Document:

rare-ex1024_1045.htm

Exhibit 10.24

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED

 

MASTER SERVICES AGREEMENT

This Master Services Agreement (the "Agreement") is entered into

Between

(1)Aenova Haupt Pharma Wolfratshausen GmbH, Pfaffenrieder Straße 5, 82515 Wolfratshausen Germany

- hereinafter referred to as "AENOVA" -

and

(2)Ultragenyx Pharmaceuticals Inc., 60 Leveroni Ct Novato, CA 94949

- hereinafter referred to as "Customer" -

The entities listed in no. (1) to (2) above are also referred to collectively as the "Parties" and each as a "Party".

Preamble

WHEREAS, Customer is a company active in the pharmaceutical field focussing on development of rare disease therapies, including Product (as defined hereinafter); and

WHEREAS, AENOVA is a contract manufacturing organization part of the AENOVA Group of companies that develops, manufactures, and markets solid, semi-solid, and liquid pharmaceutical products for the healthcare industries worldwide; and

WHEREAS, Customer wishes to engage AENOVA as contract manufacturing organization for the manufacturing of Product for which Customer is planning to receive marketing authorization in multiple jurisdictions globally; and

WHEREAS, AENOVA, that has affirmed to have the know-how, expertise, capability, experience and the infrastructure necessary to manufacture Product, has agreed to manufacture and supply certain amounts of Product to Customer for clinical trials and general, including commercial where possible, demands in the Territory (as defined hereinafter) subject to the terms and conditions set forth herein; and

WHEREAS, the Parties have agreed in a separate agreement on a certain capital investment of Customer in a sealing equipment to be placed at AENOVA’s site in Wolfratshausen (under Schedule A); and 

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WHEREAS, both Parties agree to cooperate with the appropriate level of trust and transparency. Each Party hereto has a duty of good faith and fair dealing in connection with its performance under this Agreement. Each Party shall perform its obligations under this Agreement in a diligent, lawful, ethical and professional manner so as to advance the purposes and intent of this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the Parties agree as follows: 

	
1.
	
Definitions and Interpretation

In this Agreement, including the preamble and except where set forth otherwise, the following terms and abbreviations shall be construed as follows:

	
1.1
	
“Additional Services” means any service specifically qualified as an additional service (see Section 6 and Schedule C for reference) in any approved Offer following approval process set forth in Section 5, except all activities involved in converting FOC Material into Product and according to the quality standards set forth in Quality Agreement including costs of in-process control, quality assurance, quality control and release, deviation and complaint handling, storage of FOC Material until delivery notice, storage of purchased material procured by AENOVA and of Product until delivery notice, disposal of waste.

	
1.2
	
“Affiliate” shall mean with respect to a Party, any person, corporation, company, partnership or other entity that controls, is controlled by, or is under common control with that Party. For the purpose of this definition, “control” shall mean direct ownership of fifty (50%) or more of the shares of stock entitled to vote for the election of directors, in the case of a corporation, or fifty percent (50%) of more of the equity interest in the case of any other type of legal entity, status as a general partner in any partnership, or any other arrangement whereby the entity or person controls or has the right to control the board of directors or equivalent governing body of a corporation or other entity, or the ability to cause the direction of the management or policies of a corporation or other entity.

	
1.3
	
 “Business Day” shall mean each day of the week excluding Saturday, Sunday and public holidays in Germany or Switzerland or the United States of America.

	
1.4
	
“Calendar Year” shall mean a period of 12 (twelve) consecutive months corresponding to the calendar year commencing on the first day of January.

	
1.5
	
“Confidential Information” means contents of this Agreement and any information regarding the other Party’s business and / or its Affiliates’ business as well as information relating to Product disclosed by one Party and / or its Affiliates to the other Party pursuant to this Agreement.

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1.6
	
“Critical Materials” means primary packaging components and materials defined in Section 11.

	
1.7
	
“Delivery Date” means the date of delivery requested by Customer in a Purchase Order, including release of Product for further use.

	
1.8
	
“Drug Substance” means Customer’s active pharmaceutical ingredient Triheptanoin, manufactured under GMP condition for human use. 

	
1.9
	
“Equipment” means any equipment system to support manufacturing and / or packaging of Product.

	
1.10
	
“Executive Collaborative Leadership” shall mean for the purpose of this Agreement, on Customer’s side, a professional holding a role not lower than the [***] and a professional holding a role not lower than the [***]; on AENOVA’s side, the [***] and [***] (or whoever is on these roles ad interim).

	
1.11
	
“Facility” shall mean AENOVA’s manufacturing facilities located in Wolfratshausen, Germany.

	
1.12
	
“Final Release” shall mean Product is quality released by Customer or Customer’s delegate as per Quality Agreement in Schedule D.

	
1.13
	
“FOC Material” means materials, including but not limited to the Drug Substance, supplied by Customer to AENOVA free of charge (FOC).

	
1.14
	
“Force Majeure” shall have the meaning as provided in Section 21 of this Agreement.

	
1.15
	
“Good Manufacturing Practices” or “cGMP” means the current Good Manufacturing Practices including EU GMP Guide, 21 CFR, ICH guidelines, EU guide and their current official interpretations applicable to the manufacturing of drug substances and products.

	
1.16
	
“Hidden Defects” means a defect of FOC Material or Product already present at the time of respective delivery but not detectable at the time of the inspection.

	
1.17
	
“Improvement” means technical and business process optimization that is beneficial for the manufacturing process, product quality, financial aspect or supply of Product.

	
1.18
	
“Intellectual Property Rights” means rights in patents, patent applications (including all utility and design patents and patent applications), inventions, trademarks, service marks, trade names, internet domain names, rights in designs, rights in get-up and trade dress, goodwill and the right to sue for passing off or unfair competition, copyrights, (including all computer applications, programs and other software, including without limitation operating software, network software, firmware, middleware, and design software rights in computer software and databases), database rights, 

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industrial property rights, moral rights of authors, rights to use, and protect the confidentiality of, confidential information (including know-how and trade secrets), utility models, any other rights (including common law rights) arising from use of the foregoing, all rights of renewal, continuations, divisions, extensions and the like relating to the foregoing, and other intellectual property rights, in each case whether registered or unregistered and including any applications and rights to apply for the grant of any such rights and all rights and forms of protection having an equivalent or similar effect anywhere in the world.

	
1.19
	
“Joint Working Team Members” shall mean the team selected by the Executive Collaborative Leadership in accordance with the criteria set out under Section 7 of this Agreement.

	
1.20
	
“Key Performance Indicators”, shall mean a quantifiable measure used to evaluate the performance of AENOVA in meeting the objectives of this Agreement as defined by the Joint Working Team and approved by the Executive Collaborative Leadership. 

	
1.21
	
“Manufacture” or “Manufacturing” means filling or processing, producing, testing and packaging of FOC Material and purchased material to obtain Product by AENOVA in accordance to Specifications.

	
1.22
	
“Material Change in Control or Business Model” shall mean any of the following: (i) the sale or disposition of all or substantially all of the assets of a Party to a Third Party, (ii) the acquisition by a Third Party, of more than 50% of a Party’s outstanding shares of voting capital stock (e.g. capital stock entitled to vote generally for the election of directors), or (iii) the merger or consolidation of a Party with or into another corporation. References in this definition to a Third Party shall also include Affiliates in case Affiliate has no comparable financial resources and financial reputation as Customer or AENOVA has. 

	
1.23
	
“Offer” shall mean AENOVA’s quotation containing the details of the proposed Services subject to Customer’s binding order. 

	
1.24
	
“Person in Plant” shall mean Customer’s representative present on Facility.

	
1.25
	
“Product” shall mean the product that contains Drug Substance, manufactured by AENOVA and to be delivered to Customer the ownership of which belongs to Customer.

	
1.26
	
“Purchase Order” shall mean a firm order placed and issued by Customer with a corresponding purchase order number to AENOVA reflecting Services provided by AENOVA.

	
1.27
	
“Quality Agreement” shall mean the Quality Agreement as referenced in Schedule D.

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1.28
	
“Quarantined Production” means a Manufacturing of Product with any material not released by the quality department of AENOVA before such Manufacturing. Such Manufacturing requires explicit request by Customer.

	
1.29
	
“Quarantined Shipment” means a shipment of Product before the quality release by AENOVA and / or Customer in accordance with Quality Agreement.

	
1.30
	
“AENOVA Know-How” means all know-how or intellectual property relating to AENOVA’s background know-how in the field of the manufacturing and AENOVA’s operations of process development services as well as regulatory, packaging and quality issues.

	
1.31
	
“AENOVA Offer” means any quote proposed for Additional Services approved by the Customer in accordance with the procedure set forth in Section 5 of this Agreement. 

	
1.32
	
“Services” means all activities related to Manufacturing of Product as described in this Agreement and Schedule C which do not include Additional Services.

	
1.33
	
“Service Fee” means the fee paid by Customer for each Services as itemized in Schedule B in this Agreement and includes all activities involved in converting FOC Material into Product and according to the quality standards set forth in Quality Agreement including costs of in-process control, quality assurance, quality control and release, packaging, storage of FOC Material. Fees for Third Party Materials and Third Party Services are not included and are covered separately.

	
1.34
	
“Specifications” means the written Product specifications as mutually agreed.

	
1.35
	
“Third Party” means any person –either individual or legal- other than Customer, AENOVA and their respective Affiliates.

	
1.36
	
“Third Party Material” means all materials procured by AENOVA for Manufacturing of Product.

	
1.37
	
“Third Party Services” means all services procured by AENOVA for Manufacturing of Product (e.g. laboratory services, hazardous waste disposal etc.).

	
1.38
	
“Technical Release” means the release of Product for transport by AENOVA in accordance with Schedule D.

	
1.39
	
“Yield” shall mean the amount of Product manufactured in a production batch, as agreed in writing by the Joint Working Team in compliance with Section 7.4.iii (iii) of this Agreement

	
2.
	
Scope of this Agreement & Schedules

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2.1.
	
AENOVA will perform on a non-exclusive basis Services and / or Additional Services upon the terms and conditions of this Agreement as well as its Schedules.

	
2.2.
	
Attached to this Agreement are the following Schedules which form an integral part of this Agreement: 

	
 
	

	
Schedule B:Service Fee 

	
 
	

	
Schedule C:Description of Services and Additional Services

	
 
	
Schedule D: 
	
Quality Agreement 

	
 
	

	
Schedule E: Compliance

	
 
	

	
Schedule F:Storage Terms

	
2.3.
	
In the case of any inconsistencies between this Agreement, the Schedules and / or an Offer referring to it, this Agreement shall prevail, except for quality aspects after the Effective Date for which Schedule D shall prevail.

	
2.4.
	
Neither Party shall alter or adjust this Agreement or any Schedule to it without the prior written permission of the other Party.

	
3.
	
Customer Responsibilities

	
3.1.
	
Customer shall be responsible to:

	
 
	
(i)
	
provide complete and accurate requirements to define the Specifications; 

	
 
	
(ii)
	
provide AENOVA in a timely manner with complete and accurate information and sufficient FOC Material necessary to perform Services;

	
 
	
(iii)
	
provide AENOVA in a timely manner with complete and accurate information to perform Additional Services.

	
3.2.
	
Customer shall supply FOC Material to AENOVA according to Schedule B in line with [***] (Incoterm 2010). Customer is responsible that such material (i) is suitable for the Manufacturing of the Product, (ii) fits for Services and (iii) is pharmaceutically compliant. 

	
3.3.
	
Customer shall strictly comply with Schedule E.

	
4.
	
AENOVA Responsibilities

	
4.1.
	
AENOVA shall perform Services listed under Schedule C and / or Additional Services described under Section 6 and Schedule C in accordance with this Agreement, including Quality Agreement, and with the standard of professional skill, care and diligence customarily applied in respect of services of the same quality and character as the Services listed under Schedule C and / or Additional Services described under Section 6 and Schedule C in 

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similar industry manufacturing processes.

	
4.2.
	
In particular, AENOVA shall comply with cGMP and with recognized industry standards, including, but not limited to applicable ICH guidelines and the pertaining laws and regulations.

	
4.3.
	
AENOVA will make available and maintain an adequate manufacturing site and facilities to perform Services and/or approved Additional Services, validated processing equipment if needed, maintain the manufacturing processes for Product in a validated state if needed, trained and competent personnel with relevant knowledge and experience, and will ensure sufficient capacity to store the FOC material and the excipients needed and render Services, and Manufacture of Product.

	
4.4.
	
All the responsibilities and obligation listed under Sections 4.1, 4.2. and 4.3. will be covered by AENOVA at their own expenses.

	
4.5.
	
AENOVA will notify Customer immediately but not later than within [***] Business Days in the event of any potential failure to deliver Product within the agreed time lines.

	
4.6.
	
AENOVA will manufacture Product in accordance with the terms of this Agreement and the responsibilities as set out in Quality Agreement.

	
4.7.
	
Until Product is approved either by the FDA or the EMA but not later than [***], AENOVA has to provide Customer with a [***] FOC Material inventory report by the [***] Business Day of [***] reflecting the inventory of FOC Material on the [***] of the [***]. After preceding condition is met, the Parties will discuss in good faith AENOVA’s FOC Material reporting obligation.

	
4.8.
	
AENOVA shall strictly comply with Schedule E.

	
5.
	
Order Processing

	
5.1.
	
AENOVA will quote Additional Services to Customer by written AENOVA Offer referring to this Agreement. 

	
5.2.
	
Upon agreement between the Parties about such AENOVA Offer, Costumer will place a related PO and AENOVA will provide Additional Services as described in the respective AENOVA Offer.

	
6.
	
Additional Services

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Provided that Order Processing under Section 5 has been followed, AENOVA will perform Additional Services such as but not limited to those under Schedule C and the followings:

	
 
	
(i)
	
[***];

	
 
	
(ii)
	
[***];

	
 
	
(iii)
	
[***];

	
 
	
(iv)
	
[***].

	
7.
	
Governance Model

	
7.1.
	
The Parties shall establish a Joint Working Team, consisting of [***] (“Joint Working Team Members”). Joint Working Team will be co-chaired by a representative designated by each Party.

	
7.2.
	
Either Party may replace its Joint Working Team Members by notice to the other Party.

	
7.3.
	
Joint Working Team Members shall be appropriately qualified and experienced in order to make a meaningful contribution to the Joint Working Team meetings.

7.4.The purpose of Joint Working Team is to:

	
 
	
(i)
	
drive and improve performance of Services and / or Additional Services, including Yield and Joint Working Team;

	
 
	
(ii)
	
deliver on Service and / or Additional Services goals;

	
 
	
(iii)
	
track yield of the delivered batches. The acceptable product yield in the commercial phase of manufacturing is [***]%. If the yield was below the [***]% the JWT Team shall conduct its discussion in good faith with a view to operating to the mutual benefit of the Parties.

	
 
	
(iv)
	
manage and reduce aggregate risk, including lead times and safety stock management of Third Party Material;

	
 
	
(v)
	
manage issues related to Services and / or Additional Services;

	
 
	
(vi)
	
maintain a collaborative and constructive relationship (at operational level);

	
 
	
(vii)
	
potentially propose any Improvement to the Executive Collaboration Leadership;

	
 
	
(viii)
	
closely monitor all transfer activities according to Sections 14.7 and 14.8.

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7.5.
	
Joint Working Team shall conduct its discussion in good faith with a view to operating to the mutual benefit of the Parties.

	
7.6.
	
Joint Working Team shall meet as often as any of Joint Working Team Members may reasonably request so, but in any event no less than [***] per [***] in a face-to-face setting with logistics of the meeting to be decided by Joint Working Team Members. Other Joint Working Team meetings can be held face-to-face or by teleconference based on Joint Working Team Members decision.

	
7.7.
	
In addition to any other topics to be discussed in the agenda of the relevant meeting, the following matters shall be invariably discussed during Joint Working Team meetings: 

	
 
	
(i)
	
team member updates;

	
 
	
(ii)
	
performance review (services, quality, relationship, financials);

	
 
	
(iii)
	
risk evaluation and associated risk mitigation projects;

	
 
	
(iv)
	
review status of past meeting action items.

	
7.8.
	
Joint Working Team Members may invite individuals with special skills to attend such meetings where it is considered to be relevant and appropriate. Individuals belonging to a third party have to be mutually agreed. These invited individuals do not have voting powers.

	
7.9.
	
The quorum for the validity of Joint Working Team meetings shall be [***] Joint Working Team Members, [***].

	
7.10.
	
All decisions of Joint Working Team shall be made in good faith in the best interests of this Agreement. In the event that the Joint Working Team is unable to reach a decision on any matter after no more than [***] good faith attempts to resolve such disagreement in a commercially reasonable fashion, then such matter should be immediately escalated, and not later than [***] Business Day after official closure of Joint Working Team’s last attempt, to and decided by Executive Collaboration Leadership in a timely manner.

	
7.11.
	
Joint Working Team shall take minutes of its meetings and resolutions, which shall be promptly circulated to the Parties after each meeting for review and agreement.

	
8.
	
Forecast and Purchase Orders

	
8.1.
	
The Parties hereby establish a forecast procedure as follows.

	
8.2.
	
Customer will provide a good faith rolling forecast covering the current plus next [***] no later than the [***] Business Day of each calendar [***], specifying the Product, the ordered quantity, number of batches and the 

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expected Delivery Date (“Forecast”). AENOVA will confirm Forecast to Customer within [***] Business Days after the receipt of such a Forecast and provide firm production schedule. The current [***] plus the first [***] of Forecast shall be firm demand (“Binding Period”) to both Parties as to the quantity of Product, number of batches and Delivery Date. Customer will issue Purchase Orders upon confirmation of Forecast reflecting the quantities of Binding Period, the batch number and requested Delivery Date. AENOVA will confirm Purchase Order and Delivery Date within [***] Business Days of receipt of such Purchase Order.

	
8.3.
	
In case Purchase Order is changed by Customer and needs to be rescheduled within Binding Period, both Parties agree to find in good faith an alternative Manufacturing schedule for respective Purchase Order. 

	
8.4.
	
For orders cancelled at least [***] calendar days prior to confirmed Delivery Date, a cancellation penalty of [***]% of the order cost will be due. For orders cancelled at least [***] days prior to the confirmed Delivery Date, a cancellation penalty of [***]% of the order cost will be due. Orders with less than [***] days to confirmed Delivery Date are non-cancellable.

	
9.
	
Delivery

	
9.1.
	
Customer shall deliver all FOC Materials with a notice time of at least [***] Business Days prior to the intended delivery date to AENOVA. FOC material shall not be delivered later than [***] Business Days prior to Delivery Date.

	
9.2.
	
Any delivery of Product by AENOVA to Customer or to a Third Party named by Customer will be based on [***]; [***] (Incoterms 2010). AENOVA will pack the Product in the manner appropriate for transport in line with [***] requirements and the Quality Agreement or mutually agreed shipping procedures. In case Customer has special requirements for transport packing, Customer shall inform AENOVA about such requirements in a timely manner. If agreed between the Parties such special packing requirements shall be documented in writing in the shipping procedures.

	
9.3.
	
In urgent cases, Customer may request in writing to AENOVA for:

	
 
	
(i)
	
Quarantined Shipment; or

	
 
	
(ii)
	
Production using quarantined materials covered by appropriate quality systems. 

Quarantined Production and/or appropriately pre-final dispositioned Product may be moved within the supply chain to prepare for and/or perform further processing to maintain critical production schedules when:

	
 
	
(iii)
	
Controls are established and documented to ensure final distribution of product only occurs when final disposition of product is completed by the responsible party;

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(iv)
	
There are no product impacting investigations open for associated material.

Customer assumes all risks, responsibilities and costs associated with a Quarantined Shipment or Provisional Production, unless the reason for the non-compliance of the Product is caused by AENOVA.

	
9.4.
	
Within [***] Business Days following notification of Final Release, AENOVA and Customer shall agree if AENOVA shall either (a) place Product with a common carrier for delivery to Customer or a Third Party as directed by Customer, or (b) store applicable Product at Facility or other mutually agreed location according to Schedule F. 

	
10.
	
Fees

	
10.1.
	
Customer will pay to AENOVA Service Fee according to Schedule B and / or fee for Additional Services following the acceptance of an Offer.

	
10.2.
	
Service Fee and fee for Additional Services do not [***]. If AENOVA’s Services or Additional Services are [***], Customer will be charged for [***] incurred in addition.

	
10.3.
	
Service Fee will be paid upon Final Release of the respective batch of Product.

	
10.4.
	
The fees for Additional Services will be paid according to the payment schedule contained in any approved AENOVA’s Offer. 

	
10.5.
	
All Payments must be made in [***] and are payable within [***] days from date of invoice or a designated date where the payment will fall due.

	
10.6.
	
AENOVA may adjust Service Fees [***] on the [***] of [***] of each [***]. Any increase will be calculated with an average value based on [***]% ([***] percent) of the [***] published by the [***] and [***]% ([***] percent) of the [***]. Annual increases will be limited to this [***] or [***]%, whichever amount is the lesser. AENOVA shall provide Customer with all the official referenced sources justifying any adjustment in accordance with this clause with a [***] Business Day notice.

 

	
11.
	
Third Party Material

	
11.1.
	
With regard to specific materials agreed in writing ("Critical Materials”), AENOVA shall be entitled to procure such quantities of Critical Materials required for Manufacture of the quantities of Product corresponding to Customer’s requirement for Product for the next [***] according to Rolling Forecast at Customer's risk. Customer shall bear the risk and costs arising from a change of Specifications affecting such Critical Materials, including 

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expenditures for the destruction and disposal of unusable Materials within the [***] period.

	
11.2.
	
All Services requiring materials which are purchased, procured, stored and tested by AENOVA shall be at AENOVA’s own expense and are subject to correct and punctual supply of AENOVA’s respective suppliers.

	
11.3.
	
AENOVA will promptly inform Customer if it encounters supply problems, including delays and / or delivery of non-conforming Third Party Material with respect to any supply of purchased material for Manufacturing of Product and AENOVA must take reasonable measures to correct such problems and the Customer may in their discretion provide assistance in agreement with AENOVA. AENOVA should ensure sufficient safety stocks available of any such Third Party Material based on best market practice and on AENOVA’s experience with its suppliers and their respective contractual agreements. The definition of such safety stock levels should be reviewed periodically and mutually agreed by Joint Working Team.

	
12.
	
Special Costs

All costs concerning the further use or importation by Customer into a country of Product are to be borne by Customer, especially administration fees connected with the marketing of Product, even if the respective administrative authority should charge AENOVA directly. In such case, Customer ensures that the respective amounts are received by AENOVA on AENOVA bank account within [***] calendar days. Customer will inform AENOVA about any administrative requirement applicable to AENOVA of any country Customer is marketing Product as soon as possible.

	
13.
	
Financial Audits 

In case of Customer’s doubts of AENOVA’s compliance with respect to FOC Material and Third Party Material inventory management, AENOVA shall make available to Customer or to a certified public accountant (“CPA”) acceptable to Customer, upon Customer’s reasonable request and with an appropriate period of notice during the regular office hours during Term (or after Term for activities started during Term but with effects after Term), books, records and other documentation relevant to the Services. For the avoidance of doubt, Customer shall bear the cost of the CPA.

	
14.
	
Term and Termination

	
14.1.
	
This Agreement is effective as of the last date of signature (“Effective Date”) and will expire (if not terminated earlier in accordance with the Agreement’s provisions) 3 (three) years thereafter (“Initial Term”). This Agreement will be automatically extended for indefinite period following Initial Term unless Customer terminates it serving written notice to AENOVA by and not later 

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than 60 days before end of Initial Term. Following Initial Term, Each Party may withdraw from this Agreement at will (without cause) with a pre-notice of 12 (twelve) months at any time. 

	
14.2.
	
This Agreement may be terminated by a Party serving written notice of such termination to the other Party if this latter breaches a material provision of this Agreement including, but not limited to: Sections 2 (Scope of this Agreement and Schedules), 3 (Customer Responsibilities), 4 (AENOVA Responsibilities), 5 (Order Processing), 6 (Additional Services), 7 (Forecast and Purchase Order), 9 (Delivery), 10 (Fees), 13 (Financial Audit), 15 (Results), 16 (Intellectual Property), 17 (Defective Product), 18 (Indemnification and Limitation of Liability), 19 (Insurance), 20 (Confidentiality) as well as any delay for reasons attributable to AENOVA in fulfilling Customer’s orders, which would lead to a Product stock-out and such breach remains uncured for [***] days following the breaching Party’s receipt of written notice of such breach from the non-breaching party.

	
14.3.
	
Each Party shall be entitled to terminate this Agreement with immediate effect if: 

	
 
	
(i)
	
any requirement / obligation mentioned in Schedule D is violated / breached by the respective other Party and / or its Affiliates;
	
 

	
 
	
(ii)
	
a Material Change in Control and Business Model of the respective other Party, in the event that this latter is sold or disposed to, acquired by or merged with a direct competitor of the Party. A direct competitor is defined as an undertaking that manufactures and /or commercializes virtually identical or similar products / services within the same relevant product market(s). Either Party shall notify to the other Party in writing without undue delay if it undergoes a Material Change in Control and Business Model; 
	
 

	
 
	
(iii)
	
the respective other Party infringes Party’s Intellectual Property Rights;
	
 

	
 
	
(iv)
	
the development program of Product is ceased (e.g. failure of meeting clinical end points or filing not approved by the Health Authorities).

	
14.4.
	
Customer shall be entitled to terminate this Agreement with immediate effect if AENOVA loses the right to operate under this Agreement following any decision from the competent authorities and / or revocation of the necessary approvals / regulatory permits (including FDA taking control of AENOVA following a consent decree).

	
14.5.
	
Unless otherwise agreed in writing termination or expiration of this Agreement for any reason shall not relieve either Party or its Affiliates from their obligations under this Agreement until the date of such termination or expiration or to perform such obligations as described in Schedule E) that 

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will survive for [***] years after the expiration or termination of this Agreement.

	
14.6.
	
Customer may terminate this Agreement at any time if AENOVA is unable to deliver Services and / or Additional Services. In the event of Force Majeure, Customer may terminate this Agreement if such Force Majeure lasts for a period greater than [***] consecutive calendar months.

	
14.7.
	
In any event of termination (including termination at will as per Section 14.1) of this Agreement triggered by any of the Parties or resulting from a Force Majeure and upon written notice by Customer (“Transfer Request”), AENOVA will start immediately to make available the manufacturing technology from AENOVA to Customer or a Third Party designated by Customer and provide reasonable technical assistance to Customer or such Third Party to operate the manufacturing process developed under the Master Services Agreement (dated XVCVX) and this Agreement in order to enable the Customer or such third party to continue the manufacturing and supply of Products (“Manufacturing Process”). AENOVA shall make reasonable efforts to complete Manufacturing Process transfer within [***]. 

	
14.8.
	
AENOVA shall initiate Manufacturing Process transfer within [***] days after written notice from Customer requesting such initiation (“Initiation Notice”), which Initiation Notice may be made by Customer within [***] after the date of Transfer Request. Costs associated with Transfer Request will be borne by Customer unless this Agreement is terminated by Customer pursuant to Section 14.4. or by AENOVA pursuant to Section 14.1. In case of termination of this Agreement resulting from Force Majeure, Manufacturing Process transfer costs will be equally borne by the Parties.

	
15.
	
Results

	
15.1.
	
Neither Party shall, as a result of this Agreement, acquire any right, title, or interest in any intellectual property that the other Party owns or controls as of the Effective Date of this Agreement, or that the other Party obtains ownership or control of separately and apart from the performance of the Services under this Agreement ("Background Intellectual Property").

	
15.2.
	
Customer shall own exclusively all rights, titles, and interests in any and all intellectual property with regard to the Product that AENOVA conceives, invents, reduces to practice, develops or makes, solely or jointly with Customer, in the course of performance of the Services or as a result of using Customer's Background Intellectual Property.

	
15.3.
	
Notwithstanding the foregoing, AENOVA shall own all rights, titles and interests in any intellectual property regarding Know-How that AENOVA develops, conceives, invents, reduces to practice or makes in the course of 

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performance of the Services that (i) relates to AENOVA Background Intellectual Property; (ii) AENOVA’s Know-How, (iii) which is severable from Product, and (iii) does not reveal or disclose any Confidential Information of Customer.

	
16.
	
Intellectual Property

	
16.1.
	
Customer represents that Manufacture, supply, marketing or any other use by Customer, AENOVA or any Third Party of Products or of Intellectual Property provided by Customer under this Agreement does not violate Intellectual Property of Third Parties. Customer shall be responsible and liable for any damage arising from the violation of Intellectual Property of Third Parties through any use of Products or Intellectual Property provided by Customer under this Agreement. Customer shall bear all judicial and extrajudicial costs and damages in connection with the violation of Intellectual Property.

	
16.2.
	
For any inventions both parties shall cooperate in good faith to allocate the rights and the costs which are associated with the possible protection of the inventions.

	
16.3.
	
If the performance of Services and / or Additional Services requires the use of Intellectual Property Rights of AENOVA, AENOVA hereby grants to Customer the necessary rights of use to these Intellectual Property Rights solely for the marketing, distribution and sale of the Products. In addition, AENOVA grants to Customer the necessary rights of use to these Intellectual Property Rights for the manufacture of Products by Customer itself. Such licenses are granted on a worldwide basis, non-exclusively and royalty-free.

	
16.4.
	
If the performance of this Agreement requires the use of Intellectual Property Rights of Customer or of Third Parties, Customer hereby grants to or procures for AENOVA the necessary rights of use to these Intellectual Property Rights solely for the performance of Services and / or Additional Services on a worldwide basis, non-exclusively and free of fees.

	
16.5.
	
All documents which AENOVA receives from Customer for the fulfilment of Services remain the property of Customer.

	
16.6.
	
AENOVA may in each case archive a copy of all documents and data produced at or in connection with Services in copy, and will not use this archive copy for any purposes other than to abide by the relevant commercial and tax law provisions or to the extent to which these documents and this data are suitable as proof of a circumstance on the basis of which an otherwise mandatory existing liability of AENOVA could be excluded.

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16.7.
	
Notwithstanding anything to the contrary in this Agreement, AENOVA shall not be required to destroy any computer files stored securely by AENOVA that are created during automatic system back-up.

	
16.8.
	
Each Party shall be obliged to acquire the inventions and rights on the inventions made under this Agreement of its employees, consultants, agents and representatives to the extent necessary to secure the other Party’s rights set out in this Section 16. The other Party shall, as the case may be, reimburse any necessary expenses associated with such acquisitions of rights.

	
17.
	
Defective Product

	
17.1.
	
Customer shall examine Product Manufactured and delivered by or on behalf of AENOVA for compliance with the Specifications, intactness, shortage, identity or any defect without undue delay. Should any of the Products fail to meet Specifications, or in the event of any other claim, Customer shall inform AENOVA in writing without undue delay, latest within [***] Business Days after observation of the defect. Hidden Defects can be claimed in writing within [***] Business Days after being detected by Customer. If Customer fails to notify the defect within such period, Customer shall be deemed to have accepted the consignment.

	
17.2.
	
In the event Customer notifies AENOVA within the period mentioned in Section 17.1 that any of the Products does not conform with Specifications or is otherwise defective and AENOVA agrees with it, AENOVA shall conduct its own evaluation within the time frame define in Quality Agreement. AENOVA will then repeat Service free of charge, if Customer agrees to that. This is Customer’s sole and exclusive remedy. If AENOVA fails to remedy, AENOVA will reimburse Customer for the damages caused by the default up to the limits of liabilities as described in Section 18. If AENOVA pays the compensation, AENOVA is no longer obliged to perform the respective concerned Service.

	
17.3.
	
In the event AENOVA disagrees with the results obtained by Customer the issue shall be submitted to an independent testing laboratory, whose decision shall be binding on both Parties. The costs of such test shall be borne by the Party found to be at fault.

	
18.
	
Indemnification and Limitation of Liability

	
18.1.
	
Subject to this Agreement, AENOVA shall indemnify, defend and hold harmless Customer and its Affiliates from and against any and all claims, losses, damages and liabilities which are subject to compensation according to applicable law (collectively “Claims”; singularly “Claim”) to the 

16 | Page

 

		
extent arising out of or resulting from (i) any negligent or willful breach of this Agreement by AENOVA; (ii) the supply of any non-conforming Product arising out of AENOVA’s negligence or willful misconduct when Manufacturing Product; in each case except to the extent arising out of Customer’s Liability and Indemnification according to Section 18.2. Customer shall promptly inform AENOVA of any Claim and shall reasonably cooperate with AENOVA in the defense of such Claims, and shall permit AENOVA to control the defense and settlement of such Claims.

	
18.2.
	
Subject to this Agreement, Customer shall indemnify, defend and hold harmless AENOVA and its Affiliates from and against any and all Claims to the extent arising out of or resulting from (i) any negligent or willful breach of this Agreement by Customer; (ii) the distribution, marketing, sale, import, and any other use by Customer or any Third Party of Product, except to the extent arising out of AENOVA’s Liability and Indemnification according to Section 18.1. AENOVA shall promptly inform Customer of any Claim and shall reasonably cooperate with Customer in the defense of such Claims, and shall permit Customer to control the defense and settlement of such Claims.

	
18.3.
	
All indemnification claims in respect of any person seeking indemnification (collectively the “Indemnitees” and each an “Indemnitee”) under this Section 18.3 shall be made by the corresponding Party (the “Indemnified Party”). The Indemnified Party shall give to the other Party (the “Indemnifying Party”) prompt written notice (“Indemnification Claim Notice”) of any losses or the discovery of any fact upon which such Indemnified Party intends to base an indemnification request. Each Indemnification Claim Notice must contain a description of the Claim and the nature and the amount of incurred loss and / or requested indemnification (to the extent that the nature and the amount are known at such time). Together with Indemnification Claim Notice, the Indemnified Party shall furnish promptly to the Indemnifying Party copies of all the notices and documents (including court papers) received by any Indemnitee in connection with Third Party Claim. The Indemnifying Party shall not be obligated to indemnify the Indemnified Party to the extent any admission or statement made by the Indemnified Party materially prejudices the defence of such Third Party Claim. Where required the Indemnifying Party shall promptly send a copy of Indemnification Claim Notice to its relevant insurers and shall permit them to exercise rights of subrogation.

	
18.4.
	
At its option the Indemnifying Party may assume control of the defence of any Third Party Claim by giving written notice to the Indemnified Party within [***] Business Days after the Indemnifying Party’s receipt of an Indemnification Claim Notice.

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18.5.
	
If the Indemnifying Party chooses not to take control of the defence or prosecute any Third Party Claim, the Indemnified Party shall retain control of the defence thereof, but no Indemnified Party or Indemnitee shall admit any liability with respect to, or settle, compromise or discharge, any such Third Party Claim without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld or delayed.

	
18.6.
	
If AENOVA’s cooperation is required in administrative procedures, especially in procedures of admission, customs or of importation, Customer indemnifies AENOVA from any liability which may arise out of this cooperation. That applies, in particular, in cases, where AENOVA, on Customer’s request, makes statements or applications at or towards governmental authorities or where AENOVA participates in making those statements or applications.

	
19.
	
Insurance

	
19.1.
	
Either Party shall, at its sole cost and expense, obtain and maintain in force for entire Term an adequate and suitable insurance in the minimum amounts set forth below with a reputable insurance company to cover its liability under this Agreement.

	
19.2.
	
[***] insurance, with [***] limits of [***] for each claim with respect to [***] and / or [***] and [***].

	
19.3.
	
Upon execution of this Agreement, each Party shall furnish to the other party a written statement by the insurer evidencing such coverages referred herein that must remain in place for the entire duration of this Agreement and for [***] years after termination triggered in compliance with Section 14 of this Agreement. For the avoidance of doubt, each Party is allowed to change the insurer during the validity term of this clause provided that all the conditions described in this Section 19 are properly met.

	
20.
	
Confidentiality

	
20.1.
	
Each of the Parties will keep Confidential Information of the respective other Party secret. Parties will use Confidential Information only for the performance of Services / Additional Services.

	
20.2.
	
Each Party shall limit the disclosure of the other Party’s Confidential Information to Affiliates, officers or employees, and, in case of AENOVA, to the employees of AENOVA, who reasonably require the same in performance of activities related to this Agreement in order to perform the Services / Additional Services and who are obligated to treat the same as confidential in the same manner and to the same extent as provided herein. 

18 | Page

 

		
The receiving Party will use its reasonable efforts to ensure that any Affiliate, employee or officer to which it discloses Confidential Information will retain such information in strict confidence. 

	
20.3.
	
The receiving Party may disclose Confidential Information to a governmental, administrative or other regulatory body or during judicial process to the extent required by mandatory law. In case of such disclosure, the receiving Party shall provide the disclosing Party – as far as legally possible - with written notice of such request or requirement so that the disclosing Party may seek a protective order or other appropriate remedy. If the receiving Party is unable to inform the disclosing Party before the information is disclosed pursuant to this paragraph, it shall to the extent permitted by law inform the disclosing Party of the full circumstances of disclosure and the Confidential Information which has been disclosed immediately after the disclosure. The receiving Party agrees further to provide immediately notice to the disclosing Party in the case of any unauthorized use of Confidential Information.

	
20.4.
	
The provisions of this Section 20 do not apply to information which receiving Party proves that: 

	
 
	
(i)
	
the receiving Party already knew, the prior knowledge of which it can document by prior written records;

	
 
	
(ii)
	
is or becomes public knowledge other than through the receiving Party’s breach of this promise of confidentiality;

	
 
	
(iii)
	
the receiving Party receives in good faith from a third party not in violation of an obligation of confidentiality or

	
 
	
(iv)
	
the receiving Party independently develops, discovers or arrives at without use of or reference to the Confidential Information.

	
20.5.
	
For the avoidance of doubt, no provision in this Agreement shall restrict each Party’s right to disclose the existence of a business relationship between the Parties to potential customers.

	
21.
	
Force Majeure

	
21.1.
	
Neither Party is liable to the other Party for failure or delay to the extent and for so long as such failure or delay results from causes beyond the reasonable control of such Party, including natural disasters, embargoes, wars, acts of war (whether war is declared or not), terrorist acts, insurrections, riots, civil commotion, omissions or delays in acting by any administrative authority or other party.

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21.2.
	
In the event of occurrence of Force Majeure, each Party will use their commercially reasonable efforts to mitigate the adverse consequences.

	
22.
	
Miscellaneous 

	
22.1.
	
No change of this Agreement is valid unless it is in writing and signed by the Parties. This applies also to the foregoing sentence.

	
22.2.
	
In case one of the clauses is invalid or unenforceable, the other clauses remain unaffected by this. The Parties shall negotiate in good faith if they wish to replace such invalid or unenforceable clause.

	
22.3.
	
Any notice or request required or permitted to be given under or in connection with this Agreement or the subject matter hereof shall be given by prepaid registered or certified first class airmail, e-mail or telefax to the recipient at its address set forth on the first page of this Agreement or to such other address as may have therefore been furnished in writing by the recipient to the sending Party. Any such aforementioned notice or request concerning this Agreement shall be effective upon receipt by the Party to which it is addressed.

	
22.4.
	
Neither Party may assign or transfer this Agreement or any rights or obligations hereunder, by operation or law or otherwise, without the prior written consent of the other Party, except that a Party may make such an assignment or transfer, by operation of law or otherwise, without the other Party’s consent to its Affiliate(s) or to an entity that acquires all or substantially all the business of such Party, whether in a merger, consolidation, reorganization, acquisition, sale or otherwise. Notwithstanding anything to the contrary contained herein, in the event of an assignment to an Affiliate pursuant to this Section 22.4, the assigning Party consents, acknowledges, covenants and guarantees that it shall remain jointly and severally liable, along with the assignee, to the non – assigning Party for all the obligations contained herein. This Agreement shall be binding on the successors and permitted assigns of the assigning Party, and the name of a Party appearing herein shall be deemed to include the name(s) of such Party’s successors and permitted assigns to the extent necessary to carry out the intent of this Agreement. Any assignment or attempted assignment by either Party in violation of this Section 22.4, shall be null and void and of no legal effect.

	
22.5.
	
This Agreement and any potential subsequent amendment to it, may be executed in two or more counterparts, each of which shall be deemed an original and all of which shall constitute together the same instrument. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a .pdf format data file, such signature shall create a valid and 

20 | Page

 

		
binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page where an original thereof.

	
22.6.
	
This Agreement is governed by the laws of Switzerland. Any controversy, claim or dispute arising out of or relating to this Agreement, any of its Schedule, and / or Offer or the breach thereof shall be settled, if possible, through good faith negotiation between the Parties. Such good faith negotiations shall commence promptly upon a Party’s receipt of notice of any claim or dispute from the other Party and continue for a period of [***]. If such efforts are not successful, such controversy, claim or dispute relating to, arising out of, or in any way connected with this Agreement or any term or condition hereof, or the performance by either Party of its obligations hereunder, whether before or after termination of this Agreement, except as otherwise expressly provided in this Agreement, shall be exclusively settled by the competent court in Basel, Switzerland.

IN WITNESS WHEREOF, this Agreement is executed as of the Agreement Effective Date on behalf of the parties by their duly authorized representatives.

[Signatures on the following page]

			
	
Aenova Haupt Pharma Wolfratshausen GmbH

 

Date:            12.03.2019

Signature:     /s/ [***]

Name:          [***]  

Position:        Managing Director, Haupt Pharma Wolfratshausen, Member of the Aenova Group

 
	
 
	
If second signature is required:

 

 

Date:             12.03.2019

Signature:     /s/ [***]

Name:           [***]

Position:        Head of Customer Service

 

	
Ultragenyx Pharmaceutical Inc.

 

Date:             08 April 2019

Signature:     /s/ Dennis Huang

Name:           Dennis Huang

Position:        Chief Tech Ops Officer 
	
 
	
If second signature is required:

 

Date:             _________________________

Signature:     _________________________

Name:           _________________________

Position:        _________________________

21 | Page

 

 

 

SCHEDULE A

Capital Investment Summary

[***]

 

22 | Page

 

SCHEDULE B

Service Fee

[***]

23 | Page

 

 

Schedule C

Description of Services and Additional Services

[***]

 

24 | Page

 

 

 

SCHEDULE D

 

Quality Agreement

 

Current version of the Quality Agreement executed separately by the Parties

25 | Page

 

SCHEDULE E

Compliance

1.Compliance

For AENOVA, it is a matter of course that group members of AENOVA comply with the law and any and all other relevant provisions applicable in the countries where they operate. AENOVA expects the same from its business partners.

2.Anti-Corruption

Neither Party shall perform any actions that are prohibited by local and other anti-corruption laws that may be applicable to one or both Parties to the Agreement. Without limiting the foregoing, neither Party shall make any payments, or offer or transfer anything of value, to any government official or government employee, to any political party official or candidate for political office or to any other Third Party related to this Agreement in a manner that would violate Anti-Corruption Laws.

3.Export

Each Party hereby acknowledges that this Agreement is or might be subject to one or more export control laws, regulations or the like, and agrees that it will not transfer, export or re-export any such item, including any documentation, information or product that incorporates, is derived from or otherwise reveals such, without complying with all applicable export control laws, regulations and like, including obtaining and / or cooperating with the other Party in securing all appropriate licenses and authorizations.

Customer specifically certifies that it will not transfer, export, or re-export any item under this Agreement to any country or entity subject to export control restrictions and / or embargoes under any applicable laws, regulations and the like.

4.Dealing with Internal Knowledge, Confidentiality

In principle, company and operational secrets must be treated with confidentiality. This shall also apply to any other information (such as customer information) whose confidentiality is in the interest of AENOVA’s customers.

5.Data Privacy

Both Parties must comply with the applicable statutory and operational principles regarding the protection of data regarding employees, customers, 

26 | Page

 

and investors in particular related, but not limited to, to the European General Data Protection Regulation of April 27, 2016 (Regulation (EU) 2016/679) and local applicable supplementary laws. In order to protect personal data either Party must observe the necessary diligence in the context of the assigned task.

6.Documentation of Business Transactions

The documentation of any and all business transactions must be complete, transparent, and in compliance with the statutory provisions as well as with any provisions and processes.

7.Social Responsibility

AENOVA respects the dignity of every human being and is committed to the compliance with and the protection of human rights.

AENOVA does not tolerate any kind of child labour as well as any exploitation of children and adolescents. Minimum age for the admission to employment must not be under the age for the fulfilment of compulsory education and in no case under 15 (fifteen) years.

AENOVA disapproves of any form of forced labour.

8.No Discrimination

AENOVA creates a working atmosphere characterized by respectful cooperation and to strictly oppose to any kind of discrimination on grounds of race or ethnic origin, gender, religion or philosophy of life, disability, age, or sexual identity.

9.EHS (Environmental, Health and Safety)

It is AENOVA’s policy to operate in a safe and responsible manner with respect to the environment and health of our employees, our customers and the communities where we operate.

AENOVA will not compromise environmental, health or safety values for other interests; value human life above all else and manage risks accordingly.

AENOVA pursues and continually improves an EHS system and processes to achieve an EHS incident-free environment.

AENOVA complies with applicable laws and set standards and for suppliers.

AENOVA uses its EHS knowledge to enhance the safety and well-being of the communities.

27 | Page

 

SCHEDULE F

Storage Terms

	
1.
	
Storage Terms

AENOVA will store Product for Customer due at Facility under the temperature conditions as defined in Specifications and / or according to Customer’s requirement. Product will remain sole and exclusive property of Customer and will stored by AENOVA following the applicable GMP regulations and in accordance with the common standards for the storage of pharmaceutical goods.

In deviation of the provisions in Section 19 of the Agreement, AENOVA will maintain an insurance for the storage site in order to cover the elemental risk for the storage of the Product. Therefore, Customer shall inform AENOVA in writing timely ahead of the first Product storage about the insurance value of Product. Upon request by Customer, AENOVA will provide evidence upon such insurance.

Upon request by Customer, AENOVA will dispatch Product ready to be picked up to a carrier designated by Customer.

 

	
2.
	
Limitation of Liability

AENOVA  ́s liabilities for the storage services as detailed in this Schedule F shall be limited to negligence or willful misconduct. With the exception of cases of willful misconduct, AENOVA shall not be liable to Customer for any indirect, punitive or consequential damages or loss of profit, whether based on contract, tort or rising under other applicable laws. With the exception of cases of willful misconduct, the Parties’ respective total liability under this Schedule F shall in no event exceed an amount equal to [***].

AENOVA DOES NOT MAKE OR HAS MADE ANY OTHER REPRESENTATION, WARRANTY, COVENANT OR AGREEMENT (WHETHER EXPRESS OR IMPLIED).

28 | Pagerare-ex1043_602.htm

 

Exhibit 10.43

ULTRAGENYX PHARMACEUTICAL INC.
EMPLOYMENT INDUCEMENT PLAN

1.DEFINED TERMS

Exhibit A, which is incorporated by reference, defines the terms used in the Plan and sets forth certain operational rules related to those terms.

2.PURPOSE

The Plan has been established to advance the interests of the Company by providing for the grant to Participants of Stock-based and other incentive Awards as inducement awards for employment with the Company pursuant to Nasdaq Listing Rule 5635(c)(4) (or any successor rule or similar rule of any stock exchange on which the Stock is listed) 

3.ADMINISTRATION

The Administrator has discretionary authority, subject only to the express provisions of the Plan, to interpret the Plan; determine eligibility for and grant Awards; determine, modify or waive the terms and conditions of any Award; prescribe forms, rules and procedures relating to the Plan; and otherwise do all things necessary or appropriate to carry out the purposes of the Plan.  Determinations of the Administrator made under the Plan will be conclusive and will bind all parties.

4.LIMITS ON AWARDS UNDER THE PLAN

(a)Number of Shares.  The maximum number of shares of Stock that may be delivered in satisfaction of Awards under the Plan is 500,000.  For purposes of this Section 4(a), the aggregate number of shares available for issuance under this Plan at any time shall not be reduced by (i) shares subject to Awards that have been terminated, expired unexercised, forfeited or settled in cash, (ii) shares subject to Awards that have been retained or withheld by the Company in payment or satisfaction of the exercise price, purchase price or tax withholding obligation of an Award, or (iii) shares subject to Awards that otherwise do not result in the issuance of shares in connection with payment or settlement thereof.  In addition, shares that have been delivered (either actually or by attestation) to the Company in payment or satisfaction of the exercise price, purchase price or tax withholding obligation of an Award shall be available for issuance under this Plan.

(b)Type of Shares.  Stock delivered by the Company under the Plan may be authorized but unissued Stock or previously issued Stock acquired by the Company.  No fractional shares of Stock will be delivered under the Plan.

5.ELIGIBILITY AND PARTICIPATION

The Administrator will select Participants from Eligible Persons. 

 

 

6.RULES APPLICABLE TO AWARDS

(a)All Awards.

(1)Award Provisions.  The Administrator will determine the terms of all Awards, subject to the limitations provided herein.  By accepting (or, under such rules as the Administrator may prescribe, being deemed to have accepted) an Award, the Participant will be deemed to have agreed to the terms of the Award and the Plan.  Notwithstanding any provision of this Plan to the contrary, awards of an acquired company that are converted, replaced or adjusted in connection with the acquisition may contain terms and conditions that are inconsistent with the terms and conditions specified herein, as determined by the Administrator.

(2)Term of Plan.  No Awards may be made after ten years from February 3, 2021, but previously granted Awards may continue beyond that date in accordance with their terms.

(3)Transferability.  Except as the Administrator otherwise expressly provides in accordance with the second sentence of this Section 6(a)(3), Awards may not be transferred other than by will or by the laws of descent and distribution.  During a Participant’s lifetime, except as the Administrator otherwise expressly, SARs and Stock Options may be exercised only by the Participant.  The Administrator may permit the gratuitous transfer (i.e., transfer not for value) of Awards to any transferee eligible to be covered by the provisions of Form S-8 (under the Securities Act), subject to such limitations as the Administrator may impose.

(4)Vesting, etc.  The Administrator will determine the time or times at which an Award will vest or become exercisable and the terms on which a Stock Option or SAR will remain exercisable.  Without limiting the foregoing, the Administrator may at any time accelerate the vesting or exercisability of an Award, regardless of any adverse or potentially adverse tax or other consequences resulting from such acceleration.  Unless the Administrator expressly provides otherwise, however, the following rules will apply if a Participant’s Employment ceases:

(A)Immediately upon the cessation of the Participant’s Employment and except as provided in (B) and (C) below, each Stock Option and SAR that is then held by the Participant or by the Participant’s permitted transferees, if any, will cease to be exercisable and will terminate and all other Awards that are then held by the Participant or by the Participant’s permitted transferees, if any, to the extent not already vested will be forfeited.

(B)Subject to (C) and (D) below, all Stock Options and SARs held by the Participant or the Participant’s permitted transferees, if any, immediately prior to the cessation of the Participant’s Employment, to the extent then exercisable, will remain exercisable for the lesser of (i) a period of three months or (ii) the period ending on the latest date on which such Stock Option or SAR could have been exercised without regard to this Section 6(a)(4), and will thereupon immediately terminate.

(C)All Stock Options and SARs held by a Participant or the Participant’s permitted transferees, if any, immediately prior to the Participant’s death, to the extent then exercisable, will remain exercisable for the lesser of (i) the one year period 

2

 

ending with the first anniversary of the Participant’s death or (ii) the period ending on the latest date on which such Stock Option or SAR could have been exercised without regard to this Section 6(a)(4), and will thereupon immediately terminate.

(D)All Stock Options and SARs (whether or not exercisable) held by a Participant or the Participant’s permitted transferees, if any, immediately prior to the cessation of the Participant’s Employment will immediately terminate upon such cessation of Employment if the termination is for Cause or occurs in circumstances that in the sole determination of the Administrator would have constituted grounds for the Participant’s Employment to be terminated for Cause.

(5)Additional Restrictions.  The Administrator may cancel, rescind, withhold or otherwise limit or restrict any Award at any time if the Participant is not in compliance with all applicable provisions of the Award agreement and the Plan, or if the Participant breaches any agreement with the Company or any Affiliate with respect to confidentiality.  Without limiting the generality of the foregoing, the Administrator may recover Awards made under the Plan and payments under or gain in respect of any Award to the extent required to comply with Company policy, with Section 10D of the Exchange Act or any stock exchange or similar rule adopted under said Section.

(6)Taxes.  The delivery, vesting and retention of Stock, cash or other property under an Award are conditioned upon full satisfaction by the Participant of all tax withholding requirements with respect to the Award.  The Administrator will prescribe such rules for the withholding of taxes as it deems necessary.  The Administrator may, but need not, hold back shares of Stock from an Award or permit a Participant to tender previously owned shares of Stock in satisfaction of tax withholding requirements.

(7)Dividend Equivalents, Etc.  The Administrator may provide for the payment of amounts (on terms and subject to conditions established by the Administrator) in lieu of cash dividends or other cash distributions with respect to Stock subject to an Award whether or not the holder of such Award is otherwise entitled to share in the actual dividend or distribution in respect of such Award.  Any entitlement to dividend equivalents or similar entitlements will be established and administered either consistent with an exemption from, or in compliance with, the requirements of Section 409A.  Dividends or dividend equivalent amounts payable in respect of Awards that are subject to restrictions may be subject to such limits or restrictions as the Administrator may impose.

(8)Rights Limited.  Nothing in the Plan will be construed as giving any person the right to continued employment or service with the Company or any Affiliate, or any rights as a stockholder except as to shares of Stock actually issued under the Plan.  The loss of existing or potential profit in Awards will not constitute an element of damages in the event of termination of Employment for any reason, even if the termination is in violation of an obligation of the Company or any Affiliate to the Participant.

(9)Coordination with Other Plans.  Awards under the Plan may be granted in tandem with other Awards under the Plan or awards made under other compensatory plans or programs of the Company or any Affiliate.  

3

 

(10)Section 409A.  Each Award will contain such terms as the Administrator determines, and will be construed and administered, such that the Award either qualifies for an exemption from the requirements of Section 409A or satisfies such requirements.

(11)Fair Market Value.  In determining the fair market value of any share of Stock under the Plan, the Administrator will make the determination in good faith consistent with the rules of Section 409A to the extent applicable.

(b)Stock Options and SARs.

(1)Time and Manner of Exercise.  Unless the Administrator expressly provides otherwise, no Stock Option or SAR will be deemed to have been exercised until the Administrator receives a notice of exercise (in form acceptable to the Administrator), which may be an electronic notice, signed (including electronic signature in form acceptable to the Administrator) by the appropriate person and accompanied by any payment required under the Award.  A Stock Option or SAR exercised by any person other than the Participant will not be deemed to have been exercised until the Administrator has received such evidence as it may require that the person exercising the Award has the right to do so.

(2)Exercise Price.  The exercise price (or the base value from which appreciation is to be measured) of each Award requiring exercise will be no less than 100% of the fair market value of the Stock subject to the Award, determined as of the date of grant, or such higher amount as the Administrator may determine in connection with the grant.  Fair market value will be determined by the Administrator consistent with the applicable requirements of Section 409A.

(3)Payment of Exercise Price.  Where the exercise of an Award is to be accompanied by payment, payment of the exercise price will be by cash or check acceptable to the Administrator or by such other legally permissible means, if any, as may be acceptable to the Administrator.

(4)Maximum Term.  Stock Options and SARs will have a maximum term not to exceed 10 years from the date of grant; provided, however, that, if a Participant still holding an outstanding but unexercised Stock Option or SAR 10 years from the date of grant (or, in the case of a Stock Option or SAR with a maximum term of less than 10 years, such maximum term) is prohibited by applicable law or a written policy of the Company applicable to similarly situated employees from engaging in any open-market sales of Stock, and if at such time the Stock is publicly traded (as determined by the Administrator), the maximum term of such Award will instead be deemed to expire on the 30th day following the date the Participant is no longer prohibited from engaging in such open market sales.

(5)No Repricing without Stockholder Approval.  Other than in connection with a change in the Company’s capitalization (as described in Section 7(b)), the Company shall not, without stockholder approval, reduce the exercise price of a Stock Option or SAR and, at any time when the exercise price of a Stock Option or SAR is above the fair market value of a share of Stock, the Company shall not, without stockholder approval (except in the case of a Covered Transaction), cancel and re-grant or exchange such Stock Option or SAR for cash or a new Award.

4

 

7.EFFECT OF CERTAIN TRANSACTIONS

(a)Mergers, etc.  Except as otherwise provided in an Award agreement, the following provisions will apply in the event of a Covered Transaction:

(1)Assumption or Substitution.  If the Covered Transaction is one in which there is an acquiring or surviving entity, the Administrator may (but, for the avoidance of doubt, need not) provide (i) for the assumption or continuation of some or all outstanding Awards or any portion thereof or (ii) for the grant of new awards in substitution therefor by the acquiror or survivor or an affiliate of the acquiror or survivor.

(2)Cash-Out of Awards.  Subject to Section 7(a)(5) below the Administrator may (but, for the avoidance of doubt, need not) provide for payment (a “cash-out”), with respect to some or all Awards or any portion thereof, equal in the case of each affected Award or portion thereof to the excess, if any, of (A) the fair market value of one share of Stock (as determined by the Administrator in its reasonable discretion) times the number of shares of Stock subject to the Award or such portion, over (B) the aggregate exercise or purchase price, if any, under the Award or such portion (in the case of an SAR, the aggregate base value above which appreciation is measured), in each case on such payment terms (which need not be the same as the terms of payment to holders of Stock) and other terms, and subject to such conditions, as the Administrator determines.

(3)Acceleration of Certain Awards.  Subject to Section 7(a)(5) below, the Administrator may (but, for the avoidance of doubt, need not) provide that any Award requiring exercise will become exercisable, in full or in part and/or that the delivery of any shares of Stock remaining deliverable under any outstanding Award of Stock Units (including Restricted Stock Units and Performance Awards to the extent consisting of Stock Units) will be accelerated in full or in part, in each case on a basis that gives the holder of the Award a reasonable opportunity, as determined by the Administrator, following exercise of the Award or the delivery of the shares, as the case may be, to participate as a stockholder in the Covered Transaction.

(4)Termination of Awards Upon Consummation of Covered Transaction.  Except as the Administrator may otherwise determine in any case, each Award will automatically terminate (and in the case of outstanding shares of Restricted Stock, will automatically be forfeited) upon consummation of the Covered Transaction, other than Awards assumed or continued pursuant to Section 7(a)(1) above.

(5)Additional Limitations.  Any share of Stock and any cash or other property delivered pursuant to Section 7(a)(2) or Section 7(a)(3) above with respect to an Award may, in the discretion of the Administrator, contain such restrictions, if any, as the Administrator deems appropriate to reflect any performance or other vesting conditions to which the Award was subject and that did not lapse (and were not satisfied) in connection with the Covered Transaction.  For purposes of the immediately preceding sentence, a cash-out under Section 7(a)(2) above or acceleration under Section 7(a)(3) above will not, in and of itself, be treated as the lapsing (or satisfaction) of a performance or other vesting condition.  In the case of Restricted Stock that does not vest and is not forfeited in connection with the Covered Transaction, the Administrator may require that any amounts delivered, exchanged or otherwise paid in respect of such Stock in 

5

 

connection with the Covered Transaction be placed in escrow or otherwise made subject to such restrictions as the Administrator deems appropriate to carry out the intent of the Plan.

(b)Changes in and Distributions With Respect to Stock.

(1)Basic Adjustment Provisions.  In the event of a stock dividend, stock split or combination of shares (including a reverse stock split), recapitalization or other change in the Company’s capital structure that constitutes an equity restructuring within the meaning of FASB ASC 718, the Administrator will make appropriate adjustments to the maximum number of shares specified in Section 4(a) that may be delivered under the Plan, and will also make appropriate adjustments to the number and kind of shares of stock or securities subject to Awards then outstanding or subsequently granted, any exercise prices relating to Awards and any other provision of Awards affected by such change.

(2)Certain Other Adjustments.  The Administrator may also make adjustments of the type described in Section 7(b)(1) above to take into account distributions to stockholders other than those provided for in Section 7(a) and 7(b)(1), or any other event, if the Administrator determines that adjustments are appropriate to avoid distortion in the operation of the Plan, having due regard for the requirements of Section 409A, where applicable.

(3)Continuing Application of Plan Terms.  References in the Plan to shares of Stock will be construed to include any stock or securities resulting from an adjustment pursuant to this Section 7.

8.LEGAL CONDITIONS ON DELIVERY OF STOCK

The Company will not be obligated to deliver any shares of Stock pursuant to the Plan or to remove any restriction from shares of Stock previously delivered under the Plan until:  (i) the Company is satisfied that all legal matters in connection with the issuance and delivery of such shares have been addressed and resolved; (ii) if the outstanding Stock is at the time of delivery listed on any stock exchange or national market system, the shares to be delivered have been listed or authorized to be listed on such exchange or system upon official notice of issuance; and (iii) all conditions of the Award have been satisfied or waived.  The Company may require, as a condition to exercise of the Award, such representations or agreements as counsel for the Company may consider appropriate to avoid violation of the Securities Act or any applicable state or non-U.S. securities law.  Any Stock required to be issued to Participants under the Plan will be evidenced in such manner as the Administrator may deem appropriate, including book-entry registration or delivery of stock certificates.  In the event that the Administrator determines that Stock certificates will be issued to Participants under the Plan, the Administrator may require that certificates evidencing Stock issued under the Plan bear an appropriate legend reflecting any restriction on transfer applicable to such Stock, and the Company may hold the certificates pending lapse of the applicable restrictions.

9.AMENDMENT AND TERMINATION

The Administrator may at any time or times amend the Plan or any outstanding Award for any purpose which may at the time be permitted by law, and may at any time terminate the Plan as to any future grants of Awards; provided, that except as otherwise expressly provided in the 

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Plan the Administrator may not, without the Participant’s consent, alter the terms of an Award so as to affect materially and adversely the Participant’s rights under the Award, unless the Administrator expressly reserved the right to do so at the time the Award was granted.  Any amendments to the Plan will be conditioned upon stockholder approval only to the extent, if any, such approval is required by law (including the Code and applicable stock exchange requirements), as determined by the Administrator.

10.OTHER COMPENSATION ARRANGEMENTS

The existence of the Plan or the grant of any Award will not in any way affect the Company’s right to Award a person bonuses or other compensation in addition to Awards under the Plan.

11.MISCELLANEOUS

(a)Waiver of Jury Trial.  By accepting an Award under the Plan and to the extent permitted under applicable law, each Participant waives any right to a trial by jury in any action, proceeding or counterclaim concerning any rights under the Plan and any Award, or under any amendment, waiver, consent, instrument, document or other agreement delivered or which in the future may be delivered in connection therewith, and agrees that any such action, proceedings or counterclaim will be tried before a court and not before a jury.  By accepting an Award under the Plan, each Participant certifies that no officer, representative, or attorney of the Company has represented, expressly or otherwise, that the Company would not, in the event of any action, proceeding or counterclaim, seek to enforce the foregoing waivers.  Notwithstanding anything to the contrary in the Plan, nothing herein is to be construed as limiting the ability of the Company and a Participant to agree to submit disputes arising under the terms of the Plan or any Award made hereunder to binding arbitration or as limiting the ability of the Company to require any eligible individual to agree to submit such disputes to binding arbitration as a condition of receiving an Award hereunder.

(b)Limitation of Liability.  Notwithstanding anything to the contrary in the Plan, neither the Company, nor any Affiliate, nor the Administrator, nor any person acting on behalf of the Company, any Affiliate, or the Administrator, will be liable to any Participant or to the estate or beneficiary of any Participant or to any other holder of an Award by reason of any acceleration of income, or any additional tax (including any interest and penalties), asserted by reason of the failure of an Award to satisfy the requirements of Section 409A or by reason of Section 4999 of the Code, or otherwise asserted with respect to the Award; provided, that nothing in this Section 11(b) will limit the ability of the Administrator or the Company, in its discretion, to provide by separate express written agreement with a Participant for any payment in connection with any such acceleration of income or additional tax.

12.ESTABLISHMENT OF SUB-PLANS

The Administrator may from time to time establish one or more sub-plans under the Plan for purposes of satisfying applicable blue sky, securities or tax laws of various jurisdictions.  The Administrator will establish such sub-plans by adopting supplements to the Plan setting forth (i) such limitations on the Administrator’s discretion under the Plan as it deems necessary or desirable 

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and (ii) such additional terms and conditions not otherwise inconsistent with the Plan as it deems necessary or desirable.  All supplements so established will be deemed to be part of the Plan, but each supplement will apply only to Participants within the affected jurisdiction (as determined by the Administrator).

13.GOVERNING LAW

(a)Certain Requirements of Corporate Law.  Awards will be granted and administered consistent with the requirements of applicable Delaware law relating to the issuance of Stock and the consideration to be received therefor, and with the applicable requirements of the stock exchanges or other trading systems on which the Stock is listed or entered for trading, in each case as determined by the Administrator.

(b)Other Matters.  Except as otherwise provided by the express terms of an Award agreement, under a sub-plan described in Section 12 or as provided in Section 13(a) above, the provisions of the Plan and of Awards under the Plan and all claims or disputes arising out of or based upon the Plan or any Award under the Plan or relating to the subject matter hereof or thereof will be governed by and construed in accordance with the domestic substantive laws of the State of Delaware without giving effect to any choice or conflict of laws provision or rule that would cause the application of the domestic substantive laws of any other jurisdiction.

(c)Jurisdiction.  By accepting an Award, each Participant will be deemed to (i) have submitted irrevocably and unconditionally to the jurisdiction of the federal and state courts located within the geographic boundaries of the United States District Court for the Northern District of California for the purpose of any suit, action or other proceeding arising out of or based upon the Plan or any Award; (ii) agree not to commence any suit, action or other proceeding arising out of or based upon the Plan or an Award, except in the federal and state courts located within the geographic boundaries of the United States District Court for the Northern District of California; and (iii) waive, and agree not to assert, by way of motion as a defense or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that the Plan or an Award or the subject matter thereof may not be enforced in or by such court.

 

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EXHIBIT A

Definition of Terms

The following terms, when used in the Plan, will have the meanings and be subject to the provisions set forth below:

“Administrator”:  The Compensation Committee, except that the Compensation Committee may delegate (i) to one or more of its members (or one or more other members of the Board (including the full Board)) such of its duties, powers and responsibilities as it may determine; (ii) to one or more officers of the Company the power to grant Awards to the extent permitted by Section 157(c) of the Delaware General Corporation Law; and (iii) to such Employees or other persons as it determines such ministerial tasks as it deems appropriate; provided, however, that such delegation does not (A) violate state or corporate law or (B) result in the loss of any exemption under Rule 16b-3 promulgated under the Exchange Act for Awards granted to Participants subject to Section 16 of the Exchange Act.  In the event of any delegation described in the preceding sentence, the term “Administrator” will include the person or persons so delegated to the extent of such delegation.

“Affiliate”:  Any corporation or other entity that stands in a relationship to the Company that would result in the Company and such corporation or other entity being treated as one employer under Section 414(b) and Section 414(c) of the Code.

“Award”:  Any or a combination of the following: (i) Stock Options, (ii) SARs, (iii) Restricted Stock, (iv) Unrestricted Stock, (v) Stock Units, including Restricted Stock Units, (vi) Performance Awards, (vii) Cash Awards or (viii) awards (other than Awards described in (i) through (vii) above) that are convertible into or otherwise based on Stock.

“Board”:  The Board of Directors of the Company.

“Cash Award”:  An Award denominated in cash.

“Cause”:  In the case of any Participant who is party to an employment or severance-benefit agreement that contains a definition of “Cause,” the definition set forth in such agreement will apply with respect to such Participant under the Plan.  In the case of any other Participant, “Cause” will mean, as determined by the Administrator in its reasonable judgment, (i) a substantial failure of the Participant to perform the Participant’s duties and responsibilities to the Company or subsidiaries or substantial negligence in the performance of such duties and responsibilities; (ii) the commission by the Participant of a felony or a crime involving moral turpitude; (iii) the commission by the Participant of theft, fraud, embezzlement, material breach of trust or any material act of dishonesty involving the Company or any of its subsidiaries; (iv) a significant violation by the Participant of the code of conduct of the Company or its subsidiaries of any material policy of the Company or its subsidiaries, or of any statutory or common law duty of loyalty to the Company or its subsidiaries; (v) material breach of any of the terms of the Plan or any Award made under the Plan, or of the terms of any other agreement between the Company or subsidiaries and the Participant; or (vi) other conduct by the Participant that could be expected to be harmful to the business, interests or reputation of the Company.

A-1

 

“Code”:  The U.S. Internal Revenue Code of 1986, as from time to time amended and in effect, or any successor statute as from time to time in effect.

“Company”:  Ultragenyx Pharmaceutical Inc.

“Compensation Committee”:  The Compensation Committee of the Board.

“Covered Transaction”:  Any of (i) a consolidation, merger, or similar transaction or series of related transactions, including a sale or other disposition of stock, in which the Company is not the surviving corporation or which results in the acquisition of all or substantially all of the Company’s then outstanding common stock by a single person or entity or by a group of persons and/or entities acting in concert, (ii) a sale or transfer of all or substantially all the Company’s assets, or (iii) a dissolution or liquidation of the Company.  Where a Covered Transaction involves a tender offer that is reasonably expected to be followed by a merger described in clause (i) (as determined by the Administrator), the Covered Transaction will be deemed to have occurred upon consummation of the tender offer.

“Eligible Person” means any Employee who is eligible to receive employment inducement grants under the Nasdaq Listing Rule 5635(c)(4) (or any successor rule or similar rule of any stock exchange on which the Stock is listed). 

“Employee”:  Any person who is employed by the Company or an Affiliate.

“Employment”:  A Participant’s employment or other service relationship with the Company and the Affiliates, which may include service as a director, consultant or independent contractor.  Employment will be deemed to continue, unless the Administrator expressly provides otherwise, so long as the Participant is employed by, or otherwise is providing services in a capacity described in Section 5 to the Company or an Affiliate.  If a Participant’s employment or other service relationship is with an Affiliate and that entity ceases to be an Affiliate, the Participant’s Employment will be deemed to have terminated when the entity ceases to be an Affiliate unless the Participant transfers Employment to the Company or its remaining Affiliates.  Notwithstanding the foregoing and the definition of “Affiliate” above, in construing the provisions of any Award relating to the payment of “nonqualified deferred compensation” (subject to Section 409A) upon a termination or cessation of Employment, references to termination or cessation of employment, separation from service, retirement or similar or correlative terms will be construed to require a “separation from service” (as that term is defined in Section 1.409A-1(h) of the Treasury Regulations) from the Company and from all other corporations and trades or businesses, if any, that would be treated as a single “service recipient” with the Company under Section 1.409A-1(h)(3) of the Treasury Regulations.  The Company may, but need not, elect in writing, subject to the applicable limitations under Section 409A, any of the special elective rules prescribed in Section 1.409A-1(h) of the Treasury Regulations for purposes of determining whether a “separation from service” has occurred.  Any such written election will be deemed a part of the Plan.

“Exchange Act”: Securities Exchange Act of 1934, as from time to time amended and in effect, or any successor statute as from time to time in effect.

“Participant”:  A person who is granted an Award under the Plan.

A-2

 

“Performance Award”:  An Award subject to Performance Criteria.  

“Performance Criteria”:  Specified criteria, other than the mere continuation of Employment or the mere passage of time, the satisfaction of which is a condition for the grant, exercisability, vesting or full enjoyment of an Award.  A Performance Criterion and any targets with respect thereto determined by the Administrator need not be based upon an increase, a positive or improved result or avoidance of loss.  The Administrator may provide in the case of any Award intended to qualify for such exception that one or more of the Performance Criteria applicable to such Award will be adjusted in an objectively determinable manner to reflect events (for example, but without limitation, acquisitions or dispositions) occurring during the performance period that affect the applicable Performance Criterion or Criteria.

“Plan”:  The Ultragenyx Pharmaceutical Inc. Employment Inducement Plan, as from time to time amended and in effect.

“Restricted Stock”:  Stock subject to restrictions requiring that it be redelivered or offered for sale to the Company if specified conditions are not satisfied.

“Restricted Stock Unit”:  A Stock Unit that is, or as to which the delivery of Stock or cash in lieu of Stock is, subject to the satisfaction of specified performance or other vesting conditions.

“SAR”:  A right entitling the holder upon exercise to receive an amount (payable in cash or in shares of Stock of equivalent value) equal to the excess of the fair market value of the shares of Stock subject to the right over the base value from which appreciation under the SAR is to be measured.

“Section 409A”:  Section 409A of the Code.

“Securities Act”: U.S. Securities Act of 1933, as from time to time amended and in effect, or any successor statute as from time to time in effect.

“Stock”:  Common stock of the Company, par value $0.001 per share.

“Stock Option”:  An option entitling the holder to acquire shares of Stock upon payment of the exercise price.  Each Stock Option granted pursuant to the Plan will be treated as providing by its terms that it is not intended to be an “incentive stock option” within the meaning of Section 422 of the Code.

“Stock Unit”:  An unfunded and unsecured promise, denominated in shares of Stock, to deliver Stock or cash measured by the value of Stock in the future.

“Unrestricted Stock”:  Stock not subject to any restrictions under the terms of the Award.

A-3

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