Document:

Exhibit

        
Exhibit 10.7

CONFIDENTIAL PORTIONS OF THIS LICENSE AMENDMENT HAVE BEEN OMITTED PURSUANT TO REGULATION S-K ITEM 601(b)(10)(iv) OF THE SECURITIES ACT OF 1933, AS AMENDED. CERTAIN CONFIDENTIAL INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT (i) IS NOT MATERIAL AND (ii) WOULD LIKELY CAUSE COMPETITIVE HARM TO 9 METERS BIOPHARMA INC. IF PUBLICLY DISCLOSED. THE REDACTED TERMS HAVE BEEN MARKED IN THIS EXHIBIT AT THE APPROPRIATE PLACES WITH EMPTY BRACKETS INDICATED BY [     ].

AMENDED AND RESTATED EXCLUSIVE LICENSE AGREEMENT

THIS AMENDED AND RESTATED EXCLUSIVE LICENSE AGREEMENT (“Agreement”) is entered into as of this 10th day of February 2020 (the “A&R Effective Date”) by and between CEDARS-SINAI MEDICAL CENTER, a California nonprofit public benefit corporation (“CSMC”), with offices at 8700 Beverly Boulevard, Los Angeles, California 90048-1865, and Naia Rare Diseases, Inc. (formerly Naia GLP, Inc.), a Cayman Islands corporation (“Licensee”), with offices at c/o Naia Pharmaceuticals, Inc., 336 Bon Air Center P.O. Box 341, Greenbrae, CA 94904.

RECITALS

A.CSMC owns and/or is entitled to grant license rights with respect to certain Patent Rights and Technical Information (as defined below) invented or developed in connection with research performed at CSMC’s Gastrointestinal Motility Program and Laboratory under the direction of Mark Pimentel, M.D., Jeffry Conklin, M.D., and Edy Soffer, M.D. (hereinafter collectively referred to as the “Inventors”).

B.CSMC previously licensed to Licensee rights in the Patent Rights and the Technical Information pursuant to that certain Exclusive License Agreement between CSMC and Licensee dated December 30, 2014 (such agreement, the “Original License”; such date, the “Original Effective Date”).

C.In order to facilitate the further development and acquisition of Products by enabling the acquisition of Licensee by Innovate Biopharmaceuticals, Inc., the parties wish to amend and restate the Original License as set forth herein.

D.Other than the rights expressly granted by CSMC hereunder within the Field of Use, Licensee acknowledges that CSMC shall retain all other rights with respect to the Patent Rights and the Technical Information.  CSMC and Licensee further intend that the execution, delivery and performance of this Agreement by each party, and the consummation of the transactions contemplated hereunder, shall not at any time threaten CSMC’s tax-exempt status under Section 501(c)(3) of the 

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Internal Revenue Code and Section 2370ld of the California Revenue and Taxation Code, or cause CSMC to be in default under any of CSMC’s issued and outstanding tax-exempt bonds.

NOW, THEREFORE, in consideration of the mutual covenants and premises herein contained, and for good and valuable consideration, the receipt and sufficiency of which and hereby acknowledged, the parties hereto herby agree as follows:

0.    AMENDMENT AND RESTATEMENT.  The Parties hereby agree that, effective as of the A&R Effective Date, the Original License is hereby amended and restated to reflect the terms and conditions set forth in this Agreement.

		
	1.
	DEFINITIONS 

1.1    “Affiliate” or “Affiliates” shall mean any corporation, person or entity, which controls, is controlled by, or is under common control with, a party to this Agreement without regard to stock or other equity ownership.  For purposes hereof, the terms “control”  and “controls” mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a corporation, person or entity, whether through the ownership of voting securities, by contract or otherwise. 

1.2    “Confidential Information” shall mean any confidential or proprietary information furnished by one party (the “Disclosing Party”) to the other party (the “Receiving Party”) in connection with this Agreement, including, without limitation, all specifications, know-how, trade secrets, technical information, drawings, software, models, business information and patent applications pertaining to the Patent Rights and Technical Information, and as further provided in Section 10 hereof.

1.3    “FDA” shall mean the United States Food and Drug Administration, or any successor agency thereof.

1.4    “Field of Use” shall mean any uses and applications.

1.5    “Improvements” shall mean all improvements, modifications or enhancements to the Patent Rights that, after the Original Effective Date, are conceived and reduced to practice if patentable, or reduced to practice if not patentable, by at least one Inventor.

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1.6    “Licensee Developments” shall mean any and all processes, uses, designs, applications, methods and compositions-of-matter, indications, improvements,  enhancements and modifications in the Field of Use directly based upon or directly created using the Patent Rights and/or Technical Information and which were discovered or developed by or on behalf of Licensee (exclusive of work performed by CSMC or the Inventors) during the term of this Agreement.

1.7    “Net Sales” shall mean the gross amounts invoiced and received by Licensee, its Affiliates, or Permitted Sublicensees for all sales or transfers of any Product in the United States to third parties, less the following amounts to the extent actually incurred or paid by Licensee, its Affiliates, or Permitted Sublicensees with respect to such sales or transfers:

(a)trade, cash and quantity discounts, charge backs or rebates actually allowed or taken, including discounts or rebates to governmental; wholesalers and other distributors; pharmacies and other retailers; buying groups; health care insurance carriers; pharmacy benefit management companies; regulatory authorities; third parties associated with patient assistance programs; or managed care organizations;
(b)credits or allowances actually given or made for rejection of, or return of previously sold Products;
(c)any charges for insurance, freight, and other transportation costs directly related to the delivery of Product to the extent included in the gross invoiced price; and
(d)any tax, tariff, duty or governmental charge levied on the sales, transfer, transportation, delivery, import, or export of the Product (including any value added tax or similar tax or government charge) borne by the seller thereof, other than franchise or income tax of any kind whatsoever.
All aforementioned deductions shall only be allowable to the extent they are commercially reasonable and determined in the ordinary course of business based on its accounting standards and practices consistently applied across its product lines and verifiable based on conventional industry practices.  For purposes of calculating Net Sales hereunder, all such discounts, allowances, credits, rebates, and other deductions shall, when offered in conjunction with discounts, allowances, credits, or rebates on other products sold for separately stated prices, not be deducted hereunder to the extent offered as an enticement or in exchange for purchasing such other products such that the Product bears a disproportionate portion of such deductions as related to such other products. Notwithstanding anything in this Agreement to the contrary, the transfer of the Product between or among Licensee, its Affiliates, and Permitted Sublicensees will not be considered a sale, provided, that in the event an Affiliate or Permitted Sublicensee is the end-user of Product, the transfer of Product to such Affiliate or Permitted Sublicensee shall be included in the calculation of Net Sales at the average selling price charged in the United States in an arm’s length sale to a third party who is not an Affiliate or Permitted Sublicensee in the relevant period. Net Sales will include the cash consideration received on a sale 

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and the fair market value of all non-cash consideration. Disposition of Product for, or use of the Product in, clinical trials or other scientific testing, as samples, or under compassionate use, named patient sales, patient assistance, or test marketing programs or other similar programs or studies where the Product is supplied at or below the cost of manufacturing shall not result in any Net Sales; provided, however, if Licensee or any of its Affiliates or Permitted Sublicensees charges an amount for such Product in excess of Licensee’s, its Affiliates’, or its Permitted Sublicensees’ cost of manufacturing, the amount billed will be included in the calculation of Net Sales, but for the sake of clarity such disposition or use of the Product shall never constitute a First Commercial Sale.
If a Product is sold or provided as part of a system, package, or combination product or service that involve one or more products ̧ active pharmaceutical ingredients, or services not covered by the Patent Rights (each, a “Combination Product”), Net Sales shall be calculated by multiplying the Net Sales of such Combination Product by the fraction A/(A+B), where A is the weighted average sales price of the Product if and when sold separately in finished form in the United States, and B is the weighted average sales price of any other products, active pharmaceutical ingredients, or services in the Combination Product if and when sold separately in finished form in the United States. If the Product in the combination is not sold separately in finished form in the United States, Net Sales shall be calculated by multiplying actual Net Sales of such Combination Product by the following formula: one (1) minus B / C  where B is the weighted average sale price(s) of the other products, active pharmaceutical ingredients, or services in the Combination Product when sold separately in finished form in the United States and C is the weighted average sale price of the Combination Product in the United States (if there is more than one other product, active pharmaceutical ingredient, or service, B shall equal the sum of all such other products’, active pharmaceutical ingredients’, or services’ weighted average sale prices in the United States). If any other active pharmaceutical molecule(s) or delivery device(s) in the combination is not sold separately in finished form in the United States, Net Sales shall be calculated by multiplying actual Net Sales of such Combination Product by a fraction A/C where A is the weighted average sales price of the Product if sold separately in finished form in the United States and C is the weighted average sales price of the Combination Product in the United States. If neither the Product nor any other product, active pharmaceutical ingredient, or service in the Combination Product is sold separately in finished form in the United States, the adjustment to Net Sales shall be determined by the Parties in good faith to reasonably reflect the fair market value of the contribution of the Product in the Combination Product to the total fair market value of such Combination Product in the United States.
1.8    “Non-Royalty Sublicense Revenues” shall mean upfront fees, license maintenance fees, and milestone payments, or other payments, including the fair market value of any non-cash consideration, received by Licensee in consideration for any rights granted to Patent Rights under a sublicense agreement, and excludes (a) any and all sales-based royalties paid to Licensee; (b) payments made in consideration for the issuance of debt or equity securities of Licensee; and (c) funding received from a Permitted Sublicensee or an Affiliate thereof, following execution of the applicable sublicense, for specific research, development, or other services performed by Licensee or an Affiliate thereof with respect to Products following the execution of such sublicense, to the extent such funding does not exceed Licensee’s and its Affiliates’ reasonable, documented cost of performing such research, development, or other services.

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1.9    “Patent Rights” shall mean the patent existing on the Original Effective Date which is described on Schedule A attached hereto, and all patents and/or patent applications (including provisional patent applications) existing as of the Original Effective Date in any other country corresponding to the foregoing, and all divisions, continuations, reissues, reexaminations, supplementary protection certificates and extensions thereof, whether domestic or foreign, all claims of continuations-in-part that are entitled to the benefit of the priority date of any of the foregoing, and any patent that issues thereon. The Patent Rights are all owned by CSMC.

1.10    “Product” or “Products” shall mean any products and/or services in the Field of Use that, except for the license granted hereunder, would infringe a Valid Claim of the Patent Rights.

1.11    “Technical Information” shall mean, as of the Original Effective Date, the following information in the Field of Use which is described in the Patent Rights or otherwise provided to Licensee: know-how, trade secrets, unpublished patent applications, software, bioinformatics, unpatented technology, technical information, statistical information and analyses, biological materials, chemical reagents, preclinical and clinical information, in each case which has been conceived or reduced to practice prior to the Original Effective Date, in connection with research performed at CSMC’s Gastrointestinal Motility Program and Laboratory under the direction of the Inventors. The Technical Information shall further include information in the Field of Use described in Schedule B hereto and which has been reduced to practice prior to the Original Effective Date in the conduct of the aforementioned research programs at CSMC under the direction of one or any of the Inventors. Technical Information is all owned by CSMC.

1.12    “Territory” shall mean the United States.

1.13    “Valid Claim” shall mean a claim of an issued patent included within the Patent Rights, which claim has not (a) lapsed, been canceled or become abandoned, (b) been declared invalid or unenforceable by a non-appealable decision or judgment of a court or other appropriate body or authority of competent jurisdiction, or (c) been admitted to be invalid or unenforceable through reissue, disclaimer or otherwise. The term Valid Claim shall also include the claims of a pending patent application within the Patent Rights for a period of seven (7) years from the actual filing date of that patent application.

		
	2.
	LICENSE

2.1    Grant of Exclusive Rights. Subject to the terms of this Agreement, CSMC hereby grants to Licensee, and Licensee hereby accepts from CSMC, the exclusive license, with the right to grant sublicenses (through multiple tiers of sublicensees, and subject to the terms of Section 2.2 

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hereof), under and to the Patent Rights and Technical Information during the term of this Agreement (as provided in Section 6 hereof) to conduct research in the Field of Use and to make, have made, use, have used, offer for sale, sell, have sold and/or import Products in the Field of Use in the Territory. The foregoing grant of exclusivity is made expressly subject to the following:

(a)    All applicable laws and regulations, including, without limitation, the requirements of federal law as pertains to the manufacture of products within the United States;
(b)    The following non-exclusive rights to the Patent Rights and Technical Information, which are retained by CSMC within the Field of Use:

(i)    the right to submit for publication the scientific findings from research conducted by or through CSMC or its investigators (including the Inventors) related to the Patent Rights and the Technical Information; provided, however, that prior to submission for publication, CSMC shall deliver a copy of the proposed publication to Licensee, and Licensee shall have the right to review the submission to determine whether a patent application should be filed and shall have the right to request that CSMC delay submission for up to sixty (60) days to allow the appropriate party to prepare and file a patent application to protect any patentable inventions disclosed in such submission; and

(ii)    the right (A) to use any tangible or intangible information contained in the Patent Rights or the Technical Information or any Improvements (so long as CSMC shall treat such information as Confidential Information and maintain its confidentiality in accordance with Section 10 hereof), for CSMC’s research, internal teaching and other educationally-related and non-commercial (except for charges to its own patients) clinical purposes, where clinical use does not involve a third party funding grant to commercialize such information, and (B) to obtain research funding for further study and development thereof from governmental and other nonprofit organizations (including grant applications).

(c)    Notwithstanding any other provision hereof to the contrary, all rights to    the Patent Rights, Technical Information and Improvements outside of the Field of Use are retained by CSMC. Furthermore, this Agreement confers no license or rights by implication, estoppel, or otherwise under any patent applications or patents of CSMC other than Patent Rights regardless of whether such patents are dominant or subordinate to Patent Rights.

2.2    Sublicensing. Licensee shall have the right to grant sublicenses, through multiple tiers of sublicensees, under its rights in Patent Rights and Technical Information in accordance with this Section 2.2 (each, “Permitted Sublicensee”). Any such Permitted Sublicensee shall be subject 

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in all respects to the applicable provisions contained in this Agreement and Licensee will remain primarily liable to CSMC for, and shall be responsible for exercising commercially reasonable efforts in monitoring and enforcing, performance of all of Licensee’s applicable obligations hereunder by any such Permitted Sublicensee. Without limiting the generality of the foregoing, as an express condition of any such sublicense, any such Permitted Sublicensee shall be required to agree in writing to be bound by commercially reasonable reporting and record keeping, indemnification and inspection provisions, and the applicable provisions of this Agreement, including, without limitation, those pertaining to the use of CSMC’s name and marks, indemnification of CSMC and the use of CSMC’s Confidential Information. Permitted Sublicensees may further sublicense without CSMC’s prior written consent, subject to the foregoing requirements. Licensee shall promptly forward to CSMC a copy of any and all fully executed sublicense agreements, any subsequent amendments, and all copies of Permitted Sublicensees’ profit sharing or royalty reports, in no event more than thirty (30) days following execution or receipt thereof, as applicable, provided that any of the foregoing may be redacted to protect any technical or proprietary information of any Permitted Sublicensee that is not necessary to ensure compliance with this Agreement. If Licensee shall conduct one or more royalty or payments audits concerning Products in the Territory of its Permitted Sublicensees hereunder during the term hereof, Licensee shall provide copies of all audit reports to CSMC on a timely basis.  The covenants pertaining to the use of CSMC’s name and marks, the indemnification of CSMC and the use of CSMC’s Confidential Information in any sublicense or assignment shall run for the benefit of CSMC, who shall be expressly stated as being a third-party beneficiary thereof with respect to such covenants set forth in this Agreement. Licensee understands and agrees that none of its permitted sublicenses hereunder shall reduce in any manner any of its obligations set forth in this Agreement.

(a)    Required Sublicensing. If Licensee is unable or unwilling to serve or develop a potential market or market territory for which there is no then-current Permitted Sublicensee and there is a company willing to be a Permitted Sublicensee, Licensee will, at CSMC’s request, use commercially reasonable efforts to negotiate in good faith a sublicense with any such potential Permitted Sublicensee.

(b)    Royalty-Free Sublicenses. If, and only if, Licensee pays all royalties due CSMC from a Permitted Sublicensee’s Net Sales, Licensee may grant that Permitted Sublicensee a royalty-free or non-cash sublicense or cross-license.

2.3    Improvements. Subject to the rights and applicable rules of the Funding Agencies (as such term is defined in Section 3.3), Licensee shall have, for a period of sixty (60) days after receipt by Licensee of written notice from CSMC disclosing an Improvement, the exclusive first right to negotiate with CSMC to obtain one or more licenses to the Improvement in the Field of Use upon such terms and conditions as shall be agreed by the parties hereto, which terms and conditions shall include provisions for fair market value consideration for the grant of any such licenses. If Licensee declines or fails to pursue, or if the parties fail to agree to summary non-binding 

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economic terms for, a license to such Improvement in the Field of Use during the sixty (60) day period specified above, then CSMC shall have the right to commence discussions with any other party concerning such Improvement. Furthermore, CSMC shall have the right to commence discussions with any other party concerning such Improvement if the parties have failed to execute a license agreement for the Improvement in the Field of Use within one hundred and eighty days (180) after receipt by Licensee of written notice from CSMC disclosing the Improvement (even if the parties have agreed to summary non-binding economic terms within the aforementioned sixty (60) day period). Subject to the provisions of this Section 2.3, Licensee acknowledges and agrees that CSMC expressly retains and reserves any and all right, title and interest in and to the Improvement, whether or not in the Field of Use and, accordingly, no license to any Improvement is granted to Licensee under this Agreement.

2.4    Licensee Developments.  In the event that Licensee intends to sponsor research in the Field of Use at CSMC, the parties shall use good faith reasonable efforts to discuss the inclusion in the research agreement to be entered into by the parties with respect to such research of the grant to CSMC of a royalty-free license to practice and use Licensee Developments for non-commercial research purposes to the extent necessary to perform such research.  

2.5    Milestones. Licensee acknowledges that it is important to CSMC that Licensee pursue the development, commercialization and marketing of Products and otherwise exercise commercially reasonable efforts to maximize the value of this Agreement to CSMC. Moreover, Licensee acknowledges that it is a requirement of the United States Government under Title 35, Section 203 of the United States Code that Licensee take effective steps to achieve practical application of the Patent Rights in the Field of Use. Licensee will use commercially reasonable efforts to develop and commercialize Products as soon as practicable, consistent with sound business practices and judgment. Within sixty (60) days after each anniversary of the A&R Effective Date, Licensee shall prepare and deliver to CSMC an annual written report (to be certified by an officer of Licensee) indicating its compliance with the obligations in this section.

		
	3.
	REPRESENTATIONS AND WARRANTIES

3.1    Rights to Technology. Except for the rights, if any, of the United States Government, CSMC represents and warrants to Licensee that, to the best of its actual, current knowledge (without investigation outside of CSMC as to such representations and warranties) (a) it has the right to grant the licenses in this Agreement, (b) it has not granted licenses to the Patent Rights or Technical Information to any other party that would restrict the rights granted hereunder except as stated herein and (c) there are no claims, judgments or settlements to be paid by CSMC with respect the Patent Rights or Technical Information or pending claims or litigation relating to the Patent Rights or Technical Information. Except for any potential or actual rights of the United States Government, 

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CSMC is not aware that any additional rights or licenses are necessary for Licensee to exercise its licensed rights granted by CSMC under this Agreement.

		
	3.2
	Limited Warranty; Certain Damages.

(a)    Limited Warranty. CSMC makes no representation or warranty other than those expressly specified in this Agreement. Licensee accepts the Patent Rights and the Technical Information on an “AS-IS” basis. CSMC MAKES NO OTHER WARRANTIES CONCERNING PATENT RIGHTS OR TECHNICAL INFORMATION COVERED BY THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, ANY EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AS TO PATENT RIGHTS, TECHNICAL INFORMATION OR ANY PRODUCT. CSMC MAKES NO WARRANTY OR REPRESENTATION AS TO THE VALIDITY OR SCOPE OF PATENT RIGHTS, OR THAT ANY PRODUCT WILL BE FREE FROM AN INFRINGEMENT ON PATENTS OR OTHER INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES, OR THAT NO THIRD PARTIES ARE IN ANY WAY INFRINGING PATENT RIGHTS COVERED BY THIS AGREEMENT. LICENSEE HEREBY AGREES THAT LICENSEE WILL NOT GIVE, AND SHALL NOT PERMIT ANY AFFILIATES OR SUBLICENSEES OR AFFILIATES THEREOF TO GIVE, ANY SUCH WARRANTY OR REPRESENTATION TO THIRD PARTIES ON BEHALF OF CSMC.

(b)    Certain Damages. EXCEPT FOR THE BREACH OF THE CONFIDENTIALITY PROVISIONS IN SECTION 10 OR IN ACCORDANCE WITH THE OBLIGATION TO INDEMNIFY SET FORTH IN SECTION 8, IN NO EVENT SHALL CSMC BE LIABLE FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF PROFITS OR EXPECTED SAVINGS OR OTHER ECONOMIC LOSSES, OR FOR INJURY TO PERSONS OR PROPERTY) ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ITS SUBJECT MATTER, REGARDLESS OF WHETHER CSMC KNOWS OR SHOULD KNOW OF THE POSSIBILITY OF SUCH DAMAGES. EXCEPT FOR THE BREACH OF THE CONFIDENTIALITY PROVISIONS IN SECTION 10 OR IN ACCORDANCE WITH THE OBLIGATION TO INDEMNIFY SET FORTH IN SECTION 8, CSMC’S AGGREGATE LIABILITY FOR ALL DAMAGES OF ANY KIND RELATING TO THIS AGREEMENT OR ITS SUBJECT MATTER SHALL NOT EXCEED THE AMOUNT PAID BY LICENSEE TO CSMC UNDER THIS AGREEMENT. THE FOREGOING EXCLUSIONS AND LIMITATIONS SHALL APPLY TO ALL CLAIMS AND ACTIONS OF ANY KIND, WHETHER BASED ON CONTRACT, TORT (INCLUDING, BUT NOT LIMITED TO NEGLIGENCE), OR ANY OTHER GROUNDS.

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3.3    Rights Retained by Funding Agencies. Licensee acknowledges that to the extent that the Improvements may be developed in part under one or more funding agreements with one or more public or private granting agencies which have provided funding to CSMC or to any of the Inventors for the development of any of the Improvements, such Funding Agencies may have certain statutory, non-exclusive rights relative thereto for use for government purposes as well as regulatory or statutory “march-in rights” (collectively, “Statutory Rights”) relative thereto. This Agreement is explicitly made subject to such Statutory Rights and, to the extent of any conflict between any such Statutory Rights and this Agreement, such Statutory Rights shall prevail.

		
	4.
	CONSIDERATION

In consideration of the execution and delivery by CSMC of this Agreement, Licensee agrees as follows:

4.1    License Fee. CSMC acknowledges and agrees that Licensee has paid a non-refundable license fee in an amount equivalent to Fifty Thousand Dollars ($50,000) as required by Section 4.1 of the Original License.

4.2    Reimbursement of Prosecution Costs. CSMC acknowledges and agree that all costs, including attorneys’ fees and filing fees, actually incurred by CSMC in the prosecution and maintenance of the Patent Rights have been reimbursed in full.

		
	4.3
	Royalties and Non-Royalty Revenue.

(a)    Running Royalties for Products. Licensee agrees to pay and shall pay to CSMC a running royalty of [     ] percent ([     ]%) of Net Sales of   Products made, used, sold or otherwise distributed by Licensee or any Permitted Sublicensee hereunder in the United States (each, a “Royalty”).

(b)    Licensee Challenge of Patent Rights. Should Licensee bring, directly or through a third party indirectly, an action challenging the validity, scope or enforceability of any Patent Rights, Licensee will first provide CSMC with at least ninety (90) days’ prior written notice that it intends so to do before filing such a challenge. Following the giving of such notice, Licensee will pay to CSMC the Royalties and Non-Royalty Sublicense Revenue due hereunder at the rate of two times the applicable rate during the pendency of such action. Should the outcome of such action determine that any claim of a patent challenged by Licensee is valid and/or infringed and/

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or enforceable, as applicable, Licensee will thereafter pay to CSMC the Royalties and share of Non-Royalty Sublicense Revenue due hereunder at the rate of three times the applicable rate for all Products sold that would infringe such claim and/or transactions that include a grant of rights to such claim. Such increased royalty reflects the increased value of the Patent Rights upheld in such action. In the event that a challenge of Patent Rights brought by Licensee is partially or entirely successful, Licensee will have no right to recoup any Royalties or other amounts paid before or during the period of the challenge. Additionally, Licensee agrees to reimburse CSMC for all costs actually incurred by CSMC in connection with the applicable legal proceedings. In the event that all or any portion of this Section 4.3(b) is invalid, illegal or unenforceable, then the parties will use their best efforts to replace the invalid, illegal or unenforceable provision(s) with valid, legal and enforceable provision(s) which, insofar as practical, gives effect to the intent of this Section 4.3(b).

(c)    Arm’s-Length Transactions. On sales of Products which are made in other than an arms’-length transaction, the value of the Net Sales attributed under this Section 4.3 to such a transaction shall be that which would have been received in an arms’-length transaction in the United States, based on sales of like quality and quantity products on or about the time of such transaction.

(d)    Duration of Royalty Obligations. The royalty obligations of Licensee as to each Product shall terminate on the later of: (i) the expiration of the last to expire Valid Claim within the Patent Rights that covers such Product, including any term extensions thereof, or (ii) the expiration of any market exclusivity period granted by a regulatory agency for such Product.

(e)    Non-Royalty Sublicense Revenues. In the event that Licensee has sublicensed the Patent Rights to a Permitted Sublicensee in accordance with Section 2.2 hereof, Licensee shall pay to CSMC a percentage of any and all “Non-Royalty Sublicense Revenues” received by Licensee from such Permitted Sublicensee, according to the following schedule:

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	Effective Date of Sublicense Agreement
	Percent of Non-Royalty Sublicense Revenues Thereunder Payable to CSMC

	Prior to initiation of a Phase I clinical trial of a Product
	[     ]%

	After initiation of Phase I clinical trial of a Product but prior to submission of a New Drug Application (“NDA”) or similar application to the FDA for a Product
	[     ]%

	After submission of NDA or similar application to the FDA for a Product but before receipt of FDA approval of a Product
	The greater of (1) [     ]% of Non-Royalty Sublicense Revenues or (2) $[     ]

	  After receipt of FDA approval of a Product
	The greater of (1) [     ]% of Non-Royalty Sublicense Revenues or (2) $[     ]

The applicable percentage of any and all “Non-Royalty Sublicense Revenues” shall be reported and paid to CSMC by Licensee within sixty (60) days of receipt by Licensee. Any non-cash consideration received by Licensee from Permitted Sublicensees as Non-Royalty Sublicense Revenues shall be valued at its fair market value thereof as of the date of receipt and the applicable percentage such amount shall be paid in cash to CSMC in accordance with the schedule above. In the event that the Patent Rights are sublicensed in combination with the license or sublicense of one or more patented technologies that are not covered under this Agreement, Non-Royalty Sublicense Revenues for the purposes of this Section 4.3(e) may, if and as elected by Licensee, be calculated on a pro-rata basis in a manner to be mutually agreed by CSMC and Licensee, and each party shall negotiate in good faith the other with respect thereto upon such an election.

Notwithstanding the foregoing, in the event that Licensee has entered into such a sublicense arrangement with a Permitted Sublicensee, Licensee may elect to either pay the aforementioned Non-Royalty Sublicense Revenue percentages or continue to pay the product development milestone payments set forth in Section 4.3(f)(i) below, and if Licensee elects to pay the product development milestone payments, then no amounts shall be payable by Licensee under this subsection (e) with respect to such sublicense; provided, however, that Licensee shall be obligated to pay the sales milestone payments set forth in Section 4.3(f)(i) below in all cases.

		
	(f)
	Milestone Payments.

(i)Product Development Milestones. Licensee agrees to pay and shall pay to CSMC the following non-creditable, non-refundable product development milestone payments within sixty (60) days of the first occurrence of a milestone (or its equivalent):

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	Milestone Event
	Milestone Payment

	Milestone 1: Dosing of first patient in a Phase I clinical trial of a Product
	$[     ]

	Milestone 2: Dosing of first patient in a Phase II clinical trial of a Product
	$[     ]

	Milestone 3: Dosing of first patient in a Phase III clinical trial of a Product
	$[     ]

	Milestone 4: Submission of NDA or similar application to the FDA for a Product
	$[     ]

	Milestone 5: Receipt of FDA approval of a Product
	$[     ]

Notwithstanding anything to the contrary, in the event that Licensee has sublicensed the Patent Rights to a Permitted Sublicensee in accordance with Section 2.2 hereof and Licensee has elected to pay the amounts set forth in Section 4.3(e) with respect to thereto, no milestone payments shall be due and payable by Licensee under this Section 4.3(f)(i).

(ii)Sales Milestones. Licensee shall pay, or  shall cause its Permitted Sublicensee (in the event that Licensee has sublicensed the Patent Rights to a Permitted Sublicensee in accordance with Section 2.2 hereof) to pay, to CSMC the following non-creditable, non-refundable sales milestone payments within sixty (60) days of the first occurrence of a milestone (or its equivalent):

	
		
	Milestone Event
	Milestone Payment

	Milestone 1: Annual gross  sales of Product by Licensee, an Affiliate thereof, or any sublicensee thereof with respect to Products first exceed 
$[     ]
	$[     ]

	Milestone 2: Annual gross  sales of Product by Licensee, an Affiliate thereof, or any sublicensee thereof with respect to Products first exceed
$[     ]
	$[     ]

(iii)    Each Milestone Payment set forth in this Section 4.3(f) shall be paid no more than once, regardless of the number of Products, indications therefor, or formulations thereof achieving such milestone.

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(g)    Notwithstanding anything else to the contrary, the royalty rate set forth in Section 4.3(a) (as it may be adjusted pursuant to Section 4.3(b)) and the sales milestone payments set forth in Section 4.3(f)(ii) shall, upon the expiration of the last to expire Valid Claim within the Patent Rights that covers a particular Product, including any term extensions thereof, be reduced by fifty percent (50%).
(h)    Permitted Deductions.  If Licensee, an Affiliate thereof, or any sublicensee makes any payment to a third party to obtain a license for the manufacture, use, sale or import of a Product or otherwise exploit the Patent Rights, Licensee shall be entitled to deduct up to fifty percent (50%) of such third party payments made in a particular calendar year against the Royalties and/or the milestone payments payable to CSMC for that year; provided, however, that in no event shall the Royalties and/or the milestone payments payable to CSMC hereunder for any one-year period be reduced by operation of this section by more than fifty percent (50%); and provided further that such third party payments shall only be creditable against the Royalties and/or the milestone payments payable to CSMC during the calendar year in which the third party payment was actually made by Licensee.

		
	(i)
	Payment and Accounting.

(i)    Reports. Each payment of Royalties shall be accompanied by a report in the form attached as Schedule C hereto, which sets forth in reasonable detail the number and each type of Product sold and the calculation of Net Sales applicable thereto, and such additional details as may be reasonably requested by CSMC for the determination of Royalties payable hereunder. Products shall be considered as being sold for the purpose of the calculation of Royalties under this Agreement when the Products have been invoiced.  Each payment of Non-Royalty Sublicense Revenue shall be accompanied by a report in the form attached as Schedule C hereto setting forth in reasonable detail the basis for the calculation of such amounts, and such additional details as may be reasonably requested by CSMC for the determination of Non-Royalty Sublicense Revenue payable hereunder. Hard copies of such reports shall be sent to CSMC’s address set forth in Section 13.1 of the Agreement, while an electronic copy shall be sent by electronic mail to CSTechTransfer@cshs.org. Except as otherwise provided herein, all amounts due hereunder shall be paid in United States dollars and shall be made without set off and free and clear of (and without any deduction or withholding for) any taxes, duties, levies, imposts or similar fees or charges. Royalties shall be payable by Licensee quarterly, within seventy-five (75) days after the end of each calendar quarter, based upon revenues accrued during the immediately preceding calendar quarter. Licensee agrees to pay and shall pay to CSMC, or cause its Permitted Sublicensees to pay to CSMC, all Royalties resulting from the activities of its Permitted Sublicensees, within seventy-five (75)days after the end of each calendar quarter.

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(ii)    Notice of Payment. Licensee shall provide prompt written notice to CSMC that it has paid any milestone payment required by Section 4.3(f)(i) and (ii) by electronic mail to CSTechTransfer@cshs.org.

(iii)    Wire Transfer Instructions. All payments due hereunder shall be made by Licensee to CSMC in accordance with the following wire transfer instructions:
[     ]

(iv)    Records and Audits. Licensee shall create and maintain complete and accurate records and documentation concerning all sales of Products by Licensee, its Affiliates and Permitted Sublicensees as well as transactions based upon which Non-Royalty Sublicense Revenue is due, in sufficient detail to enable the Royalties and Non-Royalty Sublicense Revenue, respectively, that is payable hereunder to be determined. Licensee shall retain such records and documentation for not less than three (3) years from the date of their creation. During the term of this Agreement and for a period of three (3) years thereafter, CSMC and its representatives shall have the right to audit such records and documentation as shall pertain to the determination and payment of Royalties and Non-Royalty Sublicense Revenue. Such examiners shall have reasonable access during regular business hours to Licensee’s offices and the relevant records, files and books of account, and shall have the right to examine any other records reasonably necessary to determine the accuracy of the calculations provided by Licensee. The costs of any such audit shall be borne by CSMC, unless as a result of such inspection it is determined that the amounts payable by Licensee for any period are in error in Licensee’s favor by greater seven percent (7%) of the amount due for such period, in which case the reasonable, documented costs of such audit shall be borne by Licensee. CSMC shall report the results of any such audit to Licensee within forty-five (45) days of completion. Thereafter, Licensee shall promptly pay to CSMC the amount of any underpayment discovered in such audit, or CSMC shall credit to Licensee against future Royalty payments the amount of any overpayment discovered in such audit, as the case may be. In addition, Licensee shall pay interest on any underpayment at the rate that is the lower of (i) [     ] percent ([     ]%) over the rate of interest announced by Bank of America in Los Angeles, California (or any successor in interest thereto or any commercially equivalent financial institution if no such successor exists) to be its “prime rate”, or (ii) the highest rate permitted by applicable law, from the date such amount was underpaid to the date payment is actually received.  In the event that interest is payable on any underpayment hereunder, then Licensee shall not also be required to pay the service charge set forth in Section 4.3(i)(vi) on such underpayment amount.

(v)    Currency Transfer Restrictions. If any restrictions on the transfer of currency exist in any country or other jurisdiction so as to prevent Licensee from making payments to CSMC, Licensee shall take all commercially reasonable steps to obtain a waiver of such restrictions or to otherwise enable Licensee to make such payments. If Licensee is unable to do so, Licensee shall make such payments to CSMC in a bank account or other depository designated by 

15

        

CSMC in such country or jurisdiction, which payments shall be in the local currency of such country or jurisdiction, unless payment in United States dollars is permitted. Any payment by Licensee to CSMC in currencies other than United States dollars shall be calculated using the appropriate foreign exchange rate for such currency quoted in the California edition of The Wall Street Journal for the close of business of the last banking day of the calendar quarter for which such payment is being made.

(vi)    Late Charges. A service charge equal to the interest rate set forth in subsection (iv) above, not to exceed the maximum rate allowed by applicable law, shall be payable by Licensee on any portion of Licensee’s outstanding Royalty or Non-Royalty Sublicense Revenue balance or any other amount payable by Licensee hereunder (including, without limitation, reimbursement for Prosecution costs as set forth in Section 4.2 hereof) that is not paid to CSMC within thirty (30) days past the due date. 

(vii)    Taxes. Licensee shall pay, or cause to be paid, any and all taxes required to be paid or withheld on any sales, licenses or other transfers for value of Products or Patent Rights (other than taxes imposed on the income or revenues of CSMC); provided, however, that under no circumstances shall the amounts of such taxes be deducted from the total amount of payments otherwise due to CSMC hereunder. Upon CSMC’s request, Licensee shall secure and send to CSMC proof of any such taxes withheld and paid by Licensee, its Affiliates or Permitted Sublicensees.

(viii)    No Escrow. Licensee shall pay all Royalties and Non-Royalty Sublicense Revenue directly to CSMC and shall not pay royalties into any escrow or other similar account, including in the event of a validity or non-infringement challenge to the Patent Rights.

		
	5.
	PATENT RIGHTS

5.1    Prosecution. Commencing on the Original Effective Date, Licensee shall assume, in coordination with CSMC, full responsibility for the application, maintenance, reexamination, reissue, opposition and prosecution of any kind (collectively “Prosecution”) relating to the Patent Rights in the Territory, including, but not limited to, payment of all costs, fees and expenses related thereto. Subject to the approval of CSMC (which approval shall not be unreasonably withheld), Licensee shall have the right to select counsel with respect to the responsibility assumed by Licensee in this Section 5.1, and Licensee shall diligently pursue the Prosecution of the Patent Rights to the benefit of CSMC. For all purposes of the patent Prosecution, CSMC shall be the named “client” of such patent counsel. Each party shall provide the other with copies of any and all material or communications with the United States Patent and Trademark Office, or any foreign patent office, and CSMC shall be afforded the opportunity of prior review and comment on such action or paper.

16

        

5.2    Abandonment, Disclaimers, etc. In the event that Licensee shall elect to abandon the Prosecution (including the payment of maintenance fees or annuities) of any patent or patent application included in the Patent Rights, Licensee shall notify CSMC of such election at least forty-five (45) days before a final due date which would result in abandonment or bar of patentability of the patent or patent application. In such event, CSMC may, at its sole option and expense, continue Prosecution of the patent application or patent, in which case such application or patent shall no longer be included within the Patent Rights. Licensee further agrees that it shall not file any continuation-in-part application relating to the Patent Rights unless the additional disclosure or material to be included in the continuation-in-part application is necessary or appropriate to support the patentability of a claim recited in a parent application on which the continuation-in-part application is based.  Licensee shall not file any  continuation-in-part application without CSMC’s prior written consent, which shall not be unreasonably withheld.

5.3    Expenses. Licensee shall pay all expenses resulting from its obligations in Section 5.1 hereof. CSMC shall exercise reasonable efforts to cause the Inventors (to the extent they are available and on CSMC’s staff as employees) to cooperate fully with Licensee with respect to the Prosecution of the Patent Rights, and CSMC shall be reimbursed for all reasonable out-of-pocket expenses as such expenses are incurred.

5.4    CREATE Act. Licensee shall not invoke the Cooperative Research and Technology Enhancement Act of 2004, as set forth under Title 35, Section 102(c) of the United States Code (the “CREATE Act”), with respect to the Patent Rights without first obtaining the prior written consent of CSMC.

		
	6.
	TERM AND TERMINATION

6.1    Term. Unless earlier terminated as provided in Section 6.2 hereof, the term of this Agreement shall commence on the A&R Effective Date and shall expire, on a Product-by-Product basis, on the later of: (a) the first date upon which there are no Valid Claims of the Patent Rights covering such Product in the Territory, and (b) the expiration of any market exclusivity period granted by a regulatory agency for such Product.  Upon the expiration of this Agreement for a Product, Licensee and its Affiliates shall have a perpetual, irrevocable, royalty-free, and fully-paid license, with rights of sublicense (through multiple tiers) and assignable with this Agreement under Section 13.11, to make, have made, use, sell, offer for sale, and import such Product in the Territory. 

17

        

6.2    Termination. Except as provided by Section 6.3 hereof, and in addition to the termination provisions of Section 2.5, this Agreement shall terminate upon the earliest to occur of the following:

(a)    Upon written notice from CSMC if Licensee shall enter into a liquidating bankruptcy, be adjudged insolvent, liquidate, dissolve and/or if the business of Licensee shall be placed in the hands of a receiver, assignee, or trustee, whether by voluntary act of Licensee or otherwise; provided, however, that if any such action is involuntary, termination shall not take place unless the action is not reversed within sixty (60) days. Further, Licensee shall give CSMC at least forty-five (45) days’ prior written notice before Licensee initiates any bankruptcy proceeding, and CSMC shall have the right to terminate this Agreement immediately upon receipt of such notice;

(b)    Upon sixty (60) days written notice of CSMC to Licensee if the performance by either party to this Agreement of any term, covenant, condition or provision hereof (i) shall jeopardize (A) the licensure of CSMC, (B) CSMC’s participation in the Medicare, Medi-Cal or other reimbursement or payment programs, (C) the full accreditation of CSMC by The Joint Commission or any other state or nationally recognized accreditation organization, or (D) CSMC’s tax-exempt status; or (ii) is deemed illegal by any agency or body of the United States government.  Upon the occurrence of any of the items set forth in this subparagraph (b), CSMC shall provide written notice to Licensee setting forth the reason for such termination and the parties shall promptly discuss in good faith reasonable means of avoiding such termination, including without limitation any required amendments to this Agreement, provided that, if termination cannot be avoided, such termination shall be effected at the end of such sixty (60) day period;

(c)    Upon thirty (30) days’ written notice from CSMC if, within such thirty (30) day period, (i) Licensee shall fail to pay fully any overdue Royalty or Non-Royalty Sublicense Revenue payment required by Section 4.3 hereof;

(d)    Upon ninety (90) days’ written notice from CSMC if, within such 90-day period, Licensee shall fail to cure fully any breach or default of any material obligation under this Agreement as described in such written notice detailing the facts of such breach with reasonable specificity; provided, however, that Licensee may avoid such termination if, before the end of such 75-day period, such breach or default has been cured by Licensee to the reasonable satisfaction of CSMC;

(e)    Upon ninety (90) days’ written notice from Licensee if, within such 90-day period, CSMC shall fail to cure fully any breach or default of any material obligation under 

18

        

this Agreement as described in such written notice detailing the facts of such breach with reasonable specificity; provided, however, that CSMC may avoid such termination if, before the end of such 90-day period, such breach or default has been cured by CSMC to the reasonable satisfaction of Licensee;

(f)    Upon the mutual written agreement of the parties hereto (such termination to be effective as of the date mutually agreed upon in such written agreement); and

(g)    Upon one hundred eighty (180) days’ written notice from Licensee; provided that in the event of such termination by Licensee, Licensee shall pay to CSMC a termination fee calculated in accordance with the following table no later than the effective date of termination:

	
		
	Time of Termination
	Termination Fee

	Prior to completion of Milestone 3 (Dosing of first patient in a Phase III clinical trial of a Product)
	$[     ]

	Prior to completion of Milestone 4 (Submission of NDA or similar application to the FDA for a Product)
	$[     ]

	Following completion of Milestone 5 (Receipt of FDA approval of a Product)
	$[     ]

6.3    Obligations Upon Termination. Upon any termination of this Agreement pursuant to Section 6.2 hereof, nothing herein shall be construed to release any party from any liability for any obligation incurred through the effective date of termination (e.g., confidentiality, reimbursement of patent expenses incurred prior to such date, etc.) or for any breach of this Agreement prior to the effective date of such termination. Upon any termination  of this Agreement pursuant to Section 6.2 hereof, all Prosecution Cost amounts owed by Licensee to CSMC under Section 4.2 of this Agreement which are outstanding as of the effective date of termination (including any interest that has accrued thereon) shall become immediately due and payable, and Licensee shall pay the full outstanding amounts to CSMC within five (5) business days of the effective date of such termination. Licensee may, for a period of one (1) year after the effective date of such termination, sell all tangible Products customarily classified as “inventory” that it has on hand at the date of termination, subject to payment by Licensee to CSMC of the applicable Royalty and Non-Royalty Sublicense Revenue.

6.4    Effect of Termination. In the event of any termination of this Agreement pursuant to Section 6.2 hereof, where such termination has not been caused by any uncured material breach 

19

        

by a Permitted Sublicensee of its obligations under its sublicense from Licensee, such termination of this Agreement shall be without prejudice to the rights of such Permitted Sublicensee of Licensee under the sublicense granted hereunder, such Permitted Sublicensee’s rights and obligations under such sublicense shall survive such termination, such Permitted Sublicensee shall be deemed to be a licensee of CSMC thereunder, and CSMC shall be entitled to all rights, but shall not be subject to any obligations (other than the grant of license and appurtenant obligations under this Agreement to the extent provided for in such sublicense) of Licensee thereunder, including right to payments thereunder to the extent constituting consideration for the rights to Patent Rights granted thereunder and not exceeding the corresponding amounts that would have been due hereunder with respect to such Permitted Sublicensee’s exercise of such rights.

6.5    Right to Institute Legal Actions. Notwithstanding the provisions of Section 6.2 hereof, CSMC, on the one hand, and Licensee, on the other hand, may institute any other legal action or pursue any other remedy against the other party permitted by applicable law if the other party does not substantially cure any breach or default of any material obligation as provided herein.

6.6    Reversion of Rights. Notwithstanding anything to the contrary set forth herein (including, but not limited to, Section 5 hereof), full responsibility for Prosecution of the Patent Rights shall, at the option of CSMC (exercisable in its sole and absolute discretion), and at its sole expense from the date of reversion, revert to CSMC upon any termination of this Agreement.

6.7    Return of Data. In the event of any termination or expiration of this Agreement, Licensee shall promptly provide CSMC with copies of all data, information and materials obtained or generated by or on behalf of Licensee in the course of conducting research and developing Products using the Patent Rights and the Technical Information.

		
	7.
	INFRINGEMENT BY THIRD PARTIES

7.1    Enforcement. In the event that either Party becomes aware of a substantial infringer of Patent Rights in the Territory, such Party shall provide prompt written notice of such to the other Party.  Licensee shall have the exclusive first right (which may be granted to sublicensees) to enforce, at its sole expense, any Patent Rights to the extent licensed hereunder against infringement by third parties and shall notify CSMC in writing in advance of all such enforcement efforts. Upon Licensee’s undertaking to pay all expenditures reasonably incurred by CSMC, CSMC shall reasonably cooperate in any such enforcement and, as necessary, join as a party therein. Licensee shall reimburse CSMC for all expenses, including reasonable attorneys’ fees, incurred in connection with any such enforcement. In the event that Licensee does not file suit against or commence and conclude settlement negotiations with a substantial infringer of Patent Rights within one hundred eighty (180) days of receipt of a written demand from CSMC that Licensee bring suit, then the parties will consult 

20

        

with one another in an effort to determine whether a reasonably prudent licensee would institute litigation to enforce the patent in question in light of all relevant business and economic factors (including, but not limited to, the projected cost of such litigation, the likelihood of success on the merits, the probable amount of any damage award, the prospects for satisfaction of any judgment against the alleged infringer, the possibility of counterclaims against the parties hereto, the impact of any possible adverse outcome on Licensee and the effect any publicity might have on the parties’ respective reputations and goodwill). If, after such process, it is determined that a suit should be filed and Licensee does not file suit or commence settlement negotiations forthwith against the infringer, then CSMC shall have the right, at its own expense, to enforce any Patent Rights licensed hereunder on behalf of itself and Licensee. Any damages or other recovery from an infringement action undertaken by Licensee shall first be used to reimburse the parties, on a pro rata pari passu basis, for the costs and expenses incurred in such action, and the amount thereof remaining thereafter shall be allocated between the parties as follows: (i) twenty-five percent (25%) to CSMC; and (ii) seventy-five percent (75%) to Licensee. If Licensee does not prosecute any infringement action against any infringer, then any damages or other recovery received by CSMC as a result of its prosecution of such an action, net of the parties’ costs and expenses incurred in such infringement action, shall be the sole property of CSMC.

7.2    Defense Of Patent Rights. In the event that any Patent Rights are the subject of a legal action seeking declaratory relief or of any reexamination or opposition proceeding instituted by a third party, the parties agree to promptly consult with each other concerning the defense of such actions or proceedings. If the parties agree in writing that such defense should be undertaken, then Licensee shall bear the expenses, including attorneys’ fees, associated with such defense and be entitled to retain any recoupment of its expenses. If the parties disagree, then the party desiring to defend the action or proceeding may proceed with such defense and will bear its own expenses, and be entitled to all sums recovered.

		
	8.
	INDEMNIFICATION

8.1    Indemnification by Licensee. Subject to Section 8.2 hereof, Licensee shall hold harmless, defend and indemnify CSMC and each of its officers, directors, employees (including the Inventors), agents and sponsors of the research (except Licensee) (each, an “Indemnified Party”, and collectively, the “Indemnified Parties”) from and against any and all claims, damages, losses, liabilities, costs and expenses (including reasonable attorneys’ fees and expenses and costs of investigation, whether or not suit is filed) suffered or incurred by any of the Indemnified Parties in any action, suit, litigation, arbitration or dispute of any kind (“Action”) arising or resulting from any negligence or willful acts or omissions on the part of Licensee, its Affiliates or Permitted Sublicensees in connection with (a) their use the Patent Rights or Technical Information and/or (b) the exercise of their rights hereunder or under any sublicense, including, but not limited to (i) the preclinical development and clinical testing of Products, and (ii) the manufacture, sale, use, marketing, or other disposition of Products developed, manufactured, sold, marketed, used or otherwise disposed of 

21

        

under this Agreement. As part of its obligations hereunder, Licensee shall defend any Action brought against any of the Indemnified Parties with counsel of its own choosing and reasonably acceptable to CSMC, and neither CSMC nor any other Indemnified Party shall enter into any settlement of any such Action without first obtaining prior approval of Licensee. Licensee shall pay all costs, including attorney’s fees, incurred in enforcing this indemnification provision. Should CSMC or any other Indemnified Party not afford Licensee the right to defend any such Action, or should CSMC or any other Indemnified Party not obtain the approval of Licensee to any such settlement, Licensee shall have no obligation to indemnify CSMC or any other Indemnified Party hereunder. Should Licensee fail to provide a defense for the Indemnified Parties as required hereunder, then Licensee shall reimburse CSMC for its out-of-pocket expenses (including reasonable attorneys’ fees and expenses and costs of investigation) which are incurred as a result of any investigation, defense or settlement relating to the foregoing, which reimbursement shall be made to CSMC upon receipt by Licensee of invoices reflecting in reasonable detail such expenses incurred by CSMC. Within one hundred and twenty (120) days following the Original Effective Date, Licensee shall obtain and maintain insurance policies (including products liability and general liability policies at such time as is appropriate) which are reasonable and necessary to cover its activities and to comply with the indemnification obligations set forth above. Such insurance policies shall name CSMC as an additional insured party and shall provide a minimum of $1,000,000 in coverage per occurrence. Upon initiation of any human clinical studies of Products, Licensee  shall increase its insurance coverage to a minimum of $10,000,000 in the aggregate or such lower amount as approved by CSMC’s Risk Management Director in writing at such time. Licensee shall provide CSMC with prompt written notice of any material change in coverage under such policies. If the parties determine that evidence of Licensee’s insurance coverage is necessary and appropriate, within thirty (30) days of the Original Effective Date (subject to extension if reasonably required) and annually thereafter, Licensee shall provide CSMC with a certificate of insurance issued by the appropriate insurance company evidencing the insurance coverage required by this Section 8.1, together with copies of the endorsement which specifies CSMC as an additional insured and the declarations page for each such insurance policy. The certificate of insurance, endorsements and declarations pages (and any renewals or replacements thereof), if required, shall be sent to CSMC’s Technology Transfer Office by electronic mail at CSTechTransfer@cshs.org and by prepaid, first class, certified mail, return receipt requested, at the following address: 8797 Beverly Boulevard, Suite 206, Los Angeles, CA 90048.

8.2    Notice of Claim. CSMC shall promptly notify Licensee in writing of any claim or Action or material threat thereof brought against any Indemnified Party in respect of which indemnification may be sought and, to the extent allowed by law, shall reasonably cooperate with Licensee in defending or settling any such claim or Action. No settlement of any claim, Action or threat thereof received by CSMC and for which CSMC intends to seek indemnification (for itself or on behalf of any other Indemnified Party) shall be made without the prior joint written approval of Licensee and CSMC.

		
	9.
	USE OF NAMES

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Licensee shall not, unless as required by any law or governmental regulation, use the name of CSMC, and/or any of its trademarks, service marks, trade names or fictitious business names without express prior written consent of the Vice President for Public Relations and Marketing of CSMC. Further, prior to any reference by Licensee to the names or marks of CSMC in any manner, Licensee shall provide CSMC with a writing reflecting the proposed reference so that CSMC can review the reference within a reasonable period of time prior to the proposed use thereof by Licensee. This limitation includes, but is not limited to, use by Licensee in any advertising, offering circular, prospectus, sales presentation, news release or trade publication. Subject to compliance by Licensee with the foregoing, which shall be deemed conditions precedent to any use of CSMC’s name or marks by Licensee, Licensee shall ensure that the name of CSMC is used as scientifically or academically appropriate in the “byline” of any article, abstract, manuscript or any other publication related to the subject matter hereof.

		
	10.
	CONFIDENTIALITY

10.1    Non-Disclosure. The parties hereto shall keep the terms of this Agreement and all business and scientific discussions relating to the business of the parties strictly confidential. All patient information to which a party is given access by the other party shall be subject to the provisions of the Confidentiality of Medical Information Act (Cal. Civ. Code §§56, et seq.) and the Health Insurance Portability and Accountability Act of 1996, and all regulations promulgated thereunder. It may, from time to time, be necessary for the parties, in connection with performance under this Agreement, to disclose Confidential Information (including know-how) to each other. The Receiving Party (as defined in Section 1.2 hereof) shall keep in strictest confidence the Confidential Information of the Disclosing Party (as defined in Section 1.2 hereof), using the standard of care it normally uses for information of like character, and shall not disclose the Confidential Information to any third party or use it except as expressly authorized by the prior written consent of the Disclosing Party or as otherwise permitted by this Agreement; provided, however, that Licensee may disclose the Confidential Information received from CSMC to its Affiliates and Permitted Sublicensees as shall be reasonably necessary to carry out the intent of this Agreement or any sublicense granted by Licensee as contemplated by this Agreement if, but only if, such Affiliates and/or Permitted Sublicensees each execute a confidentiality agreement containing confidentiality provisions no less restrictive than those confidentiality provisions contained in this Section 10. The Receiving Party’s obligation hereunder shall not apply to Confidential Information that the Receiving Party can show:

(a)    Is or later becomes part of the public domain through no fault or neglect of the Receiving Party;

23

        

(b)    Is received in good faith from a third party having no obligations of confidentiality to the Disclosing Party, provided that the Receiving Party complies with any restrictions imposed by the third party;

(c)    Is independently developed by the Receiving Party without use of the Disclosing Party’s Confidential Information; or

(d)    Is required by law or regulation to be disclosed (including, without limitation, in connection with FDA filings, filings with another government agency or as required under the California Public Records Act), provided that the Receiving Party uses reasonable efforts to restrict disclosure and to obtain confidential treatment.

10.2    Limits on Permitted Disclosures. Each party agrees that any disclosure or distribution of the other party’s Confidential Information within its own organization shall be made only  as is reasonably  necessary  to  carry  out  the intent  of this  Agreement.  The parties further agree that all of their respective officers, employees, agents, representatives or approved sublicensees to whom any Confidential Information is disclosed or distributed shall have agreed to maintain its confidentiality. In such event, the Receiving Party shall identify with reasonable particularity, upon request by the Disclosing Party, each person within the Receiving Party’s organization to whom the Receiving Party has disclosed or distributed Confidential Information.

10.3    Legally Required Disclosures. If a subpoena or other legal process concerning Confidential Information is served upon any party hereto pertaining to the subject matter hereof, the party served shall notify the other party immediately, the other party shall cooperate with the party served, at the other party’s expense, in any effort to contest the validity of such subpoena or other legal process. This Section 10.3 shall not be construed in any way to limit any party’s ability to satisfy any disclosure of its relationship with the other party required by any governmental authority.

10.4    Patent Rights as Confidential Information. The Patent Rights are understood by Licensee to be the Confidential Information of CSMC to the extent “unpublished” as such term is construed under the United States Patent Laws. As such, Licensee’s confidentiality obligations hereunder automatically extend to any and all Technical Information and to any and all patent applications of CSMC relating to any Patent Rights, Technical Information and Improvements and to any and all communications with the United States Patent Office, and any foreign patent office relating to any Patent Rights, Technical Information or Improvements.

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10.5    Return of Confidential Information. In the event of any termination of this Agreement, the Receiving Party shall promptly return all Confidential Information and any copies made thereof previously made available to the Receiving Party by the Disclosing Party.

10.6    Remedies. Both parties acknowledge and agree that it would be difficult to measure damages for breach by either party of the covenants set forth in this Section 10, and that injury from any such breach would be incalculable, and that money damages would therefore be an inadequate remedy for any such breach. Accordingly, either party shall be entitled, in  addition to all other remedies available hereunder or under law or equity, to injunctive or such other equitable relief as a court may deem appropriate to restrain or remedy any breach of such covenants.

		
	11.
	INFORMATION EXCHANGE

In addition to the Patent Rights and Technical Information, the parties shall cooperate to exchange such non-confidential information as may be appropriate and necessary to facilitate Licensee’s development and commercialization of Products incorporating any Patent Rights or Technical Information.

		
	12.
	PATENT MARKING

In the event any Product is the subject of a patent under the Patent Rights, Licensee shall actually or virtually mark all Products made, sold or otherwise disposed of by or on behalf of it or any of its Permitted Sublicensees as set forth under Title 35, Section 287(a) of the United States Code and shall respond to any request or disclosure under Title 35, Section 287(b)(4)(B) of the United States Code by only notifying CSMC of the request for disclosure.

		
	13.
	MISCELLANEOUS

13.1    Notices. Any notice, request, instruction or other document required by this Agreement shall be in writing and shall be deemed to have been given (a) if mailed with the United States Postal Service by prepaid, first class, certified mail, return receipt requested, at the time of receipt by the intended recipient, (b) if sent by Federal Express or other overnight carrier, signature of delivery required, at the time of receipt by the intended recipient, or (c) if sent by facsimile transmission, when so sent and when receipt has been acknowledged by appropriate telephone or facsimile receipt, addressed as follows:

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In the case of CSMC to:

Cedars-Sinai Medical Center 8700 Beverly Boulevard
Los Angeles, California 90048-1865
Attention: Senior Vice President for Academic Affairs

with a copy to Senior Vice President for Legal Affairs & General Counsel or in the case of Licensee to:
Naia Rare Diseases, Inc. 
c/o Naia Pharmaceuticals, Inc. 336 Bon Air Center, P.O. Box 341 Greenbrae, CA 94904
Attention: _________

or to such other address or to such other person(s) as may be given from time to time under the terms of this Section 13.1.

13.2    Compliance with Laws. Each party shall comply with all applicable federal, state and local laws and regulations in connection with its activities pursuant to this Agreement.

13.3    Governing Law. For any dispute between the parties to this Agreement which arises from or relates to this Agreement, the Agreement shall be construed and enforced in accordance with the laws of the United States of America and of the State of California, irrespective of choice of laws provisions. The parties agree that Los Angeles County, California shall be the situs of any legal proceeding arising out of or relating to this Agreement. Each party hereby waives any right it may have to assert the doctrine of forum non conveniens or similar doctrine or to object to venue with respect to any proceeding brought in accordance with this Section, and stipulates that the state and federal courts located in Los Angeles, California shall have in personam jurisdiction and venue over each of them for the purpose of litigating any dispute, controversy, or proceeding arising out of or related to this Agreement. Each party hereby authorizes and accepts service of process sufficient for personal jurisdiction in any action against it as contemplated by this Section by registered or certified mail, return receipt requested, postage prepaid, to its address for the giving of notices as set forth in this Agreement.

26

        

13.4    Waiver. Failure of any party to enforce a right under this Agreement shall not act as a waiver of that right or the ability to assert that right relative to the particular situation involved.

13.5    Enforceability. If any provision of this Agreement shall be found by a court of competent jurisdiction to be void, invalid or unenforceable, the same shall be reformed to comply with applicable law or stricken if not so conformable, so as not to affect the validity or enforceability of the remainder of this Agreement.

13.6    Modification. No change, modification, or addition or amendment to this Agreement, or waiver of any term or condition of this Agreement, is valid or enforceable unless in writing and signed and dated by the authorized officers of the parties to this Agreement.

13.7    Entire Agreement. This Agreement and the Schedules hereto (which are incorporated herein by this reference as if fully set forth herein) constitute the entire agreement between the parties with respect to the subject matter hereof and thereof, and replace and supersede as of the date hereof and thereof any and all prior agreements and understandings, whether oral or written, between the parties with respect to the subject matter of such agreements.

13.8    Construction. This Agreement has been prepared, examined, negotiated and revised by each party and their respective attorneys, and no implication shall be drawn and no provision shall be construed against any party to this Agreement by virtue of the purported identity of the drafter of this Agreement or any portion thereof.

13.9    Counterparts. This Agreement may be executed simultaneously in one or more counterparts, each of which shall constitute one and the same instrument. This Agreement may be executed by facsimile or in .pdf format.

13.10    Attorneys’ Fees. In the event of any action at law or in equity between the  parties hereto to enforce any of the provisions hereof, the unsuccessful party to such litigation shall pay to the successful party all reasonable costs and expenses, including reasonable attorneys’ fees, incurred therein by such successful party; and if such successful party shall recover a judgment in any such action or proceeding, such reasonable costs, expenses and attorneys’ fees may be included in and as part of such judgment.

		
	13.11
	Assignment; Successors.

27

        

(a)    Subject to Section 13.11(b), Licensee may assign this Agreement as part of a sale, regardless of whether such a sale occurs through an asset sale, stock sale, merger or other combination, or any other transfer of Licensee’s entire business or assets, or that part of Licensee’s business that exercises all rights granted under, or that portion of its assets related to the subject matter of, this Agreement. In the event of a bankruptcy, assignment is permitted in conjunction therewith only to a party that can provide adequate assurance of future performance, including diligent development and sales, of Products.

(b)    Prior to any assignment permitted under Section 13.11(a), the following conditions must be met: (i) Licensee must give CSMC prior written notice of the assignment, including the new assignee’s contact information, (ii) the new assignee must  agree in writing to be bound by this Agreement, and (iii) CSMC must have received a $[     ] assignment fee.

(c)    Licensee may assign this Agreement to any Affiliate of Licensee. Prior to such assignment, Licensee must give CSMC the Affiliate’s contact information and the Affiliate must agree in writing to be bound by this Agreement.

(d)    Subject to the limitations on assignment herein, this Agreement shall be binding upon and inure to the benefit of any successors in interest and assigns of CSMC and Licensee. Any attempt to assign this Agreement by Licensee that is not in accordance with this Section 13.11 is null and void. CSMC shall have the right to assign its rights hereunder as part of any reorganization or bond financing.

13.12    Further Assurances. At any time and from time to time after the A&R Effective Date, each party shall do, execute, acknowledge and deliver, and cause to be done, executed, acknowledged or delivered, all such further acts, transfers, conveyances, assignments or assurances as may be reasonably required to consummate the transactions contemplated by this Agreement.

13.13    Survival. The following sections shall survive any expiration or earlier termination of this Agreement: 4.3, 6.3, 6.4, 8, 9, 10, and 13.

13.14    Performance and/or Exercise by Affiliates. Licensee may perform some or all of its obligations under this Agreement through its Affiliate(s) or shall be entitled to exercise some or all of its rights under this Agreement through its Affiliates. However, Licensee shall remain responsible and be guarantor of the performance by its Affiliates and shall take reasonable steps to cause its Affiliates to comply with the provisions of this Agreement in connection with such performance.

28

        

[signature page follows]

29

        

IN WITNESS WHEREOF, the parties have caused their duly authorized representatives to execute this Agreement as of the date first above written.

“LICENSEE”

NAIA RARE DISEASES, INC.,
A Cayman Islands Corporation 

By: /s/ H. Daniel Perez, MD    
Name: H. Daniel Perez, MD
Title:  CEO

Date:  2/10/2020    

“CSMC”:

CEDARS SINAI MEDICAL CENTER, A 
California Nonprofit Public Benefit Corporation

By: Edward M. Prunchunas    
Name:  Edward M. Prunchunas
Title: Executive Vice President, Finance
          & Chief Financial Officer

Date:  1/28/2020    

By: /s/ James D. Laur, JD    
Name:  James D. Laur, JD
Title:  Vice President, Intellectual Property

Date:  1/28/2020    

        

ACKNOWLEDGE AND AGREED:

“INVENTORS”:

/s/ Mark Pimentel, M.D.    
Mark Pimentel, M.D.

/s/ Jeffrey Conklin, M.D.    
Jeffrey Conklin, M.D.

/s/ Edy Soffer, M.D.    
Edy Soffer, M.D.

        

Schedule A

Patent Rights

		
	TITLE:
	USE OF GLP-1 AGONISTS FOR TREATMENT OF SHORT-BOWEL SYNDROME

		
	INVENTOR:
	JEFFREY CONKLIN, MARK PIMENTEL & EDY E. SOFFER 

PATENT NO.:    U.S. PATENT NO. 8,236,760
		
	GRANT DATE:
	AUGUST 7, 2012, U.S. PATENT & TRADEMARK OFFICE 

DOCKET NO.:    065472-999175US00

        

Schedule B

Technical Information

The following information or material in the Field of Use which is embodied in the Patent Rights conceived or reduced to practice prior to the Original Effective Date in the conduct of research performed at CSMC under the direction of the Inventors:

1. Kunkel D, Basseri B, Low K, Lezcano S, Soffer EE, Conklin JL, Mathur R, Pimentel M.  Efficacy of the glucagon-like peptide-1 agonist exenatide in the treatment of short bowel syndrome. Neurogastroenterol Motil. 2011 Aug;23(8):739-e328.

        

Schedule C

Royalty Reporting Form

Licensee name: Reporting period: Date of report:
Date of first commercial sale:

Royalty Report
	
					
	Product (list products by name)
	No. units sold
	Invoiced price per unit
	Net sales
	Country of sale/foreign currency/ conversion rate

	Product name
	 
	 
	 
	 

	Product name
	 
	 
	 
	 

	Product name
	 
	 
	 
	 

	Total
	 
	 
	 
	 

	
		
	Total Net sales
	$

	Royalty rate
	 

	Royalty due
	$

Total royalty due: $    

Non-Royalty Sublicense Revenue Report
	
		
	Total Non-Royalty Sublicense Revenue received
	$

	Date received
	 

	Applicable percentage payable to CSMC
	 

	Total Non-Royalty Sublicense Revenue payable to CSMC
	$

        

Report prepared by: Title:
Date:

Please send report to:

Cedars-Sinai Medical Center 8700 Beverly Boulevard
Los Angeles, California 90048-1865
Attention: Senior Vice President for Academic Affairs

with a copy to Senior Vice President for Legal Affairs & General Counsel

Please send electronic copy to CSTechTransfer@cshs.org.Exhibit

Exhibit 10.8

CONFIDENTIAL PORTIONS OF THIS SIDE LETTER HAVE BEEN OMITTED PURSUANT TO REGULATION S-K ITEM 601(b)(10)(iv) OF THE SECURITIES ACT OF 1933, AS AMENDED. CERTAIN CONFIDENTIAL INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT (i) IS NOT MATERIAL AND (ii) WOULD LIKELY CAUSE COMPETITIVE HARM TO 9 METERS BIOPHARMA, INC. IF PUBLICLY DISCLOSED. THE REDACTED TERMS HAVE BEEN MARKED IN THIS EXHIBIT AT THE APPROPRIATE PLACES WITH EMPTY BRACKETS INDICATED BY 
[       ].

NAIA RARE DISEASES, INC.
2600 Hilltop Drive
Richmond, CA  94806

May 1, 2020

Amunix Pharmaceuticals, Inc.
500 Ellis Street
Mountain View, CA  94043

Attn: Volker Schellenberger, Ph.D.

Re:  Acquisition of Naia Rare Diseases, Inc.

Ladies and Gentlemen:

We refer to that certain Amended and Restated License Agreement by and between Naia Rare Diseases, Inc. (“Naia”) and Amunix Pharmaceuticals, Inc. (“Amunix”) and dated as of August 26, 2016, as amended, governing the license of NB1001 (the “GLP-1 License”), and that License Agreement dated as of December 9, 2014, as amended, governing the license of NB1002 (the “GLP-2 License” and together with the GLP-1 License, the “Licenses”).  Capitalized terms used and not otherwise defined herein shall have the meanings specified in the Licenses or New Licenses (as defined below), as applicable.

This letter (this “Letter”) is to confirm Naia’s obligations with regards to payments to Amunix in connection with, and subject to the consummation of, a potential acquisition of Naia by Innovate Biopharmaceuticals, Inc. (including any successor thereto, “Innovate”) via one or more transactions resulting in Innovate (or a successor entity thereto) becoming the sole equityholder of Naia (such transaction, the “Merger”).  This transaction is expected to constitute a “Change of Control” as defined in each of the Licenses.  This will confirm the understandings and agreements of the parties with respect to the following matters:

1.Assumption of Licenses.  In connection with the Merger and in contemplation of Naia becoming a wholly-owned subsidiary of Innovate, each of the Licenses will be amended and restated, in substantially the forms attached hereto as Exhibits A-1 and A-2 (the “New GLP-1 License” and “New GLP-2 License”, respectively; collectively, the “New Licenses”).  Upon the closing of the Merger, Naia shall ensure that Amunix shall be reimbursed for [ ] of its reasonable legal costs incurred with the amending and restating the Licenses, in an amount up to $[ ].

2.    Change of Control Payment.  Upon the closing of the Merger, Naia is expected to receive (a) $[ ] in immediately available funds and shares of Innovate valued at $[ ], for total closing consideration of $[ ] ($[ ] of which the parties agree is the “Closing Consideration”), (b) the right to receive from Innovate certain royalty and milestone payments (the “Earnout Payments”), and (c) the reimbursement of certain expenses paid by or on behalf of Naia at or prior to the closing of the Merger, as described on Exhibit B.  In accordance with and satisfaction of Section 3.3(d) of the New GLP-1 License and Section 3.2(d) of the New GLP-2 License, Amunix shall receive [ ]% of the Closing Consideration upon the closing of the Merger (the “Closing Payment”).  As previously discussed, Amunix shall receive $[ ] of the Closing Payment in immediately available funds, and the remaining $[ ] of the Closing Payment as shares of Innovate valued at $[ ].  In accordance with Section 3.3(d) of the New GLP-1 License and Section 3.2(d) of the New GLP-2 License, $[ ] of the Closing Payment shall be creditable against any subsequent milestone and/or royalty payments payable under the New Licenses.  Such credits will not include any interest, and shall be communicated to Amunix in accordance with the requirements of the New Licenses. 
3.    Earnout Payments.  [ ]
4.    Miscellaneous.  
a.This Letter will be governed by, and construed in accordance with, the laws of the State of California (without regard to principles or conflict of laws). 
b.This Letter may be signed in more than one counterpart by different parties with the same effect as if all parties had signed the same instrument. 
c.This Letter replaces and supersedes that certain letter agreement relating to this subject matter between the parties dated as of March 5, 2020 and executed by Amunix March 9, 2020, which letter agreement is hereby terminated.
Very truly yours,

NAIA RARE DISEASES, INC.

By: /s/ Daniel Perez
Name: Daniel Perez
Title: CEO
Agreed and accepted:

AMUNIX PHARMACEUTICALS, INC.

By: /s/ Angie You
Name: Angie You
Title: CEO
Dated: 5/1/2020    

2

Exhibit A-1

CONFIDENTIAL PORTIONS OF THIS AMENDED AND RESTATED LICENSE AMENDMENT HAVE BEEN OMITTED PURSUANT TO REGULATION S-K ITEM 601(b)(10)(iv) OF THE SECURITIES ACT OF 1933, AS AMENDED. CERTAIN CONFIDENTIAL INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT (i) IS NOT MATERIAL AND (ii) WOULD LIKELY CAUSE COMPETITIVE HARM TO 9 METERS BIOPHARMA, INC. IF PUBLICLY DISCLOSED. THE REDACTED TERMS HAVE BEEN MARKED IN THIS EXHIBIT AT THE APPROPRIATE PLACES WITH EMPTY BRACKETS INDICATED BY [       ].

SECOND AMENDED AND RESTATED LICENSE AGREEMENT
This SECOND AMENDED AND RESTATED LICENSE AGREEMENT (this “Agreement”) is entered into effective May 1, 2020 (the “2nd A&R Effective Date”) by and between Naia Rare Diseases, Inc., a Cayman Islands corporation with a principal office at 336 Bon Air Center, P.O. Box 341, Greenbrae, CA 94904 (“Naia”), and Amunix Pharmaceuticals, Inc., a Delaware corporation with a principal office at 500 Ellis Street, Mountain View, CA 94043 (“Amunix”), referred to collectively as the “Parties” and individually as the or a “Party.
BACKGROUND
A.Amunix and Naia are parties to that certain Amended and Restated License Agreement dated as of August 26, 2016 (the “Existing License Effective Date”), as amended January 14, 2019 (the “Existing License”).
B.Amunix and Naia wish to amend and restate the Existing License as set forth herein in order to, inter alia, facilitate the acquisition of Naia’s assets and/or business related to the subject matter hereof by Innovate Biopharmaceuticals, Inc. (“INN”) or an Affiliate thereof (which acquisition will include the assignment (by operation of law) of this Agreement to INN or an Affiliate thereof).
NOW, THEREFORE, the Parties, intending to be legally bound, hereby agree as follows:
ARTICLE 0
AMENDMENT AND RESTATEMENT
The Parties hereby agree that, effective as of the 2nd A&R Effective Date, the Existing License is hereby amended and restated to reflect the terms and conditions set forth in this Agreement.
ARTICLE 1
DEFINITIONS

The following initially capitalized terms have the following meanings as used in this Agreement, derivative forms of them shall be interpreted accordingly, and the words “includes,” “including” and other conjugations of the verb “to include” shall be deemed followed by the phrase “without limitation” (and drawing no implication from the inconsistent actual inclusion or non-inclusion of such phrase in the text):
1.1“Active Moiety” means the portion of a Research Construct and/or Licensed Product, in either case that is an engineered protein sequence, non-naturally occurring protein sequence, or a native protein sequence (including analog derivatives based on a native sequence) with binding affinity to a GLP-1 receptor Target Set that is responsible for biological activity. For avoidance of doubt, Active Moiety does not include an XTEN Sequence.
1.2“Affiliate” means any corporation, company, firm, partnership or other entity that directly or indirectly controls, is controlled by or is under common control with either Party to this Agreement. For purposes of this definition, “control” means the ownership, directly or indirectly, of fifty percent (50%) or more of the issued share capital or shares of stock entitled to vote for the election of directors, in the case of a corporation, fifty percent (50%) or more of the equity interests, in the case of any other entity, or the legal power to direct or cause the direction of the general management and policies of the entity in question.
1.3“Amunix Background Technology” means any Know-How or Amunix Listed Patents relating to the composition of matter, properties, use, or manufacture of XTEN Sequences or Licensed Products, which Know-How in each case (a) is Controlled by Amunix or an Affiliate thereof and (b) exists as of and/or was conceived prior to the Original Effective Date, or is developed or obtained by Amunix or an Affiliate thereof independently of the Agreement without the use of Naia’s Confidential Information, and in the case of Amunix Listed Patents, claims or discloses inventions conceived prior to the Original License Effective Date or developed by Amunix or an Affiliate thereof independently of this Agreement during the Research Term without the use of Naia’s Confidential Information, or was obtained by Amunix during the Research Term not from Naia or its Affiliate, and in each case all Intellectual Property related to such Know-How and Amunix Listed Patents Controlled by Amunix or an Affiliate thereof, subject to Section 9.5. For purposes of clarity, Amunix Background Technology does not include the formulation(s) or other embodiment(s) of Research Constructs or Licensed Product made by Amunix or an Affiliate thereof pursuant to the Research Plan. The foregoing notwithstanding, and for the avoidance of doubt, Amunix Background Technology does include all data, CMC documents, toxicology reports, regulatory submissions, production strains, clinical data and reports, and other such materials that were in the possession of Amunix or an Affiliate thereof on the Original License Effective Date that pertain to VRS-859.
1.4“Amunix Improvements” means any Know-How, invention or discovery (and all Intellectual Property claiming or covering such invention or discovery) (a) conceived, discovered, or made in connection with this Agreement by either Party (or any Affiliate thereof), solely or jointly with the other Party (or any Affiliate thereof) or (b) conceived, discovered, or made by or on behalf of Naia (or any Affiliate thereof) or any Sublicensee in the development or commercialization of the Licensed Product or any Backup Molecule, in each of cases (a) and (b), whether patentable or 

not, to the extent such Know-How, invention or discovery is (i) related solely to Amunix Background Technology concerning XTEN Sequences or (ii) (1) directly related to XTEN Sequences, but excluding modifications to Naia Background Technology or Naia Improvements for use with XTEN Sequences, and (2) severable from Naia Background Technology. For purposes of clarity,  (x) Amunix Improvements includes (I) any and all derivative, modified, or truncated amino acid sequence compositions of XTEN Sequences conceived, discovered, or made in connection with this Agreement by either Party (or any Affiliate thereof), solely or jointly with the other Party (or any Affiliate thereof), or any Sublicensee, (II) any XTEN Modifications conceived or discovered by either Party (or any Affiliate thereof), solely or jointly with the other Party (or any Affiliate thereof), or any Sublicensee as a result of Naia’s, its Affiliate’s, or Sublicensee’s exercise of any rights granted by Amunix under this Agreement or knowledge of Amunix’s Confidential Information, or (III) methods of making such amino acid sequence compositions conceived, discovered, or made in connection with this Agreement by either Party (and in each case of clauses (I) – (III) all Intellectual Property claiming or covering such invention or discovery) and, notwithstanding anything to the contrary, (y) Amunix Improvements do not include, to the extent conceived, generated, or invented by or on behalf of Naia, any Affiliate thereof, or any Sublicensee, solely or jointly with Amunix, any Affiliate thereof, or any Third Party, any methods or uses for the treatment of indications or treatment regimens for Licensed Products or XTEN Sequences.
1.5“Amunix Intellectual Property” means Amunix Background Technology, Amunix Improvements, Amunix Listed Patents, and Product-specific Patents.
1.6“Amunix Listed Patents” means (a) all Patents and patent applications listed in Exhibit A (as may be periodically updated by written notice from Amunix to Naia) and any and all divisional, continuations, continuations-in-part, patents of addition and substitutions of any of the foregoing, all patent applications (including provisional and utility applications) claiming priority to the patents and patent applications listed in Exhibit A, in each case that Cover XTEN Sequences (“XTEN Patents”) or Research Constructs (including any Licensed Products); (b) all Patents issuing on any of the foregoing that Cover XTEN Sequences or Research Constructs (including any Licensed Product); (c) all reissues, reexaminations, renewals and extensions of any of the foregoing that Cover XTEN Sequences or Research Constructs (including any Licensed Products); (d) all counterparts to the foregoing in other countries that Cover XTEN Sequences or Research Constructs (including any Licensed Products); and (e) all Supplementary Protection Certifications, restoration of patent term and other similar rights of Amunix or its Affiliates based on any of the foregoing.
1.7“Amunix Patents” means Patents included within the Amunix Intellectual Property.
1.8“Backup Molecule” means, with respect to the Licensed Product, the up to three (3) total Research Constructs developed by Naia, its Affiliates, or Sublicensees for parallel development pursuant to Section 2.5(b), which in each case contain the same or functionally equivalent Active Moieties as the Licensed Product and no additional Active Moieties.
1.9“Calendar Quarter” means a financial quarter based on the fiscal year that is used by Naia and its Affiliates for internal and external reporting purposes; provided, however, that the first Calendar Quarter for the first Calendar Year extends from the 2nd A&R Effective Date to the 

end of the then current Calendar Quarter and the last Calendar Quarter extends from the first day of such Calendar Quarter until the effective date of the termination or expiration of the Agreement.
1.10“Calendar Year” means the period beginning January 1 and ending December 31, unless otherwise agreed to by the Parties for such intervals that may begin during the course of a given year.
1.11“Change of Control” means the occurrence of any of the following: (a) a Party enters into a merger, consolidation, stock sale or sale or transfer of all or substantially all of its assets or business (or that portion thereof to which this Agreement relates), or other similar transaction or series of transactions with a Third Party; or (b) any transaction or series of related transactions in which any Third Party or group of Third Parties acquires beneficial ownership of securities of a Party representing more than fifty percent (50%) of the combined voting power of the then outstanding securities of such Party. Notwithstanding the foregoing, (1) a stock sale to underwriters of a public offering of a Party’s capital stock or other Third Parties solely for the purpose of financing or a transaction solely to change the domicile of a Party or (2) a shift in the majority of the voting power of Naia as a resulting of a financing in which Naia issues convertible preferred shares or other securities to investors (including existing investors) in an arm’s length transaction shall not constitute a Change of Control.
1.12“China Sublicensee” means a Third Party to whom rights to Amunix Intellectual Property are granted pursuant to a Naia Sublicense Agreement with respect to all or any portion of the Greater China Territory.
1.13“Commercially Reasonable Efforts” means, with respect to each Party’s obligations under this Agreement, the carrying out of such obligations with a level of effort and resources consistent with the commercially reasonable practices of a similarly situated company with similar rights in the pharmaceutical or biotechnology industry that would be applied to the research, development or commercialization, as applicable, of a similar technology with similar market potential.
1.14“Confidential Information” of a Party means any and all information disclosed by or on behalf of such Party or an Affiliate thereof to the other Party or an Affiliate thereof under this Agreement, whether in oral, written, graphic or electronic form.
1.15“Control”, “Controls”, or “Controlled by” means, with respect to any Intellectual Property right, the possession of (whether by ownership or license, other than licenses granted pursuant to this Agreement) or the ability of a Party to grant access to, or a license or sublicense of, such right as provided for herein without violating the terms of any agreement or other arrangement with any Third Party existing as of the first time such Intellectual Property right is within the license (or sublicense) granted to the other Party hereunder.
1.16“Cover” (in all its verb and adjectival forms, such as “Covered” and “Covers”) means (a) with respect to Valid Patent Claims in an issued patent, that, in the absence of a license, the use, sale, or manufacture of the product in question would infringe such Valid Patent Claim or (b) with respect to a Valid Patent Claim in a pending application, that, in the absence of a license, 

the use, offer for sale, sale, importation or manufacture of the product in question would infringe such Valid Claim, should such claims issue substantially as pending.
1.17“Development Stage” means each of the “Stages” detailed in Table 2.4.
1.18“FDA” means the U.S. Food and Drug Administration or its successor.
1.19“Field” means the research, development, manufacture and sale of Licensed Products for all diagnostic, therapeutic, prophylactic, or ameliorative applications in humans, including the diagnosis, treatment and prevention of disease, in all Indications and forms of administrations in humans.
1.20“First Commercial Sale” means, with respect to a given Licensed Product, when Net Sales are first generated in an arm’s length transaction and shipment of the Licensed Product to a Third Party by Naia or its Affiliate or a Sublicensee in a country in the Territory following applicable Regulatory Approval of the Licensed Product in such country.
1.21“FTE” means a full-time equivalent person year (consisting of a total of one thousand seven hundred fifty (1,750) hours per year) of scientific, technical, regulatory, or professional work, undertaken by Amunix’s or its Affiliates’ employees, not including standard time off pursuant to Amunix’s or its Affiliates’ company policy for vacations, holidays, sick time and the like.
1.22“FTE Costs” means, for any period, the product of (i) the actual total FTEs used by Amunix to perform Research Program activities during such period, and (ii) the FTE Rate.
1.23“FTE Rate” means Three Hundred Thirty Thousand Dollars ($330,000) per year.
1.24“Generic Product” shall mean, with respect to a Licensed Product sold by Naia, an Affiliate thereof, or a Sublicensee hereunder, and on a country-by-country basis, a product that (a) is marketed for sale in such country by a Third Party for the same Indication as such Licensed Product (or an Indication included within the Indication for which such Licensed Product is sold); (b) contains the corresponding Licensed Product or substantial equivalent(s) of the active pharmaceutical ingredient(s) of the corresponding Licensed Product in such country; and (c) such product, as and to the extent required, is approved through an abbreviated process (similar, with respect to the United States, to an Abbreviated New Drug Applications under Section 505(j) of the Federal Food, Drug and Cosmetic Act (21 USC 355(j)) or is approved as a “Biosimilar Biologic Product” under Title VII, Subtitle A Biologies Price Competition and Innovation Act of 2009, U.S.C. 262, Section 351 of the Public Health Service Act, or, outside the United States, in accordance with European Directive 2001/83/EC on the Community Code for medicinal products (Article 10(4) and Section 4, Part II of Annex I) and European Regulation EEC/2309/93 establishing the Community procedures for the authorisation and evaluation of medicinal products, each as amended, and together with all associated guidance, and any counterparts thereof or equivalent process outside of the US or EU to the foregoing, in each case that relies on or incorporates data generated by Naia or any of its Affiliates or Sublicensees for the corresponding Licensed Product under this Agreement in connection with such approval.

1.25“GLP-2 Agreement” means that certain Amended and Restated License Agreement between the Parties dated as of the 2nd A&R Effective Date (the “GLP-2 License”).
1.26“Greater China Territory” means the countries or regions of China (Peoples Republic of China), Taiwan (Republic of China), Hong Kong (Hong Kong Special Administrative Region of the People’s Republic of China) and Macau (Macao Special Administrative Region of the People’s Republic of China).
1.27“IND” means an investigational new drug application filed with the FDA as more fully defined in 21 C.F.R. § 312.3 or its equivalent in any country.
1.28“Indication” means a disease or pathological condition for which a separate pivotal clinical program is required and regulatory materials are filed for the purpose of obtaining a Regulatory Approval.
1.29“Intellectual Property” means Patents, trade secrets, copyrights, trademarks, service marks and other intellectual property or proprietary rights (including, without limitation, applications relating thereto) in any inventions, techniques, Know-How or discoveries, whether or not patentable.
1.30“Know-How” means all technical information, including inventions, discoveries, unpatented and proprietary ideas, trade secrets, specifications, instructions, processes, formulae, materials (including cell lines, vectors, plasmids, nucleic acids and the like), methods, protocols, expertise and other technology applicable to formulations, compositions or products or to their manufacture, development, registration, use or marketing or to methods of assaying or testing them or processes for their manufacture, formulations containing them or compositions incorporating or comprising them, and including all biological, chemical, pharmacological, biochemical, toxicological, pharmaceutical, physical and analytical, safety, quality control, manufacturing, preclinical and clinical data, instructions, processes, formula, and expertise.
1.31“Korea Sublicensee” means a Third Party to whom rights to Amunix Intellectual Property are granted pursuant to a Naia Sublicense Agreement with respect to all or any portion of the Korea Territory.
1.32“Korea Territory” means the countries of South Korea (Republic of Korea), Malaysia, Singapore (Republic of Singapore), Indonesia (Republic of Indonesia) and The Philippines (Republic of the Philippines).
1.33“Licensed Product” means (1) the compound specified in Exhibit B and any products that contain such compound or (2) a Backup Molecule deemed the “Licensed Product” in accordance with Section 2.5 and any products that contain such Backup Molecule.
1.34“Naia Background Technology” means any Know-How and Patents relating to the composition of matter, properties, use, or manufacture of Active Moieties, proteins, peptides, nucleotide-based molecules or small molecules which Know-How and Patents in each case (a) owned, licensed, or controlled by Naia or an Affiliate thereof and (b) in the case of Know-How, 

exists as of and/or was conceived prior to the Original License Effective Date, or is developed or obtained by Naia or an Affiliate thereof independently of the Agreement without the use of Amunix’s Confidential Information, and in the case of Patents, claims or discloses inventions conceived prior to the Original License Effective Date or developed by Naia independently of the Agreement without the use of Amunix’s Confidential Information, or were obtained by Naia independently of the Agreement after the Original License Effective Date, and in each case all Intellectual Property related to such Know-How and Patents.
1.35“Naia Improvements” means any Know-How, invention or discovery (and all Intellectual Property claiming or covering such invention or discovery) conceived, discovered, or made by or on behalf of Naia, its Affiliates, or its or their agents, Sublicensees, or contractors (other than Amunix), alone or jointly with any Third Party, in the course of the Research Program or otherwise in connection with this Agreement, whether patentable or not, that (i) are directly related to GLP-1 receptor agonists and/or analogs of GLP-1 discovered or invented by or on behalf of Naia, any Affiliate thereof, or any Sublicensee, alone or jointly with any Third Party, and any Intellectual Property claiming or Covering such invention or discovery, (ii) are methods or uses for the treatment of indications or treatment regimens for Licensed Products or XTEN Sequences, or (iii) comprise, or are related to, other active pharmaceutical ingredients or therapeutic moities. For the avoidance of doubt, (a) “Naia Improvements” excludes (I) any and all XTEN Sequences and derivative, modified, or truncated amino acid sequence compositions of XTEN Sequences conceived, discovered, or made in connection with this Agreement, or as a result of using Amunix’s Confidential Information, by either Party (or any Affiliate thereof), solely or jointly with the other Party (or any Affiliate thereof), (II) any XTEN Modifications conceived, discovered, or made that were enabled as a result of the exercise of rights granted by Amunix under this Agreement, or as a result of using Amunix’s Confidential Information, by either Party (or any Affiliate thereof), solely or jointly with the other Party (or any Affiliate thereof), or (III) methods of making such amino acid sequence compositions in (I) or (II) conceived, discovered, or made in connection with this Agreement, or as a result of using Amunix’s Confidential Information, by either Party or any Affiliate thereof, whether or not included in a composition of any modified or unmodified GLP-1 and (b) such XTEN Sequences and sequence variants thereof described in (a) shall be considered either “Amunix Background Technology” or “Amunix Improvements”, as appropriate.
1.36“Naia Intellectual Property” means Naia Background Technology and Naia Improvements.
1.37“Naia Patents” means Patents under Naia Intellectual Property.
1.38“Net Sales” means the gross amounts invoiced and received by Naia, its Affiliates, or Sublicensees for all sales or transfers of any Licensed Product (including, for the purposes of Net Sales, any product containing a Backup Molecule deemed the “Licensed Product” in accordance with Section 2.5) to Third Parties during the applicable Royalty Term for such Licensed Product, less the following amounts to the extent actually incurred or paid by Naia, its Affiliates, or Sublicensees with respect to such sales or transfers:
(a)trade, cash and quantity discounts, charge backs or rebates actually allowed or taken, including discounts or rebates to governmental; wholesalers and other distributors; 

pharmacies and other retailers; buying groups; health care insurance carriers; pharmacy benefit management companies; regulatory authorities; Third Parties associated with patient assistance programs; or managed care organizations;
(b)credits or allowances actually given or made for rejection of, or return of previously sold Licensed Products;
(c)any charges for insurance, freight, and other transportation costs directly related to the delivery of Licensed Product to the extent included in the gross invoiced price;
(d)any tax, tariff, duty or governmental charge levied on the sales, transfer, transportation or delivery of the Licensed Product (including any tax such as a value added or similar tax or government charge) borne by the seller thereof, other than franchise or income tax of any kind whatsoever;
(e)any import or export duties or their equivalent borne by the seller; and
(f)wholesaler, distributor, and inventory management fees.
All aforementioned deductions shall only be allowable to the extent they are commercially reasonable and determined in the ordinary course of business based on its accounting standards and practices consistently applied across its product lines and verifiable based on conventional industry practices. All such discounts, allowances, credits, rebates, and other deductions shall, for purposes of calculating Net Sales hereunder, when offered in conjunction with discounts, allowances, credits, or rebates on other products sold for separately stated prices, shall not be deducted hereunder to the extent offered as an enticement or in exchange for purchasing such other products such that the Licensed Product bears a disproportionate portion of such deductions as related to such other products. Notwithstanding anything in this Agreement to the contrary, the transfer of the Licensed Product between or among Naia, its Affiliates, and Sublicensees will not be considered a sale, provided, that in the event an Affiliate or Sublicensee is the end-user of Licensed Product, the transfer of Licensed Product to such Affiliate or Sublicensee shall be included in the calculation of Net Sales at the average selling price charged in the applicable country in an arm’s length sale to a Third Party who is not an Affiliate or Sublicensee in the relevant period. Net Sales will include the cash consideration received on a sale and the fair market value of all non-cash consideration. Disposition of Licensed Product for, or use of the Licensed Product in, clinical trials or other scientific testing, as samples, or under compassionate use, named patient sales, patient assistance, or test marketing programs or other similar programs or studies where the Licensed Product is supplied at or below cost shall not result in any Net Sales however if Naia or any of its Affiliates or Sublicensees charges an amount for such Licensed Product in excess of Naia’s, its Affiliates’, or its Sublicensees’ cost therefor, the amount billed will be included in the calculation of Net Sales, but for the sake of clarity such disposition or use of the Licensed Product shall never constitute a First Commercial Sale.

If (i) the Licensed Product is sold and not invoiced separately in the form of a combination product containing both the Licensed Product and one or more independently therapeutically active pharmaceutical molecules (i.e., a chemical entity performing a therapeutic or prophylactic function distinct from the enhancement of the activity or bioavailability of the Licensed Product itself), (ii) the Licensed Product is sold in a form that contains (or is sold bundled for a single price with) a delivery device therefor (in either case ((i) or (ii)), a “Combination Product”), or (iii) the Licensed Product is sold as both a combination described in (i) and with a delivery device as set forth in (ii),  then Net Sales the purpose of calculating royalties owed under this Agreement for sales of such Licensed Product sold in such a manner in a particular country shall be determined as follows: first, Naia shall determine the actual Net Sales of such Combination Product in such country (using the above provisions) and then such amount shall be multiplied by the fraction A/(A+B), where A is the weighted average sales price of the Licensed Product if and when sold separately in finished form in such country, and B is the weighted average sales price of any other active pharmaceutical molecule(s) and/or delivery device(s) in the combination if and when sold separately in finished form in such country. If the Licensed Product in the combination is not sold separately in finished form in such country, Net Sales shall be calculated by multiplying actual Net Sales of such Combination Product by the following formula: one (1) minus B / C  where B is the weighted average sale price(s) of the other active pharmaceutical molecule(s) or delivery device(s) in the combination when sold separately in finished form in such country and C is the weighted average sale price of the Combination Product in such country (if there is more than one other active pharmaceutical molecule(s) or delivery device(s), B shall equal the sum of all such other active pharmaceutical molecules’ or delivery devices’ weighted average sale prices in such country). If any other active pharmaceutical molecule(s) or delivery device(s) in the combination is not sold separately in finished form in such country, Net Sales shall be calculated by multiplying actual Net Sales of such Combination Product by a fraction A/C where A is the weighted average sales price of the Licensed Product if sold separately in finished form in such country and C is the weighted average sales price of the Combination Product in such country. If neither the Licensed Product nor any other active pharmaceutical molecule or delivery device in the Combination Product is sold separately in finished form in the applicable country, the adjustment to Net Sales for such country shall be determined by the Parties in good faith to reasonably reflect the fair market value of the contribution of the Licensed Product in the Combination Product to the total fair market value of such Combination Product.
1.39“Non-Royalty Sublicense Income” means payments received by Naia or an Affiliate thereof as consideration for the grant of a sublicenses to Third Parties with respect to Amunix Intellectual Property under this Agreement, including, but not limited to, up-front payments, milestone payments, and the like, but specifically excluding (i) royalties on the sale or distribution of Licensed Product(s), (ii) funding received from a Sublicensee or an Affiliate thereof, following execution of the applicable sublicense, for specific research, development, or other services performed by Naia or an Affiliate thereof with respect to Licensed Products following the execution of such sublicense, to the extent such funding does not exceed Naia’s and its Affiliates’ reasonable, documented cost of performing such research, development, or other services, and (iii) purchases of Naia’s or its Affiliates’ equity or debt securities, to the extent the price paid therefor does not exceed the fair market value thereof, as reasonably determined in good faith by Naia’s Board of Directors. 

1.40“Original License” means that certain License Agreement, dated December 9, 2014 (the “Original License Effective Date”).
1.41“Patent” means any patent application or patent anywhere in the world, including all of the following kinds: provisional, utility, divisional, continuation, continuation-in-part, and substitution applications; and utility, re-issue, re-examination, renewal and extended patents, and patents of addition, and any Supplementary Protection Certificates, restoration of patent terms and other similar rights.
1.42“Party” means Naia or Amunix.
1.43“Phase I Clinical Trial” means, wherever in the world conducted, a study in humans, the principal purpose of which is preliminary determination of safety in healthy individuals or patients that would otherwise satisfy the requirements of 21 C.F.R. § 312.21(a) in the U.S. or its foreign equivalent.
1.44“Phase II Clinical Trial” means, wherever in the world conducted, a study in humans of the short-term side effects and risks associated with a product and its efficacy for the indication under investigation in such study, that would otherwise satisfy the requirements of 21 C.F.R. § 312.21(b) in the U.S. or its foreign equivalent.
1.45“Phase III Clinical Trial” means, wherever in the world conducted, a study in humans of the safety and efficacy of a product, which is prospectively designed to demonstrate statistically whether such product is safe and effective for use in the indication under investigation in a manner sufficient to file to obtain regulatory approval to market and sell that product in the U.S. or any other country for the indication under investigation in such study that would otherwise satisfy the requirements of 21 C.F.R. § 312.21(c) in the U.S. or its foreign equivalent. Phase III Clinical Trials also include any and all human clinical trials that serve as pivotal clinical trials, even if officially designated as phase II clinical trials.
1.46“Primary Territory” means that portion of the Territory other than the Greater China Territory and Korea Territory.
1.47“Product-specific Patents” means all Patents that: (a) claim or Cover inventions made by or on behalf of Naia, Amunix, any Affiliate of either of the foregoing, or Sublicensees, or any combination of the foregoing, after the Original License Effective Date pursuant to this Agreement that relate directly and specifically to (i) a composition that combines an XTEN Sequence with an Active Moiety; (ii) a composition comprising the Licensed Product, or (iii) methods of use of such a composition within (a)(i) or (a)(ii), except such Patents, or inventions Covered thereby, that (x) directly relate to or Cover any therapeutically active ingredients or moieties other than an XTEN Sequence or Active Moiety or (y) would be included in Naia Improvements pursuant to clause (ii) of the first sentence of Section 1.35; or (b) claim or Cover inventions made prior to the Original License Effective Date by or on behalf of Amunix or an Affiliate thereof that relate specifically to (i) a composition that combines an XTEN Sequence with an Active Moiety; (ii) a composition comprising the Licensed Product, or (iii) methods of use of a composition within (b)(i) or (b)(ii) that are subject to license under this Agreement and that are not XTEN Patents. For 

clarity, an XTEN Patent that has one or more claims that Cover the Licensed Product is not a Product-specific Patent.
1.48“Regulatory Approval” means all approvals (including, where applicable, pricing and reimbursement approval and schedule classifications), product and/or establishment licenses, registrations or authorizations (including marketing authorizations) of any governmental authority necessary for the development, manufacture, use, marketing, sale or commercialization of a pharmaceutical (including small molecule or biologic) product.
1.47“Research Construct” means an individual molecule selected for research and development by Naia as a Backup Molecule comprised of an Active Moiety and a single XTEN Sequence, wherein the combination of the Active Moiety and XTEN Sequence binds to the GLP-1 receptor Target.
1.48“Research Plan” means the research plan developed by the Parties in accordance with Section 2.1(d) with respect to one or more Backup Molecules incorporating the specific activities and obligations contemplated in Exhibit D.
1.49“Research Program” means all activities conducted under the applicable Research Plan during the applicable Research Term.
1.50“Research Term” means, with respect to a Research Construct selected as a Backup Molecule, the period commencing with the establishment of the Research Plan and expiring upon the earlier of (1) the selection of the Backup Molecule as the Licensed Product under Section 2.5 or (2) the [ ].
1.51“Side Letter” means that certain letter agreement, dated April __, 2020, between Amunix and Naia.
1.52“Sublicensee” means a Third Party to which Naia, its Affiliate, or a prior Sublicensee grants a sublicense of the rights granted to Naia under the Product License in accordance with Section 2.6(c).
1.53“Sublicensee Background Technology” means any Know-How and Patents (a) owned, controlled, or licensed by a Sublicensee or an Affiliate thereof and (b) in the case of Know-How, exists as of and/or was conceived prior to the date of such sublicense, or is developed or obtained by such Sublicensee or Affiliate thereof independently of this Agreement (and such sublicense) without the use of Amunix’s Confidential Information, and in the case of Patents, claims or discloses inventions conceived prior to the date of such sublicense or developed by Sublicensee or its Affiliates independently of the Agreement without the use of Amunix’s Confidential Information, or were obtained by such Sublicensee or its Affiliate independently of the Agreement after the date of such sublicense, and in each case all Intellectual Property related to such Know-How and Patents. 
1.54“Target” means a biological target or cell receptor ligand to which an Active Moiety has specific binding affinity.

1.55“Target Set” means, with respect to a Research Construct and/or Licensed Product, the GLP-1 receptor Target for which the Research Construct and/or Licensed Product has demonstrated clinically-relevant binding affinity.
1.56“Territory” means worldwide. The Parties acknowledge and agree that Amunix is granting worldwide rights to Naia under this Agreement.
1.57“Territory Portion” means the Greater China Territory, Korea Territory, or Primary Territory.
1.58“Third Party” means any entity other than Naia, Amunix, or an Affiliate of either Party.
1.59“U.S. Dollar” and each means United States dollars, the legal currency of the United States.
1.60“Valid Patent Claim” means a claim of a Patent, which claim is pending and has not been finally abandoned or finally rejected or is issued and unexpired and has not been found to be unpatentable, invalid or unenforceable by a court or other authority having jurisdiction, from which decision no appeal is taken, shall be taken or can be taken.
1.61“XTEN Sequence” means each sequence shown on Exhibit C attached hereto, as it may be amended from time to time by written agreement of the Parties, and derivative, modified or truncated sequences encompassed by Amunix Improvements, as well as XTEN Modifications generated pursuant to Section 2.6(d)(ii), below. For avoidance of doubt, an XTEN Sequence does not include an Active Moiety with which it may be combined in the formation of a Research Construct or Licensed Product.
1.62“Proof of Concept Clinical Trial” means an open label, repeat, dose escalation study of a Licensed Product in adults with short bowel syndrome (SBS).
ARTICLE 2
2.1Conduct of Research and Development Program.
(a)Licensed Product. Naia has selected, and Amunix agrees, “NB1001”, comprised of the Active Moiety exenatide fused to [ ], as more fully described in Exhibit B, shall be the Licensed Product unless another Licensed Product is designated in accordance with Section 2.5.
(b)Development Committee. Amunix and Naia will create a development committee (“Development Committee”) comprised of three members; two from Naia and one from Amunix. One of the representatives from Naia will chair the Development Committee. The Development Committee will meet at least twice annually at six month intervals to review the progress of the collaboration and recommend changes to the development program to Naia. The Development Committee will continue to meet until the earlier of (1) approval of a Licensed Product by FDA, EMEA or PMDA, or (2) grant of a sub-license of the Licensed Product in the Territory.

(c)Efforts. In the event that Naia requests Amunix to create and evaluate one or more Research Constructs as a Backup Molecule during the Term, Amunix shall use Commercially Reasonable Efforts to perform its obligations under the Research Plan approved by the Parties, including, without limitation, the exchange of such research materials (including Active Moieties, Active Moiety sequences and Research Constructs) and information as may be required to accomplish the activities under the Research Plan and associated Know-How associated with such materials and information. Amunix and Naia shall each conduct their respective obligation under the Research Program in good scientific manner, and in compliance in all material respects with all requirements of applicable laws and regulations to attempt to achieve its objectives efficiently and expeditiously. Both Parties shall proceed diligently with their responsibilities under the Research Program, and Amunix shall allocate such personnel, and equipment as available under the FTE funding available pursuant to Section 2.2, below, to conduct its obligations under the Research Program and to accomplish the objectives thereof. Should the Research Plan require from Amunix more than the allocation of FTEs per Section 2.2, then Naia and Amunix will agree on the extent of the additional FTE requirements, and Naia will fund the additional Amunix FTE support for the Research Plan.
(d)Research Reporting. Amunix shall keep detailed, written records of all activities performed under the Research Program and Amunix shall provide to Naia, monthly reports, describing the activities performed, results obtained, and the FTE resources used during the previous month. Within 30 days of the end of Stage 1 (or more frequently, as may be agreed by the Parties), each Party will prepare a written report that details the results of the Research Program and identifies any Naia Improvements, and/or Amunix Improvements developed during such Party’s performance of the Research Program. In addition, each Party shall have the disclosure obligations under Section 4.1.
(e)Amunix Subcontracting. With the exception of the generation of synthetic peptides or encoding polynucleotides by Amunix’s preferred vendor, Amunix shall not subcontract any part of the Research Program without Naia’s prior written consent, which will not be unreasonably withheld. Any subcontracting by Amunix shall not relieve Amunix of its obligations under this Agreement and Amunix shall be responsible for all acts and omissions of any permitted subcontractors in connection with the subcontracted services.
2.2FTE Funding. During the Research Term, Amunix shall use Commercially Reasonable Efforts to make available, on a reasonably dedicated basis, research staff sufficient to fulfill its obligations under the Research Plan, at Naia’s cost and expense, within the parameters described in this Section 2.2. Naia shall fund such FTE resources allocated according to the Research Plan. In addition, Amunix will use Commercially Reasonable Efforts to make available additional FTEs as required and requested by Naia, if any, and Naia will fund such additional Amunix FTE requirements for the Research Plan. Both Parties shall require, by written agreement, that all of their FTEs and all other personnel, employees, and agents involved in the Research Program have entered into confidentiality and invention assignment agreements that are consistent with the provisions of this Agreement.

2.3Reagent and Material Costs. During the Research Term, unless otherwise specified, each Party shall bear the cost of any reagents and/or research materials required for it to perform its designated Research Plan activities.
2.4Research and Development Programs: Development Stages and Diligence Requirements.
(a)The individual development Stages for the development of the Licensed Product in each Territory Portion under this Agreement, the Stage Periods for each Stage, extension periods available and Extension Fees are set forth in Table 2.4. Two (2) alternative diligence conditions, detailed in Sections 2.4(b) and 2.4(c), below, govern the requirement of Naia to diligently progress the Licensed Product through the five (5) Development Stages for a given Territory Portion in order to avoid Amunix having a right to cause termination of the Agreement and reversion of rights to Amunix under Section 8.5(g). Naia can meet the diligence requirement by fulfilling either condition during each Development Stage. For clarity, however, if the Stage End Event has been achieved, the next Development Stage and its diligence conditions automatically initiate. China Sublicensees will collectively be separately required by the Naia Sublicense Agreements to meet at least one of the alternative diligence conditions of Sections 2.4(b) or 2.4(c), below, with respect to the Greater China Territory, with the starting date for the earliest Stage that has not had its Stage End Event achieved for the Greater China Territory at the execution of the earliest Naia Sublicense Agreement therefor being the effective date of the sublicense. Korea Sublicensees will collectively be required by the applicable Naia Sublicense Agreements to meet at least one of the alternative diligence conditions of Sections 2.4(b) or 2.4(c), below, , with respect to the Korea Territory, with the starting date for the earliest Stage that has not had its Stage End Event achieved for the Korea Territory at the execution of the earliest Naia Sublicense Agreement therefor being the effective date of the sublicense. For the sake of clarity, the fulfillment of a given diligence condition by Naia in the Primary Territory will not relieve the obligations of China Sublicensees or the Korea Sublicensees, respectively, to meet the diligence conditions for the Greater China Territory or the Korea Territory, respectively, and vice versa.
(b)Diligence Condition 1. The terms and conditions of Section 2.4(c) notwithstanding, so long as Naia (together with its Affiliates and Sublicensees) expends in the aggregate the following minimum financial amounts in direct support of development of the Licensed Product during each of the Development Stages for a particular Territory Portion, Naia will be deemed to have performed with appropriate diligence such that no extension fee is required to prevent Amunix from having a right of termination of the Agreement for such Territory Portion:
(i)Stage 1: The Parties agree that Stage 1 has, effective as of the 2nd A&R Effective Date, been completed by the selection of NB1001and no payments from Naia are due for Stage I completion;
(ii)Stage 2: $[ ] in any consecutive [ ] ([ ]) month period during the Stage;
(iii)Stage 3: $[ ] in any consecutive [ ] ([ ]) month period during the Stage;

(iv)Stage 4: $[ ] in any consecutive [ ] ([ ]) month period during the Stage; and
(v)Stage 5: $[ ] in any consecutive [ ] ([ ]) month period during the Stage.
If Naia (together with its Affiliates and Sublicensees) (i) fails to expend the minimum financial amount during the indicated period, (ii) fails to pay the Extension Fee under Diligence Condition 2, and (iii) fails to achieve the applicable Stage End Event during the applicable Stage Period (as it may be extended hereunder), Amunix shall have the right to terminate this Agreement upon written notice given to Naia and, upon such termination and subject to Section 8.5(g), below, certain rights will revert to Amunix.
(c)Diligence Condition 2. If Naia (together with its Affiliates and Sublicensees) fails to achieve a Stage End Event (as detailed in Table 2.4) within the applicable Stage Period, Naia may extend such Stage Period for one or more additional six (6) month periods, up to the maximum number of extensions (detailed in Table 2.4 with respect to a given Stage), upon providing to Amunix written notice and the corresponding extension fee (set forth in Table 2.4). If, with respect to a particular Territory Portion, (i) Naia fails to pay the extension fee, (ii) the Stage Period ends without the applicable Stage End Event having been achieved by Naia (together with its Affiliates), and (iii) if Naia fails to expend the minimum financial amount(s) pursuant to Section 2.4(b), then Amunix shall have the right to terminate this Agreement with respect to such Territory Portion upon written notice to Naia and, upon such termination and subject to Section 8.5(g), below, certain rights will revert to Amunix.
Table 2.4: Development Stages

	
						
	Stage
	Stage Initiation Event
	Stage End Event
	Stage Period
	Maximum Number of Extensions
	Extension Fee (USD)

	Stage 1
	[ ]
	[ ]
	[ ]
	[ ]
	$[ ]

	Stage 2
	[ ]
	[ ]
	[ ]
	[ ]
	$[ ]

	Stage 3
	[ ]
	[ ]
	[ ]
	[ ]
	$[ ]

	Stage 4
	[ ]
	[ ]
	[ ]
	[ ]
	$[ ]

	Stage 5
	[ ]
	[ ]
	[ ]
	[ ]
	$[ ]

* [ ]
(d)The Parties acknowledge and agree that (i) the achievement of any Stage End Event for a particular Stage prior to the achievement of any preceding Stage’s Stage End Event shall be considered achievement of such preceding Stage’s Stage End Event for purposes of this Section 2.4(c) and (ii) the diligence obligations set forth above, Amunix’s corresponding rights of termination, and any resulting termination of this Agreement shall apply separately with respect to the Primary Territory, Greater China Territory, and Korea Territory and Naia’s rights respective rights therein (i.e., such obligations, termination rights, and termination shall apply on a Territory Portion-by-Territory Portion basis).

(e)Except for the cloning, expression, conjugation and characterization and preclinical assay work and any other work performed by Amunix under a Research Plan, Naia shall use Commercially Reasonable Efforts to perform, at Naia’s sole cost and expense, all of the activities allocated to Naia under this Agreement, including additional preclinical evaluations of the Backup Molecules, if any is elected by Naia, all subsequent clinical development and regulatory activities, manufacturing and commercialization of the Licensed Product. Amunix agrees to cooperate and reasonably assist Naia in its efforts for research, development, and commercialization of the Licensed Product, including, regulatory and manufacturing activities, at Naia’s cost and expense.
2.5Backup Molecules.
(a)    During the Research Term, Naia, its Affiliates, or Sublicensees may make modifications to the non-XTEN Sequence portion of the Licensed Product, including moving the whole XTEN Sequence to different locations in the subject Active Moiety, modifying the Active Moiety (but maintaining functional equivalence with the Active Moiety) or changing the linkage between the XTEN Sequence and the Active Moiety to generate up to a total of three (3) Backup Molecules which may be researched and developed in parallel with the Licensed Product, subject to the terms of this Agreement. The chemical structures of all Backup Molecules for the Licensed Product must be disclosed to Amunix once a Backup Molecule enters Stage 2. No Stage Periods are applicable (nor Extension Fees required) for Backup Molecules as long as the Licensed Product remains in development consistent with the diligence requirements of Section 2.4. If a Backup Molecule surpasses the development status (i.e., Stage) of the Licensed Product, such Backup Molecule will be deemed to be the Licensed Product.
2.6Licenses.
(a)Limited Research License. Subject to the terms and conditions of this Agreement, during the Research Term each Party hereby grants to the other and its Affiliates a non-exclusive royalty-free license, with rights of sublicense as set forth in Section 2.6(c) and assignable with this Agreement under Section 9.5, to use the research materials and information provided by the granting Party to the extent reasonably necessary for the grantee Party or its Affiliates or Sublicensees (as applicable to any China Sublicensee or Korea Sublicensee) to perform its obligations pursuant to such Research Program (the “Limited Research License”).  This Limited Research License includes a grant from Amunix to Naia and its Affiliates of the rights reasonably necessary to make, have made, and use the specific XTEN Sequences to be evaluated under the applicable Research Plan, but only to research and evaluate the Research Constructs that will enable Naia to select and develop Backup Molecule(s) as contemplated in the Research Plan and Research Program. The Limited Research License for each Backup Molecule will terminate upon the selection of such Backup Molecule as the Licensed Product. The Limited Research License does not include any right for Naia, its Affiliates or Sublicensees to modify the sequence, structure or length of any XTEN Sequence. Naia shall not, shall ensure that its Affiliates and Sublicensees do not, modify the sequence, structure or length of any XTEN Sequence.

(b)Product License. Amunix hereby grants to Naia and its Affiliates an exclusive, worldwide, royalty-bearing license, with rights of sublicense as set forth in Section 2.6(c) and assignable with this Agreement under Section 9.5, under the Amunix Listed Patents and Amunix Intellectual Property, to make, have made, develop, have developed, use, have used, offer for sale, sell, have sold, export, import and commercialize, the Licensed Product in the Field (the "Product License"). 
(c)Sublicense Rights. 
(i)Naia and its Affiliates shall have the right to grant sublicenses (through multiple tiers of sublicenses and sublicensees) of the Limited Research License granted in Section 2.6(a) and the Product License granted in Section 2.6(b) to its Affiliates, and subject to Section 2.6(c)(ii)-(v) below, to Third Parties solely as set forth in this Section 2.6(c) (each such sublicense granted by Naia, any Affiliate thereof, or any prior Naia Sublicensee, a "Naia Sublicense Agreement"). Naia shall remain primarily responsible for all activities undertaken by any Sublicensee and any and all failures by any Sublicensees to comply with the applicable terms of this Agreement. For clarity, sublicensing by Naia shall not relieve Naia of its obligations under this Agreement and Naia shall be responsible for all acts and omissions of any Sublicensees in connection with the sublicensed rights. 
(ii)Sublicense Rights in Greater China Territory. Naia and its Affiliates shall have the right to grant one or more sublicenses (through multiple tiers of sublicenses and sublicensees) of the Limited Research License and the Product License to one or more China Sublicensees in any or all fields within the Field. 
(iii) Sublicense Rights in Korea Territory. Naia shall have the right to grant one or more sublicenses (through multiple tiers of sublicenses and sublicensees) of the Limited Research License and the Product License to one or more Korea Sublicensees in any or all fields within the Field. 
(iv)  Naia shall, within thirty (30) days after granting any Naia Sublicense Agreement, notify Amunix of the grant of such sublicense and provide Amunix with a true and complete copy of the Naia Sublicense Agreement, subject to any reasonable redactions that may necessary to protect the proprietary technical information of any Sublicensee. With the exception of separate financial conditions for a China Sublicensee or the Korea Sublicensee (detailed in Sections 3.3 and 3.4, below), each Naia Sublicense Agreement shall be consistent with the terms and conditions of this Agreement.  Naia will use Commercially Reasonable Efforts to enforce such Naia Sublicense Agreement including, if deemed appropriate by Naia in its sole discretion, the termination of such Naia Sublicense Agreement (for example, as Naia may deem appropriate in the 

event of an uncured material breach by a Sublicensee).  Each Naia Sublicense Agreement shall include the following additional terms and conditions:
1.Each Sublicensee shall be bound by and subject to all applicable terms and conditions of this Agreement in the same manner and to the same extent as Naia is bound thereby; and
2.Naia shall have rights, ownership and/or licenses to Amunix Improvements and Product-specific Patents generated by such Sublicensee in order to pass through rights, ownership and/or licenses to Amunix as required hereunder as if such Intellectual Property were generated by Naia under this Agreement.
(d)License Restrictions.
(i)Naia shall not, shall ensure that its Affiliates do not, and shall include a covenant substantially similar to this sentence in each Naia Sublicense Agreement requiring that the applicable Sublicensee and its Sublicensees do not, in each case, use or practice any Amunix Intellectual Property outside the scope of the license granted to Naia under Sections 2.6(a) and 2.6(b), except to the extent such use or practice is permitted under the grant of rights to such Amunix Intellectual Property under a separate agreement granting Naia, its Affiliate, or such Sublicensee the right to such use or practice of such Amunix Intellectual Property, and Naia shall use Commercially Reasonable Efforts to enforce such above-referenced covenant against Sublicensees.
(ii)The Product License granted in Section 2.6(b) does not include the right for Naia, its Affiliates or Sublicensees to modify the sequence or length of any XTEN Sequence licensed hereunder (an “XTEN Modification”). For avoidance of doubt, the foregoing shall not restrict Naia, its Affiliates, or Sublicensees from making Backup Molecules in accordance with Section 2.5. Naia, its Affiliates, or Sublicensees must notify Amunix of any Backup Molecules that are progressed to IND-enabling toxicology studies and/or subsequent developmental stages. If, during the development of the Licensed Product, Naia, its Affiliates, or Sublicensees believes that the XTEN Sequence selected for the Licensed Product needs an XTEN Modification, Naia will so notify Amunix, and the Parties will cooperate in good faith to consider what XTEN Modification is appropriate. If, after consultation, Naia or its Affiliates desire to utilize such XTEN Modification and the Parties do or do not reach agreement as to the mechanism or the nature of such XTEN Modification, Naia or its Affiliates shall be entitled to make such XTEN Modification, provided that the making of such XTEN Modification would not result in any material, adverse effect on Amunix Intellectual Property and Naia communicates the details of such XTEN Modification to Amunix prior to performing and incorporating the XTEN Modification into any Backup Molecule or the Licensed Product and provides Amunix an updated Exhibit B, which updated Exhibit B shall be a part of this Agreement. In accordance with Section 2.5, Naia shall have the right to designate up to three (3) Backup Molecules under the Limited Research License granted under Section 2.6(b).
(e)Government Rights. The foregoing grant of license rights under Section 2.6(a) and (b) shall be subject to: (i) the retained rights of the U.S. Government under 35 U.S.C. § 200 et seq. and 37 C.F.R. § 401, if any, and (ii) an obligation under 35 U.S.C. § 204, if applicable, that Licensed 

Products be manufactured substantially in the United States, unless Naia obtains a waiver from the appropriate federal agency.
(f)Naia License.  Naia hereby grants and shall grant to Amunix a worldwide, royalty-free, non-exclusive license, including the right to sublicense, under any Know-How conceived, discovered, or made by Naia, its Affiliates or Sublicensees in connection with this Agreement or as a result of using Amunix’s Confidential Information, whether patentable or not, to the extent such Know-How is directly and specifically related to XTEN Sequences (and not any therapeutic moieties conjugated thereto), excluding modifications to Naia Background Technology or any Sublicensee Background Technology, or Naia Improvements for use with XTEN Sequences, and severable from Naia Background Technology and Sublicensee Background Technology, to make, have made, develop, use, offer for sale, sell, export, import and commercialize products comprising XTEN Sequences or XTEN Modifications included within Amunix Improvements, provided that such license shall not (i) during the term of this Agreement, include any rights to make, have made, develop, use, offer for sale, sell export, import and commercialize Licensed Products (as defined under this Agreement) or (ii) include any rights to any active pharmaceutical ingredients, peptides, proteins, or other therapeutic moieties that may be conjugated with XTEN Sequences.
(g)No Implied License. Except as explicitly set forth in this Agreement, neither Party grants to the other Party any license, express or implied, under its Intellectual Property rights.
ARTICLE 3
FINANCIALS
3.1License Fee. Amunix acknowledges that Naia has paid to Amunix a one-time, non-refundable, non-creditable, license fee of [ ] U.S. Dollars ($[ ]).
3.2FTEs. In the event that Naia requests assistance from Amunix for any modifications to a Licensed Product or for the creation and evaluation of a Research Construct as a Back-up Molecule, Naia will pay to Amunix all FTE Costs, on a Calendar Quarterly basis within thirty (30) days of receipt of an itemized invoice listing the FTE hours worked in the performance of the requested assistance during the previous Calendar Quarter.
3.3Milestone Payments. Upon the achievement of each Milestone Event set forth in Tables 3.3-A, 3.3-B, and 3.3-C by Naia, its Affiliates, or Sublicensees (each, a “Milestone Event”), Naia shall pay to Amunix the corresponding non-refundable, non-creditable amount(s) set forth in Tables 3.3-A (for milestones achieved in and with respect to the Primary Territory), 3.3-B (for milestones achieved in and with respect to the Greater China Territory, but only to the extent a Naia Sublicense Agreement with respect to the Greater China Territory has been entered into at the time of such Milestone Event), and 3.3-C (for milestones achieved in and with respect to the Korea Territory, but only to the extent a Naia Sublicense Agreement with respect to the Korea Territory has been entered into at the time of such Milestone Event) (each such payment contemplated in 

Tables 3.3-A, 3.3-B, and 3.3-C, a “Milestone Payment”). Naia shall separately pay to Amunix (1) the amounts set forth in Table 3.3-B for each Milestone Event when first achieved by a China Sublicensee and/or (2) the amounts set forth in Table 3.3-C for each Milestone Event when first achieved by a Korea Sublicensee, in each case upon the achievement of each such Milestone Event irrespective of whether Milestone Payments for development outside of the Greater China Territory and/or the Korea Territory have been paid.  For clarity, if Naia grants more than one Naia Sublicense Agreement with respect to the Greater China Territory or with respect to the Korea Territory, Milestone Payments set forth in Tables 3.3-B and 3.3-C will be required upon the first achievement of each Milestone Event by each China Sublicensee or each Korea Sublicensee, as applicable.
Table 3.3-A: Milestone Events and Payments with respect to the Primary Territory
	
		
	Milestone Event
	Milestone Payments for Licensed Product

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

* [ ]
** [ ]
Table 3.3-B: Milestone Events and Payments with Respect to the Greater China Territory

	
		
	Milestone Event
	Milestone Payments for Licensed Product Sublicensed in the Greater China Territory

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

* [ ]

Table 3.3-C: Milestone Events and Payments with Respect to the Korea Territory
	
		
	Milestone Event
	Milestone Payments for Licensed Product Sublicensed in the Korea Territory

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

* [ ]
(a)With the exception of payment of Net Sales Milestones, as set forth in Section 3.3(b), below, each Milestone Payment is due within thirty (30) days after the occurrence of the Milestone Event triggering the payment per the terms of Section 3.6. Naia shall promptly notify Amunix of the achievement of each Milestone Event triggering a Milestone Payment, including those achieved by a Sublicensee. Failure to pay a given Milestone Payment invoice shall be considered a material breach and the basis for termination of the Agreement under Section 8.4(a), if uncured. Notwithstanding anything herein to the contrary, (i) Naia shall only be required to pay each Milestone Payment under Table 3.3-A once, regardless of the number of Licensed Products, formulations thereof, indications therefor, or Sublicensees with respect thereto or the number of times a given Milestone Event is achieved and (ii) Naia shall only be required to pay each Milestone Payment under Tables 3.3-B and 3.3-C once for each Sublicensee achieving the corresponding milestone triggering such Milestone Payment, regardless of the number of Licensed Products, formulations thereof, or indications therefor, or the number of times a given Milestone Event is achieved by such Sublicensee.
(b)Sales Milestones. For the Licensed Product, Naia shall make each of the one-time, non-refundable, non-creditable sales milestone payments to Amunix when the aggregate Net Sales of such Licensed Product in the Primary Territory in a Calendar Year first reaches the amount specified in Table 3.3-A, above. In the event that a sublicense is granted to a China Sublicensee and/or Korea Sublicensee, Naia shall make such further one-time, non-refundable, non-creditable sales milestone payments to Amunix when the aggregate Net Sales of such Licensed Product in the Greater China Territory and/or in the Korea Territory in a Calendar Year first reaches the amounts specified in Tables 3.3-B or 3.3-C (as applicable), above. Naia shall pay to Amunix such amount in accordance with Section 3.5 within sixty (60) days after the end of the Calendar Year during which such sales milestone event is achieved. Naia shall notify Amunix of the achievement of each sales milestone event triggering a payment hereunder within sixty (60) days of such achievement. If more than one sales milestone event is achieved in any Calendar Year, all applicable milestone payments will be due. For clarity, each sales milestone of Tables 3.3-A, 3.3-B, and 3.3-C shall only be paid the first time the Licensed Product achieves such Milestone Event in the respective Territory Portion.

(c)Non-Royalty Sublicense Income Consideration. Should Naia or an Affiliate thereof enter into a Naia Sublicense Agreement with one or more Third Parties with respect to any portion of the Primary Territory, then Naia shall pay Amunix [ ] percent ([ ]%) of any Non-Royalty Sublicense Income received thereunder within [ ] ([ ]) days after receipt of such payments from its Sublicensee(s). The foregoing notwithstanding, in the event that a Naia Sublicense Agreement is entered into with a China Sublicensee or a Korea Sublicensee, respectively, granting rights under Amunix Intellectual Property with respect to the Greater China Territory or Korea Territory, respectively, Naia shall pay Amunix a one-time (for each China Sublicensee or Korea Sublicensee), non-refundable, non-creditable, license fee of [ ] U.S. Dollars $([ ]) or [ ]% of the up-front consideration received by Naia for such Naia Sublicense Agreement, whichever is greater, in addition to the milestone event payments set forth in Tables 3.3-B and 3.3-C. With the exception of Milestone Payments under Sections 3.3(a) and 3.3(b) or Royalty Payments under Section 3.4, in each case attributable to any China Sublicensee or Korea Sublicensee, the Non-Royalty Sublicense Income payments will be credited against (i) any subsequent payments owed by Naia under this Article 3 and (ii) any Milestone Payments triggered by a Milestone Event that also triggered the payment of any corresponding Non-Royalty Sublicense Income.
(d)Change of Control. [ ]
3.4Royalties.
(a)Licensed Products Covered by Valid Claim: Base Royalty Percentage.
During the Royalty Term for a Licensed Product in a particular country, and subject to Section 3.4(c), Naia shall pay to Amunix a royalty on (i) the combined, aggregate amount of annual Net Sales for such Licensed Product in the Primary Territory and Naia’s and its Affiliates’ annual Net Sales of such Licensed Product in Korea Territory and Greater China Territory at the rates described in Table 3.4-A, (ii) to the extent a Naia Sublicense Agreement with respect to the Greater China Territory has been entered into at the time of such Net Sales, the aggregate annual Net Sales by Sublicensees for the Licensed Product in the Greater China Territory at the rates described in Table 3.4-B, and (iii) to the extent a Naia Sublicense Agreement with respect to the Korea Territory has been entered into at the time of such of such Net Sales, the aggregate annual Net Sales by Sublicensees for the Licensed Product in the Korea Territory at the rates described in Table 3.4-C, as applicable, in those countries as to which the Royalty Term remains in effect.

Table 3.4-A: Royalties with Respect to the Primary Territory and Naia’s and its Affiliates’ Sales in the Greater China Territory and Korea Territory
	
		
	Combined, Aggregate Annual Net Sales of the Licensed Product in the Primary Territory and Naia’s and its Affiliates’ Annual Net Sales of the Licensed Product in the Greater China Territory and Korea Territory
	Royalty Percentage of Net Sales in the Primary Territory and Naia’s and its Affiliates’ Sales in the Greater China Territory and Korea Territory

	[ ]
	[ ]%

	$[ ] - $[ ]
	[ ]%

	Above $[ ]
	[ ]%

Table 3.4-B: Royalties with Respect to Sublicensees’ Sales in the Greater China Territory
	
		
	Aggregate Annual Net Sales by Sublicensees for the Licensed Product in Greater China Territory
	Royalty Percentage of Net Sales in the Greater China Territory

	Under $[ ]
	[ ]%

	$[ ] - $[ ]
	[ ]%

	Above $[ ]
	[ ]%

Table 3.4-C: Royalties with Respect to Sublicensees’ Sales in the Korea Territory
	
		
	Aggregate Annual Net Sales by Sublicensees for the Licensed Product in the Korea Territory
	Royalty Percentage of Net Sales in the Korea Territory

	Under $[ ]
	[ ]%

	$[ ] - $[ ]
	[ ]%

	Above $[ ]
	[ ]%

For clarity, if Naia enters into a Naia Sublicense Agreement for the Greater China Territory or the Korea Territory, Naia shall pay to Amunix a royalty of the aggregate annual Net Sales by Sublicensees for the Licensed Product in the Greater China Territory and/or the Korea Territory, as applicable, in addition to any royalty payments due for the Primary Territory or Naia’s and its Affiliates’ Net Sales of Licensed Products in the Greater China Territory and/or the Korea Territory.

(b)Licensed Products Not Covered by Valid Claim. If a Licensed Product is not Covered by a Valid Claim of the Amunix Patents in a country where such Licensed Product is sold, then the applicable royalty rate above for such Licensed Product in such country shall be reduced by [ ] percent ([ ]%) for such country.
(c)Royalty Offset. The royalty paid to Amunix under this Article 3 shall be reduced by [ ] percent ([ ]%) of the amount of any royalty or other consideration that Naia, an 

Affiliate thereof, or a Sublicensee pays to a Third Party under licenses that Naia reasonably determines to be necessary in connection with the research, development, manufacture, use or sale of the Licensed Product in a given country.  Further notwithstanding the above, the royalty obligation payable to Amunix will be reduced such that the total royalties paid by Naia and its Affiliates to Amunix and all Third Parties is no higher than [ ]% of Net Sales, provided that the amounts payable hereunder shall not be reduced by the effects of this Section 3.4(c), with respect to any Calendar Quarter, to (i) below [ ]% on Net Sales in the Primary Territory or Net Sales by Naia and its Affiliates in the Greater China Territory and/or the Korea Territory and (ii) [ ]% of Net Sales by Sublicensees in the Greater China Territory and/or the Korea Territory, as applicable.
(d)Royalty Term. For the Licensed Product, the “Royalty Term” shall be determined on a country-by-country and Licensed Product-by-Licensed product basis, beginning upon First Commercial Sale of a particular Licensed Product in such country and continuing until the latest to occur of: (i) expiration of the last-to-expire Valid Patent Claim of an Amunix Patent Covering [ ] of such Licensed Product in such country; or (ii) the [ ] ([ ]th) anniversary of the First Commercial Sale of such Licensed Product in such country. Upon expiration of the Royalty Term as to a Licensed Product in a country, Naia shall have a worldwide, irrevocable, perpetual, paid up, no fee, royalty-free, non-exclusive license, with rights of sublicense and assignable with this Agreement under Section 9.5, under the Amunix Intellectual Property necessary to make, have made, develop, have developed, use, have used, offer for sale, sell, have sold, export, import, commercialize and otherwise exploit such Licensed Product in such country.
3.5Royalty Payments and Reports. All royalty payments under Section 3.4 (“Royalty Payments”) shall be due and payable within [ ] ([ ]) days after the close of the Calendar Quarter during which the corresponding Net Sales occur. Royalty Payments will be made in U.S. Dollars to such bank account as designated by Amunix by written notice to Naia. Together with any such payment, Naia shall deliver a report specifying in the aggregate and on Licensed Product-by-Licensed Product and country-by-country basis in U.S. Dollars translated from local currency using the applicable Exchange Rate prior to calculating the royalty payable: (i) total Net Sales amount of Licensed Products by Naia and its Affiliates and Sublicensees; (ii) applicable Royalty Terms for each Licensed Product being sold in each country; (iii) royalty rates applied; and (iv) royalties accrued.
3.6Payments; Method; Late Payment. Payments of Naia are made at the times specified in this Agreement. All payments to Amunix will be paid in U.S. Dollars and shall be deposited by wire transfer in immediately available funds in the requisite amount to such bank account as Amunix may from time to time designate by written notice to Naia. If Amunix does not receive payment of any sum due to it on or before the due date, simple interest shall thereafter accrue on the sum due until the date of payment at the per annum rate of [ ] percent ([ ]%) over the then-current prime rate reported in The Wall Street Journal or the maximum rate allowable by applicable laws, whichever is lower.

3.7Taxes.
(a)Each Party shall be solely responsible for the payment of all taxes imposed on its share of income arising directly or indirectly from the efforts of the Parties under this Agreement.
(b)The Parties agree to cooperate with one another and use reasonable efforts to reduce or eliminate tax withholding or similar obligations in respect of royalties, milestone payments, and other payments made by Naia to Amunix under this Agreement. To the extent Naia is required to deduct and withhold taxes on any payment to Amunix, Naia shall pay the amounts of such taxes to the proper governmental authority in a timely manner and promptly transmit to Amunix an official tax certificate or other evidence of such withholding sufficient to enable Amunix to claim such payment of taxes. Amunix shall provide Naia any tax forms that may be reasonably necessary in order for Naia not to withhold tax or to withhold tax at a reduced rate under an applicable bilateral income tax treaty. Each Party shall provide the other with reasonable assistance to enable the recovery, as permitted by applicable laws, of withholding taxes, value added taxes, or similar obligations resulting from payments made under this Agreement, such recovery to be for the benefit of the Party bearing such withholding tax or value added tax. Naia shall require its Sublicensees in the Territory (and the Greater China Territory and the Korea Territory, as applicable) to cooperate with Amunix in a manner consistent with this Section 3.7(b).
(c)If Naia is required to make a payment to Amunix that is subject to a deduction or withholding of tax, then (i) to the extent any withholding or deduction obligation increases as a result of any Change of Control by Naia, assignment of this Agreement by Naia, intentional change of tax treatment, tax status, or jurisdiction of taxation by action of Naia following the Original Effective Date, or any failure on the part of Naia to comply with applicable laws or filing or record retention requirements that has the effect of modifying the tax treatment of the Parties hereto with respect to the payments made hereunder, then the sum payable by Naia (in respect of which such deduction or withholding is required to be made) shall be increased to the extent necessary to ensure that Amunix receives a sum equal to the sum which it would have received had no such increased withholding or deduction obligation arising from such action, Change of Control, assignment, or failure to comply by Naia occurred, and (ii) otherwise, the sum payable by Naia (in respect of which such deduction or withholding is required to be made) shall be made to Amunix after deduction of the amount required to be so deducted or withheld, which deducted or withheld amount shall be remitted to the proper Governmental Authority in accordance with applicable laws.
3.8Exchange Rate. The rate of exchange to be used in computing the amount of currency equivalent in Dollars of Net Sales invoiced in other currencies shall be made at the average of the closing exchange rates reported in The Wall Street Journal over the applicable reporting period.
3.9Records; Inspection.
(a)Naia or its Affiliates shall keep complete and accurate records of its sales and other dispositions of Licensed Product including all records that may be necessary for the purposes of calculating all payments due under this Agreement. Naia or any Affiliate receiving rights under this Agreement shall make such records available for inspection by an independent, 

internationally-recognized accounting firm selected by Amunix and reasonably acceptable to Naia at Naia’s or the relevant Affiliate’s premises on reasonable notice during regular business hours as specified in Section 3.9(b) below.
(b)For a period of three (3) years from the end of the calendar year in which a payment was due hereunder, upon thirty (30) days prior notice, Naia shall (and shall require that its Affiliates and Sublicensees) make such records relating to such payment available, during regular business hours and not more often than once each Calendar Year, for examination by an independent certified public accountant selected by Amunix, which shall have entered into confidentiality agreement with Naia reasonably satisfactory to Naia, for the purposes of verifying compliance with this Agreement and the accuracy of the records and financial reports furnished pursuant to this Agreement. Any amounts shown to be owed by Naia to Amunix shall be paid within thirty (30) days from the auditor’s report, plus interest (as set forth in Section 3.6) from the original due date. Amunix shall bear the full cost of such audit unless such audit discloses a deficiency in Naia’s payments of greater than 10% for the period subject to such audit, in which case Naia shall bear the reasonable cost of such audit.
3.10Sublicensee Reports, Records and Audits. If Naia or its Affiliates grant any Sublicenses, the agreements for such Sublicenses shall include an obligation for the Sublicensee to (i) maintain records adequate to document and verify the proper payments (including milestones and royalties) to be paid to Amunix in accordance with this Article 3; (ii) provide reports with sufficient information to allow such verification; and (iii) allow Amunix (or Naia if requested by Amunix) to verify the payments due (such audit right is not required to be any stronger than that of Section 3.9).
3.11Non-refundable, Non-creditable Payments. Except as provided herein, all payments due under this Article 3 are non-refundable, and are not creditable against any other payment(s) due to Amunix under this Agreement or under any other agreement or arrangement between the Parties or any of their Affiliates.
ARTICLE 4
INTELLECTUAL PROPERTY
4.1Ownership/Inventorship.
(a)Nothing in this Agreement changes ownership of any Patents in existence as of the Original License Effective Date or ownership of a Party’s background technology.
(b)Ownership of Improvements.
(i)Naia shall own all right, title and interest in and to any Naia Improvements generated under this Agreement made by its employees, agents or contractors.
(ii)Amunix shall own all right, title and interest in and to any Amunix Improvements regardless of inventorship. Naia and its Affiliates shall assign and do hereby assign 

to Amunix its entire right, title and interest in and to the Amunix Improvements generated under this Agreement, and agrees to take all further actions to evidence such assignment, at Amunix’s reasonable request and expense. Naia and its Affiliates shall disclose all Amunix Improvements to Amunix promptly after (and in no event later than thirty (30) days after) generation thereof. For clarity, the above assignment and disclosure obligation applies to all Amunix Improvements generated in connection with any Naia Sublicense Agreement by or on behalf of Naia, its Affiliates or any Sublicensee.
(iii)Amunix shall own all right, title and interest in and to any Product-specific Patent Covering any invention conceived or reduced to practice in Naia’s, Amunix’s, or any of either Party’s Affiliates’ or a Sublicensee’s performance of activities pursuant to this Agreement, regardless of inventorship. Naia and its Affiliates shall assign, and do hereby assign to Amunix, its and their entire right, title and interest in and to Product-specific Patents, and agree to take all further actions to evidence such assignment, at Amunix’s reasonable request and expense. Naia and its Affiliates shall disclose all inventions referenced in the first sentence of this Section 4.1(b)(iii) that could form the basis of claims of patent applications for Product-specific Patents promptly after (and in no event later than thirty (30) days after) generation of such inventions thereof. For clarity, the above assignment and disclosure obligation applies to all Product-specific Patents generated in connection with any Naia Sublicense Agreement by or on behalf of Naia, its Affiliates or any Sublicensee.
(c)Inventorship. Inventorship for patentable inventions conceived or reduced to practice during the course of the performance of activities pursuant to this Agreement shall be determined in accordance with United States patent laws for determining inventorship where a choice of law is possible; otherwise the applicable patent law in the country where patent protection is sought shall apply.
4.2Prosecution.
(a)Prosecution Control. For purposes of this Article 4, the right of a Party to control prosecution of a Patent shall include the right to control preparing, filing, and prosecuting patent applications therefor, and obtaining and maintaining any resulting Patents.  Amunix shall keep Naia reasonably and periodically updated as to the status of the Amunix Patents in writing.
(b)Right to Review and Comment. For purposes of this Article 4, references to the right of review and comment shall mean in each case that, with the exception of Amunix Listed Patents, for which Amunix will, except as otherwise explicitly provided in this Agreement, have no obligations to consult with Naia regarding prosecution, the Party in control of prosecution of a Product-specific Patent shall use Commercially Reasonable Efforts to consult with the other party in good faith regarding the preparation, filing, prosecution, and maintenance of the applicable Patents. Without limiting the foregoing, with respect to each Product-specific Patent for which a Party or its Affiliate (or a Sublicensee, as applicable pursuant to Section 4.2(e)) has prosecution control, such Party or its Affiliate (or such Sublicensee, as applicable pursuant to Section 4.2(e)) will timely provide the other Party with a copy of any proposed patent application and any proposed response or submission to any patent office at least twenty (20) business days prior to the filing or response deadline and will consider in good faith all comments made by the other Party with respect 

to such draft response or submission. To that end, each Party and its Affiliates (and Sublicensees, as applicable pursuant to Section 4.2(e)) will keep the other Party reasonably informed of the status of the applicable Product-specific Patents, including, without limitation: (A) by providing the other Party with copies of all material communications received from or filed in patent office(s), or received from or sent to foreign attorneys, with respect to such filing, and (B) by providing the other Party, a reasonable time, but in any event not less than twenty (20) business days, prior to taking or failing to take any action that would materially affect the pendency of any such filing, with prior written notice of such proposed action or inaction so that the other Party has a reasonable opportunity to review and comment. In furtherance of the foregoing requirements, each Party and its Affiliates (and Sublicensees, as applicable pursuant to Section 4.2(e)) shall itself, or shall instruct and use reasonable efforts to ensure that its outside patent counsel, promptly forward to the other Party a copy of all correspondence received from or sent to any patent office relating to the Product Specific Patents for which the other Party has a right of review and comment, and each Party and its Affiliates (and Sublicensees, as applicable pursuant to Section 4.2(e)) each agree to enter into a reasonable commonality of interest agreement if deemed advisable by either Party’s patent counsel.
(c)Amunix Improvement Patents. As of the Original License Effective Date, Amunix shall have the right to assume, at its expense, sole control over the prosecution of the Patents filed that Cover Amunix Improvements (“Amunix Improvement Patents”). Amunix will have the right to incorporate results from the Research Program (the “Research Results”) generated pursuant to the Agreement to the extent necessary to enable the filing or prosecution of Amunix Improvement Patents Covering XTEN Sequence-related inventions. Naia agrees to cooperate with Amunix in providing such Research Results in sufficient detail and scope to support such enablement of such applications.
(d)Naia Improvement Patents. As of the Original License Effective Date, Naia shall have the right to assume, at its expense, those Naia Improvement Patents made by Naia employees, agents or contractors that Cover Naia Improvements (“Naia Improvement Patents”). Amunix agrees to cooperate with Naia in providing Research Results to Naia in sufficient detail and scope to support the filing or prosecution of such Patents.
(e)Product-specific Patents.
(i)As of the Original License Effective Date, Amunix shall have the right to assume sole control over the prosecution of Product-specific Patents. The foregoing notwithstanding, upon the initial dosing of a human with a Licensed Product, Naia or its Affiliate shall have the option to assume prosecution control for Product-specific Patents or if Naia, any Affiliate thereof, or a Sublicensee has a market capitalization in excess of $500,000,000 (or any equivalent value in foreign currency) or has more than 500 employees, such party, subject to Naia’s prior written approval, shall have the option at any time to assume prosecution control for Product-specific Patents, provided that, in the case of a Sublicensee, such Sublicensee shall only be entitled to assume such control for Product-specific Patents applicable to the Licensed Product(s) to which such Sublicensee has been granted rights. Naia shall reimburse Amunix for all direct expenses associated with the filing, prosecution, and maintenance of all Product-specific Patents applicable 

to the Licensed Product for which Amunix has prosecution control, but shall not be responsible for costs for prosecuting and maintaining XTEN Patents.
(ii)With respect to such Product-specific Patents wherein Amunix controls prosecution, Naia shall provide a list of recommended countries in which such patent applications may be filed reasonably in advance of the estimated filing date, and Amunix shall make a good-faith consideration of such recommendation, provided that Amunix shall have no obligation to file in the countries recommended by Naia. If, during the term of this Agreement, the Party having prosecution control intends to allow any Product-specific Patent to lapse or to abandon any such Product-specific Patent, the Party having prosecution control shall notify the Party which does not have prosecution control of such intention at least sixty (60) days prior to the date upon which such Product-specific Patent shall lapse or become abandoned (or such shorter time as practicable), and the non-filing Party shall thereupon have the right, but not the obligation, to assume responsibility for the prosecution, maintenance and defense thereof and all expenses related thereto.
(f)Post-Grant Proceedings. Amunix at its sole expense shall have the sole and exclusive right to file, prosecute, conduct and defend any post-grant proceedings in the U.S. or internationally of and with the Amunix Patents, and Naia at its sole expense shall have the sole and exclusive right to file, prosecute, and conduct and defend any post-grant proceedings in the U.S. or internationally of and with Naia Improvement Patents, such post-grant proceedings to include (without limitation) interferences, inter partes reexaminations, ex parte reexaminations, inter partes reviews, post-grant reviews, derivation proceedings, supplemental examinations, as well as any other post-grant proceedings available either before or after the implementation of the America Invents Act and any other post-grant proceeding available outside of the U.S.. The Parties shall cooperate with each other in filing, prosecution, and conducting and defending of such proceedings. The Parties shall negotiate in good faith in order mutually agree as to which party shall have the right to conduct and defend any such proceedings of and with Product-specific Patents, and the Party responsible for expenses for such conduct and defenses.
4.3Infringement.
(a)Notice. If either Party becomes aware of suspected or alleged infringement of a Patent covering the Licensed Product by a Third Party, it shall promptly notify the other Party.

(b)Enforcement.
(i)    Amunix Patents Other than Product-specific Patents.  Amunix shall have the sole and exclusive right to assert the Amunix Patents, other than Product-specific Patents, to abate Third Party infringement thereof, at its sole expense with, except as otherwise set forth in this Agreement,  the full right to any recovery.  If Amunix decides not to enforce an Amunix Patent to cease such infringement, Naia would like to enforce such Amunix Patent at its sole expense, and if such infringement is materially damaging to Naia’s interests in the Licensed Product or Active Moiety, the Parties shall negotiate in good faith in order to establish the framework for Naia to enforce such Amunix Patent. 
(ii)    Product-specific Patents.  Naia shall have the first right, but not the obligation, to bring (or defend) and control any action or proceeding with respect to any infringement of a Product-specific Patent, and Amunix shall have the right to be represented in any such action, at Amunix’s own expense and by counsel of its own choice; provided, however, that Naia shall keep Amunix fully informed about such action.  If Naia fails to bring any such action or proceeding, or initiate settlement negotiations, with respect to an infringement of any Product-specific Patent within [ ] ([ ]) days following the notice of the alleged infringement, Amunix shall have the right to bring (or defend) and control any such action at its own expense and by counsel of its own choice, and Naia shall have the right, at its own expense, to be represented in any such action by counsel of its own choice.  The Parties hereby agree and acknowledge that Naia may extend its rights under this Section 4.3(b)(ii) to an Affiliate or Sublicensee, subject to such Affiliate’s or Sublicensee’s compliance with Naia’s obligations under this Section 4.3(b)(ii).
(iii)    Naia Patents.  Naia shall have the sole and exclusive right to enforce Naia Improvement Patents with the full right to any recovery. 
(iv) Cooperation.  Each Party shall reasonably cooperate in any such enforcement and, if requested by the other Party, join as a party therein, at the expense of the other Party. Neither Party shall have the right to enter into any settlement or consent to any judgment in any such litigation that adversely affects the rights of the other Party hereunder, or that would reasonably be anticipated to materially and adversely impact any Patents owned by the other Party (or to which Naia is granted rights under this Agreement), without the consent of such Party.
(v) Recovery.  Any recovery realized by a Party as a result of any action or proceeding pursuant to this Section 4.3(b), whether by way of settlement or otherwise, shall be applied first to reimburse the documented out-of-pocket legal expenses of the other Party incurred in connection with such action or proceeding and not previously reimbursed by the controlling Party with respect thereto, and second to reimburse the documented out-of-pocket legal expenses of the Party that brought or controlled such litigation or settlement incurred in connection with such action, proceeding, or settlement, and any remaining amounts shall be retained by the Party that brought and controlled such action (or entered into such settlement); provided, however, that (1) [ ] percent ([ ]%) of any recovery realized by Amunix or any Affiliate thereof as a result of any such action, proceeding, or settlement thereof (after reimbursement of the Parties’ litigation expenses) under Section 4.3(b)(i) with respect to any infringement of Naia’s exclusive rights to the applicable Amunix Patents shall be paid to Naia, (2) [ ] percent ([ ]%) of any recovery realized by Naia or any Affiliate 

or Sublicensee thereof as a result of any such action, proceeding, or settlement thereof (after reimbursement of the Parties’ litigation expenses) entered into by Naia or any Affiliate or Sublicensee thereof under Section 4.3(b)(ii)  shall be paid to Amunix, and (3) [ ] percent ([ ]%) of any recovery realized by Amunix or any Affiliate thereof as a result of any such action, proceeding, or settlement thereof (after reimbursement of the Parties’ litigation expenses) entered into by Amunix or any Affiliate thereof under Section 4.3(b)(ii) with respect to any infringement of Naia’s rights to such Product-specific Patents shall be paid to Naia.
ARTICLE 5
CONFIDENTIALITY; PUBLICITY
5.1Confidentiality. During the Term and for a period of ten (10) years thereafter, each Party shall maintain all Confidential Information of the other Party in trust and confidence and shall not, without the written consent of the other Party, disclose any Confidential Information of the other Party to any Third Party or use any Confidential Information of the other Party for any purpose other than as provided in this Agreement. The confidentiality obligations of this Section 5.1 shall not apply to Confidential Information to the extent that the receiving Party can establish by competent evidence that such Confidential Information: (a) is publicly known prior or subsequent to disclosure without breach of confidentiality obligations by such Party or its employees, consultants or agents; (b) was in such Party’s possession at the time of disclosure without any restrictions on further disclosure; (c) is received by such receiving Party, without any restrictions on further disclosure, from a Third Party who has the lawful right to disclose it, or (d) is independently developed by employees or agents of the receiving Party who had no access to the disclosing Party’s Confidential Information.
5.2Authorized Disclosure. Nothing herein shall preclude a Party from disclosing the Confidential Information of the other Party to the extent:
(a)such disclosure is reasonably necessary (i) for the filing or prosecuting of Patents as contemplated by this Agreement; (ii) to comply with the requirement of Regulatory Authorities with respect to obtaining and maintaining Regulatory Approval (or any pricing and reimbursement approvals) of the Licensed Product; or (iii) for prosecuting or defending litigations as contemplated by this Agreement;
(b)such disclosure is reasonably necessary to its employees, agents, consultants, contractors, licensees or Sublicensees on a need-to-know basis for the sole purpose of performing its obligations or exercising its rights under this Agreement; provided that in each case, the disclosees are bound by written obligations of confidentiality and non-use consistent with those contained in this Agreement;
(c)such disclosure is reasonably necessary to any bona fide potential or actual investor, acquirer, merger partner, or other financial or commercial partner or their advisors for the sole purpose of evaluating an actual or potential investment, acquisition or other business relationship; provided that in connection with such disclosure, such Party shall inform each disclosee 

of the confidential nature of such Confidential Information and cause each disclosee to treat such Confidential Information as confidential;
(d)such disclosure is reasonably necessary to comply with applicable laws, including regulations promulgated by applicable security exchanges, a valid order of a court of competent jurisdiction, administrative subpoena or order.
5.3Required Disclosures. If either Party is required, pursuant to a governmental law, regulation or order (or in a Party’s reasonable discretion to comply with the rules of any nationally recognized securities exchange), to disclose any Confidential Information of the other Party, the receiving Party shall have the right to do so; provided that such Party (i) shall give whenever possible at least five (5) business days advance written notice to the disclosing Party, or a smaller amount if five (5) business days is not possible, (ii) shall make a reasonable effort to assist the other Party to obtain a protective order requiring that the Confidential Information so disclosed be used only for the purposes for which the law or regulation required and (iii) shall use and disclose the Confidential Information solely to the extent required by the law or regulation.
5.4Terms of Agreement. Subject to Section 5.6, the existence of and the terms and content of this Agreement are the Confidential Information of both Parties and neither Party may disclose such terms except as contemplated in this Article 5.
5.5Return of Confidential Information. Promptly after the termination or expiration of this Agreement for any reason, each Party shall return to the other Party all tangible manifestations of such other Party’s Confidential Information at that time in the possession of the receiving Party excluding the Confidential Information related to continuing rights of either Party after termination or expiration in accordance with Section 8.4(a), except that one copy of the other Party’s Confidential Information may be retained by counsel for compliance purposes.
5.6Publicity. Neither Party shall (i) use the other Party’s name, logo, likeness, trademarks or trade names or those of its Affiliates for any advertising or promotional purposes or (ii) originate any news release or other public announcements, written or oral, whether to the public or press, stockholders or otherwise, relating to this Agreement, including its existence, the subject matter to which it relates, performance under it or any of its terms, any amendment hereto or performances hereunder, without the prior written consent of the other Party, save only any press releases and communications that are otherwise agreed to by the Parties, or as otherwise required by law. To the extent that the disclosing Party requests the deletion of any Confidential Information in the materials, the receiving Party shall delete such information. Other than repeating information in such press release (or a subsequently mutually agreed press release), neither Party will generate or allow any further publicity regarding this Agreement or the transaction or research contemplated hereunder, without giving the other Party the opportunity to review and approve the press release, to the extent practicable with respect to legally required disclosures. The disclosing Party shall provide the other Party with at least ten (10) business days advance notice of the date and extent of publication of any approved publicity. Notwithstanding the foregoing, this Agreement serves as written approval for both Parties and their Affiliates to publicly disclose the existence of and the subject matter of the Agreement and to identify each other on their websites and their PowerPoint presentations.

5.7Equitable Relief. Each Party acknowledges that its breach of Article 5 of this Agreement may cause irreparable injury to the other Party for which monetary damages may not be an adequate remedy. Therefore, each Party shall be entitled to seek injunctive and other appropriate equitable relief to prevent or curtail any actual or threatened breach of the obligations relating to Confidential Information set forth in this Article 5 by the other Party. The rights and remedies provided to each Party in this Article 5 are cumulative and in addition to any other rights and remedies available to such Party at law or in equity.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
6.1Mutual. Each of Amunix and Naia hereby represents and warrants to the other of them that the representing and warranting Party is duly organized in its jurisdiction of incorporation; that the representing and warranting Party has the full power and authority to enter into this Agreement; that this Agreement is binding upon the representing and warranting Party; that this Agreement has been duly authorized by all requisite corporate action within the representing and warranting Party; and, as of the 2nd A&R Effective Date, that it has not provided any notice of termination or material breach to the other Party under the Existing License.
6.2By Amunix. Amunix hereby represents and warrants to Naia that:
(a)Amunix solely owns the Amunix Patents and solely owns, or has a valid right to use in the manner contemplated by this Agreement, all of the Amunix Intellectual Property including, without limitation, all data, CMC documents, toxicology reports, regulatory submissions, production strains, clinical data and reports, and other such materials in the possession of Amunix that pertain to VRS-859.  As of the 2nd A&R Effective Date, neither Amunix nor any Affiliate thereof owns or controls, by license or otherwise, any Patents or Know-How, other than Amunix Intellectual Property licensed to Naia hereunder, that is necessary to develop, use, make, sell, or otherwise exploit Licensed Products.
(b)Amunix’s and Naia’s use of the Amunix Intellectual Property, including XTEN Sequences, as contemplated in the Research Plan and otherwise in compliance with the terms of this Agreement does not and will not constitute a breach of any agreement to which Amunix is a party.
(c)(i) the Amunix Patents exist as of the Original License Effective Date, (ii) to Amunix’s knowledge, the use of the Amunix Patent and Amunix Intellectual Property by the Parties as contemplated herein does not and will not infringe a valid patent claim of any Third Party and (iii) [ ], Amunix is unaware of any assertion by a Third Party that any of the Amunix Patents are invalid or unenforceable.
(d)Amunix has not previously assigned, transferred, conveyed or otherwise encumbered its right, title and interest in Amunix Intellectual Property in any manner that would prevent it from granting the rights, licenses and assignments set forth in Sections 2.6 and 4.1 or bestowing other rights in this Agreement.  Neither Amunix nor any Affiliate thereof is party to any 

agreement, contract, or other arrangement that conflicts with, or would be breached by, the terms of this Agreement or Amunix’s execution hereof or compliance herewith.
6.3DISCLAIMER OF WARRANTIES. OTHER THAN THE EXPRESS WARRANTIES OF SECTIONS 6.1 AND 6.2, EACH PARTY, MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO ANY MOIETY, TARGET, XTEN SEQUENCE LICENSED PRODUCT, TECHNOLOGY, MATERIALS, OR PATENT RIGHTS. ADDITIONALLY, AMUNIX EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, THAT THE MANUFACTURE, USE, SALE, OFFER FOR SALE, IMPORT, COPYING OR DISTRIBUTION OF ANY MOIETY, TARGET, XTEN SEQUENCE LICENSED PRODUCT, TECHNOLOGY, MATERIALS OR OTHER PRODUCT OR METHOD SUBJECT TO THIS AGREEMENT WILL NOT INFRINGE OR MISAPPROPRIATE THE INTELLECTUAL PROPERTY RIGHTS OF ANY THIRD PARTY, OTHER THAN THE EXPRESS WARRANTIES OF SECTIONS 6.1 AND 6.2. ALL TECHNOLOGY AND MATERIALS PROVIDED BY AMUNIX TO NAIA PURSUANT TO THIS AGREEMENT ARE PROVIDED “AS IS,” , OTHER THAN THE EXPRESS WARRANTIES OF SECTIONS 6.1 AND 6.2.
6.4Covenants of Amunix. Amunix hereby covenants that it will not assign, transfer, convey or otherwise encumber its right, title and interest in the XTEN Sequences in any manner that would prevent it from granting the licenses set forth in this Agreement and from performing its obligations under this Agreement. Amunix hereby further covenants that it will use reasonable efforts to obtain all data, CMC documents, toxicology reports, regulatory submissions, production strains, clinical data and reports, and other such materials not in the possession of Amunix or Naia that pertain to VRS-859, which materials, if obtained by Amunix, shall become Amunix Background Technology.
6.5Mutual Covenants.
(a)No Debarment. In the course of the development of the Licensed Product, each Party shall not use any employee or consultant who has been debarred by any regulatory Authority, or, to such Party’s knowledge, is the subject of debarment proceedings by a regulatory Authority. Each Party shall notify the other Party promptly upon becoming aware that any of its employees or consultants has been debarred or is the subject of debarment proceedings by any regulatory Authority.
(b)Compliance. Each Party and its Affiliates shall comply in all material respects with all applicable laws in the development and commercialization of the Licensed Product and performance of its obligations under this Agreement, including the statutes, regulations and written directives of the FDA, the EMA and any regulatory authority having jurisdiction in the Territory, the FD&C Act, the Prescription Drug Marketing Act, the Federal Health Care Programs Anti-Kickback Law, 42 US AC. 1320a-7b(b), the statutes, regulations and written directives of Medicare, Medicaid and all other health care programs, as defined in 42 USAC. § 1320a-7b(f), and the Foreign Corrupt Practices Act of 1977, each as may be amended from time to time.

ARTICLE 7
INDEMNIFICATION
7.1By Amunix. Amunix hereby agrees to indemnify, defend and hold harmless (collectively, “Indemnify”) Naia, its Sublicensees, its Affiliates and its and their directors, officers, agents and employees (collectively, “Naia Indemnitees”) from and against any and all liability, loss, damage or expense (including without limitation reasonable attorneys’ fees) (collectively, “Losses”) they may suffer as the result of Third Party claims, demands and actions (collectively, “Third Party Claims”) to the extent arising out of or relating to any breach of a representation or warranty made by Amunix under Article 6, except to the extent of any Losses (i) attributable to the reckless or intentional act or omission of any Naia Indemnitee, or (ii) for which Naia is required to Indemnify Amunix pursuant to Section 7.2.
7.2By Naia. Naia hereby agrees to Indemnify Amunix, its Affiliates and its and their directors, officers, agents and employees (collectively, “Amunix Indemnitees”) from and against any and all Losses they may suffer as the result of Third Party Claims to the extent arising out of or relating to (a) any breach of a representation or warranty made by Naia under Article 6, and (b) Naia’s or its Affiliate’s or Sublicensee’s research, testing, development, manufacture, use, sale, distribution, offer for sale, import, export and/or other commercialization of the Licensed Product (including all related claims of product liability, personal injury, property damage or other damage), except in each case to the extent of any Losses (i) attributable to the reckless or intentional act or omission of any Amunix Indemnitee, or (ii) for which Amunix is required to Indemnify Naia pursuant to Section 7.1.
7.3Procedures. Each of the foregoing agreements to Indemnify is conditioned on the relevant Amunix Indemnitees or Naia Indemnitees (i) providing prompt written notice of any Third Party Claim giving rise to an indemnification obligation hereunder, (ii) permitting the indemnifying Party to assume full responsibility to investigate, prepare for and defend against any such Third Party Claim, (iii) providing reasonable assistance in the defense of such claim at the indemnifying Party’s reasonable expense, and (iv) not compromising or settling such Third Party Claim without the indemnifying Party’s advance written consent. If the Parties cannot agree as to the application of the foregoing Sections 7.1 and 7.2, each may conduct separate defenses of the Third Party Claim, and each Party reserves the right to claim indemnity from the other in accordance with this Article 7 upon the resolution of the underlying Third Party Claim.
7.4Limitation of Liability. EXCEPT TO THE EXTENT SUCH PARTY MAY BE REQUIRED TO INDEMNIFY THE OTHER PARTY UNDER THIS ARTICLE 7 (INDEMNIFICATION) OR AS REGARDS A BREACH OF A PARTY’S RESPONSIBILITIES PURSUANT TO ARTICLE 5 (CONFIDENTIALITY), NEITHER PARTY NOR ITS RESPECTIVE AFFILIATES SHALL BE LIABLE FOR ANY SPECIAL, INDIRECT, EXEMPLARY, CONSEQUENTIAL, PUNITIVE DAMAGES, LOST PROFITS, OR LOST OPPORTUNITY HEREUNDER, WHETHER IN CONTRACT, WARRANTY, TORT, STRICT LIABILITY OR OTHERWISE.

ARTICLE 8
TERM AND TERMINATION
8.1Term. The term of this Agreement shall commence on the 2nd A&R Effective Date and shall expire on a country-by-country and Licensed Product-by-Licensed Product basis on the expiration of the last Royalty Term for each Licensed Product in each country, in each case, unless earlier terminated by a Party as set forth below in this Article 8.
8.2Elective Termination By Naia. Naia may terminate the Research Program or this Agreement in its entirety or with respect to a Licensed Product or Territory Portion upon sixty (60) days written notice to Amunix.
8.3Elective Termination By Amunix. Amunix shall have the right to terminate the Agreement with respect to a particular Territory Portion upon failure to achieve any Development Stage within the applicable Milestone Period and failure to satisfy the alternative diligence conditions as set forth in Section 2.4, above, with respect to such Territory Portion.
8.4Material Breach.
(a)Agreement in its Entirety. Either Party may terminate this Agreement for the material breach of this Agreement by the other Party, if such breach remains uncured sixty (60) days following notice from the nonbreaching Party to the breaching Party specifying such breach. In case of termination under this Section 8.4(a) by either Party, all rights and obligations of the Parties, other than accrued rights to payments in respect of such Licensed Product (including associated audit rights and provisions governing such payments and reports in relation to such payments) and those that explicitly survive under Section 8.5, shall end.
(b)Bankruptcy. This Agreement may further be terminated by either Party, by written notice to the other Party upon filing or institution of bankruptcy, reorganization, liquidation or receivership proceedings, or upon a general assignment of the assets for the benefit of creditors by the other Party; provided that in the case of any involuntary bankruptcy proceeding such right to terminate shall only become effective if the Party consents to the involuntary bankruptcy or such proceeding is not dismissed within ninety (90) days after the filing thereof.
8.5Effect of Termination of Agreement.
(a)No later than thirty (30) days after the effective date of any termination of this Agreement, each Party shall return, cause to be returned to the other Party, or destroy (as determined by such other Party) all Confidential Information of the other Party, all copies thereof and all biological or chemical materials delivered or provided by the other Party; provided, however, that (a) each Party may retain one copy of Confidential Information received from the other Party in its confidential files for record purposes only, and (b) to the extent a Party is expressly granted a continuing right or license to practice or use such Confidential Information after the termination of this Agreement, such Party may retain the Confidential Information received from the other Party 

that is expressly permitted to be used in the practice of such right or license and use such Information pursuant to the practice of such continuing right or license.
(b)If this Agreement is rejected by or on behalf of a Party under Article 365 of the United States Bankruptcy Code (the “Code”), all licenses and rights to licenses granted under or pursuant to this Agreement by the other Party to the Party are, and shall otherwise be deemed to be, for purposes of Article 365(n) of the Code, licenses of rights to “intellectual property” as defined under Article 101(35A) of the Code. For the avoidance of doubt, the Parties intend that the licenses granted by Amunix to Naia pursuant to Section 2.6 of this Agreement are licenses of rights to “intellectual property” as defined under Article 101 (35 A) of the Code.
(c)In the event that this Agreement is terminated or rejected by Amunix, its receiver, its debtor-in-possession or its trustee under the Code or any other applicable bankruptcy laws, Naia hereby elects pursuant to Article 365(n) of the Code or any applicable foreign equivalent thereof, to retain all rights granted to Naia under this Agreement, to the extent permitted by law.
(d)In the event that this Agreement is terminated or rejected by Naia, its receiver, its debtor-in-possession or its trustee under the Code or any other applicable bankruptcy laws, Amunix hereby elects pursuant to Article 365(n) of the Code or any applicable foreign equivalent thereof, to retain all rights granted to Amunix under this Agreement, to the extent permitted by law.
(e)If this Agreement is a terminated for any reason, provided Naia continues to make any and all applicable payments to Amunix under and in accordance with Article 3, Naia will have the right, for a period of one hundred twenty (120) days after the effective date of termination to sell off any existing inventory of Licensed Product in countries having granted Regulatory Approval as of the effective date of termination.
(f)If this Agreement is terminated by Amunix, in whole or with respect to a Territory Portion, each sublicense granted by Naia or any Affiliate thereof with respect to the Territory Portion(s) subject to such termination which provides for its survival upon such termination shall survive such termination and remain (insofar as (i) the rights thereby conferred on such Sublicensee with respect to Amunix Intellectual Property and/or Licensed Products are no greater than the rights conferred on Naia hereunder with respect thereto (ii) the obligations of Amunix thereunder upon such assignment shall be no greater than the obligations of Amunix hereunder, and (iii) such Sublicensee is not in material breach of such sublicense) in full force and effect, and be assigned to Amunix, with Amunix as such Sublicensee’s direct licensor solely with respect to, in the case of all of the foregoing, the Amunix Intellectual Property and rights to Licensed Products, provided that (a) such Sublicensee’s payment obligations with respect to its exercise of such surviving rights (but not with respect to its exercise or enjoyment of any other rights or assets) shall, in lieu of any payment obligations set forth in such sublicense, be the corresponding payment obligations set forth in this Agreement (as in effect immediately prior to the applicable termination, and which payment obligations of such Sublicensee under such direct license from Amunix shall not terminate upon termination of this Agreement), provided that if such sublicense is for less than the entire Primary Territory, Greater China Territory, or Korea Territory, then with respect to any milestone payment based on Net Sales in the Primary Territory, Greater China Territory, or Korea Territory, such milestone payment shall be triggered based on cumulative Net Sales in such 

Sublicensee’s portion of the Primary Territory, Greater China Territory, or Korea Territory, as applicable, and (b) the Sublicensee, within thirty (30) days of Naia providing or receiving the relevant notice of termination, provides Amunix with copy of the sublicense, which may be redacted to the extent necessary to protect any confidential information of any Third Party (or of such Sublicensee to the extent concerning technology other than that licensed hereunder or not concerning the terms of the agreement including such sublicense directly related to the technology licensed hereunder).
(g)If this Agreement is terminated by Naia, in its entirety or with respect to a particular Licensed Product or Territory Portion, or terminated by Amunix with respect to a Territory Portion as a result of Naia’s failure to diligently progress the Licensed Product through the Development Stages in accordance with Sections 2.4 and 8.3, but in each case other than as a result of Amunix’s breach, then upon Amunix’s written request:
(i)All rights and title to all (i) Regulatory Approvals directly concerning the Licensed Product(s) or Territory Portion subject to termination and (ii) Intellectual Property, data, Know-How, and tangible research, manufacturing and clinical records, research materials, production strains and regulatory submissions directly and solely related, in the case of all of the items listed in this clause (ii), the Licensed Product(s) or Territory Portion subject to termination (and not related to any other product or portion of the Territory) that are, in the case of (i) and (ii), owned by Naia, an Affiliate thereof, or a Sublicensee (except in the case of assignment of any Sublicense Agreement to Amunix in accordance with Section 8.5(f) above, in which case all of the foregoing assets owned or controlled by any Sublicensees whose rights survive such termination shall not be subject to this subsection (i)) (collectively, (i) and (ii), “Licensed Product Assets”) shall, to the extent the assignment or transfer thereof would not breach the terms of any agreement pursuant to which any Licensed Product Assets were obtained, be assigned to Amunix. Naia shall assign and does hereby assign to Amunix its entire right, title and interest in and to such Licensed Product Assets, and agrees to take all further actions to evidence such assignment, at Amunix’s reasonable request and at Naia’s expense.  Notwithstanding the foregoing, if any of the Licensed Product Assets consist of a license to Intellectual Property granted by a Third Party to Naia or any other asset whose transfer or assignment to, or possession or use by, Amunix would impose payment obligations on Naia, any Affiliate thereof, or Amunix, then Naia shall first disclose to Amunix a copy of the applicable license agreement or the relevant payment terms concerning such other asset, and such license agreement or other asset shall only be assigned to Amunix if Amunix has consented in writing to such assignment and the terms applicable thereto permit such assignment (such a license or asset, an “Accepted Third Party Assets”).
(ii)To the extent any such Licensed Product Assets may not be assigned to Amunix, and with respect to any other Intellectual Property, data, Know-How, tangible research, manufacturing, and clinical records, and research materials, and production strains Controlled by Naia or an Affiliate thereof as of termination and necessary to manufacture, use, sell, offer for sale or import the Licensed Product(s) subject to such termination in the Territory Portion(s) subject to termination, Naia hereby grants Amunix a worldwide, perpetual, irrevocable, sublicensable, exclusive license to such Licensed Product Assets and other Intellectual Property, data, Know-How, tangible research, manufacturing, and clinical records, and research materials, and production strains to the extent, in each case, Controlled by Naia or an Affiliate thereof and necessary to manufacture, 

use, sell, offer for sale, or import the terminated Licensed Product(s) in the Territory Portion(s) subject to such termination. Naia will cooperate to provide Amunix with copies of all such data, intellectual property filings, regulatory submissions and communications, materials and know-how relating to the terminated Licensed Product(s) in the terminated Territory Portion(s), and will provide letters to applicable regulatory agencies evidencing the transfer of any Regulatory Approvals (including any INDs or foreign counterparts) to Amunix.
(iii) To the extent any Naia Intellectual Property is necessary to use, make, have made, sell, offer for sale, import or otherwise exploit the Licensed Product(s) and Territory Portion(s) subject to termination, Naia hereby grants Amunix a worldwide, perpetual, irrevocable, sublicensable non-exclusive license to practice such Intellectual Property in the development and commercialization of such affected Licensed Product(s) in such Territory Portion(s).
(iv)    As soon as reasonably possible with respect to any termination of this Agreement subject to this Section 8.5(g) (other than a termination resulting from Amunix’s breach), the Parties shall (1) enter into reasonable good faith negotiations concerning the commercially reasonable value of the assets transferred, and rights licensed, to Amunix pursuant to clauses (i), (ii), and (iii) above, which value shall, in any event, reasonably take into account the facts and circumstances at such time and (2) use Commercially Reasonable Efforts to reach written agreement, within ninety (90) days of such termination, on the commercially reasonable financial consideration to be paid to Naia in exchange for such transfers and licenses (which (q) may include upfront payments, milestone payments, and/or royalties, as may be commercially reasonable and, upon such written agreement or, absent such agreement, any determination of such consideration as otherwise set forth below, (r) shall be paid to Naia by Amunix).  If the Parties are unable to reach written agreement with respect thereto within such ninety (90) day period pursuant to the foregoing, the form and amount of such consideration to be paid to Naia in exchange for the performance of its obligations, and grant or transfer of rights and assets, under this Section 8.5(g) shall, if and as requested by either Party in writing by notice to the other Party, be determined pursuant to Section 9.2(b), and any such determination shall be binding on the Parties. Notwithstanding anything to the contrary, any above-referenced assignment or grant of any tangible or intangible assets or rights to Amunix by Naia shall be made subject to any such rights any Sublicensee whose rights to Licensed Products survive such termination as contemplated by Section 8.5(f) may have with respect to any such rights or assets.
(v)    In the event of any assignment of an Accepted Third Party Asset, or grant of rights under subsection (ii) or (iii) above, under this Section 8.5(g), any amounts that thereafter become due to any Third Parties by Amunix, Naia, or any Affiliate thereof with respect to such Accepted Third Party Asset or grant of rights by Amunix’s, its Affiliates’, or their licensees’ or sublicensees’ possession, use or exercise of any of the foregoing, or any development, manufacture, or commercialization of Licensed Products, by or on behalf of Amunix, any Affiliate thereof, or any licensee, sublicensee, assignee, or transferee of any of the foregoing shall be the responsibility of Amunix and shall be paid by Amunix to such Third Parties in accordance with the applicable terms (in the case of the agreement imposing such payment obligation being assigned to Amunix) or Naia in reasonably sufficient time to enable Naia or any Affiliate thereof to comply with any such payment obligations (in the case of the agreement imposing such payment obligation 

not being assigned to Amunix), provided that, notwithstanding anything to the contrary, in the case of any such payment obligations arising as a result of the grant of any rights under subsection (ii) or (iii) above, Naia shall disclose such payment obligations to Amunix as soon as reasonably possible upon becoming aware of an impending applicable termination and the rights to which such payment obligations correspond shall only be granted under subsection (ii) or (iii) above to the extent Amunix elects in writing to Naia prior to such termination to accept such grant and its corresponding payment obligations.
(h)Termination of this Agreement is without prejudice to any of the other rights and remedies conferred on the terminating Party by this Agreement or by applicable law.
8.6Survival in All Cases. Termination of this Agreement shall be without prejudice to or limitation on any other remedies available nor any accrued obligations of either Party. Sections 2.6(c)(ii), 2.6(c)(iii), 2.6(c)(iv)(l)-(2), 2.6(e), 3.7, 3.9. 3.10, 4.1, 4.2(c), 4.2(d), 4.2(f), 6.3, 8.5, and 8.6 and Articles 1, 5, 7 and 9 shall survive any expiration or termination of this Agreement.
ARTICLE 9
MISCELLANEOUS
9.1Independent Contractors. The Parties shall perform their obligations under this Agreement as independent contractors. Nothing contained in this Agreement shall be construed to be inconsistent with such relationship or status. This Agreement and the Parties’ relationship in connection with it shall not constitute, create or in any way be interpreted as a joint venture, fiduciary relationship, partnership or agency of any kind.
9.2Dispute Resolution.
(a)    General.  Except with respect to any matter subject to Section 9.2(b) below, before filing any suit with respect to any dispute, claim or controversy arising from or related in any way to this Agreement or the interpretation, application, breach, termination or validity thereof, the Parties will make senior executives of the Parties (for Amunix its CEO (or his designee having sufficient authority), for Naia its CEO (or a designee having sufficient authority)) available for good faith discussion over a period of not less than thirty (30) days and make a good faith attempt to resolve the matter without engaging in litigation.
(b)    Termination-Related Payments.  In the event the Parties are unable to agree on the financial consideration to be paid to Naia by Amunix in exchange for the assignments, transfers and licenses described in clauses (i), (ii), or (iii) of Section 8.5(g) as contemplated by clause (iv) of Section 8.5(g), and, following the period set forth therein, either Party notifies the other that it wishes such matters to be determined pursuant to this Section 9.2(b), such matter shall be resolved in accordance with the process set forth in Exhibit F with the arbitrator being reasonably expert in biopharmaceutical licensing transactions; provided, however, that after the arbitrator has made its selection of the financial consideration as provided in Exhibit F, Amunix shall have the right to either (a) accept such financial consideration and the Parties would execute the agreement including such financial consideration or (b) reject such financial consideration, in which case the Parties 

shall not be obligated to execute the agreement including such financial consideration and the licenses, transfers, and assignments by Naia to Amunix under Sections 8.5(g)(i)-(iii) shall not occur.
9.3Governing Law; Venue. This Agreement is to be construed in accordance with and governed by the internal laws of the State of California (as permitted by Section 1646.5 of the California Civil Code or any similar successor provision) without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of California to the rights and duties of the parties. Any legal suit, action or proceeding arising out of or relating to this Agreement shall be commenced in a federal court in the Northern District of California or in state court in the County of Santa Clara, California, and each party hereto irrevocably submits to the exclusive jurisdiction and venue of any such court in any such suit, action or proceeding.
9.4Entire Agreement. This Agreement (including its Exhibits) sets forth all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties with respect to the subject matter hereof and supersedes and terminates all prior agreements and understandings between the Parties with respect to such subject matter (including that certain Binding Option Agreement between the Parties dated August 15, 2014, the Original License, and the Existing License), provided that, notwithstanding the foregoing, the Side Letter shall remain in effect. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by the respective authorized officers of the Parties.
9.5Assignment. Neither Party may assign in whole or in part this Agreement without the advance written consent of the other Party, except as set forth as follows:
(i)Amunix may assign this Agreement in its entirety without the consent of Naia to (i) its Affiliate; (ii) a Third Party or Affiliate which is the successor in connection with a Change of Control of Amunix or (iii) another entity that is or becomes the successor to all or substantially all of Amunix’s assets or business (or that portion thereof to which this Agreement relates) in connection with the spin-out, sale, divestiture or transfer of all or substantially all of Amunix’s assets or business (or that portion thereof) to which this Agreement relates.
(ii)Naia may assign this Agreement in its entirety without the consent of Amunix to (i) its Affiliate; (ii) a Third Party or Affiliate which is the successor in connection with a Change of Control of Naia or (iii) another entity that is or becomes the successor to all or substantially all of Naia’s assets or business (or that portion thereof to which this Agreement relates) in connection with the spin-out, sale, divestiture or transfer of all or substantially all of its assets or business (or that portion thereof to which this Agreement relates).
Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns. Any successor or assignee of rights and obligations permitted hereunder shall, in writing to the other Party, expressly assume performance of such rights and obligations following the applicable assignment. Any assignment of this Agreement not made in accordance with this Agreement is prohibited hereunder and shall 

be null and void. In the event of Amunix’s Change in Control, “Amunix Intellectual Property” shall exclude any Patents and Know-How Controlled by any successor of Amunix (or any Affiliate thereof, excluding the Party hereto that becomes an Affiliate of the successor as a result of such transaction) prior to the acquisition and which (i) were not obtained from Naia or its Affiliates or (ii) Cover inventions or comprise Know-How developed outside of and unrelated to any activities under this Agreement. In the event of Naia’s Change in Control, “Naia Intellectual Properly” shall exclude any Patents and Know-How Controlled by any successor of Naia (or any Affiliate thereof, excluding the Party hereto that becomes an Affiliate of the successor as a result of such transaction) prior to the acquisition and which (i) were not obtained from Naia or its Affiliates or (ii) Cover inventions or comprise Know-How developed outside of and unrelated to any activities under this Agreement.
9.6Severability. If one or more of the provisions in this Agreement are deemed unenforceable by law, then such provision shall be deemed stricken from this Agreement and the remaining provisions shall continue in full force and effect.
9.7Force Majeure. Both Parties shall be excused from the performance of their obligations under this Agreement to the extent that such performance is prevented by a Force Majeure (defined below) and the nonperforming Party promptly provides notice of the prevention to the other Party. Such excuse shall be continued so long as the condition constituting Force Majeure continues and the nonperforming Party takes reasonable efforts to remove the condition, but no longer than six (6) months. For purposes of this Agreement, “Force Majeure” means conditions beyond a Party’s reasonable control or ability to plan for, including acts of God, war, terrorism, civil commotion, labor strike or lock-out; epidemic; failure or default of public utilities or common carriers; and destruction of production facilities or materials by fire, earthquake, storm or like catastrophe.
9.8Notices. Any notice required or permitted to be given under this Agreement shall be in writing, shall specifically refer to this Agreement and shall be deemed to have been sufficiently given for all purposes if mailed by first class certified or registered mail, postage prepaid, delivered by express delivery service or personally delivered. Unless otherwise specified in writing, the mailing addresses of the Parties shall be as described below.
If to Amunix:
Volker Schellenberger, Ph.D.
President and CEO
Amunix Operating Inc.
500 Ellis Street 
Mountain View, CA 94043
In the case of Naia:
 Naia Rare Diseases, Inc.
c/o RDD Pharma Ltd.
8480 Honeycutt Road Suite 120

Raleigh, NC 27615 
Attention: John Temperato

9.9Construction. This Agreement has been prepared jointly and shall not be strictly construed against either Party. Ambiguities, if any, in this Agreement shall not be construed against any Party, irrespective of which Party may be deemed to have authored the ambiguous provision.
9.10Headings. The headings for each article and section in this Agreement have been inserted for convenience of reference only and are not intended to limit or expand on, nor to be used to interpret, the meaning of the language contained in the particular article or section.
9.11Certain Conventions. Any reference in this Agreement to an Article, subarticles, Section, paragraph, clause or Exhibit shall be deemed to be a reference to an Article, subarticles, Section, paragraph, clause or Exhibit, of or to, as the case may be, this Agreement, unless otherwise indicated. Unless the context of this Agreement otherwise requires, (a) words of any gender include each other gender; (b) words such as “herein,” “hereof,” and “hereunder” refer to this Agreement as a whole and not merely to the particular provision in which such words appear; (c) words using the singular shall include the plural, and vice versa; and (d) the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “but not limited to,” “without limitation,” “inter alia” or words of similar import, and the words “exclude,” “excludes” and “excluding” shall be deemed to be followed by the phrase “but not limited to,” “without limitation,” “inter alia” or words of similar import.
9.12No Waiver. Any delay in enforcing a Party’s rights under this Agreement or any waiver as to a particular default or other matter shall not constitute a waiver of such Party’s rights to the subsequent enforcement of its rights under this Agreement, excepting only as to an express written and signed waiver as to a particular matter for a particular period of time executed by an authorized officer of the waiving Party.
9.13Costs. Each Party shall bear its own legal costs of and incidental to the preparation, negotiation and execution of this Agreement.
9.14Performance by Affiliates. A Party may perform some or all of its obligations under this Agreement through Affiliate(s) or may exercise some or all of its rights under this Agreement through Affiliates. However, each Party shall remain responsible and be guarantor of the performance by its Affiliates and shall take reasonable steps to cause its Affiliates to comply with the provisions of this Agreement in connection with such performance. In particular and without limitation, all Affiliates of a Party that receive Confidential Information of the other Party pursuant to this Agreement shall be governed and bound by all obligations set forth in Article 5, and shall (to avoid doubt) be subject to the intellectual property assignment and other intellectual property provisions of Article 4 as if they were the original Party to this Agreement (and be deemed included in the actual Party to this Agreement for purposes of all intellectual property-related definitions). A Party and its Affiliates shall be jointly and severally liable for their performance under this Agreement.

9.15Insurance. Naia shall maintain insurance from the commencement of Stage 2 and for a period of at least three (3) years after the last commercial sale of the Licensed Product under this Agreement, or, if development of Licensed Product ceases prior to Regulatory Approval, three (3) years after termination of such development, with an insurer having A.M. Best’s rating of Class A-V (or its equivalent) or higher status in an amount appropriate for its business and products of the type that are the subject of this Agreement, and for its obligations under this Agreement, as reasonably determined by Naia on a country-by-country basis, but, in all cases must maintain insurance at least as protective as that detailed in Exhibit E. Upon request, Naia shall provide Amunix with evidence of the existence and maintenance of such insurance coverage.
9.16Anti-Corruption. Neither Party shall perform any actions that are prohibited by local and other anti-corruption laws (including the U.S. Foreign Corrupt Practices Act, collectively “Anti-Corruption Laws”) that may be applicable to one or both Parties to this Agreement. Without limiting the foregoing, neither Party shall make any payments, or offer or transfer anything of value, to any government official or government employee, to any political party official or candidate for political office or to any other Third Party related to the activities under this Agreement in a manner that would violate Anti-Corruption Laws.
9.17Counterparts. This Agreement may be executed in one or more identical counterparts, each of which shall be deemed to be an original, and which collectively shall be deemed to be one and the same instrument. In addition, signatures may be exchanged by facsimile or PDF.
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IN WITNESS WHEREOF, the Parties have by duly authorized persons executed this Agreement as of the date first set forth above.
AMUNIX PHARMACEUTICALS, INC.    NAIA RARE DISEASES, INC.
By: /s/ Angie You    By: /s/ Daniel Perez
Name: Angie You    Name: Daniel Perez
Title: CEO    Title: CEO

EXHIBITS LIST
A - AMUNIX LISTED PATENTS 
B - LICENSED PRODUCT 
C - XTEN SEQUENCES
D - RESEARCH PLAN 
E - INSURANCE

F - BASEBALL ARBITRATION

Exhibit A-2

CONFIDENTIAL PORTIONS OF THIS AMENDED AND RESTATED LICENSE AMENDMENT HAVE BEEN OMITTED PURSUANT TO REGULATION S-K ITEM 601(b)(10)(iv) OF THE SECURITIES ACT OF 1933, AS AMENDED. CERTAIN CONFIDENTIAL INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT (i) IS NOT MATERIAL AND (ii) WOULD LIKELY CAUSE COMPETITIVE HARM TO 9 METERS BIOPHARMA, INC. IF PUBLICLY DISCLOSED. THE REDACTED TERMS HAVE BEEN MARKED IN THIS EXHIBIT AT THE APPROPRIATE PLACES WITH EMPTY BRACKETS INDICATED BY [       ].

AMENDED AND RESTATED LICENSE AGREEMENT
This AMENDED AND LICENSE AGREEMENT (this “Agreement”) is entered into effective May 1, 2020 (the “A&R Effective Date”) by and between Naia Rare Diseases, Inc., a Cayman Islands corporation with a principal office at 336 Bon Air Center, P.O. Box 341, Greenbrae, CA 94904 (“Naia”), and Amunix Pharmaceuticals, Inc., a Delaware corporation with a principal office at 500 Ellis Street, Mountain View, CA 94043 (“Amunix”), referred to collectively as the “Parties” and individually as the or a “Party”.
BACKGROUND

A.Amunix and Naia are parties to that certain License Agreement dated as of December 9, 2014 (the “Existing License Effective Date”), as amended September 22, 2016, March 29, 2017, and January 14, 2019 (the “Existing License”).
B.Amunix and Naia wish to amend and restate the Existing License as set forth herein in order to, inter alia, facilitate the acquisition of Naia’s assets and/or business related to the subject matter hereof by Innovate Biopharmaceuticals, Inc. (“INN”) or an Affiliate thereof (which acquisition will include the assignment (by operation of law) of this Agreement to INN or an Affiliate thereof).
NOW, THEREFORE, the Parties, intending to be legally bound, hereby agree as follows:
ARTICLE 0
AMENDMENT AND RESTATEMENT
The Parties hereby agree that, effective as of the A&R Effective Date, the Existing License is hereby amended and restated to reflect the terms and conditions set forth in this Agreement
ARTICLE 1

DEFINITIONS
The following initially capitalized terms have the following meanings as used in this Agreement, derivative forms of them shall be interpreted accordingly, and the words “includes,” “including” and other conjugations of the verb “to include” shall be deemed followed by the phrase “without limitation” (and drawing no implication from the inconsistent actual inclusion or non-inclusion of such phrase in the text):
1.1“Active Moiety” means the portion of a Research Construct and/or Licensed Product, in either case, that is an engineered protein sequence, non-naturally occurring protein sequence, or a native protein sequence (including analog derivatives based on a native sequence) with binding affinity to a Target Set that is responsible for biological activity. Active Moieties can bind to one or multiple targets. For avoidance of doubt, Active Moiety does not include an XTEN Sequence.

1.2“Affiliate” means any corporation, company, firm, partnership or other entity that directly or indirectly controls, is controlled by or is under common control with either Party to this Agreement. For purposes of this definition, “control” means the ownership, directly or indirectly, of fifty percent (50%) or more of the issued share capital or shares of stock entitled to vote for the election of directors, in the case of a corporation, fifty percent (50%) or more of the equity interests, in the case of any other entity, or the legal power to direct or cause the direction of the general management and policies of the entity in question.

1.3“Amunix Background Technology” means any Know-How or Amunix Listed Patents relating to the composition of matter, properties, use, or manufacture of XTEN Sequences or Licensed Products, which Know-How and Amunix Listed Patents in each case (a) are Controlled by Amunix or an Affiliate thereof and (b) in the case of Know-How, exists as of and/or was conceived prior to the Existing License Effective Date, or is developed or obtained by Amunix or an Affiliate thereof independently of the Agreement without the use of Naia’s Confidential Information, and in the case of Amunix Listed Patents, claims or discloses inventions conceived prior to the Existing License Effective Date or developed by Amunix or an Affiliate thereof independently of this Agreement without the use of Naia’s Confidential Information, or was obtained by Amunix not from Naia or its Affiliate, and in each case all Intellectual Property related to such Know-How and Amunix Listed Patents Controlled by Amunix or an Affiliate thereof, subject to Section 9.5. For purposes of clarity, Amunix Background Technology does not include the formulation(s) or other embodiment(s) of Research Constructs or Licensed Product made by Amunix or an Affiliate thereof pursuant to the Research Plan (as defined in the Existing License). 

1.4 “Amunix Improvements” means any Know-How, invention or discovery (and all Intellectual Property claiming or covering such invention or discovery) (a) conceived, discovered, or made in the course of the Research Program (as defined in the Existing License) or otherwise in connection with this Agreement by either Party (or any Affiliate thereof), solely or jointly with the other Party (or any Affiliate thereof) or (b) conceived, discovered, or made by or on behalf of Naia (or any Affiliate thereof) or any Sublicensee in the development or commercialization of the Licensed Product or any Backup Molecule, in each of cases (a) and (b), whether patentable or not, 

to the extent such Know-How, invention or discovery is (i) related solely to Amunix Background Technology concerning XTEN Sequences or (ii) (1) directly related to XTEN Sequences, but excluding modifications to Naia Background Technology or Naia Improvements for use with XTEN Sequences, and (2) severable from Naia Background Technology. For purposes of clarity, (x) Amunix Improvements includes (I) any and all derivative, modified, or truncated amino acid sequence compositions of XTEN Sequences conceived, discovered, or made in connection with this Agreement by either Party(or any Affiliate thereof), solely or jointly with the other Party (or any Affiliate thereof), or any Sublicensee, (II) any XTEN Modifications conceived or discovered by either Party (or any Affiliate thereof), solely or jointly with the other Party (or any Affiliate thereof), or any Sublicensee as a result of Naia’s, its Affiliate’s, or Sublicensee’s exercise of any rights granted by Amunix under this Agreement or knowledge of Amunix’s Confidential Information, or (III) methods of making such amino acid sequence compositions conceived, discovered, or made in the course of the Research Program or otherwise in connection with this Agreement by either Party (and in each case of clauses (I) – (III) all Intellectual Property claiming or covering such invention or discovery) and, notwithstanding anything to the contrary, (y) Amunix Improvements do not include, to the extent conceived, generated, or invented by or on behalf of Naia, any Affiliate thereof, or any Sublicensee, solely or jointly with Amunix, any Affiliate thereof, or any Third Party, any methods or uses for the treatment of indications or treatment regimens for Licensed Products or XTEN Sequences.

1.5 “Amunix Intellectual Property” means Amunix Background Technology, Amunix Improvements, Amunix Listed Patents, and Product-specific Patents.
1.6 “Amunix Listed Patents” means (a) all Patents and patent applications listed in Exhibit A (as may be periodically updated by written notice from Amunix to Naia) and any and all divisionals, continuations, continuations-in-part, patents of addition and substitutions of any of the foregoing, all patent applications (including provisional and utility applications) claiming priority to the patents and patent applications listed in Exhibit A, in each case that Cover XTEN Sequences (“XTEN Patents”) or Research Constructs (including any Licensed Products); (b) all Patents issuing on any of the foregoing that Cover XTEN Sequences or Research Constructs (including any Licensed Product); (c) all reissues, reexaminations, renewals and extensions of any of the foregoing that Cover XTEN Sequences or Research Constructs (including any Licensed Products); (d) all counterparts to the foregoing in other countries that Cover XTEN Sequences or Research Constructs (including any Licensed Products); and (e) all Supplementary Protection Certifications, restoration of patent term and other similar rights of Amunix or its Affiliates based on any of the foregoing.
1.7 “Amunix Patents” means Patents included within the Amunix Intellectual Property.
1.8 “Backup Molecule” means, with respect to the Licensed Product, the up to three (3) total Research Constructs developed by Naia, its Affiliates, or Sublicensees for development pursuant to Section 2.3, which in each case contain the same or functionally equivalent Active Moieties as the Lead Molecule and no additional Active Moieties.
1.9 “Calendar Quarter” means a financial quarter based on the fiscal year that is used by Naia and its Affiliates for internal and external reporting purposes; provided, however, that the first 

Calendar Quarter for the first Calendar Year extends from the A&R Effective Date to the end of the then current Calendar Quarter and the last Calendar Quarter extends from the first day of such Calendar Quarter until the effective date of the termination or expiration of the Agreement.
1.10 “Calendar Year” means the period beginning January 1 and ending December 31, unless otherwise agreed to by the Parties for such intervals that may begin during the course of a given year.
1.11 “Change of Control” means the occurrence of any of the following: (a) a Party enters into a merger, consolidation, stock sale or sale or transfer of all or substantially all of its assets or business (or that portion thereof to which this Agreement relates), or other similar transaction or series of transactions with a Third Party; or (b) any transaction or series of related transactions in which any Third Party or group of Third Parties acquires beneficial ownership of securities of a Party representing more than fifty percent (50%) of the combined voting power of the then outstanding securities of such Party. Notwithstanding the foregoing, (1) a stock sale to underwriters of a public offering of a Party’s capital stock or other Third Parties solely for the purpose of financing or a transaction solely to change the domicile of a Party or (2) a shift in the majority of the voting power of Naia as a resulting of a financing in which Naia issues convertible preferred shares or other securities to investors (including existing investors) in an arm’s length transaction shall not constitute a Change of Control.
1.12 “Commercially Reasonable Efforts” means, with respect to each Party’s obligations under this Agreement, the carrying out of such obligations with a level of effort and resources consistent with the commercially reasonable practices of a similarly situated company with similar rights in the pharmaceutical or biotechnology industry that would be applied to the research, development or commercialization, as applicable, of a similar technology with similar market potential.
1.13 “Confidential Information” of a Party means any and all information disclosed by or on behalf of such Party or an Affiliate thereof to the other Party or an Affiliate thereof under this Agreement, whether in oral, written, graphic or electronic form.
1.14 “Control”, “Controls”, or “Controlled by” means, with respect to any Intellectual Property right, the possession of (whether by ownership or license, other than licenses granted pursuant to this Agreement) or the ability of a Party to grant access to, or a license or sublicense of, such right as provided for herein without violating the terms of any agreement or other arrangement with any Third Party existing as of the first time such Intellectual Property right is within the license (or sublicense) granted to the other Party hereunder.
1.15    “Cover” (in all its verb and adjectival forms, such as “Covered” and “Covers”) means (a) with respect to Valid Patent Claims in an issued patent, that, in the absence of a license, the use, sale, or manufacture of the product in question would infringe such Valid Patent Claim or (b) with respect to a Valid Patent Claim in a pending application, that, in the absence of a license, the use, offer for sale, sale, importation or manufacture of the product in question would infringe such Valid Patent Claim, should such claims issue substantially as pending.

		
	1.16
	 “Development Stage” means each of the “Stages” detailed in Table 2.2.

1.17 “FDA” means the U.S. Food and Drug Administration or its successor.
1.18 “Field” means the research, development, manufacture and sale of Licensed Products for all diagnostic, therapeutic, prophylactic, or ameliorative applications in humans, including the diagnosis, treatment and prevention of disease, in all Indications and forms of administrations in humans.
1.19     “First Commercial Sale” means, with respect to a given Licensed Product, when Net Sales are first generated in an arm’s length transaction and shipment of the Licensed Product to a Third Party by Naia or its Affiliate or a Sublicensee in a country in the Territory following applicable Regulatory Approval of the Licensed Product in such country.

1.20    “Generic Product” shall mean, with respect to a Licensed Product sold by Naia, an Affiliate thereof, or a Sublicensee hereunder, and on a country-by-country basis, a product that (a) is marketed for sale in such country by a Third Party for the same Indication as such Licensed Product (or an Indication included within the Indication for which such Licensed Product is sold); (b) contains the corresponding Licensed Product or substantial equivalent(s) of the active pharmaceutical ingredient(s) of the corresponding Licensed Product in such country; and (c) such product, as and to the extent required, is approved through an abbreviated process (similar, with respect to the United States, to an Abbreviated New Drug Applications under Section 505(j) of the Federal Food, Drug and Cosmetic Act (21 USC 355(j)) or is approved as a “Biosimilar Biologic Product” under Title VII, Subtitle A Biologics Price Competition and Innovation Act of 2009, U.S.C. 262, Section 351 of the Public Health Service Act, or, outside the United States, in accordance with European Directive 2001/83/EC on the Community Code for medicinal products (Article 10(4) and Section 4, Part II of Annex I) and European Regulation EEC/2309/93 establishing the Community procedures for the authorisation and evaluation of medicinal products, each as amended, and together with all associated guidance, and any counterparts thereof or equivalent process outside of the US or EU to the foregoing, in each case that relies on or incorporates data generated by Naia or any of its Affiliates or Sublicensees for the corresponding Licensed Product under this Agreement in connection with such approval.

1.21    “GLP-1 Agreement” means that certain Second Amended and Restated License Agreement between the Parties dated as of the A&R Effective Date (the “GLP-1 License”).

1.22    “IND” means an investigational new drug application filed with the FDA as more fully defined in 21 C.F.R. § 312.3 or its equivalent in any country.

1.23    “Indication” means a disease or pathological condition for which a separate pivotal clinical program is required and regulatory materials are filed for the purpose of obtaining a Regulatory Approval.

1.24    “Intellectual Property” means Patents, trade secrets, copyrights, trademarks, service marks and other intellectual property or proprietary rights (including, without limitation, applications relating thereto) in any inventions, techniques, Know-How or discoveries, whether or not patentable.

1.25    “Know-How” means all technical information, including inventions, discoveries, unpatented and proprietary ideas, trade secrets, specifications, instructions, processes, formulae, materials (including cell lines, vectors, plasmids, nucleic acids and the like), methods, protocols, expertise and other technology applicable to formulations, compositions or products or to their manufacture, development, registration, use or marketing or to methods of assaying or testing them or processes for their manufacture, formulations containing them or compositions incorporating or comprising them, and including all biological, chemical, pharmacological, biochemical, toxicological, pharmaceutical, physical and analytical, safety, quality control, manufacturing, preclinical and clinical data, instructions, processes, formula, and expertise.

1.26    “Lead Molecule” means the molecule comprised of an Active Moiety and a single XTEN Sequence that is set forth on Exhibit B or such Backup Molecule that may become the Lead Molecule as set forth in Section 2.3.  

1.27    “Licensed Product” means (a) the Lead Molecule, (b) any of the up to three (3) Backup Molecules that all share (i) the same or functionally equivalent Active Moieties and (ii) a single XTEN Sequence, wherein the combination of the Active Moieties and XTEN Sequence binds to GLP-2 receptor Target, selected for development by Naia pursuant to Section 2.3, or (c) any product incorporating the Lead Molecule or any such Backup Molecule.  

1.28    “Naia Background Technology” means any Know-How and Patents relating to the composition of matter, properties, use, or manufacture of Active Moieties, proteins, peptides, nucleotide-based molecules or small molecules which Know-How and Patents in each case (a) owned, licensed, or controlled by Naia or an Affiliate thereof and (b) in the case of Know-How, exists as of and/or was conceived prior to the Existing License Effective Date, or is developed or obtained by Naia or an Affiliate thereof independently of the Agreement without the use of Amunix’s Confidential Information, and in the case of Patents, claims or discloses inventions conceived prior to the Existing License Effective Date or developed by Naia independently of the Agreement without the use of Amunix’s Confidential Information, or were obtained by Naia independently of the Agreement after the Existing License Effective Date, and in each case all Intellectual Property related to such Know-How and Patents.

1.29    “Naia Improvements” means any Know-How, invention or discovery (and all Intellectual Property claiming or covering such invention or discovery) conceived, discovered, or made by or on behalf of Naia, its Affiliates, or its or their agents, Sublicensees, or contractors (other than Amunix), alone or jointly with any Third Party, in the course of the Research Program or otherwise in connection with this Agreement, whether patentable or not, that (i) are directly related to GLP-2 receptor agonists and/or analogs of GLP-2 discovered or invented by or on behalf of Naia, any Affiliate thereof, or any Sublicensee, alone or jointly with any Third Party, and any Intellectual Property claiming or Covering such invention or discovery, (ii) are methods or uses for the treatment 

of indications or treatment regimens for Licensed Products or XTEN Sequences, or (iii) comprise, or are related to, other active pharmaceutical ingredients or therapeutic moieties. For the avoidance of doubt, (a) “Naia Improvements” excludes (I) any and all XTEN Sequences and derivative, modified, or truncated amino acid sequence compositions of XTEN Sequences conceived, discovered, or made in connection with this Agreement, or as a result of using Amunix’s Confidential Information, by either Party (or any Affiliate thereof), solely or jointly with the other Party (or any Affiliate thereof), (II) any XTEN Modifications conceived, discovered, or made that were enabled as a result of the exercise of rights granted by Amunix under this Agreement, or as a result of using Amunix’s Confidential Information, by either Party (or any Affiliate thereof), solely or jointly with the other Party (or any Affiliate thereof), or (III) methods of making such amino acid sequence compositions in (I) or (II) conceived, discovered, or made in connection with this Agreement, or as a result of using Amunix’s Confidential Information, by either Party or any Affiliate thereof, whether or not included in a composition of any modified or unmodified GLP-2 and (b) such XTEN Sequences and sequence variants thereof described in (a) shall be considered either “Amunix Background Technology” or “Amunix Improvements”, as appropriate.

1.30    “Naia Intellectual Property” means Naia Background Technology and Naia Improvements.

1.31    “Naia Patents” means Patents under Naia Intellectual Property.

1.32    “Net Sales” means the gross amounts invoiced and received by Naia, its Affiliates, or Sublicensees for all sales or transfers of any Licensed Product to Third Parties during the applicable Royalty Term for such Licensed Product, less the following amounts to the extent actually incurred or paid by Naia, its Affiliates, or Sublicensees with respect to such sales or transfers:

(a)trade, cash and quantity discounts, charge backs or rebates actually allowed or taken, including discounts or rebates to governmental; wholesalers and other distributors; pharmacies and other retailers; buying groups; health care insurance carriers; pharmacy benefit management companies; regulatory authorities; Third Parties associated with patient assistance programs; or managed care organizations;
(b)credits or allowances actually given or made for rejection of, or return of previously sold Licensed Products;
(c)any charges for insurance, freight, and other transportation costs directly related to the delivery of Licensed Product to the extent included in the gross invoiced price;
(d)any tax, tariff, duty or governmental charge levied on the sales, transfer, transportation or delivery of the Licensed Product (including any tax such as a value added or similar tax or government charge) borne by the seller thereof, other than franchise or income tax of any kind whatsoever;
(e)any import or export duties or their equivalent borne by the seller; and
(f)wholesaler, distributor, and inventory management fees.

All aforementioned deductions shall only be allowable to the extent they are commercially reasonable and determined in the ordinary course of business based on its accounting standards and practices consistently applied across its product lines and verifiable based on conventional industry practices. All such discounts, allowances, credits, rebates, and other deductions shall, for purposes of calculating Net Sales hereunder, when offered in conjunction with discounts, allowances, credits, or rebates on other products sold for separately stated prices, not be deducted hereunder to the extent offered as an enticement or in exchange for purchasing such other products such that the Licensed Product bears a disproportionate portion of such deductions as related to such other products. Notwithstanding anything in this Agreement to the contrary, the transfer of the Licensed Product between or among Naia, its Affiliates, and Sublicensees will not be considered a sale, provided, that in the event an Affiliate or Sublicensee is the end-user of Licensed Product, the transfer of Licensed Product to such Affiliate or Sublicensee shall be included in the calculation of Net Sales at the average selling price charged in the applicable country in an arm’s length sale to a Third Party who is not an Affiliate or Sublicensee in the relevant period. Net Sales will include the cash consideration received on a sale and the fair market value of all non-cash consideration. Disposition of Licensed Product for, or use of the Licensed Product in, clinical trials or other scientific testing, as samples, or under compassionate use, named patient sales, patient assistance, or test marketing programs or other similar programs or studies where the Licensed Product is supplied at or below cost shall not result in any Net Sales however if Naia or any of its Affiliates or Sublicensees charges an amount for such Licensed Product in excess of Naia’s, its Affiliates’, or its Sublicensees’ cost therefor, the amount billed will be included in the calculation of Net Sales, but for the sake of clarity such disposition or use of the Licensed Product shall never constitute a First Commercial Sale.
If (i) the Licensed Product is sold and not invoiced separately in the form of a combination product containing both the Licensed Product and one or more independently therapeutically active pharmaceutical molecules (i.e., a chemical entity performing a therapeutic or prophylactic function distinct from the enhancement of the activity or bioavailability of the Licensed Product itself), (ii) the Licensed Product is sold in a form that contains (or is sold bundled for a single price with) a delivery device therefor (in either case ((i) or (ii)), a “Combination Product”), or (iii) the Licensed Product is sold as both a combination described in (i) and with a delivery device as set forth in (ii), then Net Sales the purpose of calculating royalties owed under this Agreement for sales of such Licensed Product sold in such a manner in a particular country shall be determined as follows: first, Naia shall determine the actual Net Sales of such Combination Product in such country (using the above provisions) and then such amount shall be multiplied by the fraction A/(A+B), where A is the weighted average sales price of the Licensed Product if and when sold separately in finished form in such country, and B is the weighted average sales price of any other active pharmaceutical molecule(s) and/or delivery device(s) in the combination if and when sold separately in finished form in such country. If the Licensed Product in the combination is not sold separately in finished form in such country, Net Sales shall be calculated by multiplying actual Net Sales of such Combination Product by the following formula: one (1) minus B / C where B is the weighted average sale price(s) of the other active pharmaceutical molecule(s) or delivery device(s) in the combination when sold separately in finished form in such country and C is the weighted average sale price of the Combination Product in such country (if there is more than one other active pharmaceutical molecule(s) or delivery device(s), B shall equal the sum of all such other active pharmaceutical molecules’ or delivery devices’ weighted average sale prices in such country). If any other active 

pharmaceutical molecule(s) or delivery device(s) in the combination is not sold separately in finished form in such country, Net Sales shall be calculated by multiplying actual Net Sales of such Combination Product by a fraction A/C where A is the weighted average sales price of the Licensed Product if sold separately in finished form in such country and C is the weighted average sales price of the Combination Product in such country. If neither the Licensed Product nor any other active pharmaceutical molecule or delivery device in the Combination Product is sold separately in finished form in the applicable country, the adjustment to Net Sales for such country shall be determined by the Parties in good faith to reasonably reflect the fair market value of the contribution of the Licensed Product in the Combination Product to the total fair market value of such Combination Product.
1.33    “Non-Royalty Sublicense Income” means payments received by Naia or an Affiliate thereof as consideration for the grant of a sublicenses to Third Parties with respect to Amunix Intellectual Property under this Agreement, including, but not limited to, up-front payments, milestone payments, and the like, but specifically excluding (i) royalties on the sale or distribution of Licensed Product(s), (ii) funding received from a Sublicensee or an Affiliate thereof, following execution of the applicable sublicense, for specific research, development, or other services performed by Naia or an Affiliate thereof with respect to Licensed Products following the execution of such sublicense, to the extent such funding does not exceed Naia’s and its Affiliates’ reasonable, documented cost of performing such research, development, or other services, and (iii) purchases of Naia’s or its Affiliates’ equity or debt securities, to the extent the price paid therefor does not exceed the fair market value thereof, as reasonably determined in good faith by Naia’s Board of Directors 

1.34    “Patent” means any patent application or patent anywhere in the world, including all of the following kinds: provisional, utility, divisional, continuation, continuation-in-part, and substitution applications; and utility, re-issue, re-examination, renewal and extended patents, and patents of addition, and any Supplementary Protection Certificates, restoration of patent terms and other similar rights.

1.35    “Party” means Naia or Amunix.

1.36    “Phase I Clinical Trial” means, wherever in the world conducted, a study in humans, the principal purpose of which is preliminary determination of safety in healthy individuals or patients that would otherwise satisfy the requirements of 21 C.F.R. § 312.21(a) in the U.S. or its foreign equivalent.

1.37    “Phase II Clinical Trial” means, wherever in the world conducted, a study in humans of the short-term side effects and risks associated with a product and its efficacy for the indication under investigation in such study, that would otherwise satisfy the requirements of 21 C.F.R. § 312.21(b) in the U.S. or its foreign equivalent.

1.38    “Phase III Clinical Trial” means, wherever in the world conducted, a study in humans of the safety and efficacy of a product, which is prospectively designed to demonstrate statistically whether such product is safe and effective for use in the indication under investigation in a manner sufficient to file to obtain Regulatory Approval to market and sell that product in the 

U.S. or any other country for the indication under investigation in such study that would otherwise satisfy the requirements of 21 C.F.R. § 312.21(c) in the U.S. or its foreign equivalent. Phase III Clinical Trials also include any and all human clinical trials that serve as pivotal clinical trials, even if officially designated as phase II clinical trials.

1.39    “Product-specific Patents” means all Patents that: (a) claim or Cover inventions made by or on behalf of Naia, Amunix, any Affiliate of either of the foregoing, or Sublicensees, or any combination of the foregoing, after the Existing License Effective Date pursuant to this Agreement that relate directly and specifically to (i) a composition that combines an XTEN Sequence with an Active Moiety; (ii) a composition comprising the Licensed Product, or (iii) methods of use of such a composition within (a)(i) or (a)(ii), except such Patents, or inventions Covered thereby, that (x) directly relate to or Cover any therapeutically active ingredients or moieties other than an XTEN Sequence or Active Moiety or (y) would be included in Naia Improvements pursuant to clause (ii) of the first sentence of Section 1.33; or (b) claim or Cover inventions made prior to the Existing License Effective Date by or on behalf of Amunix or an Affiliate thereof that relate specifically to (i) a composition that combines an XTEN Sequence with an Active Moiety; (ii) a composition comprising the Licensed Product, or (iii) methods of use of a composition within (b)(i) or (b)(ii) that are subject to license under this Agreement and that are not XTEN Patents. For clarity, an XTEN Patent that has one or more claims that Cover the Licensed Product is not a Product-specific Patent.

1.40    “Regulatory Approval” means all approvals (including, where applicable, pricing and reimbursement approval and schedule classifications), product and/or establishment licenses, registrations or authorizations (including marketing authorizations) of any governmental authority necessary for the development, manufacture, use, marketing, sale or commercialization of a pharmaceutical (including small molecule or biologic) product.

1.41    “Research Construct” means an individual molecule comprised of an Active Moiety and a single XTEN Sequence, wherein 1) the molecule is created either as a monomeric fusion protein or as a conjugate of an Active Moiety and an XTEN; 2) the combination of the Active Moiety and XTEN Sequence binds to the GLP-2 receptor Target; and 3) the molecule was selected for research and evaluation under a Research Plan in order to identify and select the Licensed Product, Lead Molecule, or as a Backup Molecule for development by Naia.

1.42    “Side Letter” means that certain letter agreement, dated April __, 2020, between Amunix and Naia.

1.43    “Stage Period” means the time period associated with each “Stage” detailed in Table 2.42.

1.44    “Sublicensee” means a Third Party to which Naia, its Affiliate, or a prior Sublicensee grants a sublicense of the rights granted to Naia under the Product License in accordance with Section 2.4(b).

1.45     “Sublicensee Background Technology” means any Know-How and Patents (a) owned, controlled, or licensed by a Sublicensee or an Affiliate thereof and (b) in the case of Know-How, exists as of and/or was conceived prior to the date of such sublicense, or is developed or obtained by such Sublicensee or Affiliate thereof independently of this Agreement (and such sublicense) without the use of Amunix’s Confidential Information, and in the case of Patents, claims or discloses inventions conceived prior to the date of such sublicense or developed by Sublicensee or its Affiliates independently of the Agreement without the use of Amunix’s Confidential Information, or were obtained by such Sublicensee or its Affiliate independently of the Agreement after the date of such sublicense, and in each case all Intellectual Property related to such Know-How and Patents. 

1.46    “Target” means a biological target or cell receptor ligand to which an Active Moiety has specific binding affinity.

1.47    “Target Set” means, with respect to a Research Construct and/or Licensed Product, all Targets for which the Active Moiety contained within such Research Construct and/or Licensed Product has demonstrated clinically relevant binding affinity. For clarity, for purposes of the Agreement, the Parties agree that the Target Set for the Lead Molecule and the Licensed Product is designated to be GLP-2 receptor.

1.48    “Territory” means worldwide.

1.49    “Third Party” means any entity other than Naia, Amunix, or an Affiliate of either Party.

1.50    “U.S. Dollar” and “$” each means United States dollars, the legal currency of the United States.

1.51    “Valid Patent Claim” means a claim of a Patent, which claim is pending and has not been finally abandoned or finally rejected or is issued and unexpired and has not been found to be unpatentable, invalid or unenforceable by a court or other authority having jurisdiction, from which decision no appeal is taken, shall be taken or can be taken.

1.52    “XTEN Sequence” means each sequence shown on Exhibit C attached hereto, as it may be amended from time to time by written agreement of the Parties, and derivative, modified or truncated sequences encompassed by Amunix Improvements, as well as XTEN Modifications generated pursuant to Section 2.4(c)(ii), below. For avoidance of doubt, an XTEN Sequence does not include an Active Moiety with which it may be combined in the formation of a Research Construct or Licensed Product.

ARTICLE 2
2.1Research Program.

(a)Lead Molecule. Naia has selected, and Amunix agrees, that the Lead Molecule shall be that described on Exhibit B, which has a GLP-2 analog as its Active Moiety and the Target Set therefor is GLP-2 receptor.
(b)Development Committee. Amunix and Naia will create a development committee (“Development Committee”) comprised of three members; two from Naia and one from Amunix. One of the representatives from Naia will chair the Development Committee. The Development Committee will meet at least twice annually at six-month intervals to review the progress of the collaboration and recommend changes to the development program to Naia. The Development Committee will continue to meet until the earlier of (1) approval of a Licensed Product by FDA, EMEA or PMDA or (2) grant of a sub-license of the Licensed Product.

(c)Research Records. Amunix shall keep detailed, written records of all activities performed under the Research Program (as defined under the Existing License). In addition, each Party shall have the disclosure obligations under Section 4.1.
2.2Research and Development Programs: Development Stages and Diligence Requirements.
(a)The individual Development Stages for the development of the Licensed Product under this Agreement, the Stage Periods for each Stage, extension periods available and Extension Fees are set forth in Table 2.2. Two (2) alternative diligence conditions, detailed in Sections 2.2(b) and 2.2(c), below, will govern the requirement of Naia to diligently progress the Licensed Product through the four (4) Development Stages in order to avoid Amunix having a right to cause termination of the Agreement and reversion of rights to Amunix under Section 8.5(g). Naia can meet the diligence requirement by fulfilling either condition during each Development Stage. For clarity, however, if the Stage End Event has been achieved, the next Development Stage and its diligence conditions automatically initiate. 
(b)Diligence Condition 1. The terms and conditions of Section 2.2(c) notwithstanding, so long as Naia (together with its Affiliates and Sublicensees) expends in the aggregate the following minimum financial amounts in direct support of development of the Licensed Product during each of the Development Stages, Naia will be deemed to have performed with appropriate diligence such that no extension fee is required to prevent Amunix from having a right of termination of the Agreement:
(i)Stage 1: $[ ] in any consecutive [ ] ([ ]) month period during the Stage;
(ii) Stage 2: $[ ] in any consecutive [ ] ([ ]) month period during the Stage;

(iii) Stage 3: $[ ] in any consecutive [ ] ([ ]) month period during the Stage; and
(iv)Stage 4: $[ ] in any consecutive [ ] ([ ]) month period during the Stage.
If Naia (together with its Affiliates and Sublicensees) (i) fails to expend the minimum financial amount during the indicated period, (ii) fails to pay the Extension Fee under Diligence Condition 2, and (iii) fails to achieve the applicable Stage End Event during the applicable Stage Period (as it may be extended hereunder), Amunix shall have the right to terminate this Agreement upon written notice given to Naia and, upon such termination and subject to Section 8.5(g), below, certain rights will revert to Amunix.
(c)     Diligence Condition 2. If Naia (together with its Affiliates and Sublicensees) fails to achieve a Stage End Event (as detailed in Table 2.2) within the applicable Stage Period, Naia may extend such Stage Period for one or more additional six (6) month periods, up to the maximum number of extensions (detailed in Table 2.2 with respect to a given Stage), upon providing to Amunix written notice and the corresponding extension fee (set forth in Table 2.2). If (i) Naia fails to pay the extension fee, (ii) the Stage Period ends without the applicable Stage End Event having been achieved by Naia (together with its Affiliates and Sublicensees), and (iii) if Naia fails to expend the minimum financial amount(s) pursuant to Section 2.2(b), then Amunix shall have the right to terminate this Agreement upon written notice to Naia and, upon such termination and subject to Section 8.5(g), below, certain rights will revert to Amunix.
Table 2.2: Development Stages
	
						
	Stage
	Stage Initiation Event
	Stage End Event
	Stage Period
	Maximum Number of Extensions
	Extension Fee (USD)

	1
	[ ]
	[ ]
	[ ]
	[ ]
	$[ ]

	2
	[ ]
	[ ]
	[ ]
	[ ]
	$[ ]

	3
	[ ]
	[ ]
	[ ]
	[ ]
	$[ ]

	4
	[ ]
	[ ]
	[ ]
	[ ]
	$[ ]

(d) The Parties acknowledge and agree that (i) the achievement of any Stage End Event for a particular Stage prior to the achievement of any preceding Stage’s Stage End Event shall be considered achievement of such preceding Stage’s Stage End Event for purposes of this Section 2.4(c).
(e)    Except for the cloning, expression, conjugation and characterization and preclinical assay work and any other work performed by Amunix under a Research Plan, Naia shall use Commercially Reasonable Efforts to perform, at Naia’s sole cost and expense, all of the activities allocated to Naia under this Agreement, including additional preclinical evaluations of the Research Constructs, selection of the Lead Molecule, all subsequent clinical development and regulatory activities, manufacturing and commercialization of the Licensed Product. Amunix agrees to cooperate and reasonably assist Naia in its efforts for research, development, and commercialization 

of the Licensed Product, including, regulatory and manufacturing activities, at Naia’s cost and expense.
2.3     Backup Molecules. Naia, its Affiliates, or Sublicensees may make modifications to the non-XTEN Sequence portion of the Lead Molecule, including moving the whole XTEN Sequence to different locations in the subject Active Moiety, modifying the Active Moiety (but maintaining functional equivalence with the Active Moiety of the Lead Molecule) or changing the linkage between the XTEN Sequence and the Active Moiety to generate up to three (3) Backup Molecules which may be researched and developed in parallel with the Lead Molecule, subject to the terms of this Agreement. The chemical structures of all Backup Molecules for the Licensed Product must be disclosed to Amunix once a Backup Molecule enters Stage 1. No Stage Periods are applicable (nor Extension Fees required) for Backup Molecules as long as the Lead Molecule remains in development consistent with the diligence requirements of Section 2.4. If a Backup Molecule surpasses the development status (i.e., Stage) of the Lead Molecule, such Backup Molecule becomes the “Lead Molecule” for the Licensed Product.
2.4     Licenses.
(a)Product License. Amunix hereby grants and shall grant to Naia and its Affiliates an exclusive, worldwide, royalty-bearing license, with rights of sublicense as set forth in Section 2.4(b) and assignable with this Agreement under Section 9.5, under the Amunix Listed Patents and Amunix Intellectual Property, to make, have made, develop, have developed, use, have used, offer for sale, sell, have sold, export, import and commercialize Licensed Products in the Field (the “Product License”). 
(b)Sublicense Rights.
(i) Naia and its Affiliates shall have the right to grant sublicenses (through multiple tiers of sublicenses and sublicensees) of the Product License granted in Section 2.4(a) to its Affiliates, and subject to Section 2.4(b)(ii) below, to Third Parties solely as set forth in this Section 2.4(b) (each such sublicense granted by Naia, any Affiliate thereof, or any prior Naia Sublicensee, a “Naia Sublicense Agreement”). Naia shall remain primarily responsible for all activities undertaken by any Sublicensee and any and all failures by any Sublicensees to comply with the applicable terms of this Agreement. For clarity, sublicensing by Naia shall not relieve Naia of its obligations under this Agreement and Naia shall be responsible for all acts and omissions of any Sublicensees in connection with the sublicensed rights.   
(ii) Naia shall, within thirty (30) days after granting any Naia Sublicense Agreement, notify Amunix of the grant of such sublicense and provide Amunix with a true and complete copy of the Naia Sublicense Agreement, subject to any reasonable redactions that may necessary to protect the proprietary technical information of any Sublicensee. Each Naia Sublicense Agreement shall be consistent with the terms and conditions of this Agreement. Naia will use 

Commercially Reasonable Efforts to enforce such Naia Sublicense Agreement including, if deemed appropriate by Naia in its sole discretion, the termination of such Naia Sublicense Agreement (for example, as Naia may deem appropriate in the event of an uncured material breach by a Sublicensee). Each Naia Sublicense Agreement shall include the following additional terms and conditions:
1.Each Sublicensee shall be bound by and subject to all applicable terms and conditions of this Agreement in the same manner and to the same extent as Naia is bound thereby; and
2.Naia shall have rights, ownership and/or licenses to Amunix Improvements and Product-specific Patents generated by such Sublicensee in order to pass through rights, ownership and/or licenses to Amunix as required hereunder as if such Intellectual Property were generated by Naia under this Agreement.
(c)License Restrictions.

(i)Naia shall not, shall ensure that its Affiliates do not, and shall include a covenant substantially similar to this sentence in each Naia Sublicense Agreement requiring that the applicable Sublicensee and its Sublicensees do not, in each case, use or practice any Amunix Intellectual Property outside the scope of the license granted to Naia under Sections 2.4(a), except to the extent such use or practice is permitted under the grant of rights to such Amunix Intellectual Property under a separate agreement granting Naia, its Affiliate, or such Sublicensee the right to such use or practice of such Amunix Intellectual Property, and Naia shall use Commercially Reasonable Efforts to enforce such above-referenced covenant against Sublicensees.
(ii)The Product License granted in Section 2.4(a) does not include the right for Naia, its Affiliates or Sublicensees to modify the sequence or length of any XTEN Sequence licensed hereunder (an “XTEN Modification”). For avoidance of doubt, the foregoing shall not restrict Naia, its Affiliates, or Sublicensees from making Backup Molecules in accordance with Section 2.3.  Naia, its Affiliates, or Sublicensees must notify Amunix of any Backup Molecules that are progressed to IND-enabling toxicology studies and/or subsequent developmental stages. If, during the development of the Licensed Product, Naia, its Affiliates, or Sublicensees believes that the XTEN Sequence selected for the Licensed Product needs an XTEN Modification, Naia will so notify Amunix, and the Parties will cooperate in good faith to consider what XTEN Modification is appropriate. If, after consultation, Naia, its Affiliates, or Sublicensees desire to utilize such XTEN Modification and the Parties do or do not reach agreement as to the mechanism or the nature of such XTEN Modification, Naia, its Affiliates, or Sublicensees shall be entitled to make such XTEN Modification, provided that the making of such XTEN Modification would not result in any material, adverse effect on Amunix Intellectual Property and Naia communicates the details of such XTEN Modification to Amunix prior to performing and incorporating the XTEN Modification into any Backup Molecule or the Licensed Product and provides Amunix an updated Exhibit B, which updated Exhibit B shall be a part of this Agreement. Naia shall have the right to designate up to three (3) Backup Molecules under the Product License granted under Section 2.4(a).

(d)Government Rights. The foregoing grant of license rights under Section 2.4(a) and 2.4(b) shall be subject to: (i) the retained rights of the U.S. Government under 35 U.S.C. § 200 et seq. and 37 C.F.R. § 401, if any, and (ii) an obligation under 35 U.S.C. § 204, if applicable, that Licensed Products be manufactured substantially in the United States, unless Naia obtains a waiver from the appropriate federal agency.
(e)Naia License. Naia hereby grants and shall grant to Amunix a worldwide, royalty-free, non-exclusive license, including the right to sublicense, under any Know-How conceived, discovered, or made by Naia, its Affiliates or Sublicensees in connection with this Agreement or as a result of using Amunix’s Confidential Information, whether patentable or not, to the extent such Know-How is directly and specifically related to XTEN Sequences (and not any therapeutic moieties conjugated thereto), excluding modifications to Naia Background Technology or any Sublicensee Background Technology, or Naia Improvements for use with XTEN Sequences, and severable from Naia Background Technology and Sublicensee Background Technology, to make, have made, develop, use, offer for sale, sell, export, import and commercialize products comprising XTEN Sequences or XTEN Modifications included within Amunix Improvements, provided that such license shall not (i) during the term of this Agreement, include any rights to make, have made, develop, use, offer for sale, sell export, import and commercialize Licensed Products (as defined under this Agreement) or (ii) include any rights to any active pharmaceutical ingredients, peptides, proteins, or other therapeutic moieties that may be conjugated with XTEN Sequences.
(f)No Implied License. Except as explicitly set forth in this Agreement, neither Party grants to the other Party any license, express or implied, under its Intellectual Property rights.
ARTICLE 3
FINANCIALS
3.1License Fee. Amunix acknowledges that Naia has paid to Amunix (i) [ ] U.S. Dollars ($[ ]) required by Section 3.1 of the Existing License, (ii) [ ] U.S. Dollars ($[ ]) in consideration of the extension of the Stage 1 (as defined, solely for purposes of this Section 3.1, in the Existing License) start date to [ ] and the end date of Stage 1(as defined, solely for purposes of this Section 3.1, in the Existing License) to [ ], and (iii) [ ] U.S. Dollars ($[ ]) in satisfaction of its initial payment obligation under Section 3.3 of the Existing License.

3.2Milestone Payments. Upon the achievement of each milestone event set forth in Table 3.2 by Naia, its Affiliates, or Sublicensees with respect to a Licensed Product (each, a “Milestone Event”), Naia shall pay to Amunix the corresponding non-refundable, non-creditable amount set forth in the following table (each, a “Milestone Payment”): 

Table 3.2: Milestone Events and Payments

	
		
	Milestone Event
	Milestone Payments for the Licensed Product

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

* [ ]
** [ ]

(a)With the exception of payment of Net Sales Milestones, as set forth in Section 3.2(b), below, each Milestone Payment is due within thirty (30) days after the occurrence of the Milestone Event triggering the payment per the terms of Section 3.5. Naia shall promptly notify Amunix of the achievement of each Milestone Event triggering a Milestone Payment, including those achieved by a Sublicensee. Failure to pay a given Milestone Payment invoice shall be considered a material breach and the basis for termination of the Agreement under Section 8.4(a), if uncured. Notwithstanding anything herein to the contrary, Naia shall only be required to pay each Milestone Payment under Table 3.2 once, regardless of the number of Licensed Products, formulations thereof, indications therefor, or Sublicensees with respect thereto or the number of times a given Milestone Event is achieved.

(b)Sales Milestones. For the Licensed Product, Naia shall make each of the one-time, non-refundable, non-creditable sales milestone payments to Amunix when the aggregate Net Sales of such Licensed Product in the Territory in a Calendar Year first reaches the amount specified in Table 3.2, above. Naia shall pay to Amunix such amount in accordance with Section 3.4 within sixty (60) days after the end of the Calendar Year during which such sales milestone event is achieved. Naia shall notify Amunix of the achievement of each sales milestone event triggering a payment hereunder within sixty (60) days of such achievement. If more than one sales milestone event is achieved in any Calendar Year, all applicable milestone payments will be due. For clarity, each sales milestone of Table 3.2 shall only be paid the first time the Licensed Product achieves such Milestone Event.
(c)Non-Royalty Sublicense Income Consideration. Should Naia or an Affiliate thereof enter into a Naia Sublicense Agreement with one or more Third Parties to further exploit the licensed technology in a specific territory, then Naia shall pay Amunix [ ] percent ([ ]

%) of any Non-Royalty Sublicense Income received thereunder within [ ] ([ ]) days after receipt of such payments from its Sublicensee(s). Such payments will be credited against (i) any subsequent payments owed by Naia under this Article 3 and (ii) any Milestone Payments triggered by a Milestone Event that also triggered the payment of any corresponding Non-Royalty Sublicense Income.
(d) Change of Control. [ ]
3.3    Royalties.

(a)Licensed Products Covered by Valid Claim: Base Royalty Percentage. During the Royalty Term for a particular Licensed Product in a particular country, and subject to Section 3.3(c), Naia shall pay to Amunix a royalty of the aggregate annual worldwide Net Sales for the Licensed Product in those countries as to which the Royalty Term remains in effect as follows:

	
		
	Royalty Percentage of
Net Sales
	Aggregate Worldwide Net Sales for the Licensed Product During a Particular Calendar Year

	[ ]%
	Under $[ ]

	[ ]%
	$[ ] - $[ ]

	[ ]%
	Above $[ ]

(b)Licensed Products Not Covered by Valid Claim. If a Licensed Product is not Covered by a Valid Claim of the Amunix Patents in a country where such Licensed Product is sold, then the applicable royalty rate above for such Licensed Product in such country shall be reduced by [ ] percent ([ ]%) for such country.
(c)Royalty Offset. The royalty paid to Amunix under this Article 3 shall be reduced by [ ] percent ([ ]%) of the amount of any royalty or other consideration that Naia, an Affiliate thereof, or a Sublicensee pays to a Third Party under licenses that Naia reasonably determines to be necessary in connection with the research, development, manufacture, use or sale of the Licensed Product in a given country. Further notwithstanding the above, the royalty obligation payable to Amunix will be reduced such that the total royalties paid by Naia and its Affiliates to Amunix and all Third Parties is no higher than [ ]% of Net Sales, provided that the amounts payable hereunder shall not be reduced by the effects of this Section 3.3(c), with respect to any Calendar Quarter, to below [ ]% on Net Sales.
(d)Royalty Term. For the Licensed Product, the “Royalty Term” shall be determined on a country-by-country and Licensed Product-by-Licensed Product basis, beginning upon First Commercial Sale of a particular Licensed Product in a particular country and continuing until the latest to occur of: (i) expiration of the last-to-expire Valid Patent Claim of an [ ] in such country; or (ii) the [ ] anniversary of the First Commercial Sale of such Licensed Product in such country. Upon expiration of the Royalty Term as to a Licensed Product in a country, Naia shall have a worldwide, irrevocable, perpetual, paid up, no fee, royalty-free, non-exclusive license, with rights of sublicense and assignable with this Agreement under Section 9.5, under the Amunix Intellectual 

Property necessary to make, have made, develop, have developed, use, have used, offer for sale, sell, have sold, export, import, commercialize and otherwise exploit such Licensed Product in such country.
3.4 Royalty Payments and Reports. All royalty payments under Section 3.3 (“Royalty Payments”) shall be due and payable within [ ] ([ ]) days after the close of the Calendar Quarter during which the corresponding Net Sales occur. Royalty Payments will be made in U.S. Dollars to such bank account as designated by Amunix by written notice to Naia. Together with any such payment, Naia shall deliver a report specifying in the aggregate and on Licensed Product-by-Licensed Product and country-by-country basis in U.S. Dollars translated from local currency using the applicable Exchange Rate prior to calculating the royalty payable: (i) total Net Sales amount of Licensed Products by Naia and its Affiliates and Sublicensees; (ii) applicable Royalty Terms for each Licensed Product being sold in each country; (iii) royalty rates applied; and (iv) royalties accrued.
3.5    Payments; Method; Late Payment. Payments of Naia are made at the times specified in this Agreement. All payments to Amunix will be paid in U.S. Dollars and shall be deposited by wire transfer in immediately available funds in the requisite amount to such bank account as Amunix may from time to time designate by written notice to Naia. If Amunix does not receive payment of any sum due to it on or before the due date, simple interest shall thereafter accrue on the sum due until the date of payment at the per annum rate of [ ] percent ([ ]%) over the then-current prime rate reported in The Wall Street Journal or the maximum rate allowable by applicable laws, whichever is lower.
3.6    Taxes.
(a)Each Party shall be solely responsible for the payment of all taxes imposed on its share of income arising directly or indirectly from the efforts of the Parties under this Agreement.
(b)The Parties agree to cooperate with one another and use reasonable efforts to reduce or eliminate tax withholding or similar obligations in respect of royalties, milestone payments, and other payments made by Naia to Amunix under this Agreement. To the extent Naia is required to deduct and withhold taxes on any payment to Amunix, Naia shall pay the amounts of such taxes to the proper governmental authority in a timely manner and promptly transmit to Amunix an official tax certificate or other evidence of such withholding sufficient to enable Amunix to claim such payment of taxes. Amunix shall provide Naia any tax forms that may be reasonably necessary in order for Naia not to withhold tax or to withhold tax at a reduced rate under an applicable bilateral income tax treaty. Each Party shall provide the other with reasonable assistance to enable the recovery, as permitted by applicable laws, of withholding taxes, value added taxes, or similar obligations resulting from payments made under this Agreement, such recovery to be for the benefit of the Party bearing such withholding tax or value added tax. Naia shall require its Sublicensees in the Territory to cooperate with Amunix in a manner consistent with this Section 3.6(b).
(c)If Naia is required to make a payment to Amunix that is subject to a deduction or withholding of tax, then (i) to the extent any withholding or deduction obligation increases as a 

result of any Change of Control by Naia, assignment of this Agreement by Naia, intentional change of tax treatment, tax status, or jurisdiction of taxation by action of Naia following the Existing License Effective Date, or any failure on the part of Naia to comply with applicable laws or filing or record retention requirements that has the effect of modifying the tax treatment of the Parties hereto with respect to the payments made hereunder, then the sum payable by Naia (in respect of which such deduction or withholding is required to be made) shall be increased to the extent necessary to ensure that Amunix receives a sum equal to the sum which it would have received had no such increased withholding or deduction obligation arising from such action, Change of Control, assignment, or failure to comply by Naia occurred, and (ii) otherwise, the sum payable by Naia (in respect of which such deduction or withholding is required to be made) shall be made to Amunix after deduction of the amount required to be so deducted or withheld, which deducted or withheld amount shall be remitted to the proper Governmental Authority in accordance with applicable laws.
3.7    Exchange Rate. The rate of exchange to be used in computing the amount of currency equivalent in Dollars of Net Sales invoiced in other currencies shall be made at the average of the closing exchange rates reported in The Wall Street Journal over the applicable reporting period.
3.8    Records; Inspection.
(a)Naia or its Affiliates shall keep complete and accurate records of its sales and other dispositions of Licensed Product including all records that may be necessary for the purposes of calculating all payments due under this Agreement. Naia or any Affiliate receiving rights under this Agreement shall make such records available for inspection by an independent, internationally-recognized accounting firm selected by Amunix and reasonably acceptable to Naia at Naia’s or the relevant Affiliate’s premises on reasonable notice during regular business hours as specified in Section 3.8(b) below.
(b)For a period of three (3) years from the end of the calendar year in which a payment was due hereunder, upon thirty (30) days prior notice, Naia shall (and shall require that its Affiliates and Sublicensees) make such records relating to such payment available, during regular business hours and not more often than once each Calendar Year, for examination by an independent certified public accountant selected by Amunix, which shall have entered into confidentiality agreement with Naia reasonably satisfactory to Naia, for the purposes of verifying compliance with this Agreement and the accuracy of the records and financial reports furnished pursuant to this Agreement. Any amounts shown to be owed by Naia to Amunix shall be paid within thirty (30) days from the auditor’s report, plus interest (as set forth in Section 3.5) from the original due date. Amunix shall bear the full cost of such audit unless such audit discloses a deficiency in Naia’s payments of greater than 10% for the period subject to such audit, in which case Naia shall bear the reasonable cost of such audit.
3.9      Sublicensee Reports, Records and Audits. If Naia or its Affiliates grant any Sublicenses, the agreements for such Sublicenses shall include an obligation for the Sublicensee to (i) maintain records adequate to document and verify the proper payments (including milestones and royalties) to be paid to Amunix in accordance with this Article 3; (ii) provide reports with sufficient information to allow such verification; and (iii) allow Amunix (or Naia if requested by 

Amunix) to verify the payments due (such audit right is not required to be any stronger than that of Section 3.9).
3.10    Non-refundable, Non-creditable Payments. Except as provided herein, all payments due under this Article 3 are non-refundable, and are not creditable against any other payment(s) due to Amunix under this Agreement or under any other agreement or arrangement between the Parties or any of their Affiliates.

ARTICLE 4
INTELLECTUAL PROPERTY
4.1Ownership/Inventorship.

(a)Nothing in this Agreement changes ownership of any Patents in existence as of the Existing License Effective Date or ownership of a Party’s background technology.
(b)Ownership of Improvements.
(i)Naia shall own all right, title and interest in and to any Naia Improvements generated under this Agreement made by its employees, agents or contractors.
(ii)Amunix shall own all right, title and interest in and to any Amunix Improvements regardless of inventorship. Naia and its Affiliates shall assign and do hereby assign to Amunix its entire right, title and interest in and to the Amunix Improvements generated under this Agreement, and agrees to take all further actions to evidence such assignment, at Amunix’s reasonable request and expense. Naia and its Affiliates shall disclose all Amunix Improvements to Amunix promptly after (and in no event later than thirty (30) days after) generation thereof. For clarity, the above assignment and disclosure obligation applies to all Amunix Improvements generated in connection with any Naia Sublicense Agreement by or on behalf of Naia, its Affiliates or any Sublicensee.
(iii) Amunix shall own all right, title and interest in and to any Product-specific Patent Covering any invention conceived or reduced to practice in Naia’s, Amunix’s, or any of either Party’s Affiliates’ or a Sublicensee’s performance of activities pursuant to this Agreement, regardless of inventorship. Naia and its Affiliates shall assign, and do hereby assign to Amunix, its and their entire right, title and interest in and to Product-specific Patents, and agree to take all further actions to evidence such assignment, at Amunix’s reasonable request and expense. Naia and its Affiliates shall disclose all inventions referenced in the first sentence of this Section 4.1(b)(iii) that could form the basis of claims of patent applications for Product-specific Patents promptly after (and in no event later than thirty (30) days after) generation of such inventions thereof. For clarity, the above assignment and disclosure obligation applies to all Product-specific Patents generated in connection with any Naia Sublicense Agreement by or on behalf of Naia, its Affiliates or any Sublicensee.

(c)Inventorship. Inventorship for patentable inventions conceived or reduced to practice during the course of the performance of activities pursuant to this Agreement shall be determined in accordance with United States patent laws for determining inventorship where a choice of law is possible; otherwise the applicable patent law in the country where patent protection is sought shall apply.
4.2Prosecution.

(a)Prosecution Control. For purposes of this Article 4, the right of a Party to control prosecution of a Patent shall include the right to control preparing, filing, and prosecuting patent applications therefor, and obtaining and maintaining any resulting Patents. Amunix shall keep Naia reasonably and periodically updated as to the status of the Amunix Patents in writing.
(b)Right to Review and Comment. For purposes of this Article 4, references to the right of review and comment shall mean in each case that, with the exception of Amunix Listed Patents, for which Amunix will, except as otherwise explicitly provided in this Agreement, have no obligations to consult with Naia regarding prosecution, the Party in control of prosecution of a Product-specific Patent shall use Commercially Reasonable Efforts to consult with the other Party in good faith regarding the preparation, filing, prosecution, and maintenance of the applicable Patents. Without limiting the foregoing, with respect to each Product-specific Patent for which a Party or its Affiliate (or a Sublicensee, as applicable pursuant to Section 4.2(e)) has prosecution control, such Party or its Affiliate (or such Sublicensee, as applicable pursuant to Section 4.2(e)) will timely provide the other Party with a copy of any proposed patent application and any proposed response or submission to any patent office at least twenty (20) business days prior to the filing or response deadline and will consider in good faith all comments made by the other Party with respect to such draft response or submission. To that end, each Party and its Affiliates (and Sublicensees, as applicable pursuant to Section 4.2(e)) will keep the other Party reasonably informed of the status of the applicable Product-specific Patents, including, without limitation: (A) by providing the other Party with copies of all material communications received from or filed in patent office(s), or received from or sent to foreign attorneys, with respect to such filing, and (B) by providing the other Party, a reasonable time, but in any event not less than twenty (20) business days, prior to taking or failing to take any action that would materially affect the pendency of any such filing, with prior written notice of such proposed action or inaction so that the other Party has a reasonable opportunity to review and comment. In furtherance of the foregoing requirements, each Party and its Affiliates (and Sublicensees, as applicable pursuant to Section 4.2(e)) shall itself, or shall instruct and use reasonable efforts to ensure that its outside patent counsel, promptly forward to the other Party a copy of all correspondence received from or sent to any patent office relating to the Product-specific Patents for which the other Party has a right of review and comment, and each Party and its Affiliates (and Sublicensees, as applicable pursuant to Section 4.2(e)) each agree to enter into a reasonable commonality of interest agreement if deemed advisable by either Party’s patent counsel.
(c)Amunix Improvement Patents. As of the Existing License Effective Date, Amunix shall have the right to assume, at its expense, sole control over the prosecution of the Patents filed that Cover Amunix Improvements (“Amunix Improvement Patents”). Amunix will have the right to incorporate results from the Research Program (the “Research Results”) generated pursuant 

to the Agreement to the extent necessary to enable the filing or prosecution of Amunix Improvement Patents Covering XTEN Sequence-related inventions. Naia agrees to cooperate with Amunix in providing such Research Results in sufficient detail and scope to support such enablement of such applications.
(d)Naia Improvement Patents. As of the Existing License Effective Date, Naia shall have the right to assume, at its expense, those Naia Improvement Patents made by Naia employees, agents or contractors that Cover Naia Improvements (“Naia Improvement Patents”). Amunix agrees to cooperate with Naia in providing Research Results to Naia in sufficient detail and scope to support the filing or prosecution of such Patents.
(e)Product-specific Patents.
(i)As of the Existing License Effective Date, Amunix shall have the right to assume sole control over the prosecution of Product-specific Patents. The foregoing notwithstanding: 1) as of October 1, 2017, Naia or its Affiliate shall have the option to assume prosecution control of all Product-specific Patent applications claiming priority to PCT/US2012/054941; and 2) upon the initial dosing of a human with a Licensed Product, Naia or its Affiliate shall have the option to assume prosecution control for all Product-specific Patents applicable to the Licensed Product or if Naia, any Affiliate thereof, or a Sublicensee has a market capitalization in excess of $500,000,000 (or any equivalent value in foreign currency) or has more than 500 employees, such party, subject to Naia’s prior written approval, shall have the option at any time to assume prosecution control for Product-specific Patents, provided that, in the case of a Sublicensee, such Sublicensee shall only be entitled to assume such control for Product-specific Patents applicable to the Licensed Product(s) to which such Sublicensee has been granted rights. Naia shall reimburse Amunix for all direct expenses associated with the filing, prosecution, and maintenance of all Product-specific Patents applicable to the Licensed Product for which Amunix has prosecution control, but shall not be responsible for costs for prosecuting and maintaining XTEN Patents.
(ii)With respect to such Product-specific Patents wherein Amunix controls prosecution, Naia shall provide a list of recommended countries in which such patent applications may be filed reasonably in advance of the estimated filing date, and Amunix shall make a good-faith consideration of such recommendation, provided that Amunix shall have no obligation to file in the countries recommended by Naia. If, during the term of this Agreement, the Party having prosecution control intends to allow any Product-specific Patent to lapse or to abandon any such Product-specific Patent, the Party having prosecution control shall notify the Party which does not have prosecution control of such intention at least sixty (60) days prior to the date upon which such Product-specific Patent shall lapse or become abandoned (or such shorter time as practicable), and the non-filing Party shall thereupon have the right, but not the obligation, to assume responsibility for the prosecution, maintenance and defense thereof and all expenses related thereto.
(f)Post-Grant Proceedings. Amunix at its sole expense shall have the sole and exclusive right to file, prosecute, conduct and defend any post-grant proceedings in the U.S. or internationally of and with the Amunix Patents, and Naia at its sole expense shall have the sole and exclusive right to file, prosecute, and conduct and defend any post-grant proceedings in the U.S. 

or internationally of and with Naia Improvement Patents, such post-grant proceedings to include (without limitation) interferences, inter partes reexaminations, ex parte reexaminations, inter partes reviews, post-grant reviews, derivation proceedings, supplemental examinations, as well as any other post-grant proceedings available either before or after the implementation of the America Invents Act and any other post-grant proceeding available outside of the U.S. The Parties shall cooperate with each other in filing, prosecution, and conducting and defending of such proceedings. The Parties shall negotiate in good faith in order mutually agree as to which Party shall have the right to conduct and defend any such proceedings of and with Product-specific Patents, and the Party responsible for expenses for such conduct and defenses.
4.3Infringement.

(a)Notice. If either Party becomes aware of suspected or alleged infringement of a Patent covering the Licensed Product by a Third Party, it shall promptly notify the other Party.
(b)Enforcement.
(i)    Amunix Patents Other than Product-specific Patents. Amunix shall have the sole and exclusive right to assert the Amunix Patents, other than Product-specific Patents, to abate Third Party infringement thereof, at its sole expense with, except as otherwise set forth in this Agreement, the full right to any recovery. If Amunix decides not to enforce an Amunix Patent to cease such infringement, Naia would like to enforce such Amunix Patent at its sole expense, and if such infringement is materially damaging to Naia’s interests in the Licensed Product or Active Moiety, the Parties shall negotiate in good faith in order to establish the framework for Naia to enforce such Amunix Patent. 
(ii)    Product-specific Patents. Naia shall have the first right, but not the obligation, to bring (or defend) and control any action or proceeding with respect to any infringement of a Product-specific Patent, and Amunix shall have the right to be represented in any such action, at Amunix’s own expense and by counsel of its own choice; provided, however, that Naia shall keep Amunix fully informed about such action. If Naia fails to bring any such action or proceeding, or initiate settlement negotiations, with respect to an infringement of any Product-specific Patent within [ ] ([ ]) days following the notice of the alleged infringement, Amunix shall have the right to bring (or defend) and control any such action at its own expense and by counsel of its own choice, and Naia shall have the right, at its own expense, to be represented in any such action by counsel of its own choice. The Parties hereby agree and acknowledge that Naia may extend its rights under this Section 4.3(b)(ii) to an Affiliate or Sublicensee, subject to such Affiliate’s or Sublicensee’s compliance with Naia’s obligations under this Section 4.3(b)(ii).

(iii) Naia Patents. Naia shall have the sole and exclusive right to enforce Naia Patents with the full right to any recovery. 

(iv) Cooperation. Each Party shall reasonably cooperate in any such enforcement and, if requested by the other Party, join as a party therein, at the expense of the 

other Party. Neither Party shall have the right to enter into any settlement or consent to any judgment in any such litigation that adversely affects the rights of the other Party hereunder, or that would reasonably be anticipated to materially and adversely impact any Patents owned by the other Party (or to which Naia is granted rights under this Agreement), without the consent of such Party.

(v) Recovery. Any recovery realized by a Party as a result of any action or proceeding pursuant to this Section 4.3(b), whether by way of settlement or otherwise, shall be applied first to reimburse the documented out-of-pocket legal expenses of the other Party incurred in connection with such action or proceeding and not previously reimbursed by the controlling Party with respect thereto, and second to reimburse the documented out-of-pocket legal expenses of the Party that brought or controlled such litigation or settlement incurred in connection with such action, proceeding, or settlement, and any remaining amounts shall be retained by the Party that brought and controlled such action (or entered into such settlement); provided, however, that (1) [ ] percent ([ ]%) of any recovery realized by Amunix or any Affiliate thereof as a result of any such action, proceeding, or settlement thereof (after reimbursement of the Parties’ litigation expenses) under Section 4.3(b)(i) with respect to any infringement of Naia’s exclusive rights to the applicable Amunix Patents shall be paid to Naia, (2) [ ] percent ([ ]%) of any recovery realized by Naia or any Affiliate or Sublicensee thereof as a result of any such action, proceeding, or settlement thereof (after reimbursement of the Parties’ litigation expenses) entered into by Naia or any Affiliate or Sublicensee thereof under Section 4.3(b)(ii)  shall be paid to Amunix, and (3) [ ] percent ([ ]%) of any recovery realized by Amunix or any Affiliate thereof as a result of any such action, proceeding, or settlement thereof (after reimbursement of the Parties’ litigation expenses) entered into by Amunix or any Affiliate thereof under Section 4.3(b)(ii) with respect to any infringement of Naia’s rights to such Product-specific Patents shall be paid to Naia.

ARTICLE 5
CONFIDENTIALITY; PUBLICITY
5.1Confidentiality. During the term of this Agreement and for a period of ten (10) years thereafter, each Party shall maintain all Confidential Information of the other Party in trust and confidence and shall not, without the written consent of the other Party, disclose any Confidential Information of the other Party to any Third Party or use any Confidential Information of the other Party for any purpose other than as provided in this Agreement. The confidentiality obligations of this Section 5.1 shall not apply to Confidential Information to the extent that the receiving Party can establish by competent evidence that such Confidential Information: (a) is publicly known prior or subsequent to disclosure without breach of confidentiality obligations by such Party or its employees, consultants or agents; (b) was in such Party’s possession at the time of disclosure without any restrictions on further disclosure; (c) is received by such receiving Party, without any restrictions on further disclosure, from a Third Party who has the lawful right to disclose it, or (d) is independently developed by employees or agents of the receiving Party who had no access to the disclosing Party’s Confidential Information.

5.2Authorized Disclosure. Nothing herein shall preclude a Party from disclosing the Confidential Information of the other Party to the extent:

(a)such disclosure is reasonably necessary (i) for the filing or prosecuting of Patents as contemplated by this Agreement; (ii) to comply with the requirement of regulatory authorities with respect to obtaining and maintaining Regulatory Approval (or any pricing and reimbursement approvals) of the Licensed Product; or (iii) for prosecuting or defending litigations as contemplated by this Agreement;
(b)such disclosure is reasonably necessary to its employees, agents, consultants, contractors, licensees or Sublicensees on a need-to-know basis for the sole purpose of performing its obligations or exercising its rights under this Agreement; provided that in each case, the disclosees are bound by written obligations of confidentiality and non-use consistent with those contained in this Agreement;
(c)such disclosure is reasonably necessary to any bona fide potential or actual investor, acquirer, merger partner, or other financial or commercial partner or their advisors for the sole purpose of evaluating an actual or potential investment, acquisition or other business relationship; provided that in connection with such disclosure, such Party shall inform each disclosee of the confidential nature of such Confidential Information and cause each disclosee to treat such Confidential Information as confidential;
(d)such disclosure is reasonably necessary to comply with applicable laws, including regulations promulgated by applicable security exchanges, a valid order of a court of competent jurisdiction, administrative subpoena or order.
5.3Required Disclosures. If either Party is required, pursuant to a governmental law, regulation or order (or in a Party’s reasonable discretion to comply with the rules of any nationally recognized securities exchange), to disclose any Confidential Information of the other Party, the receiving Party shall have the right to do so; provided that such Party (i) shall give whenever possible at least five (5) business days advance written notice to the disclosing Party, or a smaller amount if five (5) business days is not possible, (ii) shall make a reasonable effort to assist the other Party to obtain a protective order requiring that the Confidential Information so disclosed be used only for the purposes for which the law or regulation required and (iii) shall use and disclose the Confidential Information solely to the extent required by the law or regulation.
5.4Terms of Agreement. Subject to Section 5.6, the existence of and the terms and content of this Agreement are the Confidential Information of both Parties and neither Party may disclose such terms except as contemplated in this Article 5.
5.5Return of Confidential Information. Promptly after the termination or expiration of this Agreement for any reason, each Party shall return to the other Party all tangible manifestations of such other Party’s Confidential Information at that time in the possession of the receiving Party excluding the Confidential Information related to continuing rights of either Party after termination or expiration in accordance with Section 8.4(a), except that one copy of the other Party’s Confidential Information may be retained by counsel for compliance purposes.

5.6Publicity. Neither Party shall (i) use the other Party’s name, logo, likeness, trademarks or trade names or those of its Affiliates for any advertising or promotional purposes or (ii) originate any news release or other public announcements, written or oral, whether to the public or press, stockholders or otherwise, relating to this Agreement, including its existence, the subject matter to which it relates, performance under it or any of its terms, any amendment hereto or performances hereunder, without the prior written consent of the other Party, save only any press releases and communications that are otherwise agreed to by the Parties, or as otherwise required by law. To the extent that the disclosing Party requests the deletion of any Confidential Information in the materials, the receiving Party shall delete such information. Other than repeating information in such press release (or a subsequently mutually agreed press release), neither Party will generate or allow any further publicity regarding this Agreement or the transaction or research contemplated hereunder, without giving the other Party the opportunity to review and approve the press release, to the extent practicable with respect to legally required disclosures. The disclosing Party shall provide the other Party with at least ten (10) business days advance notice of the date and extent of publication of any approved publicity. Notwithstanding the foregoing, this Agreement serves as written approval for both Parties and their Affiliates to publicly disclose the existence of and the subject matter of the Agreement and to identify each other on their websites and their PowerPoint presentations.
5.7Equitable Relief. Each Party acknowledges that its breach of Article 5 of this Agreement may cause irreparable injury to the other Party for which monetary damages may not be an adequate remedy. Therefore, each Party shall be entitled to seek injunctive and other appropriate equitable relief to prevent or curtail any actual or threatened breach of the obligations relating to Confidential Information set forth in this Article 5 by the other Party. The rights and remedies provided to each Party in this Article 5 are cumulative and in addition to any other rights and remedies available to such Party at law or in equity.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
6.1Mutual. Each of Amunix and Naia hereby represents and warrants to the other of them that the representing and warranting Party is duly organized in its jurisdiction of incorporation; that the representing and warranting Party has the full power and authority to enter into this Agreement; that this Agreement is binding upon the representing and warranting Party; that this Agreement has been duly authorized by all requisite corporate action within the representing and warranting Party; and, as of the A&R Effective Date, that it has not provided any notice of termination or material breach to the other Party under the Existing License.

6.2By Amunix. Amunix hereby represents and warrants to Naia that:

(a)Amunix solely owns the Amunix Patents and solely owns, or has a valid right to use in the manner contemplated by this Agreement, all of the Amunix Intellectual Property. As of the A&R Effective Date, neither Amunix nor any Affiliate thereof owns or controls, by license 

or otherwise, any Patents or Know-How, other than Amunix Intellectual Property licensed to Naia hereunder, that is necessary to develop, use, make, sell, or otherwise exploit Licensed Products.
(b)Amunix’s and Naia’s use of the Amunix Intellectual Property, including XTEN Sequences, as contemplated in the Research Plan and otherwise in compliance with the terms of this Agreement does not and will not constitute a breach of any agreement to which Amunix is a party.
(c)(i) the Amunix Patents exist as of the Existing License Effective Date, (ii) to Amunix’s knowledge, the use of the Amunix Patent and Amunix Intellectual Property by the Parties as contemplated herein does not and will not infringe a valid patent claim of any Third Party and (iii) as of the Existing License Effective Date, [ ], Amunix is unaware of any assertion by a Third Party that any of the Amunix Patents are invalid or unenforceable.
(d)Amunix has not previously assigned, transferred, conveyed or otherwise encumbered its right, title and interest in Amunix Intellectual Property in any manner that would prevent it from granting the rights, licenses and assignments set forth in Sections 2.4 and 4.1 or bestowing other rights in this Agreement. Neither Amunix nor any Affiliate thereof is party to any agreement, contract, or other arrangement that conflicts with, or would be breached by, the terms of this Agreement or Amunix’s execution hereof or compliance herewith.
6.3DISCLAIMER OF WARRANTIES. OTHER THAN THE EXPRESS WARRANTIES OF SECTIONS 6.1 AND 6.2, EACH PARTY, MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO ANY MOIETY, TARGET, XTEN SEQUENCE LICENSED PRODUCT, TECHNOLOGY, MATERIALS, OR PATENT RIGHTS. ADDITIONALLY, AMUNIX EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, THAT THE MANUFACTURE, USE, SALE, OFFER FOR SALE, IMPORT, COPYING OR DISTRIBUTION OF ANY MOIETY, TARGET, XTEN SEQUENCE LICENSED PRODUCT, TECHNOLOGY, MATERIALS OR OTHER PRODUCT OR METHOD SUBJECT TO THIS AGREEMENT WILL NOT INFRINGE OR MISAPPROPRIATE THE INTELLECTUAL PROPERTY RIGHTS OF ANY THIRD PARTY, OTHER THAN THE EXPRESS WARRANTIES OF SECTIONS 6.1 AND 6.2. ALL TECHNOLOGY AND MATERIALS PROVIDED BY AMUNIX TO NAIA PURSUANT TO THIS AGREEMENT ARE PROVIDED “AS IS”, OTHER THAN THE EXPRESS WARRANTIES OF SECTIONS 6.1 AND 6.2.
6.4Covenants of Amunix. Amunix hereby covenants that it will not assign, transfer, convey or otherwise encumber its right, title and interest in the XTEN Sequences in any manner that would prevent it from granting the licenses set forth in this Agreement and from performing its obligations under this Agreement. 
6.5Mutual Covenants.

(a)No Debarment. In the course of the development of the Licensed Product, each Party shall not use any employee or consultant who has been debarred by any regulatory authority, or, to such Party’s knowledge, is the subject of debarment proceedings by a regulatory authority. Each Party shall notify the other Party promptly upon becoming aware that any of its employees or consultants has been debarred or is the subject of debarment proceedings by any regulatory Authority.
(b)Compliance. Each Party and its Affiliates shall comply in all material respects with all applicable laws in the development and commercialization of the Licensed Product and performance of its obligations under this Agreement, including the statutes, regulations and written directives of the FDA, the EMA and any regulatory authority having jurisdiction in the Territory, the FD&C Act, the Prescription Drug Marketing Act, the Federal Health Care Programs Anti-Kickback Law, 42 USAC. 1320a-7b(b), the statutes, regulations and written directives of Medicare, Medicaid and all other health care programs, as defined in 42 USAC. § 1320a-7b(f), and the Foreign Corrupt Practices Act of 1977, each as may be amended from time to time.
ARTICLE 7
INDEMNIFICATION
7.1By Amunix. Amunix hereby agrees to indemnify, defend and hold harmless (collectively, “Indemnify”) Naia, its Sublicensees, its Affiliates and its and their directors, officers, agents and employees (collectively, “Naia Indemnitees”) from and against any and all liability, loss, damage or expense (including without limitation reasonable attorneys’ fees) (collectively, “Losses”) they may suffer as the result of Third Party claims, demands and actions (collectively, “Third Party Claims”) to the extent arising out of or relating to any breach of a representation or warranty made by Amunix under Article 6, except to the extent of any Losses (i) attributable to the reckless or intentional act or omission of any Naia Indemnitee, or (ii) for which Naia is required to Indemnify Amunix pursuant to Section 7.2.

7.2By Naia. Naia hereby agrees to Indemnify Amunix, its Affiliates and its and their directors, officers, agents and employees (collectively, “Amunix Indemnitees”) from and against any and all Losses they may suffer as the result of Third Party Claims to the extent arising out of or relating to (a) any breach of a representation or warranty made by Naia under Article 6, and (b) Naia’s or its Affiliate’s or Sublicensee’s research, testing, development, manufacture, use, sale, distribution, offer for sale, import, export and/or other commercialization of the Licensed Product (including all related claims of product liability, personal injury, property damage or other damage), except in each case to the extent of any Losses (i) attributable to the reckless or intentional act or omission of any Amunix Indemnitee, or (ii) for which Amunix is required to Indemnify Naia pursuant to Section 7.1.

7.3Procedures. Each of the foregoing agreements to Indemnify is conditioned on the relevant Amunix Indemnitees or Naia Indemnitees (i) providing prompt written notice of any Third Party Claim giving rise to an indemnification obligation hereunder, (ii) permitting the indemnifying Party to assume full responsibility to investigate, prepare for and defend against any such Third 

Party Claim, (iii) providing reasonable assistance in the defense of such claim at the indemnifying Party’s reasonable expense, and (iv) not compromising or settling such Third Party Claim without the indemnifying Party’s advance written consent. If the Parties cannot agree as to the application of the foregoing Sections 7.1 and 7.2, each may conduct separate defenses of the Third Party Claim, and each Party reserves the right to claim indemnity from the other in accordance with this Article 7 upon the resolution of the underlying Third Party Claim.

7.4Limitation of Liability. EXCEPT TO THE EXTENT SUCH PARTY MAY BE REQUIRED TO INDEMNIFY THE OTHER PARTY UNDER THIS ARTICLE 7 (INDEMNIFICATION) OR AS REGARDS A BREACH OF A PARTY’S RESPONSIBILITIES PURSUANT TO ARTICLE 5 (CONFIDENTIALITY), NEITHER PARTY NOR ITS RESPECTIVE AFFILIATES SHALL BE LIABLE FOR ANY SPECIAL, INDIRECT, EXEMPLARY, CONSEQUENTIAL, PUNITIVE DAMAGES, LOST PROFITS, OR LOST OPPORTUNITY HEREUNDER, WHETHER IN CONTRACT, WARRANTY, TORT, STRICT LIABILITY OR OTHERWISE.
ARTICLE 8
TERM AND TERMINATION
8.1Term. The term of this Agreement shall commence on the A&R Effective Date and shall expire on a country-by-country and Licensed Product-by-Licensed Product basis on the expiration of the Royalty Term for each Licensed Product in each country, in each case, unless earlier terminated by a Party as set forth below in this Article 8.

8.2Elective Termination By Naia. Naia may terminate this Agreement in its entirety or with respect to a Licensed Product upon sixty (60) days written notice to Amunix.

8.3Elective Termination By Amunix. Amunix shall have the right to terminate the Agreement upon failure to achieve any Development Stage within the applicable Stage Period and failure to satisfy the alternative diligence conditions as set forth in Section 2.2, above.

8.4Material Breach.

(a)Agreement in its Entirety. Either Party may terminate this Agreement for the material breach of this Agreement by the other Party, if such breach remains uncured sixty (60) days following notice from the nonbreaching Party to the breaching Party specifying such breach. In case of termination under this Section 8.4(a) by either Party, all rights and obligations of the Parties, other than accrued rights to payments in respect of such Licensed Product (including associated audit rights and provisions governing such payments and reports in relation to such payments) and those that explicitly survive under Section 8.5, shall end.
(b)Bankruptcy. This Agreement may further be terminated by either Party, by written notice to the other Party upon filing or institution of bankruptcy, reorganization, liquidation or receivership proceedings, or upon a general assignment of the assets for the benefit of creditors by the other Party; provided that in the case of any involuntary bankruptcy proceeding such right 

to terminate shall only become effective if the Party consents to the involuntary bankruptcy or such proceeding is not dismissed within ninety (90) days after the filing thereof.
8.5Effect of Termination of Agreement.

(a)No later than thirty (30) days after the effective date of any termination of this Agreement, each Party shall return, cause to be returned to the other Party, or destroy (as determined by such other Party) all Confidential Information of the other Party, all copies thereof and all biological or chemical materials delivered or provided by the other Party; provided, however, that (a) each Party may retain one copy of Confidential Information received from the other Party in its confidential files for record purposes only, and (b) to the extent a Party is expressly granted a continuing right or license to practice or use such Confidential Information after the termination of this Agreement, such Party may retain the Confidential Information received from the other Party that is expressly permitted to be used in the practice of such right or license and use such Confidential Information pursuant to the practice of such continuing right or license.
(b)If this Agreement is rejected by or on behalf of a Party under Article 365 of the United States Bankruptcy Code (the “Code”), all licenses and rights to licenses granted under or pursuant to this Agreement by the other Party to the Party are, and shall otherwise be deemed to be, for purposes of Article 365(n) of the Code, licenses of rights to “intellectual property” as defined under Article 101(35A) of the Code. For the avoidance of doubt, the Parties intend that the licenses granted by Amunix to Naia pursuant to Section 2.4 of this Agreement are licenses of rights to “intellectual property” as defined under Article 101 (35 A) of the Code.
(c)In the event that this Agreement is terminated or rejected by Amunix, its receiver, its debtor-in-possession or its trustee under the Code or any other applicable bankruptcy laws, Naia hereby elects pursuant to Article 365(n) of the Code or any applicable foreign equivalent thereof, to retain all rights granted to Naia under this Agreement, to the extent permitted by law.
(d)In the event that this Agreement is terminated or rejected by Naia, its receiver, its debtor-in-possession or its trustee under the Code or any other applicable bankruptcy laws, Amunix hereby elects pursuant to Article 365(n) of the Code or any applicable foreign equivalent thereof, to retain all rights granted to Amunix under this Agreement, to the extent permitted by law.
(e)If this Agreement is a terminated for any reason, provided Naia continues to make any and all applicable payments to Amunix under and in accordance with Article 3, Naia will have the right, for a period of one hundred twenty (120) days after the effective date of termination to sell off any existing inventory of Licensed Product in countries having granted Regulatory Approval as of the effective date of termination.
(f)If this Agreement is terminated by Amunix, each sublicense granted by Naia or any Affiliate which provides for its survival upon such termination shall survive such termination and remain (insofar as (i) the rights thereby conferred on such Sublicensee with respect to Amunix Intellectual Property and/or Licensed Products are no greater than the rights conferred on Naia hereunder with respect thereto, (ii) the obligations of Amunix thereunder upon such assignment shall be no greater than the obligations of Amunix hereunder, and (iii) such Sublicensee is not in 

material breach of such sublicense) in full force and effect, and be assigned to Amunix, with Amunix as such Sublicensee’s direct licensor solely with respect to, in the case of all of the foregoing, the Amunix Intellectual Property and rights to Licensed Products, provided that (a) such Sublicensee’s payment obligations with respect to its exercise of such surviving rights (but not with respect to its exercise or enjoyment of any other rights or assets) shall, in lieu of any payment obligations set forth in such sublicense, be the corresponding payment obligations set forth in this Agreement (as in effect immediately prior to the applicable termination, and which payment obligations of such Sublicensee under such direct license from Amunix shall not terminate upon termination of this Agreement), provided that if such sublicense is for less than the entire Territory, then with respect to any milestone payment based on Net Sales, such milestone payment shall be triggered based on cumulative Net Sales in such Sublicensee’s portion of the Territory, and (b) the Sublicensee, within thirty (30) days of Naia providing or receiving the relevant notice of termination, provides Amunix with copy of the sublicense, which may be redacted to the extent necessary to protect any confidential information of any Third Party (or of such Sublicensee to the extent concerning technology other than that licensed hereunder or not concerning the terms of the agreement including such sublicense directly related to the technology licensed hereunder).
(g)If this Agreement is terminated by Naia, in its entirety or with respect to a particular Licensed Product, or terminated by Amunix as a result of Naia’s failure to diligently progress the Licensed Product through the Development Stages in accordance with Sections 2.4 and 8.3, but in each case other than as a result of Amunix’s breach, then upon Amunix’s written request:
(i)All rights and title to all (1) Regulatory Approvals directly concerning the Licensed Product(s) subject to termination and (2) Intellectual Property, data, Know-How, and tangible research, manufacturing, and clinical records, research materials, production strains, and regulatory submissions directly and solely related, in the case of all of the items listed in this clause (2), the Licensed Product(s) subject to termination (and not related to any other product) that are, in the case of (1) and (2), owned by Naia, an Affiliate thereof, or a Sublicensee (except in the case of assignment of any Naia Sublicense Agreement to Amunix in accordance with Section 8.5(f) above, in which case all of the foregoing assets owned or controlled by any Sublicensees whose rights survive such termination shall not be subject to this subsection (i)) (collectively, (1) and (2), “Licensed Product Assets”) shall, to the extent the assignment or transfer thereof would not breach the terms of any agreement pursuant to which any Licensed Product Assets were obtained, be assigned to Amunix. Naia shall assign and does hereby assign to Amunix its entire right, title and interest in and to such Licensed Product Assets, and agrees to take all further actions to evidence such assignment, at Amunix’s reasonable request and at Naia’s expense. Notwithstanding the foregoing, if any of the Licensed Product Assets consist of a license to Intellectual Property granted by a Third Party to Naia or any other asset whose transfer or assignment to, or possession or use by, Amunix would impose payment obligations on Naia, any Affiliate thereof, or Amunix, then Naia shall first disclose to Amunix a copy of the applicable license agreement or the relevant payment terms concerning such other asset, and such license agreement or other asset shall only be assigned to Amunix if Amunix has consented in writing to such assignment and the terms applicable thereto permit such assignment (such a license or asset, an “Accepted Third Party Assets”).

(ii)To the extent any such Licensed Product Assets may not be assigned to Amunix, and with respect to any other Intellectual Property, data, Know-How, tangible research, manufacturing, and clinical records, and research materials, and production strains Controlled by Naia or an Affiliate thereof as of termination and necessary to manufacture, use, sell, offer for sale or import the Licensed Product(s) subject to such termination, Naia hereby grants Amunix a worldwide, perpetual, irrevocable, sublicensable, exclusive license to such Licensed Product Assets and other Intellectual Property, data, Know-How, tangible research, manufacturing, and clinical records, and research materials, and production strains to the extent, in each case, Controlled by Naia or an Affiliate thereof and necessary to manufacture, use, sell, offer for sale, or import the terminated Licensed Product(s) subject to such termination. Naia will cooperate to provide Amunix with copies of all data, intellectual property filings, regulatory submissions and communications, materials and know-how relating to the terminated Licensed Product, and will provide letters to applicable regulatory agencies evidencing the transfer of any Regulatory Approvals (including any INDs or foreign counterparts) to Amunix.
(iii) To the extent any Naia Intellectual Property is necessary to use, make, have made, sell, offer for sale, import or otherwise exploit the Licensed Product(s) subject to termination, Naia hereby grants Amunix a worldwide, perpetual, irrevocable, sublicensable non-exclusive license to practice such Intellectual Property in the development and commercialization of such affected Licensed Product(s).
(iv)     As soon as reasonably possible with respect to any termination of this Agreement subject to this Section 8.5(g) (other than a termination resulting from Amunix’s breach), the Parties shall (1) enter into reasonable good faith negotiations concerning the commercially reasonable value of the assets transferred, and rights licensed, to Amunix pursuant to clauses (i), (ii), and (iii) above, which value shall, in any event, reasonably take into account the facts and circumstances at such time and (2) use Commercially Reasonable Efforts to reach written agreement, within ninety (90) days of such termination, on the commercially reasonable financial consideration to be paid to Naia in exchange for such transfers and licenses (which (q) may include upfront payments, milestone payments, and/or royalties, as may be commercially reasonable and, upon such written agreement or, absent such agreement, any determination of such consideration as otherwise set forth below, (r) shall be paid to Naia by Amunix). If the Parties are unable to reach written agreement with respect thereto within such ninety (90) day period pursuant to the foregoing, the form and amount of such consideration to be paid to Naia in exchange for the performance of its obligations, and grant or transfer of rights and assets, under this Section 8.5(g) shall, if and as requested by either Party in writing by notice to the other Party, be determined pursuant to Section 9.2(b), and any such determination shall be binding on the Parties. Notwithstanding anything to the contrary, any above-referenced assignment or grant of any tangible or intangible assets or rights to Amunix by Naia shall be made subject to any such rights any Sublicensee whose rights to Licensed Products survive such termination as contemplated by Section 8.5(f) may have with respect to any such rights or assets.
(v)    In the event of any assignment of an Accepted Third Party Asset, or grant of rights under subsection (ii) or (iii) above, under this Section 8.5(g), any amounts that thereafter become due to any Third Parties by Amunix, Naia, or any Affiliate thereof with respect 

to such Accepted Third Party Asset or grant of rights by Amunix’s, its Affiliates’, or their licensees’ or sublicensees’ possession, use or exercise of any of the foregoing, or any development, manufacture, or commercialization of Licensed Products, by or on behalf of Amunix, any Affiliate thereof, or any licensee, sublicensee, assignee, or transferee of any of the foregoing shall be the responsibility of Amunix and shall be paid by Amunix to such Third Parties in accordance with the applicable terms (in the case of the agreement imposing such payment obligation being assigned to Amunix) or Naia in reasonably sufficient time to enable Naia or any Affiliate thereof to comply with any such payment obligations (in the case of the agreement imposing such payment obligation not being assigned to Amunix), provided that, notwithstanding anything to the contrary, in the case of any such payment obligations arising as a result of the grant of any rights under subsection (ii) or (iii) above, Naia shall disclose such payment obligations to Amunix as soon as reasonably possible upon becoming aware of an impending applicable termination and the rights to which such payment obligations correspond shall only be granted under subsection (ii) or (iii) above to the extent Amunix elects in writing to Naia prior to such termination to accept such grant and its corresponding payment obligations.
(h)Termination of this Agreement is without prejudice to any of the other rights and remedies conferred on the terminating Party by this Agreement or by applicable law.
8.6Survival in All Cases. Termination of this Agreement shall be without prejudice to or limitation on any other remedies available nor any accrued obligations of either Party. Sections 2.6(b), 2.4(d), 3.6, 3.8. 3.9, 4.1, 4.2(c), 4.2(d), 4.2(f), 6.3, 8.5, and 8.6 and Articles 1, 5, 7 and 9 shall survive any expiration or termination of this Agreement.

ARTICLE 9
MISCELLANEOUS 
9.1Independent Contractors. The Parties shall perform their obligations under this Agreement as independent contractors. Nothing contained in this Agreement shall be construed to be inconsistent with such relationship or status. This Agreement and the Parties’ relationship in connection with it shall not constitute, create or in any way be interpreted as a joint venture, fiduciary relationship, partnership or agency of any kind.

9.2Dispute Resolution.

(a)    General. Except with respect to any matter subject to Section 9.2(b) below, before filing any suit with respect to any dispute, claim or controversy arising from or related in any way to this Agreement or the interpretation, application, breach, termination or validity thereof, the Parties will make senior executives of the Parties (for Amunix its CEO (or his designee having sufficient authority), for Naia its CEO (or a designee having sufficient authority)) available for good faith discussion over a period of not less than thirty (30) days and make a good faith attempt to resolve the matter without engaging in litigation.

(b)    Termination-Related Payments. In the event the Parties are unable to agree on the financial consideration to be paid to Naia by Amunix in exchange for the assignments, transfers and licenses described in clauses (i), (ii), or (iii) of Section 8.5(g) as contemplated by clause (iv) of Section 8.5(g), and, following the period set forth therein, either Party notifies the other that it wishes such matters to be determined pursuant to this Section 9.2(b), such matter shall be resolved in accordance with the process set forth in Exhibit D with the arbitrator being reasonably expert in biopharmaceutical licensing transactions; provided, however, that after the arbitrator has made its selection of the financial consideration as provided in Exhibit D, Amunix shall have the right to either (a) accept such financial consideration and the Parties would execute the agreement including such financial consideration or (b) reject such financial consideration, in which case the Parties shall not be obligated to execute the agreement including such financial consideration and the licenses, transfers, and assignments by Naia to Amunix under Sections 8.5(g)(i)-(iii) shall not occur.

9.3Governing Law; Venue. This Agreement is to be construed in accordance with and governed by the internal laws of the State of California (as permitted by Section 1646.5 of the California Civil Code or any similar successor provision) without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of California to the rights and duties of the Parties. Any legal suit, action or proceeding arising out of or relating to this Agreement shall be commenced in a federal court in the Northern District of California or in state court in the County of Santa Clara, California, and each Party hereto irrevocably submits to the exclusive jurisdiction and venue of any such court in any such suit, action or proceeding.

9.4Entire Agreement. This Agreement (including its Exhibits) sets forth all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties with respect to the subject matter hereof and supersedes and terminates all prior agreements and understandings between the Parties with respect to such subject matter (including that certain Binding Option Agreement between the Parties dated August 15, 2014 and the Existing License), provided that, notwithstanding the foregoing, the Side Letter shall remain in effect. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by the respective authorized officers of the Parties.

9.5Assignment. Neither Party may assign in whole or in part this Agreement without the advance written consent of the other Party, except as set forth as follows:

(a)Amunix may assign this Agreement in its entirety without the consent of Naia to (i) its Affiliate; (ii) a Third Party or Affiliate which is the successor in connection with a Change of Control of Amunix or (iii) another entity that is or becomes the successor to all or substantially all of Amunix’s assets or business (or that portion thereof to which this Agreement relates) in connection with the spin-out, sale, divestiture or transfer of all or substantially all of Amunix’s assets or business (or that portion thereof) to which this Agreement relates.
(b)Naia may assign this Agreement in its entirety without the consent of Amunix to (i) its Affiliate; (ii) a Third Party or Affiliate which is the successor in connection with a Change 

of Control of Naia or (iii) another entity that is or becomes the successor to all or substantially all of Naia’s assets or business (or that portion thereof to which this Agreement relates) in connection with the spin-out, sale, divestiture or transfer of all or substantially all of its assets or business (or that portion thereof to which this Agreement relates).
(c)Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns. Any successor or assignee of rights and obligations permitted hereunder shall, in writing to the other Party, expressly assume performance of such rights and obligations following the applicable assignment. Any assignment of this Agreement not made in accordance with this Agreement is prohibited hereunder and shall be null and void. In the event of Amunix’s Change of Control, “Amunix Intellectual Property” shall exclude any Patents and Know-How Controlled by any successor of Amunix (or any Affiliate thereof, excluding the Party hereto that becomes an Affiliate of the successor as a result of such transaction) prior to the acquisition and which (i) were not obtained from Naia or its Affiliates or (ii) Cover inventions or comprise Know-How developed outside of and unrelated to any activities under this Agreement. In the event of Naia’s Change of Control, “Naia Intellectual Properly” shall exclude any Patents and Know-How Controlled by any successor of Naia (or any Affiliate thereof, excluding the Party hereto that becomes an Affiliate of the successor as a result of such transaction) prior to the acquisition and which (i) were not obtained from Naia or its Affiliates or (ii) Cover inventions or comprise Know-How developed outside of and unrelated to any activities under this Agreement.
9.6Severability. If one or more of the provisions in this Agreement are deemed unenforceable by law, then such provision shall be deemed stricken from this Agreement and the remaining provisions shall continue in full force and effect.
9.7Force Majeure. Both Parties shall be excused from the performance of their obligations under this Agreement to the extent that such performance is prevented by a Force Majeure (defined below) and the nonperforming Party promptly provides notice of the prevention to the other Party. Such excuse shall be continued so long as the condition constituting Force Majeure continues and the nonperforming Party takes reasonable efforts to remove the condition, but no longer than six (6) months. For purposes of this Agreement, “Force Majeure” means conditions beyond a Party’s reasonable control or ability to plan for, including acts of God, war, terrorism, civil commotion, labor strike or lock-out; epidemic; failure or default of public utilities or common carriers; and destruction of production facilities or materials by fire, earthquake, storm or like catastrophe.
9.8Notices. Any notice required or permitted to be given under this Agreement shall be in writing, shall specifically refer to this Agreement and shall be deemed to have been sufficiently given for all purposes if mailed by first class certified or registered mail, postage prepaid, delivered by express delivery service or personally delivered. Unless otherwise specified in writing, the mailing addresses of the Parties shall be as described below.
If to Amunix:
Volker Schellenberger, Ph.D.

President and CEO
Amunix Operating Inc.
500 Ellis Street 
Mountain View, CA 94043
In the case of Naia:
Naia Rare Diseases, Inc.
c/o RDD Pharma Ltd.
8480 Honeycutt Road Suite 120
Raleigh, NC 27615 
Attention: John Temperato

9.9Construction. This Agreement has been prepared jointly and shall not be strictly construed against either Party. Ambiguities, if any, in this Agreement shall not be construed against any Party, irrespective of which Party may be deemed to have authored the ambiguous provision.
9.10Headings. The headings for each article and section in this Agreement have been inserted for convenience of reference only and are not intended to limit or expand on, nor to be used to interpret, the meaning of the language contained in the particular article or section.
9.11Certain Conventions. Any reference in this Agreement to an Article, subarticles, Section, paragraph, clause or Exhibit shall be deemed to be a reference to an Article, subarticles, Section, paragraph, clause or Exhibit, of or to, as the case may be, this Agreement, unless otherwise indicated. Unless the context of this Agreement otherwise requires, (a) words of any gender include each other gender; (b) words such as “herein,” “hereof,” and “hereunder” refer to this Agreement as a whole and not merely to the particular provision in which such words appear; (c) words using the singular shall include the plural, and vice versa; and (d) the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “but not limited to,” “without limitation,” “inter alia” or words of similar import, and the words “exclude,” “excludes” and “excluding” shall be deemed to be followed by the phrase “but not limited to,” “without limitation,” “inter alia” or words of similar import.
9.12No Waiver. Any delay in enforcing a Party’s rights under this Agreement or any waiver as to a particular default or other matter shall not constitute a waiver of such Party’s rights to the subsequent enforcement of its rights under this Agreement, excepting only as to an express written and signed waiver as to a particular matter for a particular period of time executed by an authorized officer of the waiving Party.
9.13Costs. Each Party shall bear its own legal costs of and incidental to the preparation, negotiation and execution of this Agreement.
9.14Performance by Affiliates. A Party may perform some or all of its obligations under this Agreement through Affiliate(s) or may exercise some or all of its rights under this Agreement through Affiliates. However, each Party shall remain responsible and be guarantor of the performance by its Affiliates and shall take reasonable steps to cause its Affiliates to comply with 

the provisions of this Agreement in connection with such performance. In particular and without limitation, all Affiliates of a Party that receive Confidential Information of the other Party pursuant to this Agreement shall be governed and bound by all obligations set forth in Article 5, and shall (to avoid doubt) be subject to the intellectual property assignment and other intellectual property provisions of Article 4 as if they were the original Party to this Agreement (and be deemed included in the actual Party to this Agreement for purposes of all intellectual property-related definitions). A Party and its Affiliates shall be jointly and severally liable for their performance under this Agreement.
9.15Insurance. Naia shall maintain insurance from the commencement of Stage 2 and for a period of at least three (3) years after the last commercial sale of the Licensed Product under this Agreement, or, if development of Licensed Product ceases prior to Regulatory Approval, three (3) years after termination of such development, with an insurer having A.M. Best’s rating of Class A-V (or its equivalent) or higher status in an amount appropriate for its business and products of the type that are the subject of this Agreement, and for its obligations under this Agreement, as reasonably determined by Naia on a country-by-country basis, but, in all cases must maintain insurance at least as protective as that detailed in Exhibit E. Upon request, Naia shall provide Amunix with evidence of the existence and maintenance of such insurance coverage.
9.16Anti-Corruption. Neither Party shall perform any actions that are prohibited by local and other anti-corruption laws (including the U.S. Foreign Corrupt Practices Act, collectively “Anti-Corruption Laws”) that may be applicable to one or both Parties to this Agreement. Without limiting the foregoing, neither Party shall make any payments, or offer or transfer anything of value, to any government official or government employee, to any political party official or candidate for political office or to any other Third Party related to the activities under this Agreement in a manner that would violate Anti-Corruption Laws.

9.17Counterparts. This Agreement may be executed in one or more identical counterparts, each of which shall be deemed to be an original, and which collectively shall be deemed to be one and the same instrument. In addition, signatures may be exchanged by facsimile or PDF.

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IN WITNESS WHEREOF, the Parties have by duly authorized persons executed this Agreement as of the date first set forth above.
AMUNIX PHARMACEUTICALS, INC.                NAIA RARE DISEASES, INC.
By: /s/ Angie You                            By: /s/ Daniel Perez
Name: Angie You    Name: Daniel Perez
Title: CEO    Title: CEO
EXHIBITS LIST
A – AMUNIX LISTED PATENTS 
B – LEAD MOLECULE 
C – XTEN SEQUENCES
D – BASEBALL ARBITRATION
E – INSURANCE 

Exhibit B
Naia Consideration Resulting from the Merger
The following is a description of the consideration to be paid to the holders of equity securities (“Securityholders”) of Naia Rare Diseases, Inc., an exempted company incorporated under the laws of the Cayman Islands (“Company”), pursuant to that certain Agreement and Plan of Merger (the “Merger Agreement”) to be entered into by and among Innovate Biopharmaceuticals, Inc., a Delaware corporation (“Purchaser”); Naia Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Purchaser; Second Naia Merger Sub, LLC, a Delaware limited liability company and wholly owned subsidiary of Purchaser; Company; and Naia Limited, as “Shareholders’ Agent”. Capitalized terms used in this Exhibit B not otherwise defined in the Letter are defined or referenced in Schedule 1 attached hereto.
1.1    Merger Consideration. Subject to the terms and conditions set forth in the Merger Agreement, at the closing of the Merger, the Securityholders shall be entitled to receive an amount (the aggregate amount described in (a)-(g), the “Merger Consideration”) equal to (without duplication):
(a)    $[ ] in immediately available funds; plus
(b)    the Merger Shares; plus
(c)    [ ] ([ ]) of the Prepaid License Fees; minus
(d)    $[ ] to be deposited with Shareholders’ Agent to pay any costs that the Shareholders’ Agent may incur in connection with the Merger; minus
(e)    the Company Transaction Expenses; minus 
(f)    all indebtedness of the Company outstanding as of or paid in connection with the closing of the Merger; minus
(g)    payments made to Amunix in connection with the Merger by Purchaser (on behalf of, or as successor to, Company under the New Licenses and in accordance with this Letter) due to the transactions contemplated by the Merger Agreement, which payments will consist of (i) $[ ] to be paid in immediately available funds, and (ii) a number of Merger Shares equal to the quotient of $[ ] divided by the Purchaser Stock Price (collectively, the “Initial Amunix COC Payment”).
1.2    Earnout Consideration.
(a)    Sales-Based Payments. Purchaser shall deposit with Shareholders’ Agent, for distribution to the Securityholders, during the Royalty Term, on a Product-by-Product, country-by-country, and Calendar Quarterly basis, an amount equal to the Sales-Based Payment. Sales-Based Payments due hereunder shall be deposited and paid within [ ] days of the end of each Calendar Quarter during which Net Sales occur. Within [ ] days of the end of each Calendar Quarter, whether or not Net Sales occurred during such Calendar Quarter, Purchaser shall provide Shareholders’ Agent with: (i) a statement stating (as applicable) the number, description, and aggregate Net Sales, by country, of each Product sold during the relevant Calendar Quarter by Purchaser, its Affiliates, and Licensees and (ii) the calculation of Sales-Based Payments due for such Calendar Quarter.  For clarity, the parties to the Merger Agreement hereby agree that no sales of any Product in a country following the expiration of the Royalty Term for such Product in such country shall be included in Net Sales for purposes of calculating any amounts due under this Section 1.2(a).
(b)    Milestone Payments.

(i)    NB1001 Milestone Payments. Purchaser shall deposit with Shareholders’ Agent, for distribution to the Securityholders, the amounts set forth opposite the applicable NB1001 Product Milestone within, in each case, (A) [ ] days of the first achievement of the indicated milestone with respect to an NB1001 Product (for all milestone payments not triggered by the achievement of a particular Net Sales threshold) or (B) for all milestone payments triggered by the achievement of a particular Net Sales threshold, [ ] days of the end of the Calendar Quarter during which such threshold was first achieved with respect to an NB1001 Product;
(ii)    NB1002 Milestone Payments. Purchaser shall deposit with Shareholders’ Agent, for distribution to the Securityholders, the amounts set forth opposite the applicable NB1002 Product Milestone within, in each case, (A) [ ] days of the first achievement of the indicated milestone with respect to an NB1002 Product (for all milestone payments not triggered by the achievement of a particular Net Sales threshold) or (B) for all milestone payments triggered by the achievement of a particular Net Sales threshold, [ ] days of the end of the Calendar Quarter during which such threshold was first achieved with respect to an NB1002 Product;
(iii)    Purchaser shall deposit with Shareholders’ Agent, for distribution to the Securityholders, an amount equal to the amount by which Purchaser’s obligation to pay any amount to Amunix under the New Licenses, other than sales-based royalties due under Section 3.4 of the New GLP-1 License or Section 3.3 of the New GLP-2 License, is decreased due to any credits resulting from the Initial Amunix COC Payment or any Additional Amunix COC Payment (collectively, any Additional Amunix COC Payments and $[ ] of the Initial Amunix COC Payment, the “Amunix COC Payments”).  Such payments shall be made within [ ] days of the use of such credits.  Purchaser agrees to use commercially reasonable efforts to utilize such credits as soon as available under the New Licenses, provided that Purchaser shall not use such credits for more than [ ]% of any individual payment otherwise due to Amunix.
(iv)    Purchaser shall provide Shareholders’ Agent written notice of the achievement of each NB1001 Product Milestone or NB1002 Product Milestone by the applicable due date for payment set forth therein. Each milestone payment shall only be paid once under the Merger Agreement, with respect to the initial accomplishment thereof, regardless of the number of Products (or indications therefor or formulations thereof) or the number of times such milestone may be achieved. 
(c)    Additional Amunix COC Payments.  If (i) any particular payment due under Section 1.2(a), 1.2(b)(i), or 1.2(b)(ii) would, without taking into account the effects of this Section 1.2(c), cause [ ] ([ ]%) of the total aggregate payments under Section 1.2(a), 1.2(b)(i), and 1.2(b)(ii) to exceed the milestone and royalty payments paid or payable to Amunix under the Amunix Licenses following the closing of the first merger of the Merger and (ii) Purchaser pays Amunix an amount equal to [ ] ([ ]%) of such particular payment due under Section 1.2(a), 1.2(b)(i), or 1.2(b)(ii) pursuant to Section 3 of the Letter, Purchaser shall, in lieu of the amount of such particular payment due under Section 1.2(a), 1.2(b)(i), or 1.2(b)(ii) without taking into account the effects of this Section 1.2(c), only be required under Section 1.2(a), 1.2(b)(i), or 1.2(b)(ii) to pay the Shareholders’ Agent [ ] ([ ]%) of such amount.
(d)    Prepaid License Fees.  Purchaser shall, within [ ] days of the closing of the Merger, (i) deposit with Shareholders’ Agent, for distribution to the Securityholders, an amount equal to [ ] ([ ]) of the Prepaid License Fees.
(e)    Withholding.  Purchaser, Naia Merger Sub, Inc., Second Naia Merger Sub, LLC, and the Company, as applicable, will be entitled to deduct and withhold from the amounts payable pursuant to the Merger Agreement to any Person, and to pay over to the applicable governmental authority (or other applicable Person) such amounts as Purchaser, Naia Merger Sub, Inc., Second Naia Merger Sub, LLC, and the Company, as applicable, are required to deduct and withhold with respect to the making of such payment 

under the Code or any provision of state, local or non-U.S. tax law or under any other applicable Legal Requirement; provided, however, that Purchaser shall use commercially reasonable efforts to consult with Shareholders’ Agent prior to withholding any amounts payable hereunder and to cooperate with Shareholders’ Agent to minimize or eliminate any such withholding. To the extent such amounts are so deducted or withheld and paid to the appropriate governmental authority, such amounts shall be treated for all purposes under this Agreement as having been paid to the Person to whom such amounts would otherwise have been paid. To the extent that Purchaser is required to deduct and withhold any amounts in connection with any payments of Purchaser Stock, Purchaser shall, at its discretion, (a) be entitled to retain a portion of Purchaser Stock equal in value to such required deduction or (b) offset the amounts required to be deducted and withheld against cash payments required to be made by Purchaser to the recipient of the Purchaser Stock.

Exhibit 10.8

Schedule 1
Certain Definitions
“Affiliate” of any individual, entity or governmental body (“Person”) means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. With respect to Purchaser, Naia Merger Sub, Inc., Second Naia Merger Sub, LLC, and the surviving company following the Merger are each Affiliates.
“Amunix Patents” means any Patents to which rights are granted by Amunix under the New Licenses.
“API” means active pharmaceutical ingredient.
“BLA” means a biologics license application (as defined in Title 21 of the United Stated Code of Federal Regulations) submitted to the FDA seeking regulatory approval to market and sell the Product in the United States. 
“Calendar Quarter” means each of those three (3) calendar month periods of each Calendar Year ending March 31, June 30, September 30 and December 31, provided, that (a) the initial Calendar Quarter shall begin on the closing of the Merger and end June 30, 2020 and (b) the Calendar Quarter in which the Merger Agreement expires or is terminated shall extend from the first calendar day of such Calendar Quarter until the effective date of such expiration or termination.
“Calendar Year” means (a) for the first Calendar Year, the period commencing on the closing of the Merger and ending on December 31 of the same year, (b) for the Calendar Year in which the Merger Agreement expires or is terminated, the period beginning on January 1 of such Calendar Year and ending on the effective date of such expiration or termination, and (c) for all other years, each successive twelve (12) consecutive month period beginning on January 1 and ending December 31.
“Company IP” means all intellectual property rights which the Company owns (or purports to own), or to which it has an exclusive license or similar exclusive right, including for clarity, but not limited to, the Amunix Patents and CSMC Patents.
“Company Transaction Expenses” means all of the following amounts, without duplication: all outstanding legal, financial advisory, accounting and other fees and expenses incurred by the Company and Shareholders’ Agent in connection with the negotiation and consummation of the transactions contemplated hereby (but excluding any such fees and expenses attributable to actions by the Company or its Affiliates following the closing of the Merger).
“Compounds” means NB1001 and NB1002.
“Cover” (in all its verb and adjectival forms, such as “Covered” and “Covers”) means (a) with respect to Valid Patent Claims in an issued patent, that, in the absence of a license, the use, sale, import, or manufacture of the product in question would directly or indirectly (e.g., by inducement or contributory infringement) infringe such Valid Patent Claim or (b) with respect to a Valid Patent Claim in a pending application, that, in the absence of a license, the use, offer for sale, sale, importation or manufacture of the product in question would directly or indirectly infringe such Valid Patent Claim, should such claims issue substantially as pending.
“CSMC License” means that certain Amended and Restated Exclusive License Agreement by and between Cedars-Sinai Medical Center (“CSMC”) and the Company, dated February 10, 2020, as it may be amended 

from time to time.  For clarity, any modifications or amendments to such agreement after the closing of the first merger of the Merger will be disregarded when determining amounts due and/or payable under the CSMC License for purposes of this Agreement.
“CSMC Patents” means any Patents to which rights are granted by CSMC under the CSMC License.
“First Commercial Sale” means, with respect to a particular jurisdiction, the first sale of a Product to a third party by Purchaser, any Affiliate thereof, or any Licensee in such jurisdiction following Marketing Authorization (or the foreign equivalent thereof) for such Product in such jurisdiction.
“Legal Requirement” means any federal, state, local, municipal, foreign or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, regulation, Order, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any governmental authority.
“Licensee” means a Person, other than Purchaser and its Affiliates, that is granted or otherwise obtains, directly from Purchaser, any of its Affiliates, or any previous Licensee, a license or sublicense (at any tier) to any rights under the Company IP, Amunix Patents, or CSMC Patents or any future assignee of the New GLP-1 License, the New GLP-2 License, or the CSMC License. For clarity, if an Affiliate of Purchaser ceases to be an Affiliate of Purchaser (by divestiture or otherwise), and such former Affiliate of Purchaser is granted or retains any license or sublicense rights under any Company IP, Amunix Patents, or CSMC Patents, then such former Affiliate will be considered a Licensee.
“Marketing Authorization” means the receipt of all approvals from the relevant Regulatory Authority necessary to market and sell a Product in the United States (including all applicable approvals or determinations by a Regulatory Authority for the pricing or pricing reimbursement for a pharmaceutical product even if not legally required to sell the Product in the United States).
“Merger Shares” means the shares of Purchaser Stock, issued as part of the Merger Consideration to the Securityholders and Amunix, equal to the quotient of $[ ] divided by the Purchaser Stock Price.
“Milestone Payments” means the payments to be deposited with the Shareholders’ Agent for distribution to the Securityholders pursuant to Section 1.2(b). 
“NB1001 Product” means a product that incorporates or comprises NB1001 (alone or in combination with other APIs, peptides, proteins, or biologics).
“NB1001” means the biologic having the amino acid sequence set forth on Exhibit B of the New GLP-1 License or, if applicable, any other compound that is deemed to be (or that otherwise causes a product containing such compound to be) a “Licensed Product” for purposes of, and as set forth in, the New GLP-1 License.

	
		
	“NB1001 PRODUCT MILESTONES”
	AGGREGATE PAYMENT due

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

“NB1002 Product” means a product that incorporates or comprises NB1002 (alone or in combination with other APIs, peptides, proteins, or biologics).
“NB1002” means the biologic having the amino acid sequence set forth on [Exhibit B] of the New GLP-2 License or, if applicable, any other compound that is deemed to be (or that otherwise causes a product containing such compound to be) a “Licensed Product” for purposes of, and as set forth in, the New GLP-2 License.
	
		
	“NB1002 PRODUCT MILESTONES”
	AGGREGATE PAYMENT due 

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

	[ ]
	$[ ]

“NDA” means a new drug application (as defined in Title 21 of the United States Code of Federal Regulations, as amended from time to time) submitted to the FDA seeking regulatory approval to market and sell the Product in the United States (including a new drug application submitted under Section 505(b)(2) of the Act).
“Net Sales” means in the case of Products, gross amounts invoiced or otherwise received for Purchaser’s, its Affiliates’, and Licensees’ sales of Products in the Territory, less the sum of the following, to the extent commercially reasonable and directly and solely related to the sale of such Products: (1) discounts to customers in amounts customary in the trade; (2) reasonable rebates, credits, and chargeback payments 

granted to federal, state/provincial, local and other governments or managed health care organizations, including their agencies, purchasers, and/or reimbursers, under programs available or required by law, or reasonably entered into to sustain and/or increase market share for Products; (3) sales, value added, and/or use taxes directly imposed and with reference to particular sales and that are paid by Purchaser, its Affiliates, or Licensees; (4) amounts allowed or credited on returns for defective Products; (5) shipping and insurance charges with respect to Products that are itemized on the relevant invoice and paid by the customer; and (6) import or export duties, tariffs, or similar charges incurred with respect to the import or export of Products into or out of any country. Such amounts shall be determined from the books and records of Purchaser, its Affiliates, and Licensees maintained in accordance with GAAP, consistently applied.  Furthermore, for purposes of calculating Net Sales hereunder, any discounts, allowances, credits, or rebates described above shall not be deducted hereunder to the extent they are offered as an enticement or in exchange for purchasing other products of Purchaser, its Affiliates, or Licensees, such that the Product bears a disproportionate portion of such deductions as related to such other products (for example, where the Product is offered as a “loss leader”).
Notwithstanding anything to the contrary, in the event that any Product includes, in addition to NB1001 or NB1002, one or more other APIs (a “Combination Product”), the Net Sales of such Combination Product in a particular country, for the purposes of determining the Earnout Payments under Section 1.2 (as they may be adjusted under the Merger Agreement) shall be determined by multiplying the Net Sales of the Combination Product in such country by the fraction, “A / (A+B)” where “A” is the weighted average sale price of the Product including NB1001 or NB1002, as applicable (and not any other APIs (other than NB1001 or NB1002)), included in the Combination Product (the “Basic Product”) when sold separately in finished form in such country (provided that if (i) the Product incorporates both NB1001 and NB1002, but there is no separately sold Product incorporating both NB1001 and NB1002 and no other APIs, “A” shall equal the sum of the weighted average sale prices in such country of a Product incorporating just NB1001 and a Product incorporating just NB1002), and “B” is the weighted average sale price(s) of product(s) including just the API(s) other than NB1001 or NB1002 (such products, “Other Products”) sold separately in finished form in such country (if there is more than one Other Product, “B” shall equal the sum of all such Other Products’ weighted average sale prices in such country).
In the event that, with respect to any Combination Product sold in a particular country, the weighted average sale price of the Basic Product(s) in such country can be determined but the weighted average sale price(s) of the Other Product(s) in such country cannot be determined, Net Sales for purposes of determining Sales-Based Payments for such Combination Product in such country shall be calculated by multiplying the Net Sales of the Combination Product in such country by the fraction “A / C” where “A” is the weighted average sale price(s) of the Basic Product(s) when sold separately in finished form in such country and “C” is the weighted average sale price of the Combination Product in such country.
In the event that, with respect to any Combination Product sold in a particular country, the weighted average sale price(s) of the Other Product(s) in such country can be determined but the weighted average sale price(s) of the Basic Product(s) cannot be determined, Net Sales for purposes of determining Sales-Based Payments shall be calculated by multiplying the Net Sales of the Combination Product by the following formula: “one (1) minus B / C” where “B” is the weighted average sale price(s) of the Other Product(s) when sold separately in finished form in such country and “C” is the weighted average sale price of the Combination Product in such country (if there is more than one Other Product, “B” shall equal the sum of all such Other Products’ weighted average sale prices in such country).
In the event that, with respect to any Combination Product sold in a particular country, the weighted average sale price(s) in such country of neither the Basic Product(s) nor the Other Product(s) in the Combination Product can be determined, the Net Sales of the Combination Product shall, for the purposes of determining 

Sales-Based Payments with respect to such Combination Product, be commercially reasonable and determined by good faith negotiation between Purchaser and the Shareholders’ Agent consistent with the ratios and related principles referenced above and based on the relative value of NB1001 and/or NB1002, as applicable and the other API(s) to such Combination Product.
No deductions from the amounts defined above may be made for commissions paid to individuals whether those individuals are associated with independent sales agencies or regularly employed by Purchaser, its Affiliates, or Licensees, nor may deductions be made for cost of collections. Products are considered “sold” when billed out or invoiced or, in the event such Products are not billed out or invoiced, when the consideration for sale or provision of the Products is received. Notwithstanding the foregoing, Net Sales shall not include, and shall be deemed zero with respect to, (i) Products used by Purchaser for its own internal use, (ii) the no-charge distribution of reasonable quantities of promotional samples of Products, or (iii) Products provided, prior to Regulatory Approval, for clinical trials or research purposes, or (iv) Products provided to an Affiliate or Licensee for purposes of any resale, provided such Products’ resale is subject to Earnout Payments under Section 1.2.
The weighted average sale price for a Basic Product, Other Product(s), or Combination Product in a particular country shall be calculated once for each Calendar Year and such price shall be used during all applicable Sales-Based Payments reporting periods for such Calendar Year. When determining the weighted average sale price of a Basic Product, Other Product(s), or Combination Product in a particular country, the weighted average sale price shall be calculated by dividing the sales dollars (translated into U.S. dollars) by the units of Basic Product, Combination Product, or Other Product sold in such country during the twelve (12) months (or the number of months sold in a partial Calendar Year) of that Calendar Year for the respective Basic Product, Other Product(s), or Combination Product. For each Calendar Year, a reasonably forecasted weighted average sale price will be used for the Basic Product, Other Product(s), or Combination Product, which forecasted weighted average sale price will be, for each year other than the initial Calendar Year (or portion thereof) during which the Combination Product is sold, no less than the weighted average sale price for the Basic Product, Other Product(s), or Combination Product in a particular country calculated for the preceding Calendar Year. Any over- or under-payment due to a difference between forecasted and actual weighted average sale prices will be paid or credited in the first Sales-Based Payments of the following Calendar Year. For the avoidance of doubt, excipients shall not be considered APIs for the purpose of this definition of Net Sales. 
“Phase 1 Trial” means a human clinical trial of a Product, the principal purpose of which is preliminary determination of safety in healthy individuals or patients that would otherwise satisfy the requirements of 21 C.F.R § 312.21(a) in the U.S. or its foreign equivalent.
“Phase 2 Trial” means a human clinical trial of a Product, including possibly pharmacokinetic studies, the principal purpose of which is to make a preliminary determination that such Product is safe in patients for its intended use and to obtain sufficient information about such Product’s efficacy to permit the design of further clinical trials, and which is generally consistent with 21 CFR § 312.21(b) or its foreign equivalent. 
“Phase 3 Trial” means a human clinical trial that is designed to: (a) establish that a Product is safe and efficacious for its intended use; (b) define warnings, precautions and adverse reactions that are associated with the Product in the dosage range to be prescribed; (c) support Regulatory Approval of such Product; and (d) be generally consistent with 21 CFR § 312.21(c) or its foreign equivalent.
“Prepaid License Fees” means certain fees paid by the Company under the Licenses in the amount of
$[ ].
“Product” means any product containing one or more of the Compounds. 

“Proof of Concept Study” means an open label, repeat dose, dose escalation clinical study of a Product in adult humans with short bowel syndrome.
“Purchaser Stock Price” means the lowest of (a) the volume weighted average price (“VWAP”) of Purchaser Stock during the 10 trading days ending on the last trading date immediately prior to the date of the Merger Agreement, (b) the VWAP of Purchaser Stock during the 10 calendar day trading period ending on the last trading date of the trading day immediately prior to the closing date of the Merger, and (c) the VWAP of Purchaser’s Stock over the 10 trading days immediately prior to November 12, 2019.  If at any time during the period between the date of the Merger Agreement and up to and including the closing date of the first merger of the Merger, any change in the number or type of outstanding shares of Purchaser Stock shall occur as a result of a reclassification, recapitalization, exchange, stock split (including a reverse stock split), combination or readjustment of shares or any stock dividend or stock distribution with a record date during such period, the Purchaser Stock Price and any other similarly dependent items, as the case may be, shall be appropriately adjusted to provide the Securityholders the same economic effect as contemplated by the Merger Agreement prior to such event.
“Purchaser Stock” means the common stock, par value $0.0001 per share, of Innovate Biopharmaceuticals, Inc. 
“Regulatory Approval” means any and all approvals, licenses, registrations, clearances, or authorizations of any national, supra-national (e.g., the European Commission or the Council of the European Union), regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity, that are necessary for the manufacture, distribution, use or sale of a Product for human therapeutic, prophylactic, or diagnostic use in a particular jurisdiction, including, in the U.S., an NDA or BLA.
“Regulatory Authority” means any applicable governmental authority with responsibility for granting licenses or approvals, including Marketing Authorizations, necessary for the marketing and sale of a Product in any jurisdiction, or that is concerned with the research, development, marketing, sale, use, handling and control, safety, efficacy, reliability or manufacturing of drug or biological products.
“Royalty Term” shall be determined on a country-by-country and Product-by-Product basis, beginning upon First Commercial Sale of a particular Product in such country and continuing until the latest to occur of: (i) the [ ] ([ ]th) anniversary of the First Commercial Sale of such Product in such country or (ii) if such Product is Covered in such country by a Patent within the Company IP, the expiration of the last-to-expire Valid Patent Claim of such Patents Covering the Product in such country.
“Sales-Based Payment” means, with respect to a particular Calendar Quarter, the difference between (a) the Total Sales Payment Burden with respect to Net Sales in the Territory during such Calendar Quarter and (b) the total, aggregate, combined running royalties due and payable under Section 3.4 of the New GLP-1 License, Section 3.3 of the New GLP-2 License, and Section 4.3(a) of the CSMC License on Net Sales in the Territory during such Calendar Quarter (which running royalties under the CSMC License shall, subject to certain reasonable adjustments thereof, not exceed [ ]% of net sales of Products (as calculated in a reasonable manner)), which shall, in any event and notwithstanding anything to the contrary, be calculated for purposes of this clause (b) taking into account any credits against such royalties due under Section 3.4 of the New GLP-1 License or [Section 3.3] of the New GLP-2 License resulting from the Amunix COC Payments, but without taking into account (1) any reduction in such royalties due to Amunix or CSMC as a result of the effects or application of (i) Section 3.4(b) or 3.7 of the New GLP-1 License, (ii) [Section 3.3(b) or 3.6] of the New GLP-2 License, (iii) Section 4.3(g) of the CSMC License, (iv) Section 4.3(h) of the CSMC License with respect to any adjustments thereunder not resulting from payments due under the New Licenses, or (v) Section 4.3(h) of the CSMC License with respect to [ ] ([ ]%) of any adjustments thereunder resulting from payments due under the New Licenses or (2) any expiration or termination of any obligation to pay running 

royalties with respect to any Product or country as a result of the expiration of the Royalty Term (as defined in the New Licenses) under either of the New Licenses or any expiration of the obligation to pay royalties to CSMC pursuant to Section 4.3(d) of the CSMC License (for example, if royalties due under the New Licenses with respect to a Calendar Quarter’s Net Sales equals $[ ] prior to applying any amounts creditable against such royalties due to the Amunix COC Payments, and the Amunix COC Payments creditable against such payments total $[ ], the portion of the amount described in this clause (b) attributable to the New Licenses shall, for purposes of the calculating of the Sales-Based Payment with respect to such Calendar Quarter’s Net Sales, equal $[ ]). Notwithstanding anything to the contrary, (x) if clause (b) exceeds clause (a) for any particular Calendar Quarter, the Sales-Based Payment for such Calendar Quarter shall be zero and (y) for purposes of calculating the Sales-Based Payment and Total Sales Payment Burden, Net Sales shall only include gross amounts invoiced or otherwise received for Purchaser’s, its Affiliates’, and Licensees’ sales of Products in the Territory during, on a country-by-country and Product-by-Product basis, the Royalty Term applicable to each Product in each country.
“Specified Asian Territories” means the South Korea (Republic of Korea), Malaysia, Singapore (Republic of Singapore), Indonesia (Republic of Indonesia), Philippines (Republic of the Philippines), the People’s Republic of China, the Republic of China (Taiwan), Hong Kong (Hong Kong Special Administrative Region of the People’s Republic of China), and Macau (Macao Special Administrative Region of the People’s Republic of China).
“Territory” means the entire world.
“Total Sales Payment Burden” means an amount equal to the Net Sales of a Product sold in a country during any Calendar Quarter, multiplied by the applicable Rate for such country and applicable Calendar Quarter, as set forth in the table below: 
	
			
	“Rate” for countries within the Specified Asian Territories
	“Rate” for all other countries
	Applicable Time Period

	[ ]%
	[ ]%
	[ ]

	[ ]%
	[ ]%
	[ ]

	[ ]%
	[ ]%
	[ ]

“Valid Patent Claim” means a claim of a Patent, which claim is pending and has not been finally abandoned or finally rejected or is issued and unexpired and has not been found to be unpatentable, invalid or unenforceable by a court or other authority having jurisdiction, from which decision no appeal is taken, shall be taken or can be taken.

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