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    Exhibit 10.2

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT BOTH (I) IS NOT MATERIAL AND (II) IS THE TYPE OF INFORMATION THAT THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS AS PRIVATE AND CONFIDENTIAL. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.
    
EXCLUSIVE LICENSE AND COLLABORATION AGREEMENT
This Exclusive License and collaboration Agreement (this “Agreement”) is entered into as of May 5, 2021 (the “Effective Date”) by and between Kindred Biosciences Inc., a Delaware corporation, with its principal place of business at 1555 Bayshore Highway, Suite 200, Burlingame, CA 94010 (“KindredBio”), and Elanco US Inc., a Delaware corporation, with its principal place of business at 2500 Innovation Way, Greenfield, IN 46140 (“Elanco”). KindredBio and Elanco are referred to herein individually as a “Party” and collectively as the “Parties.”
RECITALS
Whereas, KindredBio has developed, generated and produced a parvovirus monoclonal antibody known as KIND-030 and its [***]derivatives and owns intellectual property rights in such monoclonal antibody; and 
Whereas, KindredBio desires to grant Elanco an exclusive license under such intellectual property rights, and Elanco desires to obtain a license under such intellectual property rights, to Develop and Commercialize the Licensed Products in the Field in the Territory (each capitalized term as defined below), subject to the terms and conditions set forth herein.
Now, Therefore, in consideration of the foregoing premises and the mutual promises, covenants and conditions contained in this Agreement, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
Article 1.
DEFINITIONS

    For purposes of this Agreement, the following capitalized terms will have the following meanings. Capitalized terms used but not defined in this Agreement will have the meanings ascribed to them in the Master Supply Agreement, the Quality Agreement, and the Pharmacovigilance Agreement. All defined terms include the plural as well as the singular. 

a.“Act” means, as applicable, the Virus-Serum-Toxin Act, 21 USC 151-159 et. seq. et seq., and all related rules, regulations and guidelines, as any of the foregoing may be amended from time to time. 
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b.“Adverse Event” means any untoward medical occurrence in a patient or a clinical investigation subject administered a Licensed Product, including occurrences that do not necessarily have a causal relationship with such Licensed Product, as further defined in the Quality Agreement and Pharmacovigilance Agreement.
c.“Affiliate” means, with respect to any Entity (including a Party to this Agreement), any other Entity controlled by, controlling, or under common control with such Entity. For the purposes of this definition, the term “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) means direct or indirect ownership, including ownership by one or more trusts with substantially the same beneficial interests, of more than 50% of the outstanding voting and equity rights of such Entity, or possession of the power to direct the management and policies of such Entity. 
d.“Anti-Corruption Laws” means the U.S. Foreign Corrupt Practices Act (15 U.S.C. §§78dd-1, et. seq.), as amended, the Organization for Economic Co-operation and Development (OECD) Convention on combating bribery of foreign public officials in international business transactions, and any other applicable anti-corruption laws. 
e. “APHIS” means the Animal and Plant Health Inspection Service agency of the USDA or any successor agency thereto.
f.“Applicable Laws” mean all applicable federal, state and local laws, statutes, ordinances, rules, and regulations of any kind whatsoever, and any applicable orders, injunctions, or decrees of any court, administrative agency, or similar authority, whether federal, state or local, including the laws, rules and regulations and other applicable Regulatory Authority, including but not limited to the Virus-Serum-Toxin Act 21 USC 151-159 et. seq. and 9 CFR Subchapter E Parts 101 to 124.
g. “Background IP” means, in reference to KindredBio, the KindredBio Background IP and, in reference to Elanco, the Elanco Background IP.
h.“Biosimilar Product” means, with respect to a Licensed Product in a particular country, any product (other than such Licensed Product) that is a parvo monoclonal antibody that is labeled for the same indications as such Licensed Product and has highly similar structure, function, and clinical characteristics to those of such Licensed Product and is commercialized in such country by a Third Party (excluding Sublicensees).
i. “Business Day” means a day other than Saturday, Sunday or a day on which banking institutions in California are required or permitted to be closed.
j.“Calendar Quarter” means the period beginning on the Effective Date and ending on the last day of the Calendar Quarter in which the Effective Date falls, and thereafter each successive period of three (3) consecutive calendar months ending on the last day of March, June, September, or December, respectively; provided that the final Calendar Quarter ends on the last day of the Term.
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k.“Calendar Year” means the period beginning on the Effective Date and ending on December 31 of the Calendar Year in which the Effective Date falls, and thereafter each successive period of twelve (12) consecutive calendar months beginning on January 1 and ending on December 31; provided that the final Calendar Year ends on the last day of the Term.
l.“CDA” means the Mutual Confidentiality Agreement signed between the Parties on [***]
m. “Change of Control” means with respect to either Party: (a) the acquisition by a Third Party, in one transaction or a series of related transactions, of direct or indirect beneficial ownership of more than fifty percent (50%) of the then outstanding voting equity securities or other voting interests of such Party (excluding, for clarity, an acquisition by a Third Party where the stockholders of such acquired Entity immediately prior to such transaction hold a majority of the voting shares of outstanding capital stock of the surviving entity immediately following such transaction); (b) any merger, reorganization, consolidation or business combinations involving such Party, as a result of which a Third Party acquires direct or indirect beneficial ownership of more than fifty percent (50%) of the voting power of the surviving entity immediately after such merger, reorganization or consolidation; or (c) a sale of all or substantially all of the assets of such Party in one transaction or a series of related transactions to a Third Party. The acquiring or combining Third Party in any of (a), (b) or (c), and any of such Third Party’s Affiliates (whether in existence as of or any time following the applicable transaction, but other than the acquired Party and its Affiliates as in existence prior to the applicable transaction or Affiliates it controls after the applicable transaction) are referred to collectively herein as the “Acquirer”.
n. “Clinical Tests” means any clinical tests, any study incorporating more than one of the critical periods, or any clinical tests commenced after Regulatory Approval.
o.“Combination Product” means any product containing both (a) a pharmaceutically active agent or ingredient which constitutes a Licensed Product and (b) one or more other pharmaceutical active agents or ingredients which do not constitute Licensed Products.
p.“Commercialization” means any and all activities undertaken before and after obtaining Regulatory Approvals relating specifically to the pre-launch, launch, promotion, detailing, medical education and medical liaison activities, marketing, pricing, reimbursement, sale, and distribution of Licensed Products, including strategic marketing, sales force detailing, advertising, Licensed Product support, all customer support, Licensed Product distribution and invoicing and sales activities; provided, however, “Commercialization” shall exclude any activities relating to the Manufacture of Product. “Commercialize” and “Commercializing” shall have the correlative meanings. 
a.“Commercially Reasonable Efforts” means, with respect to a Party, that level of efforts and resources consistent with commercially reasonable practices of a similarly situated company in the animal health industry with respect to the Development, Commercialization, or supply of an animal health pharmaceutical product at a similar stage of research, development, or commercialization.
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b. “Confidential Information” has the meaning as provided in Section 12.1 (Confidential Information) of this Agreement. 
c.“Control” means, with respect to any Licensed Product, Know-How, Patents or other intellectual property rights, the [***] license granted to such Party under this Agreement) to grant access to, to grant use of, or to grant a license or a sublicense to the other Party, such Know-How, Patents or intellectual property rights without [***] or [***] any Third Party.
d. “Cover” means, with respect to a Patent in reference to a Licensed Product, that the manufacture, use, offer for sale, sale or import of the Licensed Product, absent a license to such Patent, would infringe a Valid Claim in such Patent [***] would be infringed, [***]. “Covered” and “Covering” have the correlative meanings.
e. “Development” means the discovery, research, preclinical, non-clinical and clinical development activities, including activities related to screening, assays, test method development and stability testing, toxicology, statistical analysis, process development and scale-up, pharmacokinetic studies, data collection and management, report writing and other pre-Regulatory Approval activities. “Development” shall exclude any activities relating to the Manufacture of Product. “Develop” and “Developing” shall have the correlative meanings. 
f.“Development Plan” has the meaning set forth in Section 4.1(c) (Development Plan). 
g.“Dispute” has the meaning set forth in Section 14.1 (Dispute Escalation).
h.“Distributor” means a Third Party distributor of Licensed Product that: (a) has no royalty or other payment obligations to Elanco or any of its Affiliates that are calculated based on amounts invoiced or received by such Third Party for sales of Licensed Product; or (b)(i) does not take title to a Licensed Product, (ii) does not invoice Licensed Product sales to Third Party customers, and (iii) is responsible only for inventory management and distribution with respect to Licensed Products on behalf of Elanco or its Affiliate.
i.“Dollar” means a U.S. dollar, and “$” shall be interpreted accordingly.
j.“Efficacy Rate” has the meaning as provided in Section 8.2 (U.S. Performance Milestone Payments). 
k.“Elanco Background IP” has the meaning set forth in Section 9.1(a) (Background IP).  
l.“Elanco Competitor” means any of the following companies: [***]any of their respective Affiliates and any other company in the animal health industry that [***].
m.“Elanco Indemnitees” has the meaning set forth in Section 11.1 (By Elanco).
n.“Elanco Inventions” means any New Invention made solely by or on behalf of Elanco, its employees, consultants or contractors, or any of its Affiliates or Sublicensees.
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o.“EMA” means the European Medicines Agency or the equivalent Regulatory Authority with competent jurisdiction in the United Kingdom or any successor entity to either of the foregoing.
p.“Entity” means any corporation, general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any limited liability company or joint stock company), firm or other enterprise, association, organization or entity. 
q.“EU” means the European Union member states as then constituted. As of the Effective Date, the European Union member states are Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden.
r.“Executive Officer” means, with respect to KindredBio, its Chief Executive Officer, and with respect to Elanco, its Executive Vice President – Innovation, Regulatory & Business Development, or, in either case, a designee with senior decision-making authority. 
s.“FDA” means the United States Food and Drug Administration, or any successor agency thereto in the United States.
t.“Field” means the treatment, prevention, or diagnosis of canine parvovirus disease.  
a.“First Commercial Sale” means, with respect to a Licensed Product or a Biosimilar Product in the Field in the Territory, the first sale for end use or consumption of such Licensed Product or such Biosimilar Product in such country following Regulatory Approval; but excluding, as applicable, (a) sales for testing, marketing and promotional or clinical trial purposes, (b) transfer of the Licensed Product in such country by or on behalf of any selling Party, or (c) transfers of Licensed Products or Biosimilar Product for bona fide charitable purposes or for compassionate use or for Licensed Product or Biosimilar Product samples.
b.“GLP” means good laboratory practice.
c.“GMP” means good manufacturing practice.
d.“Governmental Authority” means any multi-national, national, federal, state, local, municipal, provincial or other governmental authority of any nature (including any governmental division, prefecture, subdivision, department, agency, bureau, branch, office, commission, council, court or other tribunal).
e.“Indemnified Party” has the meaning set forth in Section 11.3 (Procedure).
f.“Indemnifying Party” has the meaning set forth in Section 11.3 (Procedure).
g.“Information” means any data, results, technology, business or financial information or information of any type whatsoever, in any tangible or intangible form, including 
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know-how, trade secrets, practices, techniques, methods, processes, inventions, developments, specifications, formulations, formulae, software, algorithms, marketing reports, expertise, technology, test data (including pharmacological, biological and chemical, biochemical, clinical test data and data resulting from non-clinical studies), chemical, manufacturing and control information, stability data and other study data and procedures.
h.“Infringement” has the meaning set forth in Section 9.3(a) (Notice; Procedures).
i.“Initiation” means, with respect to a clinical trial, first dosing of the first subject in such clinical trial.
j.“Intellectual Property Rights” means and includes all rights of any of the following types anywhere in the world: (a) Patents; (b) (i) copyrights, moral rights, and rights in works of authorship and (ii) all registrations for any of the foregoing (i); and (c) Know-How (other than those rights subject to clauses (a) or (b) hereof).
k.“Joint Invention” means any New Invention made jointly by (a) on the one hand, one or more employees, consultants or contractors of Elanco or any of its Affiliates or Sublicensees, and (b) on the other hand, one or more employees, consultants or contractors of KindredBio or any of its Affiliates.
l.“Joint Patents” means Patents claiming Joint Inventions. 
m.“JSC” has the meaning set forth in Section 3.1(a) (Formation and Role).
n.“KIND-030 [***]Formulation” means any Licensed Product in a [***] formulation. 
o.“KIND-030 [***]Formulation” means any Licensed Product in the [***] formulation (“[***]Formulation”). 
p.“KindredBio Background IP” has the meaning set forth in Section 9.1(a) (Ownership of IP and New Inventions).
q.“KindredBio Indemnitees” has the meaning set forth in Section 11.1 (By Elanco).
r.“KindredBio Inventions” means any New Invention made solely by or on behalf of KindredBio, its employees, consultants or contractors, or any of its Affiliates or licensees (other than Elanco). 
s.“Know-How” means any and all tangible and intangible trade secrets, know-how, expertise, discoveries, inventions, information, data or materials, including ideas, concepts, formulas, methods, procedures, designs, technologies, compositions, plans, applications, technical data, assays, manufacturing information or data, samples, chemicals, and biological materials and all derivatives, modifications, and improvements thereof, but excluding any Patents; that, in each case, are not in the public domain. 
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t.“Letter Agreement” means the Letter Agreement entered into between the Parties on December 11, 2020. 
u. “Licensed Know-How” means all Know-How that (a) is Controlled by KindredBio or its Affiliates as of the Effective Date or during the Term and (b) is necessary or reasonably useful for the research, Development, Manufacture, or Commercialization of the Licensed Products in the Field in the Territory. 
v.“Licensed Patents” means and includes (a) the Patents listed in Exhibit A (Licensed Patents) and (b) other Patents that are (i) Controlled by KindredBio or its Affiliates as of the Effective Date or during the Term and (ii) necessary or reasonably useful for the Development, Manufacture or Commercialization of any Licensed Product. 
w.“Licensed Product” means any product in the Field which is, contains or comprises of the Monoclonal Antibody or any derivative of the Monoclonal Antibody in the Field, regardless of such product’s methods of application (e.g., systemically, locally into tumors, intravenously, subcutaneously, or orally), forms (e.g., active pharmaceutical ingredient (API), finished dose forms, kits) or formulations or dosages.
x.“Licensed Technology” means the Licensed Patents and Licensed Know-How.
y.  “Master Supply Agreement” means the supply agreement to be entered into between the Parties, which governs the manufacturing and supply of the Licensed Products in the Field in the Territory and other products and services that may be agreed on and added by the Parties, and which may be modified, amended or restated from time to time by the Parties.
z.“Monoclonal Antibody” means the parvovirus injectable monoclonal antibody known as KIND-030, as described in the patent application [***] filed by KindredBio [***] and its [***]derivatives. 
aa.[***].
ab.“Net Sales” means, with respect to a Licensed Product, the gross sales amount invoiced by Elanco, its Affiliates, or any Sublicensee or Distributors thereof for the sale of the Licensed Product in the Territory to non-Affiliate Third Parties, less the following deductions to the extent actually incurred, allowed, paid, accrued or allocated in accordance with U.S. GAAP, consistently applied:
1.[***]; 
2.[***]; 
3.[***]; 
4.[***]; and 
5.[***].
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Such amounts shall be determined from the books and records of Elanco or Sublicensee, maintained in accordance with U.S. GAAP or, in the case of Sublicensees, such similar accounting principles, consistently applied. In no event shall a particular amount identified above to be deducted exceed the gross amount invoiced resulting in a negative royalty.
For clarity, [***].
ac.“New Invention” means any invention or discovery, whether or not patentable, that is made, conceived, generated or reduced to practice, in whole or in part, in the course and as a result of the conduct of the activities contemplated by this Agreement. 
ad.“Non-Royalty Income” means any payment that Elanco or any of its Affiliates receives from a Sublicensee as consideration for a sublicense under the Licensed Technology for purposes of Developing or Commercializing Licensed Products, [***]. 
ae.“Outline of Production” is a detailed written description in outline format of how a serial of product is formulated, tested, packaged, dated and recommended for use that is filed with the APHIS pursuant to U.S. 9 C.F.R. §§ 114.8 (or its successor regulation) and U.S. 9 C.F.R. §§ 114.9 (or its successor regulation), or the equivalent filing filed with any equivalent regulatory agency or governmental authority outside the U.S. (including, without limitation, an authorization application or dossier filed with the applicable Regulatory Authority of a European Union member state or with the EMA for a biological product).
af.“Patent” means any (a)  patent [***],  (b) [***]any other patent application claiming priority, or entitled to claim priority, directly or indirectly to (i) any such patent or patent application or (ii) patent or patent application from which such patent or patent application claims, or is entitled to claim, direct or indirect priority, and (c) patent issuing on any of the foregoing anywhere in the world, together with any registration, reissue, re-examination, patent of addition, patent term extension, supplemental protection certificate, or extension of any of the foregoing in anywhere in the world.
ag.“Pharmacovigilance Agreement” means the agreement for the exchange of data relating to pharmacovigilance for the Licensed Products to be entered into between the Parties which may be modified, amended or restated from time to time by the Parties.
ah.“Pivotal Trial” has the meaning as provided in Section 8.2 (U.S. Performance Milestone Payments). 
ai. “Regulatory Approval” means, with respect to a pharmaceutical product in a particular jurisdiction, all approvals or other permissions from the applicable Regulatory Authority in such jurisdiction necessary to market and sell such product in such jurisdiction, including pricing and reimbursement approvals if required prior to the first marketing or sale of such product in such jurisdiction.
aj.“Regulatory Authority” means any applicable Governmental Authority having the administrative authority to regulate the manufacturing, development, commercialization, 
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reimbursement or pricing, as applicable, for the Licensed Product, including Regulatory Approvals, including the FDA, USDA, APHIS and the EMA.
ak.“Regulatory Exclusivity” means any exclusive marketing rights or data exclusivity rights conferred by any Regulatory Authority with respect to a pharmaceutical product other than a Patent, including orphan drug exclusivity, new chemical entity exclusivity, data exclusivity, or pediatric exclusivity.
al.“Regulatory Filings” means all U.S. Veterinary Biologics Establishment License applications, U.S. Veterinary Biological Product License applications, U.S. Veterinary Biological Product Permit applications, Outlines of Productions, Regulatory Approvals, and other filings (including any formal submissions to, Regulatory Authorities), in each case, with respect to Licensed Products in any country or other jurisdiction.
am.“Right of Reference” means: (a) in the United States, a “right of reference or use,” as such term is defined in 21 C.F.R. 314.3(b); or (b) in any other country or jurisdiction, the equivalent authority to rely upon, and otherwise use, an investigation for the purpose of filing, and conducting a clinical trial under, or obtaining approval of an U.S. Veterinary Biologics Establishment License, U.S. Veterinary Biological Product License, U.S. Veterinary Biological Product Permit or other  Regulatory Approval, including the ability to make available the underlying raw data from the investigation for audit by the applicable Regulatory Authority in such country or other jurisdiction, if necessary.
an.“Royalty Term” has the meaning set forth in Section 8.5(b) (Royalty Term).
ao.“Strategic Partnership” means any agreement between Elanco or any of its Affiliates and a Third Party, under which such Third Party agrees to compensate Elanco or its Affiliates in exchange for Elanco’s or Elanco’s Affiliate’s practice of the rights that are licensed to Elanco pursuant to Section 2.1 (License to Elanco) of this Agreement on behalf of or in collaboration with such Third Party, including without limitation, for Commercialization and Development activities with respect to Licensed Products.
ap.“Sublicensee” means any Affiliate or Third Party that has received a sublicense of the rights granted to Elanco under Section 2.1(a) (License to Elanco), directly or indirectly through one or more tiers, from Elanco or its Affiliate. 
aq.“Term” has the meaning set forth in Section 13.1 (Term; Mutual Termination).
ar.“Territory” means worldwide.
as.“Third Party” means any Entity other than Elanco or KindredBio or an Affiliate of Elanco or KindredBio. 
at.“U.S.” or “United States” means the United States of America, including all possessions and territories thereof. 
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au.“USDA” means the United States Department of Agriculture, or any successor agency thereto in the United States.
av.“U.S. GAAP” means United States generally accepted accounting principles, as consistently applied throughout the organization of a particular entity.
aw.“U.S. Veterinary Biological Product License” means a document issued pursuant to 9 C.F.R. Subchapter E §§ 102 (or its successor regulation) by APHIS, or the equivalent filing by with any equivalent regulatory agency or governmental authority outside the U.S., authorizing the production of specified biological products in such jurisdiction (including, without limitation, an application or filing filed with the applicable regulatory agency of a European Union member state or with the EMA for a biological product).
ax.“U.S. Veterinary Biological Product Permit” means a document issued pursuant to 9 C.F.R. Subchapter E §§ 102 (or its successor regulation) by APHIS, or the equivalent filing filed by any equivalent regulatory agency or governmental authority outside the U.S., authorizing the importation of biological products subject to restrictions and controls in such jurisdiction (including, without limitation, an application or filing filed with the applicable regulatory agency of a European Union member state or with the EMA for a biological product).
ay.“U.S. Veterinary Biologics Establishment License” means a document issued pursuant to 9 CFR Subchapter E § 102 (or its successor regulation) by APHIS, or the equivalent filing filed by any equivalent regulatory agency or governmental authority outside the U.S. authorizing the use of designated premises for production of biological products in such jurisdiction (including, without limitation, an application or filing filed with the applicable regulatory agency of a European Union member state or with the EMA for a biological product).
az.“Valid Claim” means (a) a claim of an [***]and (b) a claim of [***].
Article 2.
LICENSES AND EXCLUSIVITY
a.License to Elanco
6.License to Elanco. Subject to the terms and conditions of this Agreement, KindredBio hereby grants Elanco an exclusive (even as to KindredBio, other than for Development and Manufacturing activities, as provided below), royalty-bearing license, with the right to grant sublicenses, in accordance with Section 2.1(b) (Sublicenses), under the Licensed Technology, to use, Manufacture, Develop, and Commercialize the Licensed Products in the Field in the Territory.
1.Sublicenses 
i.Elanco shall have a right to grant sublicenses under the Licensed Technology, to its Affiliates and to Third Parties.
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ii.Each agreement in which Elanco grants a sublicense under the Licensed Technology shall be consistent with the terms and conditions of this Agreement applicable to the scope of the sublicense granted to a Sublicensee and Elanco shall ensure that its Sublicensees comply with the applicable terms and conditions of this Agreement. 
iii.Notwithstanding any such sublicense, Elanco shall remain solely liable for the performance of its obligations hereunder, regardless of whether such obligation is delegated, subcontracted, or sublicensed to any of its Affiliates, Subcontractors or Sublicensees. 
2.Subcontractors. Elanco may appoint Distributors and engage subcontractors (including contract research organizations) for the purpose of performing Elanco’s obligations, subject to Section 2.1(b) (Sublicenses), with respect to the Development, Manufacture, and Commercialization of Product in the Field in the Territory provided, however, Elanco shall enter into agreements with such Distributors and subcontractors which contains confidentiality provisions which are at least as restrictive as the confidentiality provisions of this Agreement and the terms and conditions that enable KindredBio to exercise its rights, particularly in relation to intellectual property ownership and rights, under this Agreement.
b.Rights Retained by KindredBio. Except for the rights and licenses specified in Section 2.1 (License to Elanco), no license or other rights are granted to Elanco under any intellectual property of KindredBio, whether by implication, estoppel, or otherwise, whether any such intellectual property dominates or is dominated by the Licensed Technology. Notwithstanding anything to the contrary in this Agreement, KindredBio may use and permit others to use the Licensed Technology for any research, development, commercial, or other purposes, outside of the Field. For clarity, KindredBio retains the right, on behalf of itself and its Affiliates, to use the Licensed Technology to Develop and Manufacture the Licensed Products in the Field in the Territory pursuant to its obligations under this Agreement and the Master Supply Agreement. 
c.No Implied Licenses. Except as explicitly set forth in this Agreement, neither Party shall be deemed by estoppel or implication to have granted the other Party any license or other right to any intellectual property of such Party.
d.Access to Information. KindredBio shall provide, or cause to be provided, to Elanco and its representatives, reasonable access to all of its offices, representatives and records to conduct such investigations and reviews relating to the Licensed Technology as Elanco may reasonably request from time to time.
e.Non-Compete. During the Term of this Agreement, Elanco may not directly or indirectly sell any product which is [***].
Article 3.
GOVERNANCE
a.Joint Steering Committee
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3.Formation and Role. Promptly, and in any event within [***] days after the Effective Date, the Parties shall establish a joint steering committee (the “JSC”) to coordinate, oversee, review and discuss the Parties’ activities with respect to [***]. For that purpose and to the extent reasonably necessary, the JSC will:
iv.discuss the [***];
v.[***];
vi.[***];
vii.[***];
viii.[***]; 
ix.[***] and
x.perform such other functions as appropriate to further the purposes of this Agreement, as expressly set forth in this Agreement or as determined by the Parties in writing.
The JSC shall have only the powers expressly assigned to it in this Section 3.1 (Joint Steering Committee) and elsewhere in this Agreement, and shall have no power to amend, modify, or waive compliance with this Agreement.
4.Members. The JSC shall have [***] members. Elanco shall appoint [***] representatives to the JSC, and KindredBio shall appoint [***] representatives to the JSC. Each JSC representative may be an officer, employee, or representative of the applicable Party having sufficient experience and knowledge of matters arising within the scope of the JSC’s responsibilities to make decisions with respect thereto. Each Party may replace its representatives at any time upon written notice to the other Party. [***]. The role of the chairperson shall be [***]. 
5.Meetings. The JSC shall meet [***], unless the Parties mutually agree in writing to a different frequency for such meetings or no further development is contemplated. Either Party may also call a special meeting of the JSC (by videoconference or teleconference) by [***]Business Days’  prior written notice to the other Party in the event such Party reasonably believes that a significant matter must be addressed prior to the next regularly scheduled meeting no later than [***] Business Days prior to the special meeting, with materials [***]. 
6.Decision-Making. The JSC shall act by [***]of the Parties. The representatives from each Party will each have [***]. If after reasonable discussion and good faith consideration of each Party’s view on a particular matter before the JSC, [***]. If the issue is not resolved [***], then (i) [***]  
b.Scope of Authority. Notwithstanding the establishment and existence of the JSC or any subcommittee, each Party shall retain the rights, powers and discretion granted to it 
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hereunder, and neither the JSC nor any subcommittee is delegated or vested with rights, powers or discretion unless such delegation or vesting is expressly provided herein [***].
c.Subcommittees. From time to time, the JSC may establish additional subcommittees to oversee [***]within the scope of authority of the JSC, as it deems necessary or advisable. Each subcommittee will be composed of an [***].
Article 4.
DEVELOPMENT
a.Development
7.KindredBio’s Development Obligations. KindredBio shall be responsible for [***] the Development of the Licensed Products developed by KindredBio including conducting [***]for such Licensed Products[***].
8.Elanco’s Development Obligations. Elanco shall be responsible for [***], including conducting [***]for the Licensed Products[***]. As between the Parties, Elanco shall bear all of its costs and expenses incurred in connection with such Development activities[***].
9.Development Plan. Each Party shall Develop Licensed Products in the Field in accordance with their obligations indicated above, [***]. Each Party shall provide the other with an initial, high level development plan (the “Initial Development Plan”) [***]. 
10.Amendments to the Development Plan. Each Party agrees to keep the other Party informed of material amendments to its Development Plan via the JSC, which may review and discuss such amendments in accordance with Section 3.1(a)(iii) (Formation and Role). References to the “Development Plan” in this Agreement refer to the Development Plan as then in effect (including all amendments thereto). A Party, without notice to or review by the JSC, may make non-substantive changes to such Party’s Development Plan as long as such changes do no alter or adversely affect the other Party’s rights and obligations as provided under this Agreement and as provided under the Development Plan.   
b.Development Diligence  
11.Elanco, itself or through its Affiliates, Sublicensees, or Subcontractors, shall use Commercially Reasonable Efforts, at its sole cost and expense, to Develop the Licensed Products [***]. Elanco shall, and Elanco shall cause its Affiliates, Sublicensees and its Subcontractors to conduct all Development under this Agreement in a professional manner and in compliance with all Applicable Laws, including applicable GLP and GMP.
12.[***].  
c.Development Updates. Each Party shall keep the other Party reasonably informed, through the JSC, of the status, progress, and results of all Development activities for 
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Licensed Products in the Territory. Each Party shall promptly respond to reasonable requests of the other Party for additional Information with respect to such other Party’s Development activities for Licensed Products in the Territory. 
d.Records and Reports. Each Party shall prepare and maintain, or shall cause to be prepared and maintained, in conformity with standard animal health industry practices and the terms and conditions of this Agreement, complete and accurate written records, accounts, notes, reports and data with respect to all Development activities with respect to Licensed Products. Such records shall fully and properly reflect, in good scientific manner appropriate for regulatory and patent purposes, all work done and results achieved in the performance of all Development activities for Licensed Products, in the Territory. Each Party shall document all non-clinical studies and clinical trials in formal written study records, and shall document all manufacturing activities for Licensed Products, in each case in accordance with Applicable Laws, including applicable national and international guidelines such as GLP and GMP. The Parties shall discuss the status, progress and results of all Development activities with respect to Licensed Products, in the Territory at such JSC meetings, as required. 
e.Development Data
13.Each Party shall solely own all data, records and reports generated by or on behalf of such Party or its Affiliates, in the non-clinical and clinical Development of the Licensed Products (the “Product Data”); provided, that neither Party is deemed to conduct Development of the Licensed Products on behalf of the other Party. Notwithstanding any provision of this Agreement to the contrary, the Product Data that a Party is required to deliver to the other Party under this Agreement shall be limited to the Product Data that is (i) Controlled by such Party and (ii) that is necessary or reasonably useful to support the Development, Regulatory Approval or Commercialization of the Licensed Products.
14.Each Party, shall, on a [***]basis and at no charge to the other Party, as permitted under Applicable Law, provide the other Party with a summary of all Product Data not previously transferred under this Section 4.5(b) (Development Data). KindredBio may disclose and provide copies of such Product Data Controlled by Elanco to KindredBio’s Affiliates and Third Party licensees that have a need to know the Product Data to comply with obligations under this Agreement and that have agreed in writing to share development data with KindredBio and Elanco on terms substantially similar to the terms of this Section 4.5 (Development Data). Elanco may disclose and provide copies of such Product Data Controlled by KindredBio to Elanco’s Affiliates and Sublicensees that have agreed in writing to share development data with KindredBio and Elanco on terms substantially similar to the terms of this Section 4.5 (Development Data). 
f.Standards of Conduct. Each Party shall perform, and shall ensure that its Affiliates, Sublicensees and Third Party contractors perform, the Development activities with respect to Licensed Products in good scientific manner, and in compliance in all material respects with the requirements of Applicable Law. 
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Article 5.
REGULATORY
a.Overview
15.Licensed Products
xi.In the United States. [***]has the exclusive right to conduct, and subject to the remainder of this Article 5 (Regulatory), is solely responsible for all aspects of, activities related to (i) setting the regulatory strategy for seeking Regulatory Approvals upon consultation with [***], for Licensed Products in the Field in the United States, and (ii) seeking and obtaining Regulatory Approvals in the Field in the United States. As between the Parties, [***]shall bear all of its costs and expenses incurred in connection with such regulatory activities. 
xii.Outside the United States. [***]has the exclusive right to conduct, and subject to the remainder of this Article 5 (Regulatory), is solely responsible for all aspects of, activities related to (i) setting the regulatory strategy for seeking Regulatory Approvals (including any pricing approvals) for Licensed Products in the Field outside the United States, and (ii) seeking and obtaining Regulatory Approvals in the Field outside the United States. As between the Parties, [***]shall bear all of its costs and expenses incurred in connection with such regulatory activities.
b.Regulatory Responsibilities and Rights of Reference
16.In the United States. [***] shall prepare, submit, and own all Regulatory Filings for Licensed Products in the Field in the United States, at [***]’s sole cost and expense. [***] hereby grants to [***]an irrevocable, permanent Right of Reference to all Regulatory Filings pertaining to Licensed Products submitted by or on behalf of [***], including any such Regulatory Filings that are in the possession of any Third Party, subject to the prior written consent of such Third Party. [***]may use such Right of Reference to [***]’s Regulatory Filings solely for the purpose of seeking, obtaining, and maintaining Regulatory Approval of a Licensed Product in Field outside the United States, including in interactions with any Regulatory Authority in connection with Development or Regulatory Approval of a Licensed Product outside the United States.  
17.Outside the United States. As between the Parties, [***]shall prepare, submit, and own all Regulatory Filings for Licensed Products in the Field outside the United States, at [***]sole cost and expense. Elanco shall support [***]in seeking, obtaining, and maintaining Regulatory Approvals in the Field in the United States, including by providing necessary documents or other materials required by Applicable Law to seek, obtain, or maintain Regulatory Approval in the Field, all in accordance with the terms and conditions of this Agreement. [***]shall lead all interactions with Regulatory Authorities with respect to Licensed Products in the Field outside the United States. 
c.Regulatory Authority Inspection
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18.Inspections of [***]. [***]shall immediately notify [***]as soon as [***]becomes aware of any Regulatory Authority inspections relating to any Licensed Product in the Field outside the U.S. [***]may be present at any such inspections and [***]shall provide [***]the opportunity to review and comment on any responses that may be required to the extent practically possible. If [***]does not receive prior notice of any such inspection, [***]shall notify [***]as soon as practicable after such inspection and shall provide [***]with copies of all relevant materials, correspondence, statements, forms, and records received or generated pursuant to any such inspection. 
19.Inspections of [***]. [***]shall immediately notify [***]as soon as [***]becomes aware of any Regulatory Authority inspections relating to any Licensed Product in the Field in the United States. [***]may be present at any such inspections and [***]shall provide [***]the opportunity to review and comment on any responses that may be required to the extent practically possible. If [***]does not receive prior notice of any such inspection, [***]shall notify [***]as soon as practicable after such inspection and shall provide [***]with copies of all relevant materials, correspondence, statements, forms, and records received or generated pursuant to any such inspection relating to such Licensed Product.
d.Regulatory Cooperation
20.Each Party shall use Commercially Reasonable Efforts to provide the other Party with all reasonable assistance and take all actions reasonably requested by such other Party, without changing the allocation of responsibilities set forth in this Article 5 (Regulatory), that are necessary or desirable to enable: (i) [***]to seek, obtain, and maintain Regulatory Approvals for Licensed Products in the Field outside the United States; and (ii) [***]to seek, obtain, and maintain Regulatory Approvals for Licensed Products in the Field in the United States. Each Party shall cooperate with any inspection by any Regulatory Authority relating to Licensed Products, including any inspection prior to approval of an application for Regulatory Approval for Licensed Products. 
21.The Parties shall share on a timely basis through the JSC (or an applicable subcommittee) significant correspondence to or from a Regulatory Authority (including submissions of Regulatory Filings) that are relevant to Licensed Products. The Parties shall share and review such correspondence to or from a Regulatory Authority to assure that the Parties provide consistent responses to the Regulatory Authorities with respect to inquiries relevant to Licensed Products. Additionally, to the extent that KindredBio prepares an Outline of Production for the Licensed Product, then KindredBio shall provide Elanco with a draft of such Outline of Production at least [***] days prior to completion thereof (as well as a final copy of such Outline of Production upon completion), as well as any modifications or amendments thereto. Elanco shall have the right to review and comment on any draft of the Outline of Production (as well as any modifications or amendments thereto) and shall provide KindredBio with such comments within [***]days of receipt thereof. KindredBio shall consider any such comments in good faith. 
e.Notice of Regulatory Action. If any Third Party, including a Regulatory Authority, takes or gives notice of its intent to take any regulatory action with respect to any activity of a Party pursuant to this Agreement, which regulatory action could reasonably be 
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expected to materially adversely affect any Development, Manufacture, or Commercialization activities with respect to Licensed Products in the Field in the United States or outside the United States, then such Party’s obligations shall be  in accordance with the terms and provisions of the Master Supply Agreement.
f.Remedial Actions. If either Party obtains information indicating that any Licensed Product may be subject to any recall, corrective action, or other regulatory action by any Governmental Authority or Regulatory Authority, then such Party’s subsequent obligations shall be governed by the Master Supply Agreement and the Quality Agreement.
g.Adverse Event Reporting; SDEA; Global Pharmacovigilance Database. The Parties’ obligations with regard to the timely reporting to the appropriate Regulatory Authorities of Adverse Events and the Parties’ responsibilities to protect patients and promote their well-being in connection with the use of the Licensed Products will be governed by the Pharmacovigilance Agreement.
Article 6.
COMMERCIALIZATION
a.Commercialization Responsibilities
22.Elanco’s Responsibilities. Elanco has the exclusive right to conduct, and is solely responsible for all aspects of, the Commercialization of Licensed Products in the Field in the Territory under its own brand(s) and trademarks, including: (i) developing and executing a commercial launch and pre-launch plan (ii) marketing and promotion; (iii) booking sales and distribution and performance of related services; (iv) handling all aspects of order processing, invoicing and collection, inventory and receivables; and (v) providing customer support, including handling medical queries, and performing other related functions, in each case of (i)–(v) with respect to the Field; provided, that such decisions are consistent with the express terms and conditions of this Agreement. As between the Parties, Elanco shall bear all of its costs and expenses incurred in connection with such Commercialization activities.
b.Commercial Diligence. Elanco shall use Commercially Reasonable Efforts to (i) Commercialize Licensed Products [***]. 
c.Commercialization Plans. Elanco shall establish plans for Commercialization of Licensed Products in the Field in accordance with its normal business practices and consistent with the form and detail that Elanco normally provides for its internal products at a similar stage and shall provide the final version of such commercialization plan (the “Commercialization Plan”) [***]. After establishment of the initial commercialization plan for Licensed Products in the Field, Elanco shall [***] establish such other plans for Commercialization of Licensed 
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Products in other countries of the Territory in accordance with its normal business practices and in compliance with the Commercialization Plan [***]. 
a.Standards of Conduct. Elanco shall perform, and shall ensure that its Affiliates, Sublicensees and Third Party contractors perform, all Commercialization activities in a good scientific and ethical business manner and in compliance with Applicable Laws. Elanco represents that it has established or will establish, and shall follow, its own internal policies, procedures, and standards for promotion, Clinical Tests, medical education activities and other sales and marketing activities for Licensed Products in the Field, to ensure compliance with Applicable Laws.
Article 7.
MANUFACTURING
KindredBio will be responsible for Manufacturing globally and Elanco will be responsible for purchasing all of its requirements for Licensed Products in the Field in the Territory. The manufacturing of the Licensed Products will be governed by the terms and provisions of the Master Supply Agreement. KindredBio is responsible for obtaining GMP certification for its site at its own cost. [***]. The Master Supply Agreement shall provide for Elanco to have the right to conduct regular audits and inspections to ensure compliance with regulatory and quality requirements. 
Article 8.
COMPENSATION
a.Upfront Payments. As part of the consideration for the license and rights granted hereunder by KindredBio, Elanco agrees to pay to KindredBio a one-time [***] upfront payment of Five Hundred Thousand Dollars ($500,000) (the “Upfront Payment”) and the Parties acknowledge that the Upfront Payment was paid to and received by KindredBio prior to the date of this Agreement. 
b.U.S. Performance Milestone Payments. During the Term of this Agreement, Elanco shall pay to KindredBio the amounts set forth below upon the [***]achievement of the corresponding milestone events in the U.S. (each, a “U.S. Performance Milestone Event”) by Elanco or its Affiliates (or their respective Sublicensees) hereunder with respect to the Licensed Product, or as otherwise set forth in the Master Supply Agreement (each, a “U.S. Performance Milestone Payment”). Elanco shall notify KindredBio within [***] days after the first achievement by Elanco, its Affiliates, or Sublicensees of the following U.S. Performance Milestone Event. Elanco shall make the corresponding milestone payment [***] days following the respective U.S. Performance Milestone Event. [***]. For the avoidance of doubt, each milestone shall only be payable only once.  
[***]
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c.EU Performance Milestones. During the Term of this Agreement, Elanco shall pay to KindredBio the amounts set forth below upon the first achievement of the corresponding milestone events in the EU (each, an “EU Performance Milestone Event”) by Elanco or its Affiliates (or their respective Sublicensees) hereunder with respect to the Licensed Product (each, a “EU Performance Milestone Payment”). Elanco shall notify KindredBio within [***]days after the first achievement by Elanco, its Affiliates, or Sublicensees of the following EU Performance Milestone Events. Elanco shall make the corresponding EU Performance Milestone Payment [***] days following the EU Performance Milestone Event. For the avoidance of doubt, each milestone shall only be payable only once.  
    [***]

d.[***]Milestones. Elanco shall notify KindredBio within [***] Sales of all Licensed Products [***]by Elanco, its Affiliates, and their respective Sublicensees  in the Territory [***]first reaches [***]. Elanco shall make the corresponding [***]Milestone Payments [***] days upon such notice. 
[***]
Each such [***]Sales Milestone Payment is payable one time only. 
e.Royalties
23.Royalty Rates. Subject to Sections 8.5(a) (Royalty Rates), 8.5(c) (No Valid Claim) and 8.6 (Third Party Payments), Elanco shall pay to KindredBio royalties on aggregate Net Sales of all KIND-030 [***] Formulations in the U.S., KIND-030 [***]Formulations in the U.S., and of all Licensed Products in the Field in the Territory during the applicable Royalty Term in accordance with the [***]royalty rates set forth in the table below: 
[***]

    The specific royalty rates on Net Sales in the United States of Licensed Products which are neither KIND-030 [***]Formulations nor KIND-030 [***]Formulations shall be agreed by both Parties in writing and Elanco, its Affiliates, and Sublicensees shall not sell, distribute or otherwise commercialize such Licensed Products until both Parties have reached an agreement on royalty rates that are acceptable to KindredBio.  
24.Royalty Term. The royalties under this Section 8.5 (Royalties) shall be calculated based on aggregate Net Sales of all applicable Licensed Products and the Net Sales of each Licensed Product shall be calculated on a country-by-country and Licensed-Product-by-Licensed-Product basis during the period of time beginning on the First Commercial Sale of such 
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Licensed Product in such country and continuing until the later of: (i) the expiration or abandonment of the last-to-expire Licensed Patent Covering such Licensed Product in the respective country and (ii) [***](the “Royalty Term”). Within [***] days following the end of a Calendar Quarter during the Royalty Term, Elanco shall provide KindredBio a report containing the following information for the applicable Calendar Quarter on a Licensed-Product-by-Licensed-Product basis: (i) the amount of gross sales of such Royalty-Bearing Product in the applicable countries in the Territory; (ii) an itemized calculation of Net Sales in the applicable countries in the Territory showing actual sales prices and deductions provided for in the definition of Net Sales; and (iii) a calculation of the royalty payment due on such Net Sales. Within [***] days  of the delivery of the applicable quarterly report, Elanco shall pay KindredBio in Dollars all undisputed amounts due to KindredBio pursuant to Section 8.5 (Royalties).
25.No Valid Claim. During the Royalty Term, on a country-by-country basis, if Licensed Product is not Covered by a Valid Claim of a Licensed Patent in such country, then the [***].
26.Biosimilar Products. On a country-by-country and Licensed-Product-by-Licensed-Product basis, following the First Commercial Sale of one (1) or more Biosimilar Products with respect to any Licensed Product in any country in the Territory during the Royalty Term, the royalty rates provided in Section 8.5 (Royalties) for such Licensed Product will be permanently reduced in such country by [***]percent [***] in such country during the Royalty Term once such Biosimilar Product(s) has or have a combined market share of [***]percent [***]  or more of the market in the Field in such country from and after the date of such First Commercial Sale. The determination of market share for the purpose of this Section 8.5(d) (Biosimilar Products) shall be measured in local currency, over each Calendar Quarter, using relevant market based animal health sales data including, but not necessarily limited to, CEESA reporting.
27.Royalty Reports and Payments. Within [***] days after the end of each Calendar Quarter during the Royalty Term, Elanco shall deliver to KindredBio a written royalty report specifying, on a country-by-country and Product-by-Product basis, the amount of gross sales and Net Sales of Products during the applicable Calendar Quarter, a calculation of the amount of royalty payment due on such sales for such Calendar Quarter, any applicable royalty offsets under Section 8.6 (Third Party Payments), and a revised calculation of the payment due after the application of such offsets. Within [***] days of the delivery of such royalty report, Elanco shall pay all royalties due to KindredBio with respect to Net Sales by Elanco, its Affiliates or their respective Sublicensees for each such Calendar Quarter. 
f.Third Party Payments. If Elanco, in good faith and acting reasonably, determines that it is necessary to pay royalties to a Third Party for an intellectual property right that is necessary or reasonably useful to Develop or Commercialize any Licensed Product, then, during the respective Calendar Quarter, Elanco may deduct from any royalty payments to KindredBio under Section 8.5 (Royalties) up to [***] percent ([***]%) of any payments 
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otherwise due by Elanco or its Affiliates or Sublicensees to Third Parties for any such license or grant of rights. 
g.Royalty Floor. Notwithstanding Sections 8.5(c) (No Valid Claim) and 8.5(d) (Biosimilar Products) with respect to any Licensed Product in any Calendar Quarter, the royalties that would otherwise have been due under Section 8.5(a) (Royalty Rates) with respect to Net Sales of such Licensed Product in the applicable country(ies) during such Calendar Quarter shall not be reduced by more than [***] percent ([***]%) as a result of such reductions. The foregoing royalty floor shall not apply to reductions applicable pursuant to Section 8.6 (Third Party Payment).      
h.Non-Royalty Income. Within [***] days following receipt of any Non-Royalty Income,   
i.Foreign Exchange. The rate of exchange to be used in computing the amount of currency equivalent in Dollars of Net Sales invoiced in other currencies shall be the rate used by Elanco in its financial reporting in accordance with U.S. GAAP, as applicable. 
j.Manner and Place of Payment. All payments owed by Elanco under this Agreement shall be made by wire transfer in immediately available funds to a bank and account designated in writing by KindredBio.
k.Records; Audits. Elanco and its Affiliates and their Sublicensees and Distributors will maintain complete and accurate records in reasonably sufficient detail to permit KindredBio to confirm the accuracy of the calculation of royalty payments and the achievement of sales milestone events. Upon reasonable prior notice, such records shall be available during regular business hours for a period of [***] years from the end of the Calendar Year to which they pertain for examination, not more often than once each Calendar Year, by an independent certified public accountant selected by the auditing Party and reasonably acceptable to the audited Party, for the sole purpose of verifying the accuracy of the financial reports furnished by the other Party pursuant to this Agreement. Any such auditor shall enter into a confidentiality agreement with the audited Party and shall not disclose the audited Party’s Confidential Information, except to the extent, such disclosure is necessary to verify the accuracy of the financial reports furnished by the audited Party or the amount of payments due by one Party to the other Party under this Agreement. Any amounts shown to be owed but unpaid shall be paid, and any amounts showed to be overpaid will be refunded, within [***] days from the accountant’s report. The auditing Party shall bear the full cost of such audit unless such audit discloses an underpayment or overcharge by the audited Party of more than [***] percent ([***]%) of the amount due, in which case the audited Party shall bear the full cost of such audit.
l.Taxes
28.Taxes on Income. Except as otherwise provided in this Section 8.12 (Taxes), each Party shall be solely responsible for the payment of all taxes imposed on its share 
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of income arising directly or indirectly from the efforts of the Parties under this Agreement, including taxes asserted or collected through withholding. 
1.Withholding Tax. The Parties agree to cooperate with one another and use reasonable efforts to reduce or eliminate tax withholding or similar obligations in respect of royalties, milestone payments, and other payments made by Elanco to KindredBio under this Agreement. To the extent Elanco is required to deduct and withhold taxes on any payment to KindredBio, Elanco shall pay the amounts of such taxes to the proper Governmental Authority in a timely manner and promptly transmit to KindredBio an official tax certificate or other evidence of such withholding sufficient to enable KindredBio to claim such payment of taxes. Any such amounts deducted or withheld by Elanco shall be treated as having been paid to KindredBio for purposes of this Agreement. On or prior to the Effective Date, KindredBio shall deliver to Elanco a properly completed Internal Revenue Service Form W-8BEN-E. Each Party shall provide the other with reasonable assistance to enable the recovery, as permitted by applicable Laws, of withholding taxes, value added taxes, or similar obligations resulting from payments made under this Agreement, such recovery to be for the benefit of the Party bearing such withholding tax or value added tax.
Article 9.
INTELLECTUAL PROPERTY MATTERS
a.Ownership of IP and New Inventions  
2.Background IP. As between the Parties, KindredBio will exclusively own and retain exclusive ownership of all right, title, and interest in and to all Intellectual Property Rights (i) owned by KindredBio (or its Affiliates) prior to the Effective Date and (ii) created, conceived, developed, invented, reduced to practice, or otherwise acquired by or on behalf of KindredBio (or its Affiliates) during the Term of this Agreement outside of the activities outlined provided in this Agreement, (collectively, “KindredBio Background IP”). As between the Parties, Elanco will exclusively own and retain exclusive ownership of all right, title, and interest in and to all Intellectual Property Rights (i) owned by Elanco (or its Affiliates) prior to the Effective Date and (ii) created, conceived, developed, invented, reduced to practice, or otherwise acquired by or on behalf of Elanco (or its Affiliates) during the Term of this Agreement outside of the activities outlined provided in this Agreement (collectively, “Elanco Background IP”). 
3.New Inventions. As between the Parties, (i) title to (1) all Monoclonal Antibody Improvements created, developed, reduced to practice during the Term of this Agreement, and (2) all New Inventions created, developed, reduced to practice, invented solely by or on behalf of KindredBio or its Affiliates shall be owned by KindredBio (“KindredBio New IP”) and licensed to Elanco pursuant to Section 2.1 (License to Elanco) to the extent such New Inventions constitute Licensed Patents, Licensed Know-How or are otherwise reasonably necessary or useful for the Development and Commercialization of Licensed Products; and (ii) title to all New Inventions (other than [***]) created, developed, reduced to practice, or invented (1) solely by or on behalf of Elanco or its Affiliates shall be owned by Elanco (“Elanco New IP”); and (2) shall be jointly owned by both Parties if such New Inventions are Joint Inventions 
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(“Joint IP”); provided, however, that in no event shall any New Inventions (including any New Invention that is [***]) be deemed to include or grant rights to use a Party’s Background IP. KindredBio’s right, title and interest in and to such Joint IP shall be licensed to Elanco pursuant to Section 2.1 (License to Elanco) only to the extent such Joint IP qualifies as Licensed Patents or Licensed Know-How under this Agreement. Inventorship shall be determined by applying the patent laws of the United States, including, in the case of New Inventions jointly invented outside of the United States, as if such New Inventions were invented in the United States, and in no event shall any activities conducted by a Party under or related to the subject matter of this Agreement be deemed to be “on behalf of” the other Party.  Subject to the rights and licenses granted under this Agreement (including the exclusive rights and licenses granted to Elanco pursuant to Article 2 (Licenses and Exclusivity)), each Party shall have the right to practice and use, grant licenses to practice and use, any Joint IP without the other Party’s consent and has no duty to account to the other Party for such practice, use and license. Elanco hereby assigns and agrees to assign to KindredBio any right or interest Elanco has in and to any [***], and if such assignment is not enforceable, Elanco shall grant to KindredBio [***]license to use and exploit Elanco’s rights or interests in any such [***].
4.Disclosure. KindredBio agrees to keep Elanco informed of all New Inventions that are within the scope of Licensed Know-How or that, if the subject of a Patent, are within the scope of Licensed Patents, and Elanco agrees to keep KindredBio informed of all New Inventions that are in the nature of [***], via the JSC, and as otherwise required pursuant to Section 9.2 (Patent Prosecution and Maintenance) below, including to enable the non-Prosecuting Party to review and provide comments prior to the filing of any new Licensed Patent application or Joint Patent application. Each Party shall also promptly respond to reasonable requests from the other Party for additional information relating to any such New Inventions. 
5.Improvements. For purposes hereof, [***] means any New Invention (including any Joint Invention) that is [***]. 
b.Patent Prosecution and Maintenance. For purposes of this Section 9.2 (Patent Prosecution and Maintenance), the terms “prosecution” and “maintenance” (including variations such as “prosecute” and “maintain”) means, with respect to a Patent, the preparation, filing, prosecution (including conducting all correspondence and interactions with any patent office and seeking, conducting and defending all and any interferences, inter partes reviews, reissue proceedings, reexaminations, and oppositions and similar proceedings) and maintenance (including payment of any patent annuity fees) of such Patent, as well as re-examinations, reissues, appeals, post grant reviews (PGR), inter partes reviews (IPR) and requests for patent term adjustments, patent term extensions, supplementary protection certificates, or their equivalents with respect to such Patent, together with the initiation or defense of interferences, oppositions and other similar proceedings with respect to the particular Patent, and any appeals therefrom. For clarity, “prosecution” and “maintenance” (including variations such as “prosecute” and “maintain”) exclude any enforcement action with respect to a Patent.
6.Prosecution of Licensed Patents. Unless and until assumed by Elanco, as provided below, KindredBio shall have the first right (but not the obligation) to control the filing, 
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prosecution of maintenance and using patent counsel of any patents and patent applications for the Licensed Technology. KindredBio shall keep Elanco reasonably informed of progress with regard to its prosecution and maintenance of any Licensed Patents and filing of any new patent applications directed to Licensed Know-How, including by providing Elanco with drafts of all proposed substantive filings and correspondence to any relevant patent authority for KindredBio’s review and comment prior to the submission of such proposed filings and correspondence. KindredBio shall consider in good faith Elanco’s comments related to such Patents prior to submitting such filings and correspondence, provided that Elanco provides such comments to KindredBio within [***]days (or a shorter period reasonably designated by KindredBio if [***]days is not practicable given the filing deadline) of receiving the draft filings and correspondence from Elanco. If KindredBio: (i) seeks to abandon or cease the prosecution or maintenance of any Licensed Patent in a particular jurisdiction (without initiation of the prosecution and maintenance of a substitution therefor) or to not file a utility application prior claiming priority to a provisional patent application prior to expiration of such provisional application, (ii) elects not to file a foreign counterpart to a Licensed Patent in a particular jurisdiction within [***]days of Elanco’s request for such filing (or such shorter period has may be necessary to enable such filing within applicable filing deadlines) or (iii) elects not to file a patent application directed to a particular invention that is Licensed Know-How within [***]days of Elanco’s request for such filing (or such shorter period as may be necessary to enable such filing within applicable filing deadlines), then KindredBio shall provide reasonable prior written notice to Elanco of such intention to abandon or cease such prosecution or maintenance or election not to file (which notice shall be given no later than [***]days prior to the final, non-extendable deadline for any action that must be taken with respect to any such Licensed Patent or invention, as applicable, with the patent office). In such case, then Elanco will have the right, by written notice to KindredBio, to take over, be responsible for, and control all patent preparation, filing, prosecution, and maintenance for Licensed Technology or any New Inventions under such Licensed Technology. Until Elanco expressly assumes such responsibility, KindredBio shall continue to prosecute, maintain and enforce all Licensed Patents and will keep Elanco informed of all such matters and give due consideration to any input or suggestions of Elanco, as provided above. Elanco shall have the first right to defend the Licensed Patents and other intellectual property rights included in the Licensed Technology (other than Joint Patents, which are addressed in Section 9.2(b) (Joint Patents)). Each Party shall bear the cost of prosecuting, maintaining, and defending related to its own IP. To the extent Elanco has assumed responsibility for patent preparation, prosecution, maintenance and enforcement, Elanco shall (i) use diligent and commercially reasonable efforts, keeping KindredBio fully informed of all such matters and give due consideration to any input and suggestions of KindredBio and not make any settlements without KindredBio’s prior approval and (ii) bear the cost of prosecuting, maintaining and defending such Licensed Patents.
7.Joint Patents. The Parties shall establish the patent strategy for the prosecution and maintenance of any Joint Patents, and shall determine, on an Invention-by-Invention basis, which Party shall be responsible for the prosecution and maintenance of such Patents (such Party, the “Prosecuting Party”). In determining the Prosecuting Party, the Parties shall take into account each Party’s intellectual property or Patent position with respect to the relevant New Invention; provided, however, that if the Parties are unable to agree, Elanco shall 
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be the Prosecuting Party. The Prosecuting Party shall keep the other Party reasonably informed of progress with regard to its prosecution and maintenance of any Patents described in this Section 9.2(b) (Joint Patents), including by providing such other Party with drafts of all proposed substantive filings and correspondence to any relevant patent authority for such other Party’s review and comment prior to the submission of such proposed filings and correspondence. The Prosecuting Party shall consider in good faith the other Party’s comments related to such Patents prior to submitting such filings and correspondence, provided that the other Party provides such comments to the Prosecuting Party within [***] days (or a shorter period reasonably designated by the Prosecuting Party if thirty [***] days is not practicable given the filing deadline) of receiving the draft filings and correspondence from the Prosecuting Party. If the Prosecuting Party seeks to abandon or cease the prosecution or maintenance of any Patent described in this Section 9.2(b) (Joint Patents) (without initiation of the prosecution and maintenance of a substitution therefor), then the Prosecuting Party shall provide reasonable prior written notice to the other Party of such intention to abandon or cease such prosecution or maintenance (which notice shall be given no later than [***] days prior to the final, non-extendable deadline for any action that must be taken with respect to any such Joint Patent with the patent office). In such case, at the other Party’s sole discretion, upon written notice to the Prosecuting Party, such other Party may elect to continue the prosecution and maintenance of any such Patent described in this Section 9.2(b) (Joint Patents), and will thereafter be the Prosecuting Party with respect to such Joint Patent. The Parties shall mutually agree on the percentage of expenses that each Party shall bear with respect to the prosecution of Joint Patents (which in the absence of any other agreement between the Parties shall be borne by the Prosecuting Party).
8.Cooperation of the Parties. Each Party shall cooperate fully in the preparation, filing, prosecution and maintenance of the Licensed Patents and Joint Patents pursuant to this Section 9.2 (Patent Prosecution and Maintenance). Such cooperation includes (i) executing all papers and instruments, or requiring its employees or contractors, to execute such papers and instruments, so as to effectuate the ownership of New Inventions as set forth in Section 9.1 (Ownership of IP and New Inventions), and Patents claiming or disclosing such New Inventions, and as to enable the other Party to apply for and to prosecute patent applications in any country as permitted by Section 9.2 (Patent Prosecution and Maintenance), and (ii) promptly informing the other Party of any matters coming to such Party’s attention that may affect the prosecution and maintenance of any such patent applications. KindredBio shall, at its own expense, cooperate with Elanco. 
c.Enforcement
9.Notice; Procedures. Each Party shall notify the other Party promptly after becoming aware of any alleged or threatened infringement by a Third Party of (i) Joint Patents anywhere in the world or (ii) Licensed Patents (other than Joint Patents) if infringement of such Licensed Patents adversely affects or is expected to adversely affect any Licensed Product the Territory, and in each case of (i) and (ii), any related declaratory judgment or equivalent action alleging the invalidity, unenforceability or non-infringement of such Patents (collectively “Infringement”). For clarity, any Infringement excludes those adversarial proceedings that are addressed in Section 9.2 (Patent Prosecution and Maintenance).
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10.Enforcement Rights 
xiii.Licensed Technology. As between the Parties, Elanco  has the first right but not the obligation to bring and control any legal action to enforce any Licensed Technology against any Infringement in the Field in the Territory, as it reasonably determines appropriate, and  Elanco  shall consider in good faith the interests of   KindredBio in such enforcement of any such Licensed Technology. If KindredBio or its designee does not exercise its right to enforce, if Elanco fails to file an action to abate such Infringement within [***]days after a written request from KindredBio to do so, or if Elanco discontinues the prosecution of any such action after filing without abating such infringement, then if such Infringement has not otherwise been abated by Elanco or its designee, KindredBio may enforce any Licensed Patent against the relevant Infringement in the Territory, at its own expense. 
11.Joint Patents. If either Party becomes aware of any alleged or threatened Infringement by a Third Party of any Joint Patent, then such Party shall so notify the other Party, and the Parties shall promptly confer and determine (a) whether to bring such an enforcement action against such Third Party, (b) the strategy to be employed in connection with any such action, or (c) the manner in which to settle such action. Unless otherwise agreed, Elanco has the first right, but not the obligation, to bring and control any legal action to enforce any Joint Patents against any Infringement in the Field, at its own expense as it reasonably determines appropriate, and Elanco shall consider in good faith the interests of KindredBio in such enforcement of any such Patents. Unless otherwise agreed, if Elanco or its designee fails to file an action to abate such Infringement within [***] days after a written request from KindredBio to do so, or if Elanco discontinues the prosecution of any such action after filing without abating such infringement, then if such Infringement has not otherwise been abated by Elanco or its designee, KindredBio may enforce any Joint Patent against the relevant Infringement, at its own expense as it reasonably determines appropriate. The Party not bringing an action under this Section 9.3(c) (Joint Patents) will be entitled to separate representation in such proceeding by counsel of its own choice and at its own expense and will cooperate fully with the Party bringing such action. 
12.Cooperation. If a Party brings an infringement action in accordance with this Section 9.3 (Enforcement) (such Party, the “Enforcing Party”), the other Party shall cooperate fully, including, if required to bring such action, furnishing a power of attorney or being named as a party to such infringement action. The Enforcing Party shall not enter into any settlement or compromise of any action under this Section 9.3 (Enforcement): (i) in a manner that would diminish the rights or interests of the other Party without the written consent of such other Party, not be unreasonably withheld, conditioned, or delayed; or (ii) that would impose any cost or liability on the other Party, or admit the invalidity or unenforceability of any Patent Controlled by the other Party, without such other Party’s prior written consent, which may be withheld in such other Party’s sole discretion. 
d.Recovery. Except as otherwise agreed by the Parties in connection with a cost-sharing arrangement, any recovery as a result of any action or proceeding pursuant to Section 9.3(b) (Enforcement Rights), whether by way of settlement or otherwise, will be first 
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used to reimburse the Enforcing Party for its documented, out-of-pocket costs and expenses (including court, attorneys’ and professional fees) incurred in connection with such action or proceeding, and then to reimburse the other Party for its documented, out-of-pocket costs and expenses (including court, attorneys’ and professional fees) incurred in connection with such action or proceeding (to the extent not previously reimbursed by the Enforcing Party), and any remainder of the recovery after reimbursement of the litigation costs and expenses of the Parties, will be divided among the Parties with [***] percent ([***]%) of such funds retained by the Enforcing Party and [***] percent ([***]%) of such funds retained by the non-Enforcing Party. 
e.Infringement of Third Party Rights. Each Party shall promptly notify the other in writing of any allegation by a Third Party that Manufacture, use or sale of a Licensed Product infringes or misappropriate or may infringe or misappropriate the intellectual property rights of such Third Party. Except to the extent subject to a Party’s indemnification obligations, as provided in Article 11 (Indemnification) or in this Section 9.5 (Infringement of Third Party Rights), in which case the provisions of Section 11.3 (Procedure) shall control, (a) Elanco has the first right to control any defense of any such claim involving alleged infringement or misappropriation of Third Party rights by Elanco’s activities at its own expense and by counsel of its own choice, and KindredBio may, at its own expense, be represented in any such action by counsel of its own choice if such intellectual property rights pertain to the Territory, and (b) KindredBio has the sole right to control any defense of any such claim involving alleged infringement of Third Party rights by KindredBio’s activities at its own expense and by counsel of its own choice, and Elanco may, at its own expense, be represented in any such action by counsel of its own choice. With respect to any Third Party claim of intellectual property infringement or misappropriation of a Third Party’s Intellectual Property Rights which arises from the use by Elanco of the Licensed Technology within the scope of the license grant as permitted under this Agreement and in compliance with the terms of this Agreement, then if KindredBio knows (or should have known, following due inquiry) of such infringement or misappropriation, KindredBio shall also reimburse Elanco for its reasonable costs and expenses directly arising from such defense and shall otherwise indemnify Elanco in respect of such claim. To the extent that Third Party claims of infringement or misappropriation arise from Elanco’s uses of or modification of the Licensed Technology outside of the uses permitted under this Agreement, KindredBio shall not be obligated to reimburse or indemnify Elanco, and Elanco shall reimburse KindredBio for its reasonable costs and expense arising from such defense and shall otherwise indemnify and hold KindredBio harmless in respect of such claims. Neither Party may settle any patent infringement litigation under this Section 9.5 (Infringement of Third Party Rights) in a manner that materially diminishes the rights or interests of the other Party in the Licensed Technology (if such other Party is KindredBio) and the rights and interests under the license grant hereunder (if such other Party is Elanco) without the written consent of the other Party. 
f.Patent Term Extensions. KindredBio will cooperate with Elanco, at Elanco’s request, in seeking and obtaining patent term extensions (including any pediatric exclusivity extensions as may be available) or supplemental protection certificates or their equivalents in any country with respect to any Licensed Patents and Licensed Products. If elections with respect to 
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obtaining such patent term extensions are to be made, Elanco shall have the right to make such elections with respect to the applicable Licensed Product. 
Article 10.
REPRESENTATIONS AND WARRANTIES; COVENANTS
a.Mutual Representations and Warranties. Each Party represents and warrants to the other Party, as of the Effective Date, that: (a) it is duly incorporated or formed, validly existing, and in good standing; (b) it has taken all necessary actions on its part to authorize the execution, delivery, and performance of the obligations undertaken in this Agreement, and no other corporate actions are necessary with respect thereto; (c) it is not a party to any agreement or understanding, and knows of no applicable law or third party rights, that would prohibit it from entering into and/or performing this Agreement, or that would conflict with its performance of its obligations or the other Party’s exercise of its rights under this Agreement; (d) when executed and delivered by it, the Agreement will constitute a legal, valid, and binding obligation of it, enforceable against it in accordance with the terms and conditions hereof; and (e) it shall perform its obligations hereunder in a timely, skillful, professional, scientific and workmanlike manner, in compliance with all applicable laws and applicable industry standards, by qualified personnel exercising care, skill and diligence consistent with commercially reasonable practices in the industry, and will devote commercially reasonable resources to meet its obligations hereunder.
b. KindredBio Representations and Warranties. KindredBio hereby represents and warrants to Elanco as follows, as of the Effective Date:
13.Control. [***].
14.No Conflicts. KindredBio has not entered into any agreement with any Third Party that is in conflict or inconsistent with the rights granted to Elanco under this Agreement or would impede the performance of its obligations hereunder;
15.Intellectual Property Rights. The Licensed Technology includes all intellectual property rights [***] that are reasonably necessary or useful [***] in accordance with the terms of this Agreement [***]; 
16.Compliance with Laws. To KindredBio’s Knowledge, all Development of the Licensed Products conducted by or on behalf of KindredBio prior to the Effective Date has been conducted in compliance with all Applicable Laws; 
17.No Litigation. KindredBio is not a party to any legal action, suit or proceeding relating to the Licensed Products  in the Territory and has not received any written notice threatening such litigation or any other written notice to such effect;     
18.[***];
19.[***]. 
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20.Third Party Rights. KindredBio has not received notice and is not aware of any valid claim or demand which leads it to believe that the Parties’ exercise of any rights under the Licensed Technology as contemplated by this Agreement will infringe any patent rights or other intellectual property right of any Third Party.
21.KindredBio has taken reasonable steps to protect the confidentiality of Licensed Know-How.
22.For purposes of this Section 10.2 (KindredBio Representations and Warranties), KindredBio’s Knowledge means the actual knowledge after due inquiry of the executive officers of KindredBio.  
c.Representations and Warranties of Elanco. Elanco represents and warrants to KindredBio that as of the Effective Date: 
23.[***];
24.Elanco has sufficient financial wherewithal to (i) perform all of its obligations pursuant to this Agreement, and (ii) meet all of its obligations that come due in the ordinary course of business; and 
25.Elanco has, or can readily obtain, sufficient technical, clinical, and regulatory expertise to perform all of its obligations pursuant to this Agreement, including its obligations relating to the Products in the Field in the Territory. 
d.Mutual Covenants
26.No Debarment. In the course of Development of the Licensed Products, neither Party shall use any employee or consultant who has been debarred by any Regulatory Authority or, to such Party’s knowledge, is the subject of debarment proceedings by a Regulatory Authority. Each Party shall notify the other Party promptly upon becoming aware that any of its employees or consultants has been debarred or is the subject of debarment proceedings by any Regulatory Authority.
27.Compliance
xiv.Each Party and its Affiliates shall comply in all material respects with all Applicable Laws in the Development, Manufacture, and Commercialization of Products and performance of its obligations under this Agreement, including, to the extent applicable to such Party and its activities hereunder, the statutes, regulations and written directives of the FDA, USDA, APHIS, the EMA and any Regulatory Authority having jurisdiction in the Territory, Without limiting the foregoing, each Party shall comply with Anti-Corruption Laws, and shall not cause the other Party or its Affiliates, directors, officers, shareholders, employees or agents to be in violation of any Anti-Corruption Laws. Without limiting the foregoing, neither Party shall, directly or indirectly, pay any money to, or offer or give anything of value to, any “foreign official” as that term is used in the FCPA or any “foreign public official” as that term is used in 
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the FCPA, in order to obtain or retain business or to secure any commercial or financial advantage for the other Party or for itself or any of their respective Affiliates or Sublicensees. Each Party understands that if it fails to comply with the provisions of Anti-Corruption Laws, then such failure shall automatically be deemed a breach that allows the other Party to terminate this Agreement in accordance with Section 13.5 (Termination by Either Party for Bankruptcy), provided that, the other Party will in such case not have to allow the infringing Party any notice period or cure period.
e.Disclaimer. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, WHETHER EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, OR NON-MISAPPROPRIATION OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS, ARE MADE OR GIVEN BY OR ON BEHALF OF A PARTY, AND ALL REPRESENTATIONS AND WARRANTIES, WHETHER ARISING BY OPERATION OF LAW OR OTHERWISE, ARE HEREBY EXPRESSLY EXCLUDED. EACH PARTY ACKNOWLEDGES AND AGREES THAT THE OTHER PARTY HAS NOT MADE ANY REPRESENTATIONS, EXPRESS OR IMPLIED WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT, OTHER THAN THOSE CONTAINED IN THIS AGREEMENT. 
Article 11.
INDEMNIFICATION
a.By Elanco. Elanco shall and hereby does save, defend and hold KindredBio and its Affiliates and their respective directors, officers, employees and agents (each, a “KindredBio Indemnitee”) harmless from and against any and all claims, suits, actions, demands, liabilities, expenses and loss, including reasonable legal expense and attorneys’ fees (collectively, “Losses”) to which any KindredBio Indemnitee may become subject as a result of any claim, demand, action or other proceeding by any Third Party to the extent such Losses arise directly or indirectly out of: (a) the [***]  of Licensed Products by or on behalf of Elanco or any of its Affiliates or Sublicensees; (b) the breach by Elanco of any provision of this Agreement; or (c) the gross negligence or willful misconduct of any Elanco Indemnitee; except, in each case, to the extent such Losses result from the gross negligence or willful misconduct of any KindredBio Indemnitee or the breach by KindredBio of any provision of this Agreement, or to the extent KindredBio is obligated to indemnify such Loss, as provided in Section 9.5 (Infringement of Third Party Rights) above. 
b.By KindredBio. KindredBio shall and hereby does save, defend and hold Elanco and its Affiliates and their respective directors, officers, employees and agents (each, an “Elanco Indemnitee”) harmless from and against any and all Losses to which any Elanco Indemnitee may become subject as a result of any claim, demand, action or other proceeding by any Third Party to the extent such Losses arise directly or indirectly out of: (a) [***] of Licensed Products by or on behalf of KindredBio or any of its Affiliates or licensees (other than Elanco); (b) the breach by KindredBio of any provision of this Agreement, including KindredBio’s obligations with respect to [***] pursuant to [***]; or (c) the gross negligence or willful misconduct of any 
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KindredBio Indemnitee; except, in each case, to the extent such Losses result from the gross negligence or willful misconduct of any Elanco Indemnitee or the breach by Elanco of any provision of this Agreement, or to the extent Elanco is obligated to indemnify such Loss, as provided in Section 9.5 (Infringement of Third Party Rights) above. 
c.Procedure. If a Party (the “Indemnified Party”) seeks indemnification under Section 11.1 (By Elanco) or 11.2 (By KindredBio), the Indemnified Party shall: (a) inform the other Party (the “Indemnifying Party”) of a claim as soon as reasonably practicable after it receives notice of the claim (it being understood and agreed, however, that the failure by an Indemnified Party to give notice of a claim as provided in this Section 11.3 (Procedure) shall not relieve the Indemnifying Party of its indemnification obligation under this Agreement except and only to the extent that such Indemnifying Party is actually and materially damaged as a result of such failure to give notice); (b) permit the Indemnifying Party to assume direction and control of the defense of the claim (including the right to settle the claim solely for monetary consideration) using counsel reasonably satisfactory to the Indemnified Party; and (c) cooperate as requested (at the expense of the Indemnifying Party) in the defense of the claim. If the Indemnifying Party does not assume control of such defense within [***]days after receiving notice of the claim from the Indemnified Party, the Indemnified Party shall control such defense and, without limiting the Indemnifying Party’s indemnification obligations, the Indemnifying Party shall reimburse the Indemnified Party for all costs, including reasonable attorney fees, incurred by the Indemnified Party in defending itself within [***]days after receipt of any invoice therefor from the Indemnified Party. The Party not controlling such defense may participate therein at its own expense. 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 recommendations made by the other Party with respect thereto. 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, delayed or conditioned. 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, that imposes any liability or obligation on the Indemnified Party or that acknowledges fault by the Indemnified Party without the prior written consent of the Indemnified Party. 
d.Insurance. Each Party, at its own expense, shall maintain product liability and other appropriate insurance (or self-insure) in an amount consistent with industry standards during the Term. Each Party shall provide a certificate of insurance (or evidence of self-insurance) evidencing such coverage to the other Party upon request. 
e.Limitation of Liability. NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR INDIRECT DAMAGES ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 11.5 (LIMITATION OF LIABILITY) IS INTENDED TO OR SHALL LIMIT OR RESTRICT (A) THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF ANY PARTY UNDER 
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SECTION 11.1 (BY ELANCO) OR 11.2 (BY KINDREDBIO), OR (B) DAMAGES AVAILABLE FOR A PARTY’S BREACH OF ITS CONFIDENTIALITY AND NON-USE OBLIGATIONS UNDER ARTICLE 12 (CONFIDENTIALITY).
Article 12.
CONFIDENTIALITY
a.Confidential Information. “Confidential Information” means any non-public Information disclosed by one Party, directly or through its Affiliates or subcontractors (the “Disclosing Party”), to the other Party, directly or through its Affiliates or subcontractors (the “Receiving Party”), in connection with this Agreement and the Ancillary Agreements including scientific, technical, manufacturing, or business information, regardless of whether marked “confidential” or “proprietary” or communicated to the other by the Disclosing Party in oral, written, graphic, or electronic form. The Parties acknowledge that KindredBio’s Confidential Information includes all Licensed Know-How, Licensed Patents and any other Information, works in progress and any other documents or materials related to the Licensed Products that are not generally known to the public and disclosed to Elanco pursuant to this Agreement and the Ancillary Agreements. The Parties acknowledge that Disclosing Party’s Confidential Information includes all Information related to the business technology, products, systems, formulas, practices, processes, customers or projects of Disclosing Party including, without limitation, its Patents, Material and Supplier Technical Information (as each term is defined in the Master Supply Agreement) that are not generally disclosed to the public, and disclosed by Disclosing Party to Receiving Party during the Term of this Agreement. 
b.Restrictions on Use and Permitted Disclosures. The Receiving Party will not use Confidential Information of the Disclosing Party for any purpose other than to exercise its rights and perform its obligations under this Agreement and the Ancillary Agreements (the “Purpose”). The Receiving Party will not disclose Confidential Information of the Disclosing Party to any other Parties except as expressly permitted hereunder. The Receiving Party may disclose Confidential Information of the Disclosing Party to the extent expressly permitted by the Disclosing Party in advance in writing and otherwise only to those employees, trustees, directors, Affiliates, Sublicensees, and subcontractors of the Receiving Party who have a need to know such Confidential Information for the Purpose and who are bound by restrictions on use and disclosure under provisions no less strict than those required hereunder. To the extent that these confidentiality obligations conflict with any other rights under this Agreement, such other rights will prevail. The Receiving Party will maintain Confidential Information of the Disclosing Party with at least the same degree of care it uses to protect its own proprietary information of a similar nature or sensitivity, but no less than reasonable care under the circumstances. Upon any expiration or termination of this Agreement or upon the request of the Disclosing Party, the Receiving Party must return or destroy, at the Disclosing Party’s option, all Confidential Information of the Disclosing Party and any copies thereof, except to the extent that the Receiving Party requires such Confidential Information to exercise any surviving rights under this Agreement and  except that one copy thereof may be maintained in the file of the Receiving Party’s law department (subject to Receiving Party’s on-going compliance with the obligations 
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set forth herein) to document information developed. This provision shall supersede and replace any previous confidentiality or non-disclosure agreements between the Parties with respect to the subject matter hereof and be deemed to cover all information disclosed thereunder.  
c.Exceptions. The restrictions on use and disclosure in this Agreement will not apply to any Information that (a) is already in the Receiving Party’s possession at the time of disclosure to the Receiving Party without an obligation of confidentiality owed to the Disclosing Party, as evidenced by prior written documentation of the Receiving Party; (b) is or becomes part of public knowledge other than as a result of any action or inaction of the Receiving Party; (c) is obtained by the Receiving Party from an unaffiliated third party without a duty of confidentiality owed to the Disclosing Party; or (d) was independently developed by the Receiving Party without use of the Disclosing Party’s Confidential Information as can be shown by documentary evidence. In addition, this Agreement will not prevent the Receiving Party from disclosing Confidential Information of the Disclosing Party to the extent required by a judicial order or other legal obligation, provided that, in such event, the Receiving Party will, if permitted under Applicable Law or judicial order, promptly notify the Disclosing Party to allow intervention. The Receiving Party will advise the Disclosing Party in writing of any misappropriation or misuse of Confidential Information of such Disclosing Party of which the Receiving Party becomes aware.
d.Public Announcements 
28.Except to the extent already disclosed in a press release or other public communication issued in accordance with this Agreement, no public announcement concerning this Agreement, its subject matter or the transactions described herein shall be made, either directly or indirectly, by either Party or its Affiliates, except as may be required, in the good faith discretion of such Party’s counsel, by Applicable Law (including disclosure requirements of the U.S. Securities and Exchange Commission (“SEC”)), judicial order, or stock exchange or quotation system rule without first obtaining the approval of the other Party and agreement upon the nature, text and timing of such announcement, which approval and agreement shall not be unreasonably withheld or delayed. The Party desiring to make any such voluntary public announcement shall provide the other Party with a written copy of the proposed announcement in reasonably sufficient time prior to public release to allow the other Party to comment upon such announcement, prior to public release. In the case of press releases or other public communications required to be made by law, judicial order or stock exchange or quotation system rule, the Party making such press release or public announcement shall provide to the other Party a copy of the proposed press release or public announcement in written or electronic form upon such advance notice as is practicable under the circumstances for the purpose of allowing the notified Party to review and comment upon such press release or public announcement. Under such circumstances, the releasing Party shall not be obligated to delay making any such press release or public communication beyond the time when the same is required to be made. Neither Party shall be required to seek the permission of the other Party to repeat any information regarding the terms of this Agreement or any amendment hereto that has already been publicly disclosed by such Party or by the other Party in accordance with this Section 12.4(a) (Public Announcements); provided that such information remains accurate as of such time and provided the frequency and form of such disclosure are reasonable.
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29.Each Party may make public statements regarding this Agreement in response to questions by the press, analysts, investors or those attending industry conferences or financial analyst calls, provided that any such public statement or press release: (i) is not inconsistent with prior public disclosures or public statements made in accordance with Section 12.4(a) (Public Announcements); and (ii) does not reveal (A) information regarding the terms of this Agreement that have not previously been disclosed in accordance with Section 12.4(a) (Public Announcements) or (B) nonpublic information about the other Party. 
30.The Parties shall reasonably coordinate in advance with each other in connection with the filing of this Agreement (including redaction of certain provisions of this Agreement) with the SEC or other governmental agency or any stock exchange on which securities issued by a Party or its Affiliate are traded. Each Party shall use reasonable efforts to seek and obtain confidential treatment for the provisions of this Agreement that the Parties mutually agree to redact from such filing; provided that each Party shall ultimately retain ultimate discretion to disclose such information to the SEC or any stock exchange or other governmental agency (as the case may be) as such Party determines, based on advice of legal counsel, is required to be so disclosed. Except as expressly set forth in this Article 12 (Confidentiality), neither Party (or its Affiliates) shall be obligated to consult with or obtain approval from the other Party with respect to any filings with the SEC or any stock exchange or other governmental agency where such filings do not disclose Confidential Information of the other Party. 
e.Publications. Each Party recognizes that the publication of scientific and medical papers regarding results of and other information regarding Licensed Products, including oral presentations and abstracts, may be beneficial to both Parties provided such publications are subject to reasonable controls to protect Confidential Information. Accordingly, a Party may review and comment on any material proposed for disclosure or publication by the other Party, such as by oral presentation, manuscript or abstract, relating to the Development, Manufacture or Commercialization Products or that includes Confidential Information of the other Party. Before any such material is submitted for publication or disclosure (other than oral presentation materials and abstracts, which are addressed below), the Party proposing publication shall deliver a complete copy to the other Party at least [***]days prior to submitting the material to a publisher or initiating such other disclosure, and such other Party shall review any such material and give its comments to the Party proposing publication within [***]days of the delivery of such material to such other Party. With respect to oral presentation materials and abstracts, the Party proposing publication shall deliver a complete copy to the other Party at least [***]days prior to the anticipated date of the presentation, and such other Party shall make reasonable efforts to expedite review of such materials and abstracts, and shall return such items as soon as practicable to the Party proposing publication with appropriate comments, if any, but in no event later than [***]days from the date of delivery to the non-publishing Party. The publishing Party shall comply with the other Party’s request to delete references to the other Party’s Confidential Information in any such material and shall delay any submission for publication or other public disclosure for a period of up to an additional [***]days for the purpose of preparing and filing appropriate patent applications. For clarity, this Section 12.5 (Publications) is intended to set forth the procedures for scientific and medical presentations and publications, and other public 
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disclosures (e.g., press releases, investor presentations and the like) are addressed in Section 12.4 (Public Announcements). 
f.Change of Control. Upon the occurrence of an upcoming Change of Control of KindredBio that involves an Elanco Competitor: (a) KindredBio and/or the Elanco Competitor shall not disclose any Confidential Information of Elanco, and shall ensure that no Confidential Information of Elanco (including but not limited to information regarding Development Updates, regulatory information regarding the Licensed Products and Commercialization Plans) is disclosed, to employees or any other third parties other than those employees who were employed by KindredBio prior to such Change of Control and who were directly involved with fulfilling KindredBio’s obligations under this Agreement; provided that any such employee receiving such Confidential Information following such occurrence or announcement of an upcoming Change of Control is made aware of the confidential nature and the competitive sensitivity of such Confidential Information and is subject to a confidentiality agreement with KindredBio and/or the Elanco Competitor, as applicable; (b) Elanco shall have no obligation to share any  Confidential Information with KindredBio and/or the Elanco Competitor, other than to effect the financial, regulatory, and intellectual property provisions of this Agreement[***].
Article 13.
TERM AND TERMINATION
a.Term; Mutual Termination. This Agreement shall become effective on the Effective Date and, unless earlier terminated pursuant to this Article 13 (Term and Termination) or upon mutual agreement of both Parties, shall remain in effect until the date of expiration of the last Royalty Term of the last Licensed Product (such period, the “Term”). Upon the expiration of the Term as provided in the foregoing, the license grant in Section 2.1 (License to Elanco) will become [***].
b.Unilateral Termination by Elanco. 
31.If the submission of the Pivotal Trial to the USDA for the first Licensed Product is not achieved by [***] or the Efficacy Rate related to the Pivotal Trial of the first Licensed Product is below [***] percent ([***]%) [***], Elanco shall have right to terminate the Agreement upon [***]days’ notice. If Elanco chooses not to terminate the Agreement under such conditions, the Parties will agree to enter into good faith negotiations to discuss and renegotiate the terms of this Agreement. If USDA Full Approval does not occur by [***], Elanco may terminate this Agreement subject to [***]days’ written notice to KindredBio. If Elanco chooses not to terminate the Agreement, the USDA Full Approval milestone as provided in Section 8.2 (U.S. Performance Milestone Payments) will be reduced by [***].
32.In addition, if there is a Change of Control of KindredBio where the acquirer or the buyer of KindredBio or its assets is an Elanco Competitor, Elanco may terminate this Agreement subject to thirty [***]days’ written notice to KindredBio.
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c.Termination by Either Party for Breach
33.Breach. Subject to Section 13.3(b) (Disputed Breach), the non-breaching Party will have the right (but not the obligation to) terminate this Agreement upon written notice to the other Party if such other Party materially breaches its obligations under this Agreement and, after receiving written notice from the non-breaching Party identifying such material breach in reasonable detail, fails to cure such material breach within [***]days from the date of such notice (“Termination for Breach”); provided that if such breach is not reasonably capable of cure within such [***] period and  the breaching Party initiates good faith actions to cure such breach, the period to cure such breach shall be extended for so long as such good faith actions are being diligently pursued by the breaching Party, up to an additional [***]days.  
34.Disputed Breach. If the alleged breaching Party disputes in good faith the existence or materiality of a breach specified in a notice provided by the other Party in accordance with Section 13.3(a) (Breach), and such alleged breaching Party provides the other Party notice of such dispute within such sixty (60)-day period, then the non-breaching Party shall not have the right to terminate this Agreement under Section 13.3(a) (Breach) unless and until the arbitrators, in accordance with Article 14 (Dispute Resolution), has determined that the alleged breaching Party has materially breached this Agreement and that such Party fails to cure such breach within [***]days following such arbitrators’ decision. During the pendency of such dispute, all of the terms and conditions of this Agreement shall remain in effect and the Parties shall continue to perform all of their respective obligations hereunder.
d.Termination for Patent Challenge. KindredBio may terminate this Agreement in its entirety immediately if Elanco directly or indirectly commences a legal action anywhere in the world challenging the validity, enforceability or scope of any Licensed Patent that is included in the license granted hereunder at such time (“Patent Challenge”). The royalty rate specified in Article 8 (Compensation) will be [***] with respect to Net Sales with respect to Licensed Products invoiced during the pendency of such Patent Challenge. If the outcome of such Patent Challenge is a determination against the challenging party, (a) the royalty rate specified in Article 8 (Compensation) shall [***] and (b) Elanco shall [***] in connection with such Patent Challenge. If the outcome of such Patent Challenge is a determination in favor of the challenging party, Elanco will have [***] royalties paid before or during the pendency of such Patent Challenge. 
e.Termination by Either Party for Bankruptcy. Either Party may terminate this Agreement if, at any time, the other Party (a) files in any court or agency pursuant to any statute or regulation of any state, country or jurisdiction, a petition in bankruptcy or insolvency or for reorganization or for an arrangement or for the appointment of a receiver or trustee of such other Party or of its assets, (b) proposes a written agreement of composition or extension of its debts, (c) is served with an involuntary petition against it, filed in any insolvency proceeding that is not dismissed within [***]days after the filing thereof, (d) proposes or is a party to any dissolution or liquidation, or (e) makes an assignment for the benefit of its creditors (“Termination for Bankruptcy”).
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f.Full Force and Effect during Notice Period. This Agreement shall remain in full force and effect until the expiration of the applicable termination notice period. For clarity, if any Performance Milestone Event or Sales Milestone Event is achieved during the termination notice period, then the corresponding milestone payment in respect of such Performance Milestone Event or Sales Milestone Payment (as applicable) is accrued and Elanco shall remain responsible for the payment of such milestone payment even if the due date of such milestone payment may come after the effective date of the termination. 
g.Effect of Termination
35.Upon termination of this Agreement in its entirety or with respect to one or more countries or one or more Licensed Products pursuant to Sections 13.1 (Term; Mutual Termination), 13.2 (Unilateral Termination by Elanco), 13.3 (Termination by Either Party for Breach), 13.4 (Termination for Patent Challenge), or 13.5 (Termination by Either Party for Bankruptcy), then as more specifically set forth below, one or more of the following shall apply in accordance with the terms thereof: 
xv.Reversion of Rights. In case of any termination of this Agreement provided in the foregoing sentence of Section 13.7(a) (Effect of Termination), and except as otherwise expressly provided in this Agreement, all rights, licenses and obligations of the Parties under this Agreement shall terminate and the license granted to Elanco pursuant to Section 2.1 (License to Elanco) shall revert to KindredBio; provided that if this Agreement is only terminated with respect to one or more countries, only the rights and licenses with respect to such country or countries shall terminate and revert to KindredBio; and provided further that if the Agreement expires, then the license grant in Section 2.1 (License to Elanco) shall survive such expiration, as provided in Section 13.1 (Term; Mutual Termination) above. 
xvi.Assignment of Regulatory Approvals. 
a.Upon termination of this Agreement by KindredBio for material breach of Elanco pursuant to Sections 13.3 (Termination by Either Party for Breach), 13.4 (Termination for Patent Challenge), or 13.5 (Termination by Either Party for Bankruptcy) (a “KindredBio For Cause Termination”), [***]. 
b.If this Agreement is terminated by Elanco for material breach of KindredBio pursuant to Section 13.3 (Termination by Either Party for Breach) or 13.5 (Termination by Either Party for Bankruptcy) (an “Elanco For Cause Termination”), Elanco shall have no obligations to transfer any Regulatory Approvals under this Section 13.7(a)(ii) (Assignment of Regulatory Approvals).
c.If this Agreement terminates by mutual written agreement of the Parties pursuant to Section 13.1 (Term; Mutual Termination), [***]. 
d.Notwithstanding the foregoing, if Elanco is restricted under Applicable Laws from transferring ownership of any of such Regulatory Approvals to KindredBio under any circumstance in which it is obligated to do so, as provided above, Elanco 
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will have no obligation to transfer ownership of such Regulatory Approvals but will grant to KindredBio a Right of Reference or use to such item,  [***],  and shall take all permitted actions reasonably necessary to effect such transfer or grant of Right of Reference or use to KindredBio or its designee.
e.In addition, upon KindredBio’s written request, [***] Elanco shall, [***]provide to KindredBio copies of all [***], to the extent relating to a Licensed Product. The Parties shall discuss and establish appropriate arrangements with respect to [***]. For clarity, upon termination of this Agreement other than expiration of the term, [***]. 
xvii.Inventory. In the event that this Agreement is terminated in its entirety for any reason (but, for clarity, not upon expiration of this Agreement), Elanco shall discontinue the sale of the Licensed Products and shall have the right to sell its remaining inventory of Licensed Products following the termination of the Agreement so long as Elanco [***]. 
xviii.Intellectual Property. Upon a KindredBio For Cause Termination or upon mutual termination of this Agreement:  
f.Elanco IP. Elanco shall, and shall cause its Affiliates and Sublicensees to, disclose to KindredBio (1) any and all Product Data and Information Controlled by Elanco, its Affiliates, or Sublicensees as of the effective date of termination of this Agreement that has been generated by or on behalf of Elanco, its Affiliates or Sublicensees with respect to and that relates exclusively to Licensed Products and (2) any Patents Controlled by Elanco or its Affiliates that Cover a Licensed Product in the Field in the Territory, in each case that are necessary to enable KindredBio to [***] (collectively, the “Elanco IP”); notwithstanding that such disclosure may occur after termination of this Agreement, KindredBio acknowledges and agrees that all such [***] disclosed by Elanco, if qualified as “Confidential Information” under Article 12 (Confidentiality), shall be deemed to be Elanco’s Confidential Information for purposes of Article 12 (Confidentiality). After receipt of the Elanco IP, KindredBio may notify Elanco that it wishes to obtain a license to the Elanco IP to [***], as applicable. The Parties shall negotiate the terms of such license in good faith for a period not to exceed [***]days. [***]. 
36.KindredBio will not have any rights with respect to any Information generated by Elanco with respect to such terminated Licensed Product and such country, to any Elanco Inventions, or to any Patents Controlled by Elanco or its Affiliates, and Elanco will have no further obligations to KindredBio with respect to any such terminated Licensed Product and such country. Upon expiration or termination of this Agreement for any reason, each Party, at the request of the other Party, shall return, or at the election of the other Party, destroy, and thereafter provide the other Party written certification evidencing such destruction, all data, files, records and other materials in its or its Affiliates’ or, with respect to Elanco, Sublicensees, possession or control containing or comprising such other Party’s Confidential Information.
h.Survival. Termination or expiration of this Agreement shall not affect any rights or obligations of the Parties under this Agreement that have accrued prior to the date of termination or expiration. Notwithstanding anything to the contrary, the following provisions shall survive any expiration or termination of this Agreement: Sections 9.1 (Ownership of IP and 
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New Inventions), 9.2(b) (Joint Patents), 9.2(c) (Cooperation of the Parties), 13.7 (Effect of Termination), and 13.8 (Survival), Article 1 (Definitions), Article 11 (Indemnification), Article 12 (Confidentiality), Article 13 (Term and Termination), Article 14 (Dispute Resolution), Article 15 (Miscellaneous), and other provisions shall survive if and to the extent set out in this Agreement, as applicable based on the nature of and basis for termination or expiration of this Agreement. 
Article 14.
DISPUTE RESOLUTION
a.Dispute Escalation. Except as provided in Section 3.1(d) (Decision-Making) and Section 14.5 (Patent and Trademark Disputes), upon the written request of either Party to the other Party, either Party may refer any claim, dispute, or controversy or claim arising out of or related to this Agreement (a “Dispute”) to the Executive Officer of Elanco and the Executive Officer of KindredBio for resolution. If the Executive Officers are unable to resolve such matter within [***]days after the initial written request, then, upon the written demand of either Party, the Parties shall resolve such matter by binding arbitration, as provided in Section 14.2 (Arbitration). Any disputes about the propriety of commencing arbitration or the scope or applicability of the agreement to arbitrate shall be finally settled by the arbitral tribunal.
b.Arbitration
37.Any Dispute shall be resolved by final and binding arbitration under the rules of the International Chamber of Commerce as then in effect (the “Rules”), except as they be modified herein or by mutual agreement of the Parties.
38.The arbitration shall be conducted by one or more arbitrator(s) appointed in accordance with the Rules; provided that: (i) such arbitrator(s) is not a current or former employees or directors, or current stockholders, of either Party, any of their respective Affiliates or any Sublicensee; and (ii) each arbitrator(s) has experience and familiarity with commercial licensing practices in the pharmaceutical and biotechnology industries. The seat, or legal place, of arbitration shall be Delaware, USA, and all proceedings and communications shall be in the English language.
39.The arbitral tribunal shall permit discovery (including both the production of documents and deposition testimony) as reasonably necessary for an understanding of any legitimate issue raised in the arbitration, while also taking into account the desirability of making discovery efficient and cost-effective, and, in addition to the authority conferred upon the arbitral tribunal by such Rules, the arbitral tribunal shall have the authority to order production of documents in accordance with the IBA Rules on the Taking of Evidence in International Arbitration as current on the commencement of the arbitration.
40.The arbitral tribunal shall have the power to grant any remedy or relief that it deems appropriate, whether provisional or final, including but not limited to conservatory relief and injunctive relief, provided that the arbitral tribunal’s authority to award special, incidental, consequential or punitive damages is subject to the limitation set forth in Section 11.5 
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(Limitation of Liability), except to the extent the substantive laws of the State of [***], USA, do not permit such limitation. The award shall be rendered within five (5) months of the appointment of the arbitral tribunal unless the Parties jointly request an extension, or the arbitral tribunal determines, in a reasoned decision that the interest of justice or the complexity of the case requires that such limit be extended.
41.The arbitration award shall be final and binding on the Parties, and the Parties undertake to carry out the award without delay. Judgment upon the award may be entered in any court of competent jurisdiction.
42.During the pendency of the arbitration, each Party shall bear its own attorneys’ fees, costs, and disbursements arising out of the arbitration, and shall pay an equal share of the fees and costs of the arbitration and the arbitral tribunal shall fix costs in the arbitral award in accordance with the Rules.
c.Confidentiality of Arbitration. The existence and content of the arbitral proceedings and any rulings or awards shall be kept confidential by the Parties and the arbitral tribunal except (a) to the extent that disclosure may be required of a Party to fulfill a legal duty, protect or pursue a legal right, or enforce or challenge an award in bona fide legal proceedings before a state court or other judicial authority, (b) with the consent of all Parties, (c) where needed for the preparation or presentation of a claim or defense in this arbitration, (d) where such information is already in the public domain other than as a result of a breach of this clause, or (e) by order of the arbitral tribunal upon application of a Party.
d.Injunctive Relief; Court Actions. Either Party may apply to the arbitrators for interim injunctive relief until the arbitration award is rendered or the controversy is otherwise resolved. Either Party also may, without waiving any remedy under this Agreement, seek from any court having jurisdiction any interim injunctive or other interim relief in the context of a bona fide emergency or prospective irreparable harm, and such an action may be filed and maintained notwithstanding any ongoing discussions between the Parties or any ongoing arbitration proceeding. In addition, either Party may bring an action in any court of competent jurisdiction to resolve disputes pertaining to the validity, construction, scope, enforceability, infringement or other violations of Patents or other intellectual property rights, and no such claim shall be subject to arbitration pursuant to Section 14.2 (Arbitration). 
e.Patent and Trademark Disputes. Any dispute, controversy or claim relating to the scope, validity, enforceability or infringement of any patents or trademarks covering the Manufacture, use, importation, offer for sale or sale of a Licensed Product shall be submitted to a court of competent jurisdiction in the country in which such patent or trademark rights were granted or arose.
Article 15.
MISCELLANEOUS
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a.Rights upon Bankruptcy. All rights and licenses granted under or pursuant to this Agreement to Elanco or KindredBio are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the United States Bankruptcy Code and other similar foreign laws, licenses of rights to “intellectual property” as defined under Section 101 of the United States Bankruptcy Code or other similar foreign laws. The Parties shall retain and may fully exercise all of their rights and elections under the United States Bankruptcy Code (or any comparable provision of the laws applicable to bankruptcies or insolvencies), and other similar foreign laws. The Parties further agree that, in the event of the commencement of a bankruptcy proceeding by or against a Party under the United States Bankruptcy Code, or other similar foreign laws, the nondebtor Party shall be entitled to a complete duplicate of (or complete access to, as appropriate) any such intellectual property and all embodiments of such intellectual property and the same, which, if not already in the nondebtor Party’s possession, shall be promptly delivered to it (a) upon any such commencement of a bankruptcy proceeding upon the nondebtor Party’s written request therefor, unless the debtor Party continues to perform all of its obligations under this Agreement or (b) if not delivered under clause (a) above, following the rejection of this Agreement by or on behalf of the debtor Party upon written request therefor by the nondebtor Party.
b.Governing Law. This Agreement and any disputes, claims, or actions related thereto shall be governed by and construed in accordance with the laws of the State of [***], USA, without regard to any conflicts of law provisions thereof that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. The Parties agree to exclude the application to this Agreement of the United Nations Convention on Contracts for the International Sale of Goods.
c.Entire Agreement; Amendment; Priority. This Agreement, including the Exhibits hereto, together with the Master Supply Agreement, Quality Agreement, and the Pharmacovigilance Agreement (collectively, the “Ancillary Agreements”), is both a final expression of the Parties’ agreement and a complete and exclusive statement with respect to all of its terms. This Agreement supersedes and replaces all prior and contemporaneous agreements and communications, whether oral, written or otherwise, concerning any and all matters contained herein, including the CDA and the Letter Agreement. This Agreement may only be modified or supplemented in a writing expressly stated for such purpose and signed by an authorized representative of each Party. If any of the terms and conditions of this Agreement conflict with any Exhibit or Ancillary Agreement, this Agreement will control and prevail unless such Exhibit or Ancillary Agreement references the provisions of this Agreement with which it conflicts or is inconsistent. 
d.Relationship Between the Parties. The Parties’ relationship, as established by this Agreement, is solely that of independent contractors. This Agreement does not create any partnership, joint venture or similar business relationship between the Parties. Neither Party is a legal representative of the other Party, and neither Party can assume or create any obligation, representation, warranty or guarantee, express or implied, on behalf of the other Party for any purpose whatsoever. The Parties (and any successor, assignee, transferee, or Affiliate of a Party) shall not treat or report the relationship between the Parties arising under this Agreement as a 
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partnership for United States tax purposes, without the prior written consent of the other Party unless required by Applicable Law.
e.Non-Waiver. The failure of a Party to insist upon strict performance of any provision of this Agreement or to exercise any right arising out of this Agreement shall neither impair that provision or right nor constitute a waiver of that provision or right, in whole or in part, in that instance or in any other instance. Any waiver by a Party of a particular provision or right shall be in writing, shall be as to a particular matter and, if applicable, for a particular period of time and shall be signed by an authorized representative of such Party.
f.Assignment. Except as expressly provided hereunder, neither this Agreement nor any rights or obligations hereunder may be assigned or otherwise transferred by either Party without the prior written consent of the other Party (which consent shall not be unreasonably withheld); provided, however, that either Party may assign this Agreement and its rights and obligations hereunder without the other Party’s consent (a) to an Affiliate of such Party, provided that the assigning Party shall remain liable and responsible to the nonassigning Party hereto for the performance and observance of all such duties and obligations by such Affiliate, and (b) in connection with the transfer or sale of all or substantially all of the assets of such Party to a Third Party, whether by merger, sale of stock, sale of assets or otherwise (regardless of whether this Agreement is actually assigned or is assumed by the acquiring Party by operation of law (e.g., in the context of a reverse triangular merger)). Any attempted assignment not in accordance with this Section 15.6 (Assignment) shall be null and void and of no legal effect. The rights and obligations of the Parties under this Agreement are binding upon and inure to the benefit of the successors and permitted assigns of the Parties, and the name of a Party appearing herein shall be deemed to include the name of such Party’s successors and permitted assigns to the extent necessary to carry out the intent of this section. Any assignment not in accordance with this Agreement is void. 
g.No Third Party Beneficiaries. This Agreement is neither expressly nor impliedly made for the benefit of any Party other than those executing it.
h.Severability. If, for any reason, any part of this Agreement is adjudicated invalid, unenforceable or illegal by a court of competent jurisdiction, such adjudication shall not affect or impair, in whole or in part, the validity, enforceability or legality of any remaining portions of this Agreement. All remaining portions shall remain in full force and effect as if the original Agreement had been executed without the invalidated, unenforceable or illegal part. 
i.Notices. All notices and consents required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if and when (a) delivered personally, (b) mailed by first class certified mail, return receipt requested, postage prepaid, on the date certified by the U.S. Postal Service to have been received by the addressee, (c) by facsimile, provided the sender personally calls the recipient and confirms receipt of such facsimile, or (d) on the date certified by a nationally recognized overnight express courier service to have been received by the recipient, as follows:
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	If to KindredBio:	Kindred Biosciences, Inc.
1555 Bayshore Highway, Suite 200
Burlingame, CA 94010
Attention: [***]
Phone:  [***]

	With a copy (which shall not constitute notice) to:	Morrison & Foerster LLP
200 Clarendon Street, Floor 20
Boston, MA 02116
Attention: [***]
Phone: 617-648-[***]

	If to Elanco:	Elanco US Inc.
2500 Innovation Way
Greenfield, Indiana 46140
Attention: [***]

	With a copy to:	Elanco US Inc.
2500 Innovation Way
Greenfield, Indiana 46140
Attention: General Counsel

    If more than one (1) method for sending notice as set forth above is used, the earliest notice date established as set forth above shall control. It is understood and agreed that this Section 15.9 (Notices) is not intended to govern the day-to-day business communications necessary between the Parties in performing their duties, in due course, under the terms of this Agreement.
j.Force Majeure. Each Party shall be excused from the performance of their obligations under this Agreement to the extent that such performance is prevented by force majeure and the nonperforming Party promptly provides notice of the prevention to the other Party. Such excuse shall be continued only for so long as (a) the condition constituting force majeure, (b) the nonperforming Party takes all reasonable efforts to remove the condition, and (c) the nonperforming Party provides written notice to the other Party within fifteen (15) Business Days following the occurrence of such condition and gives the other Party a good faith estimate of the continuing effect of the condition constituting force majeure and the duration of the nonperforming Party’s nonperformance. For purposes of this Agreement, force majeure includes conditions beyond the reasonable control of the applicable Party, which may include an act of God, war, civil commotion, terrorist act, accidents, riot, labor dispute or lock-out, epidemic, pandemic, failure or default of public utilities or common carriers, destruction of production facilities or materials by fire, flood, explosion, earthquake, storm or like catastrophe, action or inaction of any Governmental Authority, and failure of plant or machinery (but excluding any event caused by or attributable to economic hardship or insufficiency of funds) (“Force Majeure Event”). Notwithstanding the foregoing, a Party shall not be excused from making payments owed hereunder because of a Force Majeure Event affecting such Party. If a Force Majeure Event persists for more than ninety (90) days, the Parties shall discuss in good faith the modification of the Parties’ obligations under this Agreement in order to mitigate the delays caused by such force majeure. For clarity, this Agreement has been negotiated during the global 
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pandemic existing as of the Effective Date of this Agreement, and as such, such pandemic and any potential Force Majeure Event that is reasonably foreseeable as of the Effective Date as a result of such pandemic, is not a Force Majeure Event for purposes of this Agreement and shall only become a Force Majeure Event when and if the U.S. government or any state or local government imposes obligations on a Party that requires such Party to suspend its business operations and such impacted Party cannot reasonably implement workarounds or alternatives to continue to perform its obligations under this Agreement.
k.Interpretation. The headings of clauses contained in this Agreement preceding the text of the 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. All references in this Agreement to the singular shall include the plural where applicable. Unless otherwise specified, references in this Agreement to any Article shall include all Sections, subsections and paragraphs in such Article, references 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. All references to days in this Agreement means calendar days, unless otherwise specified. Ambiguities and uncertainties in this Agreement, if any, shall not be interpreted against either Party, irrespective of which Party may be deemed to have caused the ambiguity or uncertainty to exist. 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.
l.Construction. Except where the context expressly requires otherwise, (a) the use of any gender herein encompasses references to either or both genders, and the use of the singular shall be deemed to include the plural (and vice versa), (b) the words “include”, “includes” and “including” are deemed followed by the phrase “without limitation”, (c) any definition of or reference to any agreement, instrument or other document herein refers to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (d) any reference herein to any person includes the person’s successors and assigns, (e) the words “herein”, “hereof” and “hereunder”, and words of similar import, refer to this Agreement in its entirety and not to any particular provision hereof, (f) all references herein to Sections or Exhibits refer to Sections or Exhibits of this Agreement, and references to this Agreement include all Exhibits hereto, and (g) the word “or” is disjunctive but not necessarily exclusive.
m.Performance by Affiliates. Each Party may discharge any obligations and exercise any right hereunder through any of its Affiliates. Each Party hereby guarantees the performance by its Affiliates of such Party’s obligations under this Agreement, and shall cause its Affiliates to comply with the provisions of this Agreement in connection with such performance. Any breach by a Party’s Affiliate of any of such Party’s obligations under this Agreement shall be deemed a breach by such Party, and the other Party may proceed directly against such Party without any obligation to first proceed against such Party’s Affiliate.
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n.Counterparts. This Agreement may be executed in counterparts, including by transmission of facsimile or PDF copies of signature pages to the Parties or their representative legal counsel, each of which shall be deemed an original document, and all of which, together with this writing, shall be deemed one instrument.
[Remainder of this page intentionally left blank.]
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In Witness Whereof, the Parties have executed this Exclusive License and Collaboration Agreement by their duly authorized officers as of the Effective Date.
						
	Kindred Biosciences Inc.

By:  /s/ Richard Chin    
Name: Richard Chin
Title: CEO 
Date: May 5, 2021
	Elanco US Inc.

By: /s/ Aaron Schacht    
Name: Aaron Schacht
Title: Exec Vice President – Innovation/Regulatory/Business Development
Date: May 5, 2021

 

EXHIBIT A
LICENSED PATENTS
    [***]Exhibit 4.1 

 

COMMON STOCK PURCHASE WARRANT

 

SENMIAO TECHNOLOGY LIMITED

 

	Warrant Shares: [●]	Initial Exercise Date: May 13, 2021

 

THIS COMMON STOCK PURCHASE WARRANT
(the “Warrant”) certifies that, for value received, [●] or its assigns (the “Holder”) is entitled,
upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date hereof
(the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on May 13, 2026 (the “Termination
Date”) but not thereafter, to subscribe for and purchase from SENMIAO TECHNOLOGY LIMITED, a Nevada corporation (the “Company”),
up to [●] shares, par value $0.0001 per share, of the Company (the “Common Stock”) (as subject to adjustment
hereunder, the “Warrant Shares”) of Common Stock. The purchase price of one share of Common Stock under this Warrant
shall be equal to the Exercise Price, as defined in Section 2(b).

 

Section 1.                 Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement
(the “Purchase Agreement”), dated May 11, 2021, among the Company and the purchasers signatory thereto. In addition,
the following terms have the meanings indicated in this Section 1:

 

“Adjustment
Right” means any right granted with respect to any securities issued in connection with, or with respect to, any issuance or
sale (or deemed issuance or sale in accordance with Section 3(b)) of Common Stock (other than rights of the type described in Section
3(d) hereof) that could result in a decrease in the net consideration received by the Company in connection with, or with respect to,
such securities (including, without limitation, any cash settlement rights, cash adjustment or other similar rights).

 

“Bid Price”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading
Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York
City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading Market, the volume weighted average price
of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then
listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market published
by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid
price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined
by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and
reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

“Change
of Control” means any Fundamental Transaction other than (i) any merger of the Company or any of its, direct or indirect, wholly-owned
Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization or reclassification of the shares of
Common Stock in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization or reclassification
continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and, directly or indirectly,
are, in all material respects, the holders of the voting power of the surviving entity (or entities with the authority or voting power to
elect the members of the board of directors (or their equivalent if other than a corporation) of such entity or entities) after such reorganization,
recapitalization or reclassification, or (iii) pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction
of incorporation of the Company or any of its Subsidiaries.

 

    1

     

    

 

“Convertible
Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly
or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares
of Common Stock.

 

“Excluded
Issuance” means the issuance of (a) Common Stock or options to employees, officers or directors of the Company pursuant to any
stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority
of the members of a committee of non-employee directors established for such purpose for services rendered to the Company; (b) securities
upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable
for or convertible into Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not been
amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or
conversion price of such securities (other than in connection with stock splits or combinations) or to extend the term of such securities,
(c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the
Company, provided that such securities are issued as “restricted securities” (as defined in Rule 144) and carry no registration
rights that require or permit the filing of any registration statement in connection therewith during the prohibition period in Section
4.11(a) of the Purchase Agreement, and provided that any such issuance shall only be to a Person (or to the equity holders of a Person)
which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business
of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction
in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing
in securities or (d) any Subsequent Placement (as defined in the Purchase Agreement) in which the Holder participates.

 

“Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading Market, the volume weighted
average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock
is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market
(or a similar organization or agency succeeding to its functions of reporting prices), the daily volume weighted average price of the
Common Stock for such date (or the nearest preceding date), or (d) in all other cases, the fair market value of a share of Common
Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities then
outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

Section 2.                     Exercise.

 

a)                   Exercise
of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times
on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile
copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the
 “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days
comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the
Holder shall deliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire
transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c)
below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any
medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything
herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has
purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall
surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of
Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of
Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder
in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing
the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of
Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,
acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares
hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the
face hereof.

 

    2

     

    

 

b)                  
Exercise Price. The exercise price per Warrant Share under this Warrant shall be $1.05, subject to adjustment hereunder
(the “Exercise Price”).

 

c)                  
Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus
contained therein is not available for the issuance of the Warrant Shares to the Holder, then this Warrant may also be exercised, in whole
or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant
Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

(A) = as applicable:
(i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1)
both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant
to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(68) of
Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP
on the Trading Day immediately preceding the date of the applicable Notice of Exercise, or (z) the Bid Price of the Common Stock on the
principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise
if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours
thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section
2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day
and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours”
on such Trading Day;

 

(B) = the Exercise
Price of this Warrant, as adjusted hereunder; and

 

(X) = the number
of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were
by means of a cash exercise rather than a cashless exercise.

 

If
Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the
Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised.  The Company
agrees not to take any position contrary to this Section 2(c).

 

Notwithstanding
anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant
to this Section 2(c).

 

    3

     

    

 

d)           
Mechanics of Exercise.

 

 i.              Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered on or prior to 12:00 p.m. (New York City time) on the Initial Exercise Date, which may be delivered at any time after the time of execution of the Purchase Agreement, the Company agrees to deliver the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial Exercise Date and the Initial Exercise Date shall be the Warrant Share Delivery Date for purposes hereunder.

 

ii.           
Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request
of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new
Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant.

 

iii.           
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant
to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

 

    4

     

    

 

iv.            Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder,
if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of
Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is
required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise
purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder
anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the
amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was
required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise
to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and
equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded)
or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its
exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of
$11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise
to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay
the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of
the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right
to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon
exercise of the Warrant as required pursuant to the terms hereof.

 

v.           
No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company
shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole share.

 

vi.           
Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer
tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the
Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder;
provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this
Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the
Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.
The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository
Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of
the Warrant Shares.

 

vii.           
Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.

 

    5

     

    

 

e)                   Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to
exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance
after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any
other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons,
 “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined
below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its
Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with
respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable
upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates
or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the
Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise
analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. 
Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the
Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange
Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the
limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other
securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is
exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the
Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together
with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the
Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination.
In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of
the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number
of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the
Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public
announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of
shares of Common Stock outstanding.  Upon the written or oral request of a Holder, the Company shall within one Trading Day
confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding.  In any case, the number of
outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the
Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of
outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be [4.99]
[9.99]1% of the number of shares of
the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of
this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of
this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common
Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by
the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will
not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall
be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this
paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein
contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations
contained in this paragraph shall apply to a successor holder of this Warrant.

 

 

1
    [As elected by such Holder by e-mail notice to the Company on or prior to the Initial Exercise Date.]

 

    6

     

    

 

f)                   
Forced Exercise.

 

i.      General.
If at any time (x) the VWAP of the Common Stock on the principal Trading Market in which the Common Stock then trades (the
 “Principal Market”) exceeds $3.675 (as adjusted for share splits, share dividends, recapitalizations and similar
events) (the “Forced Exercise Minimum Price”) for ten (10) consecutive Trading Days (each, a “Forced
Exercise Measuring Period”), and (y) no Equity Conditions Failure then exists (such date each of the foregoing conditions
are satisfied, each a “Forced Exercise Eligibility Date”), then the Company shall have the right to require the
Holder to exercise this Warrant into up to such aggregate number of fully paid, validly issued and non-assessable shares of Common
Stock equal to the lesser of (x) the aggregate number of Warrant Shares then exercisable hereunder and (y) 30% of the aggregate
trading volume of the shares of Common Stock (as reported by Bloomberg) during the three consecutive Trading Day period immediately
prior to the applicable Forced Exercise Notice Date (as defined below) (such lesser number of Warrant Shares, the “Maximum
Forced Exercise Share Amount”), as designated in the applicable Forced Exercise Notice (as defined below) to be issued and
delivered in accordance with Section 2(a) hereof (each, a “Forced Exercise”). The Company may exercise its right
to require a Forced Exercise under this Section 2(f) by delivering a written notice thereof, at one, or more times, by facsimile or
electronic mail to all, but not less than all, of the holders of Warrants (each, a “Forced Exercise Notice”, and
the date thereof, each a “Forced Exercise Notice Date”). For purposes of Section 2(a) hereof, “Forced
Exercise Notice” shall be deemed to replace “Notice of Exercise” for all purposes thereunder as if the Holder
delivered a Notice of Exercise to the Company on the Forced Exercise Notice Date, mutatis mutandis. Each Forced Exercise
Notice shall be irrevocable. Each Forced Exercise Notice shall state (i) the Trading Day selected for the Forced Exercise in
accordance with this Section 2(f), which Trading Day shall be the second (2nd) Trading Day following the applicable Forced Exercise
Eligibility Date (each, a “Forced Exercise Date”), (ii) the aggregate portion of this Warrant and the other
Warrants subject to forced exercise from the Holder and all of the holders of the Warrants pursuant to this Section 2(f) (and
analogous provisions under such other Warrants), (iii) the Maximum Forced Exercise Share Amount applicable to the Holder (including
calculations and any other documents reasonably requested by the Holder with respect thereto) and (iv) that there has been no Equity
Conditions Failure (or specifying any such Equity Conditions Failure that then exists, with an acknowledgement that unless such
Equity Conditions are waived, in whole or in part, such Forced Exercise Notice will be invalid). Notwithstanding anything herein to
the contrary, if (x) if the VWAP of the Common Stock on the Principal Market fails to exceed the Forced Exercise Minimum Price for
each Trading Day commencing on the Forced Exercise Notice Date and ending and including the Trading Day immediately prior to the
applicable Forced Exercise Date (a “Forced Exercise Price Failure”) or (y) an Equity Conditions Failure occurs at
any time after a Forced Exercise Notice Date and prior to the related Forced Exercise Date, (A) the Company shall provide the Holder
a subsequent notice to that effect and (B) unless the Holder waives the applicable Equity Conditions Failure and/or Forced Exercise
Price Failure, as applicable, the Forced Exercise shall be cancelled and the applicable Forced Exercise Notice shall be null and
void.

 

ii.     
Pro Rata Exercise Requirement. If the Company elects to cause a Forced Exercise of this Warrant pursuant to this Section
2(f), then it must simultaneously take the same action in the same proportion with respect to all of the other Warrants then outstanding.

 

    7

     

    

 

iii.     
Definitions. For the purpose of this Section 2(f) the following definitions shall apply:

 

1.                   “Equity
Conditions” means, with respect to any given date of determination: (i) on such applicable date of determination (x) the
Registration Statement shall be effective and the prospectus contained therein shall be available on such applicable date of
determination (with, for the avoidance of doubt, any Warrant Shares previously issued pursuant to such prospectus deemed
unavailable) for the issuance of all the Warrant Shares issuable upon exercise of this Warrant (such applicable aggregate number of
Warrant Shares, each, a “Required Minimum Securities Amount”); (ii) on each day during the period beginning
thirty (30) calendar days prior to the applicable date of determination and ending on and including the applicable date of
determination (the “Equity Conditions Measuring Period”), the Common Stock is listed or designated for quotation
(as applicable) on a Trading Market and shall not have been suspended from trading on a Trading Market (other than suspensions of
not more than two (2) days and occurring prior to the applicable date of determination due to business announcements by the Company)
nor shall delisting or suspension by a Trading Market have been threatened (with a reasonable prospect of delisting occurring after
giving effect to all applicable notice, appeal, compliance and hearing periods) or reasonably likely to occur or pending as
evidenced by (A) a writing by such Trading Market or (B) the Company falling below the minimum listing maintenance requirements of
such Trading Market on which the shares of Common Stock are then listed or designated for quotation (as applicable); (iii) during
the Equity Conditions Measuring Period, the Company shall have delivered all Warrant Shares issuable upon exercise of this Warrant
on a timely basis as set forth in Section 2 hereof and all other share capital required to be delivered by the Company on a timely
basis as set forth in the other Transaction Documents; (iv) any Warrant Shares to be issued in connection with the event requiring
determination may be issued in full without violating the rules or regulations of the principal Trading Market on which the Common
Stock is then listed or designated for quotation (as applicable); (v) on each day during the Equity Conditions Measuring Period, no
public announcement of a pending, proposed or intended Fundamental Transaction shall have occurred which has not been abandoned,
terminated or consummated; (vi) the Company shall have no knowledge of any fact that would reasonably be expected to cause the
Registration Statement described in clause (i) above to not be effective or the prospectus contained therein to not be available for
the issuance of all of the Warrant Shares issuable upon exercise of this Warrant in connection with the event requiring such
determination; (vii) the Holder shall not be in possession of any material, non-public information provided to any of them by the
Company, any of its Subsidiaries or any of their respective affiliates, employees, officers, representatives, agents or the like;
(viii) on each day during the Equity Conditions Measuring Period, the Company otherwise shall have been in compliance with each, and
shall not have breached any, representation or warranty in any material respect (other than representations or warranties subject to
material adverse effect or materiality, which may not be breached in any respect) or any covenant or other term or condition of any
Transaction Document, including, without limitation, the Company shall not have failed to timely make any payment pursuant to any
Transaction Document; (ix) there shall not have occurred any Volume Failure of such applicable date of determination; (x) on the
applicable date of determination all Warrant Shares to be issued in connection with the event requiring this determination may be
issued in full in compliance with Section 2(e) above; and (xi) the issuance of the Warrant Shares upon a Forced Exercise shall not
cause a breach of any provision of Section 2(e) herein.

 

2.                  
“Equity Conditions Failure” means that on each day during the period commencing twenty (20) Trading Days prior
to the applicable Forced Exercise Notice Date through and including the applicable Forced Exercise Date, the Equity Conditions have not
been satisfied (or waived in writing by the Holder).

 

3.                  
“Volume Failure” means, with respect to a particular date of determination, the aggregate daily dollar trading
volume (as reported on Bloomberg) of the Common Stock on the Principal Market on any Trading Day during the twenty (20) Trading Day period
ending on the Trading Day immediately preceding such date of determination, is less than $1,000,000.

 

    8

     

    

 

Section 3.                Certain
Adjustments.

 

a)              Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in
shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon
exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines
(including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by
reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price
shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares,
if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately
adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section
3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination
or re-classification.

 

b)             
Adjustment Upon Issuance of Common Stock. If and whenever on or after the Initial Exercise Date, the Company grants, issues
or sells, (or enters into any agreement to grant, issue or sell), or in accordance with this Section 3(b) is deemed to have issued or
sold, any Common Stock (including the issuance or sale of Common Stock owned or held by or for the account of the Company, but excluding
any Excluded Issuances issued or sold or deemed to have been issued or sold) for a consideration per share (the “New Issuance
Price”) less than a price equal to the Exercise Price in effect immediately prior to such issuance or sale or deemed issuance
or sale (such Exercise Price then in effect is referred to herein as the “Applicable Price”) (the foregoing a “Dilutive
Issuance”), then immediately after such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount equal
to the New Issuance Price. For all purposes of the foregoing (including, without limitation, determining the adjusted Exercise Price and
the New Issuance Price under this Section 3(b)), the following shall be applicable:

 

i.                Issuance of Options. If the Company in any manner grants, issues or sells (or enters into any agreement to grant, issue
or sell) any Options and the lowest price per share for which one share of Common Stock is at any time issuable upon the exercise of any
such Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise
pursuant to the terms thereof is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and
to have been issued and sold by the Company at the time of the granting, issuance or sale (or the time of execution of such agreement
to grant, issue or sell, as applicable) of such Option for such price per share. For purposes of this Section 3(b)(i), the “lowest
price per share for which one share of Common Stock is at any time issuable upon the exercise of any such Options or upon conversion,
exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant to the terms thereof”
shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with
respect to any one share of Common Stock upon the granting, issuance or sale (or pursuant to the agreement to grant, issue or sell, as
applicable) of such Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security issuable
upon exercise of such Option or otherwise pursuant to the terms thereof and (y) the lowest exercise price set forth in such Option for
which one share of Common Stock is issuable (or may become issuable assuming all possible market conditions) upon the exercise of any
such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise
pursuant to the terms thereof minus (2) the sum of all amounts paid or payable to the holder of such Option (or any other Person) upon
the granting, issuance or sale (or the agreement to grant, issue or sell, as applicable) such Option, upon exercise of such Option and
upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option or otherwise pursuant to the terms
thereof plus the value of any other consideration received or receivable by, or benefit conferred on, the holder of such Option (or any
other Person). Except as contemplated below, no further adjustment of the Exercise Price shall be made upon the actual issuance of such
shares of Common Stock or of such Convertible Securities upon the exercise of such Options or otherwise pursuant to the terms of or upon
the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities.

 

    9

     

    

 

ii.                Issuance of Convertible Securities. If the Company in any manner issues or sells (or enters into any agreement to issue
or sell) any Convertible Securities and the lowest price per share for which one share of Common Stock is at any time issuable upon the
conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof is less than the Applicable Price, then such share
of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale
(or the time of execution of such agreement to issue or sell, as applicable) of such Convertible Securities for such price per share.
For the purposes of this Section 3(b)(ii), the “lowest price per share for which one share of Common Stock is at any time issuable
upon the conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof” shall be equal to (1) the lower of
(x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common
Stock upon the issuance or sale (or pursuant to the agreement to issue or sell, as applicable) of the Convertible Security and upon conversion,
exercise or exchange of such Convertible Security or otherwise pursuant to the terms thereof and (y) the lowest conversion price set forth
in such Convertible Security for which one share of Common Stock is issuable (or may become issuable assuming all possible market conditions)
upon conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof minus (2) the sum of all amounts paid or payable
to the holder of such Convertible Security (or any other Person) upon the issuance or sale (or the agreement to issue or sell, as applicable)
of such Convertible Security plus the value of any other consideration received or receivable by, or benefit conferred on, the holder
of such Convertible Security (or any other Person). Except as contemplated below, no further adjustment of the Exercise Price shall be
made upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities or otherwise
pursuant to the terms thereof, and if any such issuance or sale of such Convertible Securities is made upon exercise of any Options for
which adjustment of this Warrant has been or is to be made pursuant to other provisions of this Section 3(b), except as contemplated below,
no further adjustment of the Exercise Price shall be made by reason of such issuance or sale.

 

iii.               
Change in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional
consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any
Convertible Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time
(other than proportional changes in conversion or exercise prices, as applicable, in connection with an event referred to in Section 3(a)),
the Exercise Price in effect at the time of such increase or decrease shall be adjusted to the Exercise Price which would have been in
effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional consideration
or increased or decreased conversion rate, as the case may be, at the time initially granted, issued or sold. For purposes of this Section
3(b)(iii), if the terms of any Option or Convertible Security that was outstanding as of the Initial Exercise Date are increased or decreased
in the manner described in the immediately preceding sentence, then such Option or Convertible Security and the shares of Common Stock
deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such increase or decrease.
No adjustment pursuant to this Section 3(b) shall be made if such adjustment would result in an increase of the Exercise Price then in
effect.

 

    10

     

    

 

iv.                Calculation
of Consideration Received. If any Option and/or Convertible Security and/or Adjustment Right is issued in connection with the
issuance or sale or deemed issuance or sale of any other securities of the Company (as determined by the Holder, the
 “Primary Security”, and such Option and/or Convertible Security and/or Adjustment Right, the “Secondary
Securities” and together with the Primary Security, each a “Unit”), together comprising one integrated
transaction, the aggregate consideration per share of Common Stock with respect to such Primary Security shall be deemed to be the
lowest of (x) the purchase price of such Unit, (y) if such Primary Security is an Option and/or Convertible Security, the lowest
price per share for which one share of Common Stock is at any time issuable upon the exercise or conversion of the Primary Security
in accordance with Section 3(b)(i) or 3(b)(ii) above and (z) the lowest VWAP of the Common Stock on any Trading Day during the five
(5) Trading Day period (the “Adjustment Period”) immediately following the public announcement of such Dilutive
Issuance (for the avoidance of doubt, if such public announcement is released prior to the opening of the applicable Trading Market
on a Trading Day, such Trading Day shall be the first Trading Day in such five Trading Day period and if this Warrant is exercised,
on any given Exercise Date during any such Adjustment Period, solely with respect to such portion of this Warrant converted on such
applicable Exercise Date, such applicable Adjustment Period shall be deemed to have ended on, and included, the Trading Day
immediately prior to such Exercise Date). If any Common Stock, Options or Convertible Securities are issued or sold or deemed to
have been issued or sold for cash, the consideration received therefor will be deemed to be the net amount of consideration received
by the Company therefor. If any shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration
other than cash, the amount of such consideration received by the Company will be the fair value of such consideration, except where
such consideration consists of publicly traded securities, in which case the amount of consideration received by the Company for
such securities will be the arithmetic average of the VWAPs of such security for each of the five (5) Trading Days immediately
preceding the date of receipt. If any shares of Common Stock, Options or Convertible Securities are issued to the owners of the
non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount of consideration
therefor will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is
attributable to such shares of Common Stock, Options or Convertible Securities (as the case may be). The fair value of any
consideration other than cash or publicly traded securities will be determined jointly by the Company and the Holder. If such
parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation (the
 “Valuation Event”), the fair value of such consideration will be determined within five (5) Trading Days after
the tenth (10th) day following such Valuation Event by an independent, reputable appraiser jointly selected by the Company and the
Holder. The determination of such appraiser shall be final and binding upon all parties absent manifest error and the fees and
expenses of such appraiser shall be borne by the Company.

 

v.               
Record Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A)
to receive a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe
for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the
issuance or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making
of such other distribution or the date of the granting of such right of subscription or purchase (as the case may be).

 

vi.               
Floor Price. No adjustment pursuant to this Section 3(b) or Section 3(h) shall cause the Exercise Price to be less than
$1.05 (as adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction occurring after the
date of the Purchase Agreement) (the “Floor Price”). Notwithstanding the foregoing, nothing contained in this Section
3(b)(vi) shall apply after the Company shall have obtained the Stockholder Approval (as defined in the Securities Purchase Agreement).

 

    11

     

    

 

c)              Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or
sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if
the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any
limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on
which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of
which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights
(provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result
in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase
Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and
such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not
result in the Holder exceeding the Beneficial Ownership Limitation).

 

d)             
Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or
make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way
of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options
by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the
Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the
beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation). To the extent that this Warrant has not been partially or completely exercised at the
time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder until the Holder
has exercised this Warrant.

 

    12

     

    

 

e)              Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or
indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of
its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer
(whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or
exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding
Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one
or more related transactions consummates a stock or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons
whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of
Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making
or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each
Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction,
at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares
of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional
consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder
of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of
Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall
apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different
components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to
be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it
receives upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the
event of a Change of Control, the Company or any Successor Entity (as defined below) shall, at the Holder’s option,
exercisable at any time concurrently with, or within 30 days after, the consummation of the Change of Control (or, if later, the
date of the public announcement of the applicable Change of Control), purchase this Warrant from the Holder by paying to the Holder
an amount of cash equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the
date of the consummation of such Change of Control; provided, however, if the Change of Control is not within the
Company's control, including not approved by the Company's Board of Directors, Holder shall only be entitled to receive from the
Company or any Successor Entity, as of the date of consummation of such Change of Control, the same type or form of consideration
(and in the same proportion), at the Black Scholes Value (as defined below) of the unexercised portion of this Warrant, that is
being offered and paid to the holders of Common Stock of the Company in connection with the Change of Control, whether that
consideration be in the form of cash, stock or any combination thereof, or whether the holders of Common Stock are given the choice
to receive from among alternative forms of consideration in connection with the Change of Control; provided, further,
that if holders of Common Stock are not offered or paid any consideration in such Change of Control, such holders of Common Stock
shall be deemed to received common equity of the Successor Entity (which entity may be the Company following the Change of Control)
in such Change of Control. “Black Scholes Value” means the value of this Warrant based on the Black Scholes
Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”) determined as
of the day of consummation of the applicable Change of Control for pricing purposes and reflecting (A) a risk-free interest rate
corresponding to the U.S. Treasury rate for a period equal to the time between the date of the contemplated public announcement of
the applicable Change of Control and the Termination Date, (B) an expected volatility equal to the greater of 100% and the 100 day
volatility obtained from the HVT function on Bloomberg as of the Trading Day immediately following the public announcement of the
applicable contemplated Change of Control, (C) the underlying price per share used in such calculation shall be the greater of (i)
the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in
such Change of Control and (ii) the greater of (x) the last VWAP immediately prior to the public announcement of such contemplated
Change of Control and (y) the last VWAP immediately prior to the consummation of such Change of Control, (D) a remaining option time
equal to the time between the date of the public announcement of the applicable contemplated Change of Control and the Termination
Date, (E) a 365 day annualization factor, and (F) a zero cost of borrow. The payment of the Black Scholes Value will be made by wire
transfer of immediately available funds (or such other consideration) within five Business Days of the Holder’s election (or,
if later, on the effective date of the Change of Control). The Company shall cause any successor
entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume
in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the
provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and
approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder,
deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital
stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon
exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction,
and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the
relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock,
such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this
Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and
substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be
substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other
Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every
right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction
Documents with the same effect as if such Successor Entity had been named as the Company herein.

 

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f)              
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share,
as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given
date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

g)             
Notice to Holder.

 

i.           
Adjustment to Exercise Price. Whenever the Exercise Price or the number Warrant Shares subject to the Warrant is adjusted
pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by facsimile or email a notice setting forth
the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement
of the facts requiring such adjustment.

 

ii.           
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)
on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of
capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or
substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities,
cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile
number or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common
Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on
which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock
for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange;
provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the
corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains,
material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with
the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing
on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

 

h)            
Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time
during the term of this Warrant, subject to the prior written consent of the Holder, reduce the then current Exercise Price to any amount
and for any period of time deemed appropriate by the board of directors of the Company.

 

    14

     

    

 

Section 4.               Transfer
of Warrant.

 

a)           
 Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable,
in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written
assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient
to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall
execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not
so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein
to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned
this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date
on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned
in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

b)            
New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office
of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by
the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division
or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of
this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

 

c)            
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose
(the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat
the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.

 

Section 5.               Miscellaneous.

 

a)            
Currency. Unless otherwise indicated, all dollar amounts referred to in this Warrant are in United States Dollars (“U.S.
Dollars”). All amounts owing under this Warrant shall be paid in U.S. Dollars. All amounts denominated in other currencies shall
be converted in the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange
Rate” means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Warrant, the U.S. Dollar
exchange rate as published in the Wall Street Journal (NY edition) on the relevant date of calculation.

 

b)            
No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other
rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in
Section 3.

 

c)           
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any certificate relating to the Warrant Shares, and
in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall
not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company
will make and deliver a new Warrant or certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or certificate.

 

d)            
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right
required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding
Business Day.

 

    15

     

    

 

e)             
Authorized Shares.

 

The Company covenants
that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number
of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further
covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the
necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action
as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation,
or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented
by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable
and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue).

 

Except and to the
extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate
of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate
to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the
Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior
to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts
to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary
to enable the Company to perform its obligations under this Warrant.

 

Before taking any
action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price,
the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.

 

f)             
Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall
be determined in accordance with the provisions of the Purchase Agreement.

 

g)            
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered,
and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal or foreign securities
laws.

 

h)           
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder
shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other
provision of this Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this
Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient
to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings,
incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

i)             
Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company
shall be delivered in accordance with the notice provisions of the Purchase Agreement.

 

    16

     

    

 

j)            
 Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant
to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the
Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.

 

k)            
Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages,
will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to
assert the defense in any action for specific performance that a remedy at law would be adequate.

 

l)             
Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby
shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted
assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and
shall be enforceable by the Holder or holder of Warrant Shares.

 

m)           
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company
and the Holder.

 

n)           
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.

 

o)            
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be
deemed a part of this Warrant.

 

********************

 

(Signature Page Follows)

 

    17

     

    

 

IN WITNESS WHEREOF, the Company
has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

	 	SENMIAO TECHNOLOGY LIMITED    
	 	 
	 	By:	 
	 	 	Name: 	 Xi Wen
	 	 	Title:	Chief Executive Officer

 

    18

     

    

 

NOTICE OF EXERCISE

 

To:        SENMIAO
TECHNOLOGY LIMITED

 

(1)  
The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the
terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all
applicable transfer taxes, if any.

 

(2)  
Payment shall take the form of (check applicable box):

 

[ ] in lawful money
of the United States; or

 

[ ] if permitted the
cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise
this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in
subsection 2(c).

 

(3)  
Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified
below:

 

_______________________________

 

The Warrant Shares shall be delivered to the following
DWAC Account Number:

_______________________________

_______________________________

_______________________________

 

[SIGNATURE
OF HOLDER]

 

	Name of Investing Entity: 	 	 

	Signature of Authorized Signatory of Investing Entity:	 	 

	Name of Authorized Signatory: 	 	 

	Title of Authorized Signatory:	 	 

	Date:	 	 

 

     

     

    

 

EXHIBIT B

 

ASSIGNMENT FORM

(To assign the foregoing
Warrant, execute this form and supply required information. Do not use this form to purchase shares.)

 

FOR VALUE RECEIVED, the foregoing
Warrant and all rights evidenced thereby are hereby assigned to

 

	Name:	 	
	 	 	(Please Print)
	 	 	 
	Address:	 	
	     	 	(Please Print)      
	 	 	 
	Phone Number:	 	 
	 	 	 
	Email Address:	 	 
	 	 	 
	Dated:  	_________________ __, _______	 	 

 

	Holder’s Signature:	 	 	 
	 	 	 
	Holder’s Address:

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