Security Agreement are declared to be severable.. 
 7.9 Reinstatement. This
Security Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against any Grantor for liquidation or reorganization, should any Grantor become insolvent or make an assignment for the benefit
of any creditor or creditors or should a receiver or trustee be appointed for all or any significant part of any Grantor’s assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance
of the Secured Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Secured Obligations, whether as a “voidable preference,”
“fraudulent conveyance,” or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Secured Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned. 
 7.10. Benefit of
Agreement. The terms and provisions of this Security Agreement shall be binding upon and inure to the benefit of the Grantors, the Lender and their respective successors and assigns (including all persons who become bound as a debtor to this
Security Agreement), except that no Grantor shall have the right to assign its rights or delegate its obligations under this Security Agreement or any interest herein, without the prior written consent of the Lender. No sales of participations,
assignments, transfers, or other dispositions of any agreement governing the Secured Obligations or any portion thereof or interest therein shall in any manner impair the Lien granted to the Lender hereunder. 

7.11. Survival of Representations. All representations and warranties of the Grantors contained in this Security Agreement shall
survive the execution and delivery of this Security Agreement. 
 7.12. Taxes and Expenses. Any taxes (including income taxes)
payable or ruled payable by Federal or State authority in respect of this Security Agreement shall be paid by the Grantors, together with interest and penalties, if any. The Grantors shall reimburse the Lender for any and all out-of-pocket expenses
and internal charges (including reasonable attorneys’, auditors’ and accountants’ fees and reasonable time charges of attorneys, paralegals, auditors and accountants who may be employees of the Lender) paid or incurred by the Lender
in connection with the preparation, execution, delivery, administration, collection and enforcement of this Security Agreement and, to the extent provided in the Credit Agreement in the audit, analysis, administration, collection, preservation or
sale of the Collateral (including the expenses and charges associated with any periodic or special audit of the Collateral). Any and all costs and expenses incurred by the Grantors in the performance of actions required pursuant to the terms hereof
shall be borne solely by the Grantors. 
 7.13. Headings. The title of and section headings in this Security Agreement are for
convenience of reference only, and shall not govern the interpretation of any of the terms and provisions of this Security Agreement. 

7.14. Termination. This Security Agreement shall continue in effect (notwithstanding the fact that from time to time there may be no
Secured Obligations outstanding) until (i) the Credit Agreement has terminated pursuant to its express terms, (ii) all of the Secured Obligations have been indefeasibly paid and performed in full (or with respect to any outstanding Letters
of Credit, a cash deposit or in the sole discretion of the Lender, a back up standby Letter of Credit reasonably satisfactory to the Lender has been delivered to the 

  
 25 

 
Lender as required by the Credit Agreement) other than contingent indemnification obligations in which no claim has been made or is reasonably foreseeable and (iii) no commitments of the
Lender which would give rise to any Secured Obligations are outstanding. 
 7.15. Entire Agreement. This Security Agreement and the
other Loan Documents embody the entire agreement and understanding between the Grantors and the Lender relating to the Collateral and supersedes all prior agreements and understandings between the Grantors and the Lender relating to the Collateral.

 7.16. CHOICE OF LAW. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS (AND NOT
THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. 
 7.17. CONSENT
TO JURISDICTION. EACH GRANTOR HEREBY IRREVOCABLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. EACH OF THE PARTIES HERETO
AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE LENDER TO BRING
PROCEEDINGS AGAINST ANY GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY GRANTOR AGAINST THE LENDER OR ANY AFFILIATE OF THE LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK, NEW YORK. 
 7.18.
WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT,
ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OR OTHER AGENT (INCLUDING ANY ATTORNEY) OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. 
 7.19. Indemnity. Each Grantor hereby agrees to
indemnify the Lender and its successors, assigns, agents and employees (each such Person being called an “Indemnitee”), from and against any and all liabilities, damages, penalties, suits, costs, and expenses of any kind and nature
(including, without limitation, all expenses 

  
 26 

 
of litigation or preparation therefor whether or not the Lender is a party thereto) imposed on, incurred by or asserted against the Lender, or its successors, assigns, agents and employees, in
any way relating to or arising out of this Security Agreement, or the manufacture, purchase, acceptance, rejection, ownership, delivery, lease, possession, use, operation, condition, sale, return or other disposition of any Collateral (including,
without limitation, latent and other defects, whether or not discoverable by the Lender or any Grantor, and any claim for Patent, Trademark or Copyright infringement); provided that such indemnity shall not, as to any Indemnitee, be available
to the extent that such liabilities, damages, penalties, suits, costs, or expenses resulted from the gross negligence or willful misconduct of such Indemnitee. 

7.20. Counterparts. This Security Agreement may be executed in any number of counterparts, all of which taken together shall constitute
one agreement, and any of the parties hereto may execute this Security Agreement by signing any such counterpart. Delivery of an executed counterpart of a signature page of this Security Agreement by facsimile or other electronic transmission shall
be effective as delivery of a manually executed counterpart of this Security Agreement. 
 ARTICLE VIII 

NOTICES 
 8.1. Sending
Notices. Any notice required or permitted to be given under this Security Agreement shall be sent in accordance with Section 8.01 of the Credit Agreement. 

8.2. Change in Address for Notices. Each of the Grantors and the Lender may change the address for service of notice upon it by a
notice in writing to the other parties. 
 {Signature Pages Follow} 

  
 27 

 IN WITNESS WHEREOF, the below has executed this Security Agreement as of the date first above
written. 
  

			
	GRANTOR:
	
	RAND WORLDWIDE, INC.
		
	By:	 	 /s/ Lawrence Rychlak

	Name:	 	Lawrence Rychlak
	Title:	 	President

 My Commission Expires: 2/12/2017 

STATE OF MARYLAND     ) 

                          
                     ) SS 
 COUNTY OF BALTIMORE)

 The foregoing instrument was acknowledged before me this 3rd day of November, 2014,
by, a            of            , on behalf of said 
  

							
	

	  		  		  	

	  		  	        Notary Public	  	
	  		  	  
 My commission expires:
	  	2/12/2017

 {Signatures continue on next page.} 

Signature Page to Security Agreement 

  

 IN WITNESS WHEREOF, the below has executed this Security Agreement as of the date first above
written. 
  

			
	GRANTOR:
	
	RAND WORLDWIDE FOREIGN HOLDINGS, INC.
		
	By:	 	 /s/ Lawrence Rychlak

	Name:	 	Lawrence Rychlak
	Title:	 	President

 My Commission Expires: 2/12/2017 

STATE OF MARYLAND    ) 

                          
                     ) SS 
 COUNTY OF BALTIMORE)

 The foregoing instrument was acknowledged before me this 3rd day of November, 2014,
by, a            of            , on behalf of said 
  

							
	

	  		  	        Notary Public	  	

	  		  	  
 My commission expires:
	  	2/12/2017

 {Signatures continue on next page.} 

Signature Page to Security Agreement 

  

 IN WITNESS WHEREOF, the below has executed this Security Agreement as of the date first above
written. 
  

			
	GRANTOR:
	
	 RAND WORLDWIDE SUBSIDIARY, INC.

		
	By:	 	 /s/ Lawrence Rychlak

	Name:	 	Lawrence Rychlak
	Title:	 	President

 My Commission Expires: 2/12/2017 

STATE OF MARYLAND    ) 

                          
                     ) SS 
 COUNTY OF BALTIMORE)

 The foregoing instrument was acknowledged before me this 3rd day of November, 2014,
by, a            of            , on behalf of said 
  

							
	

	  		  	        Notary Public	  	

	  		  	  
 My commission expires:
	  	2/12/2017

 {Signatures continue on next page.} 

Signature Page to Security Agreement 

  

 IN WITNESS WHEREOF, the below have executed this Security Agreement as of the date first above
written. 
  

			
	JPMORGAN CHASE BANK, N.A.,
	as Lender
		
	By:	 	/s/ Morgan Higgins
	Name:	 	Morgan Higgins
	Title:	 	Vice President

 Signature Page to Security Agreement 

  

 EXECUTION VERSION 

EXHIBIT A 
 (See Sections
3.2, 3.3, 3.4, 3.6, 3.9 and 4.1 of Security Agreement) 
 NOTICE ADDRESS FOR ALL GRANTORS 

 

			
		 	 Rand Worldwide
 11201 Dolfield Blvd, Suite
112
 Owings Mills, MD 21117
 Attention: Lawrence Rychlak

Facsimile: 410-581-8080

 INFORMATION AND COLLATERAL LOCATIONS OF Rand Worldwide, Inc. 

 

	I.	Full Legal Name of Grantor: Rand Worldwide, Inc. 

  

	II.	State of Incorporation or Organization: Delaware 

  

	III.	Type of Entity: Corporation 

  

	IV.	Organizational Number assigned by State of Incorporation or Organization: 2095550 

  

	V.	Federal Identification Number: 84-1035353 

  

	VI.	Place of Business (if it has only one) or Chief Executive Office (if more than one place of business) and Mailing Address: 

11201 Dolfield Blvd, Suite 112 

Owings Mills, MD 21117 

Attention: Lawrence Rychlak 
  

	VII.	Locations of Collateral:  

 (a) Properties Owned by the Grantor: 

None. 
 (b) Properties Leased
by the Grantor (Include Landlord’s Name): 
  

					
	 Address of Property
	  	Landlord’s Name	 
	 161 Worcester Rd

Suite 401

Framingham, MA 01701
	  	 	CRP-3 the Meadows, LLC	  

 (c) Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements (include name
of Warehouse Operator or other Bailee or Consignee): 
 None. 

(d) Other Locations of Collateral: 11201 Dolfield Blvd, Suite 112, Owings Mills, MD 21117 

 

	VIII.	Other Names: Avatech Solutions, Inc., Imaginit Technologies, Ascent, Rand Worldwide. 

 INFORMATION AND COLLATERAL LOCATIONS OF Rand Worldwide Foreign Holdings, Inc. 

 

	I.	Name of Grantor: Rand Worldwide Foreign Holdings, Inc. 

  

	II.	State of Incorporation or Organization: Delaware 

  

	III.	Type of Entity: Corporation 

  

	IV.	Organizational Number assigned by State of Incorporation or Organization: 4399662 

  

	V.	Federal Identification Number: 26-0630109 

  

	VI.	Place of Business (if it has only one) or Chief Executive Office (if more than one place of business) and Mailing Address: 

11201 Dolfield Blvd, Suite 112 

Owings Mills, MD 21117 

Attention: Lawrence Rychlak 
  

	VII.	Locations of Collateral: 

 (a) Properties Owned by the Grantor: 

None. 
 (b) Properties Leased
by the Grantor (Include Landlord’s Name): 
 None. 

(c) Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements (include name of Warehouse Operator or other
Bailee or Consignee): 
 None. 

(d) Other Locations of Collateral: 161 Worcester Road, Suite 401, Framingham, MA 01701; 

                        
                               11201 Dolfield Blvd, Suite 112, Owings Mills, MD 21117 

 

	VIII.	Other Names: Rand Worldwide, Inc. 

 INFORMATION AND COLLATERAL LOCATIONS OF Rand Worldwide Subsidiary, Inc. 

 

	I.	Name of Grantor: Rand Worldwide Subsidiary, Inc. 

  

	II.	State of Incorporation or Organization: Delaware 

  

	III.	Type of Entity: Corporation 

  

	IV.	Organizational Number assigned by State of Incorporation or Organization: 2662225 

  

	V.	Federal Identification Number: 52-2023997 

  

	VI.	Place of Business (if it has only one) or Chief Executive Office (if more than one place of business) and Mailing Address:  

11201 Dolfield Blvd, Suite 112 

Owings Mills, MD 21117 

Attention: Lawrence Rychlak 
  

	VII.	Locations of Collateral:  

 (a) Properties Owned by the Grantor: 

None. 
 (b) Properties Leased
by the Grantor (Include Landlord’s Name): 
  

			
	 Address of Property
	  	 Name of Landlord

	 5000 Birch St

Suite 4500

Newport Beach, CA 92660
	  	Cornerstone Partners IV, LLC
		
	 8101 East Prentice Ave.

Suite 725

Greenwood Village, CO 80111
	  	GPIPM LTD
		
	 555 Winderley Place

Suite 225

Maitland, FL 32751
	  	FCA Fund LLC
		
	 7880 Woodland Center Blvd.

Tampa, FL 33614
	  	Liberty Property Limited Partnership
		
	 35 E. Wacker Drive

Suite 1960

Chicago, IL 60601
	  	DUS Management, Inc.
		
	 3601 Algonquin Rd

Suite 220

Rolling Meadows, IL 60008
	  	3601 Crossroads, LLC
		
	 8604 Allisonville Road

Suite 370

Indianapolis, IN 46250
	  	Castle Creek Office LLC
		
	 11156 Aurora Ave

Urbandale, IA 50322
	  	R&R Realty Group LTD

			
	 11201 Dolfield Blvd

Suite 112

Owings Mills, MD 21117
	  	Merritt Properties
		
	 1228 Kirts Blvd

Suite 400

Troy, MI 48084
	  	Ari-El Enterprises
		
	 4445 Wilson South West

Grandville, MI 49418
	  	Wilson Street Management
		
	 860 Blue Gentian Road

Suite 145

Eagan, MN 55121
	  	BPG GRAND OAK BUILDING I INVESTORS, LLC
		
	 11422 Miracle Hills Drive

Suite 420

Omaha, NE 68154
	  	IRET Properties
		
	 2 Commerce Drive

Suite 203

Bedford, NH 03110
	  	2 Commerce Drive, LLC
		
	 4600- A Montgomery Blvd NE

Suite 205

Albuquerque, NM 87109
	  	Monroe HBC LLC
		
	 1 Computer Drive South

Albany, NY 12205
	  	Willard T Anderson Properties
		
	 6225 Sheridan Dr

Suite 202

Buffalo, NY 14221
	  	Univest II Corp
		
	 61 Broadway

Suite 2004

New York, NY 10006
	  	RXR 61 Broadway Owner LLC
		
	 Donwood Office Park

101-135 Old Cove Rd, Suite 109

Liverpool, NY 13090
	  	Donwood Office Park Associate
		
	 217 N Washington Street

Rome, NY 13440
	  	Persistence Realty, LLC
		
	 2201 Water Ridge Pkwy

Suite 330

Charlotte, NC 28217
	  	FRDGS II REO LLC
		
	 13420 Reese Blvd West

Huntersville, NC 28078
	  	Max Daetwyler Corporation
		
	 One Copley Parkway

Suite 104 Concourse Building

Morrisville, NC 27560
	  	Highwoods Properties, Inc.
		
	 6155 Rockside Rd

Suite 201

Independence, OH 44131
	  	Rockside Square I
		
	 2545 Farmers Drive

Suite 100

Columbus, OH 43235
	  	S F & E Associates, Ltd.

			
	 6640 Poe Avenue

Suite 4500

Dayton, OH 45414
	  	Poe Park Center LLC
		
	 1446 S Reynolds Road

Suite 320

Maumee, OH 43537
	  	Reynolds Investment Group, Ltd
		
	 421 SW 6th Ave

Suite 975

Portland, OR 97204
	  	UPI Commonwealth LLC
		
	 1255 Corporate Drive

Suite 175

Irving, TX 75038
	  	NNN Westpoint, LLC
		
	 10700 Richmond

Ste 131

Houston, TX 77042
	  	Gupta Richmond Avenue, LP
		
	 488 East 6400 South

Suite 350

Murray City, UT 84107
	  	Commerce Park Owners I LLC
		
	 630 Peter Jefferson Parkway

Suite 175

Charlottesville, VA 22911
	  	PJP Building II LC
		
	 8100 Three Chopt Road

Suite 119

Richmond, VA 23229
	  	KR Augst & Otis Poole
		
	 5700 Cleveland Street

Suite 410

Virginia Beach, VA 23462
	  	Chartway Federal Credit Union
		
	 2101 Fourth Ave

Suite 1160

Seattle, WA 98121
	  	Selig Real Estate holding Five LLC
		
	 1110 North Old World Third Street

Suite 412

Milwaukee, WI 53203
	  	RFP Office, LLC

 (c) Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements (include name
of Warehouse Operator or other Bailee or Consignee): 
 None. 

(d) Other Locations of Collateral: 161 Worcester Road, Suite 401, Framingham, MA 01701 

 

	VIII.	Other Names: Avatech Solutions Subsidiary, Inc. 

 EXHIBIT B 

(See Section 3.5 of Security Agreement) 

DEPOSIT ACCOUNTS 
  

					
	 Name of Grantor
	  	Name of Institution	  	Account Number
	 Rand Worldwide, Inc.
	  	PNC Bank	  	Ending-3847
	 Rand Worldwide, Inc.
	  	PNC Bank	  	Ending-3863
	 Rand Worldwide, Inc.
	  	PNC Bank	  	Ending-3WCL

 EXHIBIT C 

(See Section 3.7 of Security Agreement) 

LETTER OF CREDIT RIGHTS 
 None.

 CHATTEL PAPER 
 None. 

 EXHIBIT D 

(See Section 3.10 and 3.11 of Security Agreement) 

INTELLECTUAL PROPERTY RIGHTS 

PATENTS 
 None. 

PATENT APPLICATIONS 
 None. 

TRADEMARKS 
  

							
	 Name of Loan Party
	  	Trademark	  	Serial Number	  	Registration Date
	 Rand Worldwide, Inc.
	  	Avatech Solutions, Inc.	  	75269511	  	1998-09-22

 TRADEMARK APPLICATIONS 

None. 
 COPYRIGHTS 

 

							
	 Name of Loan Party
	  	 Copyright
	  	Document
Number	  	Date of
Recordation
	 Rand Worldwide, Inc.
	  	3ds max version 4 and user’s guides & 218 other titles	  	V3566D647	  	2007-09-06
				
	 Rand Worldwide, Inc.
	  	3ds max version 6 & 16 other titles	  	V3517D331	  	2004-10-15
				
	 Rand Worldwide, Inc.
	  	AutoCAD 2002 & 53 other titles	  	V3516D450	  	2004-10-20
				
	 Rand Worldwide, Inc.
	  	AutoCAD 2009 and user assistance cue cards & 83 other titles	  	V3580D696	  	2009-05-11
				
	 Rand Worldwide, Inc.
	  	AutocCAD 2002 & 18 other titles	  	V3493D454	  	2002-08-19
				
	 Rand Worldwide, Inc.
	  	AutocCAD 2002 & 18 other titles	  	V3493D455	  	2002-08-19
				
	 Rand Worldwide, Inc.
	  	AutocCAD 2002 & 18 other titles	  	V3493D456	  	2002-08-19
				
	 Rand Worldwide, Inc.
	  	AutocCAD 2002 & 18 other titles	  	V3493D457	  	2002-08-19
				
	 Rand Worldwide, Inc.
	  	AutocCAD 2002 & 18 other titles	  	V3493D458	  	2002-08-19
				
	 Rand Worldwide, Inc.
	  	Civil design in-depth courseware	  	TXu001114171	  	2003-07-08
				
	 Rand Worldwide, Inc.
	  	Discreet education reseller agreement (United States)	  	V3516D938	  	2004-09-08
				
	 Rand Worldwide, Inc.
	  	Land desktop fundamentals	  	TXu001095845	  	2003-02-04
				
	 Rand Worldwide Subsidiary, Inc.
	  	AutoCAD 2002 & 23 other titles.	  	V3516D132	  	2004-05-12

 COPYRIGHT APPLICATIONS 

None. 
 INTELLECTUAL PROPERTY LICENSES 

None. 

 EXHIBIT E 

(See Section 3.11 of Security Agreement) 

TITLE DOCUMENTS 
 I. Vehicles subject to
certificates of title: 
  

							
	 Name of Grantor
	  	Description	  	Title Number	  	State Where Issued
	 None.
	  		  		  	

 II. Aircraft/engines/parts, ships, railcars and other vehicles governed by federal statute: 

 

					
	 Name of Grantor
	  	Description	  	Registration Number
	 None.
	  		  	

 EXHIBIT F 

(See Section 3.11 of Security Agreement) 

FIXTURES 
 I. Legal description, county and
street address of property on which Fixtures are located (by Grantor): 
 None 

II. Name and Address of Record Owner: 
  

	
	 N/A

	  

	  

	  

 EXHIBIT G 

(See Section 3.13 of Security Agreement and Definition of “Pledged Collateral”) 

LIST OF PLEDGED COLLATERAL, SECURITIES AND OTHER INVESTMENT PROPERTY 

STOCKS 
  

													
	 Name of Grantor
	  	 Issuer
	  	 Certificate
Number(s)
	  	Number of
Shares	  	 Class of Stock
	  	Percentage of
Outstanding
Shares	 
	 Rand Worldwide, Inc.
	  	Rand Worldwide Subsidiary, Inc.	  	1	  	1,000	  	Common	  	 	100	% 
	 Rand Worldwide, Inc.
	  	Rand Worldwide Foreign Holdings, Inc.	  	15	  	0.65	  	Common	  	 	65	% 
	 Rand Worldwide Foreign Holdings, Inc.
	  	Rand A Technology Corporation	  	4C	  	65	  	Common	  	 	65	% 
	 Rand Worldwide Foreign Holdings, Inc.
	  	Rand A Technology Corporation	  	4AP, 5AP	  	4,972,730	  	Class A Preference Shares	  	 	100	% 

 BONDS 
 None.

 GOVERNMENT SECURITIES 
 None. 

OTHER SECURITIES OR OTHER INVESTMENT PROPERTY 

(CERTIFICATED AND UNCERTIFICATED) 
  

									
	 Name of Grantor
	  	 Issuer
	  	 Description of Collateral
	  	Percentage Ownership Interest	 
	 Rand Worldwide, Inc.
	  	PNC Bank	  	Blackrock Liquidity Fund FedFund Dollar	  	 	100	% 

 EXHIBIT H 

(See Section 3.1 of Security Agreement) 

OFFICES IN WHICH FINANCING STATEMENTS WILL BE FILED 

Delaware Secretary of State 

 EXHIBIT I 

(See Section 4.8 of Security Agreement) 

AMENDMENT 
 This Amendment, dated
            ,          is delivered pursuant to Section 4.8 of the Security Agreement referred to below. All defined terms herein shall have the
meanings ascribed thereto or incorporated by reference in the Security Agreement. The undersigned hereby certifies that the representations and warranties in Article III of the Security Agreement are and continue to be true and correct. The
undersigned further agrees that this Amendment may be attached to that certain Pledge and Security Agreement, dated              ,         , between
the undersigned, as the Grantors, and JPMorgan Chase Bank, N.A., as the Lender, (as amended or modified from time to time prior to the date hereof, the “Security Agreement”) and that the Collateral listed on Schedule I to
this Amendment shall be and become a part of the Collateral referred to in said Security Agreement and shall secure all Secured Obligations referred to in the Security Agreement. 

 

			
	  

		
	By:	 	
	Name:	 	  

	Title:	 	  

 Schedule I to Amendment to Security Agreement 

COMMERCIAL TORT CLAIMS 

 EXHIBIT J-1 

TRADEMARK SECURITY AGREEMENT 

This TRADEMARK SECURITY AGREEMENT (this “Trademark Security Agreement”) dated as of
            ,         , among Rand Worldwide, Inc., a Delaware corporation (formerly known as Avatech Solutions, Inc.) (the
“Borrower”), Rand Worldwide Foreign Holdings, Inc., a Delaware corporation (“Rand Holdings”) and Rand Worldwide Subsidiary, Inc., a Delaware corporation (“Rand Worldwide
Subsidiary”) and JPMorgan Chase Bank, N.A. (the “Lender”). The Borrower, Rand Holdings and Rand Worldwide Subsidiary are each referred to herein as a “Grantor” and collectively as the
“Grantors”. 
 Reference is made to (a) the Pledge and Security Agreement dated as of even date herewith (as
amended, supplemented or otherwise modified from time to time, the “Security Agreement”), by and among the Grantors and the Lender and (b) the Credit Agreement dated as of even date herewith (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among the Borrower, the Loan Parties (as defined in the Credit Agreement) and the Lender. The Lender has agreed to extend credit to the Borrower subject to the
terms and conditions set forth in the Credit Agreement. The obligations of the Lender to extend such credit is conditioned upon, among other things, the execution and delivery of this Trademark Security Agreement. The Grantors will derive
substantial benefits from the extension of credit pursuant to the Credit Agreement and are willing to execute and deliver this Trademark Security Agreement in order to induce the Lender to extend such credit. Accordingly, the parties hereto agree as
follows: 
 SECTION 1. Terms. Capitalized terms used in this Trademark Security Agreement and not otherwise defined herein have the
meanings specified in the Security Agreement. 
 SECTION 2. Grant of Security Interest. As security for the payment or performance,
as the case may be, in full of the Obligations (as defined in the Credit Agreement), the Grantors, pursuant to the Security Agreement, did and hereby do grant to the Lender, its successors and assigns, for the ratable benefit of the Lender, a
security interest in and lien on, all right, title or interest in or to any and all of the following assets and properties now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may
acquire any right, title or interest in all of the Grantor’s right, title, and interest in and to the following: (a) all trademarks (including service marks), trade names, trade dress, and trade styles and the registrations and
applications for registration thereof and the goodwill of the business symbolized by the foregoing; (b) all licenses of the foregoing, whether as licensee or licensor; (c) all renewals of the foregoing; (d) all income, royalties,
damages, and payments now or hereafter due or payable with respect thereto, including, without limitation, damages, claims, and payments for past and future infringements thereof; (e) all rights to sue for past, present, and future
infringements of the foregoing, including the right to settle suits involving claims and demands for royalties owing; and (f) all rights corresponding to any of the foregoing throughout the world, including those listed on Schedule I hereto
(the “Trademark Collateral”), provided, however, that notwithstanding anything herein to the contrary, the term “Trademark Collateral” shall not include the Excluded Assets. 

SECTION 3. Security Agreement. The security interests granted to the Lender herein are granted in furtherance, and not in limitation
of, the security interests granted to the Lender pursuant to the Security Agreement. The Grantors hereby acknowledge and affirm that the rights and remedies of the Lender with respect to the Trademark Collateral are more fully set forth in the
Security Agreement, the terms and provisions of which are hereby incorporated herein by reference as if fully set forth herein. In the event of any conflict between the terms of this Trademark Security Agreement and the Security Agreement, the terms
of the Security Agreement shall govern. 

 SECTION 4. Choice of Law. This Trademark Security Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York. 
 [Signatures on following page.] 

 IN WITNESS WHEREOF, the undersigned has duly executed this Trademark Security Agreement as of the
day and year first above written. 
  

			
	 GRANTOR:

	
	 RAND WORLDWIDE, INC.

		
	By:	 	  

	Name:	 	
	Title:	 	

 My Commission Expires: 

STATE OF
                                ) 

                          
                          ) SS 

COUNTY OF
                            ) 

The foregoing instrument was acknowledged before me this      day of
            , 20    , by    , a             of
            , on behalf of said 
  

							
		 		  	    Notary Public	  	
				
		 		  	My commission expires:	  	

 {Signatures continue on next page.} 

 IN WITNESS WHEREOF, the undersigned has duly executed this Trademark Security Agreement as of the
day and year first above written. 
  

			
	 GRANTOR:

	
	 RAND WORLDWIDE FOREIGN HOLDINGS, INC.

		
	By:	 	  

	Name:	 	
	Title:	 	

 My Commission Expires: 

STATE OF
                                ) 

                          
                          ) SS 

COUNTY OF
                            ) 

The foregoing instrument was acknowledged before me this      day of
            , 20    , by    , a             of
            , on behalf of said 
  

							
		 		  	    Notary Public	  	
				
		 		  	My commission expires:	  	

 {Signatures continue on next page.} 

 IN WITNESS WHEREOF, the undersigned has duly executed this Trademark Security Agreement as of the
day and year first above written. 
  

			
	 GRANTOR:

	
	 RAND WORLDWIDE SUBSIDIARY, INC.

		
	By:	 	  

	Name:	 	
	Title:	 	

 My Commission Expires: 

STATE OF
                                ) 

                          
                          ) SS 

COUNTY OF
                            ) 

The foregoing instrument was acknowledged before me this      day of
            , 20    , by    , a             of
            , on behalf of said 
  

							
		 		  	    Notary Public	  	
				
		 		  	My commission expires:	  	

 {Signatures continue on next page.} 

 IN WITNESS WHEREOF, the undersigned has duly executed this Trademark Security Agreement as of the
day and year first above written. 
  

			
	JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
		
	By:	 	  

		 	Name:
		 	Title:

 Schedule I 

TRADEMARKS 
 TRADEMARK
APPLICATIONS 

 EXHIBIT J-2 

COPYRIGHT SECURITY AGREEMENT 

This COPYRIGHT SECURITY AGREEMENT (this “Copyright Security Agreement”) dated as of
            ,         , among Rand Worldwide, Inc., a Delaware corporation (formerly known as Avatech Solutions, Inc.) (the
“Borrower”), Rand Worldwide Foreign Holdings, Inc., a Delaware corporation (“Rand Holdings”) and Rand Worldwide Subsidiary, Inc., a Delaware corporation (“Rand Worldwide
Subsidiary”) and JPMorgan Chase Bank, N.A. (the “Lender”). The Borrower, Rand Holdings and Rand Worldwide Subsidiary are each referred to herein as a “Grantor” and collectively as the
“Grantors”. 
 Reference is made to (a) the Pledge and Security Agreement dated as of even date herewith (as
amended, supplemented or otherwise modified from time to time, the “Security Agreement”), by and among the Grantors and the Lender and (b) the Credit Agreement dated as of even date herewith (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among the Borrower, the Loan Parties (as defined in the Credit Agreement) and the Lender. The Lender has agreed to extend credit to the Borrower subject to the
terms and conditions set forth in the Credit Agreement. The obligations of the Lender to extend such credit is conditioned upon, among other things, the execution and delivery of this Copyright Security Agreement. The Grantors will derive
substantial benefits from the extension of credit pursuant to the Credit Agreement and are willing to execute and deliver this Copyright Security Agreement in order to induce the Lender to extend such credit. Accordingly, the parties hereto agree as
follows: 
 SECTION 1. Terms. Capitalized terms used in this Copyright Security Agreement and not otherwise defined herein have the
meanings specified in the Security Agreement. 
 SECTION 2. Grant of Security Interest. As security for the payment or performance,
as the case may be, in full of the Obligations (as defined in the Credit Agreement), the Grantors, pursuant to the Security Agreement, did and hereby do grant to the Lender, its successors and assigns, for the ratable benefit of the Lender, a
security interest in and lien on, all right, title or interest in or to any and all of the following assets and properties now owned or at any time hereafter acquired by the Grantors or in which the Grantors now have or at any time in the future may
acquire any right, title or interest in all of the Grantors’ right, title, and interest in and to the following: (a) all copyrights, rights and interests in copyrights, works protectable by copyright, copyright registrations, and copyright
applications; (b) all renewals of any of the foregoing; (c) all moral rights in any of the foregoing; (d) all income, royalties, damages, and payments now or hereafter due and/or payable under any of the foregoing, including, without
limitation, damages or payments for past or future infringements for any of the foregoing; (e) the right to sue for past, present, and future infringements of any of the foregoing; and (f) all rights corresponding to any of the foregoing
throughout the world, including those listed on Schedule I hereto (the “Copyright Collateral”), provided, however, that notwithstanding anything herein to the contrary, the term “Copyright Collateral” shall not
include the Excluded Assets. 
 SECTION 3. Security Agreement. The security interests granted to the Lender herein are granted in
furtherance, and not in limitation of, the security interests granted to the Lender pursuant to the Security Agreement. The Grantor hereby acknowledges and affirms that the rights and remedies of the Lender with respect to the Copyright Collateral
are more fully set forth in the Security Agreement, the terms and provisions of which are hereby incorporated herein by reference as if fully set forth herein. In the event of any conflict between the terms of this Copyright Security Agreement and
the Security Agreement, the terms of the Security Agreement shall govern. 
 SECTION 4. Choice of Law. This Copyright Security
Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. 
 [Signatures on following page.] 

 IN WITNESS WHEREOF, the undersigned has duly executed this Copyright Security Agreement as of the
day and year first above written. 
  

			
	GRANTOR:
	
	RAND WORLDWIDE, INC.
		
	By:	 	  

	Name:	 	
	Title:	 	

 My Commission Expires: 

STATE OF
                                ) 

                          
                          ) SS 

COUNTY OF
                            ) 

The foregoing instrument was acknowledged before me this      day of
            , 20     , by             , a
             of             , on behalf of said 

 

	
	        Notary Public
	
	My commission expires:

 {Signatures continue on next page.} 

 IN WITNESS WHEREOF, the undersigned has duly executed this Copyright Security Agreement as of the
day and year first above written. 
  

			
	GRANTOR:
	
	RAND WORLDWIDE FOREIGN HOLDINGS, INC.
		
	By:	 	  

	Name:	 	
	Title:	 	

 My Commission Expires: 

STATE OF
                                ) 

                          
                          ) SS 

COUNTY OF
                            ) 

The foregoing instrument was acknowledged before me this      day of
            , 20    , by             , a
            of             , on behalf of said 

 

	
	        Notary Public
	
	My commission expires:

 {Signatures continue on next page.} 

 IN WITNESS WHEREOF, the undersigned has duly executed this Copyright Security Agreement as of the
day and year first above written. 
  

			
	GRANTOR:
	
	RAND WORLDWIDE SUBSIDIARY, INC.
		
	By:	 	  

	Name:	 	
	Title:	 	

 My Commission Expires: 

STATE OF
                                ) 

                          
                          ) SS 

COUNTY OF
                            ) 

The foregoing instrument was acknowledged before me this      day of
            , 20    , by             , a
             of             , on behalf of said 

 

	
	        Notary Public
	
	My commission expires:

 {Signatures continue on next page.} 

 IN WITNESS WHEREOF, the undersigned has duly executed this Copyright Security Agreement as of the
day and year first above written. 
  

			
	JPMORGAN CHASE BANK, N.A.,
	as Administrative Agent
		
	By:	 	  

		 	Name:
		 	Title:

 Schedule I 

COPYRIGHTS 
 COPYRIGHT
APPLICATIONSEXHIBIT 10.1

 

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

CANCER RESEARCH UK

and

CANCER RESEARCH TECHNOLOGY LIMITED

and

ASTERIAS BIOTHERAPEUTICS, INC.

CLINICAL TRIAL AND OPTION AGREEMENT

 

	

 

	

 

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

TABLE OF CONTENTS

	
1.

	
DEFINITIONS AND INTERPRETATION

	
2

	
2.

	
PROGRESS DEVELOPMENT WORK

	
12

	
3.

	
CONDUCT OF THE CLINICAL TRIAL AND SPONSORSHIP

	
15

	
4.

	
COMPANY’S OBLIGATIONS

	
17

	
5.

	
CONFIDENTIALITY/PUBLICATION

	
19

	
6.

	
INTELLECTUAL PROPERTY RIGHTS

	
21

	
7.

	
OPTION

	
25

	
8.

	
WARRANTIES AND LIMITS OF LIABILITY

	
26

	
9.

	
INDEMNITIES

	
27

	
10.

	
ASSIGNMENT

	
29

	
11.

	
TERM AND TERMINATION

	
29

	
12.

	
CONSEQUENCES OF TERMINATION

	
31

	
13.

	
DISPUTE RESOLUTION

	
32

	
14.

	
NOTICES

	
33

	
15.

	
WAIVER

	
34

	
16.

	
FORCE MAJEURE

	
34

	
17.

	
SEVERABILITY

	
35

	
18.

	
ENTIRE AGREEMENT

	
35

	
19.

	
AMENDMENT

	
35

	
20.

	
PUBLIC ANNOUNCEMENTS

	
35

	
21.

	
PAYMENTS

	
35

	
22.

	
DATA PROTECTION

	
36

	
23.

	
THIRD PARTY RIGHTS

	
36

	
24.

	
EXECUTION

	
36

 

	
Schedule 1

	
Company Patent Rights

	
Schedule 2

	
Report Synopsis Headings

	
Schedule 3

	
Safety Information

	
Schedule 4

	
Licence

	
Schedule 5

	
No Fault Compensation Scheme

	
Schedule 6

	
CRT Licence

	
Schedule 7

	
Third Party Licences and Payments

	
Schedule 8

	
Development Work Plan

	
Schedule 9

	
Additional Studies

	
Schedule 10

	
Form of Progress Report

	
Schedule 11

	
Clinical Protocol Summary

 

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

THIS AGREEMENT is made the 8th day of September, 2014

BETWEEN:

CANCER RESEARCH UK a company limited by guarantee registered under number 4325234 and a charity registered under number 1089464 of Angel Building, 407 St. John Street, London, EC1V 4AD, England (the “Charity”);

CANCER RESEARCH TECHNOLOGY LIMITED a company registered in England and Wales with number 1626049 and registered office at Angel Building, 407 St. John Street, London, EC1V 4AD, England (“CRT”); and

ASTERIAS BIOTHERAPEUTICS, INC., a Delaware company with principal place of business at 230 Constitution Drive, Menlo Park, CA94025, USA (the “Company”).

WHEREAS:

	(A)	The Company has the right to conduct research and clinical testing on the IMP (as defined below). At this time, the Company does not intend to undertake any further development of the Product except as provided in this Agreement.

	(B)	The Charity's charitable objects are to protect and promote the health of the public in particular by research into the nature, causes, diagnosis, prevention, treatment and cure of cancer, including development of findings of research into practical applications.

	(C)	The Charity has expertise in the clinical evaluation of novel anti-cancer agents and considers that the Product has the potential to be a valuable drug that could be applied for the treatment of cancer. Accordingly, the Charity is interested in undertaking the development of the Product at its own cost. As the development is to be undertaken in pursuance of the Charity's charitable objects, the Charity will have the right to publish the results of such development work.

	(D)	On completion of the Charity’s development work, the Company will have the option to take a licence to the results thereof with a view to the Company developing the Product further. If the Company does not wish to take a licence to such results, then CRT shall have the right to take a licence to the Company's rights in and to the Product and Related Products to enable it to find an alternative partner to develop them further.

	(E)	CRT is a wholly owned subsidiary of the Charity and is, by arrangement with the Charity, responsible for the management, exploitation and commercialisation of intellectual property generated by the Charity or using funding from the Charity and the Charity has assigned and will assign such intellectual property to CRT for such purpose. CRT remits all its taxable profits to the Charity.

	(F)	The Company, CRT and the Charity have therefore agreed to enter into this Agreement to enable the Charity to undertake the development of the IMP subject to the following terms and conditions:

 

1

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

NOW IT IS HEREBY AGREED as follows:

 

	
1.

	
DEFINITIONS AND INTERPRETATION

 

	 	
1.1

	
In this Agreement the words and phrases set out below shall, unless the context requires otherwise, have the corresponding meaning attributed to them below. In addition, any words and phrases in this Agreement which are not defined below, but which are defined in the CTD, shall have the meaning attributed to them in the CTD.

 

	 	
“Additional Studies”

	
means any biomarker, manufacturing, purity, toxicology, imaging or combination studies, or any other exploratory or pre-clinical in vitro or in vivo studies commenced after the Effective Date and associated with any part of the Product, or carried out in support of the clinical trial conducted pursuant to this Agreement, where such studies are performed by or on behalf of the Charity, including those described in Schedule 9 (as the same may be amended from time to time by the Charity).

 

	 	
“Affiliate”

	
means an entity that, whether now or in the future, Controls, is Controlled by or is under common Control with a Party. For the purpose of this definition only, “Control” means the possession (directly or indirectly) of fifty per cent or more of the voting stock or other equity interest of a subject entity with the power to vote, or the power in fact to control the management decisions of such entity through the ownership of securities or by contract or otherwise and “Controls” and “Controlled by” shall be construed accordingly.

 

	 	
“this Agreement” 

	
means this agreement and each of the Schedules to it as amended from time to time in accordance with Clause 19.

 

	 	
“Case Report Forms”

	
means a record of the data and other information gathered on each Clinical Trial Subject pursuant to the Protocol.

 

	 	
“Cell Line”

	
means ***.

 

	 	

“Charity’s Standard

Operating Procedures”

	
means the documents in use by the Drug Development Office of the Charity from time to time that are designated as standard operating procedures and which describe the procedures that must be followed to complete various tasks.

 

	 	
“Chief Investigator”

	
means the person who will lead and co-ordinate the work of the Clinical Trial overall where the Clinical Trial is to be carried out at more than one site.

 

	 	
“Clinical Trial”

	
means the Phase I/II clinical trial described in the Protocol to be conducted under the Sponsorship of the Charity, the manufacture of IMP to be conducted by the Charity, and any Additional Studies.

 

	 	
“Clinical Trial Database 

Lock Date”

	
means the date when the clinical research database relating to the Clinical Trial is locked (after the Clinical Trial Results have been cleaned but excluding any Long Term Survival Data) in accordance with the Charity’s Standard Operating Procedures.

 

2

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	 	
“Clinical Trial Legislation”

	
means all laws and regulations from time to time in force applicable to the performance of the Clinical Trial, including the CTD, the Human Rights Act 1998, the Data Protection Act 1998, the Medicines Act 1968, the Medicines for Human Use (Clinical Trials) Regulations 2004, and the Human Tissue Act 2004.

 

	 	

“Clinical Trial LPFV

Date”

	
means the date when the final Clinical Trial Subject in the Clinical Trial attends their first study visit. The Clinical Trial LPFV Date may be further defined in the Protocol.

 

	 	
“Clinical Trial Results”

	
means all Know-How, data, information and results Controlled by the Charity or CRT and arising from the Clinical Trial, including the contents of each Progress Report, the Final Report, Case Report Forms and associated Data Listings and any other updates that may be agreed by the Parties from time to time.

 

	 	
“Clinical Trial Subject”

	
means any person who is enrolled in the Clinical Trial either as a recipient or planned recipient of the Investigational Medicinal Product or as a control.

 

	 	
“Commencement Date”

	
means the date first written above.

 

	 	

“Company Combination

Patent Rights”

	
means those Patent Rights owned by or licensed to the Company which claim the use of the Product in combination with one or more other anti-cancer agents or therapies and all Patent Rights deriving priority from them.

 

	 	

“Company Intellectual

Property”

	
means the Company Patent Rights, and all rights in the Company Know-How, the Investigational Medicinal Product and the Company Materials.

 

	 	
“Company Know-How”

	
means such Know-How in the Company’s possession relating to the Product and/or Investigational Medicinal Product (and any constituents thereof), including: (i) any safety and toxicological data; (ii) information relating to the manufacturing/production; (iii) information relating to quality; (iv) information relating to safe and proper handling, storage and use; (v) information that the Company is required to disclose to the Charity pursuant to the Technology Transfer Plan; and (vi) any other data which is relevant to the efficient performance of the Clinical Trial and/or would make the Investigational Medicinal Product in any way easier to make; and (vii) any other data that would make the Product more useful, more valuable or in any way improve its prospects for development or commercialisation.

 

	 	
“Company Materials”

	
means the Cell Line and other Materials to be provided by the Company to the Charity pursuant to this Agreement including those set out the Technology Transfer Plan.

 

3

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	 	
“Company Owned 

Intellectual Property” 

	
means the Company Owned Patent Rights, and the Company’s rights in the Company Materials, Investigational Medical Product and the Company Know-How

	 	
“Company Owned Patent Rights”

	
means (i) those Patent Rights listed in Schedule 1A; (ii) those Patent Rights owned by the Company (including those arising after the Commencement Date) which would be infringed by the unauthorised manufacture, use or sale in, or importation into, the relevant country of the Product, Related Products and/or Investigational Medicinal Product; and (iii) all Patent Rights deriving priority from (i) and (ii).

	 	
“Company Patent Rights”

	
means (i) those Patent Rights listed in Schedule 1; (ii) those Patent Rights owned by or licensed to the Company (including those arising after the Commencement Date) which would be infringed by the unauthorised manufacture, use or sale in, or importation into, the relevant country of the Product, Related Products and/or Investigational Medicinal Product; and (iii) all Patent Rights deriving priority from (i) and (ii).

 

	 	
“Confidential Information”

	
means all information designated as confidential by any Party in writing, together with all other information which relates to the business, affairs, technology, products, developments, trade secrets, Know-How, manufacturing methods, product specifications personnel, customers, agents, distributors and suppliers of any Disclosing Party, or information which may reasonably be regarded as the confidential information of the Disclosing Party. Subject to the terms of any licence agreement entered into in relation to them, the Clinical Trial Results shall be the Confidential Information of the Charity and CRT.

 

	 	
“Control”

	
means, with respect to Intellectual Property Rights, possession of the ability (whether through ownership or licence, other than a licence granted under this Agreement) to grant the licences or sublicences or make the assignments as provided herein without violating the terms of any agreement or other arrangement with any third party.

 

	 	
“Contributors”

	
means the Chief Investigator, the Principal Investigator(s), the Sub-Investigators, the Experts, the NHS Trust(s) involved in the Clinical Trial, any sub-contractor of the Charity and/or any academic or not-for-profit entity involved in the Clinical Trial.

 

4

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	 	
“Costs”

	
means all actual prepaid and committed costs and expenses incurred from time to time in connection with the Clinical Trial, including, for the avoidance of doubt, the internal personnel costs of the Charity and the Charity’s Biotherapeutics Development Unit (BDU).

 

	 	
“CTD”

	
means the European Clinical Trials Directive (Directive 2001/20/EC) and national legislation implementing such Directive, as the same may be amended from time to time.

 

	 	
“Data Listings”

	
means the computer generated data listings produced by the Charity detailing all anonymised patient data collected under the Clinical Trial other than the Long Term Survival Data.

 

	 	
“Declaration of Helsinki”

	
means the 2008 version of the Helsinki Declaration of the World Medical Association.

 

	 	
“Development Work”

	
means the process development and manufacturing scale-up work to be carried out by the Company to determine a Product Manufacturing Process.

 

	 	
“Development Work Plan”

	
means the work plan in Schedule 8 setting out the Development Work along with the projected timelines for that work and any amendments to the same made in accordance with Clause 2.3.

 

	 	
“Disclosing Party”

	
has the meaning specified in Clause 5.1.

 

	 	
“Duke Licence”

	
means the License Agreement between Duke University and Merix Bioscience, effective January 10, 2000, as amended effective July 28, 2003,

 

	 	
“Ethics Committee”

	
has the meaning given to it in the CTD.

 

	 	
“Exclusive Results”

	
means those Clinical Trial Results and the Intellectual Property Rights therein that directly relate to and only to the Product and Related Products. Exclusive Results shall not include any assay methodology, formulation-related results or biomarker results which do not directly relate to and only to the Product and/or Related Products.

 

	 	
“Exercise Notice”

	
has the meaning specified in Clause 7.1.

 

	 	
“Expert”

	
means any member of the Charity’s expert committees or any other person not being an employee of the Charity whom the Charity may engage from time to time to advise the Charity on the Clinical Trial or to assist with the Product Manufacturing Process at the Charity’s Biotherapeutics Development Unit.

 

	 	
“Field”

	
means use of the Product in immunotherapy applications using ***

 

5

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	 	
“Final Report”

	
means a Report Synopsis, unless, pursuant to Clause 3.11, a Full Clinical Study Report is prepared by the Charity instead of a Report Synopsis.

 

	 	
“Financial Year”

	
means the period commencing on January 1 and ending on December 31.

 

	 	

“Full Clinical

Study Report”

	
means a full clinical study report in relation to the Clinical Trial written by or on behalf of the Charity in accordance with the Charity’s Standard Operating Procedures and which meets the standards of the ICH Guidelines for Structure and Content of Clinical Study reports as per ICH Topic E3 dated July 1996 except that Long Term Survival Data will not be included in the report.

 

	 	
“Full CS Report Fee”

	
has the meaning given to it in Clause 3.11.

 

	 	

“Good Manufacturing

Practice”

	
means the principles and guidelines of good manufacturing practice in respect of medicinal products for human use and investigational medicinal products for human use as defined in: (i) the CTD; (ii) European Community Directive 2003/94/EC; (iii) European Community Directive 2005/28/EC; (iv) Eudralex Volume 4: ‘EU Guidelines to Good Manufacturing Practice, Medicinal Products for Human and Veterinary Use, Part II Basic Requirements for Active Substances used as Starting Materials’, ICHQ7a Good Manufacturing Practice Guidance for Active Pharmaceutical Ingredients and ‘EU Guidelines to Good Manufacturing Practice Medicinal Products for Human and Veterinary Use, Annex 13: Investigational Medicinal Products’; and (v) any national legislation implementing the aforementioned Directives and any relevant guidance relating thereto.

 

	 	
“hTERT Antigen”

	
means a human telomerase antigen.

 

	 	

“hTERT Licensed

Patents”

	
 

means the patent rights listed in Schedule 1B, which were licensed to Company under the hTERT Licence.

	 	
“hTERT Licence”

	
means the Exclusive Sublicense Agreement between Geron Corporation and Company, effective October 1, 2013, a copy of which has been provided to the Charity.

	 	
“ICH GCP”  

	
means the latest version from time to time of the International Conference on Harmonisation (ICH) Tripartite Guidelines, Good Clinical Practice (CPMP/ICH/135/95) together with such other good clinical practice requirements as are specified in the CTD and in Commission Directive 2005/28/EC and in any other regulations relating to medicinal products for human use and in any guidance published by the European Commission pursuant to such Directives or regulations.

 

6

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	 	
“Immunomic/JHU

Licensed Patents”	means the patent rights listed in Schedule 1G, which were licensed to Immunomic Therapeutics under the JHU License, and subsequently sublicensed to Company as result of the Immunomic License.

	 	“Immunomic Licence”	means the Exclusive License Agreement between Geron Corporation and Immunomic Therapeutics Inc effective October 31, 2006, which was subsequently assigned by Geron Corporation to Company effective October 1, 2013, a copy of which has been provided to the Charity.

	 	“Independent Opinion”	means the opinion of an independent expert in the field of valuation of intellectual property in a similar field to the Company Intellectual Property, appointed by agreement between the Parties or in default of such agreement within twenty one (21) days of a Party seeking in writing to the others to appoint such expert, by the President for the time being of the Association of the British Pharmaceutical Industry (ABPI) in England and Wales, referred to at Clause 13.1.

 

	 	
“Intellectual Property

Rights”	means all Patent Rights, Know-How, copyright, database rights, design rights, moral rights, rights in trade names, logos and trade and service marks, domain names, rights in Materials and all rights or forms of protection of a similar nature or having equivalent or similar effect to any of them which may subsist anywhere in the world, whether or not any of them are registered, including any application for registration of any of them.

 

	 	“Investigational MedicinalProduct” or “IMP”	means the pharmaceutical formulation of the Product suitable for use in the Clinical Trial.

 

	 	
“Investigational Medicinal

Product Dossier”	means a dossier relating to the Investigational Medicinal Product which accompanies a request for clinical trial authorisation to conduct the Clinical Trial from a Regulatory Authority. The Investigational Medicinal Product Dossier shall include a specification of the IMP.

 

	 	“Isis Licensed Patents”	means the patent rights listed in Schedule 1D, which were licensed to Company under the Isis Licence.

	 	“Isis Licence”	means the Exclusive License Agreement between Geron Corporation and Isis Innovation Limited effective March 23, 2006, which was subsequently assigned by Geron Corporation to Company effective October 1, 2013, a copy of which has been provided to the Charity.

 

7

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	 	
“JHU Licence”

	
means the Exclusive License Agreement between Johns Hopkins University and Immunomic Therapeutics effective September 26, 2006.

 

	 	“Know-How”	means all technical and other information which is not in the public domain, including information comprising or relating to concepts, discoveries, data, designs, formulae, ideas, inventions, methods, models, designs for experiments and tests and results of experimentation and testing, processes, specifications and techniques, laboratory records, clinical data, reports, manufacturing data and information contained in submissions to Regulatory Authorities.

 

	 	“Licence”	means a licence to the Clinical Trial Results and any Intellectual Property Rights therein in the form attached at Schedule 4. Such licence shall be exclusive in respect of the Exclusive Results, and non-exclusive in relation to the Non-Exclusive Results. For the avoidance of doubt, neither CRT nor the Charity shall have any obligation to supply any Materials to the Company pursuant to any Licence.

 

	 	“Long Term Survival Data”	means any ongoing survival data for Clinical Trial Subjects that the Charity collects after the completion of the interventional component of the Clinical Trial.

 

	 	“Losses”	means losses, damages, costs and expenses (including reasonable legal costs and expenses).

 

	 	“Materials”	means any chemical or biological substances including any: organic or inorganic element or compound; nucleotide or nucleotide sequence including DNA and RNA sequences gene; vector or construct including plasmids, phages, bacterial vectors, bacteriophages and viruses; host organism including bacteria, fungi, algae, protozoa and hybridomas; eukaryotic or prokaryotic cell line or expression system or any development strain or product of that cell line or expression systems; protein including any peptide or amino acid sequence, enzyme, antibody or protein conferring targeting properties and any fragment of a protein or a peptide enzyme or antibody; drug or pro-drug; assay or reagent; any plasma or tissue; or any other genetic or biological material or micro-organism or any transgenic animal.

 

	 	
“Merix/Duke Licensed

Patents”	means the patent rights listed in Schedule 1E, which were licensed to Merix Bioscience under the Duke License, and were subsequently sublicensed to Company under the Merix License.

 

	 	
“Merix/Rockefeller

Licensed Patents”	
 

means the patent rights listed in Schedule 1F, which were licensed to Merix Bioscience under the Rockefeller License, and were subsequently sublicensed to Company under the Merix License.

 

8

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	 	“Merix Licence”	means the Exclusive License Agreement between Geron Corporation and Merix Bioscience (now Argos Therapeutics) effective March 6, 2004, and subsequently assigned by Geron Corporation to Company effective October 1, 2013, a copy of which has been provided to the charity.

	 	“Non-Exclusive Results”	means those Clinical Trial Results that are not Exclusive Results (and all Intellectual Property Rights therein), including all assay methodology, formulation-related results or biomarker results.

 

	 	“Option”	has the meaning specified in Clause 7.1.

 

	 	“Option Fee”	means the sum of *** less the amount of any Full CS Report Fee actually paid by the Company to CRT under Clause 3.11 and excluding VAT or other applicable sales tax.

 

	 	“Option Period”	has the meaning specified in Clause 7.1.

 

	 	“Party”	means any party to this Agreement and “Parties” means all of them.

 

	 	“Patent Rights”	means any patent applications, patents, author certificates, inventor certificates, utility models, and all foreign counterparts of them and includes all divisionals, renewals, continuations, continuations-in-part, extensions, reissues, substitutions, confirmations, registrations, revalidations and additions of or to them, as well as any Supplementary Protection Certificate, or any like form of protection (including any pediatric, orphan drug or other exclusivity granted by a Regulatory Authority beyond the expiry of the original patent expiration date).

 

	 	“Principal Investigator”	means the person who will lead and co-ordinate the work of the Clinical Trial at a particular Clinical Trial site.

 

	 	
“Post Development

Meeting”	has the meaning given in Clause 2.7.

 

	 	“Product”	means the Company’s cell based therapeutic agent known as AST-VAC2 which comprises ***.

 

	 	
“Product Manufacturing

Process”	means a reproducible process for the manufacture and quality testing of the IMP in accordance with Good Manufacturing Practice and which meets the requirements in the Transfer Criteria and the process specifications in the Technology Transfer Plan on a scale and standard suitable to enable the Charity to produce sufficient quantities of IMP to conduct the Clinical Trial.

	 	“Progress Report”	means a report on the status of the Clinical Trial in the format set out in Schedule 10, or in such other format as is the Charity’s standard practice at the relevant time in respect of a clinical trial at the same stage, and of the same scope, as the Clinical Trial.

 

9

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	 	“Protocol”	means the clinical trial protocol to be prepared by the Charity and the Chief Investigator in accordance with the criteria described in Schedule 11, as may be amended from time to time by the Charity in accordance with Clause 3.6.

	 	“Recipient Party”	has the meaning specified in Clause 5.2.

	 	“Regulatory Authority”	means any local, national or supra-national agency, authority, department, inspectorate, minister, ministry official or public or statutory person (whether autonomous or not) or any government of any country as shall have jurisdiction over the Clinical Trial or any part of it or over any activity of the Parties in connection with the Clinical Trial. Regulatory Authority includes, but is not limited to, the United Kingdom Medicines and Healthcare products Regulatory Agency (MHRA), the United States Food and Drug Administration (FDA) and the European Medicines Agency (EMEA).

	 	“Related Product”	means a cell based therapeutic agent which is not a Product but which ***.

	 	“Report Synopsis”	a summary of the results of the Clinical Trial written by or on behalf of the Charity in accordance with the Charity’s Standard Operating Procedures in a form substantially similar to the format set out in Schedule 2 and the format of the clinical study synopsis set out in Annex I of ICH Topic E3 of the ICH Guidelines for Structure and Content of Clinical Study reports dated July 1996. The Report Synopsis shall not include or contain any additional documents or any appendices, exhibits or annexes nor shall it include or contain any Data Listings, Case Report Forms or any raw data comprised within the Clinical Trial Results or cover any Long Term Survival Data.

	 	“Rockefeller Licence”	means the License Agreement between Rockefeller University and Merix Bioscience, effective June 27, 2001, as amended June 29, 2001.

	 	“Specification”	means the specification of the IMP detailed in the Investigational Medicinal Product Dossier.

	 	“Signature Period”	means the period of *** commencing on:

	 	
(i)

	
in the event that the Charity does not prepare a Full Clinical Study Report pursuant to Clause 3.11, the Company’s receipt of the Data Listings pursuant to Clause 7.3; or

 

	 	(ii)	in the event that the Charity prepares a Full Clinical Study Report pursuant to Clause 3.11, the date of the Exercise Notice.

 

10

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	 	“Sub-Investigator”	means a clinician appointed and supervised by the Chief Investigator or Principal Investigator to assist in the carrying out of the Clinical Trial at the same trial site as the Principal Investigator.

	 	
“Supplementary

Protection Certificate”	means a right based on a patent pursuant to which the holder of the right is entitled to exclude third parties from using, making, having made, selling or otherwise disposing or offering to dispose of, importing or keeping the product to which the right relates, such as supplementary protection certificates in Europe, and any similar right anywhere in the world.

	 	
“Technology Transfer

Plan”	has the meaning given in Clause 2.6.

	 	“Third Party Licences”	means those licences listed in Schedule 7

	 	
“Third Party Licence Payments”

	
means those milestone, royalty and other payments listed in Schedule 7B in respect of the Third Party Licences.

	 	“Tobacco Party”	means: (i) any entity who develops, sells or manufactures tobacco products; and/ or (ii) any entity which makes the majority of its profits from the importation, marketing, sale or disposal of tobacco products. Furthermore, Tobacco Party shall include any entity that is an Affiliate of any entity referred to in (i) or (ii);

	 	
“Transfer Approval Notice” 

	
has the meaning given in Clause 2.7.

	 	“Transfer Criteria”	means criteria to be agreed between the Parties as described in Clause 2.1 that if met thereby demonstrate to the Charity that the Product Manufacturing Process for the IMP that is to be developed by the Company under the Development Work has been scaled-up to the required level and meets the required quality, validation, price and other technical, scientific and quality requirements as further described in Clause 2.1.

 

	 	
“University of Western

Ontario Licensed

Patents”	
means the patent rights listed in Schedule 1C, which were licensed to Company under the University of Western Ontario Licence.

	 	
“University of Western

Ontario Licence”	means the Exclusive License Agreement between Geron Corporation and The University of Western Ontario effective January 30, 2009, and subsequently assigned by Geron Corporation to Company effective October 1, 2013, a copy of which has been provided to the Charity.

	 	
“WARF Intellectual

Property”	means the rights in the WARF Patents and Wisconsin Materials listed in Schedule 1H, which were licensed to the Company in the WARF Licence.

 

11

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	 	“WARF Licence”	means the Non-Exclusive License Agreement between Company and the Wisconsin Alumni Research Foundation, effective October 7, 2013, a redacted copy of which has been provided to the Charity.

 

	 	
1.2

	
In this Agreement:

 

	 	
1.2.1

	
unless the context requires otherwise, all references to a particular Clause, paragraph or Schedule shall be references to that clause, paragraph or schedule, of or to this Agreement;

	 	
1.2.2

	
the table of contents and headings are inserted for convenience only and shall be ignored in construing this Agreement;

	 	
1.2.3

	
unless the contrary intention appears, words importing the masculine gender shall include the feminine and vice versa and words in the singular include the plural and vice versa;

 

	 	
1.2.4

	
unless the contrary intention appears, words denoting persons shall include any individual, partnership, company, corporation, joint venture, trust, association, organisation or other entity, in each case whether or not having separate legal personality;

	 	
1.2.5

	
reference to any statute or regulation includes any modification or re-enactment of that statute or regulation, provided that the modification or re-enactment does not diminish the rights or extend the obligations of any Party; and

 

	 	
1.2.6

	
references to the words “include” or “including” shall be construed without limitation to the generality of the preceding words.

 

	
2.

	
PROCESS DEVELOPMENT WORK

 

	 	
2.1

	
As soon as is reasonably practicable (and within thirty (30) days of the Commencement Date), the Parties shall meet (either in person or by teleconference) to introduce the key members of their respective teams and to discuss the initial Development Work Plan and agree the actions and timeline for formulating the Transfer Criteria.  The Parties shall endeavour to have the Transfer Criteria in an agreed form as soon as practicable, but in any event by no later than three months before the date when the Development Work is anticipated to be completed as shown in the Development Work Plan (as that may be amended from time to time).  Without intending this to be an exhaustive list, the scope of the Transfer Criteria shall include  specific and measurable criteria for: adequate documentation of processes and conditions for product manufacture, QA and quality control; process reproducibility and success rates; cost of manufacture; process yields; process timelines and staffing requirements; GMP compliance at each stage of the Product Manufacturing Process through to preparing the IMP for patient use; IMP purity levels and ranges; and cost and availability of any special equipment or facilities required for performance of the Product Manufacturing Process, preparation of the prepared dose, and/or product release testing. The Company will carry out the Development Work at its own cost and in accordance with the Development Work Plan and the terms of this Agreement. It is understood that the Development Work Plan is likely to evolve as the Company moves through the Development Work and that the Company may need to update the Development Work Plan including the projected timings that form part of the same.  The Development Work Plan, including all drafts, iterations, and revisions of the Development Work Plan, shall be the Company’s Confidential Information.

 

12

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	 	
   2.2

	
The Company shall provide to the Charity written monthly updates on progress against the Development Work Plan (for clarity, such updates may be in the form of presentation slides from joint project team meetings)  and any necessary updates to the Development Work Plan along with any information or data which is reasonably necessary for the Charity to fully understand the then current status of the Development Work and the steps being taken to achieve the desired outcomes. The Company shall give due consideration to any comments or suggestions provided by the Charity on updates to the Development Work Plan (including making any amendments to the updated Development Work Plan which are reasonably requested by the Charity and which would impact on the Charity’s ability to carry out the Product Manufacturing Process at its Biotherapeutics Development Unit).

 

	 	
   2.3

	
As the Company carries out the Development Work the Parties may also wish to amend or refine the Transfer Criteria to reflect the results of the Development Work. Either the Charity or the Company may propose changes to the Transfer Criteria with the objective of ensuring that the Transfer Criteria represent a fair and measurable set of standards that it would be reasonable for the Charity to expect to be met to show that the Product Manufacturing Process is fit for purpose prior to transfer to the Charity. Each of the Charity and the Company will consider changes to the Transfer Criteria requested by the other in good faith and shall not unreasonably withhold its agreement to a change. Any agreed changes to the Transfer Criteria will be recorded in writing and signed by the Charity and the Company.

 

	 	
   2.4

	
The Company may sub-contract activities to be performed under the Development Work Plan provided that:

 

	 	
2.4.1

	
the Company informs the Charity of the identity of any proposed sub-contractor and, in the event that the Charity (acting reasonably) expresses any concerns with the proposed sub-contractor, takes such concerns into consideration prior to entering into a formal agreement with the sub-contractor to carry out any Development Work;

 

	 	
2.4.2

	
the Company will remain fully responsible for the performance of all of the Company’s obligations under this Agreement;

 

	 	
2.4.3

	
the terms of any sub-contract will allow the Company to fulfill its obligations under this Agreement, including with respect to acquiring necessary Intellectual Property Rights and confidentiality obligations;

 

	 	
2.4.4

	
no Tobacco Party shall be permitted to conduct any activities under the Development Work or otherwise in connection with the Clinical Trial; and

 

	 	
2.4.5

	
within twenty (20) days of entering into any subcontract, the Company shall provide the Charity with a true copy of the statement of work of that subcontract (which may be redacted as to terms not applicable to the Company’s compliance hereunder).

 

	 	
2.5

	
As the Development Work progresses and prior to the Post Development Meeting the Company will work with the Charity to develop a “Technology Transfer Plan” setting out how the Parties will transfer the Product Manufacturing Process from the Company to the Charity’s Biotherapeutics Development Unit and the responsibilities of each Party during and after that transfer and will include (to the extent not already covered by the Transfer Criteria):

 

13

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	 	
2.5.1

	
A description of the scope of the Technology Transfer Plan that includes a table setting out the roles, responsibilities and deliverables to be supplied by each of the Company and the Charity;

 

	 	
2.5.2

	
Documentation requirements (define which stages require a technical or analytical summary report, documents required for importation into the UK/EU of the  Cell Line, certificates of analysis and compliance, etc);

 

	 	
2.5.3

	
A process description with operating parameters for the Product Manufacturing Process (this needs to be detailed with each manipulation described);

 

	 	
2.5.4

	
A sampling plan for use during the Product Manufacturing Process and for the final IMP with quality control test acceptance criteria (define success of tech transfer);

 

	 	
2.5.5

	
Transfer of Company Know-How and training requirements for Charity staff including:

 

	 	
(a)

	
the Charity making suitably qualified employees available to spend such time at the Company prior to transfer of the Product Manufacturing Process as reasonably required to learn the how the Product Manufacturing Process is carried out at the Company (anticipated at the Commencement Date to be in the region of two (2) Charity staff working on site with the Company for up to eight (8) weeks);

 

	 	
(b)

	
The Company making suitably qualified employees available to provide such on-site scientific and technical guidance at the Charity’s Biotherapeutics Development Unit during and/or after transfer of the Product Manufacturing Process as reasonably required to ensure that the Product Manufacturing Process can be carried out at Biotherapeutics Development Unit on a scale and standard suitable to enable the Charity to produce sufficient quantities of IMP to conduct the Clinical Trial (anticipated at the Commencement Date to be in the region of one (1) Company staff member working on site with the Charity for four up to (4) weeks);

 

	 	
2.5.6

	
The Company Materials to be provided by the Company as part of the transfer of the Product Manufacturing Process, along with the quantities and specifications of such Company Materials and timing for provision;

 

	 	
2.5.7

	
A list of equipment requirements to enable the Charity to carry out the Product Manufacture Process;

 

The first draft of the Technology Transfer Plan was provided to the Charity by the Company on 5th August 2014.

 

	 	
2.6

	
The Company will notify the Charity in writing on completion of the Development Work. Within thirty (30) days after the Company provides such notice the Parties shall meet either in person or by teleconference (the “Post Development Meeting”) to review whether the Transfer Criteria have been achieved and the Company has demonstrated to the Charity’s reasonable satisfaction that the Product Manufacturing Process can be carried out on a scale and standard suitable to enable the Charity to produce sufficient quantities of IMP to conduct the Clinical Trial. Where this is the case the Charity will promptly provide the Company with written notice of approval of the Product Manufacturing Process (“Transfer Approval Notice”) and the Charity and the Company will finalise the Technology Transfer Plan. Without intending to affect the generality of foregoing it is agreed that as part of the joint review by the Parties, the Company shall make available to the Charity a report including data and conclusions generated by the Company in undertaking the Development Work. Once agreed by both the Company and the Charity the Technology Transfer Plan shall be circulated for approval and signature by the Company and the Charity.

 

14

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	 	
2.7

	
If the Parties decide at the Post Development Meeting that the Transfer Criteria have not been met (or waived by the Charity) or the Company has otherwise not demonstrated to the Charity’s reasonable satisfaction that the Product Manufacturing Process can be carried out on a scale and standard suitable to enable the Charity to produce sufficient quantities of IMP to conduct the Clinical Trial, then the Parties shall record that decision in writing and agree what further Development Work is required. On notice by the Company that it has completed any such further Development Work the Charity and Company will hold a further Post Development Meeting in accordance with Clause 2.6.

 

	 	
2.8

	
Once signed by each Party pursuant to Clause 2.6 the Charity and the Company will use commercially reasonable efforts to carry out the Technology Transfer Plan.

 

	 	
2.9

	
The Product Manufacturing Process, including all drafts, iterations, and revisions, shall be the Company’s Confidential Information.

 

	
3.

	
CONDUCT OF THE CLINICAL TRIAL AND SPONSORSHIP

 

	 	
3.1

	
Subject to: (i) the Company’s compliance with its obligations hereunder including the successful completion of the Development Work; and (ii) the Ethics Committee and the Regulatory Authority granting consent for the Clinical Trial, the Charity will use its reasonable endeavours to carry out or procure the carrying out of the Clinical Trial in accordance with the Protocol.

 

	 	
3.2

	
Once the Clinical Trial has been opened to Clinical Trial Subjects, the Charity shall use reasonable endeavours to provide to the Company at least one Progress Report per month (or with the frequency that is the Charity’s standard practice at the relevant time in respect of a clinical trial at the same stage, and of the same scope, as the Clinical Trial, but no less frequently than quarterly). The Company may use the Progress Reports for the purpose of determining whether or not to exercise the Option. All Progress Reports and any supplementary information provided under them shall be the Confidential Information of the Charity and the provisions of Clause 5 shall apply. The Company acknowledges that information or data provided under this Clause 3.2 may not be verified, clean or accurate, and is provided “as is”. Without prejudice to the generality of Clause 8.7, neither CRT nor the Charity make any representation or warranty (express or implied) of any nature in respect of such data or information, including as to its accuracy, quality, usefulness or comprehensiveness.

 

	 	
3.3

	
The Charity may, at its sole discretion: (i) sub-contract to third parties including Contributors any part of the Clinical Trial; and (ii) engage such Experts and such persons to fulfil the roles of Chief Investigator and/or Principal Investigator or to assist with the Product Manufacturing Process at the Charity’s Biotherapeutics Development Unit as the Charity deems appropriate.

 

	 	
3.4

	
The Charity shall, at its own expense, be responsible for seeking approval of the Clinical Trial and the Protocol from the Regulatory Authority and Ethics Committee prior to commencing the Clinical Trial. For the avoidance of doubt, the Charity shall not be held liable or responsible for any failure and/or refusal by the Ethics Committee or the Regulatory Authority to grant consent for the Clinical Trial or any change required therein.

 

15

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	 	
3.5

	
The Charity shall use reasonable endeavours to carry out, or procure the carrying out of, the Clinical Trial in accordance with relevant aspects of:

 

	 	
3.5.1

	
Clinical Trial Legislation; and

 

	 	
3.5.2

	
ICH GCP and the Declaration of Helsinki.

 

	 	
3.6

	
The Charity shall have control of the preparation and approval of the Protocol, which shall conform in scope with the provisions of Schedule 11 unless otherwise mutually agreed between the Parties.  The Charity may acting reasonably amend the Protocol and/or change the third party undertaking any part of the Clinical Trial in accordance with the provisions of Clauses 3.6.1 and 3.6.2, provided that such Protocol or change to the Protocol has first been approved by the Ethics Committee and, if required by law or regulation, the Regulatory Authority and further provided that;

 

	 	
3.6.1

	
prior to submission for Ethics Committee approval, the Charity shall provide to the Company a copy of the first final version of the Protocol at least fourteen (14) days before seeking Ethics Committee approval and give due consideration to any comments received from the Company by the Charity within such time.

 

	 	
3.6.2

	
the Charity shall notify the Company in writing of any proposed changes to the Protocol that has been approved by the Ethics Commitee at least fourteen (14) days before seeking Ethics Committee approval for such changes, and shall give due consideration to any comments that the Company might make within such time. In an emergency (such as patient safety needs) the said fourteen (14) day time period may be reduced to such time period as the Charity is actually able to give to the Company in the circumstances and the Charity may, if in its reasonable opinion it is required, submit such changes to the Ethics Committee prior to notifying the Company of such;

 

The Charity will try to reach a consensus with the Company on all issues arising out of the Company’s review of any Protocol pursuant to this Clause 3.6.2, but the Charity shall have the final decision save in the case where the Charity proposes to change the cancerindication, primary endpoints, to remove the monitoring of immune responses to hTERT antigen or HLA alloantigens, or to reduce the patient numbers, number of administrations per patient or dose per administration in any such case by more than *** as compared to the Protocol that has been approved by the Ethics Committee or if at the relevant time none has been approved by the Ethics Committee then the Protocol Summary in Schedule 11 in which circumstances (acting reasonably) the approval of Company shall be required.

 

	 	
3.6.3

	
in the event that the Ethics Committee and/or the Regulatory Authority does not approve the original Protocol, or if the Company, the Ethics Committee and/or the Regulatory Authority disapprove of any amendment to the Protocol, the Charity shall have the right to terminate this Agreement forthwith upon written notice to the Company.

 

	 	
3.7

	
The Charity shall have sole responsibility for the conduct and control of the Clinical Trial and shall accept the obligations of the sponsor of the Clinical Trial in accordance with the requirements of the Medicines for Human Use (Clinical Trials) Regulations 2004.

 

16

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	 	
3.8

	
The Charity shall use reasonable endeavours to procure that Clinical Trial Subjects are recruited in accordance with the selection procedures and criteria set out in the Protocol.

 

	 	
3.9

	
The Charity shall provide the Company with safety information in accordance with the procedures and timeframes set out in Schedule 3. For the avoidance of doubt the Charity shall also be permitted to provide all safety information to CRT.

 

	 	
3.10

	
The Charity shall promptly advise the Company, in writing, of the occurrence of the Clinical Trial LPFV Date.

 

	 	
3.11

	
The Company may elect to receive a Full Clinical Study Report instead of a Report Synopsis by:

 

	 	
3.11.1

	
providing the Charity with written notice of its election to receive a Full Clinical Study Report, which written notice  must be received by the Charity before the expiration of fourteen (14) days from the date the Charity advised the Company of the occurrence of the Clinical Trial LPFV Date; and

 

	 	
3.11.2

	
paying the Charity the sum of *** excluding VAT or other applicable sales tax (the “Full CS Report Fee”) within twenty one (21) days after service of such notice.

 

If the Company does not serve a written notice and pay the Full CS Report Fee as specified in this Clause 3.11, the Charity shall prepare a Report Synopsis and shall have no obligation to prepare or provide the Company with a Full Clinical Study Report.

 

	 	
3.12

	
The Charity shall provide the Final Report to the Company and CRT within *** after the Clinical Trial Database Lock Date.

 

	 	
3.13

	
The Charity shall only use the Investigational Medicinal Product for the purposes of carrying out the Clinical Trial and shall not permit any third party to use the Investigational Medicinal Product except as required for the purpose of carrying out the Clinical Trial or as set out in this Agreement.

 

	
4.

	
COMPANY’S OBLIGATIONS

 

	 	
4.1

	
The Company shall, at the Company’s sole cost, provide the Charity with:

 

	 	
4.1.1

	
such quantities of the Company Materials as are specified in Technology Transfer Plan or, where no quantities are specified, such quantities as the Charity may reasonably request to enable the Charity to carry out the Clinical Trial;

 

	 	
4.1.2

	
all Company Know-How that it deems reasonably relevant to the Charity’s efforts hereunder as soon as practicable following the Commencement Date;

 

	 	
4.1.3

	
any other information in the Company’s Control pertaining to the safety of the IMP or which in the reasonable opinion of the Company may have a bearing on the conduct of the Clinical Trial as soon as the same comes to the attention of the Company;

 

	 	
4.1.4

	
such scientific and technical guidance as the Charity may reasonably request to enable the Charity and the Contributors to conduct and manage the Clinical Trial in a safe and proper manner, provided however, that Company shall not without its prior consent be obligated to provide scientific and technical guidance other than that described in the Tech Transfer Plan in excess of *** in total cost;

 

17

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

	 	
4.1.5

	
all information (including information for inclusion in the Investigational Medicinal Product Dossier) and co-operation reasonably requested by the Charity at any time from the Commencement Date to enable the Charity to compile an Investigational Medicinal Product Dossier; provided that such requested information is in the Company’s Control. In the case of co-operation requested under this Clause 4.1.5, the Company shall procure (at its own cost) that any subcontractor which has performed activities or produced documents on its behalf under this Agreement is made available to the Charity on such notice, for such time and with such frequency as may be reasonably requested by the Charity. The Company shall provide information requested by the Charity within fourteen (14) days of request (or such other period as may be reasonable given the nature of the request);

 

	 	
4.1.6

	
all data and documentation to be provided by the Company to the Charity pursuant to the Technology Transfer Plan in the manner, and at the times, set out in the Technology Transfer Plan. If the Technology Transfer Plan does not set out specific times for certain categories of data and documentation to be provided, the Company shall provide all such data and documentation in its possession or Control at the Commencement Date (to the extent not already provided), within thirty (30) days of the Commencement Date and thereafter shall provide all such data and documentation on an ongoing basis in accordance with Clause 4.2.

 

	 	
4.2

	
The Company shall provide to the Charity any and all data, documentation, information and Know-How described in Clauses 4.1.1 to 4.1.6 on an ongoing basis within a reasonable time after the same comes to the Company’s attention (if already in the Company’s Control), or into the Company’s Control, after the Commencement Date.

 

	 	
4.3

	
The Company shall provide the Charity with safety information in accordance with the procedures and timeframes set out in Schedule 3. For avoidance of doubt, the Charity shall be entitled to pass such safety information to CRT.

 

	 	
4.4

	
The Company will keep the Charity informed of the scope and results of any pre-clinical or other non-clinical studies being undertaken by or with third parties in relation to the Product. If the Company is intending to transfer the Product or undertake any new research in relation to the Product with a third party it will consult with the Charity on the scope of the intended research and the identity of the third party and take into good faith consideration any comments the Charity may have in respect to the same. This Clause should not be interpreted to limit any restrictions on the Company’s use of the Product or any Related Product under Clause 6.1 or elsewhere in this Agreement.

 

	 	
4.5

	
The Company shall submit to CRT:

 

	 	
4.5.1

	
a copy of its detailed operating budget (including a quarterly cash flow and expenditure forecast) for development of the Product in respect of each Financial Year as adopted by the Company’s board (the “Annual Budget”), at least thirty (30) days prior to the commencement of the Financial Year to which the Annual Budget relates;

 

	 	
4.5.2

	
quarterly management accounts of the Company (to include, inter alia, a (consolidated) profit and loss account, balance sheet and cash flow statement and shall indicate where such management accounts differ to any material extent from the Annual Budget for such period), within five (5) business days  after the date by which such financial statements are filed with the United States Securities and Exchange Commission for such period, but in no event later than fifty (50) days after quarter close for the first three financial quarters and ninety five (95) days after close of the financial year. Such quarterly management accounts shall be prepared in accordance with United States generally accepted accounting principles consistently applied.

 

18

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	 	
4.6

	
The Company will maintain and will not terminate the Third Party Licences and will be solely responsible for any and all payments due under the Third Party Licences that may become due as a result of the grant of rights to the Charity under this Agreement or the carrying out the Clinical Trial in accordance with this Agreement.

 

	
5.

	
CONFIDENTIALITY/PUBLICATION

 

	 	
5.1

	
Subject to Clause 5.5, each Party shall keep confidential and not disclose to any third party (other than the Experts, Contributors, Ethics Committee, Regulatory Authority, and staff involved in carrying out the Clinical Trial on a need to know basis) any Confidential Information disclosed to it by another Party (the “Disclosing Party”) without the prior written consent of the Disclosing Party. For the avoidance of doubt, the Charity shall be permitted to disclose Confidential Information disclosed to it to CRT and CRT shall be permitted to disclose Confidential Information disclosed to it to the Charity. Any party to whom Confidential Information is disclosed in accordance with this Clause 5.1 shall be:

 

	 	
5.1.1

	
subject to no less onerous obligations than those contained in this Clause 5 to keep such information confidential; and

 

	 	
5.1.2

	
advised of its confidential nature.

 

	 	
5.2

	
The obligations of confidence referred to in Clause 5.1 shall not apply to any part of the Confidential Information which can be proved by evidence in writing:

 

	 	
5.2.1

	
was known to the recipient Party (the “Recipient Party”) before its disclosure by the Disclosing Party;

 

	 	
5.2.2

	
was available to the public before that date or was otherwise in the public domain;

 

	 	
5.2.3

	
becomes available to the public or enters the public domain after that date otherwise than as a result of an act or default of the Recipient Party;

 

	 	
5.2.4

	
is received by the Recipient Party from a third party not bound to the Disclosing Party by any obligation of secrecy;

 

	 	
5.2.5

	
is independently developed or generated by the Recipient Party in circumstances where it has not been derived directly or indirectly from the Disclosing Party’s Confidential Information; or

 

	 	
5.2.6

	
is required to be disclosed by: (i) any law or statute or  any rule or regulation of any Regulatory Authority or other government or administrative agency or authority, (ii) a Regulatory Authority; or (iii) an order of any court, provided however, that in each such event the Recipient Party required to disclose the Confidential Information shall give prompt notice to the Disclosing Party of such requirement so that such Disclosing Party may seek a protective order or other appropriate remedy to the extent of such disclosure.

 

19

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	 	
5.3

	
The obligations of the Parties under Clause 5.1 shall survive the expiry or termination of this Agreement for whatever reason for a period of ten (10) years from the date of such expiry or termination.

 

	 	
5.4

	
Each of the Parties agrees that the provisions of this Clause 5 are fair and reasonable and that money damages are not a sufficient remedy for any breach of this Clause 5 and therefore, in addition to all other remedies, all Parties shall be entitled to seek injunctive or other equitable relief as a remedy for such breach.

 

	 	
5.5

	
Notwithstanding any confidentiality obligations assumed by the Parties hereunder, the Parties acknowledge the importance of publications to the academic standing of the Charity and the Contributors and the capital raising, transactional, and licensing prospects and reporting and disclosure obligations of the Company under United States and other securities laws, and progress reporting obligations to licensors and sublicensors under Third Party Licences. Accordingly, the Parties have agreed as follows as regards publication of Clinical Trial Results and Progress Reports:

 

	 	
5.5.1

	
The Charity shall use reasonable endeavours to publish, or procure the publication by the Contributors of, the Clinical Trial Results in a timely manner in accordance with generally accepted  academic practice, whether during the course of or after completion of the Clinical Trial;

 

	 	
5.5.2

	
The Company may disclose the content of Progress Reports only to the extent required for (a) satisfying mandatory reporting and disclosure obligations under United States and other securities laws; or (b) to existing licensors or sublicensors of the Company in order to comply with reporting obligations in existence as at the date of this agreement under Third Party Licences, provided that in the case of (b) the disclosure will exclude all information regarding clinical responses and shall be limited to only information regarding the clinical indication, anticipated timelines of the trial, the number of patients dose, and such other information of a similar nature as may be reasonably required by the Third Party Licence;

 

	 	
5.5.3

	
In the event that the Company wishes to disclose the content of Progress Reports to a third party in connection with capital raising, financing, transactional, and/or licensing activities or prospects for the benefit of the Company, it shall give notice to the Charity, including details of the content of the proposed disclosure and the reason for wishing to make such disclosure, and obtain the Charity’s approval before proceeding with the disclosure. The Company shall inform Charity of the identity of the third party in its notice unless it is prevented from doing so due to express confidentiality restrictions owed to the third party, in which case the Company shall state the main business area within which the  third party operates; and

 

	 	
5.5.4

	
It is further provided that any disclosure of the content of Progress Reports by the Company shall be subject to the following conditions: (a) all recipients shall be informed in writing beforehand of the  confidential nature of the information being disclosed and shall have agreed in writing to obligations of confidentiality in favour of the Company no less onerous than those contained in this Clause 5 (but without any right of further disclosure) to keep such information confidential; and (b) only the content of the documents containing the relevant information which has been processed into a suitable format may be disclosed but not copies of the actual documents themselves. Condition (a) above shall not apply to a disclosure by the Company for the purpose mentioned in Clause 5.5.2(a).

 

20

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	 	
5.6

	
The Charity will include provisions in its contracts with the Contributor(s) that require such Contributor(s) to notify the Charity in advance of submission of any abstract, presentation or manuscript incorporating Clinical Trial Results that the Contributor(s) wish to publish or have published or to present or have presented.

 

	 	
5.7

	
Upon receipt of such notification from a Contributor or if the Charity wishes itself to publish or have published or to present or have presented an abstract, presentation or manuscript incorporating Clinical Trial Results the Charity shall so notify the Company and CRT and provide (in so far as it is able to do so in the case of a Contributor’s notification) in response to the Company’s and/or CRT’s reasonable request a copy or summary thereof at least seven (7) days prior to submission for publication of an abstract or presentation or at least thirty (30) days prior to submission for publication of a manuscript (or twenty one (21) days prior to submission for publication of a manuscript in the case of a Contributor’s notification). Any such copy or summary shall provide sufficient details to enable the Company and CRT to ascertain whether it contains Confidential Information of the Company or CRT respectively or whether Patent Rights or other proprietary protection should be sought.

 

	 	
5.8

	
The Company and CRT shall review and make any comments on such intended publication or presentation of an abstract to the Charity within seven (7) days and/or shall review and make any comments on such intended publication or presentation of a manuscript within thirty (30) days. The Company and/or CRT may request that:

 

	 	
5.8.1

	
Confidential Information of the Company (not including Clinical Trial Results nor information directly relating to the Investigational Medicinal Product) or Confidential Information of CRT (not including Clinical Trial Results) be removed from the proposed publication or presentation; and/or

 

	 	
5.8.2

	
any such publication or presentation be delayed if in the Company’s or CRT’s reasonable opinion it is necessary to delay publication or presentation in order to file a patent application or application for other proprietary protection in respect of any invention made in the course of the Clinical Trial. Any such delay will be kept to the minimum period practicable and will in no event extend beyond thirty (30) days from the date the proposed publication or presentation was provided to the Company.

 

In the event of a request pursuant to Clauses 5.8.1 or 5.8.2, the Company or CRT (as the case may be) shall provide the Charity with a written explanation of the reasons why it believes information should be removed or a delay is necessary. For the avoidance of doubt, any Patent Rights filed pursuant to Clause 5.8.2 shall be filed in CRT’s name.

 

	 	
5.9

	
The Charity and CRT shall be entitled to publish information in relation to the proposed Clinical Trial, including that it is or will be a trial conducted by the Clinical Development Partnerships initiative set up by the Charity and CRT, the pre-requisites for patient recruitment, a brief description of the Clinical Trial, including the name of the Company, the reference number and class of the Investigational Medicinal Product and the location(s) at which the trial is taking place.

 

	
6.

	
INTELLECTUAL PROPERTY RIGHTS

 

	 	
6.1

	
The Company hereby grants to the Charity:

 

21

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	 	
6.1.1

	
a *** in the Field under the Company Owned Intellectual Property; and

 

	 	
6.1.2

	
a *** in the Field under the hTERT Licensed Patents; and

 

	 	
6.1.3

	
a *** in the Field under the University of Western Ontario Licensed Patents; and

 

	 	
6.1.4

	
a *** in the Field under the Isis Licensed Patents; and

 

	 	
6.1.5

	
a *** in the Field under the Merix/Duke Licensed Patents; and

 

	 	
6.1.6

	
a *** in the Field  on consent of Johns Hopkins University (as described in Section 2.2 of the JHU License) under the Immunomic/JHU Licensed Patents; and

 

	 	
6.1.7

	
a *** in the Field under the WARF Intellectual Property

in each case subject to the terms and conditions for such sub-licence described in Schedule 7A, on a royalty-free basis, and for the purpose of preparing for and carrying out (and having prepared or carried out for the Charity) the Clinical Trial. In addition the Company hereby grants to the Charity a non-exclusive, royalty free licence under the Company Intellectual Property (including the right to use Company Materials), subject to the terms and conditions for each sub-licence described in Schedule 7A, for the Charity and scientists funded by the Charity to adapt and use the Product Manufacturing Process and make and have made Products and Related Products for non-commercial research purposes, provided that such research will not include clinical research without the prior written consent of the Company on a case-by-case basis.  Such license under the Immunomic/JHU Licensed Patents shall include only rights relating to use of ***.

 

In the event the Charity reasonably determines that its Contributors require any additional sub-licence under any Third Party Licence in order to perform their activities in support of the Clinical Trial, at the Charity’s request the Company agrees to use its reasonable endeavours to obtain the necessary consents under the relevant Third Party Licences to enable the Charity to grant the additional sub-licences to the Contributors or if such consent is refused in any case or in the Company’s reasonable opinion is unlikely to be granted then, if it is so permitted under the relevant Third Party Licence, the Company agrees to directly sublicense the Contributors as appropriate.

 

During the term of this Agreement, the Company shall not be entitled to (and shall not authorise any of its Affiliates or any other third party to) conduct any clinical trials in respect of the Product or, save as the Parties may agree otherwise pursuant to Clause 6.2 below, any Related Product.

 

If, within *** of the Effective Date, the licensor or sublicensor of a Third Party Licence requires that a provision of a Third Party Licence be added to this Agreement on the basis that the Third Party Licence requires that the provision be included in a sublicence, the Charity, CRT and the Company shall so amend this Agreement; provided, however that if the Charity reasonably determines that the provision, if added to this Agreement, would impose upon the Charity an obligation that is not acceptable to the Charity or an obligation that would be illegal for the Charity to perform under the laws of England, then the Charity may terminate this Agreement upon *** written notice to the Company.

22

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

Notwithstanding anything to the contrary above in this Clause 6.1, or elsewhere in this Agreement, the Company acknowledges, agrees and warrants that the Charity is entitled to lawfully sub-contract in accordance with Clause 3.3 above any of the work that is contemplated by this Agreement (including work that is preparatory to any such work) without requiring any further or other consents from the Company or any third party.

 

As regards the Intellectual Property Rights that have been licensed to the Charity under clauses 6.1.4, 6.1.6 and 6.1.7 above, the Parties acknowledge the consent letters set out in the table at the top of Schedule 7 that have been obtained from the relevant head licensors.  Without affecting the Charity’s rights above in this Clause 6.1:

 

	 	
(a)

	
if at any time the Charity wishes to additionally obtain a consent letter from the University of Western Ontario that provides freedom or greater freedom in favour of the Charity to sub-license the Intellectual Property Rights that have been licensed to the Charity under Clause 6.1.3, then upon being requested to do so, Asterias shall cooperate with the Charity and use its commercial reasonable endeavours to obtain such consent letter in the form reasonably requested by the Charity at the time; and

 

	 	
(b)

	
for clarity Asterias hereby represents and warrants to and for the benefit of the Charity that Asterias is entitled to grant direct sub-licences to Contributors (and any other third parties) under the  Intellectual Property Rights that have been licensed to the Charity under Clause 6.1.3 and that upon being requested to do so by the Charity at any time, Asterias shall promptly enter into such direct sub-licences with such Contributors or other third parties so as to enable the Charity to properly perform its obligations and enjoy its rights under the main body of this Agreement by means of selective sub-contracting and sub-licensing as the Charity may desire. The terms of such direct sub-licence shall be non-exclusive and free of charge and otherwise similar to the licence terms set out above in this Clause 6.1 avoiding (so far as is lawful) any restrictions or other terms that are of no relevance to the main purposes of the  sub-contract or sub-licence and excluding any right to further sub-license.

 

	 	
6.2

	
If at any time during the Clinical Trial the Company desires to commence a clinical study in respect of a Related Product, it shall give as much notice of this as practicable to CRT and the Charity and the Parties shall  endeavour to agree and enter into a separate agreement within ninety (90) days detailing the terms on which the desired clinical study may be commenced and carried out by the Company in respect of the Related Product. The Parties shall act in good faith to negotiate an agreement that facilitates clinical development of the Related Product while minimizing any potential negative impact on the ongoing Clinical Trial and commercial prospects for the Product.

 

	 	
6.3

	
The Company shall use commercially reasonable endeavours to continue to prosecute and maintain, at its own cost, all of the Company Patent Rights and to procure that where this is the responsibility of the licensor under a Third Party Licence, that the licensor similarly does so; subject to this Clause 6.3. If the Company intends to substantially narrow the scope of the claims of any patent or patent application within the Company Patent Rights it will first consult with CRT and take into good faith consideration any concerns or views expressed by CRT. If the Company elects not to prosecute or maintain any part of the Company Patent Rights, the Company shall notify CRT in writing within a reasonable period and no less than ninety (90) days prior to the expiration of any applicable time bars. After receipt of such notice, and if and to the extent permitted by the terms of the applicable Third Party Licence in the case of Company Patent Rights under a Third Party Licence, CRT may elect, before the expiry of any such time bars, by written notice to the Company, to take an assignment of any Company Patent Rights identified in such notice at CRT’s sole discretion and for consideration not exceeding one pound (£1). In the event that CRT elects to take such an assignment, the Company shall promptly transfer to CRT (or any person nominated by CRT) copies of any and all documents in the Company’s control relating to the filing, prosecution, maintenance, enforcement and defence of such Company Patent Rights. The Company shall not assign, charge, encumber or dispose of any interest in any of the Company Patent Rights in a manner that limits or impairs CRT’s rights under the licence of Company Patent Rights pursuant to this Agreement without CRT’s prior written consent or to or in favour of a Tobacco Party.

 

23

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	 	
6.4

	
As between the Company and the Charity, ***. The Charity hereby ***. CRT hereby ***.

 

	 	
6.5

	
Subject to ***, and to the exceptions allowed for under ***, the Company shall ***.

 

	 	
6.6

	
Solely in connection with the Charity’s and the Contributors’ activities performed pursuant to the Clinical Trial, where carried out in accordance with the terms of this Agreement, the Company shall not, and shall procure that its Affiliates shall not, anywhere in the world, institute or prosecute (or, other than as required by law, in any way aid any third party in instituting or prosecuting) any claim, demand, action or cause of action for damages, costs, expenses or compensation, or for an enjoinment, injunction, or any other equitable remedy, alleging the infringement by the Charity and/or any Contributors of any Patent Rights of the Company and/or any Patent Rights of the Company’s Affiliates. For the avoidance of doubt, the foregoing shall not apply in respect of: (i) development, at any time, of products other than the IMP, Products or Related Products in accordance with the provisions of Clause 6.1; or (ii) any activity in relation to Products, Related Products or the IMP which constitutes a breach of the terms of this Agreement.

 

	 	
6.7

	
Any breach of Clause 6.6 shall be a material breach and shall accordingly entitle the Charity to terminate this Agreement under Clause 11.2.

 

	 	
6.8

	
CRT hereby reserves and excludes from the Option, the worldwide, perpetual and irrevocable right in and to the Exclusive Results for the Contributors and the Charity (including scientists funded and/or employed by the Charity) to:

 

	 	
6.8.1

	
use the Exclusive Results for the purpose of non-commercial scientific research carried out by or for or under their respective direction in accordance with their respective charitable and/or academic status, whether alone or in collaboration with a third party or third parties; and

 

	 	
6.8.2

	
grant licences under, and make available, the Exclusive Results solely to the extent necessary to exercise the rights under Clause 6.8.1, but not otherwise.

 

24

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

	 	
6.9

	
For the avoidance of doubt, CRT shall be entitled, at its discretion, at any time (including during the Option Period) to grant non-exclusive licences to the Non-Exclusive Results to any person and for any purpose.

 

	 	
6.10

	
In the event that the Charity is prevented or materially restricted from carrying out the Clinical Trial in accordance with this Agreement due to an actual or potential infringement of third party Intellectual Property Rights, the Charity shall have right to terminate this Agreement under Section 11.3.4 if the Company does not, within *** after the Company’s receipt of notice of a claimed infringement from the third party, obtain a licence from the third party permitting the use of the third party’s infringed Intellectual Property Rights by the Charity in the Clinical Trial.

 

	
7.

	
OPTION

 

	 	
7.1

	
CRT grants to the Company the option, exercisable by notice to CRT in writing (the “Exercise Notice”) at any time during the *** (the “Option Period”), to enter into the Licence (the “Option”). Subject to Clause 6.8, the Option shall be ***.

 

	 	
7.2

	
Upon exercise of the Option, the Company shall pay the Option Fee to CRT within the Option Period.

 

	 	
7.3

	
Save where the Charity has provided a Full Clinical Study Report, CRT shall procure the provision of the Data Listings to the Company following the exercise of the Option and the receipt by CRT of the Option Fee.

 

	 	
7.4

	
If the Company exercises the Option, CRT and the Company shall execute the Licence within the Signature Period.

 

	 	
7.5

	
If either: (i) the Company does not exercise the Option within the Option Period; or (ii) following the exercise of the Option, the Company does not enter into the Licence within the Signature Period, then at any time within the period of *** following the expiry of the Option Period or Signature Period (as applicable), at CRT’s request the Company shall:

 

	 	
7.5.1

	
provide CRT with such assistance as CRT may reasonably request to enable CRT to carry out in-depth due diligence on the Company Patent Rights and the Third Party Licences, including by providing access to true copies of the Third Party Licences and any freedom to operate searches conducted by or in the possession or control of the Company in respect of the Company Patent Rights;

 

	 	
7.5.2

	
provide CRT with such assistance as CRT may reasonably request in liaising with the licensors under the Third Party Licences for the purpose of obtaining direct contractual rights with such licensors;

 

	 	
7.5.3

	
in respect of Third Party Licences under which the Company would retain a right to use some or all of the relevant Intellectual Property Rights after entering into the CRT Licence, ***; and

 

	 	
7.5.4

	
promptly license the Company Intellectual Property (including by granting sub-licences under the Third Party Licences to the extent laid out in Schedule 6, and subject to the terms and conditions of, the Third Party Licences) to CRT by executing an agreement in the form attached at Schedule 6 (the “CRT Licence”), and CRT shall be free to license or otherwise grant rights in respect of the Clinical Trial

25

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

Results and the Intellectual Property Rights in the Clinical Trial Results on such terms and to such third parties as it shall see fit. Further Company agrees, at CRT's sole discretion (but subject to any sublicensing limitations in the underlying Third Party Licence), to issue a direct sublicence to third parties of CRT’s choosing under those Third Party Licences for which Company is unable to award CRT a further sublicensable sublicence.  Any disagreement between CRT and the Company as to: (i) categorisation of Company Intellectual Property as “Company Background Intellectual Property” or “Company Foreground Intellectual Property” under the CRT Licence; or (ii) a fair and reasonable apportionment of Third Party Licence Payments under Clause 7.5.3, will be resolved by Independent Opinion in accordance with Clause 13.

 

	
8.

	
WARRANTIES AND LIMITS OF LIABILITY

 

	 	
8.1

	
The Charity warrants that:

 

	 	
8.1.1

	
it will procure the discharge of its obligations hereunder with reasonable care and skill; and

 

	 	
8.1.2

	
it will use its reasonable endeavours to procure that each Contributor that carries out part of the Clinical Trial ensures that where applicable the relevant Chief Investigator and/or the Principal Investigator discharge their obligations in respect of that part of the Clinical Trial in accordance with applicable ICH GCP provisions.

 

	 	
8.2

	
The Company warrants and represents that:

 

	 	
8.2.1

	
it is entitled to make the Company Materials available to the Charity for the purposes of this Agreement;

 

	 	
8.2.2

	
to the best of its knowledge the use and possession of the Company Materials and/or the use, possession and manufacture (in accordance with the Product Manufacturing Process) of IMP by the Charity and/or the Contributors shall not infringe the rights (including without limitation any Intellectual Property Rights) of any third party;

 

	 	
8.2.3

	
the Company Materials have been manufactured, handled and stored at all times in accordance with the regulatory standards agreed between the parties in the Technology Transfer Plan;

 

	 	
8.2.4

	
it has the full right, power and authority, and has obtained all approvals or consents necessary to grant the rights under the Third Party Licences as provided under this Agreement;

 

	 	
8.2.5

	
the Third Party Licences:

 

	 	
(a)

	
are the only third party licences held by the Company or to which the Company is entitled to acquire under options or otherwise in respect of the manufacture, possession and use of the IMP and the rights granted to the Charity under this Agreement;

 

	 	
(b)

	
that have been copied to CRT prior to the date of this Agreement (save for redactions that are apparent on the face of the documents) are complete and accurate and are not in the course of being varied; and

 

	 	
(c)

	
shall not be materially varied during this Agreement without the prior written approval of CRT, such approval not to be unreasonably withheld or delayed.

 

26

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	 	
8.2.6

	
the Third Party Licence Payments are the only payments that could become payable under the Third Party Licences, excepting only patent maintenance and prosecution costs, costs arising from the defence or prosecution of any infringement or alleged infringement of any patents or other intellectual property, and indemnification costs;

 

	 	
8.2.7

	
to the best of its knowledge and belief there are no outstanding breaches of the Third Party Licences by the Company; and

 

	 	
8.2.8

	
to the best of its knowledge and belief no acts or omissions have occurred which would give one or more of its licensors the right to terminate a Third Party Licence, either now or at a later date

 

	 	
8.3

	
The Company warrants and represents that all information and Know-How supplied to the Charity and/or CRT pursuant to this Agreement (including any safety information) shall be accurate and complete and shall be supplied as soon as practicable following the Commencement Date (or as otherwise specified herein) to enable the Charity to conduct and manage the Clinical Trial in a safe and proper manner.

 

	 	
8.4

	
Nothing in this Agreement shall exclude or limit the liability of any Party for death or personal injury resulting from its negligence or the negligence of its employees while acting in the course of their employment or shall exclude or limit the liability of any Party for fraud.

 

	 	
8.5

	
Subject to Clause 8.4, the entire aggregate liability for any loss or damage arising from any act or omission relating to this Agreement or its subject matter regardless of the form of action, whether in contract or tort (including in each case negligence), strict or statutory liability or otherwise,:

 

	 	
8.5.1

	
of the Charity and CRT to the Company excluding the liability of the Charity or CRT under Clause 9.1.1, shall be limited to *** in aggregate and the liability of the Charity or CRT under Clause 9.1.1 shall be limited to *** in aggregate;

 

	 	
8.5.2

	
of the Company to CRT and the Charity excluding the liability of the Company under Clause 9.2.1, shall be limited to *** in aggregate and the liability of the Company under Clause 9.2.1 shall be limited to *** in aggregate.

 

	 	
8.6

	
To the fullest extent permissible by law, no Party shall under any circumstances be liable to any other for any loss of revenue, business, contracts, anticipated savings, profits, data or information, or any indirect or consequential loss howsoever arising whether from negligence, breach of contract or otherwise.

 

	 	
8.7

	
Save to the extent otherwise provided in this Agreement, each Party specifically excludes to the extent permitted by law all warranties, representations, and conditions regarding the performance of its obligations under this Agreement including those implied by law, whether as to suitability, quality or fitness for any purpose or otherwise.

 

	
9.

	
INDEMNITIES

 

	 	
9.1

	
Subject to Clause 8.5, the Charity shall indemnify and hold the Company its officers, and employees and its licensors and sub-licensors under Third Party Licences (the “Company Indemnitees”) harmless from and against:

 

27

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	 	
9.1.1

	
***; and

 

	 	
9.1.2

	
***

 

	 	
9.1.3

	
in either case under Clauses 9.1.1 and 9.1.2 above  arising out of the conduct of the Clinical Trial by the Charity;

 

	 	
9.1.4

	
save in either case where such claims and proceedings, losses, damages, costs or expenses arise as a consequence of (i) any wrongful act or omission and/or negligence of any of the Company Indemnitees; (ii) a breach of this Agreement by the Company; or (iii) a misrepresentation by the Company. It is a condition of this indemnity that the Company hands over or procures the hand over (as the case may be) of control of the matter to the Charity, gives or procures (as the case may be) such information and assistance as the Charity may reasonably request in connection with the matter, and allows or procures, (as the case may be) that the Charity has exclusive conduct of the matter and any ensuing legal proceedings;

 

	 	
9.1.5

	
and provided always that the foregoing indemnity given in respect of liability owed by the Company to its licensors and sub-licensors under Third Party Licences shall apply only to the extent that the relevant Third Party Licence contractually requires the Company to indemnify the licensor or sublicensor against such liability.

 

	 	
9.2

	
Notwithstanding the provisions of Clause 9.1 above and any other restrictions on liability contained in this Agreement, but subject to Clause 8.5 above, the Company shall indemnify and hold the Charity, CRT, the Contributors, the Experts and their respective officers, employees and agents harmless from and against all:

 

	 	
9.2.1

	
***; and

 

	 	
9.2.2

	
***;

 

	 	
9.2.3

	
in either case under Clauses 9.2.1 and 9.2.2 above arising out of: (i) any failure or delay on the part of the Company to provide relevant or accurate Company Know-How and other information relating to the storage, manufacture, quality assurance, use and safety of any of the Company Materials; and/or (ii) any wrongful act or omission and/or negligence of the Company (or any third party engaged by the Company) ***; and

 

	 	
9.2.4

	
alleging infringement of a third party’s Patent Rights or other Intellectual Property Rights resulting from use of Company Intellectual Property or Company Materials in the course of or in consequence of the performance of the Clinical Trial or by importation, storage, manufacture, supply or use of any of the Company Materials and/or Product as permitted by this Agreement; provided always that

 

	 	
9.2.5

	
it is a condition of the indemnity that the Charity and CRT hand over or procure the hand over (as the case may be) of control of the matter to the Company, and give or procure (as the case may be) such information and assistance as the Company may reasonably request in connection with the matter, and allow or procure, (as the case may be) that the Company has exclusive conduct of the matter and any ensuing legal proceedings.

 

28

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

	 	
9.3

	
The indemnities set out in Clauses 9.1 and 9.2 shall survive the expiration or termination of this Agreement for whatever reason.

 

	 	
9.4

	
The Charity shall ensure that all Clinical Trial Subjects receive the benefit of a no-fault compensation scheme substantially in the form attached at Schedule 5 hereto. Subject to the indemnity in Clause 9.2, the Charity shall bear all costs associated with the provision of such compensation scheme including in relation to all claims received pursuant to such scheme.

 

	 	
9.5

	
The Company shall to the extent reasonably possible carry liability insurance coverage for potential liabilities which the Company may directly or indirectly have to Clinical Trial Subjects or under Clause 9.2.1 of this Agreement in amounts equal to at least *** per occurrence combined single limit and *** annual aggregate coverage. The Company shall maintain such insurance in full force throughout the term of the Agreement and shall upon request of the Charity provide such evidence of compliance as the Charity deems sufficient.

 

	
10.

	
ASSIGNMENT

 

	 	
10.1

	
No Party shall assign its rights under this Agreement or any part thereof; provided that the Company may assign its rights and obligations to a third party in connection with any merger or consolidation of the Company with another business entity, or in connection with the sale of all or a substantial part of its business and related assets that includes its business in relation to the Product, other than a merger or consolidation with or a sale of assets to a Tobacco Party and provided that the Company obtains a direct covenant from the acquiring party to CRT and the Charity  undertaking to be bound by the terms of this Agreement. Save as set out in this Agreement, no Party shall sub-contract the performance of all or any of its obligations under this Agreement without the prior written consent of the other Parties.

 

	
11.

	
TERM AND TERMINATION

 

	 	
11.1

	
Unless terminated earlier pursuant to the provisions hereunder, and except as otherwise provided hereunder, this Agreement shall remain in full force and effect from the Commencement Date until the earlier of the date that:

 

	 	
11.1.1

	
The Company enters into the Licence pursuant to Clause 7.4; or

 

	 	
11.1.2

	
The Company licenses the Company Intellectual Property to CRT pursuant to Clause 7.5; or

 

	 	
11.1.3

	
The *** period following the expiry of the Option Period or Signature Period described in Clause 7.5 has expired without request from CRT to execute the CRT Licence.

 

	 	
11.2

	
Any of the Parties hereto may at any time terminate this Agreement, but shall not be obliged to do so, upon written notice to the other Party (being the Charity and CRT where the terminating Party is the Company, or the Company where the terminating Party is the Charity or CRT) under the following circumstances:

 

	 	
11.2.1

	
in the event that the other Party commits a material breach of this Agreement and does not fully remedy, if capable of remedy, the same within sixty (60) days of its receipt of written notice of the breach from any other Party;

 

	 	
11.2.2

	
in the event, in respect of a Party, a voluntary arrangement is proposed or approved or an administration order is made, or a receiver or administrative receiver is appointed of any of such Party’s assets or undertakings or a winding-up resolution or petition is passed (otherwise than for the purpose of solvent reconstruction or amalgamation) or if any circumstances arise which entitle a court or a creditor to appoint a receiver, administrative receiver or administrator or make a winding-up order or similar or equivalent action is taken against or by such Party by reason of its insolvency; or

 

29

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	 	
11.2.3

	
If the required approval of the Ethics Committee or applicable Regulatory Authority for the commencement of the Clinical Trial is not obtained within *** of both the Technology Transfer Plan being completed and the Parties agreeing that the Transfer Criteria have been met, or if any approval granted is revoked, withdrawn, or otherwise terminated, or if an applicable Regulatory Authority orders a halt or hold on the Clinical Trial of greater than *** in duration. No right of termination arising under this Clause 11.2.3 may be exercised by a Party unless it has first notified the other Parties of its wish to terminate and entered into good faith discussions over a period of not less than thirty (30) days with the other Parties to review and discuss the circumstances with a view to avoiding a termination without affecting the purposes contemplated by this Agreement.

 

	 	
11.3

	
The Charity shall have the right to terminate this Agreement forthwith, upon written notice to the Company:

 

	 	
11.3.1

	
in accordance with Clause 3.6;

 

	 	
11.3.2

	
if the Charity is not satisfied that the Product Manufacturing Process can be carried out on a scale and standard suitable to enable the Charity to produce sufficient quantities of IMP to conduct the Clinical Trial including an inability for technical or other reasons to produce the desired quantity of IMP;

 

	 	
11.3.3

	
if the Charity faces budget constraints that require a reduction in its development portfolio; or

 

	 	
11.3.4

	
if the Charity reasonably believes that proceeding with the Clinical Trial would: (i) be unsafe or otherwise counter to the best interests of Clinical Trial Subjects; ii) be counter to changes in the business plan or research strategy of the Charity iii) be counter to  recommendations made by the committee established by the Charity to regularly review the Charity’s clinical portfolio; (iv) involve increases of more than *** to anticipated timelines, including due to difficulties with patient recruitment or unforeseen regulatory hurdles; (v) be unlikely to achieve the primary and/or secondary endpoints of the Protocol; (vi) fail to reach such defined go/no-go criteria as have been previously agreed upon by the Company and the Charity; or (vii)    infringe any third party Intellectual Property Rights and the Company does not obtain a licence entitling the Charity to use such Intellectual Property Rights in the Clinical Trial as provided in Clause 6.10; or

 

	 	
11.3.5

	
in accordance with the last sentence of Clause 6.1.

 

	 	
11.4

	
The Charity shall have the right to terminate this Agreement forthwith, upon written notice to the Company If, by way of merger, acquisition or otherwise, the Company becomes a Tobacco Party.

 

30

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	 	
11.5

	
The Parties may by mutual written agreement terminate this Agreement for any reason, including, if in their opinion the objectives of the Clinical Trial cannot be achieved.

 

	
12.

	
CONSEQUENCES OF TERMINATION

 

	 	
12.1

	
In the event of termination of this Agreement by the Company:

 

	 	
12.1.1

	
subject to Clause 12.1.3 and 12.8, the Charity shall, within thirty (30) days, return to the Company or destroy (by a method specified by the Company) and at the Company’s cost and expense any remaining quantities of the Company Materials and/or Confidential Information of the Company in the Charity’s possession or control;

 

	 	
12.1.2

	
where the Charity has commenced the Clinical Trial, the Charity shall within thirty (30) days of finalisation of the last Case Report Form submit to the Company copies of all completed Case Report Forms and Data Listings for the Clinical Trial. The Charity shall be entitled to retain the original Case Report Forms for its own records; and

 

	 	
12.1.3

	
where the Charity has commenced the Clinical Trial, the Charity shall nonetheless be entitled to continue to manufacture the Investigational Medicinal Product  and continue to provide such Investigational Medicinal Product to: (i) any particular Clinical Trial Subject who has commenced treatment; and/or (ii) any Clinical Trial Subject where the Regulatory Authority and/or Ethics Committee request or require that such provision occurs, unless, in either case, termination occurs under Clause 11.2.3 or 11.5.

 

	 	
12.2

	
In the event of any termination of this Agreement pursuant to Clause 11.2.1 or Clause 11.2.2 by CRT or the Charity:

 

	 	
12.2.1

	
the Option shall lapse forthwith;

 

	 	
12.2.2

	
the Company shall within thirty (30) days of the date of such termination reimburse the Charity all Costs; and

 

	 	
12.2.3

	
the Charity shall be entitled to (as applicable) commence and complete the Clinical Trial and the Company shall provide the Charity with the necessary assistance to allow the Charity to do so. For the avoidance of doubt, the licence granted by the Company under Clause 6.1 shall continue to the extent necessary to allow the Charity to commence and complete the Clinical Trial; provided, that upon completion or termination of the Clinical Trial the Charity shall, within thirty (30) days return to the Company or destroy (by a method specified by the Company) and at the Company’s cost and expense any remaining quantities of the Company Materials and/or Confidential Information of the Company in the Charity’s possession or control.

 

	 	
12.3

	
In the event of termination of this Agreement pursuant to Clause 11.3 by the Charity or pursuant to Clause 11.5:

 

	 	
12.3.1

	
subject to Clause 12.3.2 and 12.8, the Charity shall, within thirty (30) days, return to the Company or destroy (by a method specified by the Company) and at the Company’s cost and expense any remaining quantities of the Company Materials and/or Confidential Information of the Company in the Charity’s possession or control;

 

31

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	 	
12.3.2

	
except for termination under Clause 11.3.4, where the Charity has commenced the Clinical Trial, the Company shall nonetheless continue to permit the Charity to continue to provide Investigational Medicinal Product to: (i) any particular Clinical Trial Subject who has commenced treatment; and/or (ii) any Clinical Trial Subject where the Regulatory Authority and/or Ethics Committee request or require that such provision occurs;

 

	 	
12.3.3

	
where the Charity and CRT consider it appropriate to do so in light of the reason for termination, for a period of thirty (30) days from the date of termination (or such longer period as CRT may notify) CRT will offer the Company the option, exercisable by written notice to CRT, to enter into the Licence in respect of those Clinical Trial Results in existence at the date of termination and subject to agreement between CRT and the Company on amended financial and other terms for the Licence to reflect that the Clinical Trial was not completed. If the Parties have not been able to agree amended financial terms within thirty (30) days of the date CRT receives the Company’s exercise notice the Parties at their joint cost and expense shall obtain an Independent Opinion on a fair and reasonable reduction to the financial terms.

 

	 	
12.4

	
In the event of termination of this Agreement pursuant to Clause 11.2.3, the Charity shall, within thirty (30) days, return to the Company or destroy (by a method specified by the Company) and at the Company’s cost and expense any remaining quantities of the Company Materials and/or Confidential Information of the Company in the Charity’s possession or control.

 

	 	
12.5

	
Termination of this Agreement for whatever reason shall not affect the accrued rights of the Parties arising out of this Agreement as at the date of its termination.

 

	 	
12.6

	
The provisions of the following Clauses shall survive the expiration or termination of this Agreement 5 (Confidentiality/Publication), 6.3 (Assignment of Clinical Trial Results to CRT), 6.5 (Covenant not to sue), 8.4 to 8.6 inclusive (Limits or exclusion of liability), 8.7 (Exclusion of other warranties), 9 (Indemnities), 10 (Assignment), 12 (Consequences of termination), 13 to 23 inclusive (Dispute Resolution to Third Party Rights inclusive).

 

	 	
12.7

	
The Charity shall retain copies of the Company’s Confidential Information and the Clinical Trial Results in accordance with ICH GCP and as otherwise required under the Charity’s obligations as Sponsor of the Clinical Trial.

 

	
13.

	
DISPUTE RESOLUTION

 

	 	
13.1

	
Insofar as this Agreement provides that a matter shall be resolved by Independent Opinion, the opinion of the appointed independent expert (who shall act as an expert and not as an arbitrator) shall be final and binding on the Parties. In the event of a Party seeking an Independent Opinion under this Agreement, each Party shall make written submissions to the expert and to the other Parties within fourteen (14) days of the appointment. Each Party shall have seven (7) days to respond to the others’ submissions. The expert shall be requested to deliver his Independent Opinion within a further thirty (30) days. The costs of any Independent Opinion shall be borne in such proportions as the expert may determine in his Independent Opinion to be fair and reasonable in all the circumstances or, if no such determination is made in the Independent Opinion, by the Parties in equal proportions.

 

	 	
13.2

	
It shall be a condition precedent to the commencement of any action in court or other tribunal (save an action for an interim injunction or an Independent Opinion sought under Clause 13.1) in respect of any dispute relating to this Agreement that the Parties have sought to resolve the dispute by one Party notifying the others in writing for resolution to the Chief Executive Officer of CRT, the Director of Drug Development of the Charity and the CEO of the Company (or their express delegates) (the “Representatives”) who shall meet (whether in person or via teleconference) within twenty one (21) days of such notice to seek resolution in good faith. If the Representatives are unable to resolve the dispute at such meeting, any Party may pursue any remedy available to such Party at law or in equity, subject to the terms and conditions of this Agreement and the other agreements expressly contemplated hereunder.

 

32

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	 	
13.3

	
This Agreement shall be governed by and construed in accordance with English Law and, subject to the provisions of Clause 13.1 and 13.2, each Party agrees to submit to the exclusive jurisdiction of the English Courts (except in respect of disputes under Clause 5 where jurisdiction is non-exclusive).

 

	
14.

	
NOTICES

 

	 	
14.1

	
Any notice or other document to be given under this Agreement shall be in writing and shall be deemed to have been given:

 

	 	
14.1.1

	
upon delivery if given in person; or

 

	 	
14.1.2

	
upon confirmation of receipt if sent by facsimile (or other similar means of electronic communication such as email); or

 

	 	
14.1.3

	
(if posted to an inland destination) three (3) business days after deposit into First Class post;

 

	 	
14.1.4

	
(If posted to an overseas destination) five (5) days after deposit into airmail post; or

 

	 	
14.1.5

	
upon delivery by air delivery service;

 

to a Party at the address or fax number set out below for such Party or such other address as the Party may from time to time designate by written notice to the other Parties.

Address of the Company

Asterias Biotherapeutics

230 Constitution Dr

Menlo Park, CA 94025

Contact:                    Legal/contracts

Fax:                               001 650 433 2900

Address of the Charity

Cancer Research UK

Angel Building

407 St. John Street

London EC1V 4AD

England

Contact:                    Director of Drug Development

Fax:                                +44 (0) 20 7121 6700

33

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

With a copy to:

Cancer Research UK

Angel Building

407 St. John Street

London EC1V 4AD

England

Contact:                    Hayley Farmer

Fax:                                +44 (0) 20 7121 6700

Address of CRT

Cancer Research Technology Limited

Angel Building

407 St. John Street

London

EC1V 4AD

United Kingdom

Contact:                    Chief Executive Officer

Fax:                                +44 (0) 20 3014 8633

 

	
15.

	
WAIVER

 

	 	
15.1

	
No failure or delay on the part of any Party hereto to exercise any right or remedy under this Agreement shall be construed as or operate as a waiver thereof nor shall any single or partial exercise of any right or remedy under this Agreement preclude the exercise of any other right or remedy or preclude the further exercise of such right or remedy as the case may be.

 

	
16.

	
FORCE MAJEURE

 

	 	
16.1

	
No Party shall be liable to any other Party or shall be in default of its obligations hereunder if such default is the result of any cause beyond the reasonable control of the Party affected including war, hostilities, revolution, civil commotion, strike, epidemic, accident, fire, wind, flood or because of any act of God . The Party affected by such circumstances shall promptly notify the other Parties in writing when such circumstances cause a delay or failure in performance (a “Delay”) and where they cease to do so. In the event of a Delay lasting for twenty six (26) weeks or more either of the non-affected Parties shall have the right to terminate this Agreement immediately by notice in writing to the affected Party.

 

34

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	
17.

	
SEVERABILITY

 

	 	
17.1

	
If and to the extent that any court or tribunal of competent jurisdiction holds any of the terms, provisions or conditions or parts thereof of this Agreement, or the application hereof to any circumstances, to be invalid or to be unenforceable in a final non-appealable order, the remainder of this Agreement and the application of such term, provision or condition or part thereof to circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby, and each of the other terms, provisions and conditions of this Agreement shall be valid and enforceable to the fullest extent permissible by law.

 

	
18.

	
ENTIRE AGREEMENT

 

	 	
18.1

	
This Agreement embodies and sets forth the entire agreement and understanding of the Parties and supersedes all prior oral or written agreements, understandings or arrangements relating to the subject matter of this Agreement. No Party shall be entitled to rely on any agreement, understanding or arrangement which is not expressly set forth in this Agreement unless otherwise agreed between the Parties and recorded in writing. In the event of any inconsistency between this Agreement and the Protocol, the terms of this Agreement shall govern.

 

	
19.

	
AMENDMENT

 

	 	
19.1

	
This Agreement shall not be amended, modified, varied or supplemented except in writing signed by duly authorised representatives of the Parties.

 

	 	
19.2

	
The Charity shall at all times be free to amend, modify, vary or supplement any of the Charity’s Standard Operating Procedures.

 

	
20.

	
PUBLIC ANNOUNCEMENTS

 

	 	
20.1

	
The text of any press release, shareholders’ report or other communication to be published or disclosed in any way by or on behalf of the Company by or in the media concerning the Charity, the Contributors or the Experts, the subject matter of this Agreement or concerning this Agreement itself, other than as required by law or by any regulatory or government authority or the rules of any securities exchange, shall be submitted to the Charity and CRT at least seven (7) days in advance of publication or disclosure for approval, such approval not to be unreasonably withheld; provided, that disclosure that repeats or restates prior public disclosure permitted by this Agreement need not be submitted to the Charity or CRT for approval.

 

	
21.

	
PAYMENTS

 

	 	
21.1

	
All payments due to CRT and the Charity under this Agreement shall be made in cleared funds in pounds sterling to the bank accounts nominated by CRT and the Charity respectively from time to time. All costs of transmission shall be borne by the Company.

 

	 	
21.2

	
All payments under this Agreement are expressed to be exclusive of value added tax howsoever arising, which the Company shall pay in addition to those payments.

 

	 	
21.3

	
Save as expressly set out in Clause 7.2, all amounts due under this Agreement shall be paid in full without any deduction or withholding other than as required by law and the Company shall not be entitled to assert any credit, set-off or counterclaim against CRT or the Charity in order to justify withholding payment of any such amount in whole or in part.

 

35

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	 	
21.4

	
Where a Party does not receive payment of any sums due to it by the due date, interest shall accrue both before and after any judgement on the sum due and owing to such Party at the rate equivalent to an annual rate of four percent (4%) over the then current base rate of Natwest Bank, calculated on a daily basis, until the full amount is paid, without prejudice to such Party’s right to receive payment on the due date.

 

	
22.

	
DATA PROTECTION

 

	 	
22.1

	
The Parties’ attention is drawn to the Data Protection Act 1998, Directive 95/46/EC of the European Parliament and any national or European legislation and/or regulations implementing them or made in pursuance of them (all referred to together as the “Data Protection Requirements”).

 

	 	
22.2

	
Each Party warrants that it will observe all its obligations under the Data Protection Requirements which arise in connection with the performance of this Agreement and in particular that it will process and use any personal data fairly and lawfully.

 

	
23.

	
THIRD PARTY RIGHTS

 

	 	
23.1

	
Save for the third parties identified in Clauses 5.5 (Contributors’ right to publish), 6.5 (Covenant not to sue), 9.1 and 9.2 (Indemnities) and 9.3 (No fault compensation scheme), who shall have the benefit of those respective Clauses, this Agreement shall not create any rights that shall be enforceable by anyone other than the Parties to this Agreement. The rights created in Clauses 5.5, 6.5, 9.1, 9.2 and 9.3 may be altered or extinguished by the Parties without consent of any third party beneficiary of such rights.

 

	
24.

	
EXECUTION

 

	 	
24.1

	
This Agreement may be executed in any one or more number of counterpart agreements, and as scanned email attachments, and all signatures and counterparts so exchanged shall be considered as original and shall be deemed to form part of and together constitute this Agreement.

 

IN WITNESS whereof this Agreement has been executed by duly authorised officers of the Parties on the day first above written.

	
Signed by:

	***	 
	 	 	 
	
Name:

	 ***	
	
Title:

	 ***	
	 		
	 	
For and on behalf of

	
	 	
CANCER RESEARCH TECHNOLOGY LIMITED

	

 

36

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	
Signed by:

	***	 
	 	 	 
	
Name:

	 ***	
	 		
	
Title:

	 ***	
	 		
	 	
For and on behalf of

	
	 	
CANCER RESEARCH UK

	

 

	
Signed by:

	
 /s/ Pedro Lichtinger

	 
	 	 	 
	
Name:

	
 /s/ Pedro Lichtinger

	
	 		
	
Title:

	CEO	
	 		
	 	
For and on behalf of

	
	 	
ASTERIAS BIOTHERAPEUTICS, INC.

	

 

37

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

Schedule 1

Company Patent Rights

 

	
Schedule 1A: 

	
Company Owned Patent Rights

	
File #

	
Title

	
Country

	
App # / Patent #

	
Status

	
Filing date

	
Expiration date

	
***

	
***

	
***

	
***

	
***

	
***

	
***

 

1

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

Schedule 1B: hTERT Licensed Patents

	
File #

	
Title

	
Country

	
App #/ Patent #  

	
Status

	
Filing date

	
Expiration date

	
***

	
***

	
***

	
***

	
***

	
***

	
***

2

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

Schedule 1C:  University of Western Ontario Licensed Patents

	
File #

	
Title

	
Country

	
App #/ Patent #  

	
Status

	
Filing date

	
Expiration date

	
***

	
***

	
***

	
***

	
***

	
***

	
***

 

3

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

	
Schedule 1D:

	
Isis Licensed Patents

	
File #

	
Title

	
Country

	
App #/ Patent #      

	
Status

	
Filing date

	
Expiration date

	
***

	
***

	
***

	
***

	
***

	
***

	
***

 

4

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

	
Schedule 1E:

	
Merix/Duke Licensed Patents

	
File #

	
Title

	
Country

	
App #/ Patent #    

	
Status

	
Filing date

	
Expiration date

	
***

	
***

	
***

	
***

	
***

	
***

	
***

 

5

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

Schedule 1F:

(intentionally blank)

 

6

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

Schedule 1G:  Immunomic/JHU Licensed Patents

***

 

7

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

	
Schedule 1H:

	
WARF Intellectual Property

WARF Patents

	
WARF 

REFERENCE 

NUMBER

	
COUNTRY

	
APPLICATION 

SERIAL 

NUMBER

	
FILING DATE

	
PATENT 

NUMBER

***

Wisconsin Materials

***

 

8

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

Schedule 2

Report Synopsis Headings

 

	
 

Name of Sponsor/Company:

 

 

	
 

Individual Study Table

Referring to Part

of the Dossier

 

Volume:

 

Page:

	
 

Name of Finished Product:

 

	
 

Name of Active Ingredient:

 

	
 

Title of Study:

 

	
 

Investigators:

 

	
 

Study Centre(s):

 

	
 

Publication (reference):

 

	
 

Studied period (years):

(date of first enrolment)

 

(date of last completed)

 

	
 

Phase of development:

	
 

Objectives:

 

	
 

Methodology:

 

	
 

Number of Patients (planned and analysed):

 

	
 

Diagnosis and main criteria for inclusion:

 

	
 

Test product, dose and mode of administration, batch number:

 

	
 

Duration of treatment:

 

	
 

Reference therapy, dose and mode of administration, batch number:

 

 

1

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

	
 

Name of Sponsor/Company:

 

 

	
 

Individual Study Table

Referring to Part

of the Dossier

 

Volume:

 

Page:

	
 

Name of Finished Product:

 

	
 

Name of Active Ingredient:

 

	
 

Criteria for evaluation:

 

Efficacy:

 

Safety:

 

	
Statistical methods:

 

	
 

SUMMARY – CONCLUSIONS

 

EFFICACY RESULTS:

 

SAFETY RESULTS:

 

CONCLUSION:

 

Date of the report:

 

2

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

Schedule 3

Safety Information

	
A.

	
Cancer Research UK and Asterias Biotherapeutics Inc. have entered into a clinical trial agreement (the “Clinical Trial Agreement”) (of which this document is Schedule [3]) under which they agreed to collaborate in connection with a Phase [I/II] clinical trial of the Investigational Medicinal Product in  accordance with the Protocol.

	
B.

	
The procedure in this Schedule describes how safety information regarding the Investigational Medicinal Product (“IMP”) will be communicated as it becomes known.

	1	DEFINITIONS

“Adverse Event” (or “AE”) means any untoward medical occurrence in a patient or clinical trial subject administered a medicinal product, which does not necessarily have a causal relationship with this treatment.

An AE can therefore be any unfavourable and unintended sign (including an abnormal laboratory finding, for example), symptom or disease temporally associated with the use of a medicinal product, whether or not considered related to the medicinal product.

An AE includes but is not limited to:

		·	a clinically significant worsening of a pre-existing condition. This includes conditions which may resolve completely and then become abnormal again;

		·	an AE occurring from an overdose of an IMP, whether accidental or intentional; and

		·	an AE occurring as a result of a quality issue with a batch of IMP.

Other reportable events which must be treated as AEs include:

		·	pregnancy exposure to an IMP.  Any pregnancy occurring in a patient or a patient’s partner during treatment with an IMP or occurring within six months of the last dose of study drug administration, must be reported within the same timelines as a Serious Adverse Event (as defined below), even if the patient has been withdrawn from the clinical trial;

		·	overdose with or without an AE;

		·	inadvertent or accidental exposure to an IMP with or without an AE; and

		·	any adverse event which is serious and which could be related to the protocol procedures, and which could modify the conduct of the clinical trial.

“Development International Birth Date” (or “DIBD”) means the first date that clinical trial authorisation is given by a Regulatory Authority for an interventional clinical trial using the IMP anywhere in the world.

“Development Safety Update Report” (or “DSUR”) means a periodic safety report in relation to use of the IMP in the Clinical Trial which: (i) is written by or on behalf of the Charity in accordance with the Charity’s Standard Operating Procedures; (ii) meets the standards of the ICH Guidelines for Development Safety Update Reports as per ICH Topic E2F; and (iii) is required to be submitted annually to the Regulatory Authority in each ICH member state in which the clinical trial is conducted (and to the applicable Ethics Committee) within 60 days of the anniversary of the date of the DIBD.

 

3

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

“Global Development Safety Update Report” (or “GDSUR”) means a periodic safety report in relation to use of the IMP in two or more clinical trials which: (i) meets the standards of the ICH Guidelines for Development Safety Update Reports as per ICH Topic E2F; and (ii) is required to be submitted annually to the Regulatory Authority in each ICH member state in which the clinical trial is conducted (and to the applicable Ethics Committee) within 60 days of the anniversary of the date of the DIBD.

“Investigator’s Brochure” (or “IB”) means a compilation of the clinical and non-clinical data on the Investigational Medicinal Product or products which are relevant to the clinical trial of the product or products in human subjects.

“Medically Important Event” (or “MIE”) means any event that may jeopardise the patient or may require intervention to prevent one of the outcomes listed above.  The Charity may identify certain events which must be treated as medically important by both Parties, and subject to expedited reporting.

“Serious Adverse Event” (or “SAE”) means any untoward medical occurrence or effect (an adverse event) that at any dose, regardless of causality or expectedness, results in:

		·	death;

		·	is life-threatening;

		·	requires in-patient hospitalisation or prolongs existing in-patient hospitalisation;

		·	results in persistent or significant incapacity or disability;

		·	is a congenital anomaly or birth defect; or

		·	is any other Medically Important Event (as defined below).

These characteristics/consequences have to be considered at the time of the event.  For example, regarding a life- threatening event, this refers to an event in which the subject was at risk of death at the time of the event; it does not refer to an event which hypothetically might have caused death if it were more severe.

 

“Suspected Unexpected Serious Adverse Reaction” (or “SUSAR”) means all serious adverse events that are suspected to be related to an investigational medicinal product and that are unexpected.

“Sponsor” means an individual, company, institution or organisation which takes responsibility for the initiation, management and/or financing of a clinical trial.

All capitalised words shall have the same meaning as in the Clinical Trial Agreement unless expressed otherwise.

 

2

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

	
2.

	
PROCEDURE

	
2.1

	
Reporting of SAEs

		2.1.1	Reporting of SAEs by the investigational sites to the Company or the Charity, as the case may be

The Company shall, if it (or any of its licensees or sub-licensees) is carrying out clinical trials on Related Products, use all reasonable endeavours to

		·	monitor, and ensure that it receives from the investigational site within twenty four (24) hours of the investigator or any member of the study team becoming aware of the event) initial reports on SAEs from clinical trials of the Related Products; and

		·	actively seek follow-up information from the investigational site on SAEs from clinical trials of the Related Products until full details (including diagnosis if available, causality,  outcome and cause of death if fatal) are reported.

The Charity shall use all reasonable endeavours to:

		·	monitor, and ensure that it receives from the investigational site within twenty four (24) hours of the Principal  Investigator or any member of the study team becoming aware of the event) reports on SAEs from the Clinical Trial; and

		·	actively seek follow-up up information from the investigational site on SAEs from the Clinical Trial until full details (including diagnosis if available, causality, outcome, and cause of death if fatal) are reported.

	 	
2.1.2

	
Reporting of SAEs to the other Party

Within seven (7) calendar days of receipt by the Company for fatal and life-threatening SUSARs (where day 0 is the day the Company became aware of the event) and within fifteen (15) calendar days of receipt by the Company for all other SUSARs, the Company shall report to the Charity all initial and follow-up information on all SUSARs from clinical trials with the Related Products for which the Company is the Sponsor.

The reports shall be in the form of a CIOMS or MedWatch form.

The Company shall send reports preferably as e-mail attachments, or alternatively by fax, to:

Pharmacovigilance Group

Drug Development Office

Cancer Research UK

E-mail: SAE@cancer.org.uk

Fax +44 20 7983 9547

Within seven (7) calendar days of receipt by the Charity for fatal and life-threatening SUSARs (where day 0 is the day the Charity became aware of the event) and within fifteen (15) calendar days of receipt by the Charity for all other SUSARs, the Charity shall report to the Company all initial and follow-up information on all SUSARs from clinical trials with the IMP for which the Charity is the Sponsor.

 

3

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

The reports shall be in the form of a CIOMS form.

The Charity shall send reports preferably as e-mail attachments, or alternatively by fax, to:

Asterias Biotherapeutics

Attn: Medical Monitor

230 Constitution Dr.

Menlo Park, CA 94025

Fax:  (650)433-2998

medicalmonitor@asteriasbio.com

	 	
2.1.3

	
Late Reports

If either Party fails to provide reports to the other Party within the timelines described above, they must provide to the other Party a legitimate reason for lateness and immediately provide evidence of corrective action taken.

 

	
2.2

	
Expedited Reporting to Regulatory Authorities and Ethics Committee(s)

Each Party shall fulfil its local regulatory obligations in relation to the clinical trials it Sponsors.

The Company will report to the appropriately all SUSARs originating from clinical trials with the Related Products for which it is the Sponsor.

The Charity will report to appropriately all SUSARs originating from clinical trials with the Investigational Medicinal Product for which it is the Sponsor.

 

	
2.3

	
Quarterly Exchange of Line Listings

During the currency of the clinical trials, with a view to reconciling SAEs between the Parties, a line listing of all SAEs received during the previous quarter originating from clinical trials with the IMP for which the Party is the Sponsor shall be exchanged between the Parties on a quarterly basis

Each line listing shall include sufficient information to identify the patient and the event, i.e., case reference, study ID, patient ID, (Number, age and gender) SAE (verbatim term), date event(s) became serious, investigator causality to IMP, maximum grade using NCI CTCAE criteria, and outcome of event.

Each Party shall send line listings preferably as e-mail attachments, or alternatively by fax, to the contact details specified in 2.1.2.

 

	
2.4

	
Trials of Related Product(s)

The Company shall keep the Charity informed about clinical trials in which the Related Products arebeing used. The Company shall do this by providing to the Charity for each clinical trial a summary protocol and a summary of all protocol amendments relating to safety on an ongoing basis.  The Company will be open to questions on safety issues arising from these documents.

 

4

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

	2.5	Development Safety Update Report

		2.5.1	In the event that the Clinical Trial is the only clinical trial being conducted on the IMP anywhere in the world, the Charity will be responsible for the preparation and submission of the DSUR.

The Development International Birth Date (DIBD) to be used will be [DD‐MMM‐YYYY].

The Party responsible for the Development Safety Update Report or Global Development Safety Update Report shall provide the other Party with a draft for review. The reviewing Party shall have fourteen (14) calendar days to comment on the draft. The responsible Party shall give due consideration to any comments that the reviewing Party might make, and provide the reviewing Party with a copy of the final report.

	
2.6

	
Investigator’s Brochure (“IB”)

The Charity will produce the Investigator Brochure.  The Charity will provide an annual update to the IB or provide confirmation that an annual review of safety data has been carried out and no update is required.

The Charity must promptly provide the Company with a copy of each version of the IB within fourteen (14) calendar days of the IB version being issued.  Should the Charity disallow photocopying, it shall provide the other Party with sufficient copies of each version of the IB to allow at least one copy to be distributed to each of the Company’s investigational sites, plus two copies for the Company’s own use.  If requested, the Company will distribute and document numbered copies of the IB.

	
2.7

	
Safety Information from Other Sources

Each Party shall promptly review all information concerning safety of the IMP or Related Products that is obtained or otherwise received from any source, foreign or domestic, including data derived from clinical trials, epidemiological studies, animal experiments, commercial marketing experience, reports as part of scientific literature and unpublished scientific papers.

Any such information that is deemed important, i.e. could result in changes to protocols, patient information sheets or IB, shall be communicated within seven (7) calendar days to the other Party using the same means as for expedited SAE reports.

 

5

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

	
2.8

	
Developments and Enquiries

Each Party shall advise the other of any regulatory or other developments affecting the safety of the IMP or Related Products, e.g., proposed recalls, labelling and other registration dossier change, any proposed changes to manufacturing, IMP quality complaints or quality issues.

Each Party shall advise the other Party of any enquires from Regulatory Authorities and Ethics Committees concerning the safety of the IMP or Related Products.  The Parties shall collaborate fully, and in a timely manner, in providing a response to such enquiry.

	
2.9

	
Language

The Parties agree to communicate with each other and prepare documents on the Investigational Medicinal Product or Related Products in English.

 

6

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

Schedule 4

Licence

THIS AGREEMENT is made the________ day of ____________________20[●●]

BETWEEN:

	(1)	CANCER RESEARCH TECHNOLOGY LIMITED, a company registered in England and Wales under number 1626049 with registered office at Angel Building, 407 St. John Street, London, EC1V 4AD, England] (“CRT”); and

	(2)	ASTERIAS BIOTHERAPEUTICS, INC., a Delaware company with principal place of business at 230 Constitution Drive, Menlo Park, CA94025, USA (the “Company”).

RECITALS

	(A)	CRT is a wholly owned subsidiary of Cancer Research UK (the “Charity”) and is, by arrangement with the Charity, responsible for the management, exploitation and commercialisation of intellectual property generated by the Charity or using funding from the Charity.

	(B)	Pursuant to a Clinical Trial and Option Agreement between CRT, the Charity and the Company dated [●●●] attached at Appendix 2 (the “CTOA”) the Charity has conducted the Clinical Trial (as defined below) and assigned the results of such Clinical Trial and all intellectual property therein to CRT.

	(C)	CRT has agreed to grant the Company a licence under the Licensed Intellectual Property (as defined below) upon the terms and conditions set out in this Agreement.

OPERATIVE PROVISIONS

 

	1.	INTERPRETATION

 

		1.1	In this Agreement except where the context requires otherwise, the following words and expressions shall have the following meanings:

 

		
“Accountancy Opinion”

	
means the opinion of an independent United Kingdom chartered accountant appointed by agreement between the Parties or in default of such agreement within twenty one (21) days of either Party seeking in writing to the other to appoint such accountant, at the request of either Party, by the President for the time being of the Institute of Chartered Accountants in England and Wales, referred to in Clauses 1, 6.3 and 24.1.

 

		
“Affiliate”

	
has the same meaning as that ascribed to that phrase in the CTOA.

 

		
“Affordable Price”

	
means in relation to a Licensed Product: (i) a determination by the UK Pricing Authority that such Licensed Product should be used within the NHS; and/or (ii) approval by the UK Pricing Authority of the price proposed by the Company or its Sub-Licensee in relation to sales of that Licensed Product in the United Kingdom (or one or more constituent countries thereof).

 

1

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

		
“Agreement”

 

“BLA”

	
means this agreement and each of the Appendices as amended from time to time in accordance with Clause 21.

 

means, in relation to any Licensed Product, a biologics licence application, supplementary biologics licence application or any of their equivalents filed with the United States Food and Drugs Administration (FDA) or any successor to it, a marketing authorisation application or its equivalent filed with the European Medicines Agency (EMEA) or any successor to it, or a marketing authorisation application or a product licence application or equivalent filed with the relevant Regulatory Authority in any one or more countries or regions within the Territory.

 

		
“Clinical Trial”

	
has the same meaning as that ascribed to that phrase in the CTOA.

 

		
“Clinical Trial Results”

	
has the same meaning as that ascribed to that phrase in the CTOA.

 

		
“Commencement”

	
means the first dosing of a human subject in a Phase I Clinical Trial, Phase II Clinical Trial or Phase III Clinical Trial (as context requires).

 

		
“Company Combination Patent Rights”

 

“Company Foreground Patent Rights”

 

	
has the same meaning as that ascribed to that phrase in the CTOA.

 

 

Means those of the Company Patent Rights with applications solely or primarily related to the Product and Related Products.

 

		
“Company Intellectual Property”   

	
has the same meaning as that ascribed to that phrase in the CTOA.

 

		
“Company Patent Rights”

	
has the same meaning as that ascribed to that phrase in the CTOA.

 

		
“Competing Programme”

	
means a research and development programme, other than one conducted by the Charity or CRT or any of their Affiliates under the CTOA, under which human subjects in a clinical trial have or are to be administered a cell based therapy that incorporates the hTERT Antigen .

 

2

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

		
“Confidential Information”

	
means all information relating to the manufacturing methods, product specifications, customers, suppliers, business partners, clients, finances, operating budgets and forecasts, business plans and products, and the Development Plan, as revised or amended from time to time (in each case actual or prospective) of a Party which is not in the public domain and which is acquired by the other Party pursuant to this Agreement.

 

		
“Contributors”

	
has the same meaning as that ascribed to that phrase in the CTOA.

 

		
“Control”

	
means the possession (directly or indirectly) of fifty per cent or more of the voting stock or other equity interest of a subject entity with the power to vote, or the power in fact to control the management decisions of such entity through the ownership of securities or by contract or otherwise and “Controls” and “Controlled by” shall be construed accordingly.

 

		
“Currency”

	
means pounds sterling or such other currency as CRT may reasonably specify from time to time.

 

		
“Data Exclusivity Period”

	
means any period of clinical trial data or other regulatory exclusivity, together with any such periods under national implementations in the European Union of Article 10.1 of Directive 2001/EC/83 and all equivalents elsewhere in the Territory.

 

		
“Data Listings”

	
has the same meaning as that ascribed to that phrase in the CTOA.

 

		
“Development Plan”

	
means the development plan at Appendix 1 (as the same shall be updated in accordance with Clause 3.1) which describes: (i) the steps to be taken to develop Licensed Products (including at least one Primary Licensed Product) within the Field and the Territory; (ii) the relevant timescales within which such steps will be taken; and (iii) the estimated costs associated with each step.

 

		
“Effective Date”

	
means the date this Agreement is made.

 

		
“Exclusive Results”

	
has the same meaning as that ascribed to that phrase in the CTOA.

 

		
“Expert Opinion”

	
means the opinion of an independent expert appointed by agreement between the Parties or in default of such agreement within twenty one (21) days of either Party seeking in writing to the other to appoint such expert, by the President for the time being of the Association of the British Pharmaceutical Industry referred to in Clauses 12.3 and 24.1.

 

3

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

		
“Field”

	
means the use of the Product and/or any Related Product(s) in immunotherapy applications using ***, for the treatment, prophylaxis, prevention and/or cure of human disease and conditions.

 

		
“Final Report”

 

“First Commercial Sale”

	
has the same meaning as that ascribed to that phrase in the CTOA.

 

means, with respect to a Licensed Product, the first transfer or disposition for value of such Licensed Product by or on behalf of the Company or a Sub-Licensee or an Affiliate of either of them, after all relevant Regulatory Authorisations for the transfer or disposition of such Licensed Product have been obtained in respect of the relevant region or country.

 

		
“FTO Royalties”

	
means, on a Licensed Product by Licensed Product basis, any royalties on the sale of a Licensed Product payable by the Company under a license from a third party (after the application of any royalty stacking provisions contained therein) to the extent that: (i) but for such license the manufacture, sale, use or distribution of such Licensed Product would infringe the Intellectual Property Rights of such third party licensor, and (ii) such royalty payable is reasonably attributable to the grant of rights used in respect of a Licensed Product and not to unrelated rights also granted pursuant to the same agreement and/or by the same third party licensor.

 

		
“hTERT Antigen”

	
has the same meaning as that ascribed to that phrase in the CTOA

 

		
“Indication”

	
means a disease classification block as defined within the ‘International Statistical Classification of Diseases and Related Health Problems’ as published from time to time by the World Health Organization (e.g. “C50 Malignant neoplasm of Breast”, “C92 Myeloid leukaemia”, “B20 Human immunodeficiency virus [HIV] disease resulting in infectious and parasitic diseases”, “M34 Systemic sclerosis”).

 

		
“Investigational Medicinal Product”  

 or “IMP”

	
has the same meaning as that ascribed to that phrase in the CTOA.

 

 

		
“Intellectual Property Rights”

	
has the same meaning as that ascribed to that phrase in the CTOA.

 

4

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

		
“Know-How”

	
has the same meaning as that ascribed to that phrase in the CTOA.

 

		
“Licensed Intellectual Property”

	
means the Clinical Trial Results and all Intellectual Property Rights therein.

 

 

	 	
“Licensed Product”

	
means any Primary Licensed Product and any Related Licensed Product

 

		
“Major Markets”

	
means ***.

 

		
“Milestone Event”

	
has the meaning specified in Clause 4.2.

 

		
“Milestone Payments”

	
has the meaning specified in Clause 4.2.

		 	 
		
“Net Sales Value”

	
means, in relation to Licensed Product:

 

the gross amount invoiced by the Company or Sub-Licensee or Affiliate of the Company or a Sub-licensee less any value added tax or other sales tax, transport charges (including transport insurance) and costs of packaging to the extent that any of those items are included as separate items in the amount so invoiced, and after deducting any allowances for lost or damaged items or permitted returns, and discounts allowed and rebates given in the normal course of trade, and in the event of more than one such sale, the first such sale;

 

		
“New Company IP”

	
means any Intellectual Property Rights developed by or on behalf of the Company on or after the Effective Date that directly relate to a Licensed Product and its use.

 

		
“Non-Exclusive Results”

	
has the same meaning as that ascribed to that phrase in the CTOA.

 

		
“Oncology Indication”

	
means an Indication in the range C00 – D48 (e.g. “C50 Malignant neoplasm of Breast”, “C92 Myeloid leukaemia”).

 

		
“Party”

	
means either party to this Agreement and “Parties” means both of them.

 

		
“Patent Rights”

	
has the same meaning as ascribed to that phrase in the CTOA.

 

		
“Phase II Clinical Trial”

	
means a clinical trial of a Licensed Product (or in the adaptation of an existing clinical trial) in any country that would satisfy the requirements of 21 CFR §312.21(b) and is intended to establish dose response and/or preliminary data on the efficacy of Licensed Product and/or route of administration of the Licensed Product.

 

5

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

		
“Phase III Clinical Trial”

	
means a clinical trial of a Licensed Product (or the adaptation of an existing clinical trial) to be a larger scale (than Phase I or Phase II), usually multi-centered trial in any country that would satisfy the requirements of 21 CFR §312.21(c) and is intended to establish the efficacy and safety of the Licensed Product or any other human clinical trial of the Licensed Product intended as a pivotal trial for regulatory approval purposes whether or not such trial is a traditional Phase III trial.

 

		
“Phase III Clinical Trial Completion”

	
means the date of the last treatment visit of the last human subject under the  relevant Phase III Clinical Trial.

 

		
“pound” and “£”

	
means British pound sterling or if England changes its currency during the Term, then a sum equivalent in the new currency based on the spot exchange rate at the date of adoption of the new currency.

 

		
“Price Approval”

	
means, in those countries in the Territory where Regulatory Authorities may approve or determine pricing and/or pricing reimbursement for pharmaceutical products, such approval or determination.

 

		
“Primary Licensed Product”

	
means any product that contains the Product whether or not as the sole active ingredient.

 

		
“Product”

	
has the same meaning as ascribed to that phrase in the CTOA.

 

		
“Product Manufacturing Process”        

	
has the same meaning as ascribed to that phrase in the CTOA.

 

		
“Quarter”

	
means any of the three-monthly periods commencing on the first day of any of the months of January, April, July, and October in any year and “Quarterly” has a corresponding meaning.

 

		
“Regulatory Authorisations”

	
means all marketing authorisations, approvals, clearances and authorisations that may be required by a Regulatory Authority in any country or region within the Territory prior to Phase II Clinical Trial Commencement and/or Phase III Clinical Trial Commencement and/or commercial sale of the Licensed Product, including any necessary variations thereto, but excluding always any Price Approvals.

 

		
“Regulatory Authority”

	
means any local or national agency, court, authority, department, inspectorate, minister, ministry official or public or statutory person (whether autonomous or not) of, or of any government of, any country having jurisdiction over this Agreement or either of the Parties or over the development or marketing of medicinal products including, the European Medicines Agency and the European Court of Justice.

 

6

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

		
“Related Licensed Product”

	
means any product that is not a Primary Licensed Product and:

 

(a)            which contains a Related Product, whether or not as the sole active ingredient; and/or

 

(b)            whose application for a Regulatory Authorisation from a Regulatory Authority in any jurisdiction included the Clinical Trial Results and/or the Final Report and/or the Data Listings or any part of any of them

 

		
Related Product

	
has the same meaning as that ascribed to that phrase in the CTOA.

 

		
“Signature Fee”

	
means the sum of ***.

 

		
“Sub-Licence Revenue”

	
means any monies or non-monetary consideration (including securities) receivable from time to time by the Company or an Affiliate in respect of: (i) any sub-licence granted by the Company or an Affiliate under this Agreement; (ii) any licence granted by the Company or an Affiliate (whether under the Company Intellectual Property or otherwise) to sell Licensed Products anywhere in the Territory; and/or (iii) the grant of the right to acquire such a sub-licence or licence, including, in each case, option fees, licence issue fees or other up-front payments, annual licence fees, or other lump sum payments which are attributable to the grant of the rights in question, but excluding: (i) any milestone payments due on the achievement of specific development or sales milestones that are additional to those listed in Clause 4.2;  (ii) royalties as referred to in Clause 4.5; (iii) sales to distributors or wholesalers for resale, and sales made by sales agents, where in any such case the sales have already been or will be accounted for to CRT in determining Net Sales Value; and (iv) any money or non-monetary consideration (including securities or licences of patents, know-how, or other intellectual property) received by the Company from an Affiliate,  provided that such money or non-monetary consideration shall not reduce the Net Sales Value of any Licensed Product sold by the Company or any Affiliate. In the case of non-monetary Sub-Licence Revenue, the value shall be assessed at the date of receipt of the same by the Company or, at the option of CRT, at the date the non-monetary consideration is realised as monetary and in the absence of agreement by the Parties, the value shall be determined by Accountancy Opinion.

 

7

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

		
“Sub-Licensee”

	
means any person who is granted: (i) a sub-licence in accordance with Clause 2.3 in respect of the rights granted under this Agreement (and any further tiers of sub-licence there under); and/or (ii) a licence by the Company (whether under the Company Intellectual Property or otherwise) to sell Licensed Products anywhere in the Territory, but shall not mean distributors, wholesalers, and sales agents.

 

		
“Term”

	
means the term of this Agreement as determined under Clause 12.1.

 

		
“Territory”

	
means worldwide.

 

		
“Tobacco Party”

	
means: (i) any entity who develops, sells or manufactures tobacco products; and/ or (ii) any entity which makes the majority of its profits from the importation, marketing, sale or disposal of tobacco products. Furthermore, Tobacco Party shall include any entity that is an Affiliate of any entity referred to in (i) or (ii).

 

		
“UK Pricing Authority”

	
means any supra-national, national or regional government department, authority, agency or entity (including a non-departmental public body or similar entity) with responsibility for evaluating the cost effectiveness of medicinal products in the United Kingdom (or one or more constituent countries thereof) or otherwise determining whether the NHS (or constituent parts thereof) should purchase medicinal products.

 

		
“Year”

	
means a calendar year.

 

8

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

		1.2	In this Agreement:

		1.1.1	unless the context requires otherwise, all references to a particular Clause, paragraph or Appendix shall be references to that clause, paragraph or appendix, in or to this Agreement;

		1.1.2	the headings are inserted for convenience only and shall be ignored in construing this Agreement;

		1.1.3	unless the contrary intention appears, words importing the masculine gender shall include the feminine and vice versa and words in the singular include the plural and vice versa;

		1.1.4	unless the contrary intention appears, words denoting persons shall include any individual, partnership, company, corporation, joint venture, trust, association, organisation or other entity, in each case whether or not having separate legal personality; and

		1.1.5	references to the words ‘include’ or ‘including’ shall be construed without limitation to the generality of the preceding words.

	2.	GRANT OF LICENCE

 

		2.1	Subject to the provisions of this Agreement and the surviving provisions of the CTOA, CRT hereby grants to the Company:

 

		2.1.1	***; and

 

		2.1.2	***,

 

in each case to research, develop, make, have made, import, use and sell Licensed Products in the Field in the Territory and to apply for Regulatory Authorisation for such Licensed Products in any jurisdiction.

 

		2.2	CRT hereby reserves and excepts from the *** under Clause 2.1.1 the worldwide, perpetual and irrevocable right for the Contributors and the Charity (including use by scientists funded and/or employed by the Charity) to:

 

		2.2.1	use the Licensed Intellectual Property for the purpose of non-commercial scientific research carried out by or for or under their respective direction in accordance with their respective charitable and/or academic status, whether alone or in collaboration with a third party or third parties and whether sponsored or funded, in whole or in part, by any third party including any commercial entity; and

 

		2.2.2	make publications in relation to the Licensed Intellectual Property and any results of research using the same in accordance with generally accepted academic practice.

 

		2.3	The Company shall be entitled to grant sub-licences in respect of the rights granted under this Agreement, provided that:-

 

		2.3.1	any sub-licence granted by the Company shall be expressed to terminate automatically on the termination of this Agreement for any reason;

 

		2.3.2	the Company shall ensure that there are included in the terms of any sub-licence like obligations and undertakings on the part of the Sub-Licensee for the benefit of the Charity as are contained in this Agreement (including Clause 9 (indemnity) and Clause 14 (confidentiality) and, if further tiers of sub-licensing is allowed, this Clause 2.3) and shall further ensure that all Sub-Licensees duly comply with the same;

 

9

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

		2.3.3	no sub-licence shall be granted to a Tobacco Party;

 

		2.3.4	the sub-licence (other than a sublicence with an Affiliate) shall be entered into on an arms-length basis reflecting the market value of the rights granted; and

 

		2.3.5	the Company shall provide CRT with a copy of such sub-licence within thirty (30) days of entering into it.

 

		2.4	Any breach of Clause 2.3 shall be deemed to be a material breach.

		2.5	The grant of any sub-licence shall be without prejudice to the Company’s obligations under this Agreement. Any act or omission of any such Sub-Licensee which, if it were the act or omission of the Company would be a breach of any of the provisions of this Agreement, will be deemed to be a breach of this Agreement by the Company who will be liable to CRT accordingly.

 

		2.6	CRT will provide the Company with any Long Term Survival Data as and when the Charity has completed collection of the same.

 

		2.7	Subject to the restrictions, pre-approvals and limitations as outlined in Section 6.1 and Schedule 7A of the CTOA, the Company hereby grants to the Charity a non-exclusive, royalty free licence under the Company Intellectual Property (including the right to use Company Materials) for the Charity and scientists funded by the Charity to adapt and use the Product Manufacturing Process and make and have made Products and Related Products for non-commercial research purposes, provided that such research will not include clinical research without the prior written consent of the Company which shall be in Company’s sole control, on a case-by-case basis, and subject to establishment of a clinical trial agreement providing Company with appropriate safeguards and indemnities for such trial.

 2.8

If, within one year of the Effective Date of this Agreement, Company wishes to publish or publicly disclose the Clinical Trial Results, it will first provide a copy of such intended disclosure to the Charity for its review at least thirty (30) days prior to the intended date of submission for publication or public disclosure.  Charity will complete its review of such intended disclosure within thirty (30) days of receipt.  If, during its thirty (30) day review period, Charity reasonably determines that information contained within such intended disclosure will materially impact the ability of Charity, CRT, or a Contributor to publish results of, or to protect any Intellectual Property Rights arising from, the Clinical Trial, Company will, at its discretion, either remove such information prior to disclosure or delay disclosure for up to ninety (90) days to allow for protection or publication.  If Charity does not respond within thirty (30) days of receipt, it shall be deemed to have consented to the intended disclosure.  The foregoing provisions of this Clause 2.8 shall not apply to disclosure of Clinical Trial Results, or any portion thereof, by the Company to  the extent required for (a) satisfying mandatory reporting and disclosure obligations under United States and other securities laws; or (b) to existing licensors or sublicensors of the Company in order to comply with reporting obligations in existence as at the date of this agreement under Third Party Licences, provided that in the case of (b) the disclosure shall be limited to only information as may be reasonably required by the Third Party Licence  and subject to the third party that is receiving the information being bound by confidentiality obligations that are no less restrictive than those that the Company is bound by under this Agreement in respect of confidential information disclosed to it by the Charity .

 

10

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	3.	PERFORMANCE

 

		3.1	The Company shall provide an updated Development Plan to CRT on at least a six-monthly basis throughout the Term.

 

		3.2	The Company shall use its commercially reasonable endeavours to procure the achievement of Phase II Clinical Trial Commencement within *** of the Effective Date.

 

		3.3	The Company shall use its commercially reasonable endeavours at all times during the Term to:

 

		3.3.1	comply with the most up-to-date version of the Development Plan;

 

		3.3.2	develop and pursue Regulatory Authorisation for a Licensed Product for use in *** in each of ***;

 

		3.3.3	introduce a Licensed Product for use in *** into each of *** as soon as reasonably and commercially practical following receipt of the corresponding Regulatory Authorisations and subsequently use commercially reasonable efforts to market the Licensed Product and pursue maximum market penetration in the Major Markets;

 

		3.3.4	launch each Licensed Product in the United Kingdom as soon as practicable and in any event no later than *** after the date the first Regulatory Authorisation is granted by the European Medicines Agency;  and

 

		3.3.5	make Licensed Products that are launched in the United Kingdom available at an Affordable Price if required by a Regulatory Authority having jurisdiction over pricing in the United Kingdom.

 

		3.4	Subject to Clause 3.5.2, at least once every six (6) months the Company shall provide CRT with a report as to the progress of the development of each Licensed Product, the progress of any applications for Regulatory Authorisation and Price Approval, and the progress of and plans for the marketing and sale of the Licensed Product and its compliance with the Development Plan, in such form and detail as CRT may reasonably require.

 

		3.5	If, prior to the First Commercial Sale in the United Kingdom and two (2) other Major Markets, the Company undergoes a change of Control, or acquires or begins (whether independently or with a third party) a Competing Programme:

 

		3.5.1	it shall notify CRT in writing within thirty (30) days after the change of Control occurring, or its commencement or acquisition of the Competing Programme; and

 

		3.5.2	for the *** period following the change of Control, or commencement or acquisition of the Competing Programme, it shall provide CRT with a report described in Clause 3.4 at least once every three (3) months.

 

		3.6	The Company shall give CRT prompt notice upon the occurrence of any Milestone Event.

 

		3.7	The Company shall submit to CRT:

 

		3.7.1	a copy of its detailed operating budget (including a quarterly cash flow and expenditure forecast) for the Product in respect of each Financial Year as adopted by the Company’s board (the “Annual Budget”), at least thirty (30) days prior to the commencement of the Financial Year to which the Annual Budget relates;

 

11

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

		3.7.2	quarterly management accounts of the Company (to include, inter alia, a (consolidated) profit and loss account, balance sheet and cash flow statement and shall indicate where such management accounts differ to any material extent from the Annual Budget for such period), within five (5) business days after the date by which such financial statements are filed with the United States Securities and Exchange Commission for such period, but in no event later than fifty (50) days after quarter close for the first three financial quarters and ninety five (95) days after close of the financial year. Such quarterly management accounts shall be prepared in accordance with United States generally accepted accounting principles consistently applied.

		3.8	Any breach of Clause 3 shall be deemed to be a material breach of this Agreement.

 

		3.9	The Company may perform its obligations under Clause 3 in whole or in part through the efforts of its Affiliates, contractors, subcontractors, licensees and sublicensees.

 

	4.	CONSIDERATION

 

		4.1	The Company shall pay the Signature Fee to CRT within thirty (30) days after the Effective Date.

 

		4.2	The Company shall pay the following payments (“Milestone Payments”) to CRT after the first occurrence of each of the following events (“Milestone Events”) in accordance with this Clause 4.2 and Clause 5.2:

 

		4.2.1	Development Milestone Events in relation to ***:

 

		(a)	***;

 

		(b)	***;

		4.2.2	Development Milestone Events in relation to ***:

 

		(a)	***;

 

		(b)	***;

 

		4.2.3	Development Milestone Events in relation to ***:

 

		(a)	***;

 

		(b)	***;

 

		4.2.4	Development Milestone Events in relation to ***:

 

		(a)	***;

 

		(b)	***;

 

		4.2.5	Sales Milestone Events in relation to ***

 

		(a)	***;

 

		(b)	***; and

 

		(c)	***.

 

		4.2.6	Sales Milestone Events in relation to ***

 

		(a)	***;

 

		(b)	***; and

 

		(c)	***.

 

Upon the occurrence of each *** in respect of a Licensed Product ***, if not already triggered, the corresponding *** *** for that same Licensed Product shall be deemed to have occurred. For the avoidance of doubt a Milestone Event may be triggered by the actions of the Company, a Sub-Licensee or any third party acting on behalf of the Company or any Sub-Licensee.

 

12

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

		4.3	Subject to Clause 4.4, the Company shall pay to CRT:

 

		4.3.1	***;

 

		4.3.2	***;

 

		4.3.3	***; and

 

		4.3.4	***.

 

		4.4	In the event that any Milestone Event is triggered by any Sub-Licensee, the Company shall pay to CRT the greater of: (i) ***; and (ii) ***.

 

		4.5	Subject to Clauses 4.6 and 4.7, the Company will pay to CRT royalties on Licensed Products at the following royalty rates based on the Net Sales Value of Licensed Products in the applicable Year:

 

		(a)	***; and

 

		(b)	***; and

 

		(c)	***; and

 

		(d)	***.

 

		4.6	The Company shall pay royalties to CRT in accordance with Clause 4.5 on a Licensed Product by Licensed Product, and country by country basis until the later of:

 

		4.6.1	***; and

 

		4.6.2	***.

 

		4.6.3	***.

 

		4.7	In the event that the Company incurs FTO Royalties with respect to a Licensed Product in a country in a Quarter the following provisions shall take effect with respect to that Licensed Product in that country in that Quarter:

		4.7.1	***;

 

		4.7.2	***;

 

		4.7.3	***.

	5.	PAYMENT AND STATEMENT

 

		5.1	All payments due to CRT under this Agreement shall be made in the Currency in cleared funds to the following bank account:

 

***

 

or such other account as CRT may notify to the Company from time to time.

 

		5.2	The Company shall pay to CRT:

 

		5.2.1	the Signature Fee on the date specified in Clause 4.1;

 

		5.2.2	each of the Milestone Payments within thirty (30) days after the relevant Milestone Event occurring;

 

13

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

		5.2.3	CRT’s share of Sub-Licence Revenue due under Clause 4.3 Quarterly within thirty (30) days after the end of the Quarter in which the consideration upon which Sub-Licence Revenue is based is received by the Company from Sub-Licensee ; and

 

		5.2.4	the royalties due pursuant to Clause 4.5 Quarterly within thirty (30) days after the end of each Quarter in which the relevant Net Sales Value is invoiced by the Company or a Sub-Licensee.

 

		5.3	Where Licensed Products are sold or Sub-Licence Revenue is received by the Company (or a Sub-Licensee) in a currency other than the Currency, the rate of exchange to be used for converting such other currency into the Currency shall be the relevant mid-spot rate for the currency quoted by the Financial Times on the last day of the Quarter to which they relate.

 

		5.4	All costs of transmission and currency conversion shall be borne by the Company.

 

		5.5	All payments to CRT under this Agreement are expressed to be exclusive of value added tax howsoever arising, and the Company shall pay to CRT in addition to those payments or, if earlier, on receipt of a tax invoice or invoices from CRT, all value added tax for which CRT is liable to account in relation to any supply made or deemed to be made for value added tax purposes pursuant to this Agreement.

 

		5.6	All sums payable under this Agreement shall be paid without deduction or deferment in respect of any claims whatsoever and of any taxes except any tax which the Company is required by law to deduct or withhold. If the Company is required by law to make any such tax deduction or withholding, the Company shall pay to CRT such amount as shall, after deduction, amount to the sum referred to in this Agreement give reasonable assistance to CRT to claim exemption from or (if that is not possible) a credit for the deduction or withholding under any applicable double taxation or similar agreement from time to time in force, and shall promptly give CRT proper evidence as to the deduction or withholding and payment over of the tax deducted or withheld.

 

		5.7	Where CRT does not receive payment of any sums due to it by the due date, interest shall accrue both before and after any judgment on the sum due and owing to CRT at the rate equivalent to an annual rate of four percent (4%) over the then current base rate of the Bank of England, calculated on a daily basis, until the full amount is paid to CRT, without prejudice to CRT’s right to receive payment on the due date.

 

		5.8	Within thirty (30) days after the end of each Quarter, the Company shall send to CRT a written statement detailing in respect of that Quarter (including a nil report if appropriate):

 

		5.8.1	any Milestone Payments which became due to CRT;

 

		5.8.2	for each sub-licence, details of each item of Sub-Licence Revenue received by the Company during that Quarter and the Sub-Licence Revenue payable to CRT thereon;

 

		5.8.3	the quantity of each type of Licensed Product sold or otherwise disposed of by the Company or any Sub-Licensees in each country in the Territory;

 

		5.8.4	the Net Sales Value in respect of each such type of Licensed Product in each country of the Territory;

 

		5.8.5	the aggregate Net Sales Value in respect of that Quarter for Licensed Product;

 

		5.8.6	the type and value of deductions made in the calculation of Net Sales Value by type of Licensed Product and country;

 

14

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

		5.8.7	any currency conversions, showing the rates used;

 

		5.8.8	any further information necessary for the calculation of Sub-Licence Revenue and Net Sales Value of Licensed Products and/or the royalties due to CRT; and

 

		5.8.9	the amount of the royalties due to CRT in respect of that Quarter.

 

	6.	ACCOUNTS

 

		6.1	The Company shall:

 

		6.1.1	keep and notwithstanding termination of this Agreement, maintain and shall procure that each Sub-Licensee keeps and maintains, for at least six (6) years, true and accurate accounts and records (including any underlying documents supporting such accounts and records) in sufficient detail to enable the amount of all sums payable under this Agreement to be determined; and

 

		6.1.2	during the Term and thereafter until the said period of three (3) years relevant to the accounts and records has expired, at the reasonable request of CRT and (subject to Clause 6.2) at the expense of CRT from time to time, permit [or procure permission for] a qualified accountant nominated by CRT to inspect and audit those accounts and records and, to the extent that they relate to the calculation of those sums, to take copies of them. Subject to receiving not less than thirty (30) days written notice, the Company shall at the request of CRT assemble in one location each that is respectively convenient to the Company and Sub-Licensee(s) all such relevant accounts and records of the Company and Sub-Licensee(s).

 

		6.2	If, following any inspection pursuant to Clause 6.1.2, CRT’s nominated accountant certifies to CRT that the payments in respect of any Quarter or Year fall short of the sums which were properly payable in respect of that Quarter or Year under this Agreement, CRT shall send a copy of the certificate to the Company and the Company shall (subject to Clause 6.3) within seven (7) days of the date of receipt of the certificate pay the shortfall to CRT and, if the shortfall exceeds two per cent (2%) of the sum properly payable, the Company shall also reimburse to CRT the reasonable costs and expenses of CRT in making the inspection.

 

		6.3	If within seven (7) days of the date of receipt by the Company any certificate produced pursuant to Clause 6.2 the Company notifies CRT in writing that it disputes the certificate, the dispute shall be referred for resolution by Accountancy Opinion in accordance with Clause 24.1.

 

	7.	INTELLECTUAL PROPERTY PROTECTION, PROCEEDINGS AND COSTS

 

		7.1	The Company shall throughout the Term continue to prosecute and maintain the Company Patent Rights at its own cost and shall use commercially reasonable endeavours to maximise the scope of such Company Patent Rights, or where prosecution and maintenance of such Patent Rights is controlled by a licensor of the Company, the Company will use commercially reasonable efforts to procure that the licensor continues to prosecute and maintain such Patent Rights where the licensor has such obligation under its Third Party Licence agreement; provided that the Company shall not be obligated to commence litigation for such purpose. Notwithstanding the foregoing, if the Company elects not to prosecute or maintain any part of the Company Patent Rights it controls in any part of the Territory, the Company shall notify CRT in writing at least ninety (90) days prior to the expiration of any applicable time bars. After receipt of such notice, CRT may elect, before the expiry of any such time bars, by written notice to the Company, to take an assignment of the relevant Company Patent Rights such that CRT may continue to prosecute and/or maintain the Company Patent Rights at CRT’s sole discretion and expense.

 

15

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

		7.2	If the Company becomes aware that a Company Patent Right being prosecuted or maintained by one of its licensors is due to expire or the licensor has elected not to prosecute or maintain any such Company Patent Rights the Company will promptly notify CRT in writing. In the case of a licensor electing not to prosecute or maintain any Company Patent Rights (as opposed to expiration), where reasonably possible, the Company will take assignment of such Patent Rights or request the right for CRT to take assignment of such Patent Rights.

 

	8.	WARRANTY

 

		8.1	Each Party warrants that it has the legal capacity to enter into this Agreement.

 

		8.2	Each Party acknowledges that, in entering into this Agreement, it does not do so in reliance on any warranty or other provision except as expressly provided in this Agreement, and any conditions, warranties or other terms implied by statute or common law are excluded to the fullest extent permitted by law.

 

		8.3	Without limiting the scope of Clause 8.2, CRT does not give any warranty, representation or undertaking:

 

		8.3.1	as to the efficacy or usefulness or accuracy of the Clinical Trial Results; or

 

		8.3.2	that the exercise of rights granted under this Agreement will not infringe the intellectual property or other rights of any other person.

 

	9.	INDEMNITY

 

		9.1	The Company shall indemnify and hold harmless CRT, the Contributors and the Charity and their respective officers, employees and agents (the “Indemnified Parties”) from and against *** arising from or in connection with the exercise of the rights granted in Clause 2 by the Company or any Affiliate of the Company or a Sub-Licensee or any affiliate of a Sub-Licensee in relation to the Licensed Product.  This Clause 9 shall not limit the rights of the Company and the liabilities of CRT under Clause 9.1 of the CTOA.

 

		9.2	Promptly after receipt by CRT of any claim or alleged claim or notice of the commencement of any action, administrative or legal proceeding, or investigation to which the indemnity provided for in this Clause 9 may apply, CRT shall give written notice to the Company of such fact and specifying that the Company shall have the option to assume the defence thereof by election in writing within seven (7) days of receipt of such notice. If the Company fails to make such election, the Indemnified Party may assume such defence and the Company will be liable for the legal and other expenses consequently incurred in connection with such defence. The Parties will co-operate in good faith in the conduct of any defence, provide such reasonable assistance as may be required to enable any claim properly to be defended and the Party with conduct of the action shall provide promptly to the other Party copies of all correspondence and documents and notice in writing of the substance of all oral communications relating to such action.

 

		9.3	Should the Company assume conduct of the defence:

 

		9.3.1	the Indemnified Party may retain separate legal advisers, at its sole cost and expense, save that if the Company denies the applicability of the indemnity or reserves its position in relation to the same, the indemnity in this Clause 9 shall extend to the Indemnified Party’s costs and expenses so incurred if it is subsequently resolved between the Parties or determined by a court of competent jurisdiction (after exhaustion or expiration of all rights of appeal) that the indemnity under this Clause 9 was available to the Indemnified Party in the terms claimed by the Indemnified Party; and

 

16

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

		9.3.2	the Company will not, except with the written consent of the Indemnified Party consent to the entry of any judgment or enter into any settlement provided always, that if the Indemnified Party unreasonably refuses to consent to such entry of judgment or settlement and the matter proceeds to trial at which a greater amount is ordered by the Court then the amount which the Indemnified Party shall be entitled to recover from the Company pursuant to this Clause 9 shall be limited to the amount for which the action would otherwise have been settled or compromised and the Indemnified Party shall assume all costs of defending the claim or proceeding from the date of the Indemnified Party’s refusal; and

 

		9.3.3	CRT shall not admit liability in respect of, or compromise or settle any such action without the prior written consent of the Company, such consent not to be unreasonably withheld, conditioned or delayed; and

 

		9.3.4	the Company shall not be responsible for or bound by any settlement made by CRT in breach of Clause 9.3.3.

 

	10.	INSURANCE

 

		10.1	The Company shall maintain, at its own cost, comprehensive product liability insurance and general commercial liability insurance. Within thirty (30) days of the Effective Date and of the beginning of each policy period, the Company shall provide CRT with a certificate evidencing the coverage required hereby, and the amount thereof. Such insurance shall be with a reputable insurance company and shall be maintained for not less than six (6) years following the expiration/termination of this Agreement for any reason or if such coverage is of the ‘claims made’ type, for ten (10) years following the expiration or termination of this Agreement for any reason.

 

	11.	LIMITATION OF LIABILITY

 

		11.1	Neither Party nor the Charity, nor their respective officers, employees and agents shall have liability whether under statute or in tort (including negligence), contract or otherwise to the other Party in respect of any consequential, indirect or pure economic loss nor in any event for loss of goodwill, opportunity, profit or contract.

 

		11.2	Nothing in this Agreement shall be construed as excluding or limiting the liability of either Party or the Charity or any of their respective officers, employees and agents to the other Party for death or personal injury of any person resulting from the negligence of such persons.

 

	12.	TERM AND TERMINATION

 

		12.1	This Agreement will become effective on the Effective Date and, subject to the provisions of this Clause 12, will remain effective in each country of the Territory until expiry of the obligation of the Company under Clauses 4.5 and 4.6 to pay royalties in relation to that country pursuant to this Agreement.

 

		12.2	Without prejudice to any other rights of the Parties this Agreement may be terminated by notice in writing:

 

		12.2.1	by either Party forthwith if the other Party shall be in material breach of any of its obligations under this Agreement and in the case of a remediable breach fails to remedy the breach within sixty (60) days of written notice containing full particulars of the breach and requiring it to be remedied;

 

17

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

		12.2.2	by CRT if a voluntary arrangement is proposed or approved or an administration order is made, or a receiver or administrative receiver is appointed of any of the Company’s assets or undertakings or a winding-up resolution or petition is passed (otherwise than for the purpose of solvent reconstruction or amalgamation) or if any circumstances arise which entitle the Court or a creditor to appoint a receiver, administrative receiver or administrator or make a winding-up order or similar or equivalent action is taken against or by the Company by reason of its insolvency;

 

		12.2.3	by CRT forthwith in the event that, by way of merger, acquisition or otherwise, the Company becomes a Tobacco Party; or

 

		12.2.4	by CRT upon forty five (45) days written notice to the Company if the Company:

 

		(a)	discontinues the development (including prosecuting application for Regulatory Authorisation) of all Licensed Products; or

 

		(b)	after the filing of the IND, discontinues the development (including prosecuting application for Regulatory Authorisation) of one or more  Licensed Product(s) in all disease indications (in which case termination shall not apply to the whole Agreement but shall be limited to such Licensed Product(s)); or

 

		(c)	after the filing of the IND, discontinues the development (including prosecuting application for Regulatory Authorisation) of one or more  Licensed Product(s) in oncology (in which case termination shall not apply to the whole Agreement but shall be limited to such Licensed Product(s) in oncology); or

 

		(d)	fails to use its commercially reasonable efforts to obtain Regulatory Authorisation in a timely manner in all of the Major Markets, taking into account the unique aspects of the development and regulatory path for the Licensed Product, indication and market (in which case termination shall be effective only in respect of that Major Market); or

 

		(e)	having obtained Regulatory Authorisation for a Licensed Product in a Major Market, ceases to actively market and sell such Licensed Product in such Major Market (in which case termination shall be effective only in respect of that Licensed Product in that Major Market); or

 

		(f)	ceases to carry on business in the Field; or

 

		(g)	without reasonable cause fails to commence sale of a Licensed Product in a Major Market within two (2) years of obtaining Regulatory Authorization to market the Licensed Product in such market; or

 

		(h)	without CRT’s prior written consent, abandons or fails to prosecute any of the Company Patent Rights in any Major Market.

 

		12.3	In the event of disagreement between the Parties as to whether entitlement to terminate has arisen under Clause 12.2.1 or 12.2.4, the Parties at their joint cost and expense shall obtain an Expert Opinion which shall be final as to whether it has arisen.

 

18

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

		12.4	For the purpose of Clause 12.2.4, the efforts and actions of the Company shall be deemed to include the efforts and actions of its Affiliates, contractors, subcontractors, licensees and sublicensees.

 

	13.	EFFECTS OF TERMINATION

 

		13.1	Subject to Clause 13.2, upon the termination of this Agreement for any reason:

 

		13.1.1	other than termination by CRT pursuant to Clause 12.2.1 ,12.2.2  or 12.2.3 subject to all the terms of this Agreement (including without limitation payment of royalties), the Company shall be entitled for a period not exceeding *** following such termination to:

 

		(a)	manufacture any of the Licensed Products to the extent necessary to satisfy orders accepted before termination; and

 

		(b)	sell, use or otherwise dispose of any unsold stocks of the Licensed Products.

 

		13.1.2	subject to Clause 13.1.1, the Company shall, and shall procure that all Sub-Licensees shall, cease to exploit the Licensed Intellectual Property in any way, either directly or indirectly;

 

		13.1.3	subject to Clause 13.1.1, the Company shall, at the request and option of CRT, return or destroy CRT’s Confidential Information;

 

		13.1.4	notwithstanding any provision of this Agreement allowing the Company credit, payment of royalties and all other sums to CRT shall become due and payable to CRT immediately upon notice of termination of this Agreement;

 

		13.1.5	the Company shall, within fourteen (14) days of notice of termination of this Agreement provide CRT with a final written statement detailing, in respect of the time elapsed since the last statement under Clause 5.8, the matters set out in Clause 5.8;

 

		13.1.6	other than termination by the Company pursuant to Clause 12.2.1, the Company:

 

		(a)	subject to 13.1.6(b), shall execute with CRT an exclusive, perpetual, worldwide, sub-licensable licence under the Company Intellectual Property, Company Combination Patent Rights and New Company IP to research, develop, make, have made, market, use and sell Licensed Products, on revenue share terms to be agreed;

 

and in the case of Company Intellectual Property licensed to the Company under a Third Party Licence, such licence shall include a grant to CRT of a sub-licence reasonably similar to those provided for by Schedule 6 (CRT Licence) of the CTOA, and provide CRT with such assistance as CRT may reasonably request in liaising with the licensors under the Third Party Licences for the purpose of obtaining direct contractual rights with such licensors should they be so required;

 

		(b)	at CRT’s request, upon completion of such licence, shall promptly transfer to CRT (or any person nominated by CRT) any and all documents and information in the Company’s control or possession relating to the Company Foreground Patent Rights and CRT may assume responsibility for the prosecution, maintenance and enforcement of the same; and

 

		(c)	at CRT’s request, upon completion of such licence, shall transfer to CRT (or its nominee) any Regulatory Authorisations, Price Approvals and other permits and applications relating to Licensed Products.

 

19

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

		13.2	This Clause 13.2 shall not apply in the case of termination of this Agreement under Clause 12.1.  In the event that this Agreement is terminated solely in respect of particular Licensed Product and/or Indication and/or Major Market, the provisions of Clause 13.1 shall apply, but solely in respect of the relevant Licensed Product, Indication and/or Major Market.

 

		13.3	The termination of this Agreement howsoever arising will be without prejudice to the rights and duties of either Party accrued prior to termination. The following Clauses will continue to be enforceable notwithstanding termination: Clauses 1 (Definitions), 6 (Accounts), 9 (Indemnity), 10 (Insurance), 11 (Limitation of Liability), 12 (Termination), 13 (Effects of Termination), 14 (Confidentiality), 19 (Severability), 24 (Dispute Resolution) and 25 (Law and Jurisdiction).

 

	14.	CONFIDENTIALITY

 

		14.1	Each Party undertakes with the other that it shall keep and it shall procure that its respective directors and employees keep secret and confidential all Confidential Information belonging to or controlled by the other Party and shall not disclose the same or any part of the same to any person whatsoever other than:

 

		14.1.1	in the case of the Company: (i) to Sub-Licensees subject to compliance with Clause 2.3.4, (ii) to potential development partners, sublicensees, and investors bound by terms of confidentiality at least as strict as those herein, and (iii) as necessary in communications with Regulatory Authorities in the Territory relating to the Licensed Products.

 

		14.1.2	in the case of CRT to the Charity; and

 

		14.1.3	in the case of each Party, to its directors or employees directly or indirectly concerned in the exercise of the rights granted under this Agreement.

 

		14.2	The provisions of Clause 14.1 shall not apply to Confidential Information which CRT or the Company (as the case may be):

 

		14.2.1	can prove to have been in its possession (other than under an obligation of confidence to the other or to a third party) at the date of receipt or which enters the public domain otherwise than through a breach of any obligation of confidentiality owed to the Party communicating such information to the other;

 

		14.2.2	can prove it has independently developed; or

 

		14.2.3	is required to disclose by law or by the order of a competent court, solely to the extent of such disclosure.

 

		14.3	The provisions of this Clause 14 shall remain in force for a period of five (5) years from the expiry or termination of this Agreement

 

	15.	ASSIGNMENT

 

		15.1	The Company shall not without CRT’s consent assign its rights under this Agreement except in conjunction with a merger or consolidation of the Company with another business entity or the sale of all or substantially all or a substantial part of its business and related assets that includes its business in relation to the Licensed Products other than a merger or consolidation with, or a sale of assets to, a Tobacco Party  and provided that Company obtains a direct covenant from the acquiring party to CRT undertaking to be bound by the terms of this Agreement.

 

20

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

	16.	NOTICES

 

		16.1	Any notice or other document to be given under this Agreement shall be in writing and shall be deemed to have been given:

 

		16.1.1	upon delivery if given in person; or

 

		16.1.2	upon confirmation of receipt if sent by facsimile (or other similar means of electronic communication such as email); or

 

		16.1.3	(if posted to an inland destination) three (3) business days after deposit into First Class post; or

 

		16.1.4	(If posted to an overseas destination)five (5) days after deposit into airmail post,

 

		16.1.5	upon delivery by air delivery service;

 

to a Party at the address set out below for such Party or such other address as the Party may from time to time designate by written notice to the other Party.

Address of the Company

Asterias Biotherapeutics

230 Constitution Dr

Menlo Park, CA 94025

Contact:    Legal/contracts

Fax:                001 650 433 2900

Address of CRT

Angel Building

407 St. John Street

London EC1V 4AD

United Kingdom

Contact:    Chief Executive Officer

Fax:                +44 (0) 20 3014 8633

	17.	WAIVER

 

		17.1	No failure or delay on the part of either Party hereto to exercise any right or remedy under this Agreement shall be construed as or operate as a waiver thereof nor shall any single or partial exercise of any right or remedy under this Agreement preclude the exercise of any other right or remedy or preclude the further exercise of such right or remedy as the case may be.

 

	18.	FORCE MAJEURE

 

		18.1	Except in relation to obligations pursuant to Clauses 4 and/or 5, neither Party shall be liable to the other Party or shall be in default of its obligations hereunder if such default is the result of war, hostilities, revolution, civil commotion, strike, epidemic, accident, fire, wind, flood or because of any act of God or other cause beyond the reasonable control of the Party affected. The Party affected by such circumstances shall promptly notify the other Party in writing when such circumstances cause a delay or failure in performance (a “Delay”) and where they cease to do so. In the event of a Delay lasting for twenty six (26) weeks or more the non-affected Party shall have the right to terminate this Agreement immediately by notice in writing to the affected Party.

 

21

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

	19.	SEVERABILITY

 

		19.1	If and to the extent that any court or tribunal of competent jurisdiction holds any of the terms, provisions or conditions or parts thereof of this Agreement, or the application hereof to any circumstances, to be invalid or to be unenforceable in a final non-appealable order, the remainder of this Agreement and the application of such term, provision or condition or part thereof to circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby, and each of the other terms, provisions and conditions of this Agreement shall be valid and enforceable to the fullest extent permissible by law.

 

	20.	ENTIRE AGREEMENT

 

		20.1	This Agreement and the surviving clauses of the CTOA, embodies and sets forth the entire agreement and understanding of the Parties and supersedes all prior oral or written agreements, understandings or arrangements relating to the subject matter of this Agreement. Without prejudice to any liability for fraudulent misrepresentation or fraudulent misstatement neither Party shall be entitled to rely on any agreement, understanding or arrangement which is not expressly set forth in this Agreement unless otherwise agreed between the Parties and recorded in writing.

 

	21.	AMENDMENT

 

		21.1	This Agreement shall not be amended, modified, varied or supplemented except in writing signed by duly authorised representatives of the Parties.

 

	22.	PUBLIC ANNOUNCEMENTS

 

		22.1	The text of any press release, shareholders’ report or other communication to be published or disclosed to the public in any way by or in the media concerning CRT or the Charity, the subject matter of this Agreement or concerning this Agreement itself, other than as required by law or by any Regulatory Authority or the rules of any securities exchange, shall be submitted to CRT at least seven (7) days in advance of publication for approval, such approval not to be unreasonably withheld; provided, that disclosure that repeats or restates prior public disclosure permitted by this Agreement need not be submitted to the Charity or CRT for approval.

 

	23.	FURTHER ASSURANCE

 

		23.1	The Parties hereby undertake to do all such other acts and things, and execute and provide all such documents at the requesting Party’s cost as may be necessary or desirable to give effect to the purposes of this Agreement.

 

	24.	DISPUTE RESOLUTION

 

		24.1	Insofar as this Agreement provides that a matter shall be resolved by Accountancy Opinion or Expert Opinion the opinion of such expert (who shall act as an expert and not as an arbitrator) shall be final and binding on the Parties. In the event of a Party seeking an Accountancy Opinion or Expert Opinion under this Agreement, each Party shall make written submissions to the expert so appointed and to the other Party within fourteen (14) days of the appointment. Each Party shall have seven (7) days to respond to the other’s submissions. The expert shall be requested to deliver his Accountancy Opinion or Expert Opinion within a further thirty (30) days. The costs of any Accountancy Opinion or Expert Opinion shall be borne in such proportions as the expert may determine in his opinion to be fair and reasonable in all the circumstances or, if no such determination is made in the opinion, by the Parties in equal proportions.

 

22

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

		24.2	It shall be a condition precedent to the commencement of any action in court or other tribunal (save an action for an interim injunction or an Expert Opinion sought under Clause 12.1) in respect of any dispute relating to this Agreement that the Parties have sought to resolve the dispute by either Party notifying the other Party in writing for resolution to the Chief Executive Officer (in the case of CRT) and the Chief Executive Officer (in the case of the Company) (or their express delegates) (the “Senior Executives”) who shall meet (whether in person or via teleconference) within twenty one (21) days of such notice to seek resolution in good faith. If the Senior Executives are unable to resolve the dispute at such meeting, either Party may pursue any remedy available to such Party at law or in equity, subject to the terms and conditions of this Agreement and the other agreements expressly contemplated hereunder.

 

	25.	LAW AND JURISDICTION

 

		25.1	This Agreement shall be governed by and construed in accordance with English Law and, subject to the provisions of Clauses 24.1 and 24.2, each Party agrees to submit to the exclusive jurisdiction of the English Courts (except in respect of disputes under Clause 14 where jurisdiction is non-exclusive).

 

	26.	EXECUTION

 

		26.1	This Agreement may be executed in any one or more number of counterpart agreements , and as scanned email attachments, and all signatures and counterparts so exchanged shall be considered as original and shall be deemed to form part of and together constitute this Agreement.

 

	27.	CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

 

		27.1	Save that the Charity, the Contributors and their and CRT’s respective officers, employees and agents in respect of Clauses 9 and 11 may enforce those respective terms, no term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a Party to this Agreement. Notwithstanding the provisions of this Clause, the Parties shall be entitled to amend, suspend, cancel or terminate this Agreement or any part of it in accordance with Clause 21, without the consent of any third party including those referred to in this Clause.

 

The Parties hereby execute this Agreement by their duly authorised representatives:

 

	
Signed by:

	   	 
	 	 	 
	
Name:

	   	 
	 	 	 
	
Title:

	   	 
	 		
	 	
For and on behalf of

CANCER RESEARCH TECHNOLOGY LIMITED

	

 

23

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

	
Signed by:

	   	 
	 	 	 
	
Name:

	   	 
	 	 	 
	
Title:

	   	 
	 		
	 	
For and on behalf of

ASTERIAS BIOTHERAPEUTICS, INC

	

 

24

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

Appendix 1

Development Plan

 

25

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

Appendix 2

Executed CTOA

 

26

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

Schedule 5

No Fault Compensation Scheme

Preamble

The Association of the British Pharmaceutical Industry favours a simple and expeditious procedure in relation to the provision of compensation for injury caused by participation in clinical trials. The Association therefore recommends that a member company sponsoring a clinical trial should provide without legal commitment a written assurance to the investigator — and through him to the relevant research ethics committee — that the following Guidelines will be adhered to in the event of injury caused to a patient attributable to participation in the trial in question.

 

	
1

	
Basic Principles

	1.1	Notwithstanding the absence of legal commitment, the company should pay compensation to patient-volunteers suffering bodily injury (including death) in accordance with these Guidelines.

	1.2	Compensation should be paid when, on the balance of probabilities, the injury was attributable to the administration of a medicinal product under trial or any clinical intervention or procedure provided for by the protocol that would not have occurred but for the inclusion of the patient in the trial.

	1.3	Compensation should be paid to a child injured in utero through the participation of the subject’s mother in a clinical trial as if the child were a patient-volunteer with the full benefit of these Guidelines.

	1.4	Compensation should only be paid for the more serious injury of an enduring and disabling character (including exacerbation of an existing condition) and not for temporary pain or discomfort or less serious or curable complaints.

	1.5	Where there is an adverse reaction to a medicinal product under trial and injury is caused by a procedure adopted to deal with that adverse reaction, compensation should be paid for such injury as if it were caused directly by the medicinal product under trial.

	1.6	Neither the fact that the adverse reaction causing the injury was foreseeable or predictable, nor the fact that the patient has freely consented (whether in writing or otherwise) to participate in the trial should exclude a patient from consideration for compensation under these Guidelines, although compensation may be abated or excluded in the light of the factors described in paragraph 4.2 below.

	1.7	For the avoidance of doubt, compensation should be paid regardless of whether the patient is able to prove that the company has been negligent in relation to research or development of the medicinal product under trial or that the product is defective and therefore, as the producer, the company is subject to strict liability in respect of injuries caused by it.

 

	
2

	
Type of Clinical Research Covered

	2.1	These Guidelines apply to injury caused to patients involved in Phase II and Phase III trials, that is to say, patients under treatment and surveillance (usually in hospital) and suffering from the ailment which the medicinal product under trial is intended to treat but for which a product licence does not exist or does not authorise supply for administration under the conditions of the trial.

	2.2	These Guidelines do not apply to injuries arising from studies in non-patient volunteers (Phase I), whether or not they are in hospital, for which separate Guidelines for compensation already exist.

 

1

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

	2.3	These Guidelines do not apply to injury arising from clinical trials on marketed products (Phase IV) where a product licence exists authorising supply for administration under the conditions of the trial, except to the extent that the injury is caused to a patient as a direct result of procedures undertaken in accordance with the protocol (but not any product administered) to which the patient would not have been exposed had treatment been other than in the course of the trial.

	2.4	These Guidelines do not apply to clinical trials which have not been initiated or directly sponsored by the company providing the product for research. Where trials of products are initiated independently by doctors under the appropriate Medicines Act 1968 exemptions, responsibility for the health and welfare of patients rests with the doctor alone (see also paragraph 5.2 below).

	
3

	
Limitations

	3.1	No compensation should be paid for the failure of a medicinal product to have its intended effect or to provide any other benefit to the patient.

	3.2	No compensation should be paid for injury caused by other licensed medicinal products administered to the patient for the purpose of comparison with the product under trial.

	3.3	No compensation should be paid to patients receiving placebo in consideration of its failure to provide therapeutic benefit.

	3.4	No compensation should be paid (or it should be abated as the case may be) to the extent that the injury has arisen:

	 	
3.4.1

	
through a significant departure from the agreed protocol;

		3.4.2	through the wrongful act or default of a third party, including a doctor’s failure to deal adequately with an adverse reaction;

	 	
3.4.3

	
through contributory negligence by the patient.

	
4

	
Assessment of Compensation

	4.1	The amount of compensation paid should be appropriate to the nature, severity and persistence of the injury and should in general terms be consistent with the quantum of damages commonly awarded for similar injuries by an English Court in cases where legal liability is admitted.

	4.2	Compensation may be abated, or in certain circumstances excluded, in the light of the following factors (on which will depend the level of risk the patient can reasonably be expected to accept):

		4.2.1	the seriousness of the disease being treated, the degree of probability that adverse reactions will occur and any warnings given;

		4.2.2	the risks and benefits of established treatments relative to those known or suspected of the trial medicine.

This reflects the fact that flexibility is required given the particular patient’s circumstances. As an extreme example, there may be a patient suffering from a serious or life-threatening disease who is warned of a certain defined risk of adverse reaction. Participation in the trial is then based on an expectation that the benefit/risk ratio associated with participation may be better than that associated with alternative treatment. It is, therefore, reasonable that the patient accepts the high risk and should not expect compensation for the occurrence of the adverse reaction of which he or she was told.

	4.3	In any case where the company concedes that a payment should be made to a patient but there exists a difference of opinion between company and patient as to the appropriate level of compensation, it is recommended that the company agrees to seek at its own cost (and make available to the patient) the opinion of a mutually acceptable independent expert, and that his opinion should be given substantial weight by the company in reaching its decision on the appropriate payment to be made.

 

2

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

	
5

	
Miscellaneous

	5.1	Claims pursuant to the Guidelines should be made by the patient to the company, preferably via the investigator, setting Out details of the nature and background of the claim and, subject to the patient providing on request an authority for the company to review any medical records relevant to the claim, the company should consider the claim expeditiously.

	5.2	The undertaking given by a company extends to injury arising (at whatever time) from all administrations, clinical interventions or procedures occurring during the course of the trial but not to treatment extended beyond the end of the trial at the instigation of the investigator. The use of unlicensed products beyond the trial period is wholly the responsibility of the treating doctor and in this regard attention is drawn to the advice provided to doctors in MAL 3Q2 concerning the desirability of doctors notifying their protection society of their use of unlicensed products.

	5.3	The fact that a company has agreed to abide by these Guidelines in respect of a trial does not affect the right of a patient to pursue a legal remedy in respect of injury alleged to have been suffered as a result of participation. Nevertheless, patients will normally be asked to accept that any payment made under the Guidelines will be in full settlement of their claims.

	5.4	A company sponsoring a trial should encourage the investigator to make clear to participating patients that the trial is being conducted subject to the ABPI Guidelines relating to compensation for injury arising in the course of clinical trials and have available copies of the Guidelines should they be requested.

References

1  Guidelines for Medical Experiments in Non-patient Human Volunteers, ABPI March 1988, as amended May 1990.

2  MAL 30— A Guide to the Provisions affecting Doctors and Dentists, DHSS, (Revised June 1985)

 

 

The Association of the British Pharmaceutical Industry

12 Whitehall London SW1

 

3

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

Schedule 6

CRT Licence

THIS AGREEMENT is made the________ day of _______________________20[●●]

BETWEEN:

	(1)	CANCER RESEARCH TECHNOLOGY LIMITED, a company registered in England and Wales with number 1626049 with registered office at [Angel Building, 407 St. John Street, London, EC1V 4AD, England] (“CRT”); and

	(2)	ASTERIAS BIOTHERAPEUTICS, INC, a Delaware company with principal place of business at 230 Constitution Drive, Menlo Park, CA 94025, USA (the “Company”).

WHEREAS

	(A)	CRT, the Company and the Charity (as defined below) are parties to a Clinical Trial and Option Agreement dated [●●●] (the “CTOA”) relating to the Investigational Medicinal Product (as defined in the CTOA).

	(B)	Pursuant to clause 7.5 of the CTOA, the Company has agreed to licence the Company Intellectual Property (as defined below) and grant sub-licences under the Third Party Licences (as defined below) in return for a share of any revenue generated by CRT from the commercial exploitation of such intellectual property rights upon the terms and conditions set out below.

NOW IT IS HEREBY AGREED as follows:

	1.	INTERPRETATION

 

		1.1	In this Agreement except where the context requires otherwise, the following words and expressions shall have the following meanings:

 

		
“Charity”

	
means Cancer Research UK, a charity registered under number 1089464 of Angel Building, 407 St. John Street, London EC1V 4AD, England.

 

		
“Clinical Trial”

	
has the meaning given in the CTOA.

 

		
“Company Background Intellectual Property”

	
means those elements of the Company Intellectual Property with broad potential application within and outside the Field including the Company Combination Patent Rights and the Company Intellectual Property specified in Annexes 1A, 2A and 3A.

 

		
“Company Combination Patent Rights”

	
means those Patent Rights of the Company which claim the use of the Product or Investigational Medicinal Product in combination with one or more other anti-cancer agents and  all Patent Rights deriving priority there from.

 

1

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

		
“Company Foreground Intellectual Property”

	
means those elements of the Company Intellectual Property with applications solely or primarily within the Field including the Company Intellectual Property specified in Annexes 1B, 2B and 3B.

 

		
“Company Intellectual Property”

	
means the Company Owned Patent Rights and all rights in the Company Materials, the Investigational Medicinal Product and the Company Know-How.

 

		
“Company Know-How”

	
means: (a) any Know How of the Company that was disclosed by the Company to the Charity pursuant to the Technology Transfer Plan and/or the CTOA; (b) any Know How described in Annex 2; and (c) such other Know How of the Company relating to the Investigational Medicinal Product (and any constituents thereof) or any Related Product including but not limited to: (i) any safety and toxicological data; (ii) information relating to manufacturing/production; (iii) information relating to quality; (iv) information relating to safe and proper handling, storage and use; and (v) any information which would in any way improve the prospects for its commercialisation.

 

		
“Company Materials”

	
means Materials owned by the Company which are necessary or useful to generate the Product,  a Related or the Investigational Medicinal Product, more particularly described in Annex 3.

 

		
“Company Owned Patent Rights”

	
means (i) those Patent Rights listed in Annex 1; (ii) those Patent Rights of the Company which would be infringed by the unauthorised manufacture, use or sale in, or importation into, the relevant country of the Investigational Medicinal Product, Product or Related Products; (iii) the Company Combination Patent Rights and (iv) all Patent Rights deriving priority from (i), (ii) and (iii).

 

		
“Control”

	
has the meaning given in the CTOA.

	 		
		
“Direct Costs”

	
means any external costs and expenses incurred from time to time by or on behalf of CRT in filing, prosecuting, maintaining, enforcing, defending and exploiting the Company Intellectual Property, including without limitation:

i.          all charges paid by CRT pursuant to Clause 6.2;

ii.         official patent filing, prosecution, maintenance and renewal fees;

iii.       all patent agents, legal, accounting and other professional fees and expenses;

iv.       travel and other out-of-pocket expenditure;

v.        courier charges and third party printing costs;

vi.       any non-recoverable taxes or charges including Value Added Tax which may be imposed; and

vii.      all charges paid by CRT pursuant to Clause 2.3.

 

2

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

		
“Effective Date”

	
means the date of this Agreement.

 

		
“Exclusive Third Party Licences”

	
means those licences listed in Annex 4A.

 

 

		
“Field”

	
means the use of the Product and any Related Product(s) in immunotherapy applications using ***, for the treatment, prophylaxis, prevention and/or cure of human disease and conditions.

 

		
“Gross Revenue”

	
means any and all sums (or other consideration of monetary value) received by CRT from time to time in respect of the commercial exploitation of the Investigational Medicinal Product, Product or Related Products. For the avoidance of doubt, Gross Revenue shall exclude any sums received by CRT for the purpose of further research and/or development of the Investigational Medicinal Product.

 

		
“Investigational Medicinal Product” or “IMP”

	
has the meaning given in the CTOA.

 

 

		
“Intellectual Property Rights”

	
means all Patent Rights, Know-How, copyright, database rights, design rights, moral rights, rights in trade names, logos and trade and service marks, domain names, rights in Materials and all rights or forms of protection of a similar nature or having equivalent or similar effect to any of them which may subsist anywhere in the world, whether or not any of them are registered including any application for registration of any of them.

 

		
“Know-How”

	
has the meaning given in the CTOA.

 

		
“Licence”

	
has the meaning given in the CTOA.

 

		
“Materials”

	
has the meaning given in the CTOA.

 

		
“Net Revenue”

	
means Gross Revenue less Direct Costs.

 

		
“Non-Exclusive Third Party Licences”

	
means those licences and sublicences listed in Annex 4B.

 

3

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

		
“Party”

 

	
means either party to this Agreement and “Parties” means both of them.

		
“Patent Rights”

	
has the meaning given in the CTOA.

 

		
“Product”

	
has the meaning given in the CTOA.

 

		
“Related Product”

	
has the meaning given in the CTOA.

 

		
“Technology Transfer Plan”

	
has the meaning given in the CTOA.

 

		
“Third Party Background Intellectual Property”

	
means those elements of the Intellectual Property Rights licensed under the Third Party Licences with broad potential application within and outside the Field.

 

		
“Third Party Foreground Intellectual Property”

 

“Third Party Foreground Patent Rights”

	
means those elements of the Intellectual Property Rights licensed under the Third Party Licences with applications solely or primarily within the Field.

 

means those elements of the Patent Rights licensed under the Third Party Licences with applications solely or primarily within the Field.

 

		
“Third Party Licences”

	
means the Exclusive Third Party Licences and the Non-Exclusive Third Party Licences.

 

	 		
	 	
“Third Party Licence Costs”

	
means those milestone, royalty and other payments listed in Annex 5 (including any apportionment formulas or details) in respect of the Third Party Licences, in each case to the extent that the same becomes payable by the Company to the relevant third party licensor as a direct result of an act of CRT or its sub-licensee in the exercise of its rights pursuant to this Agreement.

 

		1.2	The headings in this Agreement are for convenience only and shall not affect its interpretation. Unless the contrary intention appears, words denoting persons shall include any individual, partnership, company, corporation, joint venture, trust, association, organisation or other entity, in each case whether or not having separate legal personality. References to the words “include” or “including” shall be construed without limitation to the generality of the preceding words.

 

	2.	LICENCE

 

		2.1	Pursuant to clause 7.5 of the CTOA, and in consideration of the provisions of Clauses 4 and 6, the Company hereby grants to CRT:

 

		2.1.1	a*** under the Company Intellectual Property; and

 

		2.1.2	an exclusive worldwide sub-licensable (through multiple tiers of sub-licences) sublicence under the hTERT Licensed Patents; and

 

4

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

		2.1.3	a*** under the University of Western Ontario Licensed Patents; and

 

		2.1.4	a*** under the Isis Licensed Patents; and

 

		2.1.5	a *** under the Merix/Duke Licensed Patents; and

 

		2.1.6	a *** under the Merix/Rockefeller Licensed Patents; and

 

		2.1.7	a*** under the Immunomic/JHU Licensed Patents,

in each case subject to the terms and conditions described in Clause 6 below and further detailed in Annex 6, to research, develop, make, have made, import, use and sell Products and Related Products in the Field in the Territory.

 

		2.2	The *** Licences prohibit further sublicensing without the consent of the licensor.  The Company agrees to work with CRT and third party licensors under these Third Party Licences to attempt to obtain expanded sublicense rights as requested by CRT to facilitate the development and commercialization of Products and Related Products.  If such expanded sublicensing rights cannot be negotiated with licensors, the Company will, to the maximum extent allowed under the applicable Third Party Licences, directly sublicense any third party CRT reasonably requests in order to facilitate the timely development and commercialization of Products and Related Products.

 

		2.3	Subject to the restrictions and preapproval procedures described in Sections 2C and 4C of the WARF License and Annex 6, the Company agrees to directly sublicense any third party CRT reasonably believes to require a sublicence under the WARF License in order to facilitate the timely development and commercialization of Products and Related Products, provided however that CRT or such third party shall be responsible for payment of any sublicensing fees incurred as a result of such sublicence.

		2.4	Those terms and provisions of any Third Party Licence that are required by the Third Party Licence to be referenced or included in a sublicence or sub-sublicence, as listed in Annex 6, are hereby incorporated into this Agreement by reference.  CRT and the Company agree to amend this Agreement to add to this Agreement any provision of a Third Party Licence that the licensor or sublicensor may reasonably require to be so added under the terms of a Third Party Licence.

 

		2.5	The Company agrees to disclose to CRT any Company Know-How and Know-How related to the IMP, the Product, or any Related Product licensed under a Third Party Licence that was not already disclosed to CRT pursuant to the CTOA within three (3) months of the Effective Date and agrees that the Company Know-How may be used by CRT and anyone to whom CRT discloses the Company Know-How and that, for so long as it is exclusively licensed to CRT under this Agreement, the Company shall not disclose the Company Know-How or Know-How licensed under a Third Party Licence to any third party for use within the Field, or use the same in any internal research programme within the Field.

 

		2.6	The Company either has or agrees to transfer the Company Materials and those Materials licensed under a Third Party Licence (the “Third Party Materials”) listed in Annex 3C to CRT (or any third party nominated by CRT) within three (3) months of the Effective Date and agrees that the Company Materials and Third Party Materials may be used by CRT and any third party authorised by CRT and that, for so long as it is exclusively licensed to CRT under this Agreement, the Company shall not transfer any Company Materials or Third Party Materials to any third party or use the same in any internal research programme within the Field.

 

5

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

		2.7	At CRT’s request, the Company shall negotiate with CRT in good faith on reasonable commercial terms a sub-licensable licence in respect of any Intellectual Property Rights which come under the Control of the Company after the Effective Date and which may be necessary and/or useful for the development and/or commercial exploitation of the Company Intellectual Property, and the Intellectual Property licensed under the Third Party Licences, in the Field.

 

		2.8	CRT and its sublicensees shall not use any Company Materials, Third Party Materials or Products for any purpose outside that permitted by this Agreement, and will not use Company Materials or Third Party Materials to perform any of the following experiments: (a) intermixing of Company Materials or Third Party Materials with an intact embryo, either human or nonhuman; (b) implanting Company Materials or Third Party Materials in a uterus, or (c) attempting to make whole embryos by any method.

 

		2.9	The Company hereby represents and warrants that as at the date of this Agreement:

 

		2.9.1	other than the Third Party Licences, it does not have an extant licence or right to acquire a licence for Intellectual Property Rights within the Field that has been or may be granted to it or an Affiliate of the Company by a third party; and

 

		2.9.2	CRT has been provided with complete (other than as visibly redacted) and accurate copies of the Third Party Licences, including all variations that have been made to them.

 

		2.10	The Company undertakes not to make any variations to the Third Party Licences without the prior written consent of CRT.

 

		2.11	If any Third Party Licence is liable to be, or is summarily terminated, the Company shall give as much notice as practicable to CRT and at CRT’s request use its commercially reasonable endeavours to facilitate a continuance and an assignment of the Third Party Licence to CRT.

	3.	ASSISTANCE AND FURTHER ASSURANCE

 

		3.1	The Company hereby agrees to promptly provide to CRT or its nominated patent agent all documents relating to the filing, prosecution and maintenance of the Company Foreground Patent Rights and, to the extent that it has the right to such documents under the relevant Third Party Licence, the Third Party Foreground Patent Rights licensed under the Exclusive Third Party Licences.

 

		3.2	The Company agrees to assist CRT and any third party that CRT may nominate in understanding and using the Company Know-How, the Company Materials and the Know-How and Materials licensed under Third Party Licences and to assist CRT and any such third party in relation to any further development of the Product, Investigational Medicinal Product or any Related Product and any regulatory application in relation thereto (including without limitation and to the extent that the Company may lawfully do so by the provision of information that may be requested from time to time in relation to the origin, development, and distribution by the Company to any third parties of the Product).

 

		3.3	The Company will maintain and will not terminate any Third Party Licence without the prior written agreement of CRT.

	4.	REVENUE SHARE

 

		4.1	CRT and the Company shall share Net Revenue in the following proportions:

 

6

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

CRT                          ***;

Company             ***.

 

		4.2	In the event that any Gross Revenue is received by CRT as part of the consideration for the grant of rights which include rights other than those in respect of Company Intellectual Property or licensed under the Third Party Licences, CRT shall apportion the consideration as between on the one hand, the rights granted in respect of the Company Intellectual Property and, on the other, any other rights granted, in such manner as is fair and reasonable.

 

		4.3	If CRT receives any non-monetary consideration in respect of the commercial exploitation of the Company Intellectual Property (such as company stocks and shares), (i) prior to entering into any agreement providing for the payment of non-monetary consideration, CRT shall obtain the express written consents of Third Party Licensors for such non-cash payments as required under the relevant Third Party Licences and (ii) such non-monetary consideration shall not form Gross Revenue until CRT has received cash proceeds from the disposal or other realisation of such consideration. CRT shall at its sole discretion determine the timing of and price for any such realisation. For the avoidance of doubt, any dividend or similar monetary consideration received in respect of such non-monetary consideration shall form Gross Revenue.

	5.	MANAGEMENT AND EXPLOITATION

 

		5.1	The filing, prosecution, maintenance, enforcement and defence of any Company Foreground Intellectual Property and further development and commercial exploitation thereof shall be at the sole cost and discretion of CRT.

	6.	THIRD PARTY LICENCES

 

		6.1	To the extent that the Company has such rights under the relevant Third Party Licence, the Company agrees that the right to control the filing, prosecution, maintenance, enforcement and defence of any Third Party Foreground Intellectual Property, or to procure that the relevant licensor(s) under the Third Party Licence(s) does so, shall be transferred to CRT. To the extent that the control of any such Third Party Foreground Intellectual Property is transferred to CRT it will comply with the patent management provisions of the relevant Third Party Licence as identified in Annex 6.

		6.2	CRT will be responsible for paying to the Company any signing fee, royalty fee, milestone payment, sub-licence fee, annual payment or other similar fee payable directly as a result of developing, out-licensing, marketing or selling Products and/or Related Products in the Field by CRT or its sub-licensees pursuant to this Agreement that the Company is obliged to pay under the Third Party Licences solely as a result of the said activities by CRT or its sub-licensees.  Any such fees that relate to both activities under this Licence by CRT or its sub-licensees and to activities of or on behalf of the Company (whenever commenced) outside of the Field shall be subject to appropriate apportionment between CRT and the Company on a fair and equitable basis which the Parties shall agree at the time. The Company shall keep CRT informed in a timely manner of the Company’s activities that have a bearing on the rights and obligations of CRT under this clause. For the avoidance of doubt  (subject to CRT’s right to require apportionment of fees between CRT and the Company as mentioned above in this clause 6.2) CRT shall have responsibility under and in accordance with this Clause 6.2 for the Third Party Licence Costs but shall not have liability for any penalties, costs or charges that are payable under the relevant Third Party Licence as a result of any negligence or breach of contract by the Company.  CRT shall not be obliged to deal with the sub-licensors under the Third Party Licences directly, and provided that CRT has made the payments to the Company of the payments mentioned above in this Clause 6.2, CRT shall have no further liability and shall be indemnified by the Company in respect of any claim made by a sub-licensor regarding the same. CRT acknowledges that it has been provided with a redacted copy of the WARF License and unredacted copies of the other Third Party Licences, and is aware of the payment obligations thereunder.

 

CRT will notify the Company:

 

7

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

		6.2.1	on becoming aware of the achievement of any milestone event that triggers Third Party Licence Costs; and

 

		6.2.2	on receipt of sales data and royalty payments from a sub-licensee in respect of which royalty based Third Party Licence Costs are payable, and will provide the Company with a copy of the relevant sales data received from CRT’s sub-licensee to enable the Company to comply with its financial reporting obligations under the Third Party Licences.

 

		6.3	CRT will pay to the Company the sums that CRT is obliged to pay to the Company pursuant to Clause 6.2 above in a timely manner so as to avoid the Company making late payment under the relevant Third Party Licence. Company will provide CRT with a copy of any invoice it receives for costs payable by CRT under any Third Party Licence, and CRT will make payment under any such properly due and payable invoices within thirty (30) days of receipt.

 

		6.4	CRT will be responsible for fulfilling or obligating its sub-licensee(s) to fulfil any diligence and development reporting obligations under the Third Party Licences [as identified in Appendix 6].  CRT acknowledges that it has been provided with a redacted copy of the WARF License and unredacted copies of all other Third Party Licences, and is aware of the diligence and development reporting obligations thereunder.

 

		6.5	Any payments or other contractual obligations of the Company owed to a third party that are not covered by Clauses 2.3, 6.1, 6.2, and 6.3 and 6.4 will remain the exclusive responsibility of the Company, whether or not connected to the rights granted to CRT under this Agreement.

 

		6.6	The Company will as soon as reasonably possible (and in any event within seven (7) days) notify CRT if it becomes aware that it has breached the terms of any Third Party Licences or otherwise becomes aware of any acts or omissions which would give one or more of its licensors the right to terminate a Third Party Licence.

 

		6.7	CRT will require as a term of any sub-licence of rights to commercialise Products or Related Products that the sub-licensee maintains levels of insurance coverage or a scheme of self insurance that is appropriate to cover the sub-licensees intended activities in respect of Products and/or Related Products.

 

		6.8	CRT will endeavour to procure from any sub-licensee(s) to which it intends to grant rights to commercialise Products or Related Products indemnities in favour of the licensors under the Third Party Licences that are consistent with those provided by the Company. In the event that CRT is unable to procure such indemnities from a prospective sub-licensee and is not willing or able to provide them its self it will not enter into such sub-licence without the prior written agreement of the Company.

 

8

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

	7.	CONFIDENTIALITY

 

		7.1	Subject to the other provisions of this Clause 7, each Party undertakes that both during and after termination of this Agreement, it will keep confidential and not disclose to any person other than to its officers, employees or professional advisors whose province it is to know, any confidential proprietary information of the other Party disclosed to or obtained by it in connection with this Agreement. For these purposes, Company Know-How shall be deemed to be the confidential information of CRT but only to the extent such Company Know-How pertains solely or directly to the Product or a Related Product and the Field.  Additionally, subject to the provisions of Clause 7.2, any information of the Charity (and any charitable body succeeding to it) disclosed to or obtained by the Company in connection with this Agreement shall be deemed to be the confidential information of the Charity.

 

		7.2	With the exception of Company Know-How which the Company shall keep confidential in accordance with Clause 7.1 and information that is required to be treated as confidential under the CTOA, Clause 7.1 shall not apply to:

 

		7.2.1	information which is or was already known to the receiving Party at the time of disclosure under this Agreement, as shown by the receiving Party’s written records, without any obligation to keep it confidential;

 

		7.2.2	information which at the time of being disclosed or obtained by the receiving Party under this Agreement or at any time thereafter, is published or otherwise generally available to the public other than due to default by the receiving Party of its obligations hereunder; or

 

		7.2.3	information which is required to be disclosed by a competent Court or regulatory authority or otherwise by applicable law or statute or any rule or regulation of any Regulatory Authority or other government or administrative agency or authority, to the extent of such disclosure, provided that the receiving Party shall give notice of such disclosure as soon as reasonably practicable.

 

		7.3	Clause 7.1 above shall not apply to the use or disclosure of any information by any Party for the purpose of exercising or enforcing its rights under this Agreement.

 

		7.4	Each Party will ensure that all personnel and third parties to whom confidential information of another Party is disclosed are informed of the provisions of this Clause 7.

 

		7.5	So long as this Agreement remains in effect, as between CRT and the Company only, clause 5 of the CTOA shall cease to operate and this Clause 7 shall replace and supersede the obligations and rights of CRT and the Company only under such clause 5 of the CTOA.  In the event that the Company exercises the Second Option under Clause 9 and this Agreement terminates, the terms of the Licence shall apply.

	8.	WARRANTIES

 

		8.1	The Company represents and warrants to CRT that to the best of its knowledge and belief:

 

		8.1.1	it is not aware of any inventors of the Company Owned Patent Rights other than the inventors named therein;

 

		8.1.2	it is the legal and beneficial owner of the Company Intellectual Property free of any third party rights or encumbrances other than those of the Geron Royalty Agreement effective October 1, 2013, a copy of which has been provided to CRT;

 

9

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

		8.1.3	no claims of infringement of intellectual property rights owned or controlled by any third party have been made or threatened against the Company with respect to the Intellectual Property Rights licensed hereunder;

 

		8.1.4	it has not and will not enter into any Agreement which prevents it fulfilling its obligations under this Agreement;

 

		8.1.5	it has not done anything whereby the whole or any part of the rights licensed under the Agreement might be invalidated or registration of them refused;

 

		8.1.6	the manufacture, use and possession of the Investigational Medicinal Product by CRT or any person authorised by CRT, in each case in accordance with the terms of this Agreement, shall not infringe the rights (including without limitation any Intellectual Property Rights) of any third party;

 

		8.1.7	it is not aware of the existence of any fact or circumstance that may materially affect the successful development and commercialisation of the Product;

 

		8.1.8	it has the full right, power and authority, and has obtained all approvals or consents necessary to grant the rights under the Third Party Licences as provided under this Agreement;

 

		8.1.9	the Third Party Licences are the only third party licences held by the Company in respect of the manufacture, possession and use the IMP and the rights granted to CRT under this Agreement;

 

		8.1.10	there are no outstanding breaches of the Third Party Licences by the Company;

 

		8.1.11	there are no acts or omissions on the part of the Company which would give one or more of its licensors the right to terminate a Third Party Licence, either now or at a later date; and

 

		8.1.12	it is entitled to make the Company Materials and the Materials licensed under the Third Party Licences available to CRT for the purposes of this Agreement.

		8.2	Nothing in this Agreement shall be treated as imposing on CRT any liability to the Company in relation to the further development and commercial exploitation of the Investigational Medicinal Product or the Company Intellectual Property.

	9.	DURATION AND REVERSION OF RIGHTS

 

		9.1	Subject to the remainder of this Clause 9, this Agreement shall come into force on the Effective Date and shall extend for so long as CRT has the potential to receive Gross Revenue.

 

		9.2	In the event that CRT has not, within *** of the Effective Date either (i) found a commercial partner that has commenced and is continuing diligent effort to develop and/or commercialize the Product or any Related Product; or (ii) initiated or is not continuing diligent further development of the Product or any Related Product using its own (or the Charity’s) resources then:

 

10

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

		9.2.1	the rights granted to CRT to the Company Background Intellectual Property and the Third Party Background Intellectual Property will terminate and revert to the Company;

 

		9.2.2	CRT’s obligations in respect of the Company Background Intellectual Property and the Third Party Background Intellectual Property, including those under Clauses 6.2 and 6.3, will terminate and revert to the Company;

 

		9.2.3	the Company will have a renewed option (the “Second Option”) exercisable within *** from the date of termination of CRT’s licence rights to the Company Background Intellectual Property and Third Party Background Intellectual Property (the “Second Option Period”) to enter into the Licence with a *** reduction to the financial consideration payable to CRT under clause 4 of the Licence. If the Company exercises its Second Option by written notice to CRT and enters into the Licence within the Second Option Period this Agreement will terminate;

 

		9.2.4	if CRT has a bona fide offer from a third party to enter into a licence agreement in respect of the Clinical Trial Results, Company Foreground Intellectual Property and/or Third Party Foreground Intellectual Property during the Second Option Period CRT will provide the Company with written notice of its intention enter into such licence and the Company will have *** from the date of such notice to exercise its Second Option by written notice to CRT and, if it does so, a further *** to enter into the Licence. If the Company does not exercise its Second Option and enter into the Licence within such time periods the Second Option will lapse and Clause 9.2.5 will apply;

 

		9.2.5	if the Company does not exercise the Second Option and enter into the Licence within the Second Option Period CRT will be free to continue to sub-licence or otherwise utilise the Clinical Trial Results, Company Foreground Intellectual Property and/or Third Party Foreground in accordance with the terms of this Agreement. In the event that CRT finds a commercial partner or development route for the Company Foreground Intellectual Property for which a licence under the Company Background Intellectual Property and/or Third Party Background Intellectual Property would be necessary or useful, in so far as the Company is still reasonably able to grant such rights, the Company will do and CRT’s rights and obligations in respect of such Company Background Intellectual Property and/or Third Party Background Intellectual Property under this Agreement will be re-instated; and

 

		9.2.6	if this Agreement terminates CRT shall, and shall require all of its sublicensees to, within thirty (30) days return to the Company or destroy (by a method specified by the Company) and at the Company’s cost and expense any remaining quantities of the Company Materials and/or Confidential Information of the Company in the possession or control of CRT and its sublicensees.

	10.	GENERAL

 

		10.1	The surviving terms and conditions of the CTOA shall, in accordance with its terms, continue in full force and effect.

 

		10.2	This Agreement shall be governed by and construed in accordance with English law and each Party agrees to submit to the exclusive jurisdiction of the English courts (except in respect of disputes under Clause 7 where jurisdiction is non-exclusive).

 

11

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

IN WITNESS whereof this document is executed by the parties on the date stated at the beginning of this Agreement through their authorised signatories

	
Signed by:

	   	 
	 	 	 
	
Name:

	  	 
	 		
	
Title:

	   	 
	 		
	 	
For and on behalf of

CANCER RESEARCH TECHNOLOGY LIMITED

	

 

	
Signed by:

	   	 
	 	 	 
	
Name:

	   	 
	 		
	
Title:

	   	 
	 		
	 	
For and on behalf of

ASTERIAS BIOTHERAPEUTICS, INC

	

 

12

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

ANNEX 1A

COMPANY BACKGROUND PATENT RIGHTS

	
PATENT/

APPLICATION NUMBER

	
TITLE

	
TERRITORY

	
FILING

DATE

	   	   	   	   
	   	  	   	   
	   	   	   	  

ANNEX 1B

COMPANY FOREGROUND PATENT RIGHTS

	
PATENT/

APPLICATION NUMBER

	
TITLE

	
TERRITORY

	
FILING

DATE

	   	  	  	  
	  	  	  	  
	  	  	  	  

ANNEX 2A

COMPANY BACKGROUND KNOW-HOW

ANNEX 2B

COMPANY FOREGROUND KNOW-HOW

ANNEX 3A

COMPANY BACKGROUND MATERIALS

ANNEX 3B

COMPANY FOREGROUND MATERIALS

ANNEX 3C

THIRD PARTY MATERIALS

ANNEX 4A

EXCLUSIVE THIRD PARTY LICENCES

 

13

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

 

Exclusive License Agreement between Geron Corporation and Isis Innovation Limited effective March 23, 2006, which was subsequently assigned by Geron Corporation to Company effective October 1, 20131

Exclusive License Agreement between Geron Corporation and The University of Western Ontario effective January 30, 2009, as amended January 30, 2011 and January 11, 2012, and subsequently assigned by Geron Corporation to Company effective October 1, 2013.2

Exclusive License Agreement between Geron Corporation and Immunomic Therapeutics Inc effective October 31, 2006, which was subsequently assigned by Geron Corporation to Company effective October 1, 2013.3

1Isis Innovation Limited retains rights to use the Licensed Technology and any Improvements (including those by the licensee), as defined in the Exclusive License Agreement, for academic and research purposes

2The University of Western Ontario retains rights to use the licensed patents for teaching and other non-commercial uses.

3Exclusive rights are for use with ***

ANNEX 4B

NON-EXCLUSIVE THIRD PARTY LICENCES

 

Non-Exclusive License Agreement between Company and the Wisconsin Alumni Research Foundation, effective October 7, 2013

Exclusive License Agreement between Geron Corporation and Argos Therapeutics (formerly Merix Biosciences, Inc.) effective March 6, 2004, and subsequently assigned (along with sublicenses described below) by Geron Corporation to the Company effective October 1, 2013.4

Patent Assignment Agreement Dated as of August 1, 2002 Between Merix and Gerold Schuler (regarding cryoconservation and generation of dendritic cells in closed systems).4

Patent Assignment Agreement Dated as of August 1, 2002 Between Merix and Gerold Schuler (regarding Cd4+ Cd25+ Reg T Cells).4

Patent Assignment Agreement dated as of June 26, 2001 Between Merix and Gerold Schuler.4

Exclusive License Agreement Between Merix. and Duke University Effective as of January 10, 2000, as Amended as of July 28, 2003.5

Exclusive License Agreement Between Merix and the Rockefeller University Effective as of June 27, 2001, as Amended as of June 29, 2001.6

4The rights under this license are “co-exclusive” with Argos Therapeutics (formerly Merix Biosciences, Inc.)

 

14

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

5Sublicensed by Argos Therapeutics (formerly Merix Biosciences, Inc.) to Geron Corporation.  The sublicense are “co-exclusive” with Argos Therapeutics

6Sublicensed by Argos Therapeutics (formerly Merix Biosciences, Inc.) to Geron Corporation.  The rights to certain patents are non-exclusive in that they are shared with third parties named in the license agreement, and the rights to all patents are “co-exclusive” with Argos Therapeutics.

ANNEX 5

THIRD PARTY LICENCE COSTS

 

15

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

Annex 6

Sublicensing Terms of Third Party Licences under CRT Licence

 

16

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

Schedule 7

Third Party Licences and Payments

The entire content of this Schedule 7 is subject to and to be interpreted in accordance with the consent letters tabulated immediately below which consent letters vary certain of the respective in- licences that are referred to in this Schedule 7:

	
Item No.

	
Name of Head  Licensor

	
Date of Original Licence

	
Licensed Technology

	
Date of Consent Letter

 

	
1

	
Isis Innovation Ltd

	
March 23, 2006

	
Isis Licensed Patents

	
1st July 2014

	
2

	
Wisconsin Alumni Research Foundation

	
October 7, 2013

	
WARF Intellectual Property

	
28th August 2014

	
3

	
John Hopkins University

	
September 26, 2006 (Head License from JHU to Immunomic)

 

October 31, 2006 (sublicense from Immunomic to Asterias)

	
Immunomic Licensed Patents

	
5th September 2014

Schedule 7A:  Sublicensing Terms of Third Party Licences under CTOA

	
Licensed Technology (CTOA Section Reference)

	
Underlying Third Party Agreement(s)

	
Language incorporated by reference

 

 

	
Other sublicensing terms & conditions (Section reference from underlying agreement)

	
hTERT Licensed Patents (6.1.2)

	
Exclusive Sublicense Agreement between Geron Corporation and Asterias Biotherapeutics, effective October 1, 2013

 

Intellectual Property License Agreement between Geron Corporation and University Technology Corporation, effective December 9, 1996

	
n/a

	
***

 

 

1

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

	
University of Western Ontario Licensed Patents (6.1.3)

	
License Agreement between Geron Corporation and University of Western Ontario, effective January 30, 2009 (assigned to Asterias by Geron effective October 1, 2013)

	
n/a

	
 

***

	
 

Isis Licensed Patents (6.1.4)

	
 

Exclusive License Agreement between Geron Corporation and Isis Innovation Ltd, effective March 23, 2006 (assigned to Asterias by Geron effective October 1, 2013)

	
***

	
***

 

	
 

Merix/Duke Licensed Patents (6.1.5)

	
 

Exclusive License Agreement between Geron Corporation and Merix Bioscience, effective March 6, 2004 (assigned to Asterias by Geron effective October 1, 2013)

 

License Agreement between Duke University and Merix Bioscience, effective January 10, 2000

 

 

	
 

n/a

	
***

	
Immunomic Licensed Patents (6.1.6)

	
Exclusive License Agreement between Geron Corporation and Immunomic Therapeutics Inc effective October 31, 2006 (assigned to Asterias by Geron effective October 1, 2013)

 

License Agreement between Johns Hopkins University and Immunomic Therapeutics, effective September 26, 2006

	
***

	
***

 

 

2

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

	
WARF Intellectual Property (6.1.7)

	
Non-exclusive License Agreement between Asterias Biotherapeutics and the Wisconsin Alumni Research Foundation, effective October 7, 2013

	    	
***

 

 

3

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

Schedule 7B  Summary of Third Party Licence Payments payable by CRT1

	
Agreement

	
Licensed IP

	
Milestone payments

	
Royalties/Revenue Share  

	
Other financial obligations

	
WARF License

	
WARF Patents, Wisconsin Materials

	
***

 

	
***

	
***

	
hTERT License

	
hTERT Licensed Patents

	
***

	
***

 

	
***

 

	
Royalty Agreement between Asterias Biotherapeutics and Geron Corporation, effective October 1, 2013

	
Company Owned Patent Rights listed in Schedule 1A

 

University of Western Ontario Licensed Patents

 

Isis Licensed Patents

 

Merix/Duke Licensed Patents

 

Merix/Rockefeller Licensed Patents

 

Immunomic/JHU Licensed Patents

 

 

	
***

 

	
***

 

	
***

	
Merix License

	
Sublicense under Merix/Duke Licensed Patents

 

Sublicense under Merix/Rockefeller Licensed Patents

	
***

	
***

	
***

 

4

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

	
Duke License

	
Merix/Duke Licensed Patents

	
***

	
***

 

	
***

	
Rockefeller License

	
Merix/Rockefeller Licensed Patents

	
***

	
***

 

	
***

	
Immunomic License

	
Sublicense under Immunomic/JHU Licensed Patents

	
***

	
***

	
***

	
University of Western Ontario

	
University of Western Ontario Licensed Patents

	
***

	
***

	
***

	
Isis Innovation Ltd

	
Isis Licensed Patents

	
***

	
***

	
***

1The parties agree that the foregoing is a summary for convenience only.  Although every attempt has been made to make the following summary as accurate and complete as possible, summarizing contractual terms can result in inaccuracies or incomplete information.

***

 

5

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

Schedule 8

Development Work Plan

***

Asterias will perform method development with minimal qualification with the expectation that that CR-UK or a designated analytical facility would perform the qualifications. Analytical in-process and non-qualified release assay protocols will be transferred to CR-UK or a designated analytics facility.

Technology Transfer

As is referenced in the agreement Asterias will collaborate with CR-UK to develop an appropriate Technology Transfer Plan to assure a successful transfer of the AST-VAC2 process.

 

Based upon the achievement of the Phase I development criteria, Asterias will provide documentation and select materials for the AST-VAC2 project. Documentation includes any specified development reports, a process description and flow diagrams; ***; equipment, materials and reagent lists, and supplier information.

 

Training on the AST-VAC2 process and analytical protocols at Asterias will be initiated at a time and schedule that is documented in the Technology Transfer Plan and compatible to CR-UK’s schedule for a successful transferal of information and selected materials.

Proposed Time Lines

The following represents a projected schedule and sequence of events for the development and tech transfer of the AST-VAC2 process to CR-UK (Figure 1).

 

1

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

Figure 1: Proposed Time Line

***

 

2

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

Milestones & Deliverables:

Table 1: Milestones

***

Asterias will supply monthly updates discussing data and progress toward agreed upon development objectives as well as any foreseen critical issues.

Based on the Technology Transfer Plan referenced in the agreement, Asterias deliverables will include the following as part of the transfer of the AST-VAC2 process:

		·	Working Cell Bank vials (***)

		·	Regulatory history files on lines and bank

		·	Available RNA plasmid vials

		·	Process Description

		·	Process Flow Diagram(s)

		·	Equipment lists

		·	Bill of Materials

		·	Reagent Preparation-Protocols and Forms

		·	Analytical Method Protocols

		·	Stage I, II & III protocols

A final technology transfer summary may also be considered to realize the completion of the technology transfer milestone(s).  The Technology Transfer Plan will contain the summation of the on-site training plan as well as the results of the receiving site’s independent process run.

Additional requirements can be detailed in the Technology Transfer Plan.

 

3

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

Schedule 9

Additional Studies

 

		·	In tumour biopsies collected during surgical resection:

		o	***

		·	In blood samples collected after the commencement of therapy and up until surgical resection:

		o	***

		o	***

		·	Scale-up runs performed by the Charity for technology transfer of AST-VAC2 process

 

		·	Engineering run for AST-VAC2 manufacture performed by the Charity prior to manufacture of cGMP batch of AST-VAC2 IMP

		·	cGMP manufacturing of AST-VAC2 IMP by the Charity

		·	Studies performed by the Charity to assess and qualify the *** used for the final production of AST-VAC2

		·	Studies performed by the charity to qualify the use of AST-VAC2 release assays at the Charity

		·	In process, release, and stability testing of AST-VAC2 IMP performed by the Charity

 

For the avoidance of doubt, all references in this Schedule 9 to anything done “by the Charity” shall be construed as including anything done on behalf of or at the instruction of the Charity.

 

1

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

Schedule 10

Form of Progress Report

 

1

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.  Confidential Portions are marked: [***].

Schedule 11

Clinical Protocol Summary

	
Indication

	
***

	
Number of patients

	
***

	
Number of administrations per patient

	
***

	
Dose per administration

	
***

	
Primary endpoints

	
***

	
[Secondary endpoints]

	
***

***

	
Major inclusion criteria

	
***

 

 

1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00237-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00237-of-00352.parquet"}]]