Document:

EX-4.1

 Exhibit 4.1 
  

					
	

	 	Mailing Address:	  	Location:
	 	PO Box 9431 Stn Prov Govt	  	2nd Floor - 940 Blanshard Street
	 	Victoria BC V8W 9V3	  	Victoria BC
	 	www.corporateonline.gov.bc.ca	  	1 877 526-1526

  
  

 

			
		  	CERTIFIED COPY
		  	Of a Document filed with the Province of British Columbia Registrar of Companies
		
	Notice of Articles	  	

	BUSINESS CORPORATIONS ACT	  	CAROL PREST

  

			
	This Notice of Articles was issued by the Registrar on: November 18, 2020
10:13 AM Pacific Time
	 	 
	Incorporation Number:	  	BC0390154
	 
	Recognition Date: Incorporated on July 6, 1990

  

			
	NOTICE OF ARTICLES
	Name of Company:	  	
	CRESCO LABS INC.	  	
		
	REGISTERED OFFICE INFORMATION	  	
		
	Mailing Address:	  	Delivery Address:
	25TH FLOOR, 666 BURRARD STREET	  	25TH FLOOR, 666 BURRARD STREET
	VANCOUVER BC V6C 2X8	  	VANCOUVER BC V6C 2X8
	CANADA	  	CANADA
		
	RECORDS OFFICE INFORMATION	  	
		
	Mailing Address:	  	Delivery Address:
	25TH FLOOR, 666 BURRARD STREET	  	25TH FLOOR, 666 BURRARD STREET
	VANCOUVER BC V6C 2X8	  	VANCOUVER BC V6C 2X8
	CANADA	  	CANADA

  
 Page: 1 of 4 

			
	DIRECTOR INFORMATION	  	
		
	Last Name, First Name, Middle Name:	  	
	Walter, John R.	  	
		
	Mailing Address:	  	Delivery Address:
	400 W ERIE STREET, SUITE 110	  	400 W ERIE STREET, SUITE 110
	CHICAGO IL 60654	  	CHICAGO IL 60654
	UNITED STATES	  	UNITED STATES
		
	Last Name, First Name, Middle Name:	  	
	Podolsky, Randy	  	
		
	Mailing Address:	  	Delivery Address:
	400 W ERIE STREET, SUITE 110	  	400 W ERIE STREET, SUITE 110
	CHICAGO IL 60654	  	CHICAGO IL 60654
	UNITED STATES	  	UNITED STATES
		
	Last Name, First Name, Middle Name:	  	
	Manning, Thomas	  	
		
	Mailing Address:	  	Delivery Address:
	400 W ERIE STREET, SUITE 110	  	400 W ERIE STREET, SUITE 110
	CHICAGO IL 60654	  	CHICAGO IL 60654
	UNITED STATES	  	UNITED STATES
		
	Last Name, First Name, Middle Name:	  	
	Corcoran, Gerald	  	
		
	Mailing Address:	  	Delivery Address:
	400 W ERIE STREET, SUITE 110	  	400 W ERIE STREET, SUITE 110
	CHICAGO IL 60654	  	CHICAGO IL 60654
	UNITED STATES	  	UNITED STATES
		
	Last Name, First Name, Middle Name:	  	
	Sampson, Robert M.	  	
		
	Mailing Address:	  	Delivery Address:
	400 W ERIE STREET, SUITE 110	  	400 W ERIE STREET, SUITE 110
	CHICAGO IL 60654	  	CHICAGO IL 60654
	UNITED STATES	  	UNITED STATES
		
	Last Name, First Name, Middle Name:	  	
	Sergi, Dominci	  	
		
	Mailing Address:	  	Delivery Address:
	400 W ERIE STREET, SUITE 110	  	400 W ERIE STREET, SUITE 110
	CHICAGO IL 60654	  	CHICAGO IL 60654
	UNITED STATES	  	UNITED STATES

  
 Page: 2 of 4 

			
	Last Name, First Name, Middle Name:	  	
	Bachtell, Charles	  	
		
	Mailing Address:	  	Delivery Address:
	400 W ERIE STREET, SUITE 110	  	400 W ERIE STREET, SUITE 110
	CHICAGO IL 60654	  	CHICAGO IL 60654
	UNITED STATES	  	UNITED STATES
		
	Last Name, First Name, Middle Name:	  	
	Roberts, Michele	  	
		
	Mailing Address:	  	Delivery Address:
	400 W ERIE STREET, SUITE 110	  	400 W ERIE STREET, SUITE 110
	CHICAGO IL 60654	  	CHICAGO IL 60654
	UNITED STATES	  	UNITED STATES
		
	Last Name, First Name, Middle Name:	  	
	Lustig, Marc	  	
		
	Mailing Address:	  	Delivery Address:
	400 W ERIE STREET, SUITE 110	  	400 W ERIE STREET, SUITE 110
	CHICAGO IL 60654	  	CHICAGO IL 60654
	UNITED STATES	  	UNITED STATES
		
	Last Name, First Name, Middle Name:	  	
	Vallone, Carol	  	
		
	Mailing Address:	  	Delivery Address:
	400 W ERIE STREET, SUITE 110	  	400 W ERIE STREET, SUITE 110
	CHICAGO IL 60654	  	CHICAGO IL 60654
	UNITED STATES	  	UNITED STATES

 RESOLUTION DATES: 

Date(s) of Resolution(s) or Court Order(s) attaching or altering Special Rights and Restrictions attached to a class or a series of shares: 

November 14, 2018 

June 29, 2020 
  

					
	AUTHORIZED SHARE STRUCTURE	  	 
	 1. No Maximum
	  	Subordinate Voting Shares	  	Without Par Value
			
		  		  	With Special Rights or
		  		  	Restrictions attached
	 	 	 
	 2. 500,000
	  	Super Voting Shares	  	Without Par Value
			
		  		  	With Special Rights or
		  		  	Restrictions attached

  
 Page: 3 of 4 

					
	 3. No Maximum
	  	Proportionate Voting Shares	  	Without Par Value
			
		  		  	With Special Rights or
		  		  	Restrictions attached
	 	 	 
	 4. No Maximum
	  	Special Subordinate Voting Shares	  	Without Par Value
			
		  		  	With Special Rights or
	 	  	 	  	Restrictions attached
		  		  	

  
 Page: 4 of 4 

					
	INFORMATION REGARDING ALTERATION TO ARTICLES

  

					
	1.	  	The attached is a copy of an alteration made to the Articles of:
		
		  	Cresco Labs Inc.
		
	2.	  	The alteration was:
			
		  	(a)	  	Passed by the type of resolution and on the date indicated below:
		
	☐	  	Director(s) resolution dated:
                                         
                                         
                                         
                                     
		
	☐	  	Ordinary resolution dated:
                                         
                                         
                                         
                                        

		
	☒	  	Special resolution dated: June 29, 2020 creating a class of Special Subordinate Voting shares without par value; attaching special rights to the Special Subordinate Voting shares as Part 30; varying the special
rights and restrictions attached to the Subordinate Voting, Super Voting, and Proportionate Voting shares under Parts 27, 28, and 29; amending Parts 27, 28, 29 in their entirety and adding to the Articles Parts 27, 28, 29, and 30 in the form
attached as Schedule A
		
	☐	  	Exceptional resolution dated:
                                         
                                         
                                         
                                     
			
		  	(b)	  	Became effective on the date (and time) indicated below:
		
	☐	  	Date/time the resolution was received for deposit at the records office being:
		
		  	                                    
                                         
                                         
                                         
                                         
        
		
	☐	  	Date/time specified in the resolution being:
		
		  	                                    
                                         
                                         
                                         
                                         
        
		
	☒	  	Date/time the Notice of Alteration was filed with the Registrar of Companies being:
		
		  	12:45 p.m. June 29, 2020.
		
	☐	  	Date/time the Transition Application was filed with the Registrar of Companies being:
		
		  	                                    
                                         
                                         
                                         
                                         
        

 BENNETT JONES LLP 

Date:    June 29, 2020 

 SCHEDULE “A” 

 

	27.	 SUBORDINATE VOTING SHARES 

 

	27.1	 Special Rights and Restrictions 

An unlimited number of Subordinate Voting Shares, without nominal or par value, having attached thereto the special rights and restrictions as set forth below:

  

	 	(1)	 Voting Rights. Holders of Subordinate Voting Shares shall be entitled to notice of and to attend
at any meeting of the shareholders of the Company, except a meeting of which only holders of another particular class or series of shares of the Company shall have the right to vote. At each such meeting holders of Subordinate Voting Shares shall be
entitled to one vote in respect of each Subordinate Voting Share held. 

  

	 	(2)	 Alteration to Rights of Subordinate Voting Shares. As long as any Subordinate Voting Shares
remain outstanding, the Company will not, without the consent of the holders of the Subordinate Voting Shares by separate special resolution, prejudice or interfere with any right or special right attached to the Subordinate Voting Shares.

  

	 	(3)	 Dividends. Holders of Subordinate Voting Shares shall be entitled to receive as and when declared
by the directors, dividends in cash or property of the Company. 

  

	 	(4)	 Liquidation, Dissolution or Winding-Up. In the event of the
liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, or in the event of any other distribution of assets of the Company among its shareholders for the purpose of
winding up its affairs, the holders of Subordinate Voting Shares shall, subject to the prior rights of the holders of any shares of the Company ranking in priority to the Subordinate Voting Shares (including, without restriction, the Super Voting
Shares) be entitled to participate rateably along with all other holders of Subordinate Voting Shares, Special Subordinate Voting Shares (on an as converted to Subordinate Voting Shares basis) and the Proportionate Voting Shares (on an as converted
to Subordinate Voting Shares basis). 

  

	 	(5)	 Rights to Subscribe; Pre-Emptive Rights. The holders of
Subordinate Voting Shares are not entitled to a right of first refusal to subscribe for, purchase or receive any part of any issue of Subordinate Voting Shares, or bonds, debentures or other securities of the Company now or in the future.

  

	 	(6)	 Subdivision or Consolidation. No subdivision or consolidation of the Subordinate Voting Shares
shall occur unless, simultaneously, the Subordinate Voting Shares, the Special Subordinate Voting Shares, the Proportionate Voting Shares and the Super Voting Shares are subdivided or consolidated in the same manner or such other adjustment is made
so as to maintain and preserve the relative rights of the holders of the shares of each of the said classes. 

	 	(7)	 Conversion: In the event that an offer is made to purchase Proportionate Voting Shares and the
offer is one which is required, pursuant to applicable securities legislation or the rules of a stock exchange on which the Proportionate Voting Shares are then listed, to be made to all or substantially all the holders of Proportionate Voting
Shares in a given province or territory of Canada to which these requirements apply, each Subordinate Voting Share shall become convertible at the option of the holder into Proportionate Voting Shares at the inverse of the Conversion Ratio then in
effect at any time while the offer is in effect until one day after the time prescribed by applicable securities legislation for the offeror to take up and pay for such shares as are to be acquired pursuant to the offer. The conversion right may
only be exercised in respect of Subordinate Voting Shares for the purpose of depositing the resulting Proportionate Voting Shares pursuant to the offer, and for no other reason. In such event, the Company’s transfer agent shall deposit the
resulting Proportionate Voting Shares on behalf of the holder. Should the Proportionate Voting Shares issued upon conversion and tendered in response to the offer be withdrawn by shareholders or not taken up by the offeror, or should the offer be
abandoned or withdrawn, the Proportionate Voting Shares resulting from the conversion shall be automatically reconverted, without further intervention on the part of the Company or on the part of the holder, into Subordinate Voting Shares at the
Conversion Ratio then in effect. 

  

	 	(8)	 Conversion of Subordinate Voting Shares Upon an Offer. In the event that an offer is made to
purchase Proportionate Voting Shares, and the offer is one which is required, pursuant to applicable securities legislation or the rules of a stock exchange, if any, on which the Proportionate Voting Shares are then listed, to be made to all or
substantially all the holders of Proportionate Voting Shares in a province or territory of Canada to which the requirement applies, each Subordinate Voting Share shall become convertible at the option of the holder into Proportionate Voting Shares
at the inverse of the Conversion Ratio (as defined in Article 29) then in effect, at any time while the offer is in effect until one day after the time prescribed by applicable securities legislation for the offeror to take up and pay for such
shares as are to be acquired pursuant to the offer. The conversion right may only be exercised in respect of Subordinate Voting Shares for the purpose of depositing the resulting Proportionate Voting Shares under the offer, and for no other reason.
In such event, the transfer agent for the Subordinated Voting Shares shall deposit under the offer the resulting Proportionate Voting Shares, on behalf of the holder. To exercise such conversion right, the holder or his or its attorney duly
authorized in writing shall 

  

	 	(a)	 give written notice to the transfer agent of the exercise of such right, and of the number of Subordinate
Voting Shares in respect of which the right is being exercised; 

  

	 	(b)	 deliver to the transfer agent the share certificate or certificates representing the Subordinate Voting Shares
in respect of which the right is being exercised, if applicable; and 

  

	 	(c)	 pay any applicable stamp tax or similar duty on or in respect of such conversion. 

No share certificates representing the Proportionate Voting Shares, resulting from the conversion of the Subordinate Voting Shares will be
delivered to the holders on whose behalf such deposit is being made. If Proportionate Voting Shares, resulting from the conversion and deposited pursuant to the offer, are withdrawn by the holder or are not taken up by the offeror, or the offer is
abandoned, withdrawn or terminated by the offeror or the offer otherwise expires without such Proportionate Voting Shares being taken up and paid for, the Proportionate Voting Shares resulting from the conversion will be re-converted into Subordinate Voting Shares at the then Conversion Ratio and a share certificate representing the Subordinate Voting Shares will be sent to the holder by the transfer agent. In the event that the
offeror takes up and pays for the Proportionate Voting Shares resulting from conversion, the transfer agent shall deliver to the holders thereof the consideration paid for such shares by the offeror. 

	27.2	 Take-Over Bid 

In the event that a take-over bid is made for the Super Voting Shares, the holders of Subordinate Voting Shares will not be entitled to participate in such
offer and may not tender their shares into any such offer, whether under the terms of the Subordinate Voting Shares or under any coattail trust or similar agreement. Notwithstanding this, any take-over bid for solely the Super Voting Shares is
unlikely given that by the terms of the Investment Agreement (as defined in 28.1(9)), upon any sale of Super Voting Shares to an unrelated third party purchaser, such Super Voting Shares will be redeemed by the Corporation for their issue price.

  

	28.	 SUPER VOTING SHARES 

 

	28.1	 Special Rights and Restrictions 

An unlimited number of Super Voting Shares, without nominal or par value, having attached thereto the special rights and restrictions as set forth below: 

 

	 	(1)	 Voting Rights. Holders of Super Voting Shares shall be entitled to notice of and to attend at any
meeting of the shareholders of the Company, except a meeting of which only holders of another particular class or series of shares of the Company shall have the right to vote. At each such meeting holders of Super Voting Shares shall be entitled to
2,000 votes in respect of each Super Voting Share held provided that if at any time the aggregate number of issued and outstanding (i) non-voting common shares (the “Cresco Corp.
Redeemable Shares”) in the capital of Cresco U.S. Corp. (“Cresco Corp.”) and (ii) Common Units (the “Cresco Redeemable Units”) in the capital of Cresco Labs, LLC
(“Cresco”) (or such securities of any successor to Cresco Corp. or Cresco as may exist from time to time) beneficially owned, directly or indirectly by a holder of the Super Voting Shares (the “Holder”) and the
Holder’s predecessor or transferor, permitted transferees and permitted successors (in accordance with the Investment Agreement (as defined in 28.1(9)), and any prior tranferor’s transferor and any prior permitted transferee’s
permitted transferee (the “Holder’s Group”), divided by the aggregate number of (i) Cresco Corp. Redeemable Shares and (ii) Cresco Redeemable Units beneficially owned, directly or indirectly by the Holders and the
Holder’s Group as at the date of completion of the business combination transaction involving, among others, the Company, Cresco Corp. and Cresco be less than 50% (the “Triggering Event”), the Holder shall from that time
forward be entitled to 50 votes in respect of each Super Voting Share held. The holders of Super Voting Shares shall, from time to time upon the request of the Company, provide to the Company evidence as to such holders’ direct and indirect
beneficial ownership (and that of its permitted transferees and permitted successors) of Cresco Corp. Redeemable Shares and Cresco Redeemable Units to enable the Company to determine the voting entitlement of the Super Voting Shares. For the
purposes of these calculations, a Holder shall be deemed to beneficially own Cresco Corp. Redeemable Shares held by an intermediate company or fund in proportion to their equity ownership of such company or fund. 

	 	(2)	 Alteration to Rights of Super Voting Shares. As long as any Super Voting Shares remain
outstanding, the Company will not, without the consent of the holders of the Super Voting Shares by separate special resolution, prejudice or interfere with any right or special right attached to the Super Voting Shares. Consent of the holders
of a majority of the outstanding Super Voting Shares shall be required for any action that authorizes or creates shares of any class having preferences superior to or on a parity with the Super Voting Shares. In connection with the exercise of the
voting rights contained in this paragraph (b) each holder of Super Voting Shares will have one vote in respect of each Super Voting Share held. 

  

	 	(3)	 Dividends. The holder of Super Voting Shares shall not be entitled to receive dividends.

  

	 	(4)	 Liquidation, Dissolution or Winding-Up. In the event of the
liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, or in the event of any other distribution of assets of the Company among its shareholders for the purpose of
winding up its affairs, the Company will distribute its assets firstly and in priority to the rights of holders of any other class of shares of the Company (including the holders of Subordinate Voting Shares, Special Subordinate Voting Shares and
the Proportionate Voting Shares) to return the issue price of the Super Voting Shares to the holders thereof and if there are insufficient assets to fully return the issue price to the holders of the Super Voting Shares such holders will receive an
amount equal to their pro rata share in proportion to the issue price of their Super Voting Shares along with all other holders of Super Voting Shares. The holders of Super Voting Shares shall not be entitled to receive directly or indirectly as
holders of Super Voting Shares any other assets or property of the Company and their sole rights will be to the return of the issue price of such Super Voting Shares in accordance with this Article 28.1(4). 

 

	 	(5)	 Rights to Subscribe; Pre-Emptive Rights. The holders of Super
Voting Shares are not entitled to a right of first refusal to subscribe for, purchase or receive any part of any issue of Subordinate Voting Shares, or bonds, debentures or other securities of the Company not convertible into Super Voting
Shares, now or in the future. 

  

	 	(6)	 Subdivision or Consolidation. No subdivision or consolidation of the Super Voting Shares shall
occur unless, simultaneously, the Super Voting Shares, Proportionate Voting Shares, the Special Subordinate Voting Shares and the Subordinate Voting Shares are subdivided or consolidated in the same manner, so as to maintain and preserve the
relative rights of the holders of the shares of each of the said classes. 

  

	 	(7)	 Redemption Rights. Upon the occurrence of a Triggering Event, the Company has the right to redeem
all or some of the Super Voting Shares from the Holder and Holder’s Group who caused the Triggering Event to occur, by providing two days prior written notice to the Holder and Holder’s Group of such Super Voting Shares, for an amount
equal to the issue price for each Super Voting Share, payable in cash to the holders of the Super Voting Shares so redeemed. The Company need not redeem Super Voting Shares on a pro-rata basis among the
Holders or Holder’s Group. Holders of Super Voting Shares to be redeemed by the Company shall surrender the certificate or certificates representing such Super Voting Shares to the Company at its records office duly assigned or endorsed for
transfer to the Company (or accompanied by duly executed share transfers relating thereto). Each surrendered certificate shall be cancelled, and the Company shall thereafter make payment of the applicable redemption amount by certified cheque, bank
draft or wire transfer to the registered holder of such certificate; provided that, if less than all the Super Voting Shares represented by a surrendered certificate are redeemed then a new share 

	 	certificate representing the unredeemed balance of Super Voting Shares represented by such certificate shall be issued in the name of the applicable registered holder of the cancelled share certificate. If on the
applicable redemption date the redemption price is paid (or tendered for payment) for any of the Super Voting Shares to be redeemed then on such date all rights of the holder in the Super Voting Shares so redeemed and paid or tendered shall cease
and such redeemed Super Voting Shares shall no longer be deemed issued and outstanding, regardless of whether or not the holder of such Super Voting Shares has delivered the certificate(s) representing such securities to the Company, and from and
after such date the certificate formerly representing the retracted Super Voting Shares shall evidence the only the right of the former holder of such Super Voting Shares to receive the redemption price to which such holder is entitled.

  

	 	(8)	 Transfer Restrictions. No Super Voting Share may be transferred by the holder thereof unless such
transfer is to an Immediate Family Member or a transfer for purposes of estate or tax planning to a company or person that is wholly beneficially owned by such holder or Immediate Family Members of such holder or which such holder or Immediate
Family Members of such holder are the sole beneficiaries thereof (in each case, a “Permitted Transfer”). In order to be effective, any Permitted Transfer shall require the prior written consent of the Company.

 For the purposes of this Article 28.1(8), “Immediate Family Member” means with respect to any
individual, each parent (whether by birth or adoption), spouse (including if such person is legally married to such individual, lives in civil union with such individual or is a common law partner with such individual, as defined in the Income
Tax Act (Canada), as amended), child or other descendants (whether by birth or adoption) of such individual, each spouse of any of the aforementioned persons, each trust created solely for the benefit of such individual and/or one or more of the
aforementioned persons. For greater certainty, a person who was a spouse of an individual within the meaning of this paragraph shall continue to be considered a spouse of such individual after the death of such individual. 

 

	 	(9)	 Investment Agreement. To supplement the rights, privileges, restrictions and conditions attached
to the Super Voting Shares, the Company and Charlie Bachtell, Joe Caltabiano, Robert M. Sampson, Brian McCormack and Dominic Sergi being the initial holders of Super Voting Shares (the “Founders”), entered into an investment
agreement, dated November 30, 2018 (the “Investment Agreement”) which, among other things, provides that (i) each Super Voting Share will be transferable only to the holder’s immediate family members or an affiliated
entity or a transfer to the other Founder or an entity affiliated with the other Founder, and (ii) upon any sale of Super Voting Shares to a third party purchaser not listed in clause (i), such Super Voting Shares will immediately be redeemed
by the Company for their issue price. 

  

	29.	 PROPORTIONATE VOTING SHARES 

 

	29.1	 Special Rights and Restrictions 

An unlimited number of Proportionate Voting Shares, without nominal or par value, having attached thereto the special rights and restrictions as set forth
below: 

	 	(1)	 Voting Rights. Holders of Proportionate Voting Shares shall be entitled to notice of and to
attend at any meeting of the shareholders of the Company, except a meeting of which only holders of another particular class or series of shares of the Company shall have the right to vote. At each such meeting, holders of Proportionate Voting
Shares will be entitled to one vote in respect of each Subordinate Voting Share into which such Proportionate Voting Share could ultimately then be converted, which for greater certainty, shall initially be equal to 200 votes per Proportionate
Voting Share (subject to adjustment at the discretion of the Board, depending upon the ratios necessary to preserve foreign private issuer status in accordance with Article 29.1(6)(c)). 

 

	 	(2)	 Alteration to Rights of Proportionate Voting Shares. As long as any Proportionate Voting Shares
remain outstanding, the Company will not, without the consent of the holders of the Proportionate Voting Shares and Super Voting Shares by separate special resolution, prejudice or interfere with any right or special right attached to the
Proportionate Voting Shares. Consent of the holders of a majority of the outstanding Proportionate Voting Shares and Super Voting Shares shall be required for any action that authorizes or creates shares of any class having preferences superior to
or on a parity with the Proportionate Voting Shares. In connection with the exercise of the voting rights contained in this Article 29.1(2) each holder of Proportionate Voting Shares will have one vote in respect of each Proportionate Voting Share
held. 

  

	 	(3)	 Dividends. The holder of Proportionate Voting Shares shall have the right to receive dividends,
out of any cash or other assets legally available therefor, pari passu (on an as converted basis, assuming conversion of all Proportionate Voting Shares into Subordinate Voting Shares at the Conversion Ratio) as to dividends and any
declaration or payment of any dividend on the Subordinate Voting Shares. No dividend will be declared or paid on the Proportionate Voting Shares unless the Company simultaneously declares or pays, as applicable, equivalent dividends (on an as-converted to Subordinate Voting Share basis) on the Subordinate Voting Shares and the Special Subordinate Voting Shares. 

  

	 	(4)	 Liquidation, Dissolution or Winding-Up. In the event of the
liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, or in the event of any other distribution of assets of the Company among its shareholders for the purpose of
winding up its affairs, the holders of Proportionate Voting Shares will, subject to the prior rights of the holders of any shares of the Company ranking in priority to the Proportionate Voting Shares (including, without restriction, the Super Voting
Shares), be entitled to participate rateably along with all other holders of Proportionate Voting Shares (on an as-converted to Subordinate Voting Share basis), the Special Subordinate Voting Shares (on an as-converted to Subordinate Voting Share basis) and the Subordinate Voting Shares. 

  

	 	(5)	 Rights to Subscribe; Pre-Emptive Rights. The holders of
Proportionate Voting Shares are not entitled to a right of first refusal to subscribe for, purchase or receive any part of any issue of Subordinate Voting Shares, or bonds, debentures or other securities of the Company now or in the future.

  

	 	(6)	 Conversion. Subject to the Conversion Restrictions set forth in this Article 29.1(6), holders of
Proportionate Voting Shares shall have conversion rights as follows: 

  

	 	(a)	 Right to Convert. Each Proportionate Voting Share shall be convertible, at the option of the
holder thereof, at any time after the date of issuance of such share at the office of the Company or any transfer agent for such shares, into fully paid and nonassessable Subordinate Voting Shares as is determined by multiplying the number of
Proportionate Voting Shares by the Conversion Ratio applicable to such share, determined as hereafter provided, in effect on the date the Proportionate Voting Share is surrendered for conversion. The initial “Conversion
Ratio” for shares of Proportionate Voting Shares shall be 200 Subordinate Voting Shares, subject to adjustment for each Proportionate Voting Share; provided, however, that the Conversion Ratio shall be subject to adjustment as set forth
in Articles 29.1(6)(h) and (i). 

	 	(b)	 Conversion Limitations. Before any holder of Proportionate Voting Shares shall be entitled to
convert the same into Subordinate Voting Shares, the Board of Directors (or a committee thereof) shall designate an officer of the Company to determine if any Conversion Limitation set forth in Article 29.1(6)(d) shall apply to the conversion of
Proportionate Voting Shares. 

  

	 	(c)	 Foreign Private Issuer Protection Limitation: The Company will use commercially reasonable
efforts to maintain its status as a “foreign private issuer” (as determined in accordance with Rule 3b-4 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Accordingly, the Company may, in its sole discretion, refuse to effect any conversion of Proportionate Voting Shares, and the holders of Proportionate Voting Shares shall not have the right to convert any portion of the Proportionate Voting Shares,
pursuant to Article 29.1(6) or otherwise, without the consent of the Company, to the extent that after giving effect to all permitted issuances after such conversions of Proportionate Voting Shares, the aggregate number of Subordinate Voting Shares,
Special Subordinate Voting Shares, Super Voting Shares and Proportionate Voting Shares held of record, directly or indirectly, by residents of the United States (as determined in accordance with Rules 3b-4 and
12g3-2(a) under the Exchange Act (“U.S. Residents”)) would exceed forty percent (40%) (the “40% Threshold”) of the aggregate number of Subordinate Voting Shares,
Super Voting Shares, Special Subordinate Voting Shares and Proportionate Voting Shares issued and outstanding after giving effect to such conversions (the “FPI Protective Restriction”). The Board may by resolution increase
the 40% Threshold to an amount not to exceed 50% and in the event of any such increase all references to the 40% Threshold herein, shall refer instead to the amended threshold set by such resolution. 

 

	 	(d)	 Conversion Limitations. In order to effect the FPI Protection Restriction, each holder of
Proportionate Voting Shares will be subject to the 40% Threshold based on the number of Proportionate Voting Shares held by such holder as of the date of the initial issuance of the Proportionate Voting Shares and thereafter at the end of each of
the Company’s subsequent fiscal quarters (each, a “Determination Date”), calculated as follows: 

X = [(A x 0.4) - B] x (C/D) Where on the Determination Date: 

X = Maximum number of Subordinate Voting Shares available for issue upon conversion of Proportionate Voting Shares by a holder. 

A = The number of Subordinate Voting Shares, Special Subordinate Voting Shares, Proportionate Voting Shares and Super Voting Shares issued and
outstanding on the Determination Date. 

 B = The aggregate number of Subordinate Voting Shares, Special Subordinate Voting Shares,
Proportionate Voting Shares and Super Voting Shares held of record, directly or indirectly, by U.S. Residents on the Determination Date. 

C = The aggregate number of Proportionate Voting Shares held by holder on the Determination Date. 

D = The aggregate number of all Proportionate Voting Shares on the Determination Date. 

For purposes of this subsection (d), the Board of Directors (or a committee thereof) shall designate an officer of the Company to determine as
of each Determination Date: (A) the 40% Threshold and (B) the FPI Protective Restriction. Unless the Company determines otherwise in its sole discretion, to the extent that requests for conversion of Proportionate Voting Shares subject to
the FPI Protection Restriction would result in the 40% Threshold being exceeded, the number of such Proportionate Voting Shares eligible for conversion held by a particular holder shall be prorated relative to the number of Proportionate Voting
Shares submitted for conversion. To the extent that the FPI Protective Restriction contained in this Article 29.1(6)(d) applies, the determination of whether Proportionate Voting Shares are convertible shall be in the sole discretion of the Company.

  

	 	(e)	 Mandatory Conversion. Notwithstanding anything contained herein to the contrary, the Company may
require each holder of Proportionate Voting Shares to convert all, and not less than all, the Proportionate Voting Shares at the applicable Conversion Ratio (a “Mandatory Conversion”) if at any time all the following conditions are
satisfied (or otherwise waived by special resolution of holders of Proportionate Voting Shares): 

  

	 	(A)	 the Subordinate Voting Shares issuable upon conversion of all the Proportionate Voting Shares are registered
for resale and may be sold by the holders thereof pursuant to an effective registration statement and/or prospectus covering the Subordinate Voting Shares under the United States Securities Act of 1933, as amended (the “U.S. Securities
Act”); 

  

	 	(B)	 the Company is subject to the reporting requirements of Section 13 or 15(d) of the U.S. Exchange Act; and

  

	 	(C)	 the Subordinate Voting Shares are listed or quoted (and are not suspended from trading) on a recognized North
American stock exchange or by way of reverse takeover transaction on the Toronto Stock Exchange, the TSX Venture Exchange, the Canadian Securities Exchange or Aequitas NEO Exchange (or any other stock exchange recognized as such by the Ontario
Securities Commission). 

 The Company will issue or cause its transfer agent to issue each holder of Proportionate
Voting Shares of record a Mandatory Conversion Notice at least 20 days prior to the record date of the Mandatory Conversion, which shall specify therein, (i) the number of Subordinate Voting Shares into which the Proportionate Voting Shares are
convertible and (ii) the address of record for such holder. On the record date of a Mandatory Conversion, the Company will issue or cause its transfer agent to issue each holder of record on the Mandatory Conversion Date certificates
representing the number of Subordinate Voting Shares into which the Proportionate Voting Shares are so converted and each certificate representing the Proportionate Voting Shares shall be null and void. 

	 	(f)	 Disputes. In the event of a dispute as to the number of Subordinate Voting Shares issuable to a
Holder in connection with a conversion of Proportionate Voting Shares, the Company shall issue to the Holder the number of Subordinate Voting Shares not in dispute and resolve such dispute in accordance with Article 29.1(6)(m).

  

	 	(g)	 Mechanics of Conversion. Before any holder of Proportionate Voting Shares shall be entitled to
convert Proportionate Voting Shares into Subordinate Voting Shares, the holder thereof shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Company or of any transfer agent for Subordinate Voting Shares, and
shall give written notice to the Company at its principal corporate office, of the election to convert the same and shall state therein the name or names in which the certificate or certificates for Subordinate Voting Shares are to be issued (each,
a “Conversion Notice”). The Company shall (or shall cause its transfer agent to), as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or
certificates for the number of Subordinate Voting Shares to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the
Proportionate Voting Shares to be converted, and the person or persons entitled to receive the Subordinate Voting Shares issuable upon such conversion shall be treated for all purposes as the record holder or holders of such Subordinate Voting
Shares as of such date. 

  

	 	(h)	 Adjustments for Distributions. In the event the Company shall declare a distribution to holders
of Subordinate Voting Shares payable in securities of other persons, evidences of indebtedness issued by the Company or other persons, assets (excluding cash dividends) or options or rights not otherwise causing adjustment to the Conversion Ratio (a
“Distribution”), then, in each such case for the purpose of this Article 29.1(6)(h), the holders of Proportionate Voting Shares shall be entitled to a proportionate share of any such Distribution as though they were the holders of
the number of Subordinate Voting Shares into which their Proportionate Voting Shares are convertible as of the record date fixed for the determination of the holders of Subordinate Voting Shares entitled to receive such Distribution.

  

	 	(i)	 Recapitalizations; Stock Splits. If at any time or from time-to-time, the Company shall (i) effect a recapitalization of the Subordinate Voting Shares; (ii) issue Subordinate Voting Shares as a dividend or other distribution on outstanding
Subordinate Voting Shares; (iii) subdivide the outstanding Subordinate Voting Shares into a greater number of Subordinate Voting Shares; (iv) consolidate the outstanding Subordinate Voting Shares into a smaller number of Subordinate Voting
Shares; or (v) effect any similar transaction or action (each, a “Recapitalization”), provision shall be made so that the holders of Proportionate Voting Shares shall thereafter be entitled to receive, upon conversion of
Proportionate Voting Shares, the number of Subordinate Voting Shares or other 

 securities or property of the Company or otherwise, to which a holder of Subordinate Voting
Shares deliverable upon conversion would have been entitled on such Recapitalization. In any such case, appropriate adjustment shall be made in the application of the provisions of this Article 29.1(6) with respect to the rights of the holders of
Proportionate Voting Shares after the Recapitalization to the end that the provisions of this Article 29.1(6) (including adjustment of the Conversion Ratio then in effect and the number of Proportionate Voting Shares issuable upon conversion of
Proportionate Voting Shares) shall be applicable after that event as nearly equivalent as may be practicable. 
  

	 	(j)	 No Fractional Shares and Certificate as to Adjustments. No fractional Subordinate Voting Shares
shall be issued upon the conversion of any Proportionate Voting Shares and the number of Subordinate Voting Shares to be issued shall be rounded up or down to the nearest whole Subordinate Voting Share. Whether or not fractional Subordinate Voting
Shares are issuable upon such conversion shall be determined on the basis of the total number of shares of Proportionate Voting Shares the holder is at the time converting into Subordinate Voting Shares and the number of Subordinate Voting Shares
issuable upon such aggregate conversion. 

  

	 	(k)	 Adjustment Notice. Upon the occurrence of each adjustment or readjustment of the Conversion Ratio
pursuant to this Article 29.1(6), the Company, at its expense, shall promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to each holder of Proportionate Voting Shares a certificate setting
forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, upon the written request at any time of any holder of Proportionate Voting Shares, furnish or cause to be
furnished to such holder a like certificate setting forth (A) such adjustment and readjustment, (B) the Conversion Ratio for Proportionate Voting Shares at the time in effect, and (C) the number of Subordinate Voting Shares and the
amount, if any, of other property which at the time would be received upon the conversion of a Proportionate Voting Share. 

  

	 	(l)	 Effect of Conversion. All Proportionate Voting Shares which shall have been surrendered for
conversion as herein provided shall no longer be deemed to be outstanding and all rights with respect to such shares shall immediately cease and terminate at the time of conversion (the “Conversion Time”), except only the right of
the holders thereof to receive Subordinate Voting Shares in exchange therefor and to receive payment in lieu of any fraction of a share otherwise issuable upon such conversion. 

 

	 	(m)	 Disputes. Any holder of Proportionate Voting Shares that beneficially owns more than 5% of the
issued and outstanding Proportionate Voting Shares may submit a written dispute as to the determination of the conversion ratio or the arithmetic calculation of the conversion ratio of Proportionate Voting Shares to Subordinate Voting Shares, the
Conversion Ratio, 40% Threshold, FPI Protective Restriction or the Beneficial Ownership Limitation by the Company to the Board of Directors (or a committee thereof) with the basis for the disputed determinations or arithmetic calculations. The
Company shall respond to the holder within five (5) Business Days of receipt, or deemed receipt, of the dispute notice with a written calculation of the Conversion Ratio, 40% Threshold, FPI Protective Restriction or 

	 	the Beneficial Ownership Limitation, as applicable. If the holder and the Company are unable to agree upon such determination or calculation of the Conversion Ratio, 40% Threshold, FPI Protective Restriction or the
Beneficial Ownership Limitation, as applicable, within five (5) Business Days of such response, then the Company and the holder shall, within one (1) Business Day thereafter submit the disputed arithmetic calculation of the conversion
ratio, Conversion Ratio, FPI Protective Restriction or the Beneficial Ownership Limitation to the Company’s independent, outside accountant. The Company, at the Company’s expense, shall cause the accountant to perform the determinations or
calculations and notify the Company and the holder of the results no later than five (5) Business Days from the time it receives the disputed determinations or calculations. Such accountant’s determination or calculation, as the case may
be, shall be binding upon all parties absent demonstrable error. 

  

	 	(7)	 Subdivision or Consolidation. No subdivision or consolidation of the Proportionate Voting Shares
shall occur unless, simultaneously, the Subordinate Voting Shares, the Special Subordinate Voting Shares, the Proportionate Voting Shares and the Super Voting Shares are subdivided or consolidated in the same manner or such other adjustment is made
so as to maintain and preserve the relative rights of the holders of the shares of each of the said classes. 

  

	 	(8)	 Notices of Record Date. Except as otherwise provided under applicable law, in the event of any
taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend) or other distribution, any right to subscribe for,
purchase or otherwise acquire any shares of any class or any other securities or property, or to receive any other right, the Company shall mail to each holder of Proportionate Voting Shares, at least 20 days prior to the date specified therein, a
notice specifying the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and the amount and character of such dividend, distribution or right. 

 

	30.	 SPECIAL SUBORDINATE VOTING SHARES 

 

	30.1	 Special Rights and Restrictions 

An unlimited number of Special Subordinate Voting Shares, without nominal or par value, having attached thereto the special rights and restrictions as set
forth below: 
  

	 	(1)	 Voting Rights. Holders of Special Subordinate Voting Shares shall be entitled to notice of and to
attend at any meeting of the shareholders of the Company, except a meeting of which only holders of another particular class or series of shares of the Company shall have the right to vote. At each such meeting, holders of Special Subordinate Voting
Shares will be entitled to one vote in respect of each Subordinate Voting Share into which such Special Subordinate Voting Shares could ultimately then be converted, which for greater certainty, shall initially be equal to 0.00001 of a vote per
Special Subordinate Voting Share. 

  

	 	(2)	 Alteration to Rights of Special Subordinate Voting Shares. As long as any Special Subordinate
Voting Shares remain outstanding, the Company will not, without the consent of the holders of the Special Subordinate Voting Shares by separate special resolution, prejudice or interfere with any right or special right attached to the Special
Subordinate Voting Shares. In connection with the exercise of the voting rights contained in this Article 30.1(1) each holder of Special Subordinate Voting Shares will have one vote in respect of each Special Subordinate Voting Share held.

	 	(3)	 Dividends. The holders of Special Subordinate Voting Shares shall have the right to receive
dividends, out of any cash or other assets legally available therefor, pari passu (on an as converted basis, assuming conversion of all Special Subordinate Voting Shares into Subordinate Voting Shares at the Special Conversion Ratio, as
defined in 30.1(8)(a)) as to dividends and any declaration or payment of any dividend on the Subordinate Voting Shares. No dividend will be declared or paid on the Special Subordinate Voting Shares unless the Company simultaneously declares or pays,
as applicable, equivalent dividends (on an as-converted to Subordinate Voting Share basis) on the Subordinate Voting Shares and the Proportionate Voting Shares. 

 

	 	(4)	 Liquidation, Dissolution or Winding-Up. In the event of the
liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, or in the event of any other distribution of assets of the Company among its shareholders for the purpose of
winding up its affairs, the holders of Special Subordinate Voting Shares will, subject to the prior rights of the holders of any shares of the Company ranking in priority to the Special Subordinate Voting Shares (including, without restriction, the
Super Voting Shares), be entitled to participate rateably along with all other holders of Special Subordinate Voting Shares (on an as-converted to Subordinate Voting Share basis), the Proportionate Voting
Shares (on an as-converted to Subordinate Voting Share basis) and the Subordinate Voting Shares. 

  

	 	(5)	 Right to Subscribe; Pre-Emptive Rights. The holders of Special
Subordinate Voting Shares are not entitled to a right of first refusal to subscribe for, purchase or receive any part of any issue of Subordinate Voting Shares, or bonds, debentures or other securities of the Company now or in the future.

  

	 	(6)	 Ownership Restrictions. The Special Subordinate Voting Shares may only be beneficially owned or
controlled, directly or indirectly, by a person or persons who are not a U.S. Person. 

 A “U.S. Person”
shall mean an individual resident in the United States, an estate or trust of which any executor or administrator or trustee, respectively, is a U.S. Person and any partnership or corporation organized or incorporated under the laws of the United
States (as defined in Regulation S under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”)). 
  

	 	(7)	 Transfer Restrictions. No Special Subordinate Voting Share or any rights or interests therein may
be transferred legally, beneficially or in any other manner by the holder thereof without the prior written consent of the Board of Directors (or a committee thereof), which may be withheld in its sole discretion. 

 

	 	(8)	 Conversion. Subject to the conversion restrictions set forth in this Article 30.1(8), holders of Special
Subordinate Voting Shares shall have conversion rights as follows: 

	 	(a)	 Right to Convert. Each Special Subordinate Voting Share shall be convertible, at the option of
the holder provided that such holder has received the prior written consent of the Board of Directors (or a committee thereof), which may be withheld in its sole discretion, at any time after the date of issuance of such share at the office
of the Company or any transfer agent for such shares, into fully paid and nonassessable Subordinate Voting Shares as is determined by multiplying the number of Special Subordinate Voting Share by the Special Conversion Ratio applicable to such
share, determined as hereafter provided, in effect on the date the Special Subordinate Voting Share is surrendered for conversion. The initial “Special Conversion Ratio” for shares of Special Subordinate Voting Shares shall
be 0.00001 Subordinate Voting Shares, subject to adjustment for each Special Subordinate Voting Share; provided, however, that the Special Conversion Ratio shall be subject to adjustment as set forth in Articles 30.1(10) and 30.1(11).

  

	 	(b)	 Mechanics of Conversion. Before any holder of Special Subordinate Voting Shares shall be entitled
to convert Special Subordinate Voting Shares into Subordinate Voting Shares, the holder thereof shall: (i) have received the prior written consent of the Board of Directors (or a committee thereof) as provided in Article 30.1(8)(a); and
(ii) have surrendered the certificate or certificates therefor, duly endorsed, at the office of the Company or of any transfer agent for Subordinate Voting Shares, and shall give written notice to the Company at its principal corporate office,
of the election to convert the same and shall state therein the name or names in which the certificate or certificates for Subordinate Voting Shares are to be issued (each, a “Special Conversion Notice”). The Company shall (or shall
cause its transfer agent to), as soon as practicable thereafter: 

  

	 	(A)	 issue and deliver at such office to such holder, or, subject to payment by the registered holder of any stock
transfer or other applicable taxes and compliance with any other reasonable requirements of the Company in respect of such transfer, in such name or names as such registered holder may direct in writing, a certificate or certificates for the number
of Subordinate Voting Shares to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the Special Subordinate Voting Shares to
be converted, and the person or persons entitled to receive the Subordinate Voting Shares issuable upon such conversion shall be treated for all purposes as the record holder or holders of such Subordinate Voting Shares as of such date;

  

	 	(B)	 remove or cause the removal of such holder from the register of holders in respect of the Special Subordinate
Voting Shares for which the conversion privilege is being exercised, add the holder (or any person or persons in whose name or names such converting holder shall have directed the resulting Subordinate Voting Shares to be registered) to the register
of holders in respect of the resulting Subordinate Voting Shares, cancel or cause the cancellation of the certificate or certificates representing such Special Subordinate Voting Shares; and 

 

	 	(C)	 if less than all of the Special Subordinate Voting Shares represented by any certificate are to be converted,
the holder shall be entitled to receive a new certificate representing the Special Subordinate Voting Shares represented by the original certificate which are not converted. 

	 	(c)	 Mandatory Conversion. Notwithstanding anything contained herein to the contrary, the Company may
require each holder of Special Subordinate Voting Shares to convert all, and not less than all, of the Special Subordinate Voting Shares at the applicable Special Conversion Ratio (a “Special Mandatory Conversion”) if at any
time all the following conditions are satisfied (or otherwise waived by special resolution of holders of Special Subordinate Voting Shares): 

  

	 	(A)	 the Company is no longer a “foreign private issuer” (as determined in accordance with Rule 3b-4 of the Exchange Act); or 

  

	 	(B)	 the Board of Directors (or a committee thereof) determine that the Special Subordinate Voting Shares are no
longer necessary or required. 

  

	 	(d)	 Mechanics of Mandatory Conversion. Upon a Special Mandatory Conversion, the Company shall at its
expense: 

  

	 	(A)	 issue (or cause its transfer agent to issue) to each holder of Special Subordinate Voting Shares of record a
Mandatory Conversion notice at least 20 days prior to the record date of the Mandatory Conversion, which shall specify therein, (i) the number of Subordinate Voting Shares into which the Special Subordinate Voting Shares are convertible; and
(ii) the address of record for such holder; 

  

	 	(B)	 on the record date of a Special Mandatory Conversion, issue (or cause its transfer agent to issue) each holder
of record on the date of the Mandatory Conversion certificates representing the number of Subordinate Voting Shares into which the Special Subordinate Voting Shares are so converted and each certificate representing the Special Subordinate Voting
Shares shall be null and void; and 

  

	 	(C)	 remove or cause the removal of such holder from the register of holders in respect of the Special Subordinate
Voting Shares, add such holder to the register of holders in respect of the resulting Subordinate Voting Shares. 

  

	 	(e)	 Effect of Conversion. All Special Subordinate Voting Shares which shall have been surrendered for
conversion as herein provided shall no longer be deemed to be outstanding and all rights with respect to such shares shall immediately cease and terminate at the time of conversion except only the right of the holders thereof to receive Subordinate
Voting Shares. 

  

	 	(9)	 Redemption Rights. The Company has the right to redeem all or some of the Special Subordinate
Voting Shares from any holder thereof at any time by providing two (2) days prior written notice (the “Redemption Notice”) to such holder for either: (i) cash, at a price per Special Subordinate Voting Share equal to the
Special Conversion Ratio (as may be adjusted in accordance with this Article 30) multiplied by the average volume weighted average trading price of the Subordinate Voting Shares on the CSE (or such other stock exchange or
quotation system the Subordinate Voting Shares are then principally listed or quoted) for the ten (10) trading days immediately prior to the date of the Redemption Notice (a “Cash Redemption”); or (ii) Subordinate Voting
Shares at the Special Conversion Ratio, as may be adjusted in accordance with this Article 30 (a “Share Redemption”). The Company need not redeem Special Subordinate Voting Shares on a
pro-rata basis among the holders of Special Subordinate Voting Shares. Holders of Special Subordinate Voting Shares to be redeemed by the Company shall surrender the 

 certificate(s) representing such Special Subordinate Voting Shares to the Company at its
records office duly assigned or endorsed for transfer to the Company (or accompanied by duly executed share transfers relating thereto). Each surrendered certificate shall be cancelled, and the Company shall: (i) in the event of a Cash
Redemption, make payment of the applicable redemption amount by certified cheque, bank draft or wire transfer to the registered holder of such certificate; or (ii) in the event of a Share Redemption issue and deliver to the registered holder,
or, subject to payment by the registered holder of any stock transfer or other applicable taxes and compliance with any other reasonable requirements of the Company in respect of such transfer, in such name or names as such registered holder may
direct in writing, a certificate or certificates for the number of Subordinate Voting Shares at the Special Conversion Ratio, as may be adjusted in accordance with this Article 30. In the event that less than all the Special Subordinate Voting
Shares represented by a surrendered certificate are redeemed by the Company then a new certificate representing the unredeemed balance of Special Subordinate Voting Shares represented by such certificate shall be issued in the name of the applicable
registered holder of the cancelled certificate. If on the applicable redemption date the redemption price is paid (or tendered for payment) in the case of a Cash Redemption or the Company issues (or cause its transfer agent to issue) Subordinate
Voting Shares in the case of a Share Redemption, for any of the Special Subordinate Voting Shares to be redeemed then on such date all rights of the holder in the Special Subordinate Voting Shares so redeemed shall cease and such redeemed Special
Subordinate Voting Shares shall no longer be deemed issued and outstanding, regardless of whether or not the holder of such Special Subordinate Voting Shares has delivered the certificate(s) representing such securities to the Company, and from and
after such date the certificate(s) formerly representing the redeemed Special Subordinate Voting Shares shall evidence the only the right of the former holder of such Special Subordinate Voting Shares to receive the applicable redemption price to
which such holder is entitled. 
  

	 	(10)	 Adjustments for Distributions. In the event the Company shall declare a distribution to holders
of Subordinate Voting Shares payable in securities of other persons, evidences of indebtedness issued by the Company or other persons, assets (excluding cash dividends) or options or rights not otherwise causing adjustment to the Special Conversion
Ratio (a “Special Distribution”), then, in each such case for the purpose of this Article 30.1(10), the holders of Special Subordinate Voting Shares shall be entitled to a proportionate share of any such Special Distribution as
though they were the holders of the number of Subordinate Voting Shares into which their Special Subordinate Voting Shares are convertible as of the record date fixed for the determination of the holders of Subordinate Voting Shares entitled to
receive such Special Distribution. 

  

	 	(11)	 Recapitalizations; Stock Splits. If at any time or from time-to-time, the Company effects a Recapitalization, provisions shall be made so that the holders of Special Subordinate Voting Shares shall thereafter be entitled to receive, upon conversion or
redemption of Special Subordinate Voting Shares, the number of Subordinate Voting Shares or other securities or property of the Company or otherwise, to which a holder of Subordinate Voting Shares deliverable upon conversion or redemption would have
been entitled on such Recapitalization. In any such case, appropriate adjustment shall be made in the application of the provisions of this Articles 30.1(8) and 30.1(8)(e) with respect to the rights of the holders of Special Subordinate Voting
Shares after the Recapitalization to the end that the provisions of Articles 30.1(8) and 30.1(8)(e) (including adjustment of the Special Conversion Ratio then in effect and the number of Subordinate Voting Shares issuable upon conversion of Special
Subordinate Voting Shares) shall be applicable after that event as nearly equivalent as may be practicable. 

	 	(12)	 No Fractional Shares and Certificate as to Adjustments. No fractional Subordinate Voting Shares
shall be issued upon the conversion or redemption (in the case of a Share Redemption) of any Special Subordinate Voting Shares and the number of Subordinate Voting Shares to be issued shall be rounded up or down to the nearest whole Subordinate
Voting Share. Whether or not fractional Subordinate Voting Shares are issuable upon such conversion or redemption (in the case of a Share Redemption) shall be determined on the basis of the total number of Special Voting Shares of the holder being
redeemed or converted into Subordinate Voting Shares and the number of Subordinate Voting Shares issuable upon such aggregate conversion or redemption (in the case of a Share Redemption). 

 

	 	(13)	 Adjustment Notice. Upon the occurrence of each adjustment or readjustment of the Special
Conversion Ratio pursuant to this Article 30, the Company, at its expense, shall promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to each holder of Special Subordinate Voting Shares a
certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, upon the written request at any time of any holder of Special Subordinate Voting
Shares, furnish or cause to be furnished to such holder a like certificate setting forth (A) such adjustment and readjustment, (B) the Special Conversion Ratio for the Special Subordinate Voting Shares at the time in effect, and
(C) the number of Subordinate Voting Shares and the amount, if any, of other property which at the time would be received upon the conversion or redemption of a Special Subordinate Voting Share. 

 

	 	(14)	 Subdivision or Consolidation. The Special Subordinate Voting Shares may be subdivided or
consolidated by resolution of the directors (or a committee thereof) without the simultaneous subdivision or consolidation of the Subordinate Voting Shares, the Proportionate Voting Shares and the Super Voting Shares in the same manner,
provided that the Special Conversion Ratio is correspondingly adjusted and the Voting Rights of the Special Subordinate Voting Shares is correspondingly adjusted such that the aggregate number of votes held by all holders of
Special Subordinate Voting Shares prior to subdivision or consolidation is equal to the aggregate number of votes held by all holders of Special Subordinate Voting Shares following the subdivision or consolidation. 

 

	 	(15)	 Notices of Record Date. Except as otherwise provided under applicable law, in the event of any
taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend) or other distribution, any right to subscribe for,
purchase or otherwise acquire any shares of any class or any other securities or property, or to receive any other right, the Company shall mail to each holder of Special Subordinate Voting Shares, at least 20 days prior to the date specified
therein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and the amount and character of such dividend, distribution or right. 

 

	 	(16)	 Disputes. Any holder of Special Subordinate Voting Shares that beneficially owns more than 5% of
the issued and outstanding Special Subordinate Voting Shares may submit a written dispute as to the determination of or the arithmetic calculation of the Special Conversion Ratio by the Company to the Board of Directors (or a committee thereof) with

	 	the basis for the disputed determinations or arithmetic calculations. The Company shall respond to the holder within five (5) Business Days of receipt, or deemed receipt, of the dispute notice with a written
calculation of then the applicable Special Conversion Ratio. If the holder and the Company are unable to agree upon such determination or calculation of the Special Conversion Ratio, within five (5) Business Days of such response, then the
Company and the holder shall, within one (1) Business Day thereafter submit the disputed arithmetic calculation of the Special Conversion Ratio to the Company’s independent, outside accountant. The Company, at the Company’s expense,
shall cause the accountant to perform the determinations or calculations and notify the Company and the holder of the results no later than five (5) Business Days from the time it receives the disputed determinations or calculations. Such
accountant’s determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error. 

  

	30.2	 Take-Over Bid. 

In the event that a take-over bid is made for the Super Voting Shares or the Subordinate Voting Shares, the holders of Special Subordinate Voting Shares
will not be entitled to participate in such offer and may not tender their shares into any such offer, whether under the terms of the Special Subordinate Voting Shares or under any coattail trust or similar agreement, absent being permitted to
convert such shares into Subordinate Voting Shares. Notwithstanding this, any take-over bid for solely the Super Voting Shares is unlikely given that by the terms of the Investment Agreement (as defined in 28.1(9)), upon any sale of Super Voting
Shares to an unrelated third party purchaser, such Super Voting Shares will be redeemed by the Company for their issue price. 

 INFORMATION REGARDING ALTERATION TO ARTICLES 

 

					
	1.	  	The attached is a copy of an alteration made to the Articles of:
		
		  	Cresco Labs Inc.
		
	2.	  	The alteration was:
			
		  	(a)	  	Passed by the type of resolution and on the date indicated below:
		
	☐	  	Director(s) resolution dated:
                                         
                                         
                                         
                                     
		
	☐	  	Ordinary resolution dated:
                                         
                                         
                                         
                                        

		
	☒	  	Special resolution dated: January 20, 2020 adopting a new set of articles attached hereto
		
	☐	  	Exceptional resolution dated:
                                         
                                         
                                         
                                   
			
		  	(b)	  	Became effective on the date (and time) indicated below:
		
	☒	  	Date/time the resolution was received for deposit at the records office being:
		
		  	March 13, 2020 at 10:30
a.m.                                         
                                         
                                         
                                   
		
	☐	  	Date/time specified in the resolution being:
		
		  	                                    
                                         
                                         
                                         
                                         
        
		
	☐	  	Date/time the Notice of Alteration was filed with the Registrar of Companies being:
		
		  	                                    
                                         
                                         
                                         
                                         
        
		
	☐	  	Date/time the Transition Application was filed with the Registrar of Companies being:
		
		  	                                    
                                         
                                         
                                         
                                         
        

 BENNETT JONES LLP 

Date: March 13, 2020 

 CRESCO LABS INC. 

(the “Company”) 

Incorporation Number: BC0390154 
  

									
		 		  	ARTICLES	  			
			
	1.	 	INTERPRETATION	  	 	6	 
		 	1.1	  	Definitions	  	 	6	 
		 	1.2	  	Business Corporations Act and Interpretation Act Definitions Applicable	  	 	6	 
			
	2.	 	SHARES AND SHARE CERTIFICATES	  	 	6	 
		 	2.1	  	Authorized Share Structure	  	 	6	 
		 	2.2	  	Form of Share Certificate	  	 	6	 
		 	2.3	  	Shareholder Entitled to Certificate or Acknowledgment	  	 	6	 
		 	2.4	  	Delivery by Mail	  	 	7	 
		 	2.5	  	Replacement of Worn Out or Defaced Certificate or Acknowledgement	  	 	7	 
		 	2.6	  	Replacement of Lost, Stolen or Destroyed Certificate or Acknowledgment	  	 	7	 
		 	2.7	  	Splitting Share Certificates	  	 	7	 
		 	2.8	  	Certificate Fee	  	 	7	 
		 	2.9	  	Recognition of Trusts	  	 	8	 
			
	3.	 	ISSUE OF SHARES	  	 	8	 
		 	3.1	  	Directors Authorized	  	 	8	 
		 	3.2	  	Commissions and Discounts	  	 	8	 
		 	3.3	  	Brokerage	  	 	8	 
		 	3.4	  	Conditions of Issue	  	 	8	 
		 	3.5	  	Share Purchase Warrants and Rights	  	 	8	 
			
	4.	 	SHARE REGISTERS	  	 	9	 
		 	4.1	  	Central Securities Register	  	 	9	 
		 	4.2	  	Closing Register	  	 	9	 
			
	5.	 	SHARE TRANSFERS	  	 	9	 
		 	5.1	  	Registering Transfers	  	 	9	 
		 	5.2	  	Form of Instrument of Transfer	  	 	9	 
		 	5.3	  	Transferor Remains Shareholder	  	 	9	 
		 	5.4	  	Signing of Instrument of Transfer	  	 	10	 
		 	5.5	  	Enquiry as to Title Not Required	  	 	10	 
		 	5.6	  	Transfer Fee	  	 	10	 
			
	6.	 	TRANSMISSION OF SHARES	  	 	10	 
		 	6.1	  	Legal Personal Representative Recognized on Death	  	 	10	 
		 	6.2	  	Rights of Legal Personal Representative	  	 	10	 
			
	7.	 	PURCHASE OF SHARES	  	 	11	 
		 	7.1	  	Company Authorized to Purchase Shares	  	 	11	 

									
		 	7.2	  	Purchase When Insolvent	  	 	11	 
		 	7.3	  	Sale and Voting of Purchased Shares	  	 	11	 
			
	8.	 	BORROWING POWERS	  	 	11	 
			
	9.	 	ALTERATIONS	  	 	12	 
		 	9.1	  	Alteration of Authorized Share Structure	  	 	12	 
		 	9.2	  	Special Rights and Restrictions	  	 	12	 
		 	9.3	  	Change of Name	  	 	12	 
		 	9.4	  	Other Alterations	  	 	13	 
			
	10.	 	MEETINGS OF SHAREHOLDERS	  	 	13	 
		 	10.1	  	Annual General Meetings	  	 	13	 
		 	10.2	  	Resolution Instead of Annual General Meeting	  	 	13	 
		 	10.3	  	Calling of Meetings of Shareholders	  	 	13	 
		 	10.4	  	Notice for Meetings of Shareholders	  	 	13	 
		 	10.5	  	Record Date for Notice	  	 	13	 
		 	10.6	  	Record Date for Voting	  	 	14	 
		 	10.7	  	Failure to Give Notice and Waiver of Notice	  	 	14	 
		 	10.8	  	Notice of Special Business at Meetings of Shareholders	  	 	14	 
		 	10.9	  	Location of Annual General Meeting	  	 	14	 
			
	11.	 	PROCEEDINGS AT MEETINGS OF SHAREHOLDERS	  	 	14	 
		 	11.1	  	Special Business	  	 	14	 
		 	11.2	  	Special Majority	  	 	15	 
		 	11.3	  	Quorum	  	 	15	 
		 	11.4	  	One Shareholder May Constitute Quorum	  	 	15	 
		 	11.5	  	Other Persons May Attend	  	 	16	 
		 	11.6	  	Requirement of Quorum	  	 	16	 
		 	11.7	  	Lack of Quorum	  	 	16	 
		 	11.8	  	Lack of Quorum at Succeeding Meeting	  	 	16	 
		 	11.9	  	Chair	  	 	16	 
		 	11.10	  	Selection of Alternate Chair	  	 	16	 
		 	11.11	  	Adjournments	  	 	17	 
		 	11.12	  	Notice of Adjourned Meeting	  	 	17	 
		 	11.13	  	Decisions by Show of Hands or Poll	  	 	17	 
		 	11.14	  	Declaration of Result	  	 	17	 
		 	11.15	  	Motion Need Not be Seconded	  	 	17	 
		 	11.16	  	Casting Vote	  	 	17	 
		 	11.17	  	Meeting by Telephone or Other Communications Medium	  	 	18	 
			
	12.	 	VOTES OF SHAREHOLDERS	  	 	18	 
		 	12.1	  	Number of Votes by Shareholder or by Shares	  	 	18	 
		 	12.2	  	Votes of Persons in Representative Capacity	  	 	18	 
		 	12.3	  	Votes by Joint Holders	  	 	18	 
		 	12.4	  	Legal Personal Representatives as Joint Shareholders	  	 	19	 
		 	12.5	  	Representative of a Corporate Shareholder	  	 	19	 
		 	12.6	  	Proxy Provisions Do Not Apply to All Companies	  	 	19	 

  
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		 	12.7	  	Appointment of Proxy Holders	  	 	20	 
		 	12.8	  	Alternate Proxy Holders	  	 	20	 
		 	12.9	  	Deposit of Proxy	  	 	20	 
		 	12.10	  	Validity of Proxy Vote	  	 	20	 
		 	12.11	  	Form of Proxy	  	 	20	 
		 	12.12	  	Revocation of Proxy	  	 	21	 
		 	12.13	  	Revocation of Proxy Must Be Signed	  	 	21	 
		 	12.14	  	Production of Evidence of Authority to Vote	  	 	21	 
			
	13.	 	DIRECTORS	  	 	22	 
		 	13.1	  	First Directors; Number of Directors	  	 	22	 
		 	13.2	  	Change in Number of Directors	  	 	22	 
		 	13.3	  	Directors’ Acts Valid Despite Vacancy	  	 	22	 
		 	13.4	  	Remuneration of Directors	  	 	22	 
		 	13.5	  	Reimbursement of Expenses of Directors	  	 	23	 
		 	13.6	  	Special Remuneration for Directors	  	 	23	 
		 	13.7	  	Gratuity, Pension or Allowance on Retirement of Director	  	 	23	 
			
	14.	 	ELECTION AND REMOVAL OF DIRECTORS	  	 	23	 
		 	14.1	  	Election at Annual General Meeting	  	 	23	 
		 	14.2	  	Consent to be a Director	  	 	23	 
		 	14.3	  	Failure to Elect or Appoint Directors	  	 	24	 
		 	14.4	  	Places of Retiring Directors Not Filled	  	 	24	 
		 	14.5	  	Directors May Fill Casual Vacancies	  	 	24	 
		 	14.6	  	Remaining Directors Power to Act	  	 	24	 
		 	14.7	  	Shareholders May Fill Vacancies	  	 	25	 
		 	14.8	  	Additional Directors	  	 	25	 
		 	14.9	  	Ceasing to be a Director	  	 	25	 
		 	14.10	  	Removal of Director by Shareholders	  	 	25	 
		 	14.11	  	Removal of Director by Directors	  	 	25	 
			
	15.	 	ALTERNATE DIRECTORS	  	 	26	 
		 	15.1	  	Appointment of Alternate Director	  	 	26	 
		 	15.2	  	Notice of Meetings	  	 	26	 
		 	15.3	  	Alternate for More Than One Director Attending Meetings	  	 	26	 
		 	15.4	  	Consent Resolutions	  	 	26	 
		 	15.5	  	Alternate Director Not an Agent	  	 	26	 
		 	15.6	  	Revocation of Appointment of Alternate Director	  	 	27	 
		 	15.7	  	Ceasing to be an Alternate Director	  	 	27	 
		 	15.8	  	Remuneration and Expenses of Alternate Director	  	 	27	 
			
	16.	 	POWERS AND DUTIES OF DIRECTORS	  	 	27	 
		 	16.1	  	Powers of Management	  	 	27	 
		 	16.2	  	Appointment of Attorney of Company	  	 	27	 
		 	16.3	  	Remuneration of the auditor	  	 	28	 
			
	17.	 	DISCLOSURE OF INTEREST OF DIRECTORS	  	 	28	 
		 	17.1	  	Obligation to Account for Profits	  	 	28	 

  
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	 	 	17.2	  	Restrictions on Voting by Reason of Interest	  	28
	 	 	17.3	  	Interested Director Counted in Quorum	  	28
	 	 	17.4	  	Disclosure of Conflict of Interest or Property	  	28
	 	 	17.5	  	Director Holding Other Office in the Company	  	28
	 	 	17.6	  	No Disqualification	  	29
	 	 	17.7	  	Professional Services by Director or Officer	  	29
	 	 	17.8	  	Director or Officer in Other Corporations	  	29
			
	 18.
	 	PROCEEDINGS OF DIRECTORS	  	29
	 	 	18.1	  	Meetings of Directors	  	29
	 	 	18.2	  	Voting at Meetings	  	29
	 	 	18.3	  	Chair of Meetings	  	29
	 	 	18.4	  	Meetings by Telephone or Other Communications Medium	  	30
	 	 	18.5	  	Calling of Meetings	  	30
	 	 	18.6	  	Notice of Meetings	  	30
	 	 	18.7	  	When Notice Not Required	  	30
	 	 	18.8	  	Meeting Valid Despite Failure to Give Notice	  	30
	 	 	18.9	  	Waiver of Notice of Meetings	  	31
	 	 	18.10	  	Quorum	  	31
	 	 	18.11	  	Validity of Acts Where Appointment Defective	  	31
	 	 	18.12	  	Consent Resolutions in Writing	  	31
			
	 19.
	 	EXECUTIVE AND OTHER COMMITTEES	  	32
	 	 	19.1	  	Appointment and Powers of Executive Committee	  	32
	 	 	19.2	  	Appointment and Powers of Other Committees	  	32
	 	 	19.3	  	Obligations of Committees	  	32
	 	 	19.4	  	Powers of Board	  	33
	 	 	19.5	  	Committee Meetings	  	33
			
	 20.
	 	OFFICERS	  	33
	 	 	20.1	  	Directors May Appoint Officers	  	33
	 	 	20.2	  	Functions, Duties and Powers of Officers	  	33
	 	 	20.3	  	Qualifications	  	34
	 	 	20.4	  	Remuneration and Terms of Appointment	  	34
			
	 21.
	 	INDEMNIFICATION	  	34
	 	 	21.1	  	Definitions	  	34
	 	 	21.2	  	Mandatory Indemnification of Directors and Former Directors	  	34
	 	 	21.3	  	Indemnification of Other Persons	  	35
	 	 	21.4	  	Non-Compliance with Business Corporations Act	  	35
	 	 	21.5	  	Company May Purchase Insurance	  	35
			
	 22.
	 	DIVIDENDS	  	35
	 	 	22.1	  	Payment of Dividends Subject to Special Rights	  	35
	 	 	22.2	  	Declaration of Dividends	  	35
	 	 	22.3	  	No Notice Required	  	35
	 	 	22.4	  	Record Date	  	36
	 	 	22.5	  	Manner of Paying Dividend	  	36

  
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	 	 	22.6	  	Settlement of Difficulties	  	36
	 	 	22.7	  	When Dividend Payable	  	36
	 	 	22.8	  	Dividends to be Paid in Accordance with Number of Shares	  	36
	 	 	22.9	  	Receipt by Joint Shareholders	  	36
	 	 	22.10	  	Dividend Bears No Interest	  	36
	 	 	22.11	  	Fractional Dividends	  	36
	 	 	22.12	  	Payment of Dividends	  	37
	 	 	22.13	  	Capitalization of Surplus	  	37
			
	 23.
	 	DOCUMENTS, RECORDS AND REPORTS	  	37
	 	 	23.1	  	Recording of Financial Affairs	  	37
	 	 	23.2	  	Inspection of Accounting Records	  	37
			
	 24.
	 	NOTICES	  	37
	 	 	24.1	  	Method of Giving Notice	  	37
	 	 	24.2	  	Deemed Receipt of Mailing	  	38
	 	 	24.3	  	Certificate of Sending	  	38
	 	 	24.4	  	Notice to Joint Shareholders	  	38
	 	 	24.5	  	Notice to Trustees	  	38
			
	 25.
	 	SEAL AND EXECUTION OF DOCUMENTS	  	39
	 	 	25.1	  	Who May Attest Seal	  	39
	 	 	25.2	  	Sealing Copies	  	39
	 	 	25.3	  	Mechanical Reproduction of Seal	  	39
	 	 	25.4	  	Execution of Documents Generally	  	40
			
	 26.
	 	PROHIBITIONS	  	40
	 	 	26.1	  	Definitions	  	40
	 	 	26.2	  	Application	  	40
	 	 	26.3	  	Consent Required for Transfer of Shares or Designated Securities	  	40
			
	 27.
	 	SUBORDINATE VOTING SHARES	  	40
	 	 	27.1	  	Special Rights and Restrictions	  	40
	 	 	27.2	  	Take-Over Bid	  	43
			
	 28.
	 	SUPER VOTING SHARES	  	43
	 	 	28.1	  	Special Rights and Restrictions	  	43
			
	 29.
	 	PROPORTIONATE VOTING SHARES	  	46
	 	 	29.1	  	Special Rights and Restrictions	  	46

  
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	1.	 INTERPRETATION 

 

	1.1	 Definitions 

In these Articles, unless the context otherwise requires: 
  

	 	(1)	 “board of directors”, “directors” and “board” mean the directors or sole director
of the Company for the time being; 

  

	 	(2)	 “Business Corporations Act” means the Business Corporations Act (British Columbia) as amended
from time to time and includes all regulations as amended from time to time made pursuant to that Act; 

  

	 	(3)	 “legal personal representative” means the personal or other legal representative of the shareholder;

  

	 	(4)	 “registered address” of a shareholder means the shareholder’s address as recorded in the central
securities register; 

  

	 	(5)	 “seal” means the seal of the Company, if any. 

 

	1.2	 Business Corporations Act and Interpretation Act Definitions Applicable

 The definitions in the Business Corporations Act and the definitions and rules of construction in the Interpretation
Act, with the necessary changes, so far as applicable, and unless the context requires otherwise, apply to these Articles as if they were an enactment. If there is a conflict between a definition in the Business Corporations Act and a
definition or rule in the Interpretation Act relating to a term used in these Articles, the definition in the Business Corporations Act will prevail in relation to the use of the term in these Articles. If there is a conflict
between these Articles and the Business Corporations Act, the Business Corporations Act will prevail. 
  

	2.	 SHARES AND SHARE CERTIFICATES 

 

	2.1	 Authorized Share Structure 

The authorized share structure of the Company consists of shares of the class or classes and series, if any, described in the Notice of Articles of the
Company. 
  

	2.2	 Form of Share Certificate 

Each share certificate issued by the Company must comply with, and be signed as required by, the Business Corporations Act. The directors may, by
resolution, provide that; (a) the shares of any or all of the classes and series of the Company’s shares must be uncertificated shares; or (b) any specified shares must be uncertificated shares. Within reasonable time after the issue
or transfer of a share that is an uncertificated share, the Company must send to the shareholder a written notice in accordance with the Business Corporations Act. 
  

	2.3	 Shareholder Entitled to Certificate or Acknowledgment 

Unless the shares of which the shareholder is registered owner are uncertificated shares, each shareholder is entitled, on request and at the
shareholder’s option, to receive, without charge, (a) one share certificate representing the shares of each class or series of shares registered in the shareholder’s name or (b) a
non-transferable written acknowledgment of the shareholder’s right to obtain such a share certificate, provided that in respect of a share held jointly by several 

  
 - 6 - 

 persons, the Company is not bound to issue more than one share certificate and delivery of a share
certificate for a share to one of several joint shareholders or to one of the shareholders’ duly authorized agents will be sufficient delivery to all. 
  

	2.4	 Delivery by Mail 

Any share certificate or non-transferable written acknowledgment of a shareholder’s right to obtain a share
certificate may be sent to the shareholder by mail at the shareholder’s registered address and neither the Company nor any director, officer or agent of the Company is liable for any loss to the shareholder because the share certificate or
acknowledgement is lost in the mail or stolen. 
  

	2.5	 Replacement of Worn Out or Defaced Certificate or Acknowledgement 

If the directors are satisfied that a share certificate or a non-transferable written acknowledgment of the
shareholder’s right to obtain a share certificate is worn out or defaced, they must, on production to them of the share certificate or acknowledgment, as the case may be, and on such other terms, if any, as they think fit: 

 

	 	(1)	 order the share certificate or acknowledgment, as the case may be, to be cancelled; and 

 

	 	(2)	 issue a replacement share certificate or acknowledgment, as the case may be. 

 

	2.6	 Replacement of Lost, Stolen or Destroyed Certificate or Acknowledgment 

If a share certificate or a non-transferable written acknowledgment of a shareholder’s right to obtain a share
certificate is lost, stolen or destroyed, a replacement share certificate or acknowledgment, as the case may be, must be issued to the person entitled to that share certificate or acknowledgment, as the case may be, if the directors receive: 

 

	 	(1)	 proof satisfactory to them that the share certificate or acknowledgment is lost, stolen or destroyed; and

  

	 	(2)	 any indemnity the directors consider adequate. 

 

	2.7	 Splitting Share Certificates 

If a shareholder surrenders a share certificate to the Company with a written request that the Company issue in the shareholder’s name two or more share
certificates, each representing a specified number of shares and in the aggregate representing the same number of shares as the share certificate so surrendered, the Company must cancel the surrendered share certificate and issue replacement share
certificates in accordance with that request. 
  

	2.8	 Certificate Fee 

There must be paid to the Company, in relation to the issue of any share certificate under Articles 2.5, 2.6 or 2.7, the amount, if any and which must not
exceed the amount prescribed under the Business Corporations Act, determined by the directors. 
  

  
 - 7 - 

	2.9	 Recognition of Trusts 

Except as required by law or statute or these Articles, no person will be recognized by the Company as holding any share upon any trust, and the Company is not
bound by or compelled in any way to recognize (even when having notice thereof) any equitable, contingent, future or partial interest in any share or fraction of a share or (except as by law or statute or these Articles provided or as ordered by a
court of competent jurisdiction) any other rights in respect of any share except an absolute right to the entirety thereof in the shareholder. 
  

	3.	 ISSUE OF SHARES 

 

	3.1	 Directors Authorized 

Subject to the Business Corporations Act and the rights of the holders of issued shares of the Company, the Company may issue, allot, sell or otherwise
dispose of the unissued shares, and issued shares held by the Company, at the times, to the persons, including directors, in the manner, on the terms and conditions and for the issue prices (including any premium at which shares with par value may
be issued) that the directors may determine. The issue price for a share with par value must be equal to or greater than the par value of the share. 
  

	3.2	 Commissions and Discounts 

The Company may at any time pay a reasonable commission or allow a reasonable discount to any person in consideration of that person purchasing or agreeing to
purchase shares of the Company from the Company or any other person or procuring or agreeing to procure purchasers for shares of the Company. 
  

	3.3	 Brokerage 

The Company may pay such brokerage fee or other consideration as may be lawful for or in connection with the sale or placement of its securities. 

 

	3.4	 Conditions of Issue 

Except as provided for by the Business Corporations Act, no share may be issued until it is fully paid. A share is fully paid when: 

 

	 	(1)	 consideration is provided to the Company for the issue of the share by one or more of the following:

  

	 	(a)	 past services performed for the Company; 

 

	 	(b)	 property; 

  

	 	(c)	 money; and 

  

	 	(2)	 the value of the consideration received by the Company equals or exceeds the issue price set for the share
under Article 3.1. 

  

	3.5	 Share Purchase Warrants and Rights 

 

  
 - 8 - 

 Subject to the Business Corporations Act, the Company may issue share purchase warrants, options and
rights upon such terms and conditions as the directors determine, which share purchase warrants, options and rights may be issued alone or in conjunction with debentures, debenture stock, bonds, shares or any other securities issued or created by
the Company from time to time. 
  

	4.	 SHARE REGISTERS 

 

	4.1	 Central Securities Register 

As required by and subject to the Business Corporations Act, the Company must maintain in British Columbia a central securities register. The directors
may, subject to the Business Corporations Act, appoint an agent to maintain the central securities register. The directors may also appoint one or more agents, including the agent which keeps the central securities register, as
transfer agent for its shares or any class or series of its shares, as the case may be, and the same or another agent as registrar for its shares or such class or series of its shares, as the case may be. The directors may terminate such appointment
of any agent at any time and may appoint 
 another agent in its place. 
  

	4.2	 Closing Register 

The Company must not at any time close its central securities register. 
  

	5.	 SHARE TRANSFERS 

 

	5.1	 Registering Transfers 

A transfer of a share of the Company must not be registered unless: 
  

	 	(1)	 a duly signed instrument of transfer in respect of the share has been received by the Company;

  

	 	(2)	 if a share certificate has been issued by the Company in respect of the share to be transferred, that share
certificate has been surrendered to the Company; and 

  

	 	(3)	 if a non-transferable written acknowledgment of the shareholder’s
right to obtain a share certificate has been issued by the Company in respect of the share to be transferred, that acknowledgment has been surrendered to the Company. 

 

	5.2	 Form of Instrument of Transfer 

The instrument of transfer in respect of any share of the Company must be either in the form, if any, on the back of the Company’s share certificates or
in any other form that may be approved by the directors from time to time. 
  

	5.3	 Transferor Remains Shareholder 

Except to the extent that the Business Corporations Act otherwise provides, the transferor of shares is deemed to remain the holder of the shares until
the name of the transferee is entered in a securities register of the Company in respect of the transfer. 
  

  
 - 9 - 

	5.4	 Signing of Instrument of Transfer 

If a shareholder, or his or her duly authorized attorney, signs an instrument of transfer in respect of shares registered in the name of the shareholder, the
signed instrument of transfer constitutes a complete and sufficient authority to the Company and its directors, officers and agents to register the number of shares specified in the instrument of transfer or specified in any other manner, or, if no
number is specified, all the shares represented by the share certificates or set out in the written acknowledgments deposited with the instrument of transfer: 
  

	 	(1)	 in the name of the person named as transferee in that instrument of transfer; or 

 

	 	(2)	 if no person is named as transferee in that instrument of transfer, in the name of the person on whose behalf
the instrument is deposited for the purpose of having the transfer registered. 

  

	5.5	 Enquiry as to Title Not Required 

Neither the Company nor any director, officer or agent of the Company is bound to inquire into the title of the person named in the instrument of transfer as
transferee or, if no person is named as transferee in the instrument of transfer, of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered or is liable for any claim related to registering the
transfer by the shareholder or by any intermediate owner or holder of the shares, of any interest in the shares, of any share certificate representing such shares or of any written acknowledgment of a right to obtain a share certificate for such
shares. 
  

	5.6	 Transfer Fee 

There must be paid to the Company, in relation to the registration of any transfer, the amount, if any, determined by the directors. 

 

	6.	 TRANSMISSION OF SHARES 

 

	6.1	 Legal Personal Representative Recognized on Death 

In case of the death of a shareholder, the legal personal representative, or if the shareholder was a joint holder, the surviving joint holder, will be the
only person recognized by the Company as having any title to the shareholder’s interest in the shares. Before recognizing a person as a legal personal representative, the directors may require proof of appointment by a court of competent
jurisdiction, a grant of letters probate, letters of administration or such other evidence or documents as the directors consider appropriate. 
  

	6.2	 Rights of Legal Personal Representative 

The legal personal representative has the same rights, privileges and obligations that attach to the shares held by the shareholder, including the right to
transfer the shares in accordance with these Articles, provided the documents required by the Business Corporations Act and the directors have been deposited with the Company. 

 

  
 - 10 - 

	7.	 PURCHASE OF SHARES 

 

	7.1	 Company Authorized to Purchase Shares 

Subject to Article 7.2, the special rights and restrictions attached to the shares of any class or series and the Business Corporations Act, the Company
may, if authorized by the directors, purchase or otherwise acquire any of its shares at the price and upon the terms specified in such resolution. 
  

	7.2	 Purchase When Insolvent 

The Company must not make a payment or provide any other consideration to purchase or otherwise acquire any of its shares if there are reasonable grounds for
believing that: 
  

	 	(1)	 the Company is insolvent; or 

 

	 	(2)	 making the payment or providing the consideration would render the Company insolvent. 

 

	7.3	 Sale and Voting of Purchased Shares 

If the Company retains a share redeemed, purchased or otherwise acquired by it, the Company may sell, gift or otherwise dispose of the share, but, while such
share is held by the Company, it: 
  

	 	(1)	 is not entitled to vote the share at a meeting of its shareholders; 

 

	 	(2)	 must not pay a dividend in respect of the share; and 

 

	 	(3)	 must not make any other distribution in respect of the share. 

 

	8.	 BORROWING POWERS 

The Company, if authorized by the directors, may: 
  

	 	(1)	 borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that
they consider appropriate; 

  

	 	(2)	 issue bonds, debentures and other debt obligations either outright or as security for any liability or
obligation of the Company or any other person and at such discounts or premiums and on such other terms as they consider appropriate; 

  

	 	(3)	 guarantee the repayment of money by any other person or the performance of any obligation of any other person;
and 

  

	 	(4)	 mortgage, charge, whether by way of specific or floating charge, grant a security interest in, or give other
security on, the whole or any part of the present and future assets and undertaking of the Company. 

  
 - 11 - 

	9.	 ALTERATIONS 

  

	9.1	 Alteration of Authorized Share Structure 

Subject to Article 9.2 and the Business Corporations Act, the Company may by resolution of the directors: 

 

	 	(1)	 create one or more classes or series of shares or, if none of the shares of a class or series of shares are
allotted or issued, eliminate that class or series of shares; 

  

	 	(2)	 increase, reduce or eliminate the maximum number of shares that the Company is authorized to issue out of any
class or series of shares or establish a maximum number of shares that the Company is authorized to issue out of any class or series of shares for which no maximum is established; 

 

	 	(3)	 subdivide or consolidate all or any of its unissued, or fully paid issued, shares; 

 

	 	(4)	 if the Company is authorized to issue shares of a class of shares with par value: 

 

	 	(a)	 decrease the par value of those shares; or 

 

	 	(b)	 if none of the shares of that class of shares are allotted or issued, increase the par value of those shares;

  

	 	(5)	 change all or any of its unissued, or fully paid issued, shares with par value into shares without par value or
any of its unissued shares without par value into shares with par value; 

  

	 	(6)	 alter the identifying name of any of its shares; or 

 

	 	(7)	 otherwise alter its shares or authorized share structure when required or permitted to do so by the Business
Corporations Act. 

  

	9.2	 Special Rights and Restrictions 

Subject to the Business Corporations Act, the Company may by special resolution: 

 

	 	(1)	 create special rights or restrictions for, and attach those special rights or restrictions to, the shares of
any class or series of shares, whether or not any or all of those shares have been issued; or 

  

	 	(2)	 vary or delete any special rights or restrictions attached to the shares of any class or series of shares,
whether or not any or all of those shares have been issued. 

  

	9.3	 Change of Name 

The Company may by consent resolution of the directors or by special resolution authorize an alteration of its Notice of Articles in order to change its name
or adopt or change any translation of that name. 

  
 -12 - 

	9.4	 Other Alterations 

If the Business Corporations Act does not specify the type of resolution and these Articles do not specify another type of resolution, the Company may
by special resolution alter these Articles. 
  

	10.	 MEETINGS OF SHAREHOLDERS 

 

	10.1	 Annual General Meetings 

Unless an annual general meeting is deferred or waived in accordance with the Business Corporations Act, the Company must hold its first annual
general meeting within 18 months after the date on which it was incorporated or otherwise recognized, and after that must hold an annual general meeting at least once in each calendar year and not more than 15 months after the last annual
reference date at such time and place as may be determined by the directors. 
  

	10.2	 Resolution Instead of Annual General Meeting 

If all the shareholders who are entitled to vote at an annual general meeting consent by a unanimous resolution under the Business Corporations Act to
all of the business that is required to be transacted at that annual general meeting, the annual general meeting is deemed to have been held on the date of the unanimous resolution. The shareholders must, in any unanimous resolution passed under
this Article 10.2, select as the Company’s annual reference date a date that would be appropriate for the holding of the applicable annual general meeting. 
  

	10.3	 Calling of Meetings of Shareholders 

The directors may, whenever they think fit, call a meeting of shareholders. 
  

	10.4	 Notice for Meetings of Shareholders 

The Company must send notice of the date, time and location of any meeting of shareholders, in the manner provided in these Articles, or in such other manner,
if any, as may be prescribed by ordinary resolution (whether previous notice of the resolution has been given or not), to each shareholder entitled to attend the meeting, to each director and to the auditor of the Company, unless these Articles
otherwise provide, at least the following number of days before the meeting: 
  

	 	(1)	 if and for so long as the Company is a public company, 21 days; 

 

	 	(2)	 otherwise, 10 days. 

  

	10.5	 Record Date for Notice 

The directors may set a date as the record date for the purpose of determining shareholders entitled to notice of any meeting of shareholders. The record date
must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Business Corporations Act, by more than four months. The record date must not
precede the date on which the meeting is held by fewer than: 

  
 - 13 - 

	 	(1)	 if and for so long as the Company is a public company, 21 days; 

 

	 	(2)	 otherwise, 10 days. 

If no record date is set, the record date is 5:00 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent,
the beginning of the meeting. 
  

	10.6	 Record Date for Voting 

The directors may set a date as the record date for the purpose of determining shareholders entitled to vote at any meeting of shareholders. The record date
must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Business Corporations Act, by more than four months. If no record date is set,
the record date is 5:00 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of the meeting. 
  

	10.7	 Failure to Give Notice and Waiver of Notice 

The accidental omission to send notice of any meeting to, or the non-receipt of any notice by, any of the persons
entitled to notice does not invalidate any proceedings at that meeting. Any person entitled to notice of a meeting of shareholders may, in writing or otherwise, waive or reduce the period of notice of such meeting. 

 

	10.8	 Notice of Special Business at Meetings of Shareholders 

If a meeting of shareholders is to consider special business within the meaning of Article 11.1, the notice of meeting must: 

 

	 	(1)	 state the general nature of the special business; and 

 

	 	(2)	 if the special business includes considering, approving, ratifying, adopting or authorizing any document or the
signing of or giving of effect to any document, have attached to it a copy of the document or state that a copy of the document will be available for inspection by shareholders: 

 

	 	(a)	 at the Company’s records office, or at such other reasonably accessible location in British Columbia as is
specified in the notice; and 

  

	 	(b)	 during statutory business hours on any one or more specified days before the day set for the holding of the
meeting. 

  

	10.9	 Location of Annual General Meeting 

The Company may by resolution of the directors choose a location outside of British Columbia for the purpose of the meeting. 

 

	11.	 PROCEEDINGS AT MEETINGS OF SHAREHOLDERS 

 

	11.1	 Special Business 

  
 - 14 - 

 At a meeting of shareholders, the following business is special business: 

 

	 	(1)	 at a meeting of shareholders that is not an annual general meeting, all business is special business except
business relating to the conduct of or voting at the meeting; 

  

	 	(2)	 at an annual general meeting, all business is special business except for the following: 

 

	 	(a)	 business relating to the conduct of or voting at the meeting; 

 

	 	(b)	 consideration of any financial statements of the Company presented to the meeting; 

 

	 	(c)	 consideration of any reports of the directors or auditor; 

 

	 	(d)	 the setting or changing of the number of directors; 

 

	 	(e)	 the election or appointment of directors; 

 

	 	(f)	 the appointment of an auditor; 

 

	 	(g)	 business arising out of a report of the directors not requiring the passing of a special resolution or an
exceptional resolution; 

  

	 	(h)	 any other business which, under these Articles or the Business Corporations Act, may be transacted at a meeting
of shareholders without prior notice of the business being given to the shareholders. 

  

	11.2	 Special Majority 

The majority of votes required for the Company to pass a special resolution at a meeting of shareholders is two-thirds
of the votes cast on the resolution. 
  

	11.3	 Quorum 

Subject to the special rights and restrictions attached to the shares of any class or series of shares, the quorum for the transaction of business at a meeting
of shareholders is two shareholders entitled to vote at the meeting whether in person or by proxy who hold, in the aggregate, at least 5% of the issued shares entitled to be voted at the meeting. 

 

	11.4	 One Shareholder May Constitute Quorum 

If there is only one shareholder entitled to vote at a meeting of shareholders: 
  

	 	(1)	 the quorum is one person who is, or who represents by proxy, that shareholder, and 

 

	 	(2)	 that shareholder, present in person or by proxy, may constitute the meeting. 

 

  
 - 15 - 

	11.5	 Other Persons May Attend 

The directors, the president (if any), the secretary (if any), the assistant secretary (if any), any lawyer for the Company, the auditor of the Company and any
other persons invited by the directors are entitled to attend any meeting of shareholders, but if any of those persons does attend a meeting of shareholders, that person is not to be counted in the quorum and is not entitled to vote at the meeting
unless that person is a shareholder or proxy holder entitled to vote at the meeting. 
  

	11.6	 Requirement of Quorum 

No business, other than the election of a chair of the meeting and the adjournment of the meeting, may be transacted at any meeting of shareholders unless a
quorum of shareholders entitled to vote is present at the commencement of the meeting, but such quorum need not be present throughout the meeting. 
  

	11.7	 Lack of Quorum 

If, within one-half hour from the time set for the holding of a meeting of shareholders, a quorum is not present: 

 

	 	(1)	 in the case of a general meeting requisitioned by shareholders, the meeting is dissolved, and

  

	 	(2)	 in the case of any other meeting of shareholders, the meeting stands adjourned to the same day in the next week
at the same time and place. 

  

	11.8	 Lack of Quorum at Succeeding Meeting 

If, at the meeting to which the meeting referred to in Article 11.7(2) was adjourned, a quorum is not present within
one-half hour from the time set for the holding of the meeting, the person or persons present and being, or representing by proxy, one or more shareholders entitled to attend and vote at the meeting constitute
a quorum. 
  

	11.9	 Chair 

The following individual is entitled to preside as chair at a meeting of shareholders: 

 

	 	(1)	 the chair of the board, if any; or 

 

	 	(2)	 if the chair of the board is absent or unwilling to act as chair of the meeting, the president, if any.

  

	11.10	 Selection of Alternate Chair 

If, at any meeting of shareholders, there is no chair of the board or president present within 15 minutes after the time set for holding the meeting, or if the
chair of the board and the president are unwilling to act as chair of the meeting, or if the chair of the board and the president have advised the secretary, if any, or any director present at the meeting, that they will not be present

  
 - 16 - 

 
at the meeting, the directors present must choose one of their number to be chair of the meeting or if all of the directors present decline to take the chair or fail to so choose or if no
director is present, the shareholders entitled to vote at the meeting who are present in person or by proxy may choose any person present at the meeting to chair the meeting. 
  

	11.11	 Adjournments 

The chair of a meeting of shareholders may, and if so directed by the meeting must, adjourn the meeting from time to time and from place to place, but no
business may be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. 
  

	11.12	 Notice of Adjourned Meeting 

It is not necessary to give any notice of an adjourned meeting or of the business to be transacted at an adjourned meeting of shareholders except that, when a
meeting is adjourned for 30 days or more, notice of the adjourned meeting must be given as in the case of the original meeting. 
  

	11.13	 Decisions by Show of Hands or Poll 

Subject to the Business Corporations Act, every motion put to a vote at a meeting of shareholders will be decided on a show of hands unless a poll,
before or on the declaration of the result of the vote by show of hands, is directed by the chair or demanded by at least one shareholder entitled to vote who is present in person or by proxy. 

 

	11.14	 Declaration of Result 

The chair of a meeting of shareholders must declare to the meeting the decision on every question in accordance with the result of the show of hands or the
poll, as the case may be, and that decision must be entered in the minutes of the meeting. A declaration of the chair that a resolution is carried by the necessary majority or is defeated is, unless a poll is directed by the chair or demanded under
Article 11.13, conclusive evidence without proof of the number or proportion of the votes recorded in favour of or against the resolution. 
  

	11.15	 Motion Need Not be Seconded 

No motion proposed at a meeting of shareholders need be seconded unless the chair of the meeting rules otherwise, and the chair of any meeting of shareholders
is entitled to propose or second a motion. 
  

	11.16	 Casting Vote 

In case of an equality of votes, the chair of a meeting of shareholders does not, either on a show of hands or on a poll, have a second or casting vote in
addition to the vote or votes to which the chair may be entitled as a shareholder. 

  
 - 17 - 

	11.17	 Meeting by Telephone or Other Communications Medium 

A shareholder or proxy holder may participate in a meeting of the shareholders in person or by telephone if all shareholders or proxy holders participating in
the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other. A shareholder or proxy holder may participate in a meeting of the shareholders by a communications medium other than telephone if
all shareholders or proxy holders participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other and if all shareholders or proxy holders who wish to participate in the meeting
agree to such participation. A shareholder or proxy holder who participates in a meeting in a manner contemplated by this Article 11.17 is deemed for all purposes of the Business Corporations Act and these Articles to be present at the
meeting and to have agreed to participate in that manner. 
  

	12.	 VOTES OF SHAREHOLDERS 

 

	12.1	 Number of Votes by Shareholder or by Shares 

Subject to any special rights or restrictions attached to any shares and to the restrictions imposed on joint shareholders under Article 12.3: 

 

	 	(1)	 on a vote by show of hands, every person present who is a shareholder or proxy holder and entitled to vote on
the matter has one vote; and 

  

	 	(2)	 on a poll, every shareholder entitled to vote on the matter has one vote in respect of each share entitled to
be voted on the matter and held by that shareholder and may exercise that vote either in person or by proxy. 

  

	12.2	 Votes of Persons in Representative Capacity 

A person who is not a shareholder may vote at a meeting of shareholders, whether on a show of hands or on a poll, and may appoint a proxy holder to act at the
meeting, if, before doing so, the person satisfies the chair of the meeting, or the directors, that the person is a legal personal representative or a trustee in bankruptcy for a shareholder who is entitled to vote at the meeting. 

 

	12.3	 Votes by Joint Holders 

If there are joint shareholders registered in respect of any share: 
  

	 	(1)	 any one of the joint shareholders may vote at any meeting, either personally or by proxy, in respect of the
share as if that joint shareholder were solely entitled to it; or 

  

	 	(2)	 if more than one of the joint shareholders is present at any meeting, personally or by proxy, and more than one
of them votes in respect of that share, then only the vote of the joint shareholder present whose name stands first on the central securities register in respect of the share will be counted. 

  
 - 18 - 

	12.4	 Legal Personal Representatives as Joint Shareholders 

Two or more legal personal representatives of a shareholder in whose sole name any share is registered are, for the purposes of Article 12.3, deemed to be
joint shareholders. 
  

	12.5	 Representative of a Corporate Shareholder 

If a corporation, that is not a subsidiary of the Company, is a shareholder, that corporation may appoint a person to act as its representative at any meeting
of shareholders of the Company, and: 
  

	 	(1)	 for that purpose, the instrument appointing a representative must: 

 

	 	(a)	 be received at the registered office of the Company or at any other place specified, in the notice calling the
meeting, for the receipt of proxies, at least the number of business days specified in the notice for the receipt of proxies, or if no number of days is specified, two business days before the day set for the holding of the meeting; or

  

	 	(b)	 be provided, at the meeting, to the chair of the meeting or to a person designated by the chair of the meeting;

  

	 	(2)	 if a representative is appointed under this Article 12.5: 

 

	 	(a)	 the representative is entitled to exercise in respect of and at that meeting the same rights on behalf of the
corporation that the representative represents as that corporation could exercise if it were a shareholder who is an individual, including, without limitation, the right to appoint a proxy holder; and 

 

	 	(b)	 the representative, if present at the meeting, is to be counted for the purpose of forming a quorum and is
deemed to be a shareholder present in person at the meeting. 

 Evidence of the appointment of any such representative may be sent to the
Company by written instrument, fax or any other method of transmitting legibly recorded messages. 
  

	12.6	 Proxy Provisions Do Not Apply to All Companies 

If and for so long as the Company is a public company or a pre-existing reporting company which has the Statutory
Reporting Company Provisions as part of its Articles or to which the Statutory Reporting Company Provisions apply, Articles 12.7 to 12.14 apply only insofar as they are not inconsistent with any securities legislation in any province or territory of
Canada or in the federal jurisdiction of the United States or in any states of the United States that is applicable to the Company and insofar as they are not inconsistent with the regulations and rules made and promulgated under that legislation
and all administrative policy statements, blanket orders and rulings, notices and other administrative directions issued by securities commission or similar authorities appointed under that legislation. 

  
 - 19 - 

	12.7	 Appointment of Proxy Holders 

Every shareholder of the Company, including a corporation that is a shareholder but not a subsidiary of the Company, entitled to vote at a meeting of
shareholders of the Company may, by proxy, appoint one or more (but not more than five) proxy holders to attend and act at the meeting in the manner, to the extent and with the powers conferred by the proxy. 

 

	12.8	 Alternate Proxy Holders 

A shareholder may appoint one or more alternate proxy holders who need not be shareholders to act in the place of an absent proxy holder. 

 

	12.9	 Deposit of Proxy 

A proxy for a meeting of shareholders must: 
  

	 	(1)	 be received at the registered office of the Company or at any other place specified, in the notice calling the
meeting, for the receipt of proxies, at least the number of business days specified in the notice, or if no number of days is specified, two business days before the day set for the holding of the meeting; or 

 

	 	(2)	 unless the notice provides otherwise, be provided, at the meeting, to the chair of the meeting or to a person
designated by the chair of the meeting. 

 A proxy may be sent to the Company by written instrument, fax or any other method of
transmitting legibly recorded messages. 
  

	12.10	 Validity of Proxy Vote 

A vote given in accordance with the terms of a proxy is valid notwithstanding the death or incapacity of the shareholder giving the proxy and despite the
revocation of the proxy or the revocation of the authority under which the proxy is given, unless notice in writing of that death, incapacity or revocation is received: 
  

	 	(1)	 at the registered office of the Company, at any time up to and including the last business day before the day
set for the holding of the meeting at which the proxy is to be used; or 

  

	 	(2)	 by the chair of the meeting, before the vote is taken. 

 

	12.11	 Form of Proxy 

A proxy, whether for a specified meeting or otherwise, must be either in the following form or in any other form approved by the directors or the chair of the
meeting: 

  
 - 20 - 

 [name of company] 

(the “Company”) 
 The
undersigned, being a shareholder of the Company, hereby appoints [name] or, failing that person, [name], as proxy holder for the undersigned to attend, act and vote for and on behalf of the undersigned at the meeting of shareholders of
the Company to be held on [month, day, year] and at any adjournment of that meeting. 
 Number of shares in respect of which this
proxy is given (if no number is specified, then this proxy is given in respect of all shares registered in the name of the shareholder): _____________________ 

 

	
	 Signed [month, day, year]

	
	  

	 [Signature of shareholder]

	
	  

	 [Name of shareholder - printed]

  

	12.12	 Revocation of Proxy 

Subject to Article 12.14, every proxy may be revoked by an instrument in writing that is: 

 

	 	(1)	 received at the registered office of the Company at any time up to and including the last business day before
the day set for the holding of the meeting at which the proxy is to be used; or 

  

	 	(2)	 provided, at the meeting, to the chair of the meeting. 

 

	12.13	 Revocation of Proxy Must Be Signed 

An instrument referred to in Article 12.13 must be signed as follows: 
  

	 	(1)	 if the shareholder for whom the proxy holder is appointed is an individual, the instrument must be signed by
the shareholder or his or her legal personal representative or trustee in bankruptcy; 

  

	 	(2)	 if the shareholder for whom the proxy holder is appointed is a corporation, the instrument must be signed by
the corporation or by a representative appointed for the corporation under Article 12.5. 

  

	12.14	 Production of Evidence of Authority to Vote 

The chair of any meeting of shareholders may, but need not, inquire into the authority of any person to vote at the meeting and may, but need not, demand from
that person production of evidence as to the existence of the authority to vote. 

  
 - 21 - 

	13.	 DIRECTORS 

  

	13.1	 First Directors; Number of Directors 

The first directors are the persons designated as directors of the Company in the Notice of Articles that applies to the Company when it is recognized under
the Business Corporations Act. The number of directors, excluding additional directors appointed under Article 14.8, is set at: 
  

	 	(1)	 subject to paragraphs (2) and (3), the number of directors that is equal to the number of the
Company’s first directors; 

  

	 	(2)	 if the Company is a public company, the greater of three and the most recently set of: 

 

	 	(a)	 the number of directors set by ordinary resolution (whether or not previous notice of the resolution was
given); and 

  

	 	(b)	 the number of directors set under Article 14.4; 

 

	 	(3)	 if the Company is not a public company, the most recently set of: 

 

	 	(a)	 the number of directors set by ordinary resolution (whether or not previous notice of the resolution was
given); and 

  

	 	(b)	 the number of directors set under Article 14.4. 

 

	13.2	 Change in Number of Directors 

If the number of directors is set under Articles 13.1(2)(a) or 13.1(3)(a): 
  

	 	(1)	 the shareholders may elect or appoint the directors needed to fill any vacancies in the board of directors up
to that number; 

  

	 	(2)	 if the shareholders do not elect or appoint the directors needed to fill any vacancies in the board of
directors up to that number contemporaneously with the setting of that number, then the directors may appoint, or the shareholders may elect or appoint, directors to fill those vacancies. 

 

	13.3	 Directors’ Acts Valid Despite Vacancy 

An act or proceeding of the directors is not invalid merely because fewer than the number of directors set or otherwise required under these Articles is in
office. 
  

	13.4	 Remuneration of Directors 

The directors are entitled to the remuneration for acting as directors, if any, as the directors may from time to time determine. If the directors so decide,
the remuneration of the directors, if any, will be determined by the shareholders. That remuneration may be in addition to any salary or other remuneration paid to any officer or employee of the Company as such, who is also a director. 

  
 - 22 - 

	13.5	 Reimbursement of Expenses of Directors 

The Company must reimburse each director for the reasonable expenses that he or she may incur in and about the business of the Company. 

 

	13.6	 Special Remuneration for Directors 

If any director performs any professional or other services for the Company that in the opinion of the directors are outside the ordinary duties of a director,
or if any director is otherwise specially occupied in or about the Company’s business, he or she may be paid remuneration fixed by the directors, or, at the option of that director, fixed by ordinary resolution, and such remuneration may be
either in addition to, or in substitution for, any other remuneration that he or she may be entitled to receive. 
  

	13.7	 Gratuity, Pension or Allowance on Retirement of Director 

Unless otherwise determined by ordinary resolution, the directors on behalf of the Company may pay a gratuity or pension or allowance on retirement to any
director who has held any salaried office or place of profit with the Company or to his or her spouse or dependants and may make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance.

  

	14.	 ELECTION AND REMOVAL OF DIRECTORS 

 

	14.1	 Election at Annual General Meeting 

At every annual general meeting and in every unanimous resolution contemplated by Article 10.2: 

 

	 	(1)	 the shareholders entitled to vote at the annual general meeting for the election of directors must elect, or in
the unanimous resolution appoint, a board of directors consisting of the number of directors for the time being set under these Articles; and 

  

	 	(2)	 all the directors cease to hold office immediately before the election or appointment of directors under
paragraph (1), but are eligible for re-election or re-appointment. 

  

	14.2	 Consent to be a Director 

No election, appointment or designation of an individual as a director is valid unless: 

 

	 	(1)	 that individual consents to be a director in the manner provided for in the Business Corporations
Act; 

  

	 	(2)	 that individual is elected or appointed at a meeting at which the individual is present and the individual does
not refuse, at the meeting, to be a director; or 

  
 - 23 - 

	 	(3)	 with respect to first directors, the designation is otherwise valid under the Business Corporations Act.

  

	14.3	 Failure to Elect or Appoint Directors 

If: 
  

	 	(1)	 the Company fails to hold an annual general meeting, and all the shareholders who are entitled to vote at an
annual general meeting fail to pass the unanimous resolution contemplated by Article 10.2, on or before the date by which the annual general meeting is required to be held under the Business Corporations Act; or 

 

	 	(2)	 the shareholders fail, at the annual general meeting or in the unanimous resolution contemplated by Article
10.2, to elect or appoint any directors; 

 then each director then in office continues to hold office until the earlier of: 

 

	 	(3)	 the date on which his or her successor is elected or appointed; and 

 

	 	(4)	 the date on which he or she otherwise ceases to hold office under the Business Corporations Act
or these Articles. 

  

	14.4	 Places of Retiring Directors Not Filled 

If, at any meeting of shareholders at which there should be an election of directors, the places of any of the retiring directors are not filled by that
election, those retiring directors who are not re-elected and who are asked by the newly elected directors to continue in office will, if willing to do so, continue in office to complete the number of directors for the time being set pursuant to
these Articles until further new directors are elected at a meeting of shareholders convened for that purpose. If any such election or continuance of directors does not result in the election or continuance of the number of directors for the time
being set pursuant to these Articles, the number of directors of the Company is deemed to be set at the number of directors actually elected or continued in office. 
  

	14.5	 Directors May Fill Casual Vacancies 

Any casual vacancy occurring in the board of directors may be filled by the directors. 

 

	14.6	 Remaining Directors Power to Act 

The directors may act notwithstanding any vacancy in the board of directors but, if the Company has fewer directors in office than the number set pursuant to
these Articles as the quorum of directors, the directors may only act for the purposes of appointing directors up to that number, summoning a meeting of shareholders for the purpose of filling any vacancies on the board of directors, or, subject to
the Business Corporations Act, for any other purpose. 

  
 - 24 - 

	14.7	 Shareholders May Fill Vacancies 

If the Company has no directors or fewer directors in office than the number set pursuant to these Articles as the quorum of directors, the shareholders may
elect or appoint directors to fill any vacancies on the board of directors. 
  

	14.8	 Additional Directors 

Notwithstanding Articles 13.1 and 13.2, between annual general meetings or unanimous resolutions contemplated by Article 10.2, the directors may appoint one or
more additional directors, but the number of additional directors appointed under this Article 14.8 must not at any time exceed: 
  

	 	(1)	 one-third of the number of first directors, if, at the time of the
appointments, one or more of the first directors have not yet completed their first term of office; or 

  

	 	(2)	 in any other case, one-third of the number of the current directors who
were elected or appointed as directors other than under this Article 14.8. 

 Any director so appointed ceases to hold office immediately
before the next election or appointment of directors under Article 14.1(1), but is eligible for re-election or re-appointment. 

 

	14.9	 Ceasing to be a Director 

A director ceases to be a director when: 
  

	 	(1)	 the term of office of the director expires; 

 

	 	(2)	 the director dies; 

  

	 	(3)	 the director resigns as a director by notice in writing provided to the Company or a lawyer for the Company; or

  

	 	(4)	 the director is removed from office pursuant to Articles 14.10 or 14.11. 

 

	14.10	 Removal of Director by Shareholders 

The Company may remove any director before the expiration of his or her term of office by special resolution. In that event, the shareholders may elect, or
appoint by ordinary resolution, a director to fill the resulting vacancy. If the shareholders do not elect or appoint a director to fill the resulting vacancy contemporaneously with the removal, then the directors may appoint or the shareholders may
elect, or appoint by ordinary resolution, a director to fill that vacancy. 
  

	14.11	 Removal of Director by Directors 

The directors may remove any director before the expiration of his or her term of office if the director is convicted of an indictable offence, or if the
director ceases to be qualified to act as a director of a company and does not promptly resign, and the directors may appoint a director to fill the resulting vacancy. 

  
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	15.	 ALTERNATE DIRECTORS 

 

	15.1	 Appointment of Alternate Director 

Any director (an “appointor”) may by notice in writing received by the Company appoint any person (an “appointee”) who is qualified to act
as a director to be his or her alternate to act in his or her place at meetings of the directors or committees of the directors at which the appointor is not present unless (in the case of an appointee who is not a director) the directors have
reasonably disapproved the appointment of such person as an alternate director and have given notice to that effect to his or her appointor within a reasonable time after the notice of appointment is received by the Company. 

 

	15.2	 Notice of Meetings 

Every alternate director so appointed is entitled to notice of meetings of the directors and of committees of the directors of which his or her appointor is a
member and to attend and vote as a director at any such meetings at which his or her appointor is not present. 
  

	15.3	 Alternate for More Than One Director Attending Meetings 

A person may be appointed as an alternate director by more than one director, and an alternate director: 

 

	 	(1)	 will be counted in determining the quorum for a meeting of directors once for each of his or her appointors
and, in the case of an appointee who is also a director, once more in that capacity; 

  

	 	(2)	 has a separate vote at a meeting of directors for each of his or her appointors and, in the case of an
appointee who is also a director, an additional vote in that capacity; 

  

	 	(3)	 will be counted in determining the quorum for a meeting of a committee of directors once for each of his or her
appointors who is a member of that committee and, in the case of an appointee who is also a member of that committee as a director, once more in that capacity; 

 

	 	(4)	 has a separate vote at a meeting of a committee of directors for each of his or her appointors who is a member
of that committee and, in the case of an appointee who is also a member of that committee as a director, an additional vote in that capacity. 

  

	15.4	 Consent Resolutions 

Every alternate director, if authorized by the notice appointing him or her, may sign in place of his or her appointor any resolutions to be consented to in
writing. 
  

	15.5	 Alternate Director Not an Agent 

Every alternate director is deemed not to be the agent of his or her appointor. 

  
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	15.6	 Revocation of Appointment of Alternate Director 

An appointor may at any time, by notice in writing received by the Company, revoke the appointment of an alternate director appointed by him or her. 

 

	15.7	 Ceasing to be an Alternate Director 

The appointment of an alternate director ceases when: 
  

	 	(1)	 his or her appointor ceases to be a director and is not promptly
re-elected or re-appointed; 

  

	 	(2)	 the alternate director dies; 

 

	 	(3)	 the alternate director resigns as an alternate director by notice in writing provided to the Company or a
lawyer for the Company; 

  

	 	(4)	 the alternate director ceases to be qualified to act as a director; or 

 

	 	(5)	 his or her appointor revokes the appointment of the alternate director. 

 

	15.8	 Remuneration and Expenses of Alternate Director 

The Company may reimburse an alternate director for the reasonable expenses that would be properly reimbursed if he or she were a director, and the alternate
director is entitled to receive from the Company such proportion, if any, of the remuneration otherwise payable to the appointor as the appointor may from time to time direct. 

 

	16.	 POWERS AND DUTIES OF DIRECTORS 

 

	16.1	 Powers of Management 

The directors must, subject to the Business Corporations Act and these Articles, manage or supervise the management of the business and affairs of the
Company and have the authority to exercise all such powers of the Company as are not, by the Business Corporations Act or by these Articles, required to be exercised by the shareholders of the Company. 

 

	16.2	 Appointment of Attorney of Company 

The directors may from time to time, by power of attorney or other instrument, under seal if so required by law, appoint any person to be the attorney of the
Company for such purposes, and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the directors under these Articles and excepting the power to fill vacancies in the board of directors, to remove a
director, to change the membership of, or fill vacancies in, any committee of the directors, to appoint or remove officers appointed by the directors and to declare dividends) and for such period, and with such remuneration and subject to such
conditions as the directors may think fit. Any such power of attorney may contain such provisions for the protection or convenience of persons dealing with such attorney as the directors think fit. Any such attorney may be authorized by the
directors to sub-delegate all or any of the powers, authorities and discretions for the time being vested in him or her. 

  
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	16.3	 Remuneration of the auditor 

The directors may set the remuneration of the auditor without the prior approval of the shareholders. 

 

	17.	 DISCLOSURE OF INTEREST OF DIRECTORS 

 

	17.1	 Obligation to Account for Profits 

A director or senior officer who holds a disclosable interest (as that term is used in the Business Corporations Act) in a contract or
transaction into which the Company has entered or proposes to enter is liable to account to the Company for any profit that accrues to the director or senior officer under or as a result of the contract or transaction only if and to the
extent provided in the Business Corporations Act. 
  

	17.2	 Restrictions on Voting by Reason of Interest 

A director who holds a disclosable interest in a contract or transaction into which the Company has entered or proposes to enter is not entitled to vote on any
directors’ resolution to approve that contract or transaction, unless all the directors have a disclosable interest in that contract or transaction, in which case any or all of those directors may vote on such resolution. 

 

	17.3	 Interested Director Counted in Quorum 

A director who holds a disclosable interest in a contract or transaction into which the Company has entered or proposes to enter and who is present at the
meeting of directors at which the contract or transaction is considered for approval may be counted in the quorum at the meeting whether or not the director votes on any or all of the resolutions considered at the meeting. 

 

	17.4	 Disclosure of Conflict of Interest or Property 

A director or senior officer who holds any office or possesses any property, right or interest that could result, directly or indirectly, in the creation of a
duty or interest that materially conflicts with that individual’s duty or interest as a director or senior officer, must disclose the nature and extent of the conflict as required by the Business Corporations Act. 

 

	17.5	 Director Holding Other Office in the Company 

A director may hold any office or place of profit with the Company, other than the office of auditor of the Company, in addition to his or her office of
director for the period and on the terms (as to remuneration or otherwise) that the directors may determine. 

  
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	17.6	 No Disqualification 

No director or intended director is disqualified by his or her office from contracting with the Company either with regard to the holding of any office or
place of profit the director holds with the Company or as vendor, purchaser or otherwise, and no contract or transaction entered into by or on behalf of the Company in which a director is in any way interested is liable to be voided for that reason.

  

	17.7	 Professional Services by Director or Officer 

Subject to the Business Corporations Act, a director or officer, or any person in which a director or officer has an interest, may act in a professional
capacity for the Company, except as auditor of the Company, and the director or officer or such person is entitled to remuneration for professional services as if that director or officer were not a director or officer. 

 

	17.8	 Director or Officer in Other Corporations 

A director or officer may be or become a director, officer or employee of, or otherwise interested in, any person in which the Company may be interested as a
shareholder or otherwise, and, subject to the Business Corporations Act, the director or officer is not accountable to the Company for any remuneration or other benefits received by him or her as director, officer or employee of, or from his
or her interest in, such other person. 
  

	18.	 PROCEEDINGS OF DIRECTORS 

 

	18.1	 Meetings of Directors 

The directors may meet together for the conduct of business, adjourn and otherwise regulate their meetings as they think fit, and meetings of the directors
held at regular intervals may be held at the place, at the time and on the notice, if any, as the directors may from time to time determine. 
  

	18.2	 Voting at Meetings 

Questions arising at any meeting of directors are to be decided by a majority of votes and, in the case of an equality of votes, the chair of the meeting does
not have a second or casting vote. 
  

	18.3	 Chair of Meetings 

The following individual is entitled to preside as chair at a meeting of directors: 
  

	 	(1)	 the chair of the board, if any; 

 

	 	(2)	 in the absence of the chair of the board, the president, if any, if the president is a director; or

  

	 	(3)	 any other director chosen by the directors if: 

 

	 	(a)	 neither the chair of the board nor the president, if a director, is present at the meeting within 15 minutes
after the time set for holding the meeting; 

  

	 	(b)	 neither the chair of the board nor the president, if a director, is willing to chair the meeting; or

  
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	 	(c)	 the chair of the board and the president, if a director, have advised the secretary, if any, or any other
director, that they will not be present at the meeting. 

  

	18.4	 Meetings by Telephone or Other Communications Medium 

A director may participate in a meeting of the directors or of any committee of the directors in person or by telephone if all directors participating in the
meeting, whether in person or by telephone or other communications medium, are able to communicate with each other. A director may participate in a meeting of the directors or of any committee of the directors by a communications medium other than
telephone if all directors participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other and if all directors who wish to participate in the meeting agree to such
participation. A director who participates in a meeting in a manner contemplated by this Article 18.4 is deemed for all purposes of the Business Corporations Act and these Articles to be present at the meeting and to have agreed to
participate in that manner. 
  

	18.5	 Calling of Meetings 

A director may, and the secretary or an assistant secretary of the Company, if any, on the request of a director must, call a meeting of the directors at any
time. 
  

	18.6	 Notice of Meetings 

Other than for meetings held at regular intervals as determined by the directors pursuant to Article 18.1, reasonable notice of each meeting of the directors,
specifying the place, day and time of that meeting must be given to each of the directors and the alternate directors by any method set out in Article 24.1 or orally or by telephone. 

 

	18.7	 When Notice Not Required 

It is not necessary to give notice of a meeting of the directors to a director or an alternate director if: 

 

	 	(1)	 the meeting is to be held immediately following a meeting of shareholders at which that director was elected or
appointed, or is the meeting of the directors at which that director is appointed; or 

  

	 	(2)	 the director or alternate director, as the case may be, has waived notice of the meeting.

  

	18.8	 Meeting Valid Despite Failure to Give Notice 

The accidental omission to give notice of any meeting of directors to, or the non-receipt of any notice by, any
director or alternate director, does not invalidate any proceedings at that meeting. 

  
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	18.9	 Waiver of Notice of Meetings 

Any director or alternate director may send to the Company a document signed by him or her waiving notice of any past, present or future meeting or meetings of
the directors and may at any time withdraw that waiver with respect to meetings held after that withdrawal. After sending a waiver with respect to all future meetings and until that waiver is withdrawn, no notice of any meeting of the directors need
be given to that director and, unless the director otherwise requires by notice in writing to the Company, to his or her alternate director, and all meetings of the directors so held are deemed not to be improperly called or constituted by reason of
notice not having been given to such director or alternate director. 
  

	18.10	 Quorum 

The quorum necessary for the transaction of the business of the directors may be set by the directors and, if not so set, is deemed to be set at two directors
or, if the number of directors is set at one, is deemed to be set at one director, and that director may constitute a meeting. 
  

	18.11	 Validity of Acts Where Appointment Defective 

Subject to the Business Corporations Act, an act of a director or officer is not invalid merely because of an irregularity in the election or
appointment or a defect in the qualification of that director or officer. 
  

	18.12	 Consent Resolutions in Writing 

A resolution of the directors or of any committee of the directors may be passed without a meeting: 

 

	 	(1)	 in all cases, if each of the directors entitled to vote on the resolution consents to it in writing; or

  

	 	(2)	 in the case of a resolution to approve a contract or transaction in respect of which a director has disclosed
that he or she has or may have a disclosable interest, if each of the other directors who are entitled to vote on the resolution consents to it in writing. 

A consent in writing under this Article may be by signed document, fax, email or any other method of transmitting legibly recorded messages. A consent in
writing may be in two or more counterparts which together are deemed to constitute one consent in writing. A resolution of the directors or of any committee of the directors passed in accordance with this Article 18.12 is effective on the date
stated in the consent in writing or on the latest date stated on any counterpart and is deemed to be a proceeding at a meeting of directors or of the committee of the directors and to be as valid and effective as if it had been passed at a meeting
of the directors or of the committee of the directors that satisfies all the requirements of the Business Corporations Act and all the requirements of these Articles relating to meetings of the directors or of a committee of the
directors. 

  
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	19.	 EXECUTIVE AND OTHER COMMITTEES 

 

	19.1	 Appointment and Powers of Executive Committee 

The directors may, by resolution, appoint an executive committee consisting of the director or directors that they consider appropriate, and this committee
has, during the intervals between meetings of the board of directors, all of the directors’ powers, except: 
  

	 	(1)	 the power to fill vacancies in the board of directors; 

 

	 	(2)	 the power to remove a director; 

 

	 	(3)	 the power to change the membership of, or fill vacancies in, any committee of the directors; and

  

	 	(4)	 such other powers, if any, as may be set out in the resolution or any subsequent directors’ resolution.

  

	19.2	 Appointment and Powers of Other Committees 

The directors may, by resolution: 
  

	 	(1)	 appoint one or more committees (other than the executive committee) consisting of the director or directors
that they consider appropriate; 

  

	 	(2)	 delegate to a committee appointed under paragraph (1) any of the directors’ powers, except:

  

	 	(a)	 the power to fill vacancies in the board of directors; 

 

	 	(b)	 the power to remove a director; 

 

	 	(c)	 the power to change the membership of, or fill vacancies in, any committee of the directors; and

  

	 	(d)	 the power to appoint or remove officers appointed by the directors; and 

 

	 	(3)	 make any delegation referred to in paragraph (2) subject to the conditions set out in the resolution or
any subsequent directors’ resolution. 

  

	19.3	 Obligations of Committees 

Any committee appointed under Articles 19.1 or 19.2, in the exercise of the powers delegated to it, must: 

 

	 	(1)	 conform to any rules that may from time to time be imposed on it by the directors; and 

 

	 	(2)	 report every act or thing done in exercise of those powers at such times as the directors may require.

  
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	19.4	 Powers of Board 

The directors may, at any time, with respect to a committee appointed under Articles 19.1 or 19.2: 

 

	 	(1)	 revoke or alter the authority given to the committee, or override a decision made by the committee, except as
to acts done before such revocation, alteration or overriding; 

  

	 	(2)	 terminate the appointment of, or change the membership of, the committee; and 

 

	 	(3)	 fill vacancies in the committee. 

 

	19.5	 Committee Meetings 

Subject to Article 19.3(1) and unless the directors otherwise provide in the resolution appointing the committee or in any subsequent resolution, with respect
to a committee appointed under Articles 19.1 or 19.2: 
  

	 	(1)	 the committee may meet and adjourn as it thinks proper; 

 

	 	(2)	 the committee may elect a chair of its meetings but, if no chair of a meeting is elected, or if at a meeting
the chair of the meeting is not present within 15 minutes after the time set for holding the meeting, the directors present who are members of the committee may choose one of their members to chair the meeting; 

 

	 	(3)	 a majority of the members of the committee constitutes a quorum of the committee; and 

 

	 	(4)	 questions arising at any meeting of the committee are determined by a majority of votes of the members present,
and in case of an equality of votes, the chair of the meeting does not have a second or casting vote. 

  

	20.	 OFFICERS 

  

	20.1	 Directors May Appoint Officers 

The directors may, from time to time, appoint such officers, if any, as the directors determine and the directors may, at any time, terminate any such
appointment. 
  

	20.2	 Functions, Duties and Powers of Officers 

The directors may, for each officer: 
  

	 	(1)	 determine the functions and duties of the officer; 

 

	 	(2)	 entrust to and confer on the officer any of the powers exercisable by the directors on such terms and
conditions and with such restrictions as the directors think fit; and 

  

	 	(3)	 revoke, withdraw, alter or vary all or any of the functions, duties and powers of the officer.

  
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	20.3	 Qualifications 

No officer may be appointed unless that officer is qualified in accordance with the Business Corporations Act. One person may hold more than one
position as an officer of the Company. Any person appointed as the chair of the board or as a managing director must be a director. Any other officer need not be a director. 

 

	20.4	 Remuneration and Terms of Appointment 

All appointments of officers are to be made on the terms and conditions and at the remuneration (whether by way of salary, fee, commission, participation in
profits or otherwise) that the directors thinks fit and are subject to termination at the pleasure of the directors, and an officer may in addition to such remuneration be entitled to receive, after he or she ceases to hold such office or leaves the
employment of the Company, a pension or gratuity. 
  

	21.	 INDEMNIFICATION 

 

	21.1	 Definitions 

In this Article 21: 
  

	 	(1)	 “eligible penalty” means a judgment, penalty or fine awarded or imposed in, or an amount paid in
settlement of, an eligible proceeding; 

  

	 	(2)	 “eligible proceeding” means a legal proceeding or investigative action, whether current, threatened,
pending or completed, in which a director, former director or alternate director of the Company (an “eligible party”) or any of the heirs and legal personal representatives of the eligible party, by reason of the eligible party being or
having been a director or alternate director of the Company: 

  

	 	(a)	 is or may be joined as a party; or 

 

	 	(b)	 is or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the
proceeding; 

  

	 	(3)	 “expenses” has the meaning set out in the Business Corporations Act. 

 

	21.2	 Mandatory Indemnification of Directors and Former Directors 

Subject to the Business Corporations Act, the Company must indemnify a director, former director or alternate director of the Company and his or her
heirs and legal personal representatives against all eligible penalties to which such person is or may be liable, and the Company must, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by such
person in respect of that proceeding. Each director and alternate director is deemed to have contracted with the Company on the terms of the indemnity contained in this Article 21.2. 

  
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	21.3	 Indemnification of Other Persons 

Subject to any restrictions in the Business Corporations Act, the Company may indemnify any person. 

 

	21.4	 Non-Compliance with Business Corporations Act

 The failure of a director, alternate director or officer of the Company to comply with the Business Corporations Act or these
Articles does not invalidate any indemnity to which he or she is entitled under this Part. 
  

	21.5	 Company May Purchase Insurance 

The Company may purchase and maintain insurance for the benefit of any person (or his or her heirs or legal personal representatives) who: 

 

	 	(1)	 is or was a director, alternate director, officer, employee or agent of the Company; 

 

	 	(2)	 is or was a director, alternate director, officer, employee or agent of a corporation at a time when the
corporation is or was an affiliate of the Company; 

  

	 	(3)	 at the request of the Company, is or was a director, alternate director, officer, employee or agent of a
corporation or of a partnership, trust, joint venture or other unincorporated entity; 

  

	 	(4)	 at the request of the Company, holds or held a position equivalent to that of a director, alternate director or
officer of a partnership, trust, joint venture or other unincorporated entity; 

 against any liability incurred by him or her as such
director, alternate director, officer, employee or agent or person who holds or held such equivalent position. 
  

	22.	 DIVIDENDS 

  

	22.1	 Payment of Dividends Subject to Special Rights 

The provisions of this Article 22 are subject to the rights, if any, of shareholders holding shares with special rights as to dividends. 

 

	22.2	 Declaration of Dividends 

Subject to the Business Corporations Act, the directors may from time to time declare and authorize payment of such dividends as they may deem
advisable. 
  

	22.3	 No Notice Required 

The directors need not give notice to any shareholder of any declaration under Article 22.2. 

  
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	22.4	 Record Date 

The directors may set a date as the record date for the purpose of determining shareholders entitled to receive payment of a dividend. The record date must not
precede the date on which the dividend is to be paid by more than two months. If no record date is set, the record date is 5:00 p.m. on the date on which the directors pass the resolution declaring the dividend. 

 

	22.5	 Manner of Paying Dividend 

A resolution declaring a dividend may direct payment of the dividend wholly or partly by the distribution of specific assets or of fully paid shares or of
bonds, debentures or other securities of the Company, or in any one or more of those ways. 
  

	22.6	 Settlement of Difficulties 

If any difficulty arises in regard to a distribution under Article 22.5, the directors may settle the difficulty as they deem advisable, and, in particular,
may: 
  

	 	(1)	 set the value for distribution of specific assets; 

 

	 	(2)	 determine that cash payments in substitution for all or any part of the specific assets to which any
shareholders are entitled may be made to any shareholders on the basis of the value so fixed in order to adjust the rights of all parties; and 

  

	 	(3)	 vest any such specific assets in trustees for the persons entitled to the dividend. 

 

	22.7	 When Dividend Payable 

Any dividend may be made payable on such date as is fixed by the directors. 
  

	22.8	 Dividends to be Paid in Accordance with Number of Shares 

All dividends on shares of any class or series of shares must be declared and paid according to the number of such shares held. 

 

	22.9	 Receipt by Joint Shareholders 

If several persons are joint shareholders of any share, any one of them may give an effective receipt for any dividend, bonus or other money payable in respect
of the share. 
  

	22.10	 Dividend Bears No Interest 

No dividend bears interest against the Company. 
  

	22.11	 Fractional Dividends 

If a dividend to which a shareholder is entitled includes a fraction of the smallest monetary unit of the currency of the dividend, that fraction may be
disregarded in making payment of the dividend and that payment represents full payment of the dividend. 

  
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	22.12	 Payment of Dividends 

Any dividend or other distribution payable in cash in respect of shares may be paid by cheque, made payable to the order of the person to whom it is sent, and
mailed to the address of the shareholder, or in the case of joint shareholders, to the address of the joint shareholder who is first named on the central securities register, or to the person and to the address the shareholder or joint shareholders
may direct in writing. The mailing of such cheque will, to the extent of the sum represented by the cheque (plus the amount of the tax required by law to be deducted), discharge all liability for the dividend unless such cheque is not paid on
presentation or the amount of tax so deducted is not paid to the appropriate taxing authority. 
  

	22.13	 Capitalization of Surplus 

Notwithstanding anything contained in these Articles, the directors may from time to time capitalize any surplus of the Company and may from time to time
issue, as fully paid, shares or any bonds, debentures or other securities of the Company as a dividend representing the surplus or any part of the surplus. 
  

	23.	 DOCUMENTS, RECORDS AND REPORTS 

 

	23.1	 Recording of Financial Affairs 

The directors must cause adequate accounting records to be kept to record properly the financial affairs and condition of the Company and to comply with the
Business Corporations Act. 
  

	23.2	 Inspection of Accounting Records 

Unless the directors determine otherwise, or unless otherwise determined by ordinary resolution, no shareholder of the Company is entitled to inspect or obtain
a copy of any accounting records of the Company. 
  

	24.	 NOTICES 

  

	24.1	 Method of Giving Notice 

Unless the Business Corporations Act or these Articles provides otherwise, a notice, statement, report or other record required or permitted by the
Business Corporations Act or these Articles to be sent by or to a person may be sent by any one of the following methods: 
  

	 	(1)	 mail addressed to the person at the applicable address for that person as follows: 

 

	 	(a)	 for a record mailed to a shareholder, the shareholder’s registered address; 

 

	 	(b)	 for a record mailed to a director or officer, the prescribed address for mailing shown for the director or
officer in the records kept by the Company or the mailing address provided by the recipient for the sending of that record or records of that class; 

  

	 	(c)	 in any other case, the mailing address of the intended recipient; 

  
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	 	(2)	 delivery at the applicable address for that person as follows, addressed to the person: 

 

	 	(a)	 for a record delivered to a shareholder, the shareholder’s registered address; 

 

	 	(b)	 for a record delivered to a director or officer, the prescribed address for delivery shown for the director or
officer in the records kept by the Company or the delivery address provided by the recipient for the sending of that record or records of that class; 

  

	 	(c)	 in any other case, the delivery address of the intended recipient; 

 

	 	(3)	 sending the record by fax to the fax number provided by the intended recipient for the sending of that record
or records of that class; 

  

	 	(4)	 sending the record by email to the email address provided by the intended recipient for the sending of that
record or records of that class; 

  

	 	(5)	 physical delivery to the intended recipient. 

 

	24.2	 Deemed Receipt of Mailing 

A record that is mailed to a person by ordinary mail to the applicable address for that person referred to in Article 24.1 is deemed to be received by the
person to whom it was mailed on the day, Saturdays, Sundays and holidays excepted, following the date of mailing. 
  

	24.3	 Certificate of Sending 

A certificate signed by the secretary, if any, or other officer of the Company or of any other corporation acting in that behalf for the Company stating that a
notice, statement, report or other record was addressed as required by Article 24.1, prepaid and mailed or otherwise sent as permitted by Article 24.1 is conclusive evidence of that fact. 

 

	24.4	 Notice to Joint Shareholders 

A notice, statement, report or other record may be provided by the Company to the joint shareholders of a share by providing the notice to the joint
shareholder first named in the central securities register in respect of the share. 
  

	24.5	 Notice to Trustees 

A notice, statement, report or other record may be provided by the Company to the persons entitled to a share in consequence of the death, bankruptcy or
incapacity of a shareholder by: 
  

	 	(1)	 mailing the record, addressed to them: 

 

	 	(a)	 by name, by the title of the legal personal representative of the deceased or incapacitated shareholder, by the
title of trustee of the bankrupt shareholder or by any similar description; and 

  

	 	(b)	 at the address, if any, supplied to the Company for that purpose by the persons claiming to be so entitled; or

  
 - 38 - 

	 	(2)	 if an address referred to in paragraph (1)(b) has not been supplied to the Company, by giving the notice in a
manner in which it might have been given if the death, bankruptcy or incapacity had not occurred. 

  

	25.	 SEAL AND EXECUTION OF DOCUMENTS 

 

	25.1	 Who May Attest Seal 

Except as provided in Articles 25.2 and 25.3, the Company’s seal, if any, must not be impressed on any record except when that impression is attested by
the signatures of: 
  

	 	(1)	 any two directors; 

  

	 	(2)	 any officer, together with any director; 

 

	 	(3)	 if the Company only has one director, that director; or 

 

	 	(4)	 any one or more directors or officers or persons as may be determined by the directors. 

 

	25.2	 Sealing Copies 

For the purpose of certifying under seal a certificate of incumbency of the directors or officers of the Company or a true copy of any resolution or other
document, despite Article 25.1, the impression of the seal may be attested by the signature of any director or officer. 
  

	25.3	 Mechanical Reproduction of Seal 

The directors may authorize the seal to be impressed by third parties on share certificates or bonds, debentures or other securities of the Company as they may
determine appropriate from time to time. To enable the seal to be impressed on any share certificates or bonds, debentures or other securities of the Company, whether in definitive or interim form, on which facsimiles of any of the signatures of the
directors or officers of the Company are, in accordance with the Business Corporations Act or these Articles, printed or otherwise mechanically reproduced, there may be delivered to the person employed to engrave, lithograph or print
such definitive or interim share certificates or bonds, debentures or other securities one or more unmounted dies reproducing the seal and the chair of the board or any senior officer together with the secretary, treasurer, secretary-treasurer, an
assistant secretary, an assistant treasurer or an assistant secretary-treasurer may in writing authorize such person to cause the seal to be impressed on such definitive or interim share certificates or bonds, debentures or other securities by the
use of such dies. Share certificates or bonds, debentures or other securities to which the seal has been so impressed are for all purposes deemed to be under and to bear the seal impressed on them. 

  
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	25.4	 Execution of Documents Generally 

The directors may from time to time by resolution appoint any one or more persons, officers or directors for the purpose of executing any instrument, document
or agreement in the name of and on behalf of the Company for which the seal need not be affixed, and if no such person, officer or director is appointed, then any one officer or director of the Company may execute such instrument, document or
agreement. 
  

	26.	 PROHIBITIONS 

  

	26.1	 Definitions 

In this Article 26: 
  

	 	(1)	 “designated security” means: 

 

	 	(a)	 a voting security of the Company; 

 

	 	(b)	 a security of the Company that is not a debt security and that carries a residual right to participate in the
earnings of the Company or, on the liquidation or winding up of the Company, in its assets; or 

  

	 	(c)	 a security of the Company convertible, directly or indirectly, into a security described in paragraph
(a) or (b); 

  

	 	(2)	 “security” has the meaning assigned in the Securities Act (British Columbia); 

 

	 	(3)	 “voting security” means a security of the Company that: 

 

	 	(a)	 is not a debt security, and 

 

	 	(b)	 carries a voting right either under all circumstances or under some circumstances that have occurred and are
continuing. 

  

	26.2	 Application 

Article 26.3 does not apply to the Company if and for so long as it is a public company or a pre-existing reporting
company which has the Statutory Reporting Company Provisions as part of its Articles or to which the Statutory Reporting Company Provisions apply. 
  

	26.3	 Consent Required for Transfer of Shares or Designated Securities 

No share or designated security may be sold, transferred or otherwise disposed of without the consent of the directors and the directors are not required to
give any reason for refusing to consent to any such sale, transfer or other disposition. 
  

	27.	 SUBORDINATE VOTING SHARES 

 

	27.1	 Special Rights and Restrictions 

  
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 An unlimited number of Subordinate Voting Shares, without nominal or par value, having attached thereto the
special rights and restrictions as set forth below: 
  

	 	(1)	 Voting Rights. Holders of Subordinate Voting Shares shall be entitled to notice of and to attend
at any meeting of the shareholders of the Company, except a meeting of which only holders of another particular class or series of shares of the Company shall have the right to vote. At each such meeting holders of Subordinate Voting Shares shall be
entitled to one vote in respect of each Subordinate Voting Share held. 

  

	 	(2)	 Alteration to Rights of Subordinate Voting Shares. As long as any Subordinate Voting Shares
remain outstanding, the Company will not, without the consent of the holders of the Subordinate Voting Shares by separate special resolution, prejudice or interfere with any right or special right attached to the Subordinate Voting Shares.

  

	 	(3)	 Dividends. Holders of Subordinate Voting Shares shall be entitled to receive as and when declared
by the directors, dividends in cash or property of the Company. 

  

	 	(4)	 Liquidation, Dissolution or Winding-Up. In the event of the
liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, or in the event of any other distribution of assets of the Company among its shareholders for the purpose of
winding up its affairs, the holders of Subordinate Voting Shares shall, subject to the prior rights of the holders of any shares of the Company ranking in priority to the Subordinate Voting Shares (including, without restriction, the Super Voting
Shares) be entitled to participate rateably along with all other holders of Subordinate Voting Shares and the Proportionate Voting Shares (on an as converted to Proportionate Voting Shares basis). 

 

	 	(5)	 Rights to Subscribe; Pre-Emptive Rights. The holders of
Subordinate Voting Shares are not entitled to a right of first refusal to subscribe for, purchase or receive any part of any issue of Subordinate Voting Shares, or bonds, debentures or other securities of the Company now or in the future.

  

	 	(6)	 Subdivision or Consolidation. No subdivision or consolidation of the Subordinate Voting Shares
shall occur unless, simultaneously, the Subordinate Voting Shares, the Proportionate Voting Shares and the Super Voting Shares are subdivided or consolidated in the same manner or such other adjustment is made so as to maintain and preserve the
relative rights of the holders of the shares of each of the said classes. 

  

	 	(7)	 Conversion: In the event that an offer is made to purchase Proportionate Voting Shares and the
offer is one which is required, pursuant to applicable securities legislation or the rules of a stock exchange on which the Proportionate Voting Shares are then listed, to be made to all or substantially all the holders of Proportionate Voting
Shares in a given province or territory of Canada to which these requirements apply, each Subordinate Voting Share shall become 

  
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	 	convertible at the option of the holder into Proportionate Voting Shares at the inverse of the Conversion Ratio then in effect at any time while the offer is in effect until one day after the time prescribed by
applicable securities legislation for the offeror to take up and pay for such shares as are to be acquired pursuant to the offer. The conversion right may only be exercised in respect of Subordinate Voting Shares for the purpose of depositing the
resulting Proportionate Voting Shares pursuant to the offer, and for no other reason. In such event, the Company’s transfer agent shall deposit the resulting Proportionate Voting Shares on behalf of the holder. Should the Proportionate Voting
Shares issued upon conversion and tendered in response to the offer be withdrawn by shareholders or not taken up by the offeror, or should the offer be abandoned or withdrawn, the Proportionate Voting Shares resulting from the conversion shall be
automatically reconverted, without further intervention on the part of the Company or on the part of the holder, into Subordinate Voting Shares at the Conversion Ratio then in effect. 

 

	 	(8)	 Conversion of Subordinate Voting Shares. Upon an Offer. In the event that an offer is made to
purchase Proportionate Voting Shares, and the offer is one which is required, pursuant to applicable securities legislation or the rules of a stock exchange, if any, on which the Proportionate Voting Shares are then listed, to be made to all or
substantially all the holders of Proportionate Voting Shares in a province or territory of Canada to which the requirement applies, each Subordinate Voting Share shall become convertible at the option of the holder into Proportionate Voting Shares
at the inverse of the Conversion Ratio (as defined in Article 29) then in effect, at any time while the offer is in effect until one day after the time prescribed by applicable securities legislation for the offeror to take up and pay for such
shares as are to be acquired pursuant to the offer. The conversion right may only be exercised in respect of Subordinate Voting Shares for the purpose of depositing the resulting Proportionate Voting Shares under the offer, and for no other reason.
In such event, the transfer agent for the Subordinated Voting Shares shall deposit under the offer the resulting Proportionate Voting Shares, on behalf of the holder. To exercise such conversion right, the holder or his or its attorney duly
authorized in writing shall 

  

	 	(a)	 give written notice to the transfer agent of the exercise of such right, and of the number of Subordinate
Voting Shares in respect of which the right is being exercised; 

  

	 	(b)	 deliver to the transfer agent the share certificate or certificates representing the Subordinate Voting Shares
in respect of which the right is being exercised, if applicable; and 

  

	 	(c)	 pay any applicable stamp tax or similar duty on or in respect of such conversion. 

 

  
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 No share certificates representing the Proportionate Voting Shares, resulting from the
conversion of the Subordinate Voting Shares will be delivered to the holders on whose behalf such deposit is being made. If Proportionate Voting Shares, resulting from the conversion and deposited pursuant to the offer, are withdrawn by the holder
or are not taken up by the offeror, or the offer is abandoned, withdrawn or terminated by the offeror or the offer otherwise expires without such Proportionate Voting Shares being taken up and paid for, the Proportionate Voting Shares resulting from
the conversion will be re-converted into Subordinate Voting Shares at the then Conversion Ratio and a share certificate representing the Subordinate Voting Shares will be sent to the holder by the transfer
agent. In the event that the offeror takes up and pays for the Proportionate Voting Shares resulting from conversion, the transfer agent shall deliver to the holders thereof the consideration paid for such shares by the offeror. 

 

	27.2	 Take-Over Bid 

In the event that a take-over bid is made for the Super Voting Shares, the holders of Subordinate Voting Shares will not be entitled to participate in such
offer and may not tender their shares into any such offer, whether under the terms of the Subordinate Voting Shares or under any coattail trust or similar agreement. Notwithstanding this, any take-over bid for solely the Super Voting Shares is
unlikely given that by the terms of the investment agreement described below, upon any sale of Super Voting Shares to an unrelated third party purchaser, such Super Voting Shares will be redeemed by the Corporation for their issue price. 

 

	28.	 SUPER VOTING SHARES 

 

	28.1	 Special Rights and Restrictions 

An unlimited number of Super Voting Shares, without nominal or par value, having attached thereto the special rights and restrictions as set forth below: 

 

	 	(1)	 Voting Rights. Holders of Super Voting Shares shall be entitled to notice of and to attend at any
meeting of the shareholders of the Company, except a meeting of which only holders of another particular class or series of shares of the Company shall have the right to vote. At each such meeting holders of Super Voting Shares shall be entitled to
2,000 votes in respect of each Super Voting Share held provided that if at any time the aggregate number of issued and outstanding (i) non-voting common shares (the “Cresco Corp.
Redeemable Shares”) in the capital of Cresco U.S. Corp. (“Cresco Corp.”) and (ii) Common Units (the “Cresco Redeemable Units”) in the capital of Cresco Labs, LLC (“Cresco”) (or such
securities of any successor to Cresco Corp. or Cresco as may exist from time to time) beneficially owned, directly or indirectly by a holder of the Super Voting Shares (the “Holder”) and the Holder’s predecessor or transferor,
permitted transferees and permitted successors, and any prior tranferor’s transferor and any prior permitted transferee’s permitted transferee (the “Holder’s Group”), divided by the aggregate number of (i) Cresco
Corp. Redeemable Shares and (ii) Cresco Redeemable Units beneficially owned, directly or indirectly by the Holders and the Holder’s Group as at the date of completion of the business combination transaction involving, among others, the
Company, Cresco Corp. and Cresco be less than 50% (the “Triggering Event”), the Holder shall from that time forward 

  
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	 	be entitled to 50 votes in respect of each Super Voting Share held. The holders of Super Voting Shares shall, from time to time upon the request of the Company, provide to the Company evidence as to such holders’
direct and indirect beneficial ownership (and that of its permitted transferees and permitted successors) of Cresco Corp. Redeemable Shares and Cresco Redeemable Units to enable the Company to determine the voting entitlement of the Super Voting
Shares. For the purposes of these calculations, a Holder shall be deemed to beneficially own Cresco Corp. Redeemable Shares held by an intermediate company or fund in proportion to their equity ownership of such company or fund. 

 

	 	(2)	 Alteration to Rights of Super Voting Shares. As long as any Super Voting Shares remain
outstanding, the Company will not, without the consent of the holders of the Super Voting Shares by separate special resolution, prejudice or interfere with any right or special right attached to the Super Voting Shares. Consent of the holders of a
majority of the outstanding Super Voting Shares shall be required for any action that authorizes or creates shares of any class having preferences superior to or on a parity with the Super Voting Shares. In connection with the exercise of the voting
rights contained in this paragraph (b) each holder of Super Voting Shares will have one vote in respect of each Super Voting Share held. 

  

	 	(3)	 Dividends. The holder of Super Voting Shares shall not be entitled to receive dividends.

  

	 	(4)	 Liquidation, Dissolution or Winding-Up. In the event of the
liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, or in the event of any other distribution of assets of the Company among its shareholders for the purpose of
winding up its affairs, the Company will distribute its assets firstly and in priority to the rights of holders of any other class of shares of the Company (including the holders of Subordinate Voting Shares and the Proportionate Voting Shares) to
return the issue price of the Super Voting Shares to the holders thereof and if there are insufficient assets to fully return the issue price to the holders of the Super Voting Shares such holders will receive an amount equal to their pro rata share
in proportion to the issue price of their Super Voting Shares along with all other holders of Super Voting Shares. The holders of Super Voting Shares shall not be entitled to receive directly or indirectly as holders of Super Voting Shares any other
assets or property of the Company and their sole rights will be to the return of the issue price of such Super Voting Shares in accordance with this Article 28.1(4). 

 

	 	(5)	 Rights to Subscribe; Pre-Emptive Rights. The holders of Super
Voting Shares are not entitled to a right of first refusal to subscribe for, purchase or receive any part of any issue of Subordinate Voting Shares, or bonds, debentures or other securities of the Company not convertible into Super Voting
Shares, now or in the future. 

  

	 	(6)	 Subdivision or Consolidation. No subdivision or consolidation of the Super Voting Shares shall
occur unless, simultaneously, the Super Voting Shares, Proportionate Voting Shares and the Subordinate Voting Shares are subdivided or consolidated in the same manner, so as to maintain and preserve the relative rights of the holders of the shares
of each of the said classes. 

  
 - 44 - 

	 	(7)	 Redemption Rights. Upon the occurrence of a Triggering Event, the Company has the right to redeem
all or some of the Super Voting Shares from the Holder and Holder’s Group who caused the Triggering Event to occur, by providing two days prior written notice to the Holder and Holder’s Group of such Super Voting Shares, for an amount
equal to the issue price for each Super Voting Share, payable in cash to the holders of the Super Voting Shares so redeemed. The Company need not redeem Super Voting Shares on a pro-rata basis among the
Holders or Holder’s Group. Holders of Super Voting Shares to be redeemed by the Company shall surrender the certificate or certificates representing such Super Voting Shares to the Company at its records office duly assigned or endorsed for
transfer to the Company (or accompanied by duly executed share transfers relating thereto). Each surrendered certificate shall be cancelled, and the Company shall thereafter make payment of the applicable redemption amount by certified cheque, bank
draft or wire transfer to the registered holder of such certificate; provided that, if less than all the Super Voting Shares represented by a surrendered certificate are redeemed then a new share certificate representing the unredeemed balance of
Super Voting Shares represented by such certificate shall be issued in the name of the applicable registered holder of the cancelled share certificate. If on the applicable redemption date the redemption price is paid (or tendered for payment) for
any of the Super Voting Shares to be redeemed then on such date all rights of the holder in the Super Voting Shares so redeemed and paid or tendered shall cease and such redeemed Super Voting Shares shall no longer be deemed issued and outstanding,
regardless of whether or not the holder of such Super Voting Shares has delivered the certificate(s) representing such securities to the Company, and from and after such date the certificate formerly representing the retracted Super Voting Shares
shall evidence the only the right of the former holder of such Super Voting Shares to receive the redemption price to which such holder is entitled. 

  

	 	(8)	 Transfer Restrictions. No Super Voting Share may be transferred by the holder thereof unless such
transfer is to an Immediate Family Member or a transfer for purposes of estate or tax planning to a company or person that is wholly beneficially owned by such holder or Immediate Family Members of such holder or which such holder or Immediate
Family Members of such holder are the sole beneficiaries thereof (in each case, a “Permitted Transfer”). In order to be effective, any Permitted Transfer shall require the prior written consent of the Company. 

For the purposes of this Article 28.1(8), “Immediate Family Member” means with respect to any individual, each parent (whether
by birth or adoption), spouse (including if such person is legally married to such individual, lives in civil union with such individual or is a common law partner with such individual, as defined in the Income Tax Act (Canada), as amended),
child or other descendants (whether by birth or adoption) of such individual, each spouse of any of the aforementioned persons, each trust created solely for the benefit of such individual and/or one or more of the aforementioned persons. For
greater certainty, a person who was a spouse of an individual within the meaning of this paragraph shall continue to be considered a spouse of such individual after the death of such individual. 

  
 - 45 - 

 To supplement the rights, privileges, restrictions and conditions attached to the Super Voting Shares, the
Company and Charlie Bachtell, Joe Caltabiano, Robert M. Sampson, Brian McCormack and Dominic Sergi being the initial holders of Super Voting Shares (the “Founders”), entered into an investment agreement which, among other things,
provides that (i) each Super Voting Share will be transferable only to the holder’s immediate family members or an affiliated entity or a transfer to the other Founder or an entity affiliated with the other Founder, and (ii) upon any sale
of Super Voting Shares to a third party purchaser not listed in clause (i), such Super Voting Shares will immediately be redeemed by the Company for their issue price. 
  

	29.	 PROPORTIONATE VOTING SHARES 

 

	29.1	 Special Rights and Restrictions 

An unlimited number of Proportionate Voting Shares, without nominal or par value, having attached thereto the special rights and restrictions as set forth
below: 
  

	 	(1)	 Voting Rights. Holders of Proportionate Voting Shares shall be entitled to notice of and to
attend at any meeting of the shareholders of the Company, except a meeting of which only holders of another particular class or series of shares of the Company shall have the right to vote. At each such meeting, holders of Proportionate Voting
Shares will be entitled to one vote in respect of each Subordinate Voting Share into which such Proportionate Voting Share could ultimately then be converted, which for greater certainty, shall initially be equal to 200 votes per Proportionate
Voting Share (subject to adjustment at the discretion of the Board, depending upon the ratios necessary to preserve foreign private issuer status in accordance with Article 29.1(6)(c)). 

 

	 	(2)	 Alteration to Rights of Proportionate Voting Shares. As long as any Proportionate Voting Shares
remain outstanding, the Company will not, without the consent of the holders of the Proportionate Voting Shares and Super Voting Shares by separate special resolution, prejudice or interfere with any right or special right attached to the
Proportionate Voting Shares. Consent of the holders of a majority of the outstanding Proportionate Voting Shares and Super Voting Shares shall be required for any action that authorizes or creates shares of any class having preferences superior to
or on a parity with the Proportionate Voting Shares. In connection with the exercise of the voting rights contained in this Article 29.1(2) each holder of Proportionate Voting Shares will have one vote in respect of each Proportionate Voting Share
held. 

  
 - 46 - 

	 	(3)	 Dividends. The holder of Proportionate Voting Shares shall have the right to receive dividends,
out of any cash or other assets legally available therefor, pari passu (on an as converted basis, assuming conversion of all Proportionate Voting Shares into Subordinate Voting Shares at the Conversion Ratio) as to dividends and any
declaration or payment of any dividend on the Subordinate Voting Shares. No dividend will be declared or paid on the Proportionate Voting Shares unless the Company simultaneously declares or pays, as applicable, equivalent dividends (on an as- converted to Subordinate Voting Share basis) on the Subordinate Voting Shares. 

  

	 	(4)	 Liquidation, Dissolution or Winding-Up. In the event of the
liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, or in the event of any other distribution of assets of the Company among its shareholders for the purpose of
winding up its affairs, the holders of Proportionate Voting Shares will, subject to the prior rights of the holders of any shares of the Company ranking in priority to the Proportionate Voting Shares (including, without restriction, the Super Voting
Shares), be entitled to participate rateably along with all other holders of Proportionate Voting Shares (on an as-converted to Subordinate Voting Share basis) and the Subordinate Voting Shares.

  

	 	(5)	 Rights to Subscribe; Pre-Emptive Rights. The holders of
Proportionate Voting Shares are not entitled to a right of first refusal to subscribe for, purchase or receive any part of any issue of Subordinate Voting Shares, or bonds, debentures or other securities of the Company now or in the future.

  

	 	(6)	 Conversion. Subject to the Conversion Restrictions set forth in this Article 29.1(6), holders of
Proportionate Voting Shares Holders shall have conversion rights as follows (the “Conversion Rights”): 

  

	 	(a)	 Right to Convert. Each Proportionate Voting Share shall be convertible, at the option of the
holder thereof, at any time after the date of issuance of such share at the office of the Company or any transfer agent for such shares, into fully paid and nonassessable Subordinate Voting Shares as is determined by multiplying the number of
Proportionate Voting Shares by the Conversion Ratio applicable to such share, determined as hereafter provided, in effect on the date the Proportionate Voting Share is surrendered for conversion. The initial “Conversion
Ratio” for shares of Proportionate Voting Shares shall be 200 Subordinate Voting Shares, subject to adjustment for each Proportionate Voting Share; provided, however, that the Conversion Ratio shall be subject to adjustment as set forth
in Articles 29.1(6)(h) and (i). 

  

	 	(b)	 Conversion Limitations. Before any holder of Proportionate Voting Shares shall be entitled to
convert the same into Subordinate Voting Shares, the Board of Directors (or a committee thereof) shall designate an officer of the Company to determine if any Conversion Limitation set forth in Article 29.1(6)(d) shall apply to the conversion of
Proportionate Voting Shares. 

  

	 	(c)	 Foreign Private Issuer Protection Limitation: The Company will use commercially reasonable
efforts to maintain its status as a “foreign private 

  
 - 47 - 

 issuer” (as determined in accordance with Rule
3b-4 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Accordingly, the Company shall not effect any conversion of Proportionate Voting Shares, and the holders of
Proportionate Voting Shares shall not have the right to convert any portion of the Proportionate Voting Shares, pursuant to Article 29.1(6) or otherwise, to the extent that after giving effect to all permitted issuances after such conversions of
Proportionate Voting Shares, the aggregate number of Subordinate Voting Shares, Super Voting Shares and Proportionate Voting Shares held of record, directly or indirectly, by residents of the United States (as determined in accordance with Rules 3b-4 and 12g3-2(a) under the Exchange Act (“U.S. Residents”)) would exceed forty percent (40%) (the “40% Threshold”) of the
aggregate number of Subordinate Voting Shares, Super Voting Shares and Proportionate Voting Shares issued and outstanding after giving effect to such conversions (the “FPI Protective Restriction”). The Board may by resolution
increase the 40% Threshold to an amount not to exceed 50% and in the event of any such increase all references to the 40% Threshold herein, shall refer instead to the amended threshold set by such resolution. 

 

	 	(d)	 Conversion Limitations. In order to effect the FPI Protection Restriction, each holder of
Proportionate Voting Shares will be subject to the 40% Threshold based on the number of Proportionate Voting Shares held by such holder as of the date of the initial issuance of the Proportionate Voting Shares and thereafter at the end of each of
the Company’s subsequent fiscal quarters (each, a “Determination Date”), calculated as follows: 

 X
= [(A x 0.4) - B] x (C/D) Where on the Determination Date: 
 X = Maximum number of Subordinate Voting Shares available for issue upon
conversion of Proportionate Voting Shares by a holder. 
 A = The number of Subordinate Voting Shares, Proportionate Voting Shares and Super
Voting Shares issued and outstanding on the Determination Date. 
 B = The aggregate number of Subordinate Voting Shares, Proportionate
Voting Shares and Super Voting Shares held of record, directly or indirectly, by U.S. Residents on the Determination Date. 
 C = The
aggregate number of Proportionate Voting Shares held by holder on the Determination Date. 
 D = The aggregate number of all Proportionate
Voting Shares on the Determination Date. 

  
 - 48 - 

 For purposes of this subsection (g)(iv), the Board of Directors (or a committee thereof)
shall designate an officer of the Company to determine as of each Determination Date: (A) the 40% Threshold and (B) the FPI Protective Restriction. Within thirty (30) days of the end of each Determination Date (a “Notice of
Conversion Limitation”), the Company will provide each holder of record a notice of the FPI Protection Restriction and the impact the FPI Protective Provision has on the ability of each holder to exercise the right to convert Proportionate
Voting Shares held by the holder. To the extent that requests for conversion of Proportionate Voting Shares subject to the FPI Protection Restriction would result in the 40% Threshold being exceeded, the number of such Proportionate Voting Shares
eligible for conversion held by a particular holder shall be prorated relative to the number of Proportionate Voting Shares submitted for conversion. To the extent that the FPI Protective Restriction contained in this Article 29.1(6)(d) applies, the
determination of whether Proportionate Voting Shares are convertible shall be in the sole discretion of the Company. 
  

	 	(e)	 Mandatory Conversion. Notwithstanding anything contained herein to the contrary, the Company may
require each holder of Proportionate Voting Shares to convert all, and not less than all, the Proportionate Voting Shares at the applicable Conversion Ratio (a “Mandatory Conversion”) if at any time all the following
conditions are satisfied (or otherwise waived by special resolution of holders of Proportionate Voting Shares): 

  

	 	(A)	 the Subordinate Voting Shares issuable upon conversion of all the Proportionate Voting Shares are registered
for resale and may be sold by the holders thereof pursuant to an effective registration statement and/or prospectus covering the Subordinate Voting Shares under the United States Securities Act of 1933, as amended (the “U.S. Securities
Act”); 

  

	 	(B)	 the Company is subject to the reporting requirements of Section 13 or 15(d) of the U.S. Exchange Act; and

  

	 	(C)	 the Subordinate Voting Shares are listed or quoted (and are not suspended from trading) on a recognized North
American stock exchange or by way of reverse takeover transaction on the Toronto Stock Exchange, the TSX Venture Exchange, the Canadian Securities Exchange or Aequitas NEO Exchange (or any other stock exchange recognized as such by the Ontario
Securities Commission). 

  
 - 49 - 

 The Company will issue or cause its transfer agent to issue each holder of Proportionate
Voting Shares of record a Mandatory Conversion Notice at least 20 days prior to the record date of the Mandatory Conversion, which shall specify therein, (i) the number of Subordinate Voting Shares into which the Proportionate Voting Shares are
convertible and (ii) the address of record for such holder. On the record date of a Mandatory Conversion, the Company will issue or cause its transfer agent to issue each holder of record on the Mandatory Conversion Date certificates
representing the number of Subordinate Voting Shares into which the Proportionate Voting Shares are so converted and each certificate representing the Proportionate Voting Shares shall be null and void. 

 

	 	(f)	 Disputes. In the event of a dispute as to the number of Subordinate Voting Shares issuable to a
Holder in connection with a conversion of Proportionate Voting Shares, the Company shall issue to the Holder the number of Subordinate Voting Shares not in dispute and resolve such dispute in accordance with Article 29.1(6)(m).

  

	 	(g)	 Mechanics of Conversion. Before any holder of Proportionate Voting Shares shall be entitled to
convert Proportionate Voting Shares into Subordinate Voting Shares, the holder thereof shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Company or of any transfer agent for Subordinate Voting Shares, and
shall give written notice to the Company at its principal corporate office, of the election to convert the same and shall state therein the name or names in which the certificate or certificates for Subordinate Voting Shares are to be issued (each,
a “Conversion Notice”). The Company shall (or shall cause its transfer agent to), as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or
certificates for the number of Subordinate Voting Shares to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the
Proportionate Voting Shares to be converted, and the person or persons entitled to receive the Subordinate Voting Shares issuable upon such conversion shall be treated for all purposes as the record holder or holders of such Subordinate Voting
Shares as of such date. 

  

	 	(h)	 Adjustments for Distributions. In the event the Company shall declare a distribution to holders
of Subordinate Voting Shares payable in securities of other persons, evidences of indebtedness issued by the Company or other persons, assets (excluding cash dividends) or options or rights not otherwise causing adjustment to the Conversion Ratio (a
“Distribution”), then, in each such case for the purpose of this Article 29.1(6)(h), the holders of Proportionate Voting Shares shall be entitled to a proportionate share of any such Distribution as though they were the holders of
the number of Subordinate Voting Shares into which their Proportionate Voting Shares are convertible as of the record date fixed for the determination of the holders of Subordinate Voting Shares entitled to receive such Distribution.

  
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	 	(i)	 Recapitalizations; Stock Splits. If at any time or from time-to-time, the Company shall (i) effect a recapitalization of the Subordinate Voting Shares; (ii) issue Subordinate Voting Shares as a dividend or other distribution on outstanding
Subordinate Voting Shares; (iii) subdivide the outstanding Subordinate Voting Shares into a greater number of Subordinate Voting Shares; (iv) consolidate the outstanding Subordinate Voting Shares into a smaller number of Subordinate Voting
Shares; or (v) effect any similar transaction or action (each, a “Recapitalization”), provision shall be made so that the holders of Proportionate Voting Shares shall thereafter be entitled to receive, upon conversion of
Proportionate Voting Shares, the number of Subordinate Voting Shares or other securities or property of the Company or otherwise, to which a holder of Subordinate Voting Shares deliverable upon conversion would have been entitled on such
Recapitalization. In any such case, appropriate adjustment shall be made in the application of the provisions of this Article 29.1(6) with respect to the rights of the holders of Proportionate Voting Shares after the Recapitalization to the end that
the provisions of this Section Article 29.1(6) (including adjustment of the Conversion Ratio then in effect and the number of Proportionate Voting Shares issuable upon conversion of Proportionate Voting Shares) shall be applicable after that event
as nearly equivalent as may be practicable. 

  

	 	(j)	 No Fractional Shares and Certificate as to Adjustments. No fractional Subordinate Voting Shares
shall be issued upon the conversion of any Proportionate Voting Shares and the number of Subordinate Voting Shares to be issued shall be rounded up or down to the nearest whole Subordinate Voting Share. Whether or not fractional Subordinate Voting
Shares are issuable upon such conversion shall be determined on the basis of the total number of shares of Proportionate Voting Shares the holder is at the time converting into Subordinate Voting Shares and the number of Subordinate Voting Shares
issuable upon such aggregate conversion. 

  

	 	(k)	 Adjustment Notice. Upon the occurrence of each adjustment or readjustment of the Conversion Ratio
pursuant to this Article 29.1(6), the Company, at its expense, shall promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to each holder of Proportionate Voting Shares a certificate setting
forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, upon the written request at any time of any holder of Proportionate Voting Shares, furnish or cause to be
furnished to such holder a like certificate setting forth (A) such adjustment and readjustment, (B) the Conversion Ratio for Proportionate Voting Shares at the time in effect, and (C) the number of Subordinate Voting Shares and the
amount, if any, of other property which at the time would be received upon the conversion of a Proportionate Voting Share. 

  
 - 51 - 

	 	(l)	 Effect of Conversion. All Proportionate Voting Shares which shall have been surrendered for
conversion as herein provided shall no longer be deemed to be outstanding and all rights with respect to such shares shall immediately cease and terminate at the time of conversion (the “Conversion Time”), except only the right of
the holders thereof to receive Subordinate Voting Shares in exchange therefor and to receive payment in lieu of any fraction of a share otherwise issuable upon such conversion. 

 

	 	(m)	 Disputes. Any holder of Proportionate Voting Shares that beneficially owns more than 5% of the
issued and outstanding Proportionate Voting Shares may submit a written dispute as to the determination of the conversion ratio or the arithmetic calculation of the conversion ratio of Proportionate Voting Shares to Subordinate Voting Shares, the
Conversion Ratio, 40% Threshold, FPI Protective Restriction or the Beneficial Ownership Limitation by the Company to the Board of Directors with the basis for the disputed determinations or arithmetic calculations. The Company shall respond to the
holder within five (5) Business Days of receipt, or deemed receipt, of the dispute notice with a written calculation of the conversion ratio, the Conversion Ratio, 40% Threshold, FPI Protective Restriction or the Beneficial Ownership
Limitation, as applicable. If the holder and the Company are unable to agree upon such determination or calculation of the Conversion Ratio, FPI Protective Restriction or the Beneficial Ownership Limitation, as applicable, within five
(5) Business Days of such response, then the Company and the holder shall, within one (1) Business Day thereafter submit the disputed arithmetic calculation of the conversion ratio, Conversion Ratio, FPI Protective Restriction or the
Beneficial Ownership Limitation to the Company’s independent, outside accountant. The Company, at the Company’s expense, shall cause the accountant to perform the determinations or calculations and notify the Company and the holder of the
results no later than five (5) Business Days from the time it receives the disputed determinations or calculations. Such accountant’s determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable
error. 

  

	 	(7)	 Subdivision or Consolidation. No subdivision or consolidation of the Proportionate Voting Shares
shall occur unless, simultaneously, the Subordinate Voting Shares, the Proportionate Voting Shares and the Super Voting Shares are subdivided or consolidated in the same manner or such other adjustment is made so as to maintain and preserve the
relative rights of the holders of the shares of each of the said classes. 

  
 - 52 - 

	 	(8)	 Notices of Record Date. Except as otherwise provided under applicable law, in the event of any
taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend) or other distribution, any right to subscribe for,
purchase or otherwise acquire any shares of any class or any other securities or property, or to receive any other right, the Company shall mail to each holder of Proportionate Voting Shares, at least 20 days prior to the date specified therein, a
notice specifying the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and the amount and character of such dividend, distribution or right. 

  
 - 53 -atra-ex1030_10.htm

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS NOT MATERIAL, AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

Exhibit 10.30

 

Execution Version

 

RESEARCH, DEVELOPMENT AND LICENSE AGREEMENT

This LICENSE AGREEMENT (“Agreement”) is entered into as of December 4, 2020 (the “Effective Date”) by and between:

Bayer AG (“Bayer”), a company organized under the Laws of Germany, whose office is situated at Müllerstraße 178, 13353 Berlin, Germany,

and

Atara Biotherapeutics, Inc.(“Atara”), a company organized under the Laws of Delaware, whose office is situated at 611 Gateway Blvd, Suite 900, South San Francisco, CA 94080, U.S.A.

Bayer and Atara shall also each individually be referred to herein as a “Party”, and shall be referred to collectively as the “Parties”.

Recitals

WHEREAS, Bayer is engaged in the development, commercialization and manufacture of pharmaceutical products;

WHEREAS, Atara owns - partly through ownership, partly through acquired license - certain patent rights, know how and other intellectual property relating to Licensed Cell Therapeutics (as hereinafter defined), and is developing the Licensed Cell Therapeutics for the treatment or prevention of cancer;

WHEREAS, Bayer desires to obtain from Atara, and Atara is willing to grant to Bayer, an exclusive license and, to the extent that it controls the intellectual property through acquired license, an exclusive sublicense under certain intellectual property rights Controlled by Atara to Develop, Commercialize and Manufacture the Licensed Cell Therapeutics in the Field in the Territory, on the terms and subject to the conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the recitals above and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

DEFINITIONS

For purposes of this Agreement, the terms defined in this section and used in this Agreement with a capital initial letter shall have the respective meanings set forth below.

 

 

1.01“Acquired Affiliate”, “Acquired Competing Products” and “Acquisition Date” each have the meaning as set forth in Section 15.4.1.

1.02“Agreement” has the meaning set forth in the introductory paragraphs of this Agreement.

1.03“Affiliate” means any business entity controlled by, controlling or under common control with a Party at the Effective Date or at any time during the term of this Agreement and as long as such control remains. For the purpose of this definition, a business entity shall be deemed to “control” another business entity if it:

	
 
	
(i)
	
owns directly or indirectly more than fifty percent (50%) of the outstanding voting securities, capital stock or other comparable equity or ownership interest of such business entity having the power to vote on or direct the affairs of such business entity, as applicable (or such lesser percentage which is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction), or 

	
 
	
(ii)
	
possesses, directly or indirectly, the power to direct or cause the direction of the policies and management of such business entity, as applicable, whether by the ownership of stock, by contract or otherwise.

1.04“Alliance Manager” has the meaning set forth in Section 3.6.2 below.

1.05“Anti-Corruption Laws” means the United States Foreign Corrupt Practices Act, the United Kingdom Bribery Act, and any other Laws of a similar nature for the prevention of fraud, corruption, racketeering, money laundering and terrorism, in each case as they may be amended from time to time.

1.06“ATA2271” means the autologous CAR-T product comprising an m912 scFv binder, a 1XX signaling domain and a co-expressed PD1-DNR element that is the subject of the Phase 1 Clinical Trial having ClinicalTrials.gov identifier NCT04577326.

1.07“ATA2271 Phase 1 Clinical Trial” means the Phase 1, first in human clinical research program relating to ATA2271 for the treatment of mesothelioma (ClinicalTrials.gov identifier NCT04577326) in the manner outlined within the ATA2271 Plan. 

1.08“ATA2271 Plan” means the plan attached to this Agreement as Exhibit 1.8, which sets forth the activities for the development of ATA2271, including the ATA2271 Phase 1 Clinical Trial [[***]], as such plan may be amended by the JSC in accordance with Section 3.6.3.2(vi). 

1.09“ATA3271” means Atara’s allogeneic version of the ATA2271 CAR-T product based on Atara’s proprietary technology entailing the use of T cells activated against EBV.

1.10“Atara” has the meaning set forth in the introductory paragraphs of this Agreement.

1.11“Atara Indemnified Parties” has the meaning set forth in Section 16.1 below.

1.12“Atara Cell Therapeutic” means ATA2271, ATA3271 [[***]].

 

Page 2

 

1.13“Atara FTE Rate” means the annual rate of [[***]] per FTE employed or contracted by Atara  or any of its Affiliates based upon the fully burdened cost of such personnel, such amount to be adjusted as of [[***]] of each following Calendar Year, by the percentage increase or decrease, if any, in the Consumer Price Index (Urban Wage Earners and Clerical Workers, U.S. City Average, All Items, 1982-1984 = 100, published by the United States Department of Labor, Bureau of Statistics, or its successor equivalent index) through [[***]] of the prior year. 

1.14“Atara Results” means any Collaboration Results solely made by Atara’s employees, agents, representatives or contractors, in each case in the course of or as a result of the performance of the Collaboration Activities.  For clarity, “Atara Results” includes any and all data generated by MSK for ATA2271. 

1.15“Bayer” has the meaning set forth in the introductory paragraphs of this Agreement.

1.16“Bayer Background Improvement” means any Results that are solely related to the Bayer Background Technology and not specific to the Collaboration Activities.

1.17“Bayer Background Technology” means any Know How, Patent Right or other intellectual property right that is both (a) Controlled by Bayer (i) as of the Effective Date or (ii) during the Collaboration Term and generated outside the performance of the Collaboration Activities; and (b) is used by Bayer, or provided by Bayer to Atara for use, in the performance of the Collaboration Activities. 

1.18“Bayer FTE Rate” means the annual rate of [[***]] per FTE employed or contracted by Bayer or any of its Affiliates based upon the fully burdened cost of such personnel, such amount to be adjusted as of [[***]] of each following Calendar Year, by the percentage increase or decrease, if any, in the price index for German F&E personnel within the pharmaceutical industry, as published in the annual publication “Chemiewirtschaft in Zahlen” edited by Verband der Chemischen Industrie e.V. of the previous year.

1.19“Bayer Improvement IP” has the meaning set forth in Section 11.2.2.4.

1.20“Bayer Indemnified Parties” has the meaning set forth in Section 16.2 below.

1.21“Bayer Marks” means any proprietary name, logotype, trade dress or other Marks of Bayer or any of its Affiliates and any Product Marks (including any Mark that includes the name “Bayer” or the “Bayer Cross”).

1.22“Bayer Party” means Bayer, its Sublicensee(s) and any of Bayer’s or its Sublicensee’s Affiliates.

1.23“Bayer Results” means any Collaboration Results solely made by Bayer’s employees, agents, representatives or contractors.

1.24“Biosimilar Product” means, on a country-by-country basis, with respect to a Licensed Product being sold in any country, a product that (a) contains the same or substantially the same active cellular agent irrespective of its form as such Licensed Product regardless of the 

 

Page 3

 

dosage and formulation of such product; (b) obtained Regulatory Approval by means of an Abbreviated New Drug Application filing or another procedure for establishing equivalence to such Licensed Product that does not require clinical testing (other than a bioequivalence or substantially similar study); and (c) is legally marketed in such country by an entity other than a Bayer Party.

1.25“BioVec” means BioVec Pharma, Inc., with a place of business located at 1202 rue du Capitaine Bernier, Quebec, QC, Canada.

1.26“BioVec Upstream License” means the License Agreement between Atara and BioVec Pharma, Inc., dated October 7, 2020.

1.27“BLA” means with respect to a Licensed Product, a filing serving to apply for Regulatory Approval including, in the United States, a Biologics License Application (as defined in the FDC Act and the regulations promulgated thereunder (21 CFR 600 et seq)), in the European Union, a Marketing Approval Application (MAA), or, in any other jurisdiction, a comparable filing, and, in each case, any amendments and supplements thereto.

1.28“Business Day” means a day other than a Saturday, Sunday or any day on which commercial banks located in (i) San Francisco, California, U.S.A., (ii) Berlin, Germany or (iii) Leverkusen, Germany are authorized or obligated by law to be closed.

1.29“Calendar Year” means a period of twelve (12) consecutive months corresponding to the calendar year commencing on the first day of January and ending on the last day of December. 

1.30“CAR” means [[***]]. 

1.31“CAR-T(s)” means [[***]].  

1.32“cGCP” means regulations and published guidelines related to current good clinical practices that relate to the conduct of clinical studies in humans including the regulations set forth in 21 CFR 50, 54, 56, 312 and 314 promulgated by the FDA, the ICH Harmonised Tripartite Guideline for Good Clinical Practice and similar standards, guidelines and regulations promulgated or otherwise required by other Regulatory Authorities, in each case, as they may be amended from time to time.

1.33“cGLP” means regulations and published guidelines related to current good laboratory practices that relate to the conduct of preclinical studies in animals including the regulations set forth in 21 CFR 58 promulgated by the FDA and similar standards, guidelines and regulations promulgated or otherwise required by other Regulatory Authorities, in each case, as they may be amended from time to time.

1.34“cGMP” means regulations and published guidelines related to current good manufacturing practices that relate to the testing, manufacturing, processing, packaging, holding or distribution of drug or biologic drug substances and finished drugs or biologics including the regulations set forth in 21 CFR 210 and 211 promulgated by the FDA and 

 

Page 4

 

similar standards, guidelines and regulations promulgated or otherwise required by other Regulatory Authorities, in each case, as they may be amended from time to time.

1.35“Change of Control” means with respect to a Party:

	
 
	
(i)
	
that a majority of the outstanding voting securities of such Party become beneficially owned directly or indirectly by any Third Party (or group of Third Parties acting in concert) that did not own a majority of the voting securities of such Party as of the Effective Date; 

	
 
	
(ii)
	
that the possession of the power to direct or cause the direction of the management and policies of such Party, whether through ownership of the outstanding voting securities or by contract or otherwise, becomes vested in one or more individuals or entities that did not possess such power as of the Effective Date;

	
 
	
(iii)
	
that such Party consolidates with or merges into another corporation or entity, or any corporation or entity consolidates with or merges into such Party, in either event pursuant to a transaction in which more than fifty percent (50%) of the total voting power of the securities outstanding of the surviving entity normally entitled to vote in elections of directors is not held by the individuals or entities holding at least fifty percent (50%) of the outstanding securities of such entity preceding such consolidation or merger; or

	
 
	
(iv)
	
such Party conveys, transfers or leases all or substantially all of the assets of such Party to which the subject matter of this Agreement relates to any Third Party. 

1.36“Clinical Trials” means Phase 1 Clinical Trials, Phase 2 Clinical Trials and / or Phase 3 Clinical Trials. 

1.37“CMC Activities” means the activities specified in Section 3.1.2. 

1.38“CMC Plan” means the plan attached to this Agreement as Exhibit 1.38 [[***]] as such plan may be amended by both Parties in accordance with Section 3.5. 

1.39“Collaboration Activities” means each of (a) the Research Activities and (b) the CMC Activities.

1.40“Collaboration Plan(s)” means the Research Plan and the CMC Plan.

1.41“Collaboration Results” means any and all Results except for the Bayer Background Improvements.

1.42“Collaboration Term” means, with respect to each of (a) the Research Activities and (b) the CMC Activities, the period for the performance of such Collaboration Activities, as set forth in the relevant Collaboration Plan.

 

Page 5

 

1.43“Combination Licensed Product” means a product for use in the Field sold in a single stock keeping unit (SKU) for a single selling price, wherein such product utilizes, contains, incorporates or is made through the use of one or more Licensed Cell Therapeutic(s) or Licensed Product(s) in combination with one or more other products, components or ingredients including compounds, that are not Licensed Cell Therapeutics or Licensed Products, and are not required for the independent function of the included Licensed Cell Therapeutic(s) or Licensed Product(s). For clarity, a Combination Licensed Product shall constitute a Licensed Product, when that defined term is used herein, provided that [[***]]. 

1.44“Commercialize” or “Commercialization” means all activities undertaken relating to use for commercial purposes, [[***]].

1.45“Commercially Reasonable Efforts” means [[***]]. 

1.46“Company Core Data Sheet” means the global reference labeling document used to direct the content of country-specific labeling for Licensed Products.

1.47“Competing Product” means [[***]].

1.48“Complete Invention Disclosure” means a description of the invention which shall include, in reasonable detail, a description of (i) database searches on state of the art undertaken; (ii) relevant prior art references found including an assessment of their relevance to the invention, (iii) the technical problem underlying the invention, (iv) the solution to this problem, (v) the technical, economic and commercial advantages of the solution particularly as compared to prior solutions to, and / or attempts to solve the problem (vi) the names and private addresses of the inventors, (vii) the individual contribution of each inventor to the invention, (viii) examples, all materials and methods used in connection with performing the invention, (ix) any and all sources of funding for the work done on the invention, (x) the date, if any, the invention was first publicly disclosed, (xi) any publications discussing or describing the invention; and (xi) any encumbrance related to the invention. 

1.49“Confidential Information” has the meaning set forth in Section 12.1.1 below.

1.50“Control” means, with respect to any Patent Rights or Know How and subject to the second sentence of this Section 1.50, the ownership or possession by a Party of the right, power and authority to license or sublicense such Patent Rights or Know How, as applicable, on the terms and conditions set forth in this Agreement, without violating the terms of any then-existing agreement with any Third Party. In the event a Party enters into a transaction or series of transactions with a Third Party acquiror that constitutes a Change of Control of such Party, in no event shall any Know How or Patent Rights that 

	
 
	
1)
	
were immediately prior to the consummation of such Change of Control controlled by the Third Party acquiror or its affiliates, or 

	
 
	
2)
	
[[***]],  

be deemed “Controlled” by the acquired Party (or such Party’s other Affiliates) for purposes of this Section 1.50 or otherwise be included in any of the licenses or 

 

Page 6

 

covenants granted or made under this Agreement by the acquired Party (or such Party’s other Affiliates); [[***]]. 

1.51“Derivative Cell Therapeutic” means any cell therapeutic [[***]]. 

1.52“Develop” or “Development” means to engage in research and development activities (including preclinical studies, translational studies, Clinical Trials, CMC development and regulatory activities). 

1.53“Disclosing Party” has the meaning set forth in Section 12.1.1 below.

1.54“EBV” means Epstein-Barr Virus.

1.55“Effective Date” has the meaning set forth in the introductory paragraphs of this Agreement.

1.56“EMA” means the European Medicines Agency or any successor agency thereto. 

1.57“Exclusive Technology” means all Licensed Technology other than the Non-Exclusive Technology.

1.58“Executive Sponsor” means, (a) with respect to Atara, [[***]], and (b) with respect to Bayer,[[***]], in each case (a) and (b), or such other person designated by one Party to the other Party in writing from time to time. 

1.59“Existing Agreement(s)” means those agreements listed in Exhibit 1.59 hereto. 

1.60“Exploit” or “Exploitation” means to use, Develop, have Developed, Commercialize, have Commercialized, Manufacture and have Manufactured.

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

1.62“FDC Act” means the United States Food, Drug and Cosmetic Act, as amended from time to time, and regulations promulgated thereunder.

1.63“Field” means[[***]].

1.64“Field Infringement” has the meaning set forth in Section 11.7.1.

1.65“Final Bayer Offer” has the meaning as set forth in Section 2.5.2.6.

1.66“Final Third Party Offer Notice” has the meaning as set forth in Section 2.5.2.5.

1.67“First Commercial Sale” means, on a country-by-country basis, the first invoiced sale of Licensed Product by a Bayer Party to a Third Party after grant of a Regulatory Approval in the applicable country or jurisdiction[[***]]. 

1.68“Force Majeure” has the meaning as set forth in Section 19.1 below. 

 

Page 7

 

1.69“FTE” means, with respect to a Party, the equivalent of a full-time employee  employed or contracted by such Party to the performance of research, development, or other activities under this Agreement based upon a total of [[***]] per year of research, development, or other work. For clarity, the Parties intend the FTE to be a unit of measurement used to calculate the amount of time dedicated to the performance of this Agreement by a Party. One FTE may constitute work performed by an individual whose time is dedicated solely to this Agreement (but, for clarity, under no circumstances may more than one (1) FTE per year be allocated to one and the same individual) or may comprise the efforts of several individuals, each of whom dedicates only part of his or her time to work under this Agreement.

1.70“Improvements” mean any invention, discovery, development or modification, whether or not patentable, that (a) is made with respect to a Licensed Cell Therapeutic or Licensed Product, or the Development, Commercialization or Manufacturing thereof, (b) is conceived, reduced to practice, discovered, or developed at any time during the term of this Agreement, and (c) is reasonably useful for the Exploitation of such Licensed Cell Therapeutic or Licensed Product, including any enhancement in the efficiency, operation, manufacture, cost of manufacture, ingredients, preparation, presentation, formulation, means of delivery or dosage, use, or methods of use or packaging of such Licensed Cell Therapeutic or Licensed Product, any discovery or development of any new or expanded indications for such Licensed Cell Therapeutic or Licensed Product, any discovery or development that improves the stability, safety or efficacy of such Licensed Cell Therapeutic or Licensed Product or would, if Commercialized, replace or displace such Licensed Cell Therapeutic or Licensed Product for the indication for which such Licensed Cell Therapeutic or Licensed Product has received Regulatory Approval or for which Bayer is seeking Marketing Approval in the Field.

1.71“IND” means a filing with a Regulatory Authority that must be made prior to commencing clinical testing in humans including, (a) in the United States, an Investigational New Drug application (as defined in the FDC Act and the regulations promulgated thereunder (21 CFR 312.1 et seq)), (b) in the European Union, a Clinical Trial Application (CTA), or (c) in any other jurisdiction, a comparable filing and, in each case (a) through (c), any amendments and supplements thereto.

1.72“IND Readiness” means [[***]].  

1.73“Indemnified Party” has the meaning set forth in Section 16.3.1 below.

1.74“Indemnifying Party” has the meaning set forth in Section 16.3.1 below.

1.75“Invention” has the meaning set forth in Section 11.3 below. 

1.76“Joint Invention” means any Invention within the Collaboration Results made jointly by one or more employees, officers, directors, consultants or directors of Atara and by one or more employees, officers, directors, consultants or directors of a Bayer Party.

1.77“Joint Results Patent” means any Patent Right filed, sought or obtained covering Joint Inventions. 

 

Page 8

 

1.78“Joint Results” means any Collaboration Results generated jointly by one or more employees, officers, directors, consultants or directors of Atara and by one or more employees, officers, directors, consultants or directors of a Bayer Party.

1.79“Joint Steering Committee” or “JSC” has the meaning set forth in Section 3.6.3 below.

1.80“Know How” means all intellectual property (other than Patent Rights), including all proprietary and confidential commercial, technical, scientific and other information, inventions (whether patentable or not), trade secrets, knowledge, technology, methods, processes, practices, formulae, instructions, skills, techniques, procedures, experiences, ideas, technical assistance, designs, drawings, assembly procedures, computer programs, specifications, data and results (including biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, pre-clinical, clinical, safety, manufacturing and quality control data and know how, including study designs and protocols), in all cases whether in written, electronic or any other tangible or non-tangible form, including information related to materials, samples, assays, compounds, compositions or formulations.  [[***]].

1.81“Knowledge” means, with respect to a Party, [[***]]. 

1.82“Laws” means all applicable laws (including Anti-Corruption Laws), statutes, rules, regulations (including cGCP, cGLP and cGMP), orders, judgments and / or ordinances of any Regulatory Authority, governmental authority or court or any subpoena of a competent court having effect from time to time in the Territory.

1.83“Licensed Cell Therapeutic” means any Atara Cell Therapeutic or Derivative Cell Therapeutic.

1.84“Licensed Know How” means any Know How relating to Atara Cell Therapeutic(s) and / or Licensed Product(s) comprising an Atara Cell Therapeutic [[***]] for the development, manufacture and / or commercialization of Licensed Products comprising an Atara Cell Therapeutic, which are owned by or otherwise under the Control of Atara as of the Effective Date or at any time during the term of this Agreement until (i) [[***]] and (ii) [[***]]. Licensed Know How includes the Know How listed in Exhibit 1.84, but excludes (a) Know How only Controlled through the MOFFITT Upstream Licenses and (b) New Technology. 

1.85“Licensed Patent Rights” means any of the following:

	
 
	
(i)
	
the Patent Rights listed in Exhibit 1.85 hereto;

	
 
	
(ii)
	
any other Patent Rights Controlled by Atara or any of its Affiliates as of the Effective Date or at any time during the term of this Agreement, that cover the Atara Cell Therapeutic(s) and / or Licensed Product(s) comprising an Atara Cell Therapeutic, including the development, manufacture and / or commercialization thereof, but excluding (a) Patent Rights only Controlled through the MOFFITT Upstream Licenses and (b) Patent Rights constituting New Technology; and

 

Page 9

 

	
 
	
(iii)
	
any Patent Right Controlled by Atara or any of its Affiliates belonging to the same patent family of the Patent Rights included in clauses (i) and (ii), whether existing at the Effective Date or thereafter, including any Patent Rights filed from or claiming the same priority of the Patent Rights included in clauses (i) and (ii) in any country or region of the Territory. 

1.86“Licensed Product” means any product in the Field in the Territory comprising a Licensed Cell Therapeutic (alone or with other ingredients) and covered by at least one (1) Valid, Practiced Claim of any Licensed Patents or directly generated with the use of Licensed Know How.

One Licensed Product, as opposed to another Licensed Product, shall be defined as follows: 

	
 
	
(i)
	
any (a) modifications or improvements in the [[***]], and / or (b) modifications or improvements of [[***]] shall be deemed only variations of the same Licensed Product [[***]]; whereas 

	
 
	
(ii)
	
any Licensed Product containing a cell that has been reengineered to [[***]], [[***]] shall be deemed another Licensed Product [[***]]. 

1.87“Licensed Technology” means the Licensed Patent Rights and Licensed Know How.

1.88“Losses” has the meaning set forth in Section 16.1 below.

1.89“Major Markets” means [[***]].

1.90“Mandatory Public Communication” means a Public Communication which is required by Laws, Securities Exchange Rules or a Regulatory Authority’s valid request.

1.91“Manufacture” and “Manufacturing” means all operations required to manufacture, test, release, handle, package, store and destroy a product, including formulation and process development, all subsequent packaging and labeling activities, and quality control and other testing.

1.92“Mark” means any word, name, symbol, color, designation or device or any combination thereof for use in the course of trade, including all trademarks, service marks, brand mark, logos, slogans, trade dress, logos, slogans, designs, brand names, trade names, business symbols, domain names and all other indicia of origin, together with all translations, adaptations, derivations, and combinations thereof, and all registrations, applications for registration thereof and social media handles associated therewith, together with any extensions and renewals thereof and all goodwill associated therewith.

1.93“Materials” has the meaning set forth in Section 2.6.1 below.

1.94“Mesothelin” means [[***]]. 

 

Page 10

 

1.95“MOFFITT” means H.Lee Moffitt Cancer Center and Research Institute, Inc. with a place of business located at 12902 Magnolia Drive, Tampa, Florida 33612, U.S.A.

1.96“MOFFITT Option Period” has the meaning set forth in Section 2.5.1.

1.97“MOFFITT Upstream Licenses” means the licenses granted by MOFFITT to Atara as of the Effective Date under the agreements listed in Exhibit 1.97, as may be amended from time to time.  [[***]].

1.98“MSK” means Memorial Sloan Kettering Cancer Center with a place of business located at 1275 York Avenue, New York, New York 10065, U.S.A. 

1.99“MSK CAR-T License” means the agreement specified under (i) of Exhibit 1.102 (“MSK Upstream Licenses).

1.100“MSK MSLN License” means the agreement specified under (iv) of Exhibit 1.102 (“MSK Upstream Licenses”), as amended.

1.101“MSK PD1-DNR License” means the agreement specified under (v) of Exhibit 1.102 (“MSK Upstream Licenses”). 

1.102“MSK Upstream Licenses” means the licenses granted by MSK to Atara under the agreements listed in Exhibit 1.102, as may be amended from time to time.  [[***]].

1.103“Net Sales” shall mean the gross amount [[***]] for sales of a Licensed Product (or Combination Licensed Product) to Third Parties, less the following deductions: 

	
 
	
(i)
	
Taxes (including sales, value-added, consumption and similar taxes), duties and other governmental charges actually incurred paid or collected and remitted to the relevant tax or other authority for the sale, export, import, transfer or use of Licensed Products; 

	
 
	
(ii)
	
credits, reserves or allowances granted for (a) damaged, outdated, returned, rejected, withdrawn or recalled Licensed Product, (b) wastage replacement and short-shipments; (c) billing errors and (d) indigent patient and similar programs (e.g., price capitation); 

	
 
	
(iii)
	
cash, trade, volume, and prompt payment discounts actually granted and deducted solely on account of sales of Licensed Products (or Combination Products); 

	
 
	
(iv)
	
rebates actually paid to individual or group purchasers of Licensed Products that are solely on account of the purchase of such Licensed Products; 

	
 
	
(v)
	
rebates, fees, discounts or other charges paid as required by government or public healthcare legislation granted to governmental healthcare organizations, purchasing groups, wholesalers, distributors, selling agents (excluding any sales representatives of a selling party), group purchasing organizations, Third Party payors, other contractees and managed care entities; 

 

Page 11

 

	
 
	
(vi)
	
retroactive price reductions actually granted to the Third Party applicable to sales of the Licensed Product; 

	
 
	
(vii) 
	
[[***]] percent [[***]] lump sum of the gross amount invoiced to cover transportation, freight, distribution and shipping (including insurance), packaging and handling expenses; and 

	
 
	
(viii)
	
[[***]] percent [[***]] lump sum of the gross amount invoiced to cover uncollectible amounts accrued, with respect to the sale of Licensed Products. 

Gross sales of Licensed Products shall be deemed to have been made on [[***]] in accordance with their standard accounting procedures. For clarity, Net Sales shall include [[***]].

All deductions from gross sales except those defined above as [[***]] may be made on an accrual basis. For the avoidance of doubt, any provision release after the end of the Royalty Term shall be royalty bearing. 

For the purpose of calculating Net Sales, the Parties recognize that: (a) customers may include [[***]]; and (b) in such cases, [[***]] can be deducted from the total gross amount invoiced in order to calculate Net Sales.

In the event that a Licensed Product is sold in the form of a Combination Licensed Product, then, for the purpose of calculating royalties due, Net Sales will be adjusted by multiplying by the fraction A/(A+B) where A is the gross per unit invoice price of the Licensed Product, if sold separately, and B is the gross per unit invoice price of any other active ingredient(s) in the combination, if sold separately.

If, on a country-by-country basis, the other active ingredient(s) in the combination are not sold separately in that country, Net Sales will be adjusted by multiplying by the fraction A/C where A is the gross per unit invoice price of the Licensed Product, if sold separately, and C is the gross per unit invoice price of the Combination Licensed Product.  In each case, the gross per unit invoice price shall be those applicable during the relevant Quarter or, if sales of both the Licensed Product and the other product(s) did not occur in such Quarter, then in the most recent Quarter in which sales of both occurred. If, on a country-by-country basis, neither the Licensed Product nor the other active ingredient(s) of the Combination Licensed Product are sold separately in such country, then the fraction by which the Net Sales value shall be multiplied shall be determined between the Parties in good faith.  

1.104“New Technology” means Patent Rights and Know How that are [[***]] for the Exploitation of the Licensed Cell Therapeutics or the Licensed Products and come into Atara’s Control through upstream licenses agreed after the Effective Date with licensors other than MSK and NIH.

1.105“New Technology Offer” has the meaning set forth in Section 2.3.

 

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1.106“NIH” means the National Institutes of Health, which is the agency of the United States of America (U.S.A.) Public Health Service (PHS) within the Department of Health and Human Services (HHS) of the U.S.A.

1.107“NIH Benchmarks” has the meaning set forth in Section 4.4.2.

1.108“NIH Upstream License” means the licenses granted by NIH to Atara under the patent license agreement effective December 18, 2018, as amended by Amendment No. 1 effective December 1, 2020, and as may be further amended from time to time. For clarity, Atara may not agree to an amendment of the NIH Upstream License other than in accordance with Atara’s covenants and other obligations under this Agreement (subject in all cases to NIH’s unilateral right to amend pursuant to the terms of the NIH Upstream License).

1.109“Non-Exclusive Technology” means (a) those Patent Rights and Know How constituting the Licensed Patent Rights and Licensed Know How in-licensed by Atara pursuant to the [[***]]; for clarity, Non-Exclusive Technology excludes Collaboration Results (as such term is defined in [[***]]) relating to manufacturing processes, methods or assays specific to Licensed Products, which are exclusively licensed by [[***]] to Atara; and (b) those Patent Rights and Know How constituting the Licensed Patent Rights and Licensed Know How in‐licensed by Atara pursuant to [[***]] for which, as of the Effective Date, [[***]] has granted to Atara a non-exclusive, sublicensable license. 

1.110“Objection Notice” has the meaning as set forth in Section 2.5.2.5.

1.111“Other CAR-T” means [[***]]. 

1.112“Party” or “Parties” has the meaning set forth in the introductory paragraphs of this Agreement.

1.113“Patent Challenge” has the meaning set forth in Section 18.2.3.

1.114“Patent Rights” mean:

	
 
	
(i)
	
all national, regional and international patents, patent applications, utility models, design patents and design rights filed in any country of the world including provisional patent applications;

	
 
	
(ii)
	
all patents, patent applications, utility models, design patents and design rights filed either from such patents, patent applications, utility models, design patents, design rights or provisional patent applications or claiming priority from either of these, including any continuation, continuation-in part, division, provisional, converted provisional and continued prosecution applications, or any substitute application;

	
 
	
(iii)
	
any patent issued with respect to or in the future issued from any such patent applications; 

 

Page 13

 

	
 
	
(iv)
	
any and all extensions or restorations by existing or future extension or restoration mechanisms, including reissues, re-examinations, and extensions (including any supplementary protection certificates and the like) of the foregoing patents, patent applications, utility models, design patents and design rights; and 

	
 
	
(v)
	
any foreign counterparts of the foregoing.

1.115“Payment Date” has the meaning set forth in Section 9.6.2 below.

1.116“Phase 1 Clinical Trial” means a human clinical trial of a Licensed Cell Therapeutic, the principal purpose of which is to determine initial tolerance or safety of such Licensed Cell Therapeutic in the target patient population, including, in the United States, a human clinical trial as described in 21 CFR 312.21(a), or, in a country other than the United States, a similar clinical study prescribed by the applicable Regulatory Authority.

1.117“Phase 2 Clinical Trial” means a human clinical trial of a Licensed Cell Therapeutic, the principal purpose of which is to evaluate the effectiveness of such Licensed Cell Therapeutic in the target patient population, including, in the United States, a human clinical trial as described in 21 CFR 312.21(b), or, in a country other than the United States, a similar clinical study prescribed by the applicable Regulatory Authority.

1.118“Phase 3 Clinical Trial” means a human clinical trial of a Licensed Cell Therapeutic, on a sufficient number of subjects that is designed to form the basis for the BLA for Regulatory Approval of the Licensed Cell Therapeutic including, in the United States, a human clinical trial as described in 21 CFR 312.21(c), or, in a country other than the United States, a similar clinical trial prescribed by the applicable Regulatory Authority, but not under accelerated approval regulations in the United States as described in 21 CFR 601, subpart E, or similar conditions of an applicable Regulatory Authority in a country other than the United States. 

1.119“Preliminary Bayer Offer”, “Preliminary Third Party Offer” and “Preliminary Third Party Offer Period” each have the meaning as set forth in Section 2.5.2.3.

1.120“Pricing Approval” means all applicable governmental pricing and reimbursement approvals required from the relevant Regulatory Authority to market and sell and / or obtain reimbursement for, the Licensed Product in a particular country or jurisdiction.

1.121“Product Marks” means any Mark Controlled by a Bayer Party and used in connection with the Development, Commercialization or Manufacture of the Licensed Product; for the avoidance of doubt, Product Marks do not include the Bayer Marks.

1.122“Program Transfer” has the meaning set forth in Section 18.3.4.2.

1.123“Public Communication(s)” means any communication by a Party, whether made in writing, orally or in any other form, (i) which is directed to the general public, media, analysts, investors, attendees of industry conferences or financial analyst calls or similar audiences (including press releases, statements in corporate material, on internet sites or in investor relations material and any written or oral response to media inquiries or to questions in 

 

Page 14

 

shareholder meetings or financial analyst calls), (ii) which refers to the transaction contemplated under this Agreement (including signing of this Agreement, reach of milestones, outcome of clinical trials, Regulatory Approval and / or launch of a Licensed Product, sales figures and development of the relevant markets, but excluding, for the sake of clarity, promotional claims regarding any Licensed Cell Therapeutic and / or Licensed Product), and (iii) which does not qualify as Scientific Communication. 

1.124“Quarter” means each period of three (3) months ending on March 31, June 30, September 30, or December 31, and “Quarterly” shall be construed accordingly.

1.125“Receiving Party” has the meaning set forth in Section 12.1.1 below.

1.126“Regulatory Approval” means any approval, license, registration or authorization required from the relevant Regulatory Authority to market and sell the Licensed Product in a particular country or jurisdiction; for the avoidance of doubt, Regulatory Approval does not include any Pricing Approvals.

1.127“Regulatory Authority” means the FDA, the EMA or any supranational, national or local agency, authority, department, inspectorate, ministry official, parliament or public or statutory person of any government of any country having jurisdiction over any of the activities contemplated by this Agreement or the Parties, or any successor bodies thereto.

1.128“Regulatory Documentation” means all applications, registrations, licenses, authorizations and approvals, all correspondence submitted to or received from Regulatory Authorities (including minutes and official contact reports relating to any communications with any Regulatory Authority) and all supporting documents and all clinical studies and tests relating to the Licensed Product, and all data included in the foregoing, including all INDs, BLAs, Regulatory Approvals, regulatory drug lists, adverse events files and complaints files.

1.129“Research Activities” has the meaning set forth in Section 3.1.1.

1.130“Research Plan” means the plan attached to this Agreement as Exhibit 1.130, [[***]], as such plan may be amended by both Parties in accordance with Section 3.5.

1.131“Results” means any Know How and related Patent Rights that are generated in the course of or as a result of the performance of the Collaboration Activities; for clarity, Results include all Collaboration Results and Bayer Background Improvements.

1.132“Royalty Term” means, on a country-by-country basis and Licensed Product-by-Licensed Product basis, the period commencing with the First Commercial Sale of such Licensed Product in the relevant country, and ending upon the later of:

	
 
	
(i)
	
twelve (12) years from the First Commercial Sale of such Licensed Product in such country; or

	
 
	
(ii)
	
expiration or termination of the last to expire Valid, Practiced Claim of a Licensed Patent covering such Licensed Product in such country that claims the [[***]] of such Licensed Product. 

 

Page 15

 

1.133“Scientific Communication” means any communication by a Party (including documents, posters, manuscripts and abstracts, and including, with respect to Atara, any communication by MSK relating to ATA2271), whether made in writing, orally or in any other form,  (i) which is directed to the general public, the scientific community, physicians, attendees of industry conferences and / or similar audiences, (ii) which is of a purely scientific or medical nature and does not qualify as promotional material under Laws, and (iii) which includes any data or results of any clinical trial or any other information regarding or related to the Licensed Cell Therapeutic and / or Licensed Product. 

1.134“Securities Exchange Rules” means the applicable rules or regulations of a securities exchange or listing entity on which its publicly-traded securities are listed.

1.135“Sublicensee” means a Third Party to which Atara and/or Bayer has granted a sublicense in accordance with Section 2.1 and/or Section 2.2 of this Agreement, in each case, as the context may require.

1.136“Sublicense Income” means [[***]] received by Bayer or Bayer Affiliates from Sublicensees (other than Bayer Affiliates) as license fee for the right to Develop and / or Commercialize any [[***]].

1.137“Systemic Product” has the meaning set forth in Section 9.4.1.

1.138“Terminated Product” has the meaning set forth in Section 18.3.4.2(v).

1.139“Territory” means all countries of the world.

1.140“Third Party” means any entity or person other than a Bayer Party or Atara or its Affiliates.

1.141“Tumor Type”, as opposed to another Tumor Type, shall be [[***]].

1.142“Upstream Licensors” means, with respect to (a) the MSK Upstream Licenses, MSK, (b), the NIH Upstream License, NIH, and (c) the BioVec Upstream License, BioVec.

1.143“U.S. Bankruptcy Code” has the meaning set forth in Section 18.5.1 below.

1.144“Valid, Practiced Claim” means, with respect to a Licensed Product in a particular country: 

	
 
	
(i)
	
a claim of an issued Patent Right covering [[***]] that would be infringed but for the licenses granted in this Agreement and that has not (A) expired or been cancelled, (B) been declared invalid or unenforceable by a decision of a court, patent office, administrative agency, or other appropriate body of competent jurisdiction, from which no appeal is or can be taken, (C) been admitted to be invalid or unenforceable through reexamination, reissue, disclaimer or otherwise, or (D) irretrievably lapsed or been abandoned, revoked or disclaimed; provided that 

 

Page 16

 

	
 
	
(ii)
	
solely with respect to Licensed Patent Rights within the MSK Upstream License, “Valid, Practiced Claim” also includes a claim of a pending patent application constituting a Licensed Patent Right that was filed and is being prosecuted in good faith, covering [[***]] that would, if a patent containing such claim issues, be infringed but for the licenses granted in this Agreement and that has not been (A) pending for more than [[***]] years, (B) abandoned or (C) finally disallowed without the possibility of appeal or re-filing of the application; provided, however, that in the case of (ii)(A), if, thereafter, a patent containing such claim issues, such claim shall thereafter be considered a Valid, Practiced Claim in accordance with subclause (i) above. 

1.145“Voluntary Public Communication” means a Public Communication which is not required by Laws, Securities Exchange Rules or a Regulatory Authority’s valid request.

1.146Additional Definitions:  The following table identifies the location of definitions set forth in various Sections of this Agreement:  

 

	
Defined Term
	
Section Reference

	
“Acquiror Group”
	
Section 15.4.5

	
“Acquisition Notice Period”
	
Section 15.4.1

	
“Alliance Sponsor”
	
Section 3.6.1

	
“Bayer Supplier Code of Conduct”
	
Section 3.3.6

	
“Cessation Notice”
	
Section 11.6.2

	
“Co-Chair”
	
Section 3.6.3.1

	
“Commercialization Plan”
	
Section 6.1.4

	
“Employee Data”
	
Section 17.4.1.3

	
“Human Data”
	
Section 17.4.1.4

	
“Human Samples”
	
Section 17.4.1.4

	
“JSC Charter”
	
Section 3.6.3.2

	
“Overpayment Amount”
	
Section 10.2.9

	
“Patent Matters”
	
Section 20.4

	
“Prosecuting Party”
	
Section 11.7.2.1

 

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“Rules”
	
Section 20.2

	
“Upfront License Payment”
	
Section 9.1

	
“VAT”
	
Section 9.7.1

 

LICENSE GRANT, TECHNOLOGY TRANSFER

1.147License Grants by Atara. 

Subject to the terms of this Agreement, Atara hereby grants to Bayer and Bayer’s Affiliates 

	
 
	
(a)
	
a royalty- and milestone- bearing license - with the right to grant sublicenses, including the right to grant further sublicenses through multiple tiers of sublicensees pursuant to Section 2.4 below - under the Licensed Technology to Exploit Licensed Cell Therapeutics and Licensed Products in the Field in the Territory. The license granted to Bayer under this Section 2.1.1 shall be exclusive (even as to Atara and its Affiliates, except to the extent necessary or reasonably useful for Atara and its Affiliates to perform its and their obligations under this Agreement) with respect to the Exclusive Technology and non-exclusive with respect to the Non-Exclusive Technology; and

	
 
	
(b)
	
a royalty-free, fully paid-up, irrevocable, perpetual, non-sublicensable, non-exclusive license under the Licensed Know How owned solely by Atara, solely for Bayer’s and Bayer’s Affiliates internal research purposes. 

	
 
	
(c)
	
Existing Agreements.  Notwithstanding anything to the contrary in this Agreement, [[***]].

1.148License Grant by Bayer.

Subject to the terms of this Agreement, Bayer hereby grants to Atara and Atara’s Affiliates  

	
 
	
(a)
	
a non-exclusive, fully paid-up, royalty-free, non-sublicensable (except to subcontractors approved in accordance with Section 3.3.6, performing work or otherwise acting on behalf of Atara) license under the Bayer Background Technology and Bayer Background Improvements for the purpose of conducting the Collaboration Activities under and in accordance with this Agreement; 

	
 
	
(b)
	
a royalty-free, fully paid-up, irrevocable, perpetual, non-exclusive license - with the right to grant sublicenses (including the right to grant further sublicenses through multiple tiers of sublicensees pursuant to Section 2.4 below) - under any Bayer Results and Joint Results that are Improvements to Atara’s proprietary technology relating to the Manufacture of EBV-sensitized T cells  for any and all purposes; and 

 

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(c)
	
a royalty-free, fully paid-up, irrevocable, perpetual, non-sublicensable license under the Know How within the Bayer Background Technology solely owned by Bayer that is disclosed by any of the Bayer Parties to Atara or Atara’s Affiliates, in each case solely for Atara’s internal research purposes.

1.149License Grant with respect to New Technology. With respect to New Technology, Atara shall: 

	
 
	
(i)
	
promptly notify Bayer of the acquisition by Atara or any of its Affiliates of any New Technology, including a description of the type of such New Technology, its potential benefits known to Atara with respect to the Exploitation of Licensed Products and [[***]]; and 

	
 
	
(ii)
	
within [[***]] after such notification, offer Bayer a license [[***]], such license to form part of the licenses granted under this Agreement, subject to any limitations resulting from the terms of the upstream license as specifically disclosed by Atara to Bayer. 

If Bayer agrees to such offer (each such offer a “New Technology Offer”) in writing, the licensed rights shall, upon Atara’s receipt of Bayer’s written acceptance, become subject to the licenses granted to Bayer under Section 2.1, provided that such licensed rights shall be subject to the terms of the applicable upstream license as specifically disclosed by Atara to Bayer. [[***]]. Notwithstanding anything to the contrary contained in this Agreement, this Section 2.3 will terminate in the event that Atara enters into a [[***]], provided that such Third Party is an entity that, immediately prior to the entering into such Change of Control transaction(s), (a) is active in the field of [[***]] and (b) has either (i) a market capitalization of at least [[***]], or (ii) reported revenue of more than [[***]] in the [[***]] month period preceding such Change of Control transaction(s).

1.150Sublicensing. To the extent that the licenses granted under Sections 2.1 and 2.2 are sublicensable, the sublicensing Party shall comply with the following obligations: 

	
 
	
(a)
	
Sublicensing Party’s Responsibility. For the avoidance of doubt, any sublicense granted hereunder shall (i) be subject to the terms of this Agreement (including, where applicable, the consent of the applicable upstream licensor) and (ii) not relieve the sublicensing Party from any of its obligations under this Agreement. In addition, any act or omission by a Sublicensee of a Party in connection with this Agreement that, if committed by such Party would be a breach of this Agreement, shall constitute a breach of this Agreement by such Party, provided that Atara shall not have the right to terminate this Agreement pursuant to Section 18.2.2 for an uncured material breach by Sublicensee if (i) such breach was not made at the direction or with the approval of Bayer or a Bayer Affiliate and (ii) upon Atara’s request, Bayer causes such Sublicensee to cure such breach within [[***]] days following such notice or, if the Sublicensee fails to cure the breach within such period, terminates the sublicense after the end of the applicable cure period within [[***]] Business Days from Bayer’s receipt of a request from Atara to terminate the sublicense. Notwithstanding the foregoing, [[***]].

 

Page 19

 

	
 
		

	
 
	
(b)
	
Notice to Atara. 

	
 
	
(i)
	
Bayer shall provide written notice thereof to Atara within [[***]] Business Days after entering into any sublicense permitted under Section 2.1.1 (other than to an Affiliate of Bayer, provided that should any such Affiliate of Bayer cease to be an Affiliate of Bayer at any time during the Term, Bayer shall within [[***]] Business Days provide written notice to Atara of the applicable sublicense to such former Bayer Affiliate). Bayer will provide to Atara a complete copy of the relevant sublicense agreement within [[***]] days following its execution; provided, however, that the terms of any such sublicense agreement may be redacted to the extent they are not necessary to assess whether Bayer is in compliance with this Agreement. In addition, and notwithstanding the above, if the sublicense agreement includes any sublicense grant from Bayer to a Third Party under the NIH Upstream License, once such sublicense agreement is substantially complete, Bayer shall promptly deliver a copy of such draft to Atara (and Atara shall promptly deliver such copy to NIH) in order to permit NIH to exercise the rights set forth in Section 4 of the NIH Upstream License, it being understood that NIH shall have at least [[***]] Business Days from delivery of such copy by Atara to review and provide comments on such draft, and Atara will promptly provide such comments, if any, to Bayer. Without limiting the foregoing, any such sublicense agreement will be subject to NIH’s consent pursuant to the NIH Upstream License, provided that, should Atara fail to provide a response to Bayer within [[***]] Business Days from delivery to Atara of the substantially complete draft referenced above, Bayer may execute and enter into such sublicense agreement. 

	
 
	
(ii)
	
Without limiting the foregoing, 

	
 
	
1)
	
any sublicense grant from Bayer to a Third Party that at the time of such grant is engaged in the Development and/or Commercialization, whether on its own or together with its affiliates or Third Parties, of any [[***]] requires Atara’s prior written approval, which approval Atara may not unreasonably withhold, condition or delay; and 

	
 
	
2)
	
any sublicense grant from Bayer to a Third Party under the NIH Upstream License requires Atara’s prior written approval, which approval Atara may only withhold on the grounds of [[***]]; and

	
 
	
3)
	
any sublicense grant from Bayer to a Third Party under the BioVec Upstream License must be in connection with a license under further Licensed Technology and requires Atara’s prior written approval, which approval Atara may only withhold on the grounds of [[***]].

provided that, with respect to (ii) and (iii) above, Atara shall use reasonable efforts to request NIH and/or BioVec to provide such approval. 

 

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1.151Options to negotiate.

	
 
	
(a)
	
Option for Sublicense under MOFFITT Upstream License. For [[***]] (the “MOFFITT Option Period”), provided that Atara has no obligation to amend or attempt to amend the MOFFITT Upstream License to extend the term thereof, Atara hereby grants to Bayer an option - which option Bayer may only exercise upon the occurrence of [[***]] - to negotiate with Atara a non-exclusive sublicense under the MOFFITT Upstream License [[***]]. Bayer may exercise such option right by written option exercise notice during the MOFFITT Option Period or the term of this Agreement, whichever ends sooner. Upon Atara’s receipt of any such option exercise notice, Atara shall within due course, but in no event later than [[***]] after receipt of the notice, offer Bayer to include the relevant MOFFITT Upstream License in the definition of “Licensed Technology” under this Agreement [[***]], which offer will include, with respect to such MOFFITT sublicense, any deviations from this Agreement that are [[***]] required to ensure consistency with the terms and conditions of the relevant MOFFITT Upstream Licenses, and conditional upon MOFFITT’s approval, in each case if and to the extent required for Atara to comply with its contractual obligations under the MOFFITT Upstream License. Atara will use [[***]] efforts to obtain MOFFITT’s approval of the sublicense grant to Bayer and, upon Bayer’s reasonable request, to negotiate with MOFFITT any further amendments which may be required to grant Bayer the right to use the relevant MOFFITT Upstream License with the same scope as the rights granted by Atara to Bayer under the Licensed Technology pursuant to Section 2.1. 

	
 
	
(b)
	
Option for Other CAR-Ts. Bayer will receive the following preferential treatment in the event that Atara or any of its Affiliates has determined to out-license or otherwise grant any Development or Commercialization rights to Third Parties (for clarity, except for ancillary rights granted to contractors, consultants, or other Third Parties engaged by Atara or any of its Affiliates to perform services for or on behalf of Atara or any of its Affiliates) under any Patent Rights or Know How covering any Other CAR-T, in each case to the extent legally possible without breaching any Laws (including on data privacy) or obligations (including contractual obligations) towards Atara’s licensors with respect to such Other CAR-T or any other Third Parties who possess any rights, interest or title in any such Other CAR-T, provided that Atara shall not agree on contractual restrictions that limit Atara’s ability to grant a license specifically to Bayer whilst not limiting Atara’s ability to grant a license to Third Parties generally (for clarity, notwithstanding Atara’s right to grant to its contractors, consultants or other Third Parties performing services for Atara or any of its Affiliates or otherwise acting on Atara’s or its Affiliates’ behalf all rights required for performance of such services): 

	
 
	
(i)
	
Subject to Section 2.5.2.9, during the [[***]] period beginning on the Effective Date, Atara will promptly inform Bayer in writing about the Other CAR-T and the availability of a license thereunder prior to [[***]] and will, upon written request of Bayer to be submitted within [[***]] Business Days upon receipt of Atara’s notification, negotiate in good faith a respective agreement with Bayer.  Notwithstanding the foregoing or anything to the contrary contained in Section 2.5.2, Atara shall, at all times, be free to enter into negotiations with any Third Parties for a license to any such Other CAR-T following notification of Bayer 

 

Page 21

 

	
 
		
pursuant to this Section 2.5.2.1 and, for clarity, Atara may continue to negotiate with any such Third Parties while separately and concurrently negotiating with Bayer for a license to any such Other CAR-T (including the same Other CAR-T), in each case subject to Bayer’s other rights under Section 2.5.2.

	
 
	
(ii)
	
Subject to Section 2.5.2.9, during the [[***]] period beginning on the Effective Date, Atara hereby additionally grants Bayer a right of [[***]] prior to any grant of rights under such Other CAR-T programs to Third Parties, as described in detail in Sections 2.5.2.3 - 2.5.2.8 below.

	
 
	
(iii)
	
If Atara reaches final agreement on a term sheet or, in the absence of any final agreement on a term sheet before a definitive agreement is drafted, on the key business terms with a Third Party with respect to the transfer of, or grant of license or rights under, any Other CAR-T (whether by assignment, license or otherwise) (a “Preliminary Third Party Offer”), Atara shall notify Bayer in writing within [[***]] days of reaching such agreement, which notice shall include [[***]] - for such Preliminary Third Party Offer (a “Preliminary Third Party Offer Notice”). Such notice shall be subject to any applicable confidentiality obligations to such Third Party; provided that Atara shall [[***]]. Bayer shall have [[***]] Business Days after Atara has delivered to Bayer such Preliminary Third Party Offer Notice to deliver a written response to Atara, which response shall include [[***]].

	
 
	
(iv)
	
If Atara determines in good faith that such Preliminary Bayer Offer is [[***]], taking into consideration all material terms thereof but not any terms undisclosed to Bayer, Atara shall so notify Bayer in writing, and (i) Atara will promptly enable Bayer to perform a customary due diligence on the applicable Other CAR- and (ii) within [[***]] days from Bayer’s receipt of such notice from Atara  – such period to be extended in good faith upon written request of Bayer if both Parties are still in active negotiations – the Parties shall use good faith efforts to [[***]].

	
 
	
(v)
	
Prior to entering into a definitive agreement with any Third Party with respect to the transfer of, or grant of license or rights under, the Other CAR-T (whether by assignment, license or otherwise, Atara shall review whether the envisaged final agreement deviates in any respect from [[***]]. In case of any such deviations, Atara shall provide Bayer with a written summary of such differences, including its assessment whether these deviations are material in any of the following manners: 

	
 
	
(vi)
	
at least [[***]] percent [[***]] deviation of [[***]] to be paid to Atara or any Affiliate of Atara up to (including) first commercial sale of a licensed product; 

	
 
	
(vii)
	
at least [[***]] percent [[***]] change of [[***]] to be paid to Atara or any Affiliate of Atara; 

	
 
	
(viii)
	
any material change of [[***]], licensed field or licensed territory; or

 

Page 22

 

	
 
		

	
 
	
(ix)
	
any material change of [[***]], supply and commercialization activities; 

(the “Final Third Party Offer Notice”). [[***]].

	
 
	
(x)
	
Bayer shall have [[***]] Business Days following Atara’s delivery to Bayer of a Final Third Party Offer Notice [[***]] to deliver a written counter-offer to Atara (a “Final Bayer Offer”), and Atara shall within [***]] Business Days upon receipt of such Final Bayer Offer determine in good faith - and provide written notice thereof to Bayer - whether the terms of such Final Bayer Offer are [[***]], taking into consideration all material terms thereof, but not any terms undisclosed to Bayer. If Atara, in its reasonable discretion based solely on a comparison of the Final Third Party Offer Notice and the Final Bayer Offer, determines that the Final Bayer Offer is [[***]], Atara shall so notify Bayer in writing, and (i) Atara will promptly enable Bayer to perform a customary due diligence on the applicable Other CAR-T and (ii) within [[***]] days from Bayer’s receipt of such notice from Atara  – such period to be extended in good faith upon written request of Bayer if both Parties are still in active negotiations – the Parties shall use good faith efforts to enter into a license agreement with respect to such Other CAR-T on the terms of the Final Bayer Offer. If Atara, in its reasonable discretion based on the principles specified above, determines that the Final Bayer Offer is [[***]], Atara shall so notify Bayer in writing.

	
 
	
(xi)
	
If Atara disagrees with Bayer’s Objection Notice or if Bayer objects within [[***]] days after receipt of notice of Atara’s determination that a Preliminary Bayer Offer or Final Bayer Offer is [[***]], the objecting Party shall notify the other Party of the dispute and the issue shall be referred to each Party’s Executive Sponsor who shall meet within [[***]] Business Days (in person, by means of telephone conference, videoconference or other means of communications) and attempt in good faith to resolve such issue within such [[***]] Business Days period (subject only to, in the case of Atara, approval of its board of directors or, in the case of Bayer, approval of the applicable management board, if required). Notwithstanding the foregoing, if [[***]].

	
 
	
(xii)
	
If, [[***]] Atara shall thereafter be free to enter into an agreement with such Third Party related to such Other CAR-T based on the Final Third Party Offer. For clarity, Bayer’s option with respect to any particular Other CAR-T shall [[***]]. 

	
 
	
(xiii)
	
Notwithstanding anything to the contrary contained in this Agreement, the options and preferential treatment granted to Bayer and Atara’s obligations under Section 2.5.2 will, at Atara’s option, terminate in the event that Atara enters into a transaction or series of transactions with a Third Party acquiror that constitutes a Change of Control of Atara, provided that such Third Party is an entity that, immediately prior to the entering into such Change of Control transaction(s), (a) is active in the field of [[***]] and (b) has either (i) a market capitalization of at least [[***]], or (ii) reported revenue of more than [[***]] in the [[***]] month period preceding such Change of Control transaction(s). Atara may exercise such option 

 

Page 23

 

	
 
		
by written notice to Bayer within [[***]] following any such Change of Control of Atara. For clarity, the foregoing sentence does not apply in the reverse scenario where Atara acquires a Third Party subject to the Change of Control definition in this Agreement. If Atara’s obligations under Sections 2.5.2.2-2.5.2.8 terminate pursuant to this Section 2.5.2.9 during the [[***]]period beginning on the Effective Date and Bayer has not acquired any rights under any Other CAR-T prior to such termination, then Atara shall pay to Bayer an amount of [[***]] within [[***]] days of receipt of the relevant invoice from Bayer, which Bayer may submit on or following the date of termination of such Atara obligations. For clarity, any exercised options under Section 2.5.2 (including all subsections thereunder) shall remain unaffected by any termination of the option rights pursuant to this Section 2.5.2.9. For clarity, and without limiting the foregoing, Section 2.5.2 (including all subsections thereunder) does not and will not apply to any grant of rights to any Third Party resulting from a transaction or series of transactions between Atara and any Third Party acquiror that constitutes a Change of Control of Atara, and Bayer will not receive the preferential treatment and option rights contemplated under Section 2.5.2 in any such scenario. 

	
 
	
(c)
	
Additional License.  To the extent Bayer wishes to obtain (a) a commercial license under any Know How or Patent Rights Controlled by Atara that is [[***]], or (b) [[***]] under Section 2.1.2, Bayer may, during the term of this Agreement, notify Atara of its desire to enter into negotiations regarding such potential license or expansion by providing written notice to Atara specifying (i) [[***]] or (ii) [[***]] license under the Know How granted to Bayer and its Affiliates under Section 2.1.2, as applicable. Upon Atara’s receipt of any such notice and if Atara so agrees in its sole discretion, the Parties shall discuss the terms of a possible license agreement with respect to the relevant intellectual property rights for which Bayer has requested a license. 

1.152Technology Transfer.

	
 
	
(a)
	
Subject to Article 7, which covers the CMC/manufacturing process transfer, within [[***]] days of the Effective Date, Atara shall, and shall cause its Affiliates to, [[***]] deliver to Bayer and / or its designated Affiliate or Sublicensee, in a mutually agreeable form, copies of all written, graphic or electronic embodiments of the Licensed Technology and related Complete Invention Disclosures as well as all cell therapeutics and other materials pertaining to [[***]] for Exploiting Licensed Cell Therapeutics and Licensed Products (hereinafter the “Materials”), [[***]]. 

	
 
	
(b)
	
Thereafter, on a continuing basis during the term of this Agreement, Atara shall, [[***]] and shall cause its Affiliates to, as soon as reasonably practicable disclose and deliver to Bayer and / or its designated Affiliate or Sublicensee, as soon as reasonably practicable, in a mutually agreeable form, copies of all written, graphic or electronic embodiments of all additional Licensed Technology and / or Complete Invention Disclosures and of all Material which comes into existence from time to time, [[***]]. 

	
 
	
(c)
	
Without prejudice to the generality of Sections 2.6.1 and 2.6.2, until [[***]] Atara shall, [[***]] at the Atara FTE Rate for each additional FTE hour, provide Bayer or its 

 

Page 24

 

	
 
		
designated Affiliate or Sublicensee with reasonable technical assistance relating to the use of the Licensed Technology for the purposes of transferring the Licensed Technology from Atara to the applicable Bayer Party, for the purposes of the applicable Bayer Party’s acquisition of expertise on the practical application of the Licensed Technology or for the provision of assistance to the applicable Bayer Party on issues arising from time to time during any Exploitation of the Licensed Technology, e.g. with respect to [[***]]. If visits of Atara’s representatives to the facilities of the applicable Bayer Party are requested, Atara shall send appropriate representatives to such facilities, provided that Bayer shall reimburse Atara for its reasonable and verifiable out-of-pocket expenses of travel and accommodation for such representatives that have been pre-approved by Bayer in writing. 

1.153Good Faith Efforts to Control Required Intellectual Property. Upon Bayer’s written request, Atara shall use good faith efforts to acquire licenses under Know How and Patent Rights that become controlled by MSK and NIH after the Effective Date, to the extent that those intellectual property rights are (i) not yet included in Atara’s licenses under the MSK Upstream Licenses and the NIH Upstream License, as applicable, and (ii) reasonably required for the Exploitation of Licensed Products. This obligation is subject to good faith agreement between Atara and Bayer on sharing of any additional license fees to be paid for the additional licenses.

1.154No Other Licenses. Except as expressly provided in this Agreement, neither Party shall be deemed, whether by estoppel, implication or otherwise, to have granted the other Party any license or other right with respect to any intellectual property rights of such Party, its Sublicensees, its upstream licensors, or its or their Affiliates. And each Party hereby covenants, on behalf of itself and its Affiliates, not to Exploit any intellectual property rights licensed to such Party or its Affiliates under this Agreement (and, to the extent such Party sublicenses any such intellectual property rights to any Sublicensees hereunder, shall cause such Sublicensees, not to Exploit any such intellectual property rights) except as expressly permitted herein.

GOVERNANCE

1.155Purpose and Scope of Collaboration. The Parties are entering into a collaboration, with the intent of 

	
 
	
(a)
	
further developing ATA3271 [[***]] (hereinafter the “Research Activities”) in accordance with the Research Plan; and

	
 
	
(b)
	
developing the CMC process for clinical supply manufacture with respect to ATA3271 (hereinafter the “CMC Activities”) in accordance with the CMC Plan. 

1.156Collaboration Plans. Each of (a) the Research Activities and (b) the CMC Activities shall be carried out during the relevant Collaboration Term in accordance with the relevant Collaboration Plan. Each Collaboration Plan sets forth the responsibilities and activities to be performed by the Parties, details regarding each of the Parties’ deliverables and timetables for delivery of such deliverables. The Collaboration Plans may be modified by the JSC in 

 

Page 25

 

accordance with Section 3.5, provided that no such modification may materially increase the other Party’s obligations under such Collaboration Plan unless the Parties have agreed to such increase in accordance with Section 21.11. To the extent any terms in any Collaboration Plan should at any time conflict with the terms of this Agreement, the terms of this Agreement shall prevail.

1.157Performance of the Collaboration Activities.

	
 
	
(a)
	
Each Party shall [[***]] perform those parts of the Collaboration Activities that it is responsible for in the manner and within the times frame set forth in the relevant Collaboration Plan and otherwise in accordance with the terms of this Agreement.

	
 
	
(b)
	
Each Party shall maintain and make available for the Collaboration Activities all laboratories, offices and other facilities that are necessary to carry out its responsibilities under the relevant Collaboration Activities pursuant to the relevant Collaboration Plan.  

	
 
	
(c)
	
Reports.

	
 
	
(i)
	
Each Party shall submit to the other Party reports on its activities under each of the (a) Research Activities and (b) CMC Activities, and shall provide to the other Party deliverables of such activities, each with information, frequency, within the timelines and with a format as specified in the relevant Collaboration Plan.

	
 
	
(ii)
	
In addition, each Party’s Alliance Manager shall, with respect to each of the (a) Research Activities and (b) CMC Activities, 

	
 
	
1)
	
provide the members of the JSC with written updates regarding its Party’s activities under the relevant Collaboration Plan, including summary results and analyses thereof, prior to each JSC meeting; and

	
 
	
2)
	
on a [[***]] basis until the end of the relevant Collaboration Term, provide the JSC with a written report regarding its Party’s activities under the relevant Collaboration Plan, including protocols, experimental procedures, results, analyses thereof and conclusions for the previous [[***]] month period (or in the case of the report at the end of the relevant Collaboration Term for the period since the previous written report) in a mutually agreed format.  

At the request of an Alliance Manager, the Alliance Managers and members of the responsible teams of both Parties will discuss any questions regarding the contents of such reports.

	
 
	
(d)
	
Records. Each Party shall prepare and maintain complete and accurate written records, in sufficient detail and in good scientific manner appropriate also for patent and regulatory purposes, pertaining to its respective activities under the Collaboration Activities. Such records shall properly reflect all work done, results achieved and inventions discovered and reduced to practice in the performance of its works under the Collaboration Activities and shall be retained by such Party for at least [[***]] years after the expiration or 

 

Page 26

 

	
 
		
termination of this Agreement, or for such longer period as may be required by any Laws. Each Party shall make such records available for inspection by the other Party at all reasonable times and deliver copies of such records to the other Party at such other Party’s reasonable request.

	
 
	
(e)
	
Place of Performance. Atara shall perform those parts of the Collaboration Activities that it is responsible for exclusively at [[***]]; as applicable.  

	
 
	
(f)
	
Subcontracting. Atara shall not subcontract any parts of the Collaboration Activities to any Third Party without the prior written consent of Bayer. Bayer, however, hereby consents to Atara’s Affiliates and, solely with respect to activities that MSK is responsible for pursuant to the ATA2271 Plan, to MSK acting as subcontractors of Atara. In case of any written consent of Bayer, if required, to the use of a specific subcontractor for a specific activity, unless explicitly otherwise agreed, the consent will be deemed given under the condition that such contractor of the other Party enters or has entered into an agreement obligating such contractor to all confidentiality, publication and intellectual property-related provisions of this Agreement, applicable to Atara. Each Party shall be solely responsible for the supervision and direction of contractors performing activities designated as such Party’s task under the Collaboration Plan and shall be solely liable for the performance of such activities by such contractors in compliance with this Agreement. Atara will impose on any subcontractor who supplies drug product or any parts thereof sustainability obligations that are substantially equivalent to the sustainability requirements specified in the Bayer Supplier Code of Conduct, which is attached hereto as Exhibit 3.3.6 (the “Bayer Supplier Code of Conduct”).

	
 
	
(g)
	
Each Party agrees to perform all its activities within the Collaboration Activities in good scientific manner and to comply with all Laws applicable to the performance of the activities that it is responsible for under the Collaboration Plans. 

	
 
	
(h)
	
Neither Party shall use in any capacity the services of anyone debarred, disqualified, blacklisted or banned or under investigations or threat of investigations by any regulatory authority for debarment, disqualification, blacklisting or any similar regulatory action in any jurisdiction anywhere in the world. Furthermore, each Party represents and warrants that neither such Party nor its employees, agents or representatives involved in the performance of the Collaboration Activities have been debarred, disqualified, blacklisted or banned by any regulatory authority, nor are they currently, to such Party’s Knowledge, the subject of such a debarment, disqualification, blacklisting or banning proceeding. During the term of the Agreement, each Party shall promptly notify the other Party should it or any of its employees, agents or representatives involved in the performance of the Collaboration Activities become the subject of such debarment, disqualification, blacklisting or banning proceeding.

	
 
	
(i)
	
Atara is expected to [[***]] organize its activities under the Collaboration Plans in a manner that [[***]] in line with the Bayer Supplier Code of Conduct, provided that in the event of any conflict between the Bayer Supplier Code of Conduct and a Collaboration Plan, the Collaboration Plan shall govern. Bayer shall have the right to audit the sustainability performance of Atara, either by written assessment (online, paper 

 

Page 27

 

	
 
		
questionnaire, etc.) or, upon reasonable advance written notice, by an onsite audit conducted at a mutually agreeable time and in a mutually agreeable manner, executed directly by Bayer or by a Third Party auditor reasonably acceptable to Atara, provided that any such Third Party auditor has entered into an agreement obligating such Third Party auditor to all confidentiality, publication and intellectual property-related provisions of this Agreement, applicable to Bayer. The sustainability performance will be evaluated by comparing it with the Bayer Supplier Code of Conduct principles. 

	
 
	
(j)
	
Material Transfer. 

	
 
	
(i)
	
From time to time, Bayer may transfer materials to Atara for purposes of the Collaboration Activities.  

	
 
	
(ii)
	
Atara understands that materials transferred by Bayer are experimental in nature and Bayer does not make any representation or warranty, express or implied, as to the identity, ownership, purity, utility, safety or activity of such biological materials.  

	
 
	
(iii)
	
Atara shall use Bayer’s materials only for the purposes of performing its obligations or exercising its rights under this Agreement. Atara shall not reverse engineer or analyze (except to the extent expressly permitted in the Collaboration Plan and then only for the purposes of the Collaboration Activities) the material or otherwise attempt to determine the identity, structure, or composition of the material, nor will Atara permit or assist others to do so.  

	
 
	
(iv)
	
Atara shall not transfer Bayer’s material to any Third Party, except to contractors or collaborators of Atara for the purposes authorized by this Agreement upon prior written notice of such transfer to Bayer.  

1.158Responsibility for Expenses for Conduct of the Collaboration Activities. Except as may be specifically agreed to in writing by the Parties, Bayer shall bear its own costs and expenses incurred in the performance of the activities to be performed by it under the Collaboration Plans and the reimbursement upfront fee to be paid by Bayer to Atara pursuant to Section 9.2 shall, except as otherwise specified in this Agreement, be the complete reimbursement for Atara’s costs and expenses incurred in the performance of Collaboration Activities identified as [[***]] under the Collaboration Plans. For clarity, neither Party shall be under any obligation to incur any cost other than as necessary to fulfill such Party’s obligations under this Agreement.

1.159Revisions or Expansions to Collaboration Plan. 

	
 
	
(a)
	
Any revision or expansion to the Collaboration Plan that may be requested by either of the Parties during the relevant Collaboration Term shall be discussed by the JSC. This includes, without limitation, discussions regarding the effect any such requested revision or expansion will have on the deliverables (including timing) to be provided under the relevant Collaboration Plan and the allocation of Atara’s and / or Bayer’s resources for performance of its activities under the relevant Collaboration Activities.

 

Page 28

 

	
 
	
(b)
	
The JSC shall have the authority to amend the relevant Collaboration Plan per such Party’s request, and such amendment shall be incorporated into the relevant Collaboration Plan by reference. For clarity, this does not include any right of the JSC to change any terms of this Agreement other than solely within the relevant Collaboration Plan. 

If the JSC determines that a Party’s request refers to matters that do not materially change the Collaboration Plan and such changes do not materially impact the amount of resources allocated to such activity, the JSC shall have the authority to amend the Collaboration Plan per such Party’s request, and such amendment shall be incorporated into the Collaboration Plan by reference. 

If the JSC determines that the request refers to matters that materially change the Collaboration Plan, or that such changes materially impact the amount of resources allocated to such activity, the JSC shall prepare and present to the Parties’ respective Executive Sponsors a detailed written proposal for such revision or expansion to the Collaboration Plan.  If such proposal is approved by the Executive Sponsor of each of the Parties, the amended Collaboration Plan shall be agreed upon pursuant to Section 21.11.

1.160Governance.

	
 
	
(a)
	
Alliance Sponsors. Each party shall designate an executive as sponsor for the alliance (each such executive, an “Alliance Sponsor”). The Alliance Sponsors shall meet and confer as often as they deem appropriate to maintain the health, priority, and direction of the relationship and to proactively solve issues as necessary. The initial Alliance Sponsor designated by Atara is the Vice President, Corporate Strategy and Business Development of Atara, and the initial Alliance Sponsor designated by Bayer is the Vice President, Head of Oncology Strategy & Early Commercialization of Bayer. 

	
 
	
(b)
	
Alliance Managers. As soon as practicable after the Effective Date, each Party shall nominate a representative to act as its alliance manager under this Agreement (the “Alliance Manager”). The Alliance Managers shall serve as the key contact point between the Parties. Each Alliance Manager shall be a permanent non-voting member of the Joint Steering Committee and any subcommittee(s).  A Party may replace its Alliance Manager at any time by providing written notice to the other Party.

	
 
	
(c)
	
Joint Steering Committee. Within [[***]] days after the Effective Date the Parties shall establish a joint steering committee (the “Joint Steering Committee” or “JSC”).

	
 
	
(i)
	
Composition. The JSC shall be composed of an equal number of representatives [[***]] from each Party plus the Alliance Manager(s) in a [[***]] capacity. Each JSC representative shall have appropriate experience, knowledge and authority within such Party’s organization to carry out the duties and obligations of the JSC. Each Party shall name its initial JSC representatives and designate one of its representatives as the co-chair (each, a “Co-Chair”) for that Party.

 

Page 29

 

	
 
		

	
 
	
(ii)
	
Responsibilities of the JSC. The JSC provides strategic direction and operational oversight to the Alliance, evaluates performance, recommends corrective action and shall act as the point of escalation for issues that cannot be resolved at subcommittee or sub-team levels. Within [[***]] days of the execution of the agreement, the JSC shall jointly establish a charter (the “JSC Charter”) that details specific responsibilities and such JSC Charter will be updated annually to ensure it is focusing on key activities and contractual obligations. Initial considerations for the JSC Charter include:

	
 
	
1)
	
monitoring performance of this Agreement as well as progress of the Collaboration Activities compared to the goals defined in the Collaboration Plans and deciding on corrective action, where required;

	
 
	
2)
	
serving as the principal means by which each Party keeps the other Party informed about the status of those parts of the Collaboration Activities within its responsibilities; 

	
 
	
3)
	
reviewing and discussing as to whether the deliverables have been achieved;

	
 
	
4)
	
agreeing on changes to the existing Collaboration Plans - including, with respect to the Research Plan in the event of [[***]] - in each case, which do not materially increase or decrease Atara’s or Bayer’s obligations, provided that, for clarity, the JSC shall not have the authority to [[***]];

	
 
	
5)
	
recommending modifications to the Collaboration Plan which materially increase or decrease Atara’s or Bayer’s obligations, or any other amendments to this Agreement;

	
 
	
6)
	
agreeing on changes to the ATA2271 Plan, which changes shall be subject to MSK approval prior to taking effect, provided that Atara shall use reasonable efforts to obtain such MSK approval;

	
 
	
7)
	
identifying the Bayer Background Technology, if any, to be used in connection with the Collaboration Activities;

	
 
	
8)
	
acting as the point of escalation for issues that cannot be resolved otherwise; and

	
 
	
9)
	
performing such other functions as are specifically assigned to the JSC in this Agreement.

	
 
	
(iii)
	
Operation of the JSC.

	
 
	
1)
	
JSC Meetings. The JSC shall meet (in person, by means of telephone conference, videoconference or other means of communications) as deemed necessary by the Co-Chairs but at least once Quarterly through the IND filing for the first allogeneic Licensed Product, and semi-annually thereafter (unless the Parties mutually agree otherwise). The location for in-person meetings, if any, shall alternate between the facilities of the Parties (or such other location as is mutually agreed by the respective 

 

Page 30

 

	
 
		
Co-Chairs of the JSC). A kick-off meeting of appropriate duration should be scheduled within [[***]] after the Effective Date.

	
 
	
2)
	
Preparation of Meetings. In close interaction with the Co-Chairs the Alliance Managers are responsible for the scheduling, planning and preparation of the JSC meetings. Particular responsibilities of the Alliance Managers include:

	
 
	
a)
	
JSC-aligned scheduling of the regular and additional meetings of the JSC;

	
 
	
b)
	
preparation of a JSC-aligned meeting agenda; and

	
 
	
c)
	
providing the JSC members with advance notices for all scheduled meetings, meeting agendas and other relevant materials reasonably in advance of such meeting. 

	
 
	
(iv)
	
Meeting Attendees / Guests. In addition to the members of the JSC, the Co-Chairs of each subcommittee (if any) and a reasonable number of additional representatives of a Party or advisors may attend the meetings of the JSC in a non-voting capacity for the limited purpose of providing input with respect to a particular matter on the agenda. A list of all representatives of each Party expected to attend the meeting shall be included on the meeting agenda and distributed to the JSC prior to the relevant meeting. 

	
 
	
(v)
	
Meeting Minutes. Responsibility for preparing the definitive minutes of each meeting of the JSC shall alternate between the Alliance Managers of the Parties. The Alliance Managers shall prepare and circulate a draft of the minutes of each meeting to all members of the JSC for comments within [[***]] Business Days after such meeting. Such minutes shall provide a description, in reasonable detail, of the discussions at the meeting and shall document all actions and decisions approved by the JSC at such meeting. The Parties shall promptly discuss any comments on such minutes and finalize the minutes promptly. Formal joint approval of the minutes should take place no later than the date of the next meeting of the JSC. Meeting minutes for subcommittees are the responsibility of the Co-Chairs of the respective subcommittee.

	
 
	
(vi)
	
Meeting Costs. Costs incurred by each Party in connection with its participation at any meetings of the JSC shall be borne [[***]]. 

	
 
	
(vii)
	
Decision Making by the JSC. Decisions of the JSC required to be made by this Agreement shall be made by vote, with each Party’s voting representatives on the JSC collectively having one (1) vote. No vote may be taken unless at least one (1) of each Party’s representatives participates.  

	
 
	
(viii)
	
Limited Powers of the JSC. The JSC shall have only the powers assigned expressly to it in this Agreement, and shall not have the power to (i) determine any issue in a manner that would conflict with the express terms and conditions of this Agreement; or (ii) modify or amend the terms and conditions of this Agreement subject to the JSC’s right to agreeing on non-material modifications to the Collaboration Plans. In furtherance thereof, each Party shall retain the rights, 

 

Page 31

 

	
 
		
powers and discretion granted to it under this Agreement and no such rights, powers or discretion shall be delegated or vested in the JSC.

	
 
	
(d)
	
Subcommittees. The JSC shall have the right to establish and disband subcommittees as deemed necessary by the JSC depending on the scope, nature and phase of the alliance described in this Agreement. When establishing such subcommittees, the JSC shall specify the composition, responsibilities and duration of such subcommittee. Unless specified at the time a subcommittee is established by the JSC, the provisions of Section 3.6.3 shall apply mutatis mutandis to each such subcommittee formed pursuant to this Section 3.6.4.

1.161Escalation.

	
 
	
(a)
	
If any subcommittee established by the JSC is unable to decide or resolve unanimously any matter properly presented to it for action within [[***]] days of such matter being referred to it for action, at the written request of either Party, the issue shall be referred to the JSC who shall meet within [[***]] Business Days (in person, by means of telephone conference, videoconference or other means of communications) and attempt in good faith to resolve such issue (subject only to, in the case of Atara, approval of its Executive Sponsor or, in the case of Bayer, approval of the applicable management board, if required). 

	
 
	
(b)
	
If the JSC is unable to decide or resolve unanimously any matter properly presented to it for action within [[***]] Business Days of such matter being referred to it for action, at the written request of either Party, the issue shall be referred to the Executive Sponsors who shall meet within [[***]] Business Days (in person, by means of telephone conference, videoconference or other means of communications) and attempt in good faith to resolve such issue (subject only to, in the case of Atara, approval of its board of directors or, in the case of Bayer, approval of the applicable management board, if required). Notwithstanding the foregoing, if the Executive Sponsors cannot resolve such matter within [[***]] Business Days of the date such matter is first referred to them, then, [[***]]: 

[[***]];

	
 
	
(ii) 
	
[[***]]; 

	
 
	
(iii) 
	
notwithstanding any other provision of this Agreement to the contrary, [[***]]; and 

	
 
	
(iv) 
	
notwithstanding any other provision of this Agreement to the contrary, [[***]].  

In each case, [[***]].

 

Page 32

 

1.162Termination of the JSC.  The JSC shall continue to exist until the latter of: (i) the [[***]]; or (ii) [[***]]  

DEVELOPMENT

1.163Responsibility. With the exception of the ATA2271 Phase 1 Clinical Trial and any other Phase 1 Clinical Trial relating to ATA2271 mutually agreed between the Parties after the Effective Date, and subject to the terms and conditions of this Agreement, Bayer shall be solely responsible for the Development of the Licensed Cell Therapeutics and / or Licensed Products in the Field in the Territory, at Bayer’s sole discretion (subject to Section 4.4) and Bayer’s sole expense, including for the avoidance of doubt:

	
 
	
(a)
	
determining, planning and implementing the Development plans and strategies for the Licensed Cell Therapeutic and / or Licensed Product; and

	
 
	
(b)
	
conducting, and determining the timing and scope of and schedule for, all Clinical Trials related to the Licensed Cell Therapeutic and / or Licensed Product (including performing cell selection for allogeneic Licensed Products, which, for clarity, Atara is not responsible to perform),

in all cases, whether performed by or on behalf of Bayer or any other Bayer Party or Third Party appointed by Bayer.

1.164Atara’s ATA2271 Development Responsibilities. 

	
 
	
(a)
	
Atara (in collaboration with MSK) will [[***]] continue, and will [[***]] cause MSK to continue, [[***]] the ATA2271 Phase 1 Clinical Trial in the manner outlined within the ATA2271 Plan and any other Phase 1 Clinical Trial relating to ATA2271 in the manner pre-agreed upon (including with respect to any financial terms) with Bayer. Atara will report on its activities under such Phase 1 Clinical Trial and results thereof both through written reports and through oral communication (including via the JSC), and shall provide Bayer deliverables of such activities and results, each with information, frequency, within the timelines and with a format as specified in the relevant ATA2271 Plan. This includes that Atara will submit to Bayer all Regulatory Documentation and all other study data relating to the ATA2271 Phase 1 Clinical Trial within due course, but in no event later than within [[***]] Business Days after such documents and data are received or generated by Atara. Upon request of Bayer, Atara will enable Bayer scientists to participate as observing members in any material development-related activities of Atara and to the extent that Atara has the right to do so, any material development-related activities of MSK, said participation being subject to MSK’s approval. Atara will [[***]] obtain such approval from MSK and will, upon Bayer’s written request, inform Bayer about the steps taken to obtain such MSK approval and the status of the approval process. 

	
 
	
(b)
	
After completion of [[***]], Bayer shall be solely responsible, at its sole discretion, for continuing the ATA2271 clinical development and Atara will take all steps reasonably required to enable Bayer to take over such program in a mutually agreeable manner. 

 

Page 33

 

	
 
	
(c)
	
For clarity, all materials, documents and data generated within the ATA2271 clinical development, as described above, form part of the Licensed Technology and, consequently, Bayer has the exclusive right to use such materials, documents and data for Exploitation of Licensed Cell Therapeutics and Licensed Products in the Field in the Territory.

1.165Cooperation of Atara. Bayer acknowledges Atara’s expertise and experience in preclinical development, CMC/manufacturing, regulatory matters and early clinical development for cell therapy products. Therefore, Atara shall reasonably cooperate with and provide assistance to Bayer in connection with Bayer’s Development activities with respect to the Licensed Cell Therapeutic and / or Licensed Product, in accordance with Section 2.6.3. 

1.166Efforts. 

	
 
	
(a)
	
Bayer shall use Commercially Reasonable Efforts to Develop [[***]] in each of the Major Market countries. For clarity, Bayer shall not have any Development obligations for any additional indication or in any other country. 

	
 
	
(b)
	
Without limiting the foregoing, with respect to Licensed Products covered by Licensed Patents in-licensed by Atara under the NIH Upstream License, the following applies:

	
 
	
1)
	
“Commercially Reasonably Efforts”, for the purposes of this provision, shall include [[***]]. 

	
 
	
2)
	
Bayer will provide Atara written [[***]] reports on its product development progress [[***]]within [[***]] days after the end of each Calendar Year. These progress reports shall include, but not be limited to: [[***]]. Bayer agrees to provide any additional information reasonably required by the NIH to evaluate Bayer’s compliance with its diligence obligation under the NIH Upstream License. 

	
 
	
3)
	
Bayer shall report to Atara the dates for achieving the [[***]] and the First Commercial Sale in each country in the Territory within [[***]] days of such occurrences. 

REGULATORY

1.167General responsibility. Except as specifically set forth in Section 5.2, subject to the terms and conditions of this Agreement, Bayer shall be solely responsible for, at Bayer’s sole expense (except as set forth elsewhere in this Agreement, including its Exhibits):

	
 
	
(a)
	
determining, planning and implementing the regulatory plans and strategies for the Licensed Product(s);

	
 
	
(b)
	
preparing and maintaining the “Company Core Data Sheet” for the Licensed Product(s);

	
 
	
(c)
	
either directly or through its Affiliates or Sublicensees, making all regulatory filings with respect to the Licensed Product(s);

 

Page 34

 

	
 
	
(d)
	
preparing, filing, and holding all INDs and Regulatory Approvals throughout the Territory in the name of either itself or its Affiliates or Sublicensees, with the exception of the IND data package up to IND Readiness for ATA3271, which Atara shall provide to Bayer; and

	
 
	
(e)
	
all interactions with Regulatory Authorities with respect to the Licensed Product(s), including all submissions, meetings and discussions in all cases, whether performed by or on behalf of Bayer or any other Bayer Party or Third Party appointed by Bayer.

1.168Responsibility for ATA2271 Phase 1 Clinical Trial. Atara (in collaboration with MSK) shall be [[***]] responsible for all regulatory filings with respect to the ATA2271 Phase 1 Clinical Trial as well as the IND relating to ATA2271, up to [[***]].  Sections 4.2.1 – 4.2.3 apply mutatis mutandis. 

1.169Cooperation of Atara. Atara shall [[***]] cooperate with and provide assistance (excluding any research or development work, which is addressed in Section 2.6.3, or any drafting with respect to the content of any IND or BLA) to Bayer solely to address regulatory questions during the review of IND or BLA filings or any other filing with a Regulatory Authority, in each case with respect to a Licensed Product, including by promptly executing any required documents, providing access to personnel and providing all such documentation as Bayer may reasonably require and request from time to time, as well as by [[***]] to ensure that Bayer Parties obtain from MSK all authorizations that may be required to fully benefit from the results of any ATA2271 clinical development (including any cross references to the ATA2271 IND in an IND filing for another Licensed Cell Therapeutic) Atara shall cooperate with the Bayer Parties, as may be requested by Bayer, in connection with any inspection by a Regulatory Authority relating to a Licensed Product including any inspection prior to approval of an BLA for any Licensed Product. 

1.170Assignment of Regulatory Documentation. Notwithstanding Atara’s earlier reporting obligations pursuant to Section 4.2 of this Agreement, upon [[***]] Atara shall assign, and shall [[***]] cause MSK to assign, to Bayer all of its and MSK’s rights, title and interest in and to all Regulatory Documentation, including, to the extent permitted by Law, all Regulatory Approvals and INDs Controlled by Atara or MSK as of the Effective Date and from time to time during the term of this Agreement. Atara shall, and shall [[***]] cause MSK to, duly execute and deliver, in each case within [[***]] Business Days of the Effective Date, such instruments, and shall do, and shall [[***]] cause MSK to do, such acts and things, including the filing of such assignments, agreements, documents and instruments as Bayer may reasonably request from time to time in connection with Bayer’s rights under this Section 5.4. Atara shall also provide to Bayer all updates to such Regulatory Documentation within [[***]] Business Days of their first becoming available to Atara.

1.171Rights of Reference.  

	
 
	
(a)
	
Right of Reference for Atara. Atara and its Affiliates and their designees will have, and Bayer (on behalf of itself and its Affiliates) hereby grants, and shall cause all other Bayer Parties to grant, to Atara and its Affiliate and their designees, access and a “Right of Reference or Use” as that term is defined in 21 C.F.R. § 314.3(b) (without any further 

 

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action required on the part of Atara, its Affiliates or contractors, whose authorization to file this consent with any Regulatory Authority is hereby granted) in connection with the development of products of Atara and its Affiliates to all Regulatory Documentation relating to any Licensed Cell Therapeutic or Licensed Product, or any components thereof, controlled by or on behalf of any Bayer Parties and all data contained or referenced therein, and agrees to sign and cause the other Bayer Parties to sign, any instruments reasonably requested by Atara in order to effect such grant. 

	
 
	
(b)
	
Right of Reference for Bayer. Atara hereby grants and shall [[***]] cause MSK and Atara’s and MSK’s Affiliates grant to Bayer Parties a “Right of Reference or use” as that term is defined in 21 C.F.R. § 314.3(b), without any further action required on the part of Bayer Parties or their contractors (whose authorization to file this consent with any Regulatory Authority is hereby granted), in connection with the development of Licensed Cell Therapeutics or Licensed Products to all Regulatory Documentation relating to ATA2271 or any components thereof and all data contained or referenced therein, and agrees to sign, and shall [[***]] cause MSK and Atara’s and MSK’s Affiliates to sign, any instruments reasonably requested by Bayer Parties in order to effect such grant.  If Bayer wishes to obtain a “Right of Reference or use” to any other regulatory filing Controlled by Atara, Bayer shall so notify Atara in writing, and, provided that Atara has the rights necessary to grant Bayer any such rights and that such additional Right of Reference or use is reasonably required to Develop the Licensed Cell Therapeutic or Licensed Product without any unnecessary delay or significant additional cost, Atara shall consider, in good faith, Bayer’s request for an additional grant of such rights to Bayer and shall not unreasonably withhold its consent to such request.

COMMERCIALIZATION

1.172Commercialization.

	
 
	
(a)
	
Responsibility. Subject to the terms and conditions of this Agreement, Bayer shall be solely responsible for the Commercialization of the Licensed Product in the Field in the Territory at Bayer’s sole expense (except as set forth elsewhere in this Agreement), including, for the avoidance of doubt, the planning and implementation, distribution, booking of sales, pricing and reimbursement, in all cases, whether performed by or on behalf of Bayer or any other Bayer Party or Third Party appointed by Bayer.

	
 
	
(b)
	
Efforts. Bayer shall use Commercially Reasonable Efforts to Commercialize [[***]] in each Major Market. 

	
 
	
(c)
	
Additional Restrictions relating to NIH Upstream License. Solely with respect to Licensed Products that are covered by Licensed Patents under the NIH Upstream License, Bayer shall use Commercially Reasonable Efforts to (i) make Licensed Products reasonably accessible to the United States public, (ii) make reasonable quantities of Licensed Products available to patient assistance programs, (iii) develop educational materials (e.g., brochures, website, etc.) directed to patients and physicians detailing the Licensed Products or medical aspects of the prophylactic and therapeutic uses of the Licensed Products, and (iv) upon request of Atara or NIH, supply NIH with inert samples 

 

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of the Licensed Products or their packaging for educational and display purposes only, provided that, unless explicitly stated otherwise in the request, such samples or packaging shall be mailed to: [[***]]. Furthermore, solely with respect to Licensed Patents under the NIH Upstream License that cover Licensed Products (if any), Bayer and all Bayer Parties agree to mark the Licensed Products, or their packaging sold in the United States with the applicable U.S. patent numbers and similarly to indicate "“Patent Pending"” status of such Licensed Patents. 

	
 
	
(d)
	
Commercialization Plan.  At least [[***]] days in advance of the anticipated [[***]] of a Licensed Product in [[***]] in the Territory, Bayer shall prepare and submit to Atara a written plan setting forth the activities to be undertaken with respect to the Commercialization of Licensed Products (the “Commercialization Plan”), which shall describe in reasonable detail Bayer’s Commercialization activities for the rest of the relevant [[***]].  Thereafter, Bayer shall prepare and submit to Atara for the rest of the term of the Agreement a Commercialization Plan on any new [[***]] no later than [[***]] days after [[***]]. 

MANUFACTURING 

1.173Except as specifically set forth in Sections 7.2 and 7.3, subject to the terms and conditions of this Agreement, Bayer shall be solely responsible for and bear all costs of the manufacture, storage, distribution and supply of the Licensed Products in the Field in the Territory. 

1.174Notwithstanding the foregoing, Atara will be responsible for the performance of the CMC Activities in accordance with the CMC Plan.

1.175Within [[***]] days following the Effective Date, the Parties shall enter into a Phase 1 – 2 Manufacturing and Supply Agreement pursuant to which [[***]].  The key terms of the Phase 1 – 2 Manufacturing and Supply Agreement and the Phase 3 Manufacturing and Supply Agreement are set forth in Exhibit 7.3, attached hereto. Such Manufacturing and Supply Agreements shall include as an annex a Quality Agreement containing terms and conditions regarding quality assurance/quality control and compliance with cGCP, cGLP and cGMP, as applicable.

PHARMACOVIGILANCE

1.176General.  Both Parties agree to promptly exchange all information that relates to the safety of the Licensed Product and to comply with all Laws relating to the Licensed Product concerning drug safety.

1.177Pharmacovigilance Agreement.  In furtherance of Section 8.1, the Parties shall negotiate and execute a pharmacovigilance agreement within [[***]] days of the Effective Date. Bayer will create and maintain a master drug safety database which shall cross-reference adverse events relating to the Licensed Product occurring anywhere in the world. Bayer shall be the sole owner of the master drug safety database. Atara shall submit all data collected by it with respect to adverse events relating to the Licensed Product to Bayer in accordance with the timelines set forth in the pharmacovigilance agreement. After transfer of 

 

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the [[***]] to Bayer, Bayer shall be responsible for all reporting of adverse events pursuant to Law with respect to the Licensed Products.

FINANCIAL PROVISIONS

1.178License Upfront Payment. In consideration of the licenses granted by Atara to Bayer under the Agreement, Atara shall be entitled to invoice Bayer for a one-time license upfront payment of US$45,000,000 (in words: forty-five million U.S. dollars) (the “Upfront License Payment”) on or after the Effective Date, which Upfront License Payment reflects the aggregate value of the Licensed Technology as set forth in Exhibit 9.1.

1.179Reimbursement Upfront Payment. As reimbursement for Atara’s expenses for activities identified as [[***]] under the Collaboration Plans, Atara shall be entitled to invoice Bayer for a one-time reimbursement upfront fee of US$15,000,000 (in words: fifteen million U.S. dollars) on or after the Effective Date. 

Should the preclinical development of [[***]] be stopped early ([[***]]), then any unused portion of such reimbursement upfront fee will be used for [[***]], provided that the decision on the [[***]] and the related Research Plan shall be made by the JSC pursuant to Section 3.6.3.2(iv). 

1.180Remuneration for Further Research Activities. In consideration for the conduct of the activities identified as [[***]] under the Research Plan, Atara shall be entitled to invoice Bayer for an amount equal to US$5,000,000 (in words: five million U.S. dollars) in the following installments: 

[[***]] percent [[***]] upon initiation of any one of the activities identified as [[***]] under the Research Plan;

	
 
	
(ii)
	
[[***]] percent [[***]] upon Atara’s delivery of Atara’s qualification report following [[***]], such report, as applicable, to be consistent with the table of contents set forth in Exhibit 1.72 and to be in a form consistent with the reporting template identified as “Pre-clinical Technical Report” disclosed by Atara to Bayer prior to the Effective Date; and 

	
 
	
(iii)
	
[[***]] percent [[***]] upon Atara’s delivery of the last qualification or study report, as applicable,  following [[***]], such report, as applicable, to be consistent with the table of contents set forth in Exhibit 1.72 and to be in a form consistent with the reporting template identified as “Preclinical Technical Report” disclosed by Atara to Bayer prior to the Effective Date.

1.181Milestones. 

	
 
	
(a)
	
Development and Regulatory Milestones for Licensed Products other than [[***]] Licensed Products. Upon the first (1st) achievement of any of the following milestone 

 

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events for a human therapeutic Licensed Product that is not an [[***]] Licensed Product, Atara shall be entitled to invoice the following one-time payments to Bayer: 

[[***]]

For [[***]] met with a [[***]] Licensed Cell Therapeutic or Licensed Product that is [[***]], the respective milestone payments above shall become due, each with an [[***]]. For [[***]] met with a [[***]] Licensed Cell Therapeutic or Licensed Product that is a [[***]], the respective milestone payments above shall become due, each with an [[***]]. For [[***]] met with a [[***]] Licensed Cell Therapeutic or Licensed Product that is a [[***]], the respective milestone payments above shall become due, each with an [[***]].

For clarity, [[***]] will be deemed to have been met with a Systemic Product [[***]] upon [[***]]. 

Notwithstanding Section 9.4.5.1, in the event a Phase 2 Clinical Trial seeking accelerated Regulatory Approval is initiated, the milestone payments under [[***]] shall be due upon the earliest of [[***]]. Bayer shall provide written notice to Atara of any of the events described in clauses (a) – (c) of the preceding sentence within [[***]] days following the occurrence of the relevant event. 

For clarity, any inference or reference to a “first, “second” or “third” Tumor Type above, shall be construed to mean the “first”, “second” or “third” Tumor Type that achieves the applicable milestone event, regardless of how many other Tumor Types have been previously pursued with respect to the same or other Licensed Products without achieving the applicable milestone event; this means, [[***]].

In the event that [[***]], Atara is entitled to invoice an amount of [[***]] to Bayer together with [[***]]. Bayer shall make such payment within [[***]] days from [[***]]. For clarity, [[***]].  In the event that, following such payment by Bayer, [[***]], then [[***]].  

	
 
	
(b)
	
Development and Regulatory Milestones for [[***]] Licensed Products. Upon the first achievement of any of the following milestone events for the first human therapeutic [[***]] Licensed Product (including a Licensed Product comprising [[***]]), [[***]] Atara shall be entitled to invoice the following one-time payments to Bayer: 

[[***]]

	
 
	
(c)
	
Sales Milestones. Upon the first (1st) occurrence of aggregate annual Net Sales set out below with respect to a Licensed Product in the Field in the Territory, Bayer shall make the following payments to Atara:

[[***]]

 

 

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(d)
	
Reporting on Milestone Achievement and Payment. Bayer shall provide written notice to Atara of (a) any occurrence of any of the development milestones set forth above no later than [[***]] days following the occurrence of the relevant milestone, and (b) any occurrence of any of the sales milestones set forth above with the royalty report to be provided by Bayer for the respective Quarter pursuant to Section 9.5.5, and shall, upon receipt of an invoice pursuant to Section 9.6, make the associated milestone payments in accordance with Section 9.6.

	
 
	
(e)
	
Limitation on Milestones. For the avoidance of doubt:

	
 
	
(i)
	
The Development and Regulatory Milestones are intended to be successive on a country-by-country or region-by-region basis, as applicable; in the event that Bayer skips any of such milestones on a country‐by-country or region-by-region basis, as applicable, Bayer shall be deemed to have achieved such skipped milestone when it achieves the next successive Development and Regulatory Milestone for the relevant Licensed Product.  

	
 
	
(ii)
	
No milestone payment will be made more than once per Licensed Product (as opposed to another Licensed Product); 

	
 
	
(iii)
	
No additional milestone payments shall be due in respect of subsequent or repeated achievements of any milestone(s), irrespective of the number of countries in which such milestone has been achieved, or in respect of any further indications not explicitly specified within the milestones listed under Section 9.4.1 and 9.4.2 above;  

	
 
	
(iv)
	
No additional milestone payments shall be due in respect of any Combination Licensed Product where the milestone has already been paid on a Licensed Product; and

	
 
	
(v)
	
Each milestone payment shall be due whether the corresponding milestone event has been achieved by Bayer, its Affiliates or Sublicensees.

1.182Royalties.

	
 
	
(a)
	
Royalty Rates. Subject to the terms and conditions set forth in this Section 9.5 and elsewhere in this Agreement, Bayer shall pay to Atara royalties on aggregated annual Net Sales of each such Licensed Product sold in the Territory during the Royalty Term in the following amount:

[[***]]

For the avoidance of doubt, the cumulative Net Sales value shall be based on cumulative Net Sales from the start of a Calendar Year and reset on an annual basis.

For the avoidance of doubt, no royalties shall be due or payable on samples of Licensed Product or clinical trial materials or other transfers or dispositions of the 

 

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Licensed Product for charitable, promotional, pre-clinical, clinical, manufacturing, testing or qualification, regulatory or governmental purposes.

	
 
	
(b)
	
Sublicense Income for an [[***]] Licensed Product. In addition to the associated milestones and royalties outlined above, Bayer shall pay to Atara the following percentage of all Sublicense Income: 

	
 
	
(i)
	
[[***]] percent [[***]] if at the time of execution of the sublicense agreement the status of the project is [[***]]; or 

	
 
	
(ii)
	
[[***]] percent [[***]] if [[***]]. 

	
 
	
(c)
	
Reduction in Royalties.

	
 
	
(i)
	
No Valid, Practiced Claim. If, during the Royalty Term, in any particular country in the Territory, a Licensed Product is not covered or claimed by a Valid, Practiced Claim, then the royalties that would otherwise have been payable on Net Sales of such Licensed Product in such country under this Agreement shall be reduced by [[***]] percent [[***]] as from the first Quarter in which there is no Valid, Practiced Claim. The calculation of the royalty reduction shall be conducted separately for each Licensed Product in each country.

	
 
	
(ii)
	
Compulsory Licenses. [[***]]. 

	
 
	
(iii)
	
Biosimilar Product. [[***]].

	
 
	
(iv)
	
Third Party Technology. Subject to the last sentence of this Section 9.5.3.4, if during the term of this Agreement Atara or Bayer becomes aware of a Third Party Patent Right (excluding for clarity any Patent Rights controlled by MSK) and where Bayer reasonably determines, in the absence of a license to such Third Party Patent Right, such Third Party Patent Right would be infringed by the Exploitation of the Licensed Cell Therapeutic and / or Licensed Product (solely to the extent consisting of an Atara Cell Therapeutic), Bayer (itself or through any other Bayer Party) may obtain a license to such Third Party Patent Right in any country in the Territory. Atara agrees to fully co-operate with Bayer in any licensing of such rights by Bayer, as Bayer may reasonably request. In the event that Bayer pays any [[***]] in consideration solely for a license to such Third Party Patent Right for the Exploitation of the Licensed Cell Therapeutic and / or Licensed Product (solely to the extent consisting of an Atara Cell Therapeutic) (subject to the limitation specified in sentence 1 of this Section 9.5.3.4), as applicable, [[***]]payable by Bayer to Atara pursuant to Section 9.5.1 shall be reduced by [[***]] percent [[***]] of the amounts actually paid to such Third Party in such country as consideration solely for any such license to such Third Party Patent Rights for such purpose.

	
 
	
(v)
	
For clarity, Atara shall be solely responsible to cover any third party royalty obligations that Atara may have under the Existing Agreements in relation to this license.

 

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(d)
	
Notwithstanding anything to the contrary in this Agreement, in no event shall the royalties payable to Atara under Section 9.5.1 be reduced to less than: 

	
 
	
(i)
	
[[***]] 

	
 
	
(e)
	
Royalty Reporting. Starting from the date of First Commercial Sale of the Licensed Product(s) in any country, Bayer shall submit within [[***]] days after the end of each Quarter a good faith, non-binding, preliminary indication of Net Sales achieved within the previous Quarter (such preliminary indication not including any further breakdown, e.g., into countries, Licensed Products). Within [[***]] days of the end of each Quarter, Bayer shall prepare and deliver to Atara a written statement setting forth: 

	
 
	
(i)
	
Net Sales for that Quarter on a Licensed Product-by-Licensed Product and country-by-country basis;

	
 
	
(ii)
	
[[***]]; and 

	
 
	
(iii)
	
[[***]];

	
 
	
(iv)
	
[[***]]; and 

	
 
	
(v)
	
the associated royalties due to Atara.  

Following Atara’s receipt of such quarterly statement, Atara shall deliver to Bayer an invoice for the royalties due to Atara, and upon Bayer’s receipt of such invoice, Bayer shall make the associated royalty payments in accordance with Section 9.6.2. 

1.183Payments.

	
 
	
(a)
	
Currency. All payments under this Agreement will be made in U.S. dollars. Where the payments due are calculated based on a currency other than U.S. dollars, the amount due will be converted to U.S. dollars using the average quarter to date exchange rate for the applicable quarter as consistently applied per Bayer’s internal accounting and reporting process.

	
 
	
(b)
	
Payment Date. The License Upfront Payment, the Reimbursement Upfront Payment, any and all royalties owing from Bayer to Atara under Section 9.5 and the payments owing from Bayer to Atara under Section 9.3, shall be paid by Bayer to Atara within [[***]] days after receipt of invoice, and the milestone payments and any other payment by Bayer shall be made within [[***]] days after receipt of invoice (each a “Payment Date”).

	
 
	
(c)
	
All payments due to Atara under this Agreement shall be paid upon the receipt of a respective invoice in U.S. dollars by wire transfer to the following bank account, or to such other bank account specified, at least [[***]] Business Days prior to the applicable Payment Date, in writing by Atara to Bayer: 

 

	
Account Holder:
	
[[***]]

 

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Bank Name:
	
[[***]]

	
Bank Address, City, and State:
	
[[***]]

	
Account No.:
	
[[***]]

	
Bank Code:
	
[[***]]

	
SWIFT (BIC):
	
[[***]]

	
Routing Transit Number ABA:
	
[[***]]

 

Each invoice for payments shall be sent to:

[[***]]

mentioning such other information required and as may be amended and / or provided by Bayer to Atara from time to time.

Alternatively, each invoice for payments mentioning the aforementioned address and reference may be sent electronically in portable document format (pdf) via email without electronic signature (“pdf-invoicing”), to 

[[***]]

thus replacing a corresponding paper form. 

	
 
	
(d)
	
Late Payments. All payments not made by [[***]] days after the respective Payment Date set out in this Agreement shall be subject to Late Payment interest at the United States Secured Overnight Financing Rate (SOFR), currently published on Bloomberg screen <SOFRRATE Index>, fixed [[***]] Business Days prior to the respective Payment Date and reset to the prevailing [[***]] month SOFR at monthly intervals thereafter, plus a premium of [[***]] (or the maximum applicable legal rate of interest if lower). Interest shall be calculated based on the actual number of days in the interest period divided by 360 and shall be calculated from the respective Payment Date (inclusive) until the date of payment (exclusive).

1.184Taxes.

	
 
	
(a)
	
All agreed consideration is exclusive of Value Added TAX (“VAT”). If legally applicable, VAT will be invoiced and has to be paid additionally after receipt of a proper invoice, which meets all legal requirements according to the applicable VAT-law. 

	
 
	
(b)
	
Any party required to make a payment pursuant to this Agreement shall be entitled to deduct and withhold from the amount payable the tax for which paying party on behalf of payee is liable under any provisions of tax law. If the withholding tax rate is reduced according to the regulations in the Double Tax Treaty no deduction shall be made or a reduced amount shall be deducted only if paying party is timely furnished with necessary documents by payee issued from the relevant tax authority, certifying that the payment is exempt from tax or subject to a reduced tax rate. Except as otherwise provided in Section 9.6.3, any withheld tax shall be treated as having been paid by paying party to payee for all purposes of this Agreement. Paying party shall timely forward the tax receipts 

 

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certifying the payments of withholding tax on behalf of payee. In case paying party must pay, but cannot deduct the withholding tax due to fulfillment and completion of payment obligation by settlement or set-off, payee will pay the withholding tax to the paying party separately. If paying party failed to deduct withholding tax but is still required by tax law to pay withholding tax on account of payee to the tax authorities, payee shall assist paying party with regard to all procedures required in order to obtain reimbursement by tax authorities or, in case tax authorities will not reimburse withholding tax to paying party, payee will immediately refund the tax amount. 

	
 
	
(c)
	
Notwithstanding the foregoing, if (a) any party redomiciles or assigns its rights or obligations under this Agreement, (b) as a result of such redomiciliation or assignment, such Party (or its assignee) is required by Law to withhold taxes, or such redomiciliation or assignment results in the imposition of indirect taxes that were not otherwise applicable, from or in respect of any amount payable from such party to the other party under this Agreement, (c) the other Party is despite reasonable efforts not able to obtain an exemption or reduction from such additional tax; and (d) such withholding taxes or indirect taxes which cannot be exempted from tax by the other Party with reasonable efforts exceed the amount of withholding taxes or indirect taxes that would have been applicable had such redomiciliation or assignment not occurred, then any such amount payable shall be increased to take into account such withholding taxes or indirect taxes as may be necessary so that, after making all required withholdings (including withholdings on the additional amounts payable) and / or paying such indirect taxes, as the case may be, the payee party (or its assignee) receives an amount equal to the sum it would have received had no such increased withholding been made and no such Indirect Taxes had been imposed.  The obligation to pay additional amounts pursuant to the preceding sentence shall not apply, however, to the extent such increased withholding tax or indirect taxes would not have been imposed but for the assignment by the payee party of its rights or obligations under this Agreement or the redomiciliation of such payee party outside of the United States. 

BOOKS, RECORDS, AUDIT

1.185Records. Bayer shall keep, and shall procure that all Bayer Parties keep, true and accurate records and books of account containing all data necessary for the calculation of the amounts payable by it to Atara pursuant to this Agreement. Those records and books of account shall be kept for

	
 
	
(i)
	
with respect to Licensed Products that are covered by Licensed Patents under the MSK MSLN License and/or that are containing, derived from or made using BioVec Products (as such term is defined in the BioVec Upstream License), [[***]] years; 

	
 
	
(ii)
	
with respect to other Licensed Products than those listed under a) above, if they are covered by Licensed Patents under the NIH Upstream License, [[***]] years;

 

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(iii)
	
with respect to other Licensed Products than those listed under a) and b) above, if they are covered by Licensed Patents under the MSK PD1-DNR License and/or MSK CAR-T License, [[***]] years; and

	
 
	
(iv)
	
with respect to other Licensed Products than those listed under a), b) and c) above, [[***]] years,

in each case following the end of the period to which they relate. 

1.186Audits. To validate Bayer’s compliance with its obligations under or in connection with this Agreement, Atara may, during the course of this Agreement and for [[***]] year after termination of this Agreement, appoint an independent certified public accountant, at Atara’s expense (except as otherwise contemplated below), to carry out an audit of Bayer’s records from time to time on behalf of Atara. The auditors selected by Atara shall be subject to acceptance by Bayer, such acceptance not to be unreasonably withheld or delayed. Any such audit shall be conducted pursuant to the following terms and conditions:

	
 
	
(a)
	
Any such audits shall be conducted during regular business hours at Bayer’s premises upon [[***]] days’ prior written notice by Atara and shall not interfere unreasonably with the Bayer’s business activities; 

	
 
	
(b)
	
The auditor may inspect records for up to [[***]] years after the end of the period to which they pertain;

	
 
	
(c)
	
Audits may not take place more than [[***]] per Calendar Year and no period may be audited more than [[***]];

	
 
	
(d)
	
Prior to the audit taking place, auditor shall undertake to Bayer that they shall keep all information confidential and shall not disclose any information to Atara (except as set forth in Section 10.2.5 below) or any Third Party, and shall only use the same for the purpose of calculations which they need to perform hereunder; 

	
 
	
(e)
	
Details of the auditor’s findings (including, for the avoidance of doubt, monetary values and supporting calculations) shall not be shared with Atara except in the form of a summary report (and, in any event), the summary report shall be communicated to Bayer before being shared with Atara and Bayer shall be given a period of [[***]] Business Days to review and respond to the auditor’s findings before the summary report may be provided to Atara (such reports to include Bayer’s response to the findings);

	
 
	
(f)
	
The auditor shall not be permitted to include any extrapolation calculations in their calculation of amounts allegedly underpaid to Atara;

	
 
	
(g)
	
If an audit reveals that Bayer has underpaid royalties due, Atara may invoice Bayer for the underpaid amount; 

	
 
	
(h)
	
If an audit reveals an underpayment in excess of [[***]] percent [[***]] of the fees for the period subject to review by Atara, then Bayer shall pay the reasonable costs of the auditors within [[***]] days of Atara’s receipt of the summary report in Section 10.2.5 

 

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notifying Bayer that the audit has been completed; for clarity, any underpayment shall be subject to Late Payment interest in accordance with Section 9.6.4; and 

	
 
	
(i)
	
If an audit reveals that Bayer has overpaid any royalties (the amount of each such overpayment, an “Overpayment Amount”), then, as may be requested by Bayer, (i) the Overpayment Amount will be credited against any future amounts payable to Atara by any Bayer Party, or (ii) Atara shall reimburse Bayer for such Overpayment Amount (or any portion thereof that has not been credited as set out in the foregoing clause within [[***]] days after the date such auditor reveals to any Bayer Party, or any Bayer Party reveals to Atara, such Overpayment Amount; for clarity, no interest shall become due on the Overpayment Amount from the date such payment was received by Atara until the due date after the overpayment was revealed.

INTELLECTUAL PROPERTY

1.187Inventorship. Notwithstanding the provisions of Section 21.2, inventorship of any inventions created, generated, invented, discovered or conceived by, or on behalf of, a Party or any of its Affiliates, whether solely or jointly with any Third Party (or with the other Party or any of its Affiliates), in the course of the Collaboration Activities shall be determined by application of United States patent law pertaining to inventorship.

1.188Ownership.

	
 
	
(a)
	
Intellectual Property owned by Atara. 

	
 
	
(i)
	
As between the Parties, Atara shall retain all right, title and interest in and to, and shall [[***]] own, [[***]] Licensed Technology (including [[***)] Atara Results) with the exception of [[***]] Results.  

	
 
	
(ii)
	
No right or license is granted to Bayer hereunder with respect to any Licensed Technology, other than the licenses and rights granted to Bayer pursuant to Section 2.1. 

	
 
	
(b)
	
Intellectual Property owned by Bayer.  

	
 
	
(i)
	
As between the Parties, Bayer will retain all right, title and interest in and to, and shall [[***]] own, [[***]]Bayer Results, Joint Results, Bayer Background Technology and Bayer Background Improvements. 

	
 
	
(ii)
	
To the extent any copyrights constituting Bayer Background Improvements generated in whole or in part by Atara or any Joint Results, cannot be assigned by Atara to Bayer under applicable Law, Atara hereby grants Bayer an exclusive, irrevocable, perpetual, fully paid-up, royalty-free, world-wide license, with the right to grant sublicenses, to Exploit such copyrights and Joint Results for any and all purposes.

 

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(iii)
	
No right or license is granted to Atara hereunder with respect to any Bayer Results, Bayer Background Technology, Bayer Background Improvements other than the licenses and rights granted to Atara pursuant to Article 2.

	
 
	
(iv)
	
For clarity, as between the Parties, Bayer shall [[***]] own all intellectual property rights conceived and reduced to practice in the conduct of Bayer’s activities [[***]] in exercise of the licenses granted by Atara to Bayer under this Agreement (such intellectual property rights, the “Bayer Improvement IP”) and Bayer may file, prosecute, maintain and enforce Patent Rights on such Bayer Improvement IP as it deems appropriate.

	
 
	
(c)
	
Cooperation and Support. If and as may be reasonably requested by the other Party, each Party shall (and shall, as applicable, cause each of its employees, officers, directors, consultants or contractors to) duly execute and deliver (or cause to be duly executed and delivered) such agreements and other documents, including assignment agreements, and take such further actions (or cause such further actions to be taken), to make such assignment(s) as may be reasonably necessary or desirable to effect the ownership rights set out in this Section 11.2 and to evidence, confirm, record and perfect any such assignment(s).

1.189Each Party will notify the other Party promptly in writing of any Result that is or might in its reasonable assessment be patentable (any such Result an “Invention”) and shall, upon request of the other Party, provide the other Party with a Complete Invention Disclosure within a period of [[***]] days. 

1.190Prosecution and Enforcement of Bayer Results and Bayer Background Improvements. Bayer has the exclusive right but no obligation to file, prosecute, maintain and enforce, in its own name, at its sole discretion and expense patent applications or other intellectual property rights on Bayer Background Improvements and Bayer Results in or for any country. Atara will, at Bayer’s request, provide and execute all necessary documents including declarations/assignments and cooperate with Bayer, as reasonably required, to enable Bayer to conduct the drafting, filing and prosecution of such applications and to defend and enforce such rights.

1.191Filing, Prosecution and Maintenance of Joint Results Patents.

	
 
	
(a)
	
Bayer shall have the first right, but not the obligation, to prepare, file, prosecute and maintain the Joint Results Patents worldwide.  Bayer shall keep Atara reasonably informed of all material steps with regard to the preparation, filing, prosecution and maintenance of the Joint Results Patents, including by providing Atara with a copy of material communications to and from any patent authority in the Territory regarding such Joint Results Patents, and Atara shall be copied on all material correspondence with Bayer’s patent counsel with respect thereto.  Bayer shall provide Atara drafts of any material filings or responses to be made to such patent authorities in the Territory in advance of submitting such filings or responses so as to allow for a reasonable opportunity for Atara to review and comment thereon, and Bayer shall consider in good faith and discuss Atara’s requests and suggestions with respect to Bayer’s drafts and with 

 

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respect to strategies for filing and prosecuting the Joint Results Patents.  Bayer shall consult with Atara reasonably prior to (but at least [[***]] days prior to) taking or failing to take any substantive action (including making any filings) with respect to the Joint Results Patents, including any action that would materially affect the scope or validity of rights under any patent applications or patents with the Joint Results Patents (such as substantially narrowing or canceling any claim without reserving the right to file a continuing or divisional patent application, abandoning any patent or not filing or perfecting the filing of any patent application in any country).  If Bayer decides not to prepare, file, prosecute or maintain a Joint Results Patent in a country in the Territory, Bayer shall provide reasonable prior written notice to Atara of such intention (which notice shall, in any event, be given no later than [[***]] days prior to the next deadline for any action that may be taken with respect to such Patent Right in such country), Atara shall thereupon have the option, in its sole discretion to assume the control and direction of the preparation, filing, prosecution and maintenance of such Joint Results Patent.  Upon Atara’s written exercise of such option, Atara shall assume the responsibility and control for the preparation, filing, prosecution and maintenance of such Joint Results Patent.  In such event, Bayer shall promptly provide Atara with the appropriate documents for such transfer of responsibility and control and reasonably cooperate with Atara in such country, including by (i) executing all papers and instruments, or requiring its employees or contractors to execute such papers and instruments, so as to enable Atara to apply for and to prosecute the Joint Results Patents in the Territory, and (ii) promptly informing Atara of any matters coming to Bayer’s attention that may materially affect the preparation, filing, prosecution or maintenance of any such Joint Results Patent.  The Parties shall [[***]] costs associated with filing and prosecuting the Joint Results Patents.

1.192Filing, Prosecution and Maintenance of Licensed Patents.

	
 
	
(a)
	
Atara shall be responsible, and [[***]] to file, prosecute and maintain the Licensed Patent Rights, through a qualified and recognized patent counsel, at least in the countries listed in Exhibit 11.6.1, and shall [[***]].  Atara shall inform Bayer of any materially relevant communication with patent offices relating to the filing, prosecution or maintenance of such Licensed Patent Rights. Furthermore, Atara shall provide Bayer with copies of any materially relevant documents or correspondence with patent offices or any other documents which may be important for any action to be taken in a timely manner and no less than [[***]] days prior to any relevant deadline, provided such time is available. Bayer shall communicate its comments on the same to Atara on the earlier of: [[***]] days from the date the information was received by Bayer; and no less than [[***]] days before the deadline, or intended deadline, for the action to be taken, provided that such period is available, and Atara shall consider in good faith the comments provided by Bayer.

	
 
	
(b)
	
If Atara determines that it is not commercially reasonable to file, nationalize (if applicable) or further prosecute a Licensed Patent Right in any country listed in Exhibit 11.6.1, Atara shall provide reasonable advance written notice (“Cessation Notice”) to Bayer of such determination (which notice shall, in any event, be given no later than [[***]] days prior to the next deadline for any action that may be taken with respect to such Licensed Patent Right in such country). Upon receipt of such notice, Bayer may 

 

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object to such determination within [[***]] days and request that Atara continue filing or prosecuting such Licensed Patent Right. If the Parties cannot agree upon whether Atara will or will not continue to file or prosecute such Licensed Patent Right, such dispute will be referred to the [[***]] for dispute resolution in accordance with Section 20.1. During the dispute resolution process, Atara will continue to file and / or prosecute, as applicable, such Licensed Patent Right at Atara’s cost.  If, following dispute resolution in accordance with Section 20.1, the Parties determine that Atara’s decision was appropriate, Bayer will [[***]] with the filing and / or prosecution of such Licensed Patent Right following Atara’s delivery of the applicable Cessation Notice to Bayer.

	
 
	
(c)
	
The Parties acknowledge and agree that this Section 11.6 is subject to the terms and conditions of the Existing Agreements, but solely with respect to those Patent Rights within the Licensed Patents Rights that are owned by MSK or NIH and licensed to Atara under the Existing Agreements. 

1.193Patent Enforcement.

	
 
	
(a)
	
Notice. If any Licensed Patent Right is or might be infringed by a Third Party making, using or selling a Competing Product in the Field (each a “Field Infringement”), the Party first having knowledge thereof shall promptly notify the other Party in writing. Such notice shall set forth the facts of the Field Infringement in reasonable detail. 

	
 
	
(b)
	
Enforcement.

	
 
	
(i)
	
Atara shall have the first right (but not the obligation), by counsel of its own choice and at its sole expense, to institute, prosecute and control the enforcement or defense of Licensed Patent Rights, except that, subject to Section 2.1.3  of this Agreement, Bayer shall have the first right (but not the obligation), by counsel of its own choice and at its sole expense, to institute, prosecute and control the enforcement of any Licensed Patent Rights within the Exclusive Technology against any Field Infringements. Prior to undertaking any such action to enforce or defend such Licensed Patents Rights, the Party controlling the suit or action (“Prosecuting Party”) shall notify the other Party in writing. If the Prosecuting Party requests that the other Party join any such action, the other Party shall do so and the other Party hereby agrees that counsel for the Prosecuting Party shall also represent the other Party in such action. The other Party shall have the right, at its own expense, to also be represented in any action by counsel of its own choice. For the avoidance of doubt, should the other Party partake in any such action brought by the Prosecuting Party, either at the Prosecuting Party’s request or otherwise, the Prosecuting Party shall retain control of the proceeding and shall have [[***]]related thereto.

	
 
	
(ii)
	
In the event that the Party with the first right to enforce determines not to make use of its right to institute an action or proceeding or otherwise take appropriate action to enforce or defend Licensed Patent Rights, then such Party shall provide written notice to the other Party that it declines such right as to such activity as soon as reasonably practicable, but in no event later than [[***]] days 

 

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after notice by the other Party requesting action, or within [[***]] days prior to any deadline associated with the defense or enforcement of the Licensed Patent Rights (which deadline has been previously communicated to the other Party), and after receiving such notice, subject to Section 2.1.3 of this Agreement, the other Party shall have the right (but not the obligation) to institute and / or prosecute and control such an action or proceeding in its name with respect to such enforcement or defense at its sole expense and by counsel of its own choice, and the non‐Prosecuting Party shall have the right to be represented in any such action by counsel of its own choice and at its own expense. The Parties shall reasonably cooperate with each other in the planning and execution of any such action to enforce or defend such Licensed Patent Rights and shall [[***]]. 

	
 
	
(iii)
	
The Parties agree to cooperate fully in any action or proceeding for a Field Infringement, as applicable, pursuant to Sections 11.7.2.1 or 11.7.2.2.  If a Party brings such an action or proceeding, such Party shall (a) keep the other Party reasonably informed of all material steps proposed to be taken, and provide copies of all material documents filed or received (to the extent permitted), in connection with the Licensed Patent Rights, as applicable, in such action or proceeding, and (b) consider in good faith any comments from the non-enforcing Party with respect thereto.  At the request of the Party bringing such action or proceeding, the other Party shall, where necessary, furnish a power of attorney solely for such purpose or shall join in, or be named as a necessary party to, such action or proceeding.  Bayer shall not settle any action or proceeding in accordance with Sections 11.7.2.1 and 11.7.2.2 with respect to a Field Infringement without the prior written approval of Atara, not to be unreasonably withheld, conditioned or delayed; provided, however, in all cases, Bayer shall not have the right to settle such action or proceeding in a manner that involves an admission of invalidity or unenforceability with respect to any Licensed Patent Rights, without the prior written consent of Atara, such consent to be granted or withheld in Atara’s sole discretion. Without limiting the foregoing, if either Party initiates an action or proceeding pursuant to Sections 11.7.2.1 or 11.7.2.2, such Party shall provide the other Party with copies of all pleadings and other documents filed with the court.

	
 
	
(iv)
	
All monies recovered upon the final judgment or settlement of any such suit or action to enforce the Licensed Patent Rights against a Field Infringement in the Field in the Territory shall be applied in the following order of priority: (x) first, the Party bringing suit or action shall be reimbursed for all costs and expenses (including reasonable attorney’s fees and costs) incurred in connection with such suit or action, then to the costs and expenses (if any) of the other Party; and (y) thereafter, any remainder shall be shared as follows: [[***]] to Bayer and [[***]] to Atara. 

	
 
	
(c)
	
Enforcement Outside Scope of Exclusive License. For the avoidance of doubt, Atara shall have the right (but not the obligation), at its sole expense and sole discretion, to control the enforcement or defense of the Licensed Patent Rights to abate any infringement other than a Field Infringement. Atara shall, however, in any such action coordinate and reasonably cooperate with Bayer with the intent to ensure that any position taken, and / or 

 

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arguments made, by Atara (e.g., claim constructions) do not adversely impact any of the Licensed Patent Rights or any of Bayer’s rights or licenses hereunder.

	
 
	
(d)
	
Patent Challenge. To the extent permitted by Laws on a country-by-country basis, Bayer agrees (i) not to challenge the validity or enforceability of any claim within the Licensed Patent Rights that are subject to the MSK Upstream Licenses, (ii) [[***]]. 

1.194Defense of Third Party Claims. If a Party becomes aware of any actual or potential claim that the Exploitation of any Licensed Cell Therapeutic or Licensed Product or any other use by any person of Licensed Technology infringes the intellectual property rights of any Third Party, such Party shall promptly notify the other Party. (i) Atara shall not acknowledge to a Third Party the validity of any such allegation or admit liability without the prior written consent of Bayer, and (ii) Bayer shall not acknowledge to a Third Party the validity of any such allegation or admit liability without the prior written consent of Atara, in each case (i) and (ii), such consent not to be unreasonably withheld or delayed. Bayer and Atara shall each keep the other advised of all material developments in the conduct of any proceedings in defending any claim of such alleged infringement or misappropriation and shall cooperate with the other in the conduct of such defense. In no event may either Party settle any such infringement or misappropriation claim in a manner that would limit the rights of the other Party or impose any obligation on the other Party, without such other Party’s prior written consent, such consent not to be unreasonably withheld or delayed.  For clarity, this Section 11.8 is subject to Article 16.

1.195Product Marks. Bayer shall be responsible for the selection, registration and maintenance of all Product Marks, such Product Marks to be filed and maintained in Bayer’s sole discretion. Bayer shall own and Control such Product Marks and pay all relevant costs with respect thereto. 

1.196Bayer Marks. Atara hereby recognizes and acknowledges the exclusive ownership by Bayer of the Bayer Marks.

1.197Cooperation. The Parties shall reasonably cooperate with each other in connection with the matters covered by this Article 11, if and as may be reasonably requested by the other Party from time to time, and each Party shall bear all of its own related costs and expenses incurred in connection therewith.

CONFIDENTIALITY 

1.198Definition. 

	
 
	
(a)
	
As used herein, “Confidential Information” means all confidential or proprietary information disclosed by or on behalf of one Party or its Affiliates (such Party together with its Affiliates the “Disclosing Party”) to the other Party or its Affiliates (such Party together with its Affiliates, the “Receiving Party”) pursuant to this Agreement, in written, graphical, physical, electronic, oral or any other form. For the avoidance of doubt, Bayer’s Confidential Information includes the royalty reports provided by Bayer or non-public results of any Clinical Trial sponsored by Bayer with respect to any Licensed Product as well as any Bayer Background Technology, Bayer Results and Bayer 

 

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Background Improvements, and Atara’s Confidential Information includes any and all Licensed Know How.

	
 
	
(b)
	
Further, the terms and conditions of this Agreement shall be deemed both Parties’ Confidential Information hereunder and, with regard thereto, both Parties shall be subject to the obligations of confidentiality and non-use as per Section 12.2.

	
 
	
(c)
	
Confidential Information does not include information which:

	
 
	
(i)
	
is at the time of disclosure part of the public domain or becomes thereafter part of the public domain other than by an unauthorized disclosure of the Receiving Party. For the sake of clarity, information shall not be deemed to be in, or have come into, the public domain merely because any part of such information is embodied in general information which is or becomes publicly known or because individual features, components or combinations thereof are or become publicly known.

	
 
	
(ii)
	
the Receiving Party can prove to have obtained from a Third Party prior to or after its disclosure by the Disclosing Party; provided that such information was not obtained by said Third Party, directly or indirectly, from the Disclosing Party under an obligation of confidentiality; and / or

	
 
	
(iii)
	
information which the Receiving Party can prove was developed by or on behalf of it independently of the Confidential Information provided by the Disclosing Party.

1.199Protection of Disclosing Party’s Confidential Information.

	
 
	
(a)
	
Obligation of Confidentiality and Non-Use. Each Party agrees, with regard to Confidential Information received from the Disclosing Party, that during the term of this Agreement and for a period [[***]] years thereafter: 

	
 
	
(i)
	
it shall keep the Confidential Information strictly confidential and reasonably protected against disclosure as further described under Section 12.2.2 below;

	
 
	
(ii)
	
it shall not use the Confidential Information, for any purposes other than those expressly permitted under this Agreement including, with regard to each Party, exercise of the rights and licenses granted to such Party pursuant to Article 2; and

	
 
	
(iii)
	
it shall not disclose Confidential Information to any Third Party other than as permitted by Section 12.2.3.

 

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(b)
	
Information Security Obligations.

	
 
	
(i)
	
Each Party shall adopt technical and organizational measures to guarantee reasonable protection of the other Party’s Confidential Information, including the measures listed in Exhibit 12.2.2.1.

	
 
	
(ii)
	
Each Party may audit the other Party’s technical and organizational measures. For this purpose, each Party shall have the right, upon [[***]] Business Days’ prior notice and during regular business hours, to:

	
 
	
1)
	
request information from the other Party (self-reporting);

	
 
	
2)
	
cause a personal on-site inspection of the other Party, by a qualified Third Party (on-site audit). For such on-site audit, the audited Party shall grant the auditing Party access to, in particular, the data processing systems, files and documents pertaining to or containing Confidential Information of the auditing Party; and / or

	
 
	
3)
	
interview relevant personnel, provided that such rights may not be exercised in a manner that interferes with the normal operations and activities of the audited Party’s personnel. 

The audited Party shall and shall cause its personnel to cooperate with any such activities. In particular, it shall immediately make available to the auditing Party all information and certifications that are necessary for the performance of the information security control.

	
 
	
(c)
	
Exceptions from the Obligation of Confidentiality and Non-Use. A Receiving Party may disclose Confidential Information disclosed to it as follows:

	
 
	
1)
	
Confidential Information (including for clarity the terms of this Agreement) may be disclosed to the following persons and entities if such have a need to know and are bound by an obligation (contractual, fiduciary or otherwise) of confidentiality, non-use and non-disclosure at least as restrictive as set forth herein: (x) the Receiving Party’s officers, directors and employees,  (y) any Third Party to the extent reasonably necessary or appropriate to perform the Receiving Party’s rights and / or obligations under this Agreement, which includes, with regard to each Party, actual or potential (A) in the case of Atara with respect to Licensed Know How, licensees, and (B) in the case of both Parties, Sublicensees, investigators, distributors, co-promoters, co-marketers, suppliers, contractors, consultants, insurers, service providers and other similar persons and entities and (z) potential investors, investment bankers, merger partners or acquirors of a Party or substantially all of its assets referring to the Licensed Cell Therapeutic(s) and any Licensed Products. 

	
 
	
2)
	
Each Receiving Party may also disclose Confidential Information disclosed to it to Regulatory Authorities or other governmental authorities in order to obtain, maintain or defend Patent Rights or seek or obtain approval to conduct Clinical Trials, gain Regulatory Approval or Pricing Approval with respect to a Licensed Product or otherwise Exploit a Licensed Cell Therapeutic and / or Licensed Product;

 

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3)
	
Confidential Information may also be disclosed if and only to the extent such disclosure is required by (x) Laws, (y) Securities Exchange Rules, or (z) a validly issued request for information from a Regulatory Authority (including, for the sake of clarity, any governmental authority); provided that promptly, however, if reasonably possible, not later than [[***]] Business Days prior to any such disclosure, to the extent permitted by Laws, the Receiving Party shall notify the Disclosing Party and give reasonable opportunity to review and comment on the proposed disclosure and / or seek a protective order or other appropriate remedy and the Receiving Party shall consider in good faith the comments provided by the Disclosing Party.  In particular, the Parties shall consult with each other on the provisions of this Agreement to be redacted in any filings made by either Party pursuant to Laws or Securities Exchange Rules; or

	
 
	
4)
	
Any general, aggregate Confidential Information on the terms and conditions of this Agreement (including the Effective Date and maximum financial obligations) and on the collaboration of the Parties thereunder  (including reach of Development milestones, estimated Development timelines) may be disclosed in a Voluntary Public Communication and / or Scientific Communication under the terms of Sections 13.1 and 13.2 without any additional approvals under Article 12 being required.

To the fullest extent permitted by Laws and / or Securities Exchange Rules, the Receiving Party shall seek confidential treatment of any Confidential Information disclosed to it under this Section 12.2.3(ii) and (iii).

Subject, for clarity, to Section 12.1.3, the status of Confidential Information disclosed pursuant to this Section 12.2.3 shall remain Confidential Information for all other purposes of this Agreement.

1.200Protection of Licensed Know How. Without limiting Atara’s rights to the Licensed Know How, and Bayer’s confidentiality obligations with respect thereto, during the term of this Agreement Atara shall keep the Licensed Know How confidential and shall not disclose such to any Third Party; provided that (i) Section 12.2 shall apply mutatis mutandis (where Atara shall be deemed the Receiving Party solely for such purpose), and (ii) Atara shall not be restricted in disclosing Licensed Know How to any Third Party licensee (a) outside the Field, (b) within the Field, (x) solely with respect to therapeutic, prophylactic, diagnostic, and other healthcare-related products or treatments that are not directed to Mesothelin, or (y) with Bayer’s consent, and / or (c) in a country of the Territory in which the exclusive license granted to Bayer hereunder has expired or become non-exclusive, provided that such Third Party licensee is bound by a contractual obligation of confidentiality and non-use at least as restrictive as set forth in this Agreement. For clarity, Atara is responsible to ensure that its contractors, collaborators and other licensees will also be bound by substantially similar confidentiality obligations with respect to any Licensed Know How. 

1.201Prior Non-Disclosure Agreement. As of the Effective Date, the terms of this Article 12 shall supersede any prior non-disclosure, secrecy or confidentiality agreement(s) between the Parties (and / or their Affiliates) dealing with the subject matter of this Agreement, including 

 

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[[***]]. Any confidential information disclosed under any such prior agreement shall be deemed disclosed under this Agreement.

PUBLICATIONS, PUBLICITY, USE OF NAME

1.202The Parties shall not make any Public Communication nor submit or issue any Scientific Communication unless expressly permitted by Section 13.2 below.

1.203Voluntary Public Communication and Scientific Communication.

	
 
	
(a)
	
By Atara. Atara may issue (i) a Voluntary Public Communication and / or (ii) a Scientific Communication, provided that any such Voluntary Public Communication and / or Scientific Communication shall be conditional upon Bayer’s prior written consent subject to the procedure as per Section 13.2.3 below. To the extent MSK issues any Scientific Communication relating to the ATA2271 Phase 1 Clinical Trial sponsored by MSK without Bayer’s prior written consent, such issuance shall not constitute a breach of this Section 13.2.1 by Atara, provided that Atara shall use reasonable efforts under the terms of the applicable MSK Upstream Licenses to cause MSK to comply with this Section 13.2.1. 

	
 
	
(b)
	
By Bayer. Bayer may issue (i) a Voluntary Public Communication and / or (ii) a Scientific Communication; provided that Bayer allows Atara to review and comment in line with Section 13.2.3 below. 

	
 
	
(c)
	
Good faith cooperation. Each Party shall send to the other Party any Voluntary Public Communication and / or Scientific Communication (i) in case of a Voluntary Public Communication in the form of a statement included in any quarterly or annual earnings statements, press releases or investor presentations at least [[***]] Business Days prior to its intended publication, (ii) in case of any other Voluntary Public Communication at least [[***]] Business Days prior to its intended publication and (iii) in case of a Scientific Communication at least [[***]] Business Days prior to its intended submission or publication. The Parties shall cooperate in good faith to address any comments, concerns or objections within the respective period. 

	
 
	
(d)
	
Re-use. Once approved as per Section 13.2.1 (in case of Atara) or aligned as per Section 13.2.2 (in case of Bayer), after such approved Voluntary Public Communication has been issued, presented, or otherwise made by a Party, the precise or substantially similar wording may be frequently re-issued by such Party unless (i) the content of such Voluntary Public Communication has become misleading or otherwise inadequate as to subsequent developments, or (ii) any subsequent Voluntary Public Communication referring to the subject-matter thereof has been issued in line with Section 13.2.1 (in case of Atara) or Section 13.2.2 (in case of Bayer), in which case only the later Voluntary Public Communication may be re-issued, or (iii) the Parties have expressly agreed that a certain Voluntary Public Communication should exclusively be issued on one or more defined occasions.  

	
 
	
(e)
	
Any modification, alteration, amendment or adjustment of a Voluntary Public Communication or Scientific Communication shall be deemed a new Voluntary Public 

 

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Communication or Scientific Communication for the purpose of Sections 13.1, 13.2.1 and 13.2.2.

	
 
	
(f)
	
For the sake of clarity: Any Confidential Information included in any Voluntary Public Communication or Scientific Communication shall be subject to Article 12.

	
 
	
(g)
	
Article 12 shall remain unaffected with regard to the disclosure of such Confidential Information for any other purposes.

1.204Mandatory Public Communication. Either Party may issue a Mandatory Public Communication subject to [[***]]. 

1.205Use of Product Mark. Atara agrees not to use the Licensed Product’s expected trade name or any other expected Product Mark in any Public Communication in any country of the Territory prior to the Licensed Product obtaining Marketing Approval in such country without Bayer’s prior written consent, which consent may, for clarity, be withheld in Bayer’s sole discretion.

1.206Media Inquiries. Atara shall promptly direct all inquiries received by Atara or any of its Affiliates from members of the media and related to the Development or Commercialization of the Licensed Cell Therapeutic(s) and / or any Licensed Product to Bayer for handling, unless such media inquiry can be adequately answered by a Voluntary Public Communication which has been approved by Bayer in which case Section 13.2.4 shall apply.

1.207Press Release. The Parties shall mutually agree upon a joint press release regarding this Agreement and either Party may make subsequent Voluntary Public Communication of the contents of such press release in accordance with Sections 13.2.4 – 13.2.6.

1.208Non-Use of MSK’s Name. Bayer shall not use the names of MSK, including Memorial Sloan Kettering Cancer Center, Sloan Kettering Institute for Cancer Research, and Memorial Hospital for Cancer and Allied Diseases, nor any of their employees, nor any adaptation thereof, in any public announcements, publicity or advertising relating to this Agreement without prior written consent obtained from Atara or MSK, except as otherwise expressly permitted in the MSK Upstream Licenses.  

REPRESENTATIONS, WARRANTIES

1.209Mutual Representations and Warranties. Each Party hereby represents and warrants to the other Party that as of the Effective Date:

	
 
	
(a)
	
It is duly organized and validly existing under the laws of its jurisdiction of incorporation or formation; 

	
 
	
(b)
	
It has full corporate right, power and authority to enter into this Agreement and to perform its respective obligations under this Agreement (including, with respect to Atara, to grant the rights and licenses (including any sublicenses) granted by Atara to Bayer pursuant to this Agreement);

 

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(c)
	
It is duly authorized to execute and deliver this Agreement, and the person or persons executing this Agreement on its behalf have been duly authorized to do so by all requisite corporate action; and

	
 
	
(d)
	
This Agreement is legally binding upon it, enforceable in accordance with its terms. 

1.210Representations and Warranties by Atara. Atara hereby represents and warrants to Bayer that as of the Effective Date:

	
 
	
(a)
	
General. 

	
 
	
(i)
	
The execution and delivery of this Agreement by Atara, the performance of Atara’s obligations hereunder, including the rights and licenses (including any sublicenses) granted by Atara to Bayer pursuant to this Agreement (A) do not conflict with or violate any requirement of any Laws existing as of the Effective Date and (B) do not materially conflict with, breach or constitute a default under, or otherwise violate any contractual obligations of Atara or any of its Affiliates existing as of the Effective Date;

	
 
	
(ii)
	
To Atara’s Knowledge, Atara has provided Bayer with all material information relating to the Licensed Technology and Licensed Cell Therapeutics in Atara’s’ or any of its Affiliates’ possession or control, including all material information regarding ongoing Clinical Trials, efficacy, side effects, injury, toxicity or sensitivity, reaction and incidents or severity thereof and any manufacturing issues;

	
 
	
(iii)
	
To Atara’s Knowledge, the documents delivered or made available by Atara to Bayer in connection with the transaction contemplated by this Agreement do not contain any untrue statement of a material fact nor omit to state a material fact necessary in order to make the statements contained therein not misleading; and Atara has not, up through and including the Effective Date, withheld from Bayer any material information concerning the Licensed Technology, the Licensed Cell Therapeutic, the Licensed Product or the transaction contemplated by this Agreement;

	
 
	
(iv)
	
Atara and, to Atara’s Knowledge, its collaborators (including MSK) have in the course of developing the Licensed Cell Therapeutics and / or Licensed Products, not conducted any Development activities (including any preclinical studies or Clinical Studies) in material violation of any Laws;

	
 
	
(v)
	
With respect to each submission to a Regulatory Authority regarding the Licensed Cell Therapeutic and / or Licensed Product, to Atara’s Knowledge, Atara and its collaborators (including MSK) have not made an untrue statement of a material fact or fraudulent statement to such Regulatory Authority or knowingly failed to disclose a material fact required to be disclosed to such Regulatory Authority; and

 

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(vi)
	
Neither Atara nor any employee of Atara, or to Atara’s Knowledge, subcontractor, collaborator or employee of a subcontractor or collaborator which has performed services with respect to the Licensed Cell Therapeutic and / or Licensed Product has been debarred by any Regulatory Authority (including the FDA pursuant to its authority under Sections 306(a) and (b) of FDC Act) or is the subject of any investigation or proceeding which may result in debarment by any Regulatory Authority.

	
 
	
(b)
	
Existing Agreements.

	
 
	
(i)
	
Atara has provided to Bayer a true and complete copy (subject to appropriate redactions) of each Existing Agreement;

	
 
	
(ii)
	
The Existing Agreements constitute the only agreements and understandings Atara or any of its Affiliates has entered into with respect to any of the Licensed Technology; 

	
 
	
(iii)
	
To Atara’s Knowledge, each Existing Agreement is valid, binding and enforceable according to its terms and Atara is not in breach of any Existing Agreement; and 

	
 
	
(iv)
	
Atara has not received any notice of any continuing default, breach or violation under any Existing Agreement.

	
 
	
(c)
	
Licensed Technology.

	
 
	
(i)
	
Exhibit 1.85 contains a correct and complete list of all Licensed Patent Rights as of the Effective Date, including the status (as of the Effective Date) of each such Licensed Patent Right. To Atara’s Knowledge, all of the Licensed Patent Rights issued as of the Effective Date are valid and enforceable; 

	
 
	
(ii)
	
Atara (A) Controls all right, title and interest in the Licensed Know How specified in Exhibit 1.84 and the Licensed Patent Rights listed in Exhibit 1.85 (for clarity, including all materials, documents and data generated within the ATA2271 clinical development), which includes the right to grant the rights and licenses specified herein to the full extent contemplated under this Agreement, subject to the retained rights and other limitations in the Existing Agreements, as disclosed in redacted version to Bayer prior to the Effective Date; and (B) is the sole and exclusive owner of the Licensed Technology, with the exception of those parts of the Licensed Technology described in Exhibit 14.2.3.2(B). To Atara’s Knowledge, none of the Licensed Technology, nor any of Atara’s right, title or interest therein or thereto, is subject to any lien, option or other contingent right, restriction or claim of ownership (or other right, title or interest) by any Third Party (subject to the Existing Agreements) or any other encumbrance;

	
 
	
(iii)
	
Neither Atara nor any of its Affiliates has granted any license or other right, title or interest to any Third Party relating to any of the Licensed Technology, 

 

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Licensed Cell Therapeutics and / or Licensed Products which would conflict with the rights granted to Bayer hereunder;

	
 
	
(iv)
	
To Atara ́s Knowledge, there is and has been no actual, alleged or threatened infringement, misappropriation or other violation of Licensed Technology and there are no claims, judgments or settlements against, or amounts with respect thereto owed by, Atara or any of its Affiliates relating to any of the Licensed Technology, and no Licensed Technology is subject to any outstanding consent, settlement, decree, order, injunction, judgment, or ruling, including any that restricts or otherwise limits the use, ownership, validity, enforceability, disposition or other exploitation thereof;

	
 
	
(v)
	
Neither Atara nor any of its Affiliates has received any written or, to Atara’s Knowledge, any other communication from any Third Party, or is or was a party to any suit, action or other proceeding pursuant to which any Third Party is or was, (A) claiming that the practice or other use of the Licensed Technology or the Exploitation of the Atara Cell Therapeutics is or was infringing the patent rights, or misappropriating or otherwise violating any other intellectual property rights, of any Third Party (including in any demand letter to in-license any Third Party intellectual property), or (B) challenging the validity, enforceability, patentability, use or ownership of any of the Licensed Technology or with respect to the Atara Cell Therapeutics, including by making any adverse claim of ownership thereof or claiming joint ownership or that the Licensed Patent Rights are invalid or unenforceable (and, in each case (clauses (A) and (B)) to Atara’s Knowledge, none of the foregoing have been threatened and there is no reasonable basis for any of the foregoing;

	
 
	
(vi)
	
The Licensed Patent Rights are being equitably and diligently filed and prosecuted with the respective patent offices in accordance with all Laws and all applicable patent prosecution and maintenance fees with respect thereto have been timely paid;

	
 
	
(vii)
	
To Atara’s Knowledge, there are no facts or circumstances which cause it to believe or conclude that any Licensed Patent Right is or may be invalid or unenforceable;

	
 
	
(viii)
	
To Atara’s Knowledge, [[***]] neither the manufacturing of Atara Cell Therapeutics nor the practice or other use of any Licensed Technology relating to CMC and manufacturing of Atara Cell Therapeutics and, to Atara’s Knowledge, neither the other Exploitation of the Atara Cell Therapeutics nor the practice or other use of any other Licensed Technology in accordance with the licenses granted by Atara to Bayer under this Agreement is infringing, misappropriating or otherwise violating any Patent Right or Know How of any other person or entity; and

	
 
	
(ix)
	
Neither Atara nor any of its Affiliates has entered into an agreement or other arrangement with any academic institution, research center or governmental 

 

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authority (or any person working for or on behalf of any of the foregoing) and / or accepted any funding, facilities, personnel or other resources from any academic institution, research center or governmental authority with respect to the Development of any Licensed Technology or any Atara Cell Therapeutic, including in connection with the conception, invention, reduction to practice, development or other creation of any intellectual property relating to any or any intellectual property that is included in any Licensed Technology or Atara Cell Therapeutic, except for, and pursuant to, the Existing Agreements.

1.211Disclaimer of Warranties. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, TO THE OTHER PARTY, AND, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EACH PARTY HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY THAT THE DEVELOPMENT, COMMERCIALIZATION AND MANUFACTURE OF THE LICENSED CELL THERAPEUTIC AND / OR LICENSED PRODUCTS, OR THE OBTAINMENT OF MARKETING AUTHORIZATION OR PRICING APPROVAL IN ANY PARTICULAR COUNTRY, PURSUANT TO THIS AGREEMENT WILL BE SUCCESSFUL. 

ADDITIONAL COVENANTS

1.212No Transfer of Rights. During the term of this Agreement, without Bayer’s prior written consent, Atara shall not, and shall cause its Affiliates not to:

	
 
	
(i)
	
transfer by assignment or otherwise any of the Licensed Technology to any Third Party except in strict compliance with Section 21.5; 

	
 
	
(ii)
	
grant any lien, option or other contingent right, or any other encumbrance on the Licensed Technology, in each case, which would conflict with the rights and licenses granted to Bayer hereunder; nor

	
 
	
(iii)
	
grant any right, title or interest to any Third Party relating to the Licensed Technology, or any Licensed Cell Therapeutic or Licensed Product, which would conflict with the rights and licenses granted to Bayer hereunder.

1.213Existing Third Party Obligations.

	
 
	
(a)
	
Within [[***]] Business Days following the Effective Date, Atara shall provide to Bayer a true and complete unredacted copy of each Existing Agreement. During the term of this Agreement, Atara shall:

	
 
	
(i)
	
keep Bayer reasonably informed of any material development pertaining to, including any request or proposal to amend or modify, an Existing Agreement, in each case that could reasonably be expected to adversely affect the rights and licenses granted to Bayer hereunder;

	
 
	
(ii)
	
not amend, or waive any right under, any Existing Agreement (in each case where such amendment or waiver could reasonably be expected to 

 

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adversely affect the rights and licenses granted to Bayer hereunder) without the prior written consent of Bayer which consent shall not be unreasonably withheld or delayed;

	
 
	
(iii)
	
maintain each Existing Agreement in full force and effect; and

	
 
	
(iv)
	
perform its obligations thereunder, including any payment obligations due pursuant to any Existing Agreement. 

	
 
	
(b)
	
With respect to any breach or default under any Existing Agreement that if uncured would enable the other party(ies) to such Existing Agreement to render non-exclusive or terminate the licenses granted to Atara thereunder (which would in turn render non-exclusive or terminate or have any other detrimental impact on Bayer’s interests with respect to the licenses granted to Bayer hereunder), Atara shall if notified of such breach or default or notified of the other party ́s intention to notify:

	
 
	
(i)
	
give prompt written notice thereof to Bayer; 

	
 
	
(ii)
	
cure such breach or default within the period of time as may be required pursuant to the applicable Existing Agreement; and 

	
 
	
(iii)
	
provide Bayer with written confirmation thereof. 

In the event that Atara is unable to cure such breach or default within this required time period, Atara shall provide Bayer with prompt written notice thereof and, to the extent permitted under the applicable Existing Agreement, permit Bayer, in its sole discretion, to cure such breach or default within the relevant cure period on behalf of the Atara, if possible. All out-of-pocket sums expended by Bayer in the exercise of its rights under this section, and concomitant interest (at the rate set forth in Section 9.6.4) accruing shall be deducted by Bayer from any future sums due from Bayer to the Atara pursuant to this Agreement.

1.214Non-Compete. 

	
 
	
(a)
	
No Development or Commercialization of Competing Products. Except as permitted or required pursuant to terms of this Agreement, subject to Section 15.4, Atara covenants that neither it nor any of its Affiliates shall, during the term of this Agreement, perform, or actively and voluntarily participate or assist any Third Party in performing, (i) any Development with respect to, or Manufacture or Commercialization of any Competing Product; or (ii) any research program the goal of which is to identify Competing Products, in each case (i) and (ii) provided that the covenant not to Develop Competing Products, including with respect to [[***]] expires on [[***]]. 

	
 
	
(b)
	
Development After [[***]].  Except as permitted or required pursuant to terms of this Agreement, subject to Section 15.4, Atara covenants that neither it nor any of its Affiliates shall, [[***]] of a Licensed Product in a [[***]], perform, or actively and voluntarily participate or assist any Third Party, in performing, any Development of a Competing Product  entailing the use by Atara of employees of Atara who have been 

 

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involved in the Development of the Licensed Cell Therapeutic and / or Licensed Product, unless the Know How regarding the Licensed Cell Therapeutic and / or Licensed Product gained by such employees could not reasonably be used for the Development of the Competing Product.   

	
 
	
(c)
	
With regard to any country of the Territory in which any covenants contained in Sections 15.3.1 or 15.3.2 might violate the Laws, now or in the future, such covenants shall become null and void and of no effect, but only to the extent it violates the Laws of such country and provided, for clarity, that Sections 15.3.1 and 15.3.2 shall remain valid with regard to any other country of the Territory. 

1.215Transactions by Atara.

	
 
	
(a)
	
Notification Requirement. Notwithstanding Section 15.3, in the event that (i) Atara or (subject to Section 15.4.5) any of its Affiliates acquires, whether by merger, acquisition, asset purchase, or other similar transaction, a Third Party or any of its Affiliates (collectively, the “Acquired Affiliate”) and, (ii) prior to the date of the consummation of the relevant transaction (the “Acquisition Date”), the Acquired Affiliate has been (either directly or through any Third Party) Exploiting one or more Competing Products in a way that would violate Section 15.3 if done so by Atara (the “Acquired Competing Products”), then Atara shall provide written notice of such Acquired Competing Products to Bayer within [[***]] days from the Acquisition Date (“Acquisition Notice Period”). 

	
 
	
(b)
	
Election of Remedy. Prior to the end of the Acquisition Notice Period, Atara shall elect with regard to each Acquired Competing Product either to: (i) terminate, or cause the Acquired Affiliate to terminate, the Exploitation of the Acquired Competing Product in violation to Section 15.3 or (ii) divest, or cause the Acquired Affiliate to divest, whether by license or otherwise, such Acquired Competing Product. 

	
 
	
(c)
	
Termination of Acquired Competing Product. If Atara notifies Bayer about its intention to terminate an Acquired Competing Product according to Section 15.4.2(i), then Atara or its Acquired Affiliate shall (i) terminate the Exploitation of such Acquired Competing Product as promptly as reasonably possible with due regard for patient safety and the requirements of Laws; and (ii) confirm to Bayer in writing when such termination has been completed. 

	
 
	
(d)
	
Divestment of Acquired Competing Product. If Atara notifies Bayer about its intention to divest an Acquired Competing Product in accordance with Section 15.4.2(ii), then Atara or its Acquired Affiliate shall effect such divestment within [[***]] months of the Acquisition Date; provided, that such [[***]] months period shall be extended for an additional period not to exceed [[***]] days if necessary to obtain any merger clearance required to complete such divestiture. Atara shall keep Bayer reasonably informed of its efforts and progress in effecting such divestiture until it is completed. If Atara or its Acquired Affiliate effects such divestiture by way of one or more licenses or sublicenses, then Atara or its Acquired Affiliate shall be entitled to receive license fees, milestones and royalties on sales of any Acquired Competing Product so divested; provided that 

 

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neither Atara nor its Acquired Affiliate funds or continues to conduct development or commercialization of such Acquired Competing Product.

	
 
	
(e)
	
Change of Control of Atara. If Atara enters into a transaction or series of transactions with a Third Party acquiror that constitutes a Change of Control of Atara [[***]] then the Third Party acquiror (and / or its affiliates other than Atara, which affiliates, together with the Third Party acquiror, shall be referred to as the “Acquiror Group”) shall not be subject to Sections 15.3 or 15.4.1-15.4.4, provided that (i) no Licensed Technology (for clarity, neither any Exclusive Technology nor Non-Exclusive Technology) or Bayer Confidential Information is used by the Acquiror Group in connection with any Competing Product Exploited by the Acquiror Group, and (ii) the Acquiror Group implements reasonable measures to ensure that the personnel engaged in the development and / or commercialization of Licensed Cell Therapeutics and Licensed Products operate independently from the personnel engaged in the development and / or commercialization of the Competing Product(s).

1.216Bayer Activities. Nothing in this Agreement shall be interpreted as prohibiting a Bayer Party from, independently or with a Third Party, directly or indirectly, including through any ownership interest, funding or conducting any activity that has as its goal or intent discovering, identifying or Exploiting a Competing Product or any other compound or product, provided that no Licensed Technology or Confidential Information of Atara and / or its Affiliates is used or accessed in connection with the foregoing activities outside the scope of the licenses and any other rights granted to Bayer under this Agreement.

INDEMNIFICATION, LIABILITY, INSURANCE

1.217Indemnification by Bayer. Bayer shall defend, indemnify and hold harmless 

(i) Atara, its Affiliates and their respective directors, officers, and employees; as well as 

(ii) solely with respect to Licensed Product that are covered by Licensed Technology that is subject to MSK Upstream Licenses, MSK and its trustees, directors, officers, medical and professional staff, employees, students, and agents and their respective successors, heirs, and assigns; and

(iii) solely with respect to Licensed Product that are covered by Licensed Technology that is subject to the NIH Upstream License, NIH and its trustees, directors, officers, medical and professional staff, employees, students, and agents and their respective successors, heirs, and assigns, 

(the “Atara Indemnified Parties”) from and against all claims, demands, liabilities, damages, penalties, fines, costs and expenses, including reasonable attorneys’ and expert fees and costs, and costs or amounts paid to settle (collectively, “Losses”), arising from or occurring as a result of a Third Party’s claim (including any Third 

 

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Party product liability), action, suit, judgment or settlement to the extent such Losses are due to or based upon:

	
 
	
(a)
	
the Exploitation of the Licensed Product; 

	
 
	
(b)
	
gross negligence, intentional wrongful acts or omissions or violations of Laws by a Bayer Party or their respective directors, officers or employees in connection with the Licensed Product; or

	
 
	
(c)
	
breach by Bayer of any representation, warranty or covenant made by Bayer in this Agreement,

except, in each case, to the extent arising from or occurring as a result of (A) the gross negligence, intentional wrongful acts or omissions or violations of Laws by Atara, its Affiliates, Upstream Licensors or any of their respective directors, officers or employees; or (B) the breach by Atara of any representation, warranty or covenant made by it in this Agreement.

1.218Indemnification by Atara. Atara shall defend, indemnify and hold harmless each Bayer Party and their respective directors, officers, and employees (the “Bayer Indemnified Parties”) from and against all Losses arising from or occurring as a result of a Third Party’s claim (including any Third Party product liability), action, suit, judgment or settlement to the extent such Losses are due to or based upon: 

	
 
	
(i)
	
the ATA2271 Phase 1 Clinical Trial and any other Phase 1 Clinical Trial related to ATA2271;

	
 
	
(ii)
	
gross negligence, intentional wrongful acts or omissions or violations of Laws or regulation by or of Atara, its Affiliates, Upstream Licensors or their respective directors, officers or employees in connection with the Licensed Product;

	
 
	
(iii)
	
breach by Atara of any representation or warranty made by it in the Agreement; or

	
 
	
(iv)
	
any conflict arising from the explicit apportionment of the Upfront License Payment set forth in Section 9.1,

except, in each case, to the extent arising from or occurring as a result of (A) the gross negligence, intentional wrongful acts or omissions or violations of Laws by a Bayer Party or any of their respective directors, officers or employees; or (B) the breach by Bayer of any representation, warranty or covenant made by Bayer in this Agreement.

1.219Claims for Indemnification. 

	
 
	
(a)
	
A person entitled to indemnification under Section 16.1 or 16.2 (an “Indemnified Party”) shall give prompt written notification to the person from whom indemnification is sought (the “Indemnifying Party”) of the commencement of any action, suit or proceeding relating to a Third Party claim for which indemnification may be sought or, if earlier, upon the assertion of any such claim by a Third Party. 

 

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(b)
	
Within [[***]] days after receipt of such notification, the Indemnifying Party may, upon written notice thereof to the Indemnified Party, assume control of the defense of such action, suit, proceeding or claim with counsel of its choice. If the Indemnifying Party does not assume control of such defense, the Indemnified Party shall control such defense.

	
 
	
(c)
	
The Party not controlling such defense may participate therein at its own expense.

	
 
	
(d)
	
The Party controlling such defense shall keep the other Party advised of the status of such action, suit, proceeding or claim and the defense thereof and shall consider in good faith reasonable recommendations made by the other Party with respect thereto.

	
 
	
(e)
	
If the Indemnifying Party chooses to defend or prosecute any Third Party claim, the Indemnified Party that is a Party to this Agreement shall, and shall cause each of its Affiliates and each of their respective directors, officers, employees and agents to reasonably cooperate in the defense or prosecution thereof and shall furnish such records, information and testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection therewith. Such cooperation shall include access during normal business hours by the Indemnifying Party to, and reasonable retention by the Indemnified Party of, records and information that are reasonably relevant to such Third Party claim, and making the Indemnified Party, its Affiliates and its and their respective directors, officers, employees and agents available on a mutually convenient basis to provide additional information and explanation of any records or information provided, and the Indemnifying Party shall reimburse the Indemnified Party for all of its related reasonable out-of-pocket expenses. 

	
 
	
(f)
	
The Indemnified Party shall not agree to any settlement of such action, suit, proceeding or claim without the prior written consent of the Indemnifying Party, which shall not be unreasonably withheld. The Indemnifying Party shall not agree to any settlement of such action, suit, proceeding or claim or consent to any judgment in respect thereof that does not include a complete and unconditional release of the Indemnified Party from all liability with respect thereto or that imposes any liability or obligation on the Indemnified Party without the prior written consent of the Indemnified Party. 

1.220Limitation of Liability. EXCEPT IN CASES OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, IN NO EVENT SHALL EITHER PARTY OR THEIR AFFILIATES BE LIABLE OR OBLIGATED TO THE OTHER PARTY IN ANY MANNER FOR ANY SPECIAL, NON-COMPENSATORY, CONSEQUENTIAL, INDIRECT, INCIDENTAL, STATUTORY OR PUNITIVE DAMAGES OF ANY KIND, OR LOST PROFITS, LOST REVENUE OR LOST GOODWILL, REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT, NEGLIGENCE, STRICT PRODUCT LIABILITY OR OTHERWISE, EVEN IF INFORMED OF OR AWARE OF THE POSSIBILITY OF ANY SUCH DAMAGES IN ADVANCE, PROVIDED THAT THIS LIMITATION OF LIABILITY SHALL NOT APPLY (I) TO THE EXTENT THAT IT WOULD BE INVALID BY LAW, (II) FOR A MATERIAL BREACH OF Article 12 (CONFIDENTIALITY) AND / OR (III) TO CLAIMS ARISING IN CONNECTION WITH SECTIONS 16.1, 16.2 AND 16.3 (INDEMNIFICATION). 

 

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1.221Insurance. 

	
 
	
(a)
	
Subject to the proceeding subsection, each Party, at its own expense, shall, during the term of this Agreement, at its sole cost, obtain, carry and keep in force a liability insurance covering such risks as are appropriate in accordance with sound business practice and the Parties’ obligations under this Agreement.

	
 
	
(b)
	
In lieu of the insurance coverage described in the preceding subsection, Bayer shall have the right to undertake self-insurance to cover its obligations hereunder, with financial protection comparable to that arranged by it for its own protection with regard to other products in its portfolio.

COMPLIANCE WITH LAWS

1.222Compliance. Both Bayer and Atara shall perform, and shall procure that their respective Affiliates and Sublicensees perform, their obligations under this Agreement in accordance with the Law and accepted pharmaceutical industry business practices, including, if and to the extent applicable to such Party (or its Affiliates or Sublicensees, as applicable) or its (or their) activities hereunder, the Federal Food, Drug, and Cosmetic Act (21 U.S.C. § 301 et seq.), the Public Health Service Act (42 U.S.C. § 201 et seq.), the Anti-Kickback Statute (42 U.S.C. § 1320a-7b), Civil Monetary Penalty Statute (42 U.S.C. § 1320a-7a), the False Claims Act (31 U.S.C. § 3729 et seq.), comparable state statutes, the regulations promulgated under all such statutes, and the regulations issued by the FDA or other applicable Regulatory Authority. Each Party shall promptly notify the other Party in writing of any written allegation received from a Third Party or Regulatory Authority of an alleged material deviation from applicable Laws with respect to activities under this Agreement. No Party or any of its Affiliates shall, or shall be required to, undertake any activity under or in connection with this Agreement which violates, or which it believes, in good faith, may violate (or cause the other Party to violate), any Law.

1.223Export Controls. This Agreement is made subject to any restrictions concerning the export of products or technical information from the United States or other countries which may be imposed upon or related to Bayer or Atara from time to time. Each Party agrees that it will not export, directly or indirectly, any technical information acquired from the other Party under this Agreement or any products using such technical information to a location or in a manner that at the time of export requires an export license or other governmental authority approval, without first obtaining the written consent to do so from the appropriate governmental authority.

1.224Marking of Licensed Products. With respect to Licensed Products that are subject to the MSK Upstream Licenses, to the extent required by Law, or if the failure to mark would reduce the rights of MSK or Atara to enforce such Licensed Patent Rights against infringers, Bayer shall mark, and shall cause its Affiliates and Sublicensees to mark, such Licensed Products (or the packaging thereof) with the appropriate Licensed Patent Rights.

 

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1.225Data Privacy. 

	
 
	
(a)
	
General aspects.

	
 
	
(i)
	
Each party shall comply with their respective obligations under applicable data privacy laws.

	
 
	
(ii)
	
Data privacy related terms shall have the meaning as defined in Art. 4 General Data Protection Regulation EU 2016/679 (GDPR) if not otherwise defined in this Agreement.

	
 
	
(iii)
	
The Parties acknowledge that they will need to process personal data of the respective other Party’s employees (“Employee Data”) for the purpose of executing this contract. 

	
 
	
(iv)
	
In the context of this Agreement, a Party may need to transfer human biological samples (including any derivatives or progeny thereof like cell lines) (“Human Samples”) including information regarding the origin, pathology or integrity of such samples and/or other research related data (including information about health) on a one-person-level to the respective other Party. Such data, and/or the results of analyses of said human biological samples, may qualify as personal data (in this case: “Human Data”). For the avoidance of doubts, one-person-level data may qualify as personal data (if it falls under the definition of personal data in applicable data privacy law) but does not necessarily do so. 

	
 
	
(b)
	
Privacy obligations of Disclosing Party.

	
 
	
(i)
	
Where a Party discloses Human Samples and/or Human Data to the respective other Party, the disclosing Party is responsible to ensure meeting all conditions that are legally required to allow this disclosure for purposes of this Agreement (including medical and diagnostic research and development purposes). This may include e.g. ensuring that respective data subjects have given and not withdrawn their consents, or anonymizing or de-identifying Human Samples and/or Human Data prior to disclosure (examples not exhaustive).

	
 
	
(ii)
	
In case a transfer of Human Samples and/or Human Data from Bayer to Atara is required, the Parties hereby enter by reference the standard contractual clauses as published by the European Commission as Decision 2004/915/EC. Atara as data importer will process personal data in scope of the standard contractual clauses according to Annex A of the standard contractual clauses. Specifications required for annex B are as follows: 

	
 
	
A.
	
Data subjects: Participants of clinical studies, donors of human samples

	
 
	
B.
	
Purposes of transfer: Purposes as specified in the Agreement

 

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C.
	
Category of data: Human Samples and/or Human data collected as part of clinical studies or obtained for research purposes

	
 
	
D.
	
Recipients: Atara

	
 
	
E.
	
Sensitive data: Data about health, genetic data

	
 
	
F.
	
Contact point for data protection inquiries:
Data importer: [[***]] 
Data exporter: [[***]]

In the event that a change in applicable data protection law would require a different transfer mechanism than the standard contractual clauses as published by the European Commission as Decision 2004/915/EC in order to allow an export of personal data from Bayer to Atara, Bayer and Atara shall cooperate in good faith to implement such an alternative prior to the effective date of any such change.

	
 
	
(iii)
	
Each Parties confirms that at time of signature of this Agreement, it is not aware of any legal requirement that may hinder disclosing Human Samples and/or Human Data to the respective other Party as required to fulfill the obligations under this Agreement.

	
 
	
(iv)
	
The Party disclosing Human Data to the other Party shall do so only encrypted or via secure communication channels.

	
 
	
(c)
	
Privacy obligations of Receiving Party.

	
 
	
(i)
	
The Party receiving Employee Data and Human Samples and/or Human Data from the respective other Party may only use those as required for purposes of this Agreement.

	
 
	
(ii)
	
Receiving Party is responsible to meet applicable privacy Laws when using received Human Samples and/or Human Data; receiving Party is in this respect a data controller as defined in the GDPR.

	
 
	
(iii)
	
Receiving Party shall refrain from any attempt to identify the donor and/or data subject of the Human Samples and/or Human Data. This includes that Human Samples and/or Human Data shall not be supplemented or combined with any information which de-facto allows for a re-identification.

	
 
	
(iv)
	
Receiving Party shall implement appropriate technical and organizational measures to protect the Human Samples and/or Human Data against accidental or unlawful destruction or accidental loss, alteration, unauthorised disclosure or access, and which provide a level of security appropriate to the risk represented by the processing and the nature of the data to be protected. This included restricting access to Human Samples and/or Human Data to a need-to-know level.

 

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(v)
	
Receiving Party shall notify the disclosing Party without undue delay in the event that receiving Party becomes aware of a breach of applicable data privacy laws in the context of activities related to the Agreement. 

TERM AND TERMINATION

1.226Term. This Agreement shall commence on the Effective Date and shall end, on a Licensed Product-by-Licensed Product and country-by-country basis upon the earlier of (i) expiration of the Royalty Term applicable to such country, or (ii) any termination of this Agreement or parts thereof in accordance with Section 18.2 below.

1.227Termination.

	
 
	
(a)
	
Termination by Bayer. Bayer shall have the right to terminate this Agreement in whole or on a Licensed Product-by-Licensed Product and country-by-country (except in any of the Major Market countries) basis at any time after the Effective Date on at least [[***]] days prior written notice to Atara.

	
 
	
(b)
	
Termination for Breach. Either Party shall be entitled to terminate this Agreement by written notice to the other with immediate effect if the other Party materially breaches any of its material obligations under this Agreement and, if such breach is curable within the aforesaid period, fails to cure such breach within [[***]] days following its receipt of written notice thereof from the terminating Party.

	
 
	
(c)
	
Termination for Patent Challenge. If Bayer or [[***]] (a) commences or actively and voluntarily participates in any action or proceeding (including any patent opposition or re-examination proceeding), or otherwise asserts any claim, challenging or denying the validity or enforceability  of any claim of any Licensed Patent Rights, or (b) actively and voluntarily assists any other party in bringing or prosecuting any action or proceeding (including any patent opposition or re-examination proceeding) challenging or denying the validity or enforceability of any claim of any Licensed Patent Rights (each of (a) and (b), a “Patent Challenge”), then, to the extent permitted by Laws, Atara shall have the right, in its sole discretion, to give notice to Bayer that Atara may terminate this Agreement [[***]] days following such notice and, unless Bayer or such Bayer Party, as applicable, withdraws or causes to be withdrawn all such challenge(s) within such [[***]] day period, Atara shall have the right to (i) [[***]] terminate this Agreement by providing written notice thereof to Bayer or (ii) [[***]]. The foregoing right to terminate shall not apply with respect to any Patent Challenge where the Patent Challenge is made in defense of an assertion of the relevant Patent Right that is first brought by Atara against Bayer. 

	
 
	
(d)
	
Termination for Bankruptcy. To the extent permitted by Law, either Party may terminate this Agreement by written notice to the other with immediate effect if the other Party is compelled to file bankruptcy, or appoints or suffers appointment of a receiver or trustee over all or substantially all of its property, or makes a general assignment for the benefit of creditors, in each case, where the relevant proceedings are not dismissed, discharged or stayed within [[***]] days after the filing thereof

 

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1.228Effect of Termination or Expiration of Agreement. 

	
 
	
(a)
	
In case of any termination or expiration of this Agreement, all rights and obligations of the Parties shall cease immediately, unless otherwise indicated in this Agreement. 

	
 
	
(b)
	
Expiration or termination of this Agreement shall not relieve the Parties of any obligation accrued prior to such expiration or termination, nor shall expiration or any termination of this Agreement preclude either Party from pursuing all rights and remedies it may have under this Agreement, at law or in equity, with respect to breach of this Agreement nor prejudice any Party’s right to obtain performance of any obligation.

	
 
	
(c)
	
Upon termination or expiration of this Agreement, upon the request of the Disclosing Party, the Receiving Party shall promptly return to the Disclosing Party or destroy the Disclosing Party’s Confidential Information, including all copies thereof, except to the extent that retention of such Confidential Information is reasonably necessary for the Receiving Party to Exploit any continuing rights it may have and / or to fulfill its obligations contemplated herein, including its obligations of non-disclosure and non-use hereunder. The return and / or destruction of such Confidential Information as provided above shall not relieve the Receiving Party of its obligations under this Agreement. The provisions of this section shall not apply to copies of electronically exchanged Confidential Information made as a matter of routine information technology backup and to Confidential Information or copies thereof which must be stored by the Receiving Party according to provisions of Law or the Receiving Party’s internal policies and procedures.

	
 
	
(d)
	
Program Transfer.

	
 
	
(i)
	
Upon termination of this Agreement in its entirety (i) [[***]] or (ii) [[***]], in each case (i) and (ii) at Atara’s option, upon written notice submitted to Bayer no later than [[***]] days after the effective date of the termination, [[***]].  

	
 
	
(ii)
	
Upon agreement of a program transfer agreement or Atara’s request for a Program Transfer, as applicable, in each case, pursuant to Section 18.3.4.1, Bayer will (in the case of a program transfer agreement, within the timelines agreed in such agreement, or otherwise as promptly as reasonably practicable), in each case to the extent legally possible without breaching any Laws (including on data privacy) or obligations towards Third Parties (including contractual obligations), make the following transfers to Atara (“Program Transfer”):

	
 
	
1)
	
Regulatory Documentation.  [[***)].

	
 
	
2)
	
Clinical Trials. [[***]]. 

	
 
	
3)
	
Trademarks. [[***]].

	
 
	
4)
	
Inventory.  [[***]].

 

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5)
	
Licenses.  [[***]]

	
 
	
6)
	
Transition of Contracts.  [[***]]. 

1.229Additional Effects of Expiration. Upon expiration (but not early termination) of this Agreement in a particular country pursuant to Section 18.1, Bayer shall have a fully paid-up, perpetual, irrevocable [[***]] license (including the right to [[***]]) in the Field in such country under the Licensed Technology to Exploit the Licensed Cell Therapeutic(s) / Licensed Product(s).

1.230Bayer’s Rights upon Atara’s Bankruptcy.

	
 
	
(a)
	
All licenses granted under this Agreement shall be deemed licenses of rights to intellectual property for purposes of Section 365(n) of the U.S. Bankruptcy Code as it may be amended from time to time (the “U.S. Bankruptcy Code”). The Parties hereby agree that Bayer may fully exercise all of its rights and elections under the U.S. Bankruptcy Code.

	
 
	
(b)
	
The Parties hereby agree that Bayer, as licensee of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the U.S. Bankruptcy Code or any other Law outside the United States that provide similar protection for intellectual property rights. Atara (in any capacity, including debtor-in-possession) and its successors and assigns (including any trustee) grants to Bayer and its Affiliates a right to obtain possession of and to benefit from a complete duplicate of (or complete access to, as appropriate) any Licensed Technology and all embodiments of the Licensed Technology held by Atara or such successors and assigns, or otherwise available to them, which, if not already in Bayer’s possession, shall be promptly delivered to Bayer upon Bayer’s written request. Embodiments of Licensed Technology includes all tangible, electronic or other embodiments of rights and licenses hereunder, including all Licensed Products, all Regulatory Documentation and rights of reference therein. Atara (in any capacity, including debtor-in-possession) and its successors and assigns (including any trustee) shall not interfere with the exercise by Bayer or its Affiliates of rights and licenses to Licensed Technology and embodiments of Licensed Technology licensed hereunder in accordance with this Agreement and agrees to reasonably assist Bayer and its Affiliates to obtain the Licensed Technology and embodiments of Licensed Technology in the possession or control of Third Parties as reasonably necessary or desirable for Bayer or its Affiliates to exercise such rights and licenses in accordance with this Agreement (in each case to the extent Atara has such right under the agreement(s) with the applicable Third Parties). Whenever Atara (in any capacity, including debtor-in-possession) and its successors and assigns (including any trustee) provides to Bayer, pursuant to this Section 18.5, any of the Licensed Technology and embodiments of Licensed Technology in accordance with this Agreement, Bayer shall have the right to perform the obligations of Atara hereunder with respect to such Licensed Technology and embodiments of Licensed Technology, but neither such provision nor such performance by Bayer shall release Atara (in any capacity, including debtor-in-possession) and its successors and assigns (including any trustee) from liability 

 

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resulting from any rejection of the license or the failure to perform such obligations set forth in this Agreement.

1.231Survival. The provisions of Sections 2.1.2, 2.1.3, 2.2.2, 2.2.3, 2.8, 3.3.4, 8.1 (solely with respect to units of Licensed Products administered or sold prior to the expiration or termination of this Agreement), 9.6.4 (solely with respect to payments that are accrued but unpaid at the time of expiration or termination, or otherwise to the extent applicable), 9.7, 11.2, 14.1-14.2 (solely with respect to claims arising from a breach of warranty, subject to applicable statute of limitation),14.3, 17.4, 18.3, 18.4, 18.5.1, 18.5.2 (if this Agreement is terminated by either Party under Section 18.2.4) and this 18.6 and Article 1, Article 10, Article 12, Article 16 (but not Section 16.5), Article 20 and Article 21 shall survive any termination or expiration of this Agreement.

FORCE MAJEURE

1.232Force Majeure. Neither Party shall be responsible or liable to the other Party for any failure to perform any of its obligations hereunder, if such failure results from circumstances beyond the control of such Party, including requisition by any governmental authority, the effect of any statute, ordinance or governmental order or regulation, wars, strikes, lockouts, riots, epidemic, pandemic, disease, an act of God, civil commotion, fire, earthquake, storm, failure of public utilities, common carriers or supplies, or any other circumstances, whether or not similar to the above causes and whether or not foreseeable (“Force Majeure”). The Parties shall use Commercially Reasonable Efforts to avoid or remove any such cause and shall resume performance under this Agreement as soon as feasible whenever such cause is removed; provided that the foregoing shall not be construed to require either Party to settle any dispute with any Third Party, to commence, continue or settle any litigation, or to incur any unusual or extraordinary expenses.

1.233Prompt Notification. The Party affected by the Force Majeure event shall upon its occurrence promptly give written notice to the other Party specifying the nature of the event and its anticipated duration.

DISPUTE RESOLUTION

1.234Dispute Resolution. If a dispute arises, other than a dispute governed by Section 3.7, each Party shall notify the other Party of the dispute and the issue shall be referred to each Party’s Executive Sponsor who shall meet within [[***]] days (in person, by means of telephone conference, videoconference or other means of communications) and attempt in good faith to resolve such issue (subject only to, in the case of Atara, approval of its board of directors or, in the case of Bayer, approval of the applicable management board, if required). All such discussions shall be confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence. Notwithstanding the foregoing, if such executives cannot resolve such matter within [[***]] days of the date such matter is first referred to them, then, either Party may pursue the remedies set forth in Sections 20.2 - 20.4.

1.235Arbitration. Subject to Sections 20.3 - 20.5 below, any dispute, which cannot be resolved pursuant to Section 20.1 above, shall be finally settled under the Rules of Arbitration 

 

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of the International Chamber of Commerce (the “Rules”) by a panel of three arbitrators appointed in accordance with the Rules, save that the third arbitrator, who will act as president of the arbitral tribunal, shall not be appointed by the International Court of Arbitration, but by the two arbitrators which have been appointed by either of the Parties in accordance with Article 12 para 4 of the Rules. The place of arbitration shall be New York and the language to be used in any such proceeding (and for all testimony, evidence and written documentation) shall be English.  The IBA Rules on the Taking of Evidence in International Arbitration shall apply on any evidence to be taken up in the arbitration. 

1.236Disputes Related to Diligence. If Atara believes Bayer is in breach of its obligation to use Commercially Reasonable Efforts under Section 4.4 or Section 6.1.2, or if Bayer believes Atara is in breach of its cooperation obligations under Section 4.4 or Section 6.1.2, it shall so notify Bayer in writing, specifying on what grounds it believes so, and the Parties shall enter into good faith discussions about the situation.  If the Parties cannot reach an agreement in this regard, then the matter shall, upon notification of either Party, be referred to the Parties’ respective Executive Sponsors in accordance with the process as described in Section 20.1 for dispute resolution, provided, however, that if the Executive Sponsors cannot resolve the matter, then Atara (with respect to an alleged breach of Section 4.4 or Section 6.1.2) or Bayer (with respect to an alleged breach of Section 4.4 or Section 6.1.2) may notify the other Party of an alleged breach of contract, which notice will start the cure period pursuant to Section 18.2.2. For clarity, the effects of any violation of diligence obligations pursuant to this Agreement will in any event be limited to a right to terminate this Agreement with any other rights (such as damages, specific performance, etc.) being excluded.  

1.237Disputes Related to Patent Rights. Notwithstanding anything in this Agreement to the contrary, any and all issues regarding the validity and enforceability of any Patent Rights (“Patent Matters”) shall be determined in a court or other tribunal, as the case may be, of competent jurisdiction under the applicable patent laws of the applicable country, with a jury trial being however excluded.  If such dispute involves both Patent Matters and other matters, the arbitrators will have the right to stay the arbitration until determination of Patent Matters material to the resolution of the dispute as to the other matters is resolved.

1.238Injunctive Relief. Nothing contained in this Agreement shall deny either Party the right to seek injunctive relief, equitable relief, interim or provisional relief including a temporary restraining order, specific performance, preliminary or permanent injunction or other interim equitable relief from a court of competent jurisdiction in the context of a breach or threatened breach of any provision of this Agreement, bona fide emergency or prospective irreparable harm, or as reasonable and necessary to protect its legitimate interests. Such an action may be filed and maintained, notwithstanding any ongoing discussions between the Parties or any ongoing arbitration proceeding concerning a dispute, if necessary to protect the interests of such Party or to preserve the status quo pending the arbitration proceeding.

 

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GENERAL PROVISIONS

1.239Interpretation.

	
 
	
(a)
	
The headings of sections, subsections and paragraphs hereof are inserted solely for convenience and ease of reference only and shall not constitute any part of this Agreement, or have any effect on its interpretation or construction. 

	
 
	
(b)
	
All references in this Agreement to the singular shall include the plural where applicable.

	
 
	
(c)
	
The use of any gender is applicable to all genders.

	
 
	
(d)
	
Unless otherwise specified, references in this Agreement to any section shall include all subsections and paragraphs in such section, and references in this Agreement to any subsection shall include all paragraphs in such subsection. 

	
 
	
(e)
	
Any list or examples following the word “including” shall be interpreted without prejudice to the generality of the preceding words.

	
 
	
(f)
	
All references to days or years in this Agreement shall mean calendar days or years, as the case may be, unless otherwise specified. 

	
 
	
(g)
	
This Agreement has been prepared in the English language and the English language shall control its interpretation. In addition, all notices required or permitted to be given hereunder, and all written, electronic, oral or other communications between the Parties regarding this Agreement shall be in the English language.

1.240Applicable Law. This Agreement and any disputes, claims, or actions related thereto shall be governed by and construed in accordance with the Laws of New York without giving effect to any choice or conflict of law provisions. 

1.241Venue. Each of the Parties hereto agrees to venue in, and submits to the exclusive jurisdiction of, the New York courts for any legal proceeding of every nature, kind and description whatsoever arising pursuant to Section 20.4 or 20.5. Both Parties agree to waive their right to a jury trial.

1.242Notices. Any notice required or permitted to be given under this Agreement by one Party to the other shall be in writing and delivered via an internationally recognized courier service with acknowledgement of receipt, and addressed to such other Party at its address indicated below, or to such other address as the addressee shall have last furnished in writing to the addressor, and shall be effective upon receipt by the addressee.

 

	
If to Bayer:
	
[[***]]

	
With a copy to (which shall not constitute notice):
	
[[***]]

 

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If to Atara:
	
[[***]]

	
With a copy to (which shall not constitute notice):
	
[[***]]

 

1.243Assignment. 

	
 
	
(a)
	
Except as otherwise expressly provided under this Agreement, neither Party may assign or otherwise transfer this Agreement or any right or obligation hereunder without the express prior written consent of the other Party; provided that: (a) either Party shall be permitted to effect such an assignment or other transfer of this Agreement, or any right or obligation hereunder, to any of its Affiliates, without the prior written consent of the non-assigning Party, provided that the assigning Party will remain liable and responsible for all of its obligations under this Agreement; and (b) either Party shall be permitted to effect such an assignment or other transfer of this Agreement, or any right or obligation hereunder without the prior written consent of the other Party, to a successor to substantially all of the business to which this Agreement pertains, whether in a merger, sale of stock, sale of assets or other transaction, provided that the assignee will expressly agree to be bound by such Party’s obligations under this Agreement. Additionally, either Party shall be permitted, without the prior consent of the other Party, to assign any or all of its rights to receive payments under this Agreement to any Affiliate or Third Party. 

	
 
	
(b)
	
Any purported assignment or other transfer in violation of this section shall be null and void. 

	
 
	
(c)
	
Subject to the foregoing provisions of this section, this Agreement shall be binding upon, and shall inure to the benefit of, all permitted assigns.

1.244Severability. If any provision of this Agreement shall be found to be invalid or otherwise unenforceable in whole or in part, the validity or enforceability of the remainder of this Agreement shall not be affected. Furthermore, the Parties agree that the invalid portion of an unenforceable provision or part thereof shall be superseded by an adequate provision that, to the legally permitted extent, comes closest to what the Parties would have desired at the time of conclusion of this Agreement had they considered the issue concerned. 

1.245Affiliates. Each Party may perform, at such Party’s exclusive option, its obligations hereunder itself or through one or more Affiliates for the avoidance of doubt and unless expressly stated otherwise in this Agreement for any particular obligation, Bayer may perform its obligations, and exercise its rights, under this Agreement itself or through any other Bayer Party or Third Party contractor. Neither Party shall permit any of its Affiliates or permitted Third Party contractors to commit any act (including any act of omission) which such Party is prohibited hereunder from committing directly. The Party so acting through its Affiliate(s) shall remain liable for the due fulfillment of its obligations by, and for any breach, act or omission of, such Affiliate(s).

1.246Independent Contractors. Nothing in this Agreement shall create, or be deemed to create, a partnership, joint venture or the relationship of principal and agent or employer and 

 

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employee between the Parties. Neither Party shall enter into or have authority to enter into any engagement or make any representation or warranty on behalf of the other Party or otherwise bind or oblige the other Party hereto. Each Party agrees to perform under this Agreement solely as independent contractor.

1.247Third Party Beneficiary. MSK is an intended third party beneficiary of the terms set forth in Sections 10.1, 11.7.4, 13.7, 16.1 and 17.1-17.3 of this Agreement to the extent related to the Licensed Technology that is in-licensed by Atara under the MSK Upstream Licenses, and NIH is an intended third party beneficiary of the terms set forth in in Sections 4.4, 6.1.2 and 16.1 of this Agreement and Exhibit 2.1.3(b) No. 1 to the extent related to the Licensed Technology that is in-licensed by Atara under the NIH Upstream License. 

1.248Waiver. Any term or condition of this Agreement may be waived only by a written instrument executed by the Party waiving the benefit of a right hereunder. The waiver by a Party of any right hereunder shall not be deemed a continuing waiver of such right or of another right hereunder, whether of a similar nature or otherwise.

1.249Amendments. This Agreement (including the attached exhibit(s)) shall not be amended or otherwise modified without a written document signed by the duly authorized representative(s) of each Party.

1.250Entire Agreement. This Agreement (including the attached exhibit(s)) contains the entire understanding of the Parties with respect to the subject matter hereof. All other express or implied representations, agreements and understandings with respect to the subject matter hereof, either oral or written, heretofore made are expressly superseded by this Agreement. 

1.251Priorities. In the event of any ambiguity, doubt or conflict emerging herein, the terms and conditions of this Agreement shall take precedence over the terms and conditions of any exhibit, unless the latter makes an explicit reference to the provision of this Agreement that shall be amended.

1.252Further Assurances. Each Party agrees to execute, acknowledge and deliver such further instructions, and to do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.

1.253Counterparts; Electronic Delivery. This Agreement may be executed in counterparts, each and every one of which shall be deemed an original and all of which together shall constitute one and the same instrument. Each Party may execute this Agreement by facsimile transmission or in AdobeTM Portable Document Format (PDF) sent by electronic mail. Facsimile or PDF signatures of authorized signatories of the Parties shall be deemed to be original signatures, shall be valid and binding upon the Parties, and, upon delivery, shall constitute due execution of this Agreement, provided that such electronic signing and delivery is confirmed in a written paper copy signed by and delivered to each Party promptly following electronic signing and delivery.

[Remainder of this page intentionally left blank.]

 

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Exhibits

 

	
Exhibit 1.8
	
ATA2271 Plan

	
Exhibit 1.38
	
CMC Plan

	
Exhibit 1.59
	
Existing Agreements

	
Exhibit 1.72
	
ATA3271 IND Data Package

	
Exhibit 1.84
	
Licensed Know How

	
Exhibit 1.85
	
Licensed Patent Rights

	
Exhibit 1.97
	
MOFFITT Upstream Licenses

	
Exhibit 1.102
	
MSK Upstream Licenses

	
Exhibit 1.130
	
Research Plan

	
Exhibit 2.1.3
	
Terms of Upstream Licenses

	
Exhibit 3.3.6
	
Bayer Supplier Code of Conduct

	
Exhibit 4.4(A)
	
NIH Upstream Agreement Commercial Development Plan

	
Exhibit 4.4(B)
	
NIH Benchmarks

	
Exhibit 7.3
	
Key Terms of the Manufacturing and Supply Agreement

	
Exhibit 9.1
	
Upfront License Payment

	
Exhibit 11.6.1
	
Countries for Patent Prosecution

	
Exhibit 12.2.2.1
	
Technical and Organizational IT Security Measures

	
Exhibit 14.2.3.2(B)
	
Licensed Technology Not Solely Owned by Atara

 

 

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

 

	
Berlin, Germany
	
 
	
San Francisco, California, U.S.A.

	
BAYER AG
	
 
	
ATARA BIOTHERAPEUTICS, INC

	
/s/ Wolfram Carius
	
 
	
/s/ Pascal Touchon

	
Wolfram Carius
	
 
	
Pascal Touchon

	
EVP, Head of Cell and Gene Therapy
	
 
	
President and Chief Executive Officer

	
/s/ Marianne de Backer
	
 
	
 

	
Marianne de Backer
	
 
	
 

	
EVP, Head of Business Development & Licensing, Pharma

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