Document:

Exhibit 10.8

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

ASSET PURCHASE AGREEMENT

 

between

 

1.                                      Kenta Biotech Ltd., Wagistrasse 25, 8952 Schlieren, Switzerland

 

(“Seller”)

 

and

 

2.                                      Aridis Pharmaceuticals LLC, 5941 Optical Court, San Jose, CA 95138, USA

 

(“Buyer”)

 

Seller and Buyer individually and collectively referred to as “Party” or “Parties”

 

regarding the sale and purchase of Seller’s Assets as described herein

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

WHEREAS:

 

A.                                    Seller is a corporation (Aktiengesellschaft) duly incorporated in Schlieren (Canton of Zurich, Switzerland), registered under the identification number CH-035.3.035.876-2.  Seller’s principal purpose is research, development, manufacture and marketing of biotechnology and pharmaceutical products, particularly monoclonal antibodies, as well as the exploitation of intellectual property assets and immaterial property law similar assets (research projects, know-how).

 

B.                                    Buyer is a company duly incorporated under the laws of the State of California, USA, with registered address at 5941 Optical Court, San Jose, CA 95138.

 

C.                                    The Parties completed an unsigned “Non-Binding Outline of Proposed Terms” outlining the structure and the major terms and conditions of this asset deal.

 

D.                                    Pursuant to the terms and conditions of this Agreement, Seller intends to sell to Buyer and Buyer intends to purchase from Seller the Assets as further described herein.

 

NOW, THEREFORE, the Parties agree as follows:

 

1.                                      DEFINITIONS

 

“Agreement” shall mean this Agreement and its Exhibits.

 

“Assets” shall mean the Physical Assets, the Contracts and the Technology in the property of the Seller at Closing Date, but shall exclude any advance payments made by the Seller to a third party.

 

“Business Day” shall mean any day on which the commercial banks in Zurich are open for regular business transactions.

 

“CO” shall mean the Swiss Code of Obligations.

 

“Closing” shall mean the consummation of the transactions as set forth in Section 5 of this Agreement and “Closing Date” shall mean the date and time thereof.

 

“Liens” shall mean any liens, encumbrances, charges, pledges or other security arrangements, other than created by applicable law in the ordinary course of business.

 

“Purchase Price” shall mean the amount defined in Section 3 of this Agreement.

 

“Physical Assets” shall mean all physical assets owned or controlled by Kenta, including but not limited to cell lines, genes, antibodies, diagnostic assays and related documentation, which are related to Kenta’s MabIgX technology platform for hybridoma generation and its monoclonal antibodies targeting Staphylococcus aureus (SA), Pseudomonas

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

aeruginosa (PA), Acinetobacter baumannii (AB) and respiratory syncytial virus, including such Physical Assets as are specified in Schedule A existing on the Closing Date.

 

“Contracts” shall mean the contracts and agreements (including all rights and obligations thereunder), whether oral or written, which Seller has concluded and which pertain to the Assets, as listed in Schedule B attached hereto.

 

“Technology” shall mean all intellectual property, including but not limited to patents, patent applications, trademarks, knowhow, trade secrets, regulatory filings, clinical trials, clinical trial information, all supporting documentation and all other related intellectual property which are related to Kenta’s MabIgX technology platform for hybridoma generation and its monoclonal antibodies targeting Staphylococcus aureus (SA), Pseudomonas aeruginosa (PA), Acinetobacter baumannii (AB) and respiratory syncytial virus, including such Technology as is listed in Schedule C attached hereto.

 

“Signing” shall mean the signing of this contract as set forth in Section 4 and “Signing Date” shall mean the date and time thereof.

 

2.                                      SALE AND PURCHASE OF THE ASSETS

 

Subject to the terms and conditions defined herein, Seller hereby agrees to sell to Buyer the Assets by assigning and transferring the Physical Assets, Contracts and the Technology to Buyer and Buyer hereby agrees to purchase from Seller the Assets by accepting the sale, assignment and transfer of the Physical Assets, the Contracts and the Technology by way of singular succession.

 

3.                                      PURCHASE PRICE

 

The consideration for the Assets sold in accordance with Section 2 of this Agreement consists of a Fixed Purchase Price (according to Section 3.1) and Royalty Payments (according to Section 3.2) (the “Purchase Price”).

 

3.1.                            Fixed Purchase Price

 

Subject to the terms and conditions defined herein, Buyer agrees to pay to Seller by wire transfer to the account mentioned in Schedule 3.1 the aggregate amount of USD [***] divided into five installments and on the respective dates as described hereinafter:

 

·                                          [***] (payable on Signing Date);

 

·                                          [***] (payable 90 Business Days after Signing Date);

 

·                                          [***] (payable on Closing Date);

 

·                                          [***] (payable 60 Business Days after Closing Date);

 

·                                          [***] (payable 180 Business Days after Closing Date);

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

(the sum of the items listed in this Section 3.1 being referred to as the “Fixed Purchase Price”).

 

3.2.                            Royalty Payments

 

3.2.1.                  Determination of Royalty Payments

 

In addition to the Fixed Purchase Price, Buyer shall pay to Seller a Royalty Payment on Gross Licensing Revenue actually received by Buyer.  The amount of the Royalty Payments according to Section 3.2.2 shall be calculated on a diminishing scale as follows:

 

·                                          [***]

 

·                                          [***]

 

·                                          [***]

 

·                                          [***]

 

(each item listed above in this Section 3.2 being referred to as “Royalty Payment”).

 

In this context “Gross Licensing Revenue” shall mean all amounts received by Buyer in consideration for out-licensing of the Assets (including Physical Assets or Technology) to any third parties for commercial sale worldwide.  Gross Licensing Revenue shall exclude amounts received in consideration other than for license of the Assets, such as research reimbursement or equity investment.

 

Gross Licensing Revenue shall include net sales revenue of the Buyer for sale of products incorporating Assets although the royalty payment due shall be under a separate schedule as described here (this includes net sales made by the Buyer alone or in cooperation with a distributing, co-marketing or co-promotion partner, but it does not include net sales made by partners of Buyer to whom the Assets have been out-licensed by Buyer — for those partners Buyer shall pay royalties only on its Gross Licensing Revenue receipts from the third party partner and the royalty rates listed above apply): Where such net sales are received, Buyer shall pay to Seller a Royalty Payment equal to [***] of net sales (gross sales less customarily accepted shipping, insurance, taxes and similar usual deductions).  In this case the above mentioned diminishing scale is not applicable.  This clause does not apply where Assets have been sold to a third party as provided below, and that party thereafter receives such net sales.

 

In the case of the sale of the Assets to a third party, including a sale of the Assets in combination with other property of Buyer, the sale of the entire business of Buyer, or the sale of the business of Buyer in exchange for shares of a third party company, the following shall apply: Gross Licensing Revenue shall include the amounts received for sale of the Assets to the third party, or pro rata for that portion of the sale proceeds received due to the value of the Assets in such sale.  The amount received for sale shall include deferred payments like Royalty Payments, earn-out payments or any other payments to be made in

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

future.  If shares are provided as consideration, Seller may receive the appropriate portion of shares (if only a part of the payment is made with shares, the Seller shall receive shares pro rata as to other consideration in the equal ratio as the Buyer).  If such shares are publicly traded, Seller may in lieu request the fair market value thereof at time of receipt.  In any such sale, Buyer shall use reasonable efforts to ensure that fair market value for Assets is received.  If a pro rata portion of such sale applies to Assets, Buyer shall describe in reasonable detail the sale to Seller, and accompany such description with reasonable description of the value of all components sold and the calculation used in the determination of the pro rata portion.  Such documentation shall also be subject to review pursuant to section 3.2.2 below.  In the event of any significant disagreement by Seller as to the assessment made, the parties shall first meet to attempt to determine a fair apportionment, and if no such apportionment can be made, the arbitration provisions below shall be activated.

 

In all such sales of Assets by Buyer, all royalty obligations under this Agreement shall cease, this Agreement shall terminate, and the third party purchaser shall thereafter be free to further license, sell product incorporating or based on, or otherwise exploit Assets without payment of further royalties hereunder.

 

3.2.2.                  Payment of Royalty Payments

 

Royalty Payments shall be paid by Buyer to Seller as follows:

 

(i)                                     regarding one time Gross Licensing Revenue (e.g. upfront payment regarding an out-licensing agreement payment, a milestone payment or a sale of Assets/IPR), within 90 Business Days after Buyer has received such payment;

 

(ii)                                  regarding regularly generated Gross Licensing Revenue (or net sales royalties, if applicable), on a quarterly basis, due 90 days after the conclusion of each calendar quarter of each year.

 

Each of these Royalty Payments to be made in cash, in USD, by wire transfer to the account of Seller according to Schedule 3.1.

 

Royalty Payments will be due to Seller for the following periods: (i) for products based upon Kenta’s monoclonal antibodies targeting Staphylococcus aureus (SA) or Pseudomonas aeruginosa (PA), the date which is the twentieth anniversary of the Closing Date; and (ii) for all other products incorporating Kenta Assets, the date which is the tenth anniversary of the Closing Date; except that (iii) if at any point the Royalty Payments (on Gross Licensing Revenue and net sales royalties combined; and including any Gross Licensing Revenue arising from sale of Assets as described above) paid by Buyer amount to a total cumulative sum of USD 50 million, all further royalty payments shall immediately cease and no further amounts shall be due.

 

Seller shall be responsible for all taxes, including VAT (if any), that occurs on the Royalty Payments.

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

3.2.3.                  Expert

 

Buyer shall keep complete and accurate records in connection with the sale or licensing of the Assets or any portion thereof to third parties so as to permit Seller to confirm the accuracy of the determination of the Gross Licensing Revenue according to Section 3.2.1 (“Royalty Payment Calculation”).  Any books and records to be maintained by Seller under this Agreement shall be maintained in accordance with generally accepted accounting principles, consistently applied in its territory.

 

The accounts of Buyer must be made available to Seller to the extent necessary to verify the accuracy of the Royalty Payment Calculations within 90 days after the end of each calendar year or the respective business year of Buyer.

 

At the request of Seller, Buyer shall permit an independent, certified public accountant appointed by Seller and reasonably acceptable to Buyer, at reasonable times and upon reasonable notice, to examine those records as may be necessary to verify the Royalty Payment Calculations for any period.  Results of any such examination shall be made available to both Parties.  Seller shall bear the full cost of the performance of any such audit requested except as hereinafter set forth.

 

If, as a result of any inspection of the books and records of Buyer, it is shown that Buyer’s Royalty Payments to Seller under this Agreement were less than the amount that should have been paid, then Buyer shall make all payments required to be made to eliminate any discrepancy revealed by said inspection within thirty (30) days after Seller’s demand therefore.  Furthermore, if the payments made were less than ninety percent (90%) of the amount that should have been paid during the period in question, Buyer shall also reimburse the Seller for the reasonable costs of such audit at the same time.

 

4.                                      SIGNING AND SIGNING DATE

 

The contract shall be signed in Schlieren on the May 10, 2013.

 

4.1.                            Signing Actions

 

The Buyer shall pay the first installment of the Fixed Purchase Price, meaning [***], to Seller, as set forth in article 3.1 in this agreement.  Within a reasonable time after signing, Seller shall provide access to the Buyer or a third party appointed by the Buyer (at Buyer’s discretion) to all documentation and data related to Assets (including all Contracts), and other reasonable assistance to Buyer as is necessary to enable Buyer to pursue financing related to the development of the Assets.

 

4.2.                            Conduct between Signing and Closing

 

a)                                     The Kenta KBSA301 clinical trial has been suspended and is on hold.  Between Signing and Closing of this Agreement, Seller shall maintain the clinical trial on hold without termination and therefore perform the necessary payments, provide

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

for IT services and for the Location and maintain the communication with the responsible authorities.  Furthermore Seller shall maintain sufficient Assets to properly terminate the trial if required, or if this Agreement is terminated during that time.

 

In case Buyer requires further assistance to maintain the Kenta KBSA301 clinical trial, the Buyer shall contact the present or former staff of Seller and Buyer shall agree on the respective terms and conditions directly with the required person.

 

b)                                     The Buyer shall pay 90 Business Days after Signing Date the second installment of the Fixed Purchase Price, meaning [***], to Seller, as set forth in article 3.1 in this agreement.

 

5.                                      CLOSING CONDITIONS, CLOSING ACTIONS AND DELIVERIES

 

5.1.                            Closing Conditions

 

The respective obligations of each Party to consummate the transactions contemplated in this Agreement shall be subject to the satisfaction or waiver at or prior to the Closing Date of the following condition precedent:

 

a)                                     Buyer has paid second installment, can make the Closing Date installment, and has secured or can demonstrate a reasonable expectation to be able to secure (for example, through a financing letter of intent) all the outstanding installments of the Fixed Purchase Price;

 

b)                                     Buyer continues reasonable best efforts to secure funds for the remainder of the completion of the clinical trial currently on hold;

 

c)                                      There are no judgments or orders outstanding or suits or actions filed which enjoin or threaten to enjoin the consummation of the transactions contemplated in this Agreement;

 

d)                                     If one of the Closing Conditions are not fulfilled and not waived by the other Party, this Agreement shall be automatically terminated without any further payments or obligations of either Party.

 

5.2.                            Closing and Closing Date

 

The transactions contemplated in this Agreement shall be consummated 180 Business Days after Signing or, to the extent legally possible, waiver by the Parties of the conditions precedent set forth in article 5.1 of this Agreement, or at any other date mutually agreed by the Parties, by simultaneously performing the actions and deliveries set forth in Section 5.3 until 5.4 of this Agreement (“Closing Date”).

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

5.3.                            Seller’s Closing Actions and Deliveries

 

At Closing Date Seller shall:

 

a)                                     assign and transfer the Physical Assets to Buyer and for such purpose execute any other instruments and documents necessary to validly transfer the Assets to Buyer;

 

b)                                     assign and transfer the Contracts to Buyer, at the option of and pursuant to instructions as provided by Buyer;

 

c)                                      assign and transfer to Buyer the Technology and for such purpose execute the instruments and documents necessary to validly assign and transfer the IPR to Buyer.

 

5.4.                            Buyer’s Closing Actions and Deliveries

 

At Closing Date Buyer shall:

 

a)                                     pay the third installment of the Fixed Purchase Price, meaning [***], to Seller;

 

b)                                     duly execute any agreements necessary regarding the transfer of the Assets.

 

5.5.                            Further Actions and Delivery

 

The Buyer shall use reasonable business efforts in its development of the Assets to maximize the outcome of the business related to the Assets (e.g. Gross Licensing Revenue).

 

5.6.                            Concurrent Actions

 

The actions described in Section 5.3 until 5.4 shall be deemed to take place concurrently.

 

6.                                      NO TRANSFER OF LIABILITIES

 

This is a contract for the purchase of Assets by Buyer.  No transfer of business risk, operations risk, or existing liabilities of the business of Seller is intended or made hereunder unless specifically noted herein.  Buyer does not take over or assume any liabilities, whatever their nature, whether contingent or otherwise from Seller.  Seller shall hold Buyer harmless from, and indemnify Buyer, against any losses and liabilities arising from the transferred Assets, if any, if and to the extent that such losses and liabilities relate to matters up to and including the Closing Date.  Any losses or liabilities up to the Closing Date relating to the Physical Assets, the Contracts and the Technology or any other matter related to the transfer of Assets contemplated by this Agreement shall be borne exclusively by Seller, irrespective of the fact that any such losses or liabilities may have been transferred by operation of law to Buyer.

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

7.                                      WARRANTIES & GUARANTEES OF SELLER

 

Seller hereby provides for the following warranties and guarantees to Buyer:

 

7.1.                            Authorizations

 

Seller warrants to Buyer that he is fully authorized and empowered to enter into this Agreement and that the entering into the Agreement and the performance of their respective obligations under the Agreement will not violate any agreement or regulation.

 

7.2.                            Assets

 

Seller has sole and valid title to the Assets which are free and clear of any liens.  The Assets have been properly maintained in accordance with past practice and are in good working condition, and in particular to Seller’s best knowledge there are no known safety issues related to any Assets, no data to suggest or imply lack of efficacy, safety issues, or the potential for serious adverse events in any clinical trial related to the Assets, including that there are no reported serious adverse events considered by the investigators related to the study drug KBSA301.

 

7.3.                            Contracts

 

The Contracts are valid and binding on Seller and, to the best knowledge of Seller, the counterparties thereto, and are in full force and effect.  Seller is not in breach or material default under any of the Contracts to which it is a party.  Neither the execution of this Agreement nor the consummation of the transactions contemplated herein will terminate or give rise to any right of the respective counterparty to terminate, not automatically renew, accelerate or modify, or require the consent of the respective counterparty to the transfer of, any of the Contracts.

 

Furthermore, neither the execution of this Agreement nor the consummation of the transactions contemplated herein will result in or give rise to any additional right or entitlement of the respective counterparty to increased, additional or accelerated payments under any of the Contracts, result in the creation or imposition of any liens upon any of the Assets under the terms of any of the Contracts, or result in any restriction on Seller’s rights under any of the Contracts.

 

7.4.                            Intellectual Property Rights

 

Seller is registered owner of or, as the case may be, has valid title to the Assets including the Technology.  As used by Seller in its territories, the Technology does not, until the Closing Date, infringe the intellectual property rights of any third party and to the best of Seller’s knowledge no third party has infringed the Technology.

 

Until the Closing Date, the development of the Assets as conducted in its territories does not conflict with, infringe, misappropriate or otherwise violate the intellectual property rights or other proprietary rights of any third party.  To the best of Seller’s knowledge,

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

Buyer will be entitled to use all intellectual property rights necessary to develop the Assets until the Closing Date.

 

7.5.                            Litigation

 

There are no legal actions or proceedings pending or threatened against Seller relating to, or arising out of, the Assets which could have a material adverse effect on the Assets.

 

7.6.                            Taxes and Charges

 

There are no tax liabilities or charges for periods up to the Closing Date, including but not restricted to VAT liabilities, connected with or attached to the Assets in a way that Buyer may be held liable for such tax liabilities or charges or that the tax authorities may claim for a lien over such assets or contracts.

 

7.7.                            Data, Files and Records

 

All material data, files, records and archives relating to the Assets are owned and maintained by and in the possession of Seller in accordance with applicable legal requirements.

 

7.8.                            No Material Adverse Change

 

Between April 1, 2013, and the Closing Date, Seller has:

 

a)                                     not made any material changes in the Physical Assets, Contracts or Technology or other than changes in the ordinary course of business;

 

b)                                     not made any changes which are likely to have a materially detrimental effect on the Assets;

 

c)                                      not materially amended or terminated any Contract, other than in the ordinary course of business;

 

d)                                     has maintained all patent applications or patents without forfeiture or abandonment of rights.

 

8.                                      WARRANTIES & GUARANTEES OF BUYER

 

Buyer hereby provides for the following warranties and guarantees to Seller:

 

8.1.                            Authorizations

 

Buyer warrants to Seller that he is fully authorized and empowered to enter into this Agreement and that the entering into the Agreement and the performance of their respective obligations under the Agreement will not violate any agreement or regulation.

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

8.2.                            Financing

 

Buyer has all funds necessary to finance itself the payment of the Purchase Price, whether exclusively by its own means or with a partial external financing available to Buyer.

 

9.                                      REMEDIES, LIMITATION AND EXCLUSION OF LIABILITY

 

9.1.                            Indemnity

 

In case of a breach of a representation and warranty by Seller, Seller shall within the limitations set forth in article 4 of this Agreement remedy such breach within forty-five (45) days after being duly notified in writing thereof.  If such remedy is not possible or successful, Seller shall pay to Buyer the amount which is necessary to establish the state described in such representation and warranty, including compensation for any Losses caused by such breach, except for any lost profits or goodwill.

 

9.2.                            Term of Representations and Warranties

 

The representations and warranties set forth in Section 8 of this Agreement shall continue in effect until eighteen (18) months after the Closing Date.

 

9.3.                            Limitations and Exclusions of Liability

 

Seller shall have no obligation to pay any compensation or damages for a breach of a representation and warranty unless the amount of any single claim raised by Buyer exceeds USD 50,000.00 or the cumulative value of claims exceeds USD 100,000 (“De minimis”).  Seller’s total liability for breaches of representations and warranties shall be limited to the Fixed Purchase Price (“Cap”).

 

Seller shall not be liable in respect of a claim by Buyer for a breach of a representation and warranty:

 

a)                                     If and to the extent the matter giving rise to a claim has been fairly and adequately disclosed to Buyer; or

 

b)                                     If and to the extent Buyer is entitled to claim compensation for any Losses from a third party (no double dip); or

 

c)                                      If and to the extent any Losses were caused by the fact that Buyer has failed to mitigate the Losses caused by a breach of a representation and warranty.

 

9.4.                            Procedure with Third Parties and Authorities

 

If a breach of a representation and warranty arises because any authority or other third party raises claims against Buyer or if Buyer in connection with such a breach has to enforce any rights or claims against such authority or other third party, any negotiations and proceedings required shall be carried out upon consultation with Seller and, upon Seller’s

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

request and at Seller’s expense, with the good faith participation of Seller’s counsel.  Buyer may in any event not settle any such claims without Seller’s prior written consent which shall not be unreasonably withheld, it being understood that Seller shall respond to Buyer’s request for consent within 20 days or such shorter period as a competent authority may set, failing which consent shall be deemed given the Business Day after expiry of such period.

 

9.5.                            Exclusive Remedies

 

Buyer shall exclusively have the remedies provided for in this Agreement including claims for specific performance.  Any other claims of Buyer against Seller as well as claims asserted by Buyer against Seller on the basis of other legal provisions, including damages, remedies under the theory of culpa in contrahendo, enrichment law, or any statutory warranty, in particular the remedies of rescission (Wandlung) and reduction of purchase price (Minderung) are hereby expressly excluded.

 

Buyer hereby confirms that all facts relevant for Buyer in the sense of Article 24 of the Swiss Code of Obligations are covered by the representations and warranties made by the Seller in Section 7 of this Agreement; as a result, Buyer explicitly waives the right to rescind this Agreement under Article 24 of the Swiss Code of Obligations.

 

10.                               COVENANTS

 

10.1.                     Taxes and other Charges

 

10.1.1.           Taxes caused by the Business

 

Any taxes arising from or with respect to the Physical Assets, the Contracts or the Technology or arising from or with respect to any operations of the Business prior to the Closing Date shall be borne by Seller.

 

10.1.2.           Transfer Taxes, Charges, Duties and Fees

 

Each party shall bear its own transfer taxes, charges, duties or fees caused by the transfer of the Physical Assets, the Contracts or the Technology.

 

11.                               TERM AND TERMINATION

 

11.1.                     Term

 

This Agreement shall enter into effect upon signature of both Parties at Signing Date.

 

This Agreement shall remain effective until the Royalty Payment obligations under section 3.2.1 have expired.

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

12.                               MISCELLANEOUS

 

12.1.                     Costs and Fees

 

Each Party shall bear its own fees and expenses of its counsel and advisors (including, without limitation, notary and register fees and expenses and related lawyer’s fees).

 

12.2.                     Notices

 

Any notice, request, instruction or other document deemed by either Party to be necessary or desirable to be given to the other Party, shall be in writing and shall be sent by registered mail or facsimile followed by registered mail addressed as follows:

 

If to Buyer:                                                                                Kenta Biotech Ltd.
 Dr. Franco Merckling 
 Wagistrasse 25
 8952 Schlieren 
 Switzerland

 

If to Seller:                                                                                    Aridis Pharmaceuticals LLC
 Dr. Vu L. Truong
 5941 Optical Court San Jose
 CA 95138, USA

 

Each Party may at any time change its address by giving notice to the other Party in the manner described above.  All notices shall be effective upon receipt (in case of email followed by registered mail/DHL).

 

12.3.                     Entire Agreement; Amendments

 

This Agreement embodies the entire agreement between the Parties with respect to the transactions contemplated herein, and there have been and are no agreements or understandings between the Parties other than those set forth or provided for herein.  It supersedes the “Non-Binding Outline of Proposed Terms”.

 

This Agreement may be amended only in writing through a document duly signed by the Parties.

 

12.4.                     No Waiver

 

The failure of any of the Parties to enforce any provision of this Agreement or any rights with respect thereto shall in no way be considered as a waiver of such provision or rights or in any way to affect the validity of this Agreement.  The waiver of any claim for breach of this Agreement by any of the Parties shall not operate as a waiver of any claim pertaining to another, prior or subsequent breach.

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

12.5.                     Assignment

 

Except as set forth hereunder, neither of the Parties shall assign this Agreement or any rights or obligations to any third party without the consent of the other Party provided however that any assignment to an affiliated company or to the shareholders of a Party shall be possible without prior consent of the other Party.

 

12.6.                     Binding on Successors

 

All of the terms, provisions and conditions of this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns except as set forth herein.

 

12.7.                     Severability; Good Faith

 

Should any part or provision of this Agreement be held to be invalid or unenforceable by any competent court, governmental or administrative authority having jurisdiction, the other provisions of this Agreement shall nonetheless remain valid.  In such case, the Parties shall endeavour to negotiate a substitute provision that best reflects the economic intentions of the Parties without being invalid or unenforceable, and shall execute all instruments and documents required to this effect.

 

12.8.                     Confidentiality

 

The Parties agree to keep the terms and conditions of this Agreement confidential subject to requirements by law or by authorities; however, Buyer may disclose details regarding the Agreement and the Assets in communications, websites, and otherwise as necessary to support its financing efforts related to development of the Assets.

 

13.                               GOVERNING LAW AND JURISDICTION

 

13.1.                     Governing Law

 

This Agreement, and any other agreements to be entered into under this Agreement, shall be subject to and governed by Swiss substantive law to the exclusion of the rules set forth in the United Nations Convention on the International Sale of Goods.

 

13.2.                     Arbitration

 

All disputes arising out of or in connection with this Agreement and the annexes, including its validity, performance and termination, shall be settled as follows:

 

a)                                     The Parties shall first use reasonable business efforts to resolve such dispute among themselves.  The Parties agree to meet face-to-face to discuss the issues and attempt, in good faith, to negotiate an amicable resolution.  Such meeting will happen at a place mutually agreed, not later than 30 days after written notice of a dispute is served by one Party upon the other.

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

b)                                     If the Parties fail to achieve a resolution within 60 days of the initiation of the dispute resolution process, the dispute shall be solely and finally settled by a sole arbitrator in accordance with the Rules of International Arbitration of the Swiss Chambers of Commerce.  The place of arbitration shall be Zurich.  The arbitral tribunal shall conduct the proceedings in English.

 

15

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

SCHEDULES

 

Schedule A

 

List of Physical Assets

 

All physical assets owned or controlled by Kenta, including but not limited to cell lines, genes, antibodies, diagnostic assays and related documentation, related to:

 

·                                          MabIgX technology platform (unique fusion cell line for human hybridoma generation);

 

·                                          KBSA301 master cell bank, preclinical and (preliminary) clinical data;

 

·                                          KBSA301 GMP study material;

 

·                                          KBPA101 master cell bank, preclinical and clinical data (phase 2a);

 

·                                          KBPA102-104 (human monoclonal antibodies against the other most prevalent PA serotypes) preclinical data;

 

·                                          Rapid PA serotype-specific companion diagnostic kit;

 

·                                          KBAB401 (preliminary human monoclonal antibody leads against AB) and validated antibody or vaccine targets of AB;

 

·                                          KBRV201 (human monoclonal antibody to prevent respiratory syncytial virus (RSV) infections) preclinical data showing superiority vs. Astra Zeneca’s marketed product (Synagis).

 

KBPA101 - KBPA104

 

Cell lines (MCB, RCB and cell lines)

 

	
Cell lines
    	
 
    	
Location
    
	
KBPA101 hybridoma MCB (approx. 100 vials)
    	
 
    	
Sanquin Pharmaceutical Services SPS, Amsterdam, NL
    
	
KBPA102 hybridoma
    	
 
    	
Kenta Biotech, Schlieren, CH
    
	
KBPA103 hybridoma
    	
 
    	
Kenta Biotech, Schlieren, CH
    
	
KBPA104 hybridoma
    	
 
    	
Kenta Biotech, Schlieren, CH
    

 

16

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

	
Cell lines
    	
 
    	
Location
    
	
CHO-KBPA102
    	
 
    	
Kenta Biotech, Schlieren, CH
    
	
CHO-KBPA103
    	
 
    	
Kenta Biotech, Schlieren, CH
    
	
CHO-KBPA104
    	
 
    	
Kenta Biotech, Schlieren, CH
    
	
Anti-ID KBPA101
    	
 
    	
Kenta Biotech, Schlieren, CH
    
	
Anti-ID KBPA102
    	
 
    	
Kenta Biotech, Schlieren, CH
    
	
Anti-ID KBPA103
    	
 
    	
Kenta Biotech, Schlieren, CH
    
	
Anti-ID KBPA104
    	
 
    	
Kenta Biotech, Schlieren, CH
    
	
Mock-KBPA101-hybridoma (non-producer)
    	
 
    	
Kenta Biotech, Schlieren, CH
    
	
Mock-KBPA103-hybridoma (non-producer)
    	
 
    	
Kenta Biotech, Schlieren, CH
    
	
Mock-KBPA104-hybridoma (non-producer)
    	
 
    	
Kenta Biotech, Schlieren, CH
    

 

Reagents

 

All remaining reagents stored at 2-8C, -20C and -80C, including remaining GMP-clinical material (KBPA101), sera and samples from animal and human studies (see document “Freezer Content”) as well as reagents for diagnostic kit;

 

Sera and clinical isolates from phase I and phase IIa clinical trial (stored at Kenta Biotech, Schlieren).

 

KBSA301

 

Cell lines (MCB, RCB and cell lines)

 

	
Cell lines
    	
 
    	
Location
    
	
KBSA301 hybridoma cell line 243-5 MCB
    	
 
    	
Bioreliance, US and UK
    

 

17

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

	
Cell lines
    	
 
    	
Location
    
	
KBSA301 hybridoma cell line 243-5 RCB
    	
 
    	
Kenta Biotech, Schlieren, CH
    
	
Anti-ID KBSA301 cell line
    	
 
    	
Kenta Biotech, Schlieren, CH
    
	
SA-243 Mock cell line
    	
 
    	
Kenta Biotech, Schlieren, CH
    

 

Reagents

 

All remaining reagents stored at 2-8C, -20C and -80C, including rejected GMP-clinical material (KBSA301), placebo, sera and samples from animal and human studies (see document “Freezer Content”).

 

KBRV201

 

Reagents

 

All remaining reagents stored at 2-8C, -20C and -80C.

 

Reagents for KBRV201 include expression vectors for production of intact KBRV201 antibody by transient transfection of mammalian cell lines.

 

KBAB401

 

Cell lines (MCB, RCB and cell lines)

 

	
Cell lines
    	
 
    	
Location
    
	
All KBAB401 hybridoma and LCL cell lines   (uncharacterized)
    	
 
    	
Kenta Biotech, Schlieren, CH
    

 

Reagents

 

All remaining human PBLS stored in LN2 and all patient sera stored at -20C (see document “Freezer Content”).

 

18

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

General

 

Cell lines

 

	
Cell lines
    	
 
    	
Location
    	
 
    	
 
    
	
LA55 fusion partner cell line (RCB)
    	
 
    	
Kenta Biotech, Schlieren, CH
    	
 
    	
 
    
	
HL60 phagocytic cell line
    	
 
    	
Kenta Biotech, Schlieren, CH
    	
 
    	
 
    
	
B95-8 EBV secreting cell line
    	
 
    	
Kenta Biotech, Schlieren, CH
    	
 
    	
 
    
	
EL4-B5 murine feeder cell line
    	
 
    	
Kenta Biotech, Schlieren, CH
    	
 
    	
 
    
	
Patients PBL
    	
 
    	
Kenta Biotech, Schlieren, CH
    	
 
    	
 
    
	
Commercially available cell lines (Jurkat,   HEK293, etc.)
    	
 
    	
Kenta Biotech, Schlieren, CH
    	
 
    	
See list of LN2 storage tank
    
	
 
    	
 
    	
Kenta Biotech, Schlieren, CH
    	
 
    	
 
    
	
 
    	
 
    	
Kenta Biotech, Schlieren, CH
    	
 
    	
 
    

 

Reagents

 

All remaining reagents stored at 2-8C, -20C and -80C (see document “Freezer Content”), including clinical isolates of viruses (RSV) and bacteria (P. aeruginosa, S. aureus, A. baumannii);

 

Patients sera and clinical isolates (BAL, ETA and sputum) from all research activities.

 

19

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

Schedule B

 

List of Contracts

 

KBSA301-001 FIH CT

 

Operational Partner:

 

·                  ORION Clinical Services Limited, 7 Bath Road, Slough, England SL1 3UA

·                  Fisher Clinical Services Switzerland, Steinbühlweg 69, 4123 Allschwil / Switzerland

·                  Cenduit LLC, Chelsea Place, 1007 Slater Road, Suite 301, Durham, NC 27703, USA

·                  Eurofins Medinet B.V., Bergschot 71, 4817 PA, Breda, the Netherlands

 

Details:

 

	
Partner
    	
 
    	
Title
    	
 
    	
Effective date
    
	
ORION
    	
 
    	
Amendment No 5 to Work Order 001
    	
 
    	
expected
    
	
 
    	
 
    	
Amendment No 4 to Work Order 001
    	
 
    	
Mar 27, 2013
    
	
 
    	
 
    	
Amendment No 3 to Work Order 001
    	
 
    	
Mar 26, 2013
    
	
 
    	
 
    	
Amendment No 2 to Work Order 001
    	
 
    	
Feb 1, 2013
    
	
 
    	
 
    	
Amendment No 1 to Work Order 001
    	
 
    	
Feb 1, 2013
    
	
 
    	
 
    	
Work Order 001
    	
 
    	
Feb 1, 2012
    
	
 
    	
 
    	
Master Study Agreement
    	
 
    	
Dec 8, 2011
    
	
Fisher
    	
 
    	
Order 7, Vers. 2; FCS No 205523, Quote relabeling
    	
 
    	
May 21, 2012
    
	
 
    	
 
    	
Order 1, Vers. 2; FCS No 207727, Quote LN2 storage, back ups
    	
 
    	
May 14, 2012
    
	
 
    	
 
    	
Order 4, Vers. 2; FCS No 205523, Quote Logistics
    	
 
    	
Feb 1, 2012
    
	
 
    	
 
    	
Order 6, Vers. 1; FCS No 205523, Quote Label- and Packaging
    	
 
    	
Jan 31, 2012
    
	
 
    	
 
    	
Responsibilities Agreement (GMP)
    	
 
    	
Nov 18, 2010
    
	
Cenduit
    	
 
    	
IRT Change Order Pricing
    	
 
    	
Mar 27, 2012
    
	
 
    	
 
    	
Individual Project Agreement
    	
 
    	
Feb 24, 2012
    
	
 
    	
 
    	
IRT Pricing Proposal
    	
 
    	
Feb 15, 2012
    

 

20

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

	
Partner
    	
 
    	
Title
    	
 
    	
Effective date
    
	
 
    	
 
    	
Master Project Agreement
    	
 
    	
Dec 20, 2011
    
	
Eurofins
    	
 
    	
Change Order 1 to Study Agreement
    	
 
    	
Apr 11, 2012
    
	
 
    	
 
    	
Study Agreement
    	
 
    	
Dec 20, 2011
    
	
Clinical Sites
    	
 
    	
Cliniques Universitaires St Luc, 10 avenue Hippocrate, 1200   Brussels, Belgium
    	
 
    	
Jun 12
    
	
 
    	
 
    	
Clinique Saint-Pierre 9, Avenue Reine Fabiola, 1340 Ottignies,   Belgium
    	
 
    	
Jun 12
    
	
 
    	
 
    	
University Hospital of Liege, CHU Sart Tilman, Avenue de   I’Hopital, n°1, 4000, Liege, Belgium
    	
 
    	
Jun 12
    
	
 
    	
 
    	
University Hospital Mont-Godinne, Avenue Docteur G. Therasse 1,   5530 Yvoir, Belgium
    	
 
    	
Jun 12
    
	
 
    	
 
    	
Le Centre Hospitalier Universitaire de Limoges, 2 Avenue Martin   Luther King, 87 042 Limoges Cedex, France
    	
 
    	
Mar 12
    
	
 
    	
 
    	
Le CENTRE HOSPITALIER VICTOR DUPOUY 69, rue du Lieutenant   Colonel Prudhon, 95107 Argenteuil, France
    	
 
    	
Apr 12
    
	
 
    	
 
    	
Le CENTRE HOSPITALIER REGIONAL ET UNIVERSITAIRE DE TOURS, 2   boulevard Tonnelle, 37044 Tours Cedex, France
    	
 
    	
Apr 12
    
	
 
    	
 
    	
I’Hopital Louis Mourier, 178, rue des Renouillers, 92700   Colombes, France
    	
 
    	
May 12
    
	
 
    	
 
    	
CHD Les Oudairies, 85925 La Roche Sur Yon Cedex 9
    	
 
    	
Apr 12
    
	
 
    	
 
    	
Centre Hospitalier Universitaire de DIJON, 1, bd Jeanne d’Arc,   BP 77908, 21079 Dijon Cedex, France
    	
 
    	
Jun 12
    
	
 
    	
 
    	
Le CENTRE HOSPITALIER UNIVERSITAIRE de NANTES, 5 allee de I’Ile   Gloriette, 44093 Nantes, Cedex 1, France
    	
 
    	
May 12
    
	
 
    	
 
    	
I’Hopital de Ia source 14, avenue de I’hopital - CHR Orleans -   BP, 86709 - 47067 Orléans Cedex, France
    	
 
    	
Apr 12
    
	
 
    	
 
    	
UNIVERSITE CLAUDE BERNARD LYON 1, 69100 Villerbanne, France
    	
 
    	
Aug 12
    
	
 
    	
 
    	
CENTRE HOSPITALIER D’ANGOULEME, 16470 Saint-Michel, France
    	
 
    	
Jul 12
    

 

21

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

	
Partner
    	
 
    	
Title
    	
 
    	
Effective date
    
	
 
    	
 
    	
CHU Angers, 4 rue Larrey, 49933 Angers cedex, France
    	
 
    	
Sep 12
    
	
 
    	
 
    	
Hospital Universitari Vall d’Hebron, Passeig Vall d’Hebron   119-129 , 08035 Barcelona, Spain
    	
 
    	
Jun 12
    
	
 
    	
 
    	
Hospital Universitario de Bellvitge (HUB) , C/ Feixa Llarga, s/n   de Hospitalet de Llobregat, 08907 Llobregat, Spain
    	
 
    	
May 12
    
	
 
    	
 
    	
Doctor Negrin University Hospital of Gran Canaria c/ Bar- ranco   de la Ballena s/n 35010, Las Palmas, Spain
    	
 
    	
Jul 12
    
	
 
    	
 
    	
Son Espases Hospital, Ctra Valldemossa 79, 07010 Palma —   Balearic Islands, Spain
    	
 
    	
Jul 12
    
	
 
    	
 
    	
HOSPITAL Universitario de Getafe, Ctra. de Toledo, Km. 12,500,   Getafe de Madrid, Spain
    	
 
    	
Nov 12
    
	
 
    	
 
    	
HOSPITAL UNIVERSITARIO LA PAZ, Po. Castellana 261, Madrid,   28046, Spain
    	
 
    	
Jun 12
    
	
 
    	
 
    	
Hospital Universitario Marqués de Valdecilla, Avenida de   Valdecilla s/n. 39008-Santander, Spain
    	
 
    	
Jul 12
    
	
 
    	
 
    	
LA FUNDACION PARA EL FOMENTO DE LA INVESTIGACION SANITARIA Y   BIOMEDICA DE LA COMUNIDAD VALENCIANA (FISABIO) C/ Micer Masco No. 31,   46010 -Valencia, Spain
    	
 
    	
Jul 12
    
	
Data Monitoring Committee
    	
 
    	
Prof Steven Michael Opal, USA
    	
 
    	
May 10
    
	
 
    	
 
    	
Prof Jean Chastre, France
    	
 
    	
Jan 12
    
	
 
    	
 
    	
Dr Philippe Eggimann, Switzerland
    	
 
    	
Oct 11
    

 

22

 

Schedule C

 

Technology

 

Documentations (all located at Kenta Biotech, Schlieren, CH) KBPA101 - KBPA104

 

·                  All preclinical reports and R&D reports for the KBPA101-104 research projects (electronic and hard copies)

·                  All regulatory documents for the KBPA101-104 projects (electronic and hard copies)

·                  All clinical documents for the KBPA101 project (phase I and phase II), (electronic (if available) and hard copies), including trials-master-files and case-report-forms (only hard copies)

·                  All documents, reports and SOP regarding the diagnostic kit

·                  All raw data stored electronically related to KBPA101 — KBPA104

 

KBSA301

 

·                  All preclinical reports and R&D reports for the KBSA301 research projects (electronic and hard copies)

·                  All regulatory documents for the KBSA301 projects (electronic and hard copies)

·                  All clinical documents for the KBSA301 project (ongoing phase I/II studies), (electronic (if available) and hard copies)

·                  All raw data stored electronically related to KBSA301

 

KBRV201

 

·                  All R&D reports for the KBRV201 research project (electronic and hard copies)

·                  All raw data stored electronically related to KBRV201

 

KBAB401

 

·                  All preclinical reports and R&D reports for the KBAB401 research project (electronic and hard copies)

·                  All raw data stored electronically related to KBAB401

 

General

 

·                  All lab journals (hard copies and electronic scans, if available)

·                  All relevant reports to cell line characterization of LA55 in hard copies and electronic forms (if available)

·                  All documentation to FCS used in research projects

·                  SOP related to R&D and clinical activities at Kenta Biotech

·                  Marketing & commercial and financial projections, presentations, competitive analysis documents & information

 

23

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

IPR

 

Until the closing of the Asset Purchase Agreement Kenta will ensure the maintenance of the IPR estate related to KBSA301 and KBAB401 and do all necessary payments to competent authorities and offices as required (cost covered by payments mentioned in this agreement).  Regarding the IPR estate related to the KBPA Franchise Kenta will consult Aridis on a case-by-case level and make the decisions accordingly (cost not covered under this agreement).  Status of IP Rights as of May 7th, 2013.

 

Patents, Licenses, Trademarks and Domains of Kenta Biotech AG

 

Kenta Biotech is focusing on the discovery and development of innovative, fully human monoclonal antibodies for the life-saving treatment of patients with serious infectious diseases.

 

For the identification and isolation of the monoclonal antibodies, the company is using its proprietary MabIgX technology platform that enables the generation of an advanced class of fully human monoclonal antibodies that are expected to have superior safety and efficacy profiles.

 

Kenta`s patent portfolio currently consists of 6 patent families: three patent families are related to human monoclonal antibodies specific for Lipopolysaccharides (LPS) of three different Pseudomonas aeruginosa serotypes, one patent application refers to assays and kits for serotyping Pseudomonas aeruginosa, one patent family is related to a human monoclonal antibody specific for alpha-toxin of Staphylococcus aureus.  Recently a patent application was filed claiming “Novel targets of Acinetobacter baumannii”

 

The IP portfolio consists further of trademarks and domains (see table below).

 

Kenta Biotech’s representatives:

 

	
European patent attorneys:
    	
 
    	
Corresponding US patent   attorneys:
    
	
 
    	
 
    	
 
    
	
Grünecker,   Kinkeldey & Schwanhäusser
    	
 
    	
Riverside Law
    
	
Leopoldstr. 4
    	
 
    	
300 Four Falls Corporate Center, Suite 710
    
	
D 80802 München
    	
 
    	
300 Conshohocken State Road
    
	
Dr. Heike   Vogelsang-Wenke
    	
 
    	
West Conshohocken, PA 19428
    
	
Phone: +49-89-212350
    	
 
    	
Dr. Kathryn Doyle
    
	
Fax: +49-89-220287
    	
 
    	
Phone: 001-215-268-3888
    
	
vogelsang-wenke@grunecker.de
    	
 
    	
(all correspondence via Grünecker et al)
    
	
 
    	
 
    	
 
    
	
Trademark   attorneys:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Kellerhals Attorneys at   Law
    	
 
    	
 
    
	
Dr. Beat Brechbühl
    	
 
    	
 
    
	
Effingerstrasse 1
    	
 
    	
 
    
	
Post Box 6916
    	
 
    	
 
    
	
CH 3001 Bern
    	
 
    	
 
    

 

24

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

	
Phone: +41-58 200 3500
    	
 
    	
 
    
	
Fax: +41-58 200 3511
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
On behalf of SELLER:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Dr. Kuno Sommer
    	
 
    	
/s/ Hans-Beat Gurlter
    
	
Dr. Kuno Sommer
    	
 
    	
Hans-Beat Gurlter
    
	
 
    	
 
    	
 
    
	
On behalf of BUYER:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Dr. Vu L, Truong
    	
 
    	
/s/ Dr. Eric Patzer
    
	
Dr. Vu L, Truong
    	
 
    	
Dr. Eric Patzer
    

 

25Exhibit 10.9

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

CONFIDENTIAL

 

FORMULATION DEVELOPMENT AGREEMENT

 

This FORMULATION DEVELOPMENT AGREEMENT (this “Agreement”) is entered into as of June l, 2007 (the “Effective Date”) by and between Aridis Pharmaceuticals, LLC, a California corporation with its business at 5941 Optical Court, San Jose, CA 95138 (“Aridis”) and PATH Vaccine Solutions, a nonprofit organization and affiliate of PATH organized as a separate legal entity under the laws of the State of Washington, having a primary place of business at 1455 NW Leary Way, Seattle, WA 98107 (“PVS”).

 

RECITALS

 

WHEREAS, PATH is an international, nonprofit, non-governmental organization whose mission is to improve the health of people around the world by advancing technologies, strengthening systems, and encouraging healthy behaviors.  PATH identifies, develops and applies appropriate and innovative solutions to public health problems, especially in low-resource settings, and shares knowledge, skills, and technologies with governmental and nongovernmental partners in developing countries and with groups in need;

 

WHEREAS, the mission of PVS is to accelerate the development of a rotavirus vaccine for pediatric indications and ensure its availability, affordability and accessibility for the developing world.  The objective of the PATH rotavirus program is to reduce the number of deaths and hospitalizations of children in the developing world due to rotavirus infection through advanced development and introduction of safe, affordable and efficacious new rotavirus vaccines;

 

WHEREAS, Aridis has expertise in the field of formulation development for vaccines and holds proprietary rights in technology for such formulation development;

 

WHEREAS, if a rotavirus vaccine formulation is successfully developed in accordance with the provisions of this Agreement, Aridis shall make available to PVS and its designated vaccine manufacturers the selected rotavirus vaccine formulations for use by such manufacturers in the manufacture and distribution of a rotavirus vaccine in accordance with PVS’ mission in Developing Countries; and

 

WHEREAS, Aridis and PVS wish to enter into an Agreement to formalize their collaboration on the development of select rotavirus vaccine formulations under conditions as set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties and covenants set forth in this Agreement, Aridis and PVS agree as follows:

 

1.                                      DEFINITIONS

 

1.1                               “Affiliate” shall mean, with respect to any Party, any other individual or entity directly or indirectly controlling, controlled by or under common control with such Party.  For

 

1

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

purposes of this Section 1.1, “control” means the beneficial ownership, directly or indirectly, of fifty percent (50%) or more of the equity or the outstanding voting shares or securities, or the right to receive fifty percent (50%) or more of the profits or earnings of an entity, or the ability to direct or cause the direction of the management or policies of an entity.

 

1.2                               “ATCC License” shall have the meaning as set forth in Section 5.3 herein.

 

1.3                               “Background Intellectual Property” shall mean any and all information, data (including research data), know-how, methods, formulas, formulations, compositions, materials, manufacturing know-how (including methods and standard operating procedures), computer programs, test results and trade secrets, owned or controlled by Aridis as of the Effective Date of this Agreement for which a license is required in order to practice the Project Intellectual Property for the manufacture, use or sale of the Primary Formulation or Optional Formulation developed under the scope of the Project.  Specifically excluded from this definition are (i) those rights held by Aridis under license to the U.S. DHHS National Institute of Health technology known as “Multivalent Human Bovine Rotavirus Vaccine,” DHHS reference No. E-015-98/0; (ii) those intellectual property rights owned, controlled or licensed by Aridis where the practice of such intellectual property would require the payment of consideration or fulfillment of obligations to a third party; (iii) rights to technologies unrelated to formulation which cover distinct therapeutic compounds, methods or product types (such as a Shigella vaccine form, for example); and (iv) clinical data.

 

1.4                               “Budget’ shall mean the budget for performing the Project, including payment schedule and deliverables, as mutually agreed upon by the Parties, a copy of which is attached hereto as Appendix A, and incorporated herein.

 

1.5                               “Developing Countries” shall mean those countries identified by the World Bank as of the Effective Date as having “low income economies,” or “lower-middle income economies” or “upper-middle income economies,” and which are set forth in Appendix C, attached hereto, as may be amended from time to time by the World Bank.

 

1.6                               “Dispute” shall have the meaning as set forth in Section 13.6 herein.

 

1.7                               “Electing Party” and “Non-Electing Party” shall have the meaning as set forth in Section 12.4 herein.

 

1.8                               “Enabling Technology” shall have the meaning as set forth in Section 4.2 herein.

 

1.9                               “Milestones” shall mean the goals, go-no-go decision points, deadlines and deliverables for the development of select rotavirus vaccine formulations as set forth in Appendix B of this Agreement and incorporated herein.

 

1.10                        “Notice of Breach” and “Notice of Termination” shall have the meaning as set forth in Section 12.2 herein.

 

1.11                        “Optional Formulation” shall have the meaning as set forth in Section 2.1 herein.

 

2

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

1.12                        “Parties” shall mean Aridis and PVS together and “Party” shall mean any one of them.

 

1.13                        “Patent Rights” shall mean (i) all patents and patent applications owned by Aridis and/or its Affiliates or sublicensees, or to which Aridis and/or its Affiliate(s) or sublicensees otherwise have the right to grant licenses, existing as of the Effective Date or coming into existence at any time thereafter, which generally or specifically claim or cover processes or formulations for Rotavirus Vaccine; (ii) all patents issued with respect to the applications described above; and (iii) all divisionals, continuations, continuations-in-part, re-examinations, re-issues and extensions of such patents and applications.  A list of Aridis’ Patent Rights as of the Effective Date is attached hereto as Appendix D and incorporated into this Agreement.  Aridis shall provide PVS with written updates of the list of Patent Rights or more frequent updates when, in Aridis’ reasonable judgment, modifications may have bearing on or be relevant to the Project.

 

1.14                        “Primary Formulation” shall have the meaning as set forth in Section 2.1 herein.

 

1.15                        “Private Sector” shall mean those entities not included within the definition of Public Sector as defined herein.

 

1.16                        “Project Plan “ shall mean the scope of work to be undertaken by Aridis in performance of its obligations under this Agreement as defined in Appendix B and incorporated herein as may be amended from time to time upon mutual written approval of the Parties.

 

1.17                        “Project Intellectual Property” shall mean any and all inventions (whether patentable or not), proprietary information, know-how, technology, formulae, processes (including all SOPs), trade secrets, materials, technical data and any other information for or related to the formulations developed for Rotavirus Vaccine, or as invented, developed or acquired by, or come into the possession or control (by licensure or otherwise) of Aridis, all where arising out of performance by Aridis of the work under the Project Plan.

 

1.18                        “Public Sector” shall mean governmental health ministries and other governmental agencies of Developing Countries, the Global Fund for Children’s Vaccines, the WHO, World Bank, UNICEF and other governmental and non-profit charitable agencies or organizations, including PATH, and shall include without limitation United States and European governmental agencies (e.g. USAID, DANIDA, DFID and GTZ) that may purchase vaccines for delivery, distribution and/or sale to Developing Countries.

 

1.19                        “Rotavirus Vaccine” shall mean a multivalent vaccine for the prevention of rotavirus infection having a bovine parenteral virus backbone developed under license from the U.S. DHHS National Institute of Health technology known as “Multivalent Human Bovine Rotavirus Vaccine,” DHHS reference No. E-015-98/0 NIH, select formulations of which shall be as developed under this Agreement.

 

1.20                        “SOPs” shall mean standard operating procedures for the development of selected formulations of the Rotavirus Vaccine.

 

3

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

1.21                        “Term” shall have the meaning as set forth in Section 12.1 herein.

 

2.                                      PROJECT PLAN

 

2.1                               The Scope of Work.  The Parties shall mutually develop and agree upon Milestones, including decision points as part of the Project Plan, attached hereto and made a part of this Agreement as Appendix B, which sets forth the scope of work for the vaccine formulation development activities to be conducted under this Agreement, it being understood that Appendix B shall initially include the scope of work for Phase I of the Project Plan, Phase II to be agreed upon by the Parties upon successful completion of Phase I and included as part of Appendix B at such time.  The Project Plan may be modified from time to time by the mutual agreement of the Parties as select formulations for Rotavirus Vaccine are identified.  The Project Plan will be comprised of two Phases, Phase I will include the identification and development of both a liquid formulation and one or more powder formulations.  Phase II will be the optimization of the formulation as selected by PVS upon the completion of Phase I.  It is anticipated by the Parties that the formulation to be initially selected by PVS for optimization may be a liquid formulation, and once selected this formulation will be referred to as the “Primary Formulation” in this Agreement.  It being under stood that prior to the start of Phase II, PVS will determine the formulation to be taken forward for optimization by Aridis and such formulation shall be designated as the Primary Formulation, and PVS may select a second formulation to be used as an optional formulation for Rotavirus Vaccine in Developing Countries (“Optional Formulation”).

 

2.2                               Conduct of the Project Plan.  Aridis shall allocate a sufficient amount of time and effort, using personnel with sufficient skills and experience, together with sufficient equipment, supplies and facilities to perform its obligations for the vaccine formulation development work as identified in the Project Plan, including without limitation, (i) in a good scientific manner; (ii) in accordance with all applicable laws and regulations (including those pertaining to animal or human use or testing); (iii) in accordance with good research practices incorporating mutually agreed standards and procedures; and (iv) with diligence, using reasonable best efforts to meet all Milestones under the Project Plan.  Successful completion of Phase I of the Plan shall be the selection by PVS of a Primary Formulation developed by Aridis under Phase I of the Plan and within the Budget for Phase I as specified in Appendix A.

 

2.2.1                     For the avoidance of doubt, it is understood and agreed by the Parties that Aridis’ obligation under this Agreement is to use reasonable best efforts as described in this Section 2.2 to perform in accordance with the Project Plan, and such reasonable best efforts shall not include an obligation to expend resources in excess of that specified in the Budget or Project Plan without the mutual prior written agreement of the Parties.

 

2.2.2                     Aridis shall be obligated to use reasonable best efforts to meet the Milestone completion dates as set forth in Appendix B, it being understood and agreed that completion of a Milestone by the designated date does not guarantee that completion of such Milestones will result in a successful formulation acceptable for use with the Rotavirus Vaccine; provided that, the steps undertaken by Aridis in completion of a Milestone meet the criteria as set forth in this Section 2.2.

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

2.2.3                     It is agreed that the deliverables to be provided to PVS or its designees by Aridis in accordance with the Project Plan, shall include data, information, study reports, and certain formulation test materials and/or reagents.  It is not anticipated that biological materials will be a part of the deliverables provided to PVS or its designees hereunder.

 

2.3                               Scientific/Technical Management Committee.  PVS and Aridis shall form a Scientific/Technical Management Committee.  The purpose of such Committee shall be to review, evaluate and offer input with respect to the efforts and activities under the Project Plan on an ad hoc basis.  Without limiting the foregoing, the Committee shall be responsible for overseeing the Project Plan in a manner consistent with the Agreement, including, but not limited to, (i) reviewing the progress of the Project Plan, including by way of example, review of Aridis activities and progress; (ii) providing technical guidance and recommendations in support of the selected formulations; and (iii) such other matters as from time to time the Parties consider necessary for the advancement of the Project Plan.

 

2.4                               Reports.

 

2.4.1                     Regular Progress Reports.  Aridis shall submit to PVS bi-annual written progress and financial reports.  Such reports shall also summarize the financial expenditures incurred by Aridis in implementing the Project Plan.  Upon completion of Phase I of the Project Plan, Aridis shall promptly submit a written report to PVS summarizing Aridis’ progress and results in implementing the Plan.  In addition, Aridis shall submit to PVS a final written progress and financial report, with substantiating documentation, within three (3) months following the completion of the Plan or termination of this Agreement if termination occurs prior to completion of the Plan.  The form of financial report is as set forth in Appendix E.

 

2.4.2                     Disclosure of Inventions and Improvements; Disclosure of Data and Information.  In addition to the foregoing reporting requirements, Aridis shall promptly disclose to PVS in writing (i) Project Intellectual Property; (ii) Background Intellectual Property; and (iii) all data, information and other documentation developed, acquired, controlled or otherwise obtained by Aridis, rights to which are specifically excluded from the definition of Background Information under Subsection l .3(ii) to the extent such data, information and other documentation is used or included by Aridis in the Project Plan.

 

2.5                               Books and Records.  Aridis shall keep complete and accurate books and records, including financial records, pertaining to its implementation of the Project Plan for a minimum of five (5) years after the completion or termination of this Agreement.  Such books and records shall be made available to PVS or its designee upon request.  PVS shall have the right, with at least seven (7) days written notice, to conduct audits of the activities undertaken by Aridis in implementing the Project Plan.

 

3.                                      PAYMENTS BY PVS; INDIRECT SUPPORT

 

3.1                               PVS Funding.  In consideration of Aridis’ performance of its obligations under this Agreement and the Project Plan, PVS shall pay to Aridis, subject to the terms of this Agreement, an amount not to exceed the total Budget as set forth in Appendix A during the Term

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

of the Agreement, subject at all times to PVS’ right, described in Section 12.2 below, to terminate this Agreement and the funding of the Project Plan.  The agreed upon Budget including payment schedule and deliverables is as set forth in Appendix A.  PVS shall only be obligated to pay those sums as set forth in the Budget that are the responsibility of PVS in accordance with schedule of payment and deliverables as set forth therein, it being understood that prior to commencement of Phase II, the statement of work for Phase II shall be agreed to by the Parties in conformance with the Budget for Phase II as set for in Appendix A.

 

3.2                               Indirect Support by PVS.  In addition to the funding provided by PVS directly to Aridis as set forth in Section 3.1 hereunder, PVS shall provide certain materials, either itself or through its designee, as set forth in the Project Plan.  Such materials are included within the definition of Enabling Technology as specifically set forth in Section 4.2.

 

3.3                               Use of PVS Funds.  Aridis shall use all funds received from PVS hereunder, including any interest earned on funds advanced, in accordance with the Budget and the Plan.  Without the prior express written permission of PVS, the total payments to Aridis under this Agreement shall not exceed the Budget agreed in advance by PVS.  PVS shall only pay Aridis for actual expenses (including overhead where specifically noted in the approved Budget) incurred up to the approved budgeted amounts as set forth in the Plan.  To the extent funds provided by PVS remain unspent due to modification of the Budget or termination of the Agreement, such unexpended funds shall be returned to PVS as set forth in Section 12.6.

 

3.4                               No Other Payments.  Other than the payments as set forth in Section 3.1 herein, all costs and expenses incurred in connection with the performance of the Project Plan and other obligations of Aridis hereunder shall be borne exclusively by Aridis without further reimbursement or compensation directly or indirectly by PVS, unless PVS in its discretion elects in writing to undertake additional funding commitments due to a modification or amendment to the Plan.

 

4.                                      OWNERSHIP OF INTELLECTUAL PROPERTY, DATA AND INFORMATION

 

4.1                               Ownership of Inventions and Prosecution of Patents.

 

4.1.1                     Subject to the provisions of this Agreement, as between PVS and Aridis, title to any inventions conceived or reduced to practice solely by an Aridis employee in the course of implementing the Project Plan shall be owned by Aridis, shall be included within the definition of Project Intellectual Property hereunder, and shall be subject to the grant of rights specified herein.  Inventions developed jointly by employees, Affiliates or consultants of PVS and employees and Affiliates of Aridis shall be jointly owned in accordance with U.S. patent laws and regulations and shall be included within the definition of Project Intellectual Property.  Aridis may file patent applications on any such inventions at their sole cost and expense.  If Aridis chooses not to file for patent protection with respect to any jointly owned inventions developed hereunder, Aridis shall notify PVS in writing of such decision within sufficient time to allow action to be taken by PVS without the loss of potential patent rights, and shall provide PVS with the opportunity to file, at PVS’ sole cost and expense, patent applications on any such jointly owned invention conceived or reduced to practice in the course of the Project Plan.

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

4.1.2                     Aridis shall not abandon any patent application, patent or other right included within the scope of the Project Intellectual Property or the Background Intellectual Property, the effect of which would be to limit or prevent PVS from practicing the intellectual property rights licensed to PVS under this Agreement, without disclosure to PVS and arrangement by mutual agreement with PVS for the protection of PVS license rights.

 

4.1.3                     Except as expressly provided in this Agreement, PVS shall receive no rights under the Aridis Background Intellectual Property and Project Intellectual Property.

 

4.2                               Enabling Technology. It is understood and agreed to by Aridis that Project Intellectual Property and the underlying Background Intellectual Property as licensed to PVS by Aridis hereunder shall be used by PVS for the advancement of the Primary Formulation and/or the Optional Formulation developed by Aridis under the Project Plan and shall be made available in accordance with Article 5 to PVS designated manufacturers for the advancement of a Rotavirus Vaccine in Developing Countries.

 

4.2.1                     Information, reagents and materials, including but not limited to (a) qualified cell lines, (b) production processes and formulations, (c) assay design and reagents, and (d) packaging design, some or all of which may be made available to Aridis by PVS or its designees or, in the case of a formulation, developed by Aridis under the Project Plan is defined as “Enabling Technology.”

 

4.2.2                     Should Aridis elect to develop and manufacture a Rotavirus Vaccine, PVS shall, upon such written notification from Aridis and to the extent reasonable based on good faith negotiations by the Parties, provide Aridis with access to Enabling Technology with the right to use such Enabling Technology in the commercial development of a Rotavirus Vaccine.  Acceptance and use of Enabling Technology shall obligate Aridis to the global access provisions as set forth in Article 6.

 

4.3                               No Impairment of Rights.  Neither Party shall grant any rights or licenses, or enter into any contract, agreement or transaction that would impair or be inconsistent with the rights and licenses that may be granted to the other Party under this Agreement.

 

5.                                      GRANT OF LICENSE; FIELD OF USE

 

5.1                               Grant of Rights to PVS.  In consideration for the funding and indirect support provided by PVS to Aridis hereunder, Aridis hereby grants to PVS a non-exclusive license, with right to sublicense, at no additional fee, charge or royalty obligation, under the Aridis Project Intellectual Property and underlying Aridis Background Intellectual Property to the extent necessary for PVS, its Affiliates and sublicensees to make, use and sell the Primary Formulation and the Optional Formulation in the Field within the Territory and with the Scope as specified in Table I below.  Table I herein summarizes the rights granted by Aridis to PVS hereunder, where the license granted to PVS as implemented for use in Developing Countries shall include the right to have manufactured the selected formulations worldwide for use solely in Developing Countries.  License rights as granted by Aridis to PVS hereunder as applied to the Field of pneumococcal disease and enteric disease shall be limited to Developing Countries; however,

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

Aridis shall discuss with PVS in good faith possible partnering or licensing opportunities with designated PVS commercial collaborators to extend the license rights proposed by PVS to such commercial collaborator to include Developed Country rights to the extent such rights are available from Aridis at that time.

 

Table I

 

	
Field
    	
 
    	
Territory
    	
 
    	
Scope
    
	
Rotavirus Vaccine
    	
 
    	
Developing Countries
    	
 
    	
Non-exclusive
    
	
Pneumococcal disease and enteric disease:
   Shigellae (all forms)
   Entertoxogenic E. coli (multiple components of ETEC)
    	
 
    	
Developing Countries
    	
 
    	
Non-exclusive
    

 

5.2                               Grant of Rights to Aridis.  Pursuant to Section 4.1, ownership of Project Intellectual Property shall be held by Aridis, provided however, use of the Project Intellectual Property and the underlying Background Intellectual Property by Aridis shall be in conformance with the license rights granted to PVS as set forth in Section 5.1 and as further defined by the terms of this Agreement.  Should Aridis elect to make, use or sell a Rotavirus Vaccine in Developing Countries as formulated using the Enabling Technology, Aridis shall undertake the commercial terms for global access as set forth in Article 6.  Table II summarized the obligations of Aridis hereunder.

 

Table II

 

	
Field
    	
 
    	
Territory
    	
 
    	
Scope
    
	
Rotavirus Vaccine
    	
 
    	
Developed Countries
    	
 
    	
Exclusive (non-exclusive with respect to PVS   manufacturing rights asset forth in Section 5. I)
    
	
Rotavirus vaccine
    	
 
    	
Developing Countries
    	
 
    	
Non-exclusive (subject to commercial terms for   global access as set forth in Article 6)
    
	
Pneumococcal and enteric disease vaccines
    	
 
    	
Worldwide
    	
 
    	
Non-exclusive ( exclusive as to   Developed Countries rights but subject to good faith discussion obligations   as set forth in Section 5.1)
    
	
Other diseases and other fields of use
    	
 
    	
Worldwide
    	
 
    	
Exclusive
    

 

5.3                               Sublicense under PVS-ATCC License Agreement.  In order to facilitate the work to be conducted by Aridis under the Project Plan, PVS may by mutual agreement with Aridis provide certain ATCC materials to Aridis.  Such ATCC materials would be provided to Aridis as a sublicensee of PVS under the PVS-ATCC License Agreement dated as of February 7, 2007 (the “ATCC License’’), and the use of such ATCC materials would be limited to those activities as set forth in the Project Plan.

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

5.3.1                     In conformance with the terms of the ATCC License, Aridis will agree in writing prior to receipt of such ATCC materials to be bound by all applicable terms, conditions, obligations (including reporting, and inspections) and other restrictions of the rights granted by ATCC to PVS under the ATCC License that protect or benefit ATCC’s rights and interests.

 

5.3.2                     Prior to the receipt of ATCC materials by Aridis hereunder, Aridis shall execute a material transfer agreement with ATCC, substantially in the form attached hereto as Appendix F, before any ATCC material is transferred to Aridis.  The transfer of ATCC material from ATCC to Aridis shall be direct from ATCC’s storage facility.

 

6.                                      COMMERCIAL TERMS FOR GLOBAL ACCESS

 

6.1                               Obligations of Global Access.  In the event that Aridis elects to commercialize a Rotavirus Vaccine in the Developing Countries under terms as set forth in Section 5.2 of this Agreement development of which incorporates or utilizes the Enabling Technology, Aridis shall negotiate in good faith with PVS to insure that the terms under which Aridis is introducing a Rotavirus Vaccine into Developing Countries, either itself or through a commercial partner, provides for availability of a Rotavirus Vaccine to Public Sector purchasers in or for Developing Countries at a preferential price and supply to that provided to Private Sector purchasers in the Developing Countries.  The following provisions in this Article 6 shall be used as the basis for the good faith negotiation of an agreement for the commercialization and supply of a Rotavirus Vaccine in Developing Countries by Aridis.  Such negotiations shall be undertaken between Aridis and PVS upon written notice by Aridis to PVS of Aridis’ intent to enter the Developing Countries market with a Rotavirus Vaccine.  In such negotiations PVS shall in its reasonable discretion take into account the degree to which Enabling Technology has enabled the Aridis Rotavirus Vaccine.

 

6.2                               Supply for Commercial Sale.  Upon an election to make and sell a Rotavirus Vaccine to Public Sector purchasers in Developing Countries, Aridis shall manufacture, supply and sell, or cause to be manufactured, supplied and sold, the Rotavirus Vaccine for use in designated Developing Countries for a period of time to be agreed upon by the Parties following licensure of a Rotavirus Vaccine in a Developing Country.  Aridis shall fill, or cause to be filled, Developing Country requirements for Rotavirus Vaccines by using commercially reasonable efforts to supply Rotavirus Vaccines to Public Sector purchasers in such quantities and timeframes sufficient to fulfill the purchase orders for use in Developing Countries.

 

6.3                               Public Sector Pricing.  Aridis shall provide Rotavirus Vaccine to Public Sector purchasers at a price to be determined by the Parties, it being understood that in accordance with achievement of the mission of PVS to make available to Developing Countries a Rotavirus Vaccine that is safe, efficacious, accessible and affordable, the Public Sector price for such Rotavirus Vaccine shall be at a substantial discount to the Private Sector price for the same Rotavirus Vaccine.

 

6.4                               Selection of Developing Countries by Aridis.  Should Aridis intend to deliver Rotavirus Vaccine into Developing Countries classified as “upper middle income” countries by the World Bank, Aridis may petition PVS for full or partial exclusivity in those territories with

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

respect to the rights otherwise granted to PVS under Section 5.1, subject to determination in PVS’s sole discretion that such exclusivity would not be inconsistent with any PVS obligations and in accordance with its objectives (including its mission to accelerate the development of a rotavirus vaccine and ensure its availability, affordability and accessibility for the developing world).

 

7.                                      CONFIDENTIALITY

 

7.1                               Exchange of Confidential Information.  During the course of this Agreement, Aridis and PVS (the “Disclosing Party,” as the case may be) may provide the other Party (the “Receiving Party”) with certain information, data or material in writing that the Disclosing Party has prominently marked or otherwise prominently identified as confidential or proprietary in nature (“Confidential Information’’).  Without limiting the Parties’ rights under this Agreement, the Receiving Party will use its commercially reasonable efforts to hold such Confidential Information in confidence and to prevent disclosure to third parties in the manner the Receiving Party treats its own similar confidential information (except that disclosure may be made to third parties working with the Receiving Party in connection with development of the Rotavirus Vaccine who are under similar confidentiality obligations).

 

7.2                               Disclosure to Third Parties.  In support of the PVS rotavirus vaccine program, either Party may disclose, under appropriate confidentiality provision no less restrictive than the confidentiality and non-use provisions under this Agreement, Confidential Information of the other Party to members of PVS supported working groups and technical advisory groups or to consultants or development partners of PVS or Aridis, respectively, as reasonably necessary for consultation directed toward the advancement of the PVS rotavirus vaccine program.  Notwithstanding the foregoing, the Receiving Party shall have no such non-disclosure obligations with respect to any information identified as Confidential Information and disclosed by the other party that (i) is or becomes publicly available through no breach of this Agreement; (ii) is rightfully in the Receiving Party’s possession prior to the Disclosing Party’s disclosure; (iii) is disclosed to the Receiving Party by an independent third party under no obligation of confidentiality; (iv) is independently developed by the Receiving Party as can be demonstrated by documentary evidence; or (v) is required to be disclosed by the Receiving Party under any applicable law, rule or regulation of any government in any country, but only to the extent of such required disclosure.  Without limiting the foregoing, PVS shall have the right to include Confidential Information as part of PVS’ reports to its donors to the extent such Confidential Information is reasonably necessary to be included within PVS reports of its rotavirus vaccine program activities (in summary or general descriptive form to the extent reasonably feasible, and otherwise so as to minimize disclosure of information not required to be disclosed).

 

8.                                      REPRESENTATIONS AND WARRANTIES

 

8.1                               PVS Representations and Warranties.  PVS represents and warrants that:

 

8.1.1                     PVS has the right, power and authority to enter into this Agreement and to perform PVS’ obligations hereunder.

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

8.1.2                     This Agreement has been duly executed and delivered by PVS and is a legal, valid and binding obligation enforceable against PVS in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, arrangement, moratorium and other laws relating to or affecting creditors’ rights generally and equitable principles.

 

8.1.3                     The execution, delivery and performance of this Agreement, and the rights granted hereunder, do not conflict with, violate or breach any agreement to which PVS is a party, and there are no agreements, assignments or encumbrances in existence inconsistent with the provisions of this Agreement.

 

8.2                               Aridis Representations and Warranties.  Aridis represent and warrant that:

 

8.2.1                     Aridis has the right, power and authority to enter into this Agreement and to perform its obligations hereunder and grant the rights granted herein.

 

8.2.2                     This Agreement has been duly executed and delivered by Aridis and is a legal, valid and binding obligation enforceable against Aridis in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, arrangement, moratorium and other laws relating to or affecting creditors’ rights generally and equitable principles.

 

8.2.3                     The execution, delivery and performance of this Agreement, and the rights granted hereunder, do not conflict with, violate or breach any agreement to which Aridis is a party, and there are no agreements, assignments or encumbrances in existence inconsistent with the provisions of this Agreement.  Aridis will not grant any license or other right in the Background Intellectual Property and/or the Project Intellectual Property that interferes with, conflicts with or is inconsistent with any of or Aridis’ obligations or PVS’ license, rights or entitlements under this Agreement.

 

8.2.4                     As of the Effective Date, Aridis has no actual knowledge of, and without having performed any investigation as to such likelihood, is not aware of any potential claim by a third party of infringement by Aridis as to its Background Intellectual Property and Aridis will in good faith endeavor not to develop Project Intellectual Property that to its knowledge could infringe the intellectual property rights of a third party.

 

8.2.5                     Should Aridis identify third party technology of possible interest for incorporation into the Project Plan, Aridis will first consult with PVS and the parties shall mutually agree upon a course of action.

 

8.2.6                     Aridis will apply the funding it receives from PVS under this Agreement directly and solely toward implementing and achieving the objectives of the Project.

 

8.2.7                     In the event PVS terminates this Agreement pursuant to Section 12.3 or 12.4, the license granted to PVS under this Agreement shall remain valid and enforceable and shall not be impaired, modified or terminated in any way as a result of such termination.

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

8.3                               Disclaimer of Certain Warranties.  Except as specifically set forth in Section 8.1 and 8.2, ARIDIS AND PVS EACH MAKE NO WARRANTIES TO THE OTHER, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTIES WITH RESPECT TO THE COMPLETION, SUCCESS OR PARTICULAR RESULTS OF THE PROJECT, STABILITY OR VIABILITY OF THE FINAL FORMULATION, OR THE CONDITION, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OF THE PROJECT RESULTS.

 

9.                                      LIMITATIONS ON LIABILITY

 

9.1                               Aridis Obligations.  Aridis shall be liable for its actions in accordance with the terms of this Agreement for (i) the performance of the Project Plan by Aridis; (ii) the acts of Aridis in connection with this Agreement; and (iii) the breach (by act or omission) of any of Aridis’ obligations, representations or warranties under this Agreement; except only to the extent such actions were caused by the gross negligence or willful misconduct of PVS.  Aridis shall not be liable under a claim of product liability for any product developed, used or sold incorporating the formulation data or information or other deliverable hereunder or Background Intellectual Property rights or Project Intellectual Property rights delivered to PVS under this Agreement.

 

9.2                               Limitation of Liability.  IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, EXEMPLARY, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING LOSS OF PROFIT) OF ANY KIND WHATSOEVER ARISING FROM THIS AGREEMENT OR AN ACT OR OMISSION BY EITHER PARTY, WHETHER BASED ON BREACH OF CONTRACT, BREACH OF WARRANTY, TORT OR ANY OTHER LEGAL THEORY.

 

10.                               INSURANCE

 

10.1                        Form of Insurance Coverage.  Aridis shall, at all times during the term of this Agreement, obtain and maintain at its own cost and expense, comprehensive commercial general liability insurance, and other insurance as may be commercially appropriate from time to time, with respect to its activities hereunder and insuring against risks therefrom.

 

10.2                        In the event Aridis elects to receive ATCC materials from PVS under a sublicense to the ATCC License as set forth in Section 5.3 of this Agreement, the insurance maintained by Aridis hereunder shall be in such amounts as Aridis and PVS may agree, based upon standards prevailing in the international vaccine industry at the time, but at least in the following amounts: Three Million US Dollars (US $3,000,000) per occurrence and Ten Million US Dollars (US $10,000,000) in the aggregate for damage, injury and/or death to persons, unless such coverage is not obtainable, in which case the parties will discuss appropriate adjustments.

 

10.3                        Verification of Insurance Coverage.  Upon execution of this Agreement and on an annual basis thereafter during the term of this Agreement, Aridis shall provide PVS with certificates of insurance for all relevant current insurance.

 

12

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

11.                               PUBLICATIONS: RELEASE OF INFORMATION

 

11.1                        Publications.  Subject to the confidentiality provisions of Section 7 of this Agreement, the Parties shall have the right to publish or present the technical data, clinical data or results of any test or clinical trial relating to the Project, in any peer review journal, similar publication or oral presentation to the general public; provided that before making such publication or presentation, each Party shall provide a draft manuscript or abstract to each other Party for its review and comment at least thirty (30) days prior to the proposed date of publication or presentation.  A Party may request the removal of any of its Confidential Information contained in the proposed publication or presentation, may request the deletion of its name which the Party, in its sole discretion, considers inappropriate, and, in the event a Party determines a need to delay the publication or presentation to protect or preserve exclusive Patent Rights, request such delay.  The non-publishing Party(ies) may comment on the publication and the publishing Party shall consider these comments seriously and give good faith consideration to revising the publication where appropriate.  The publishing Party shall delay the publication or presentation for up to ninety (90) days from the date of a non-publishing Party’s request as necessary to permit filings to preserve or protect Patent Rights.  Scientists at Aridis and PVS will be expected to treat matters of authorship in a proper, collaborative spirit, giving credit where it is due and proceeding in a manner that fosters cooperation and communication, but will not do anything in this regard that will jeopardize the issuance of a valid patent.  The provisions of this Section shall survive the termination of this Agreement.

 

11.2                        Use of Names.  Neither Party shall use the name of the other in any public documents, publicity or advertising without the prior written consent of the Party.  This obligation does not prohibit PVS from disclosing Aridis as a collaborator in the PVS rotavirus program to other PVS collaborators or potential collaborators, nor does it prohibit Aridis from acknowledging the PVS funding received by Aridis under this Agreement to potential partners or investors of Aridis.  Unless PVS informs Aridis otherwise, any publication or presentation shall state the following in an appropriate location: “Funded in whole or in part by the PATH Vaccine Solution Rotavirus Vaccine Program.”

 

11.3                        Public Statements.  Any press release, public statement or public announcement with respect to the Project shall be subject to the mutual written approval of the Parties.  PVS shall not refer to Aridis or any of its representative, officer or director in any Rotavirus Vaccine presentation, Rotavirus Vaccine packaging or promotional materials without the prior written approval of Aridis.

 

12.                               TERMINATION

 

12.1                        Term.  The initial Term of this Agreement shall be for a period of eighteen (18) months from the Effective Date, it being understood that the Term of this Agreement is in accordance with the time frame for development through the completion of Phase I of the Project.  The Parties will meet prior to the completion of Phase I to determine the scope of work to be continued under Phase II of the Project and shall amend the Budget (Appendix A), Project Plan (Appendix B), and Term of the Agreement accordingly.  The Parties may amend the Term of this Agreement by a written instrument signed by both Parties.

 

13

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

12.2                        Termination upon Completion of Phase I.  Subject to the provisions of Section 12.6 below, PVS may terminate this Agreement and its funding of the Project at its election upon sixty (60) days written notice to Aridis.  Either Party at its election may terminate this Agreement at the completion of Phase I and have no further obligations under this Agreement save for those terms that survive termination including the income rights and obligations as set forth in Sections 5.1 and 5.2.  Upon termination of this Agreement as provided hereunder, PVS shall have no further payment obligation to Aridis; provided that PVS shall pay or reimburse Aridis for all activities authorized by PVS and achieved as of the effective date of termination.

 

12.3                        Termination for Breach.  Subject to the provisions of Section 12.6 below, in the event that either Party shall breach any of the material terms, conditions or agreements contained in this Agreement and fail to remedy such breach within thirty (30) days of written notice thereof (the “Notice of Breach”) from the non-breaching Party, the non-breaching Party may terminate this Agreement, by giving the breaching Party a second notice (the “Notice of Termination”), which notice shall terminate this Agreement effective ten (10) days following the breaching Party’s receipt of such notice.

 

12.4                        Termination in Event of Bankruptcy.  Subject to the provisions of Section 12.6 below, a Party (the “Electing Party”) shall have the right to terminate this Agreement effective immediately upon written notice to the other Party (the “Non-Electing Party”) if: (a) the Non-Electing Party makes an assignment for the benefit of creditors; (b) a receiver is appointed for the Non-Electing Party and is not removed within sixty (60) days, or such assignment is not withdrawn within sixty (60) days; or (c) the Non-Electing Party files a voluntary petition in bankruptcy or is otherwise a party to proceedings in bankruptcy, reorganization or the appointment of a receiver, trustee, or custodian for or over its property and such proceedings, if involuntary are not vacated, set aside or stayed within sixty (60) days after commencement.  The termination shall become effective on the date of receipt of the notice by the Electing Party to the Non-Electing Party.

 

12.5                        Mutual Termination.  In addition to the foregoing, this Agreement may be terminated upon the mutual written agreement of the Parties only if the Parties set forth their agreement to terminate in a written document signed by a senior executive of each Party.

 

12.6                        Effect of Termination.

 

12.6.1              If this Agreement is terminated by PVS or Aridis, with respect to any activity not yet completed, Aridis shall promptly refund to PVS all unspent funds paid by PVS to Aridis, less (i) any non-cancelable amounts paid or non-cancelable obligations incurred prior to termination; and (ii) those funds as agreed to by PVS in support of the wind down of Aridis activities upon such notice of termination.

 

12.6.2              The parties acknowledge and agree that the mission of PVS to accelerate development of a Rotavirus Vaccine and to ensure its widespread and timely availability and accessibility for use in Developing Countries will be substantially impaired if this Agreement is terminated.  Therefore, in the event of termination of this Agreement by either Party for any of the reasons as set forth in Section 12.2, 12.3 , 12.4 or 12.5, upon such termination, the following

 

14

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

provisions and terms shall automatically become and/or continue to be effective: (a) except for termination due to breach or voluntary termination by PVS prior to completion of Phase I and through no breach of Arid is, the grant of license by Aridis to PVS pursuant to Section 5.1 shall survive; (b) Aridis promptly shall provide to PVS all know-how, and materials not already provided to PVS necessary for the further development of the selected formulations and rights as granted under Section 4.2 and Section 5.1; and (c) Aridis shall execute and deliver such documents and instruments as PVS may reasonably request to further evidence or give effect to this Section 12.6.2.

 

12.6.3              In the event of termination of this Agreement by either Party, then upon such termination, the following provisions and terms shall automatically become and continue to be effective:  (a) Aridis shall have the right to continue the Project under its own funding and resources and shall have the right to use for commercial purposes all Project Intellectual Property; and (b) PVS shall have the rights as set forth in Sub-Section 12.6.2.

 

12.6.4              Upon termination of this Agreement, neither Party shall use the name of the other Party without the express written permission of the other Party.

 

12.7                        Termination of Funding Obligations.  After fulfilling its financial commitments specified in Section 3.1, PVS shall have no further funding obligations under this Agreement.

 

12.8                        Survival.  The provisions of Articles 4, 5 (survival of the licenses granted by Aridis is governed by Section 12.6.2 above), 6, 7, 8, 9 and 13 and Sections 11.2, 12.6 and 12.8 shall survive the expiration or termination of this Agreement to the extent such terms by their nature continue following termination.

 

13.                               MISCELLANEOUS

 

13.1                        No Agency or Joint Venture.  Nothing in this Agreement shall be deemed to create an agency or partnership relationship or joint venture between the Parties.  Each Party shall be solely responsible for all taxes, benefits, withholding, worker’s compensation, unemployment insurance and similar requirements pertaining to its own employees.  Neither Party’s employees shall be deemed agents or employees of the other Party and neither Party shall have the power or authority to obligate or bind the other Party.

 

13.2                        Notices.  Any notices required to be given or which shall be given under this Agreement shall be in writing delivered by recognized commercial overnight courier service, personal delivery, confirmed facsimile or by certified or registered mail addressed to the parties as shown below, and shall be deemed to have been given or made as of the date received:

 

15

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

For PVS:

 

PATH Vaccine Solutions
 (PVS) 1455 NW Leary Way
 Seattle, WA 98107
 Attention: Director of Legal Affairs 
 Fax: 206-285-6619
 Tel: 206-285-3500

 

with a copy to:

 

PVS Rotavirus Vaccine 
 Program 1455 NW Leary Way
 Seattle, WA 98107
 Attention: Senior Program Administer 
 Fax: 206-285-6619
 Tel: 206-285-3500

 

For Aridis:

 

Aridis Pharmaceuticals, LLC 
 5941 Optical Court
 San Jose, CA 95138 
 Fax: 408-960-3822
 Tel: 408-385-1742

 

13.3                        Assignment.  This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns, collaborators and sublicensees.  Neither Party may assign or otherwise transfer this Agreement without the prior written consent of the other Party.

 

13.4                        Governing Law.  The validity, interpretation, construction and effect of this Agreement and the legal relationship of the parties to it shall be governed by and in accordance with the laws of the State of California, without regard to it or any other jurisdictions choice of law provisions.

 

13.5                        Voluntary Resolution of Disputes.  In the event of any dispute, controversy or claim between the Parties based on, arising out of or related to this Agreement (a “Dispute”), the Parties shall attempt in good faith to resolve such dispute promptly, voluntarily and amicably.  The Vaccine Development Committee shall first attempt to resolve the dispute.  If reasonably necessary to promote the prompt resolution of the dispute, either Party may, by written notice to the other, escalate the voluntary dispute resolution process to include the President or Chief Executive Officer of each Party or a senior officer designated by such President or Chief Executive Officer.  The designated officers of each Party shall use reasonable efforts to resolve the dispute within forty-five (45) days after the dispute is referred to them.

 

16

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

13.6                        Force Majeure.  Aridis shall not be responsible to PVS for delay in performing any of the tasks in the Project where such delay is due to force majeure causes beyond the control of Aridis, including fire, flood, explosion, lightning, windstorm, earthquake, civil commotion, riot, war, strikes, or any other cause beyond the control of Aridis.  Should the force majeure event continue for a period of more than six (6) months, PVS shall have the right, at its sole discretion, to terminate this Agreement in accordance with Section 12.2.

 

13.7                        Other Documents.  From time to time as appropriate, the Parties shall prepare, execute and deliver such other documents as may be reasonably necessary or appropriate to give effect to or implement the intentions, agreements and undertakings of the Parties set forth in this Agreement.

 

13.8                        Severability.  In the event any portion of this Agreement shall be held illegal, void or ineffective, the remaining portions hereof shall remain in full force and effect.  If any of the terms or provisions of this Agreement are in conflict with any applicable statute or rule of law, then such terms or provisions shall be deemed inoperative to the extent that they may conflict therewith and shall be deemed to be modified to conform with such statute or rule of law.  In the event that the terms and conditions of this Agreement are materially altered as a result of this Section 13.8, the parties will renegotiate the terms and conditions of this Agreement to resolve any inequities.

 

13.9                        Entire Agreement.  This Agreement embodies the entire understanding and agreement between Aridis and PVS with respect to the subject matter contained herein, and any prior or contemporaneous representations, either oral or written, are hereby superseded.  No amendments or modifications to this Agreement (including, without limitation, changes to the Project Plan), or waivers of any rights under this Agreement, shall be effective unless and until made in writing and signed and delivered by authorized representatives of the Parties.

 

13.10                 Execution in Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears hereon, and all of which shall together constitute one and the same instrument.  This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of both of the parties.

 

17

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

IN WITNESS WHEREOF, Aridis and PVS have executed and delivered this Agreement in duplicate originals by and through their duly authorized representatives below.

 

	
ARDIS PHARMACEUTICAL,   LLC
    	
 
    	
PATH VACCINE SOLUTIONS
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Eric Patzer
    	
 
    	
By:
    	
/s/ Christopher   J. Elias
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Eric Patzer
    	
 
    	
Name:
    	
Christopher J.   Elias
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
President
    	
 
    	
Title:
    	
Chair
    

 

 

APPENDICES

 

	
Appendix A
    	
 
    	
Budget (including Deliverables and Payment Schedule)
    
	
 
    	
 
    	
 
    
	
Appendix B
    	
 
    	
Project Plan
    
	
 
    	
 
    	
 
    
	
Appendix C
    	
 
    	
List of Developing Countries
    
	
 
    	
 
    	
 
    
	
Appendix D
    	
 
    	
Aridis Patent Rights
    
	
 
    	
 
    	
 
    
	
Appendix E
    	
 
    	
Financial Report Form
    
	
 
    	
 
    	
 
    
	
Appendix F
    	
 
    	
Form of MTA for ATCC Materials
    

 

18

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

APPENDIX A
 Budget
 Advancing Rotavirus Vaccine Development (ARVAC) Project

 

	
BUDGET CATEGORY
    	
 
    	
INITIAL PERIOD
   (18 months)
    	
 
    	
SECOND PERIOD
   (18 months)
    	
 
    
	
PERSONNEL 
    (Salary and fringe benefits) b
    	
 
    	
$
    	
537,195
    	
a
    	
$
    	
557,904a
    	
 
    
	
CONSULTANT COSTS c
    	
 
    	
$
    	
50,000
    	
 
    	
—
    	
 
    
	
EQUIPMENT d
    	
 
    	
$
    	
80,000
    	
 
    	
$
    	
40,000
    	
 
    
	
SUPPLIES e
    	
 
    	
$
    	
60,000
    	
 
    	
$
    	
51,000
    	
 
    
	
TRAVEL f
    	
 
    	
$
    	
42,000
    	
 
    	
$
    	
42,000
    	
 
    
	
OTHER EXPENSES g
    	
 
    	
$
    	
100,600
    	
 
    	
$
    	
100,600
    	
 
    
	
SUBTOTAL DIRECT COSTS
    	
 
    	
$
    	
869,795
    	
 
    	
$
    	
791,504
    	
 
    
	
ADMINISTRATIVE EXPENSES h
    	
 
    	
$
    	
130,159
    	
 
    	
$
    	
108,621
    	
 
    
	
TOTAL COSTS
    	
 
    	
$
    	
999,954
    	
 
    	
$
    	
900,125
    	
 
    

 

a Personnel costs for each 18 month period are itemized on page 2.

b Fringe benefits - 18%.

c Consultant costs - consultant has extensive experience in analytical characterization of viral vaccines.  Consultant will provide analytical and scientific input regarding formulations and will devote the equivalent of 25 days to this project at a per diem rate of $2,000.

d A freeze drier will be needed to accommodate the additional capacity requirements of this project and to provide adequate separation between this project and other infectious agents in the lab that utilize a freeze dried formulation.  Cost estimates for a freeze drier are $80,000 to be purchased in the initial period.  During the second period, milling equipment will be needed to convert bulk dried material to a powder at a cost of $20,000.  In addition 4°C and 25°C stability chambers will be needed for scale-up of the liquid and powder processes at a cost of $20,000.

e Lab supplies are $15,000 per full time equivalent (FTE), which is the standard rate in NIH grants.  In the initial period 4 FTE x 15,000 = $60,000.  In the second period 3.4 FTE x $15,000 = $51,000.

f Travel expenses include two international meetings per funding period for two key personnel for a total of four meetings.  Cost estimate is $8,500 per meeting x 4 = $34,000.  Two domestic meetings are included for two personnel to attend scientific meetings and/or visit consultant lab.  Cost estimate is $2,000 per trip x 4 = $8,000 total.  Total travel costs= $34,000 + $8,000 = $42,000.

g Other expenses include grant management costs ($52,000) for record keeping (scientific and financial) and project management.  This project will also incur an expansion into an adjacent laboratory at an additional cost of $2,700 per month for a total of $48,600 ($2,700 x 18 month).

 

1

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

h Includes indirect/overhead expenses at -15% of direct costs.

 

2

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

BUDGET FOR INITIAL (1st) 18 MONTH PERIOD DIRECT COSTS ONLY

 

	
ROLE ON 
   PROJECT
    	
 
    	
EFFORT ON 
   PROJECT(%)
    	
 
    	
ANNUAL 
   SALARY
    	
 
    	
SALARY REQUESTED
   FOR
   18 MONTHS
    	
 
    	
FRINGE 
   BENEFITS (18%)
    	
 
    	
TOTAL
    	
 
    
	
Principal Investigator
    	
 
    	
50
    	
 
    	
158,000
    	
 
    	
118,500
    	
 
    	
21,330
    	
 
    	
139,830
    	
 
    
	
Sr. Manager
    	
 
    	
100
    	
 
    	
104,000
    	
 
    	
156,000
    	
 
    	
28,080
    	
 
    	
184,080
    	
 
    
	
Res. Associate
    	
 
    	
100
    	
 
    	
53,000
    	
 
    	
79,500
    	
 
    	
14,310
    	
 
    	
93,810
    	
 
    
	
Res. Assistant
    	
 
    	
100
    	
 
    	
45,000
    	
 
    	
67,500
    	
 
    	
12,150
    	
 
    	
79,650
    	
 
    
	
Res. Assistant
    	
 
    	
50
    	
 
    	
45,000
    	
 
    	
33,750
    	
 
    	
6,075
    	
 
    	
39,825
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SUBTOTALS
    	
 
    	
455,250
    	
 
    	
81,945
    	
 
    	
537,195
    	
 
    

 

BUDGET FOR 2nd 18 MONTH PERIOD DIRECT COSTS ONLY

 

	
ROLE ON 
   PROJECT
    	
 
    	
EFFORT ON 
   PROJECT(%)
    	
 
    	
ANNUAL 
   SALARY
    	
 
    	
SALARY REQUESTED
   FOR
   18 MONTHS
    	
 
    	
FRINGE 
   BENEFITS (18%)
    	
 
    	
TOTAL
    	
 
    
	
Principal Investigator
    	
 
    	
40
    	
 
    	
158,000
    	
 
    	
94,800
    	
 
    	
17,064
    	
 
    	
111,864
    	
 
    
	
Sr. Manager
    	
 
    	
100
    	
 
    	
104,000
    	
 
    	
156,000
    	
 
    	
28,080
    	
 
    	
184,080
    	
 
    
	
Res. Associate
    	
 
    	
100
    	
 
    	
53,000
    	
 
    	
79,500
    	
 
    	
14,310
    	
 
    	
93,810
    	
 
    
	
Tech Transfer Manager
    	
 
    	
100
    	
 
    	
95,000
    	
 
    	
142,500
    	
 
    	
25,650
    	
 
    	
168,150
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SUBTOTALS
    	
 
    	
472,800
    	
 
    	
85,104
    	
 
    	
557,904
    	
 
    

 

3

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

Payment Schedule

 

·                                          [***] upon execution of the contract

 

·                                          [***] after six months of implementation upon receipt and approval of the narrative and financial reports

 

·                                          [***] after twelve months of implementation upon receipt and approval of the narrative and financial reports

 

·                                          [***] Up to $50,000 upon receipt and approval of all end of project deliverables (these being the study reports specified in the Project Plan)

 

4

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

APPENDIX B
  Project Plan
 UK Bovine Vaccine Project Plan for Phase I Formulation Development

 

PROJECT OBJECTIVES AND SCOPE

 

The goal of this project is to develop a rotavirus formulation using GRAS (Generally Regarded as Safe) ingredients that is superior to the current dosage formulation currently being used which is a single dose lyophilized formulation stored at 2-8°C reconstituted with liquid antacid (citrate and bicarbonate). The criteria for success are defined as follows:

 

·                                          Stability: A vaccine formulation that is stable when stored at 2-8°C for at least one year with 0.5 log FFU/dose per serotype is desirable and should be the goal of project. However if the new formulation has superior attributes to the current lyophilized formulation that enhanced commercial acceptability (e.g. stable at higher temperatures, supports a less expense delivery device, etc.) then virus loss> 0.5 log FFU/dose per serotype may be acceptable.

·                                          Buffer: A successful formulation will contain sufficient amount of antacids to buffer against stomach acids and transit through to the gut.

·                                          Cost effective: The manufacturing process for a successful formulation must be implementable at commercial scale in a developing world manufacturing setting.

·                                          Intellectual property: A successful formulation will not infringe any other patents (prior art for rotavirus vaccines).

·                                          Vaccine serotypes studied: A successful formulation must work with UK x Human reassortants for Serotype G1, G2, G4 and G9.

 

Project execution

 

Phase I is anticipated to be approximately 18 months in duration. At the completion of Phase I, Aridis will present to PVS and the UK bovine rotavirus vaccine (BRV) manufacturing partners the liquid and powder blend formulations Aridis believes meets the goals of the project. If sufficient data are available that demonstrates one or more formulation options to be superior to the existing formulation, PVS will decide whether to authorize Aridis to continue formulation development (Phase II) in cooperation with the BRV manufacturing partners and a delivery device/packaging company. This phase will evaluate delivery devices for the new formulations.

 

A superior formulation will include one or more of the following:

 

·                                          Buffer and vaccine together in one formulation

·                                          Any formulation that is liquid stored at 2-8°C

·                                          A formulation that lends itself to a more convenient delivery device

·                                          A formulation that leads to a cheaper delivery device

 

1

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

·                                          A formulation process that is determined to be less expense than lyophilization in terms of capital expense or unit cost

·                                          Increased stability resulting in less virus needed at the time of formulation

·                                          Increased stability at temperatures above 25°C

 

Project milestones and work plan

 

(All time periods originate from the date Aridis receives materials from PVS to initiate formulation activities)

 

Liquid Formulation

 

	
Month 0- 4
    	
 
    	
Develop a multidimensional phase diagram using high   throughput appropriate analytical tests (possible methods include high   resolution 2nd derivative UV spectroscopy, intrinsic and   extrinsic fluorescence spectroscopy, circular dichroism, and dynamic light   scattering) to map the pH, ionic strength, and temperature regimes where the   vaccine is most physically stable. These analytical tests will define   solution conditions that avoid viral aggregation, protein structural changes,   membrane changes, disassembly, etc. that are potential pathways leading   to poor storage stability. Data provided to PVS at the completion of this   milestone. If the data from these studies demonstrate that virus serotypes   other than G1, G2, G4 and G9 be evaluated in subsequent studies or additional   data is obtained from other sources, Aridis and PVS will work together to   make the necessary adjustments in the virus serotypes evaluated.
    
	
 
    	
 
    	
 
    
	
Month 4 and 5
    	
 
    	
Select excipients, formulations, and additives to   develop a refrigerator stable liquid formulation. Stabilizer classes that   have been successfully used previously include non- reducing polysaccharides   (sucrose, trehalose, etc.), synthetic polymers and biopolymers   (hydrolyzed gelatin, polyvinyl pyrrolidone, etc.), small charged amino   acids (arginine, lysine, etc.) and surfactants (pluronics, Tweens).   Candidate antacids (citrate, sodium bicarbonate, etc.) will also be   screened together with stabilizers. The stabilizers selected and formulations   to be studies provided to PVS.
    
	
 
    	
 
    	
 
    
	
Month 6 to 11
    	
 
    	
A minimum of 15 formulations combinations will be   tested using monovalent vaccine preparations of G9 and G1 serotype viruses   for stability under 2-8°C, and 25°C (accelerated) storage conditions.
    
	
 
    	
 
    	
 
    
	
Month 12 to 17
    	
 
    	
Up to 5 lead formulation candidates will be tested   as a tetravalent vaccine consisting of G1, G2, G4 and G9 for stability under   real-time at 2-8°C storage condition.
    
	
 
    	
 
    	
 
    
	
Month 18
    	
 
    	
Present final results to PVS on lead candidate.
    

 

2

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

Powder Formulation

 

	
Month 0-1
    	
 
    	
Review data from PVS on the Wyeth powder blend   formulation process.
    
	
 
    	
 
    	
 
    
	
Month 2 to 4
    	
 
    	
Prepare spray dried and bulk lyophilized   preparations of two rotavirus serotypes, G1 and G9 serotypes. Prepare antacid   buffer salts.
    
	
 
    	
 
    	
 
    
	
Month 5 to 6
    	
 
    	
Prepare powder blends of bivalent virus with and   without antacid buffer salts for stability evaluation under l 5°C, and 25°C   (accelerated) storage conditions.
    
	
 
    	
 
    	
 
    
	
Month 7 to 10
    	
 
    	
Evaluate the stability of all 4 powder formulations:   Gl/G9 bulk lyophilized; Gl/G9 spray dried; Gl/G9 with buffer salts; Gl/G9   without buffer salts.
    
	
 
    	
 
    	
 
    
	
Month 11 to 13
    	
 
    	
Prepare a tetravalent powder blend (G1, G2, G4 and   G9) using one manufacturing process (spray dried or bulk lyophilized) and   evaluate stability at 2-8°C.
    
	
 
    	
 
    	
 
    
	
Month 18
    	
 
    	
Present the manufacturing process and stability data   to PVS.
    

 

Materials to be provided by PVS (or through its designee):

 

1.                                      5 liters of post filtered monovalent bulk of serotypes G1, G2, G4 and G9 and 50 ml of G3 and GS stored at -70°C from Shantha, Biotech. If more vaccine bulks is needed, Shantha Biotech will supply to Aridis upon request.

 

2.                                      1ml of 1:100 dilution of monoclonal antibodies to G2, G3 and 20 vials of 1 ml each of G1, G4. Reagent supplies for GS and G9 will be determined later by PVS. If more reagent is needed, PVS or its affiliates will supply to Aridis upon request.

 

Deliverable at the end of Phase I

 

Aridis will provide PVS with an abbreviated technology transfer package of sufficient detail to allow a third party to implement the final liquid and powder formulation which has demonstrated to be an improvement over the existing formulation. Aridis will also provide in this abbreviated technology transfer package all stability data used to support the formulation selected for Phase II as well as data from formulations that were not selected. The written package will include the raw materials and solutions that were used in the final formulations studies, a brief description of the manufacturing process, any special equipment used in the formulation; unique facility requirements; process flow diagrams, process operating ranges such as mixing times, temperature conditions, etc. needed to prepare the formulation. All of the above information will

 

3

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

be provided on the formulation or formulations that Aridis and PVS agree warrant further development.

 

For clarification, the Phase 1 program comprises formulation development and stability testing but not process optimization or scale-up, and the abbreviated data package is not expected to be a manufacturing grade technology transfer package sufficient to allow third party manufacture without further development. Such manufacturing process, process flow and process operating ranges as are developed per this Project Plan - in addition to formulation and stability data - shall be shared.

 

Formulation, stability and other related data regarding formulations other than the Primary Formulation and Optional Formulation may be provided in summary form.

 

Scope of Work for Phase II Formulation Development

 

Prior to commencement of Phase II of the Project Plan, the Parties will develop a mutually agreeable Phase II Project Plan in accordance with the following objectives:

 

There are two objectives of the Phase II formulation development proposal: First, to continue the development at Aridis of a single formulation selected from the Phase I development program (either liquid or powder blend formulation) in sufficient detail to allow for a smooth transfer of the formulation technology to the developing country rotavirus vaccine manufacturer. Second, to work closely with PVS in selecting a contractor to develop a delivery device that is compatible with the formulation selected for Phase II and meets the needs of the developing world manufacturer.

 

Activities that will be included in the first objective include scale up of the formulation process in sufficient scale to permit the selection of appropriate equipment and identification of raw material suppliers to carry out the formulation process at commercial manufacturing scale. This objective will also include conducting real time stability studies at the recommended storage conditions and one higher temperature for a shorter duration on 3 pentavalent vaccine formulations containing the GI, G2, G3, G4 and G9 serotypes that were produced at a larger scale of production.

 

The second objective will involve providing samples of the formulation selected to the delivery device contractor. These samples will match as closely as possible to the final vaccine formulation selected for Phase II development except no live virus will be present. The chemical properties, ingredients and concentrations will be provided to the contractor to assist in the development of the delivery device. Aridis will work closely with the delivery device contractor to evaluate minor changes in the formulation that may be necessary to allow the formulation to adapt to the delivery device. Arid is will be expected to conduct stability studies in the delivery device selected, the extent to which will be dependent on the ability of Aridis or a contract manufacturing organization to fill the live virus vaccine formulation into the delivery device selected for development.

 

4

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

APPENDIX C
  World Bank List of Developing Countries

 

	
Low-income economies   (59)
    	
 
    	
 
    	
 
    	
 
    
	
Afghanistan

Bangladesh

Benin

Bhutan

Burkina Faso

Burundi

Cambodia

Cameroon

Central African Republic

Chad

Comoros

Congo, Dem. Rep.

Congo, Rep.

Cote d’Ivoire

Eritrea

Ethiopia

Gambia, The

Ghana

Guinea

Guinea-Bissau
    	
 
    	
Haiti

India

Kenya

Korea, Dem Rep.

Kyrgyz Republic

Lao PDR

Lesotho

Liberia

Madagascar

Malawi

Mali

Mauritania

Moldova

Mongolia

Mozambique

Myanmar

Nepal

Nicaragua

Niger

Nigeria
    	
 
    	
Pakistan

Papua New Guinea

Rwanda

Sao Tome and Principe

Senegal

Sierra Leone

Solomon Islands

Somalia

Sudan

Tajikistan

Tanzania

Timor-Leste

Togo

Uganda

Uzbekistan

Vietnam

Yemen, Rep.

Zambia

Zimbabwe
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Lower-middle-income   economies
    	
 
    	
 
    	
 
    	
 
    
	
Albania

Algeria

Angola

Armenia

Azerbaijan

Belarus

Bolivia

Bosnia and Herzegovina

Brazil

Bulgaria

Cape Verde

China

Colombia

Cuba

Djibouti

Dominican Republic

Ecuador

Egypt, Arab Rep.
    	
 
    	
El Salvador

Fiji

Georgia

Guatemala

Guyana

Honduras

Indonesia

Iran, Islamic Rep.

Iraq

Jamaica

Jordan

Kazakhstan

Kiribati

Macedonia, FYR

Maldives

Marshall Islands

Micronesia, Fed. Sts.

Morocco
    	
 
    	
Namibia

Paraguay

Peru

Philippines

Romania

Samoa

Serbia and Montenegro

Sri Lanka

Suriname

Swaziland

Syrian Arab Republic

Thailand

Tonga

Tunisia

Turkmenistan

Ukraine

Vanuatu

West Bank and Gaza
    

 

1

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

	
Upper-middle-income   economies (40)
    
	
American Samoa

Antigua and Barbuda

Argentina

Barbados

Belize

Botswana

Chile

Costa Rica

Croatia

Czech Republic

Dominica

Equatorial Guinea

Estonia

Gabon
    	
 
    	
Grenada

Hungary

Latvia

Lebanon

Libya

Lithuania

Malaysia

Mauritius

Mayotte

Mexico

Northern Mariana Islands

Oman

Palau

Panama
    	
 
    	
Poland

Russian Federation

Seychelles

Slovak Republic

South Africa

St. Kitts and Nevis

St. Lucia

St. Vincent and the Grenadines

Trinidad and Tobago

Turkey

Uruguay

Venezuela, RB
    

 

2

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

APPENDIX D
  Aridis Patent Rights

 

This Appendix is to list Aridis Patent Rights as of the Effective Date pursuant to section 1.13 of the Agreement. Certain patent applications are under consideration by Aridis and will be included in this Appendix D by amendment to be completed by Aridis promptly upon filing with the U.S. Patent Office or any equivalent foreign agency.

 

The Appendix shall note all relevant application numbers, application types, filing dates, inventors, assignees, government or other reserved rights noted in the application, and application titles.

 

3

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

APPENDIX E
 Financial Report Form

 

Recipient: Aridis Pharmaceuticals

Period of Agreement:

Period of this Report: From        , 20  , to       , 20

Dated Submitted:

 

	
 
    	
 
    	
A
    	
 
    	
B
    	
 
    	
C
    	
 
    	
D
    	
 
    	
E
    	
 
    
	
Budget Categories
    	
 
    	
Budget (in U.S.
   dollars)
    	
 
    	
Expenses this 
   Report
    	
 
    	
Total Expenses 
   Previous 
   Reports
    	
 
    	
Total Expenses 
   (8 + C)
    	
 
    	
Budget Balance 
   (A- D)
    	
 
    
	
Personnel
    	
 
    	
537,195
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Consultants
    	
 
    	
50,000
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Supplies
    	
 
    	
60,000
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Travel and per diem
    	
 
    	
42,000
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Equipment
    	
 
    	
80,000
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Other project costs
    	
 
    	
100,600
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Indirect Expenses
    	
 
    	
130,159
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TOTAL COSTS (US$)
    	
 
    	
999,954
    	
 
    	
 
    	
 
    	
 
    	
 
    	
(*)
    	
 
    	
 
    	
 
    

 

	
Status of Cash on Hand
    	
 
    	
 
    
	
Payments Received to Date
    	
 
    	
 
    
	
Expenses to Date (*)
    	
 
    	
 
    
	
Balance
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Status of Interest Earned
    	
 
    	
 
    
	
Total Interest Earned Previous Reports
    	
 
    	
 
    
	
Interest Earned this Reporting Period
    	
 
    	
 
    
	
Total Interest Earned to Date
    	
 
    	
 
    

 

	
Signature:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    

 

CERTIFICATION

 

The undersigned hereby certifies:

 

a.           That payment of the sum claimed under the cited Agreement is proper and due and that appropriate refund to PVS will be made upon request by PVS in the event of misrepresentation and/or nonperformance, in whole or in part, under the Agreement or for any breach of the terms of the Agreement, the amount of the refund to reimburse PVS for such misrepresentation, nonperformance, or breach; and

 

b.           That information in the Financial Report is correct and such detailed supporting information as PVS may require will be furnished to PVS on request; and

 

c.             That all requirements called for by the Agreement to the date of this certification have been met

 

1

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

Appendix F 

(Form of Material Transfer Agreement)

 

Material Transfer Agreement

 

This Material Transfer Agreement (hereafter “Agreement”) is between you (“ Sublicensee” or “you”) and American Type Culture Collection, a not-for-profit organization (“ATCC” or “we” or  “us”).

 

The parties are entering into this Agreement in connection with your sublicense agreement (the “Sublicense”) with PATH Vaccine Solutions (“PVS”). PVS and ATCC have entered into a License Agreement dated as of       , 2006 (the “License”).

 

Scope of Use

 

YOU MAY MAKE AND USE THE MATERIAL PROVIDED TO YOU UNDER THE SUBLICENSE (“MATERIAL”) AND ALL REPLICATES AND DERIVATIVES FOR PURPOSES PERMITTED IN THE SUBLICENSE ONLY. THE MATERIAL IS NOT INTENDED FOR USE IN HUMANS. SUBLICENSEE AGREES THAT MATERIAL DESIGNATED AS BIOSAFETY LEVEL 2 OR 3 CONSTITUTES KNOWN PATHOGENS AND THAT OTHER MATERIAL NOT SO DESIGNATED AND REPLICATES OR DERIVATIVES MAY BE PATHOGENIC UNDER CERTAIN CONDITIONS. SUBLICENSEE ASSUMES ALL RISK AND RESPONSIBILITY IN CONNECTION WITH THE RECEIPT, HANDLING, STORAGE, DISPOSAL, TRANSFER AND USE OF THE MATERIAL INCLUDING WITHOUT LIMITATION TAKING ALL APPROPRIATE SAFETY AND HANDLING PRECAUTIONS TO MINIMIZE HEALTH OR ENVIRONMENTAL RISK.

 

Sublicensee shall not distribute, sell, lend or otherwise transfer the Material, Replicates, or Derivatives (the “Biological Material”) for any reason. Except as expressly permitted in the Sublicense, any commercial use of the Biological Material is prohibited without ATCC’s prior written authorization. Your use of the Biological Materials requires a sublicense from PATH.

 

For purposes of this Agreement, “Replicate” means any biological or chemical material that represents a substantially unmodified copy of the Material such as, but not limited to, material produced by growth of cells or microorganisms or amplification of Material. “Derivative” means material created from the Material that is substantially modified to have new properties.

 

Warranty; Warranty Disclaimer

 

The Material provided to you under this Agreement is subject to a warranty provided by ATCC to PVS in the License. EXCEPT AS EXPRESSLY PROVIDED TO PVS IN THE LICENSE, THE MATERIAL AND ANY TECHNICAL INFORMATION AND ASSISTANCE PROVIDED BY ATCC ARE PROVIDED AS IS, WITHOUT WARRANTIES OF ANY KIND, EXPRESS OR

 

1

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

IMPLIED, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TYPICALITY, SAFETY, AND ACCURACY.

 

Compliance With Laws

 

SUBLICENSEE IS SOLELY RESPONSIBLE FOR COMPLIANCE WITH ALL APPLICABLE FOREIGN AND DOMESTIC, FEDERAL, STATE AND LOCAL LAWS, STATUTES, ORDINANCES AND REGULATIONS. Without limiting the generality of the foregoing, any shipment of the Material to countries outside the United States must comply with all applicable U.S. laws, including the U.S. export control laws and related regulations.

 

Indemnification

 

Sublicensee hereby agrees to indemnify, defend and hold harmless ATCC, its officers, agents,  employees and its contributors, against all third party claims, losses, expenses and damages (including reasonable attorneys’ fees) arising out of or relating to the use, receipt, handling, storage, transfer, disposal and other activities relating to the Biological Material or products related to the Biological Material. All non-monetary settlements will be subject to ATCC’s consent.

 

Limitation of Liability

 

IN NO EVENT WILL ATCC OR ITS CONTRIBUTORS BE LIABLE FOR ANY  INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY  KIND IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT,  BIOLOGICAL MATERIALS OR PRODUCTS RELATED TO BIOLOGICAL  MATERIALS (WHETHER IN CONTRACT, TORT, NEGLIGENCE, STRICT  LIABILITY, STATUTE OR OTHERWISE) EVEN IF ATCC HAS BEEN ADVISED OF  THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL ATCC’S  CUMULATIVE LIABILITY IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, THE SUBLICENSE, BIOLOGICAL MATERIALS OR PRODUCTS RELATED TO BIOLOGICAL MATERIALS EXCEED THE FEES PAID BY PVS TO ATCC UNDER THE LICENSE. THE PROVISIONS OF THIS SECTION SHALL SURVIVE THE EXPIRATION OR TERMINATION OF THIS AGREEMENT.

 

Sublicensee agrees that the limitations of liability set forth in this Agreement shall apply even if a  limited remedy provided hereunder fails of its essential purpose.

 

Intellectual Property; Identification

 

ATCC shall retain ownership of all right, title and interest in the Biological Material. ATCC also retains rights to any intellectual property it owns in the Biological Material.  Sublicensee retains ownership of those substances created through the use of the Biological Material, but which do not contain Biological Material. Sublicensee will notify ATCC of any Derivatives it creates from ATCC Material and make such Derivatives available to ATCC. The Biological Material is subject to the restrictions noted in the “Scope of Use” section above. ATCC retains all right, title and interest in the trademarks registered or owned by the ATCC and any and all ATCC catalog numbers or ATCC specific designations of Material sold by the ATCC. ATCC also retains rights to any intellectual property it owns in the Material.

 

Sublicensee is responsible for ensuring that all permits required for Sublicensee to receive Material are obtained and that sufficient proof of such permits is provided to ATCC.

 

Termination:

 

This Agreement shall survive the termination of the Sublicense provided that said Sublicense is

 

2

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

assigned to ATCC. In all other instances, or upon termination of any assigned Sublicense, this Agreement shall terminate and Sublicensee shall destroy all stocks of Biological Material and provide by ATCC with written notification of that fact. The following provisions shall survive termination of this Agreement: Indemnification, Limitation of Liability, and Intellectual Property; Identification.

 

Miscellaneous

 

This Agreement shall be governed by the laws of the State of New York, without reference to its choice of law rules. Sublicensee may not assign or otherwise transfer this Agreement or any rights or obligations under this Agreement, whether by operation of law or otherwise. Any attempted assignment or transfer will be void and of no force or effect. This Agreement and all documents incorporated herein by reference constitute the entire agreement between ATCC and Sublicensee with respect to the Biological Material and supersede all previous agreements or representations; This Agreement may not be modified, changed or terminated orally. No change, modification, addition or amendment shall be valid unless in writing and signed by an authorized representative of
 each of the parties hereto.

 

This Agreement shall be signed in two counterparts each of which shall be deemed to be an original, and both of which taken together shall constitute one and the same instrument.

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective duly authorized officers.

 

 

	
For ATCC
    	
 
    	
For Sublicensee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signature   
    	
 
    	
Signature   
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Title
    	
 
    	
Title
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date
    	
 
    	
Date
    

 

3

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