Document:

Exhibit 4.1

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

EXECUTION DRAFT

 

 

COLLABORATIVE RESEARCH AND LICENSE AGREEMENT

 

 

between

 

 

Alexion Pharma Holding Unlimited Company

 

and

 

Zealand Pharma A/S.

 

 

Dated March 20, 2019

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

COLLABORATIVE RESEARCH AND LICENSE AGREEMENT

 

THIS COLLABORATIVE RESEARCH AND LICENSE AGREEMENT (the “Agreement”), effective as of March 20, 2019 (the “Effective Date”), is entered into by and between Zealand Pharma A/S, a public limited liability company organized under the laws of Denmark having a place of business at Smedland 36, 2600 Glostrup, Copenhagen, Denmark (“ZEALAND”) and Alexion Pharma Holding Unlimited Company, an unlimited liability company incorporated under the laws of Ireland with a principal place of business at 22 Victoria Street, Hamilton HM 12 Bermuda (“ALEXION”, collectively with ZEALAND, the “Parties” and each, a “Party”)

 

RECITALS

 

WHEREAS, ZEALAND has developed and owns or has rights to certain patents and technology relating to the discovery, design, and development of peptide-based drug candidates and methods of making and using the same;

 

WHEREAS, ALEXION is engaged in, among other things, discovery, clinical Development and Commercialization of pharmaceutical products and has expertise in diseases involving the Complement Pathway (as defined below);

 

WHEREAS, ALEXION and ZEALAND are interested in collaborating to perform research and development activities to identify Candidate Products for targets in the Complement Pathway (each as defined below), which Candidate Products, once selected, would be further developed by the Parties and commercialized by ALEXION, in accordance with the terms and conditions set forth in this Agreement; and

 

WHEREAS, ALEXION desires to obtain from ZEALAND the rights and licenses set forth herein, and ZEALAND desires to grant such rights and licenses to ALEXION, including exclusive worldwide licenses, all on the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, the Parties hereto agree as follows:

 

1.             DEFINITIONS

 

1.1                               “Acceptance” means: (a) with respect to an NDA, receipt of a written communication from the applicable Regulatory Authority acknowledging that it has received such Regulatory Approval Application and that such Regulatory Approval Application is sufficiently complete to permit a substantive review for approval purposes; or (b) with respect to an IND, receipt of a written notice or other confirmation in accordance with Applicable Law that the IND is valid and effective and a Phase 1 clinical study may be commenced.  For clarity, a clinical trial authorisation issued by a competent authority in a member state in the European Union (such expression shall include the United Kingdom) would constitute a confirmation that the Phase 1 clinical study may be commenced.

 

1.2                               “Acquirer” has the meaning set forth in Section 13.1.

 

1.3                               “Additional Target” has the meaning set forth in Section 2.5.

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

1.4                               “Additional Target Notice” has the meaning set forth in Section 2.5.

 

1.5                               “Additional Target Trigger Date” has the meaning set forth in Section 2.5.

 

1.6                               “Affiliates” means, with respect to a Party or Third Party, any company or business or entity controlled by, controlling, or under common control with such Party or Third Party.  For the purpose of this definition, “control” means direct or indirect beneficial ownership of at least fifty percent (50%) interest in the voting stock (or the equivalent) of such person or entity or having the right to direct, appoint or remove a majority or more of the members of its board of directors (or their equivalent), or having the power to control the general management of such person or entity, by contract, law or otherwise.

 

1.7                               “Agreement Patent Rights” has the meaning set forth in Section 9.3.1.

 

1.8                               “ALEXION Background Intellectual Property” means (a) any [***] that (i) is [***] under this Agreement and (ii) is [***] and (b) any [***] in (a). For the avoidance of doubt, the list of Complement Pathway Targets set forth on APPENDIX 2 hereto shall, except to the extent it falls within the exemptions set out in Section 8.4, be deemed to be ALEXION Background Intellectual Property, and shall be subject to the confidentiality and non-use obligations in Article 8.

 

1.9                               “ALEXION Indemnitees” has the meaning set forth in Section 11.1.

 

1.10                        “Applicable Law” means all applicable laws, rules and regulations (including any rules, regulations, guidelines or other requirements of the Regulatory Authorities or other governmental agency) that may be in effect from time to time.

 

1.11                        “Auditor” has the meaning set forth in Section 6.13.1.

 

1.12                        “Board of Directors” has the meaning set forth in Section 1.21(i).

 

1.13                        “Business Day” means any day other than (i) Saturday, (ii) Sunday or (iii) any day on which commercial banks in Boston, MA USA or Copenhagen, Denmark are authorized or required by law to close.

 

1.14                        “Calendar Quarter” means a period of three calendar months ending on March 31st, June 30th, September 30th or December 31st in any Calendar Year; provided that the first Calendar Quarter of the Term shall begin on the Effective Date and end on the last day of the then current Calendar Quarter and the last Calendar Quarter of the Term shall begin on the first day of such Calendar Quarter and end on the last day of the Term.

 

1.15                        “Calendar Year” means a one-year period beginning on January 1st and ending on December 31st; provided that the first Calendar Year of the Term shall begin on the Effective Date and end on December 31 of the then current Calendar Year and the last Calendar Year of the Term shall begin on the first day of such Calendar Year and end on the last day of the Term.

 

1.16                        “Candidate Product(s)” means, on a Target-by-Target basis, the specific molecule(s) existing as of the Effective Date (including any Existing Lead Molecules) or identified by ZEALAND (including through any permitted subcontractor or sublicensee) through the conduct of the

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Discovery/Development Program that (i) meet the Candidate Product Criteria set forth in the relevant Development Plan or (ii) [***] that are otherwise designated by ALEXION in writing to be a “Candidate Product”.

 

1.17                        “Candidate Product Criteria” means, with respect to a Target, the success criteria agreed upon by the Parties for the molecules directed to such Target as set forth in the applicable Discovery Plan.

 

1.18                        “C.F.R.” means the U.S. Code of Federal Regulations.

 

1.19                        “cGCP” means all applicable good clinical practice laws, regulations, and standards related to the design, conduct, performance, monitoring, auditing, recording, analyses and reporting of Clinical Trials, including, as applicable (a) as set forth in the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use Harmonized Tripartite Guideline for Good Clinical Practice (ICH E6 R2) and any other guidelines related to good clinical practice for trials on medicinal products in the Territory, (b) the Declaration of Helsinki (2004) as last amended at the 52nd World Medical Association in October 2000 and any further amendments or clarifications thereto, (c) 21 C.F.R. Parts 50 (Protection of Human Subjects), 56 (Institutional Review Boards), and 312 (Investigational New Drug Application), and 42 C.F.R. Part 45 (Protection of Human Subjects or the Common Rule), and (d) the equivalent Applicable Law in the region in the Territory, each as applicable from time to time and in each case, that provide for, among other things, assurance that the clinical data and reported results are credible and accurate and protect the rights, integrity, and confidentiality of trial subjects.

 

1.20                        “cGMP” means all applicable current good manufacturing practice requirements, standards and guidelines, including, as applicable, (a) the U.S. regulations related to current good manufacturing practices for drugs, biologics, devices and combination products, including 21 C.F.R. Parts 4, 210, 211, 312, 600-680, and 820 and related guidance documents, (b) European Directive 2003/94/EC and Eudralex 4, (c) the principles detailed in the International Conference on Harmonization’s Q7 guidelines, and (d) the equivalent Applicable Law in any relevant country or region, each as may be applicable from time to time.

 

1.21                        “Change of Control” means, with respect to a Party, the occurrence of any of the following after the Effective Date:

 

i.                                          any “person” or “group” (as such terms are defined below): (a) is or becomes the “beneficial owner” (as defined below), directly or indirectly, of shares of capital stock or other interests (including partnership interests) of such Party then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of the directors, managers or similar supervisory positions (“Voting Stock”) of such Party representing fifty percent (50%) or more of the total voting power of all outstanding classes of Voting Stock of such Party; or (b) has the power, directly or indirectly, to elect a majority of the members of the Party’s board of directors, or similar governing body (“Board of Directors”); or

 

ii.                                       such Party enters into a merger, consolidation or similar transaction with another Person (whether or not such Party is the surviving entity) and as a result of such

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

merger, consolidation or similar transaction (a) the members of the Board of Directors of such Party immediately prior to such transaction constitute less than a majority of the members of the Board of Directors of such Party or such surviving Person immediately following such transaction; or (b) the Persons that beneficially owned, directly or indirectly, the shares of Voting Stock of such Party immediately prior to such transaction cease to beneficially own, directly or indirectly, shares of Voting Stock of such Party representing at least a majority of the total voting power of all outstanding classes of Voting Stock of the surviving Person; or

 

iii.                                    such Party sells or transfers to any Third Party, in one or more related transactions, properties or assets representing all or substantially all of such Party’s consolidated total assets to which this Agreement relates; or

 

iv.                                   the holders of capital stock of such Party approve a plan or proposal for the liquidation or dissolution of such Party.

 

For the purpose of this definition of “Change of Control,” (a) “person” and “group” have the meanings given such terms under Section 13(d) and 14(d) of the United States Securities Exchange Act of 1934 and the term “group” includes any group acting for the purpose of acquiring, holding or disposing of securities within the meaning of Rule 13d-5(b)(1) under the said Act; (b) a “beneficial owner” will be determined in accordance with Rule 13d-3 under the aforesaid Act; and (c) the terms “beneficially owned” and “beneficially own” will have meanings correlative to that of “beneficial owner.”

 

1.22                        “Clinical Trial” means a clinical trial in humans of a product, including a Phase I Clinical Trial, a Phase II Clinical Trial or a Pivotal Clinical Trial.

 

1.23                        “CMO” means a Third Party contract manufacturer.

 

1.24                        “CMO Supply Agreement” has the meaning set forth in Section 5.1.

 

1.25                        “Collaboration IP” means any Intellectual Property that is [***] (a) [***], or (b) [***], in each case under clauses (a) and (b) [***] under this Agreement; provided that any such Intellectual Property that is [***].

 

1.26                        “Combination Product” means (a) any single product in finished form containing as active ingredients both a Product and one or more other pharmaceutically active compounds or substances, whether co-formulated or co-packaged (i.e., within a single box or sales unit); or (b) any Product sold in combination with one or more other products (such as devices) or services for a single invoice price; or (c) any Product sold where the sale of the Product is only available with the purchase of other products or services (such other pharmaceutically active compounds or substances, or such other products (such as devices) or services referred to in clauses (a) through (c) hereof, the “Other Components”).

 

1.27                        “Commercialization”, “Commercializing” or “Commercialize” means any and all activities related to the pre-marketing, launching, marketing, promotion (including advertising and detailing), labeling, pricing, distribution, storage, handling, offering for sale, selling, having sold, importing and exporting for sale, having imported and exported for sale, distribution, having

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

distributed, customer service and support, and post-marketing safety surveillance and reporting of a product (including a Product), but not including Development or Manufacturing.

 

1.28                        “Commercially Reasonable Efforts” means, with respect to [***], that level of efforts and resources [***], taking into account, as applicable, [***], and all other relevant factors.  The [***] set forth in the immediately preceding sentence shall in no event require [***].  Commercially Reasonable Efforts shall be determined [***].

 

1.29                        “Competitor” means any [***] company with [***].

 

1.30                        “Complement Pathway” means any [***], including the [***] pathways.

 

1.31                        “Complement Pathway Target(s)” means the Lead Target and such other Complement Pathway targets listed on APPENDIX 2.

 

1.32                        “Confidential Information” has the meaning as defined in Section 8.1.

 

1.33                        “Control” or “Controlled” means, with respect to any Intellectual Property, the possession by a Party or any of its Affiliates, whether by ownership or license (other than by a license granted under this Agreement), of the ability to grant to the other Party access to or ownership of such Intellectual Property, or, a license or a sublicense in, to or under such Intellectual Property, as provided herein, without requiring the consent of a Third Party or violating the terms of any agreement or other arrangement with any Third Party. A Party shall not be deemed to Control any Intellectual Property that is owned or controlled by an Acquirer, except to the extent that any such Patent Rights or Know-How were developed in the course of such Party’s or such Acquirer’s performance of activities under this Agreement or through the use or application of the other Party’s Intellectual Property or Confidential Information.

 

1.34                        “Cover”, “Covering” or “Covered” means, with respect to a product, technology, process, method or mode of administration that, in the absence of ownership of or a license granted under a particular Patent Right, the Manufacture, use, offer for sale, sale or importation of such product or composition of matter or the practice of such technology, process, method or mode of administration would infringe such Patent Right.

 

1.35                        “CPI” means the Consumer Price Index as published by Statistics Denmark from time to time.

 

1.36                   “Created Lead Molecule” means any peptide or other molecule that is created and identified by or on behalf of ZEALAND or its Affiliates (including through any permitted subcontractor or sublicensee) through conduct of the Lead Discovery/Development Program to have or that is intended to have pharmaceutically useful binding to or modulation of the Lead Target.

 

1.37                   “Created Lead Product” means any pharmaceutical composition in any formulation or for any route of administration, and in any dosage strength or presentation that is, contains or consists of one or more Candidate Products that are Created Lead Molecules whether alone or with other active ingredients but excluding any Existing Lead Molecules.

 

1.38                        “Damages” has the meaning set forth in Section 11.1.

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

1.39                        “Debarred” means, with respect to an individual or entity, that such individual or entity has been debarred or suspended under 21 U.S.C. §335(a) or (b), the subject of a conviction described in 21 U.S.C. §335a, disqualified as a clinical investigator under 21 C.F.R. §§312.70 or 812.119, disqualified as a testing facility under 21 C.F.R. §58.202, excluded from a federal or governmental health care program, debarred from federal contracting, convicted of or pled nolo contendere to any felony, or to any federal or state legal violation (including misdemeanors) relating to prescription drug products or fraud, the subject to OFAC sanctions or on the OFAC list of specially designated nationals, or the subject of any similar sanction of any governmental authority in the Territory.

 

1.40                        “Defaulting Party” has the meaning set forth in Section 12.3.

 

1.41                        “Deliverables” means any and all deliverables to be generated or provided by ZEALAND in connection with (i) the Discovery/Development Activities conducted by ZEALAND under the Discovery Plan and any Development Plans of a Discovery/Development Program, as specified therein or (ii) the [***] Work Plan as specified therein.

 

1.42                        “Develop” or “Development” means non-clinical and clinical drug research and development activities, whether before or after Regulatory Approval, including drug metabolism and pharmacokinetics, screening, discovery, synthesis, translational research, toxicology, pharmacology, test method development and stability testing, process and packaging development and improvement, process validation, process scale-up, formulation development, delivery system development, quality assurance and quality control development, statistical analysis, conduct of Clinical Trials, regulatory affairs, the preparation and submission of regulatory filings, Clinical Trial regulatory activities, and any other activities directed towards obtaining or maintaining Regulatory Approval of any product (including a Product).  Development includes use and importation of the relevant product to conduct such Discovery/Development Activities.  Development will not include Commercialization activities.

 

1.43                        “Development Decision Notice” means, with respect to one or more peptides or molecules, a written notice provided by ALEXION to ZEALAND notifying ZEALAND as to whether ALEXION has designated such peptide(s) or molecule(s) as a Candidate Product for further Development under a Development Plan of the applicable Discovery/Development Program as set forth in Section 2.2.4.

 

1.44                        “Development Milestone Event” has the meaning set forth in Section 6.3.1.

 

1.45                        “Development Milestone Payment” has the meaning set forth in Section 6.3.1.

 

1.46                        “Development Plan” has the meaning set forth in Section 2.1.2(b).

 

1.47                        “Development Plan Term” has the meaning set forth in Section 2.1.7.

 

1.48                        “Diligent Efforts” means, with respect to [***], that level of efforts and resources [***] in order to [***], except to the extent of any [***].

 

1.49                        “Disclosing Party” has the meaning set forth in Section 8.1.

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

1.50                        “Discontinued Product” means any Candidate Product, Existing Lead Product, Created Lead Product, or Optioned Product (in each case, other than one directed to a Target that is the subject of any Discovery/Development Program or is being Developed, Commercialized, or Manufactured by or on behalf of ALEXION, its Affiliates or its Sublicensees): (i) for which ALEXION decides to permanently discontinue all Development, Commercialization, and Manufacturing, (ii) which ALEXION decides to terminate pursuant to Section 12.6, or (iii) which is the subject of termination by ZEALAND pursuant to Section 12.2.1 or to the extent [***] that is the subject of a Patent Challenge by ALEXION and termination by ZEALAND pursuant to Section 12.7, in each case except to the extent that [***].

 

1.51                        “Discovery/Development Activities” means the activities set forth in each Discovery Plan or Development Plan to be conducted by ZEALAND with respect to a Target or any Candidate Product pursuant to a Discovery/Development Program during the Discovery/Development Program Term for such Target or Candidate Product.

 

1.52                        “Discovery/Development Program” means, on a Target-by-Target basis, the program of Discovery/Development Activities undertaken for each Target under the applicable Discovery Plan and any Development Plans as set forth in Article 2 including the Lead Development Program attached as APPENDIX 1 hereto, and any Discovery/Development Programs directed to a Selected Target, a Replacement Target or an Additional Target attached to this Agreement as APPENDIX 3 and incorporated herein after the Effective Date.

 

1.53                        “Discovery/Development Program Term” has the meaning set forth in Section 2.1.5.

 

1.54                        “Discovery Plan” has the meaning set forth in Section 2.1.2(a).

 

1.55                        “Discovery Plan Term” has the meaning set forth in Section 2.1.6.

 

1.56                        “DMF” has the meaning given in Section 4.3.

 

1.57                        “Dollar” means the U.S. dollar, and “$” will be interpreted accordingly.

 

1.58                        “Effective Date” has the meaning set forth in the preamble.

 

1.59                        “EMA” has the meaning set forth in Section 1.129.

 

1.60                        “Evaluation Period” means, with respect to one or more peptides or molecules included in the Results or Deliverables under a Discovery Plan, the period of time commencing upon the [***] for such peptides or molecules and ending on [***] (unless [***]).

 

1.61                        “Executive Meeting” has the meaning set forth in Section 13.8.

 

1.62                        “Executive Officers” has the meaning set forth in Section 13.8.

 

1.63                        “Existing Lead Molecule” means any cyclic peptide or other molecule (i) created by or on behalf of ZEALAND or its Affiliates (including through any subcontractor or sublicensee) and (ii) that has been identified and demonstrated to be directed to or to have pharmaceutically useful binding to or modulation of the Lead Target, all of which are identified on Schedule 1.63.

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

1.64                        “Existing Lead Product” means any pharmaceutical composition in any formulation or for any route of administration, and in any dosage strength or presentation that is, contains or consists of one or more Existing Lead Molecules whether alone or with other active ingredients.

 

1.65                        “Existing Product Sales Milestone Event” has the meaning set forth in Section 6.3.2

 

1.66                        “Existing Product Sales Milestone Payment” has the meaning set forth in Section 6.3.2.

 

1.67                        “Expended Discovery Costs” has the meaning set forth in Section 2.2.3.

 

1.68                        “FD&C Act” means the Federal Food, Drug and Cosmetic Act.

 

1.69                        “FDA” has the meaning set forth in Section 1.129.

 

1.70                        “Field” means any and all prophylactic, diagnostic and therapeutic uses in humans, including the use of Products for the diagnosis, treatment, palliation or prevention of any disease or medical or aesthetic condition in humans.

 

1.71                        “First Commercial Sale” means, on a country-by-country and Product-by-Product basis, the [***].  For the avoidance of doubt, [***] shall not be considered a First Commercial Sale.

 

1.72                        “FTE” means a qualified full time person, or more than one person working the equivalent of a full-time person, where “full time” is based upon a total of [***] working hours per Calendar Year of scientific or technical work carried out by a duly qualified employee of ZEALAND.  Overtime and work on weekends, holidays and the like shall not be counted with any multiplier (e.g. time-and-a-half or double time) toward the number of hours that are used to calculate the FTE contribution.

 

1.73                        “FTE Rate” means [***] dollars ($[***]) per FTE for the Calendar Years [***], subject to annual adjustment beginning on [***] to reflect any year to year percentage change in the average CPI for the immediately preceding Calendar Year, provided that any annual increase shall not exceed [***].

 

1.74                        “GAAP” means the generally accepted accounting principles in the United States of America (US GAAP), which principles are currently used at the relevant time and consistently applied by the applicable Party.

 

1.75                        “Generic Competition” means, with respect to a given Product or Combination Product in a given country in the Territory, that the sales of one (1) or more Generic Products in such country (other than a Generic Product sold by ALEXION or its Affiliates or by a Sublicensee under a license granted by ALEXION or its Affiliates) achieve, [***].  If no data is commercially available, then [***].

 

1.76                        “Generic Product” means, with respect to a Product, any product that is sold by a Third Party under a Regulatory Approval granted by a Regulatory Authority to a Third Party which Third Party has not obtained the right to market or sell such product from ALEXION (including as a Sublicensee, subcontractor, or Third Party distributor of ALEXION or any of its Affiliates) and

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

either (a) [***] or (b) [***], including but not limited to any product [***].  A Product [***] will not constitute a Generic Product.

 

1.77                        “GLP” means all applicable good laboratory practice laws, regulations, and standards, including, as applicable, as set forth in the then-current regulation for Good Laboratory Practice for Nonclinical Laboratory Studies in 21 C.F.R. Part 58, and the equivalent Applicable Law in the region in the Territory, each as may be applicable from time to time.

 

1.78                        “IND” means an Investigational New Drug application described in §505(i) of the FD&C Act and subject to 21 C.F.R. Part 312 or any comparable filings outside of the United States (such as a Clinical Trial Application in the European Union) required to commence human clinical trials in such country or region, and all supplements or amendments that may be filed with respect to the foregoing.

 

1.79                        “Indemnification Claim Notice” has the meaning set forth in Section 11.3.

 

1.80                        “Indemnified Party” has the meaning set forth in Section 11.3.

 

1.81                        “Indemnifying Party” has the meaning set forth in Section 11.3.

 

1.82                        “Infringed Patent” has the meaning set forth in Section 9.4.1.

 

1.83                        “Insolvency Event” has the meaning as defined in Section 12.3.

 

1.84                        “Intellectual Property” or “IP” means all (a) Patent Rights and (b) all rights, including Patent Rights, in, under and to all Inventions and Know-How.

 

1.85                        “Invention” means any process, method, utility, formulation, composition of matter, article of manufacture, material, creation, discovery or finding, or any improvement thereof, that is conceived and/or reduced to practice, whether patentable or not.

 

1.86                        “Invoice” means an original invoice sent by ZEALAND to ALEXION with respect to any payment due hereunder meeting the reasonable requirements provided by ALEXION to ZEALAND within thirty (30) days of the Effective Date and as may be updated from time to time.

 

1.87                        “Joint Patent Rights” has the meaning set forth in Section 9.1.2.

 

1.88                        “Joint Steering Committee” or “JSC” has the meaning set forth in Section 3.2.1.

 

1.89                        “Know-How” means all scientific and technical information, know-how and data, in any tangible or intangible form and whether or not patentable, including trade secrets, specifications, instructions, processes, formulae, methods, practices, techniques, results, formulations, software, algorithms, technology, test data (including pharmacological, biological, chemical, biochemical, toxicological and clinical test data, analytical and quality control data and stability data), chemistry, manufacturing and controls information, studies and procedures, and other technology applicable to compounds, formulations, compositions, products or to their Manufacture, research and Development, registration, use or Commercialization or methods of assaying or testing them and also including any and all presentations, summaries and analyses thereof.

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

1.90                        “Lead Development Program” means, with respect to the Lead Target, the written summary attached hereto as APPENDIX 1 of the specific Discovery/Development Activities to be conducted by ZEALAND under the Discovery Plan and the initial Development Plan of the Lead Discovery/Development Program, the timelines and budget for completion of such activities with respect to the Lead Target.

 

1.91                        “Lead Target” means [***] (also referred to as “[***]”) as further identified in Appendix 2.

 

1.92                        “Licensed Intellectual Property” or “Licensed IP” means, on a Candidate Product-by-Candidate Product, Product-by-Product, Existing Lead Molecule-by-Existing Lead Molecule, Created Lead Molecule-by-Created Lead Molecule, or Target-by-Target basis as applicable, any and all Intellectual Property that is: (1) (i) owned or Controlled by ZEALAND or any of its Affiliates as of the Effective Date or at any time during the Term and/or (ii) conceived, reduced to practice or otherwise discovered (a) solely by or on behalf of ZEALAND or its Affiliates or subcontractors, or (b) jointly by, on the one hand, by or on behalf of ZEALAND or its Affiliates or subcontractors and, on the other hand, by or on behalf of Alexion or its Affiliates or subcontractors in each case under clause (ii) in the course of conducting the Discovery/Development Activities, Manufacturing, or otherwise arising out of ZEALAND’s performance of its obligations under this Agreement and (2) necessary or useful to Develop, have Developed, Manufacture, have Manufactured, use, have used, offer for sale, have offered for sale, sell, have sold, export, have exported, import, have imported, Commercialize, have Commercialized or otherwise exploit Candidate Products, Existing Lead Molecules, Created Lead Molecules, or Products.

 

1.93                        “Licensed Patent Rights” means any Patent Rights in and to the Licensed IP, including those listed on APPENDIX 5.

 

1.94                        “[***] Product” means [***] or [***] or [***] pursuant to Section 2.2.4.

 

1.95                        “MAA” means an application for the authorization to market a product in any country or group of countries outside the U.S., as defined in the Applicable Laws and filed with the Regulatory Authority of a given country or group of countries.

 

1.96                        “Major European Market” means any of [***].

 

1.97                        “Manufacture” or “Manufacturing” means any and all activities directed to manufacturing, processing, packaging, labeling, filling, finishing, assembly, shipping, storage, or freight of any pharmaceutical product, drug substance, drug product, finished product, placebo, or comparator agent (or any components or process steps involving any such product or any companion diagnostic), as the case may be, including quality assurance and stability testing, characterization testing, quality control release testing of any such product including any drug substance, drug product or finished product quality assurance batch record review and release of any such product, process development, qualification, and validation, scale-up, pre-clinical, clinical, and commercial manufacture and analytic development, and product characterization.

 

1.98                        “Mediation Period” has the meaning set forth in Section 13.8.2.

 

1.99                        “NDA” means a New Drug Application, as described in §505(b) of the FD&C Act and subject to 21 C.F.R. Part 314, including any amendments submitted pursuant to 21 C.F.R. §314.60, or any

 

11

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

analogous application or submission with any Regulatory Authority to obtain authorization to market a pharmaceutical product outside of the United States.

 

1.100                 “Net Sales” means with respect to a Product, in a particular period the sum of (i) and (ii):

 

(i)                         net sales amounts [***]; and

 

(ii)                      net sales amounts [***].

 

The calculations described in clauses (i) and (ii) above shall [***]. For the avoidance of doubt, [***] shall not be included in Net Sales.

 

In the event a Product is [***], Net Sales shall be calculated by [***].  In the event that [***], the [***] in the above described equation shall be replaced with [***]; provided, however, that [***].

 

1.101                 “Non-Defaulting Party” has the meaning set forth in Section 12.3.

 

1.102                 “Non-Sublicensing Party” has the meaning set forth in Section 9.2.6.

 

1.103                 “[***] Product” means any [***] (a) that [***] and (b) for which [***], that [***].

 

1.104                 “[***]” means [***].

 

1.105                 “[***] Period” has the meaning set forth in Section 9.2.7.

 

1.106                 “[***] Period” means, for [***], the period (1) beginning on the later of: (a) the [***] year anniversary of [***] or (b) [***] year anniversary of [***] and (2) ending [***] months thereafter.

 

1.107                 “[***]” has the meaning set forth in Section 9.2.7.

 

1.108                 “Optioned Molecule” means any peptide or other molecule that is created and identified by or on behalf of ZEALAND or its Affiliates (including through any permitted subcontractor or sublicensee) through conduct of the Discovery/Development Program that binds to or modulates a Selected Target, a Replacement Target or Additional Target to a pharmacologically relevant extent.

 

1.109                 “Optioned Product” means any pharmaceutical composition in any formulation or for any route of administration, and in any dosage strength or presentation that is, contains or consists of one or more Candidate Products that are Optioned Molecules whether alone or with other active ingredients.

 

1.110                 “Optioned Target” means any Selected Target designated pursuant to Section 2.1.3, any Replacement Target designated pursuant to Section 2.2.3 and any Additional Target designated pursuant to Section 2.5.

 

1.111                 “Orange Book” has the meaning set forth in Section 9.4.4.

 

1.112                 “Other Component(s)” has the meaning set forth in Section 1.26.

 

12

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

1.113                 “Paragraph IV Certification” has the meaning set forth in Section 9.4.5.

 

1.114                 “Paragraph IV Proceeding” has the meaning set forth in Section 9.4.5(b).

 

1.115                 “Patent Rights” means any and all (i) patents, (ii) patent applications, including all provisional and non-provisional applications, Patent Cooperation Treaty (PCT) applications, substitutions, continuations, continuations-in-part, divisions and renewals, and all patent rights granted thereon, (iii) all patents-of-addition, reissues, re-examinations and extensions or restorations by existing or future extension or restoration mechanisms, including supplementary protection certificates and equivalents thereof, (iv) inventor’s certificates, letters patent, or (v) any other substantially equivalent form of government issued right substantially similar to any of the foregoing described in subsections (i) through (v) above, anywhere in the world.

 

1.116                 “Patent Term Extension” has the meaning set forth in Section 9.6.

 

1.117                 “Per Created Lead Product Sales” has the meaning set forth in Section 6.5.2.

 

1.118                 “Per Existing Lead Product Sales” has the meaning set forth in Section 6.5.1.

 

1.119                 “Per Optioned Lead Product Sales” has the meaning set forth in Section 6.5.2.

 

1.120                 “Per Target Development Cap” have the meaning set forth in Section 2.3.

 

1.121                 “Phase I Clinical Trial” means a human clinical trial of a product, the principal purpose of which is a preliminary determination of safety in healthy individuals or patients, and that meets the requirements of 21 CFR § 312.21(a) or, if conducted in a country other than the United States, the foreign equivalent thereof.

 

1.122                 “Phase II Clinical Trial” means a human clinical trial of a product, the principal purpose of which is a determination of safety and efficacy in the target patient population, and that meets the requirements of 21 CFR § 312.21(b) or, if conducted in a country other than the United States, the foreign equivalent thereof.

 

1.123                 “Pivotal Clinical Trial” means a human clinical trial of a product (whether or not specifically referred to as a pivotal trial), the design of which is acknowledged by the FDA to be sufficient for such clinical trial to satisfy the requirements of 21 CFR § 312.21(c) or, if conducted in a country outside the United States, a similar clinical trial prescribed by the applicable Regulatory Authority in such country which is acknowledged by such Regulatory Authority to be sufficient for such clinical trial to satisfy the requirements of a pivotal efficacy and safety clinical trial.

 

1.124                 “PMDA” has the meaning set forth in Section 1.129.

 

1.125                 “Product(s)” means any product incorporating a Candidate Product (or derivative thereof) for which ALEXION has delivered a Development Decision Notice stating that ALEXION elects to continue Development of such Candidate Product in accordance with Section 2.2.4.

 

1.126                 “Program Leaders” has the meaning set forth in Section 3.1.1.

 

13

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

1.127                 “Receiving Party” has the meaning set forth in Section 8.1.

 

1.128                 “Regulatory Approval” means, with respect to a Product in a country in the Territory, (a) any and all licenses, registrations, authorizations and approvals of the applicable Regulatory Authority, including NDAs or any foreign equivalent thereof, as applicable, and (b) if applicable, any and all pricing or reimbursement authorizations and approvals, in each case ((a) and (b)) that are necessary to Manufacture, distribute, sell, obtain reimbursement for, market, use, store, and import such Product in such country.

 

1.129                 “Regulatory Authority” means (i) any governmental authority, notified body or other organization in a country or region that regulates the Manufacture or sale of pharmaceutical or medicinal products or medical devices, including the United States Food and Drug Administration (the “FDA”), Japan’s Pharmaceuticals and Medical Devices Agency (“PMDA”) and the European Medicines Agency (“EMA”), and any successors thereto, and (ii) any other relevant bodies authorized by Applicable Law to review or otherwise exercise oversight over MAAs, other regulatory filings or Regulatory Approvals.

 

1.130                 “Regulatory Documentation” has the meaning given in Section 4.3.

 

1.131                 “Replacement Development Cap” has the meaning set forth in Section 2.2.3.

 

1.132                 “Replacement Target” has the meaning given in Section 2.2.3.

 

1.133                 “Results” means, on a Target-by-Target, Candidate Product-by-Candidate Product or Product-by-Product basis, as applicable, [***] related to [***], in each case, with respect to [***].

 

1.134                 “Royalty Term” means with respect to each Product and each country in the Territory, the period beginning on the date of the First Commercial Sale of such Product in such country, and ending upon [***].

 

1.135                 “Sales Milestone Event” has the meaning set forth in Section 6.3.3.

 

1.136                 “Sales Milestone Payment” has the meaning set forth in Section 6.3.3.

 

1.137                 “Selected Target” has the meaning given in Section 2.1.3.

 

1.138                 “[***] Product” means [***] or [***] or [***] pursuant to Section 2.2.4.

 

1.139                 “sNDA” means a supplement to an NDA as set forth in 21 C.F.R. §§314.70 and 314.71, including any amendments submitted pursuant to 21 C.F.R. §314.60, or any analogous submission with any Regulatory Authority outside of the United States.

 

1.140                 “[***]” has the meaning set forth in Section 12.5.

 

1.141                 “Sublicensees” means any Third Party, including a co-development, co-promotion or co-marketing partner, to whom ALEXION or any of its Affiliates grants a sublicense of its rights hereunder to further Develop or Commercialize Products, but excluding service providers, clinical research organizations, manufacturers, wholesalers and other distributors of finished Product.

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

1.142                 “Sublicensing Party” has the meaning set forth in Section 9.2.6.

 

1.143                 “[***] Model” has the meaning set forth in Section 2.7.1.

 

1.144                 “[***] Model Work Plan” has the meaning set forth in Section 2.7.1.

 

1.145                 “Target” means the Lead Target, any other Selected Target (other than any Selected Target which has been replaced pursuant to Section 2.2.3), Additional Target or Replacement Target.

 

1.146                 “Target Exercise Notice” has the meaning set forth in Section 2.1.3.

 

1.147                 “Target Option” has the meaning set forth in Section 2.1.3.

 

1.148                 “Target Option Exercise Fee” has the meaning set forth in Section 6.2.

 

1.149                 “Target Option Period” means the period beginning on [***] and ending on the date that is [***] year anniversary of [***].

 

1.150                 “[***]” means, with respect to [***], all [***] to the extent that such [***] or [***], or [***] that is [***].

 

1.151                 “[***] Patent Rights” has the meaning set forth in Section 9.3.1.

 

1.152                 “Taxes” has the meaning set forth in Section 6.11.

 

1.153                 “Term” has the meaning set forth in Section 12.1.

 

1.154                 “Territory” means all of the countries of the world, and their territories and possessions.

 

1.155                 “[***] Activities” shall mean the activities set forth in Schedule 1.155, as may be amended by the JSC from time to time.

 

1.156                 “Third Party” means any person or entity other than ALEXION or ZEALAND or their respective Affiliates.

 

1.157                 “Third Party Claim” shall have the meaning as set forth in Section 11.1.

 

1.158                 “U.S. Prime Rate” has the meaning set forth in Section 6.10.

 

1.159                 “Valid Claim” means, with respect to a particular country, a claim of an issued patent Covering the composition of matter or use of a given Product that has not expired or been abandoned, or been revoked, held invalid or unenforceable by a patent office, court or other governmental agency of competent jurisdiction in a final and non-appealable judgment (or judgment from which no appeal has been taken within the allowable time period).

 

1.160                 “Voting Stock” has the meaning set forth in Section 1.21(i).

 

1.161                 “ZEALAND Costs” means (i) [***] and (ii) ZEALAND’S [***], in each case ((i) and (ii)), in the [***] of (a) Discovery/Development Activities performed under the applicable

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Discovery/Development Program or activities under the [***] Work Plan and in accordance with budget set forth under such Discovery/Development Program or [***] Work Plan or (b) activities for which ZEALAND is to be reimbursed under Section 2.7.4 ([***] Technology Transfer).

 

1.162                 “ZEALAND Indemnitees” has the meaning set forth in Section 11.2.

 

1.163                 “ZEALAND Patent Rights” has the meaning set forth in Section 9.3.2.

 

1.164                 “ZEALAND Target Notice” has the meaning set forth in Section 2.5.

 

2.             RESEARCH AND DEVELOPMENT PROGRAM

 

2.1                               Generally.

 

2.1.1                              Goal. With respect to any Target, the Parties agree to engage in a Discovery/Development Program to identify and Develop one or more Candidate Products directed to the Lead Target, any other Selected Targets, Replacement Targets and Additional Targets as further described in a Discovery Plan and one or more Development Plans under each Discovery/Development Program.

 

2.1.2                              Discovery/Development Program Plans.  Each Discovery/Development Program shall include a Discovery Plan and one or more Development Plans in respect to a Target.  The Parties may update and amend the Discovery Plans or Development Plans from time to time through the JSC, subject to Sections 3.2.4 and 3.2.5.

 

(a)                                          Discovery Plan. The Discovery Plan under a Discovery/Development Program shall set forth, at a minimum: (i) Candidate Product Criteria with respect to the applicable Target; (ii) the specific activities to be conducted by ZEALAND in order to identify Candidate Products from any previously identified, existing or new molecules meeting the Candidate Product Criteria and provide ALEXION with sufficient data and information with respect to such Candidate Product(s) for ALEXION to determine whether to designate such Candidate Product as an Existing Lead Product, Created Lead Product, or Optioned Product, as applicable; and (iii) a proposed timeline and budget for the performance of the Discovery Plan (“Discovery Plan”).

 

(b)                                          Development Plan. Each Development Plan under a Discovery/Development Program shall set forth, at a minimum, the activities to be conducted by ZEALAND in order to carry out further Development of any Candidate Products thereunder including (i) the generation of sufficient data and information to [***] in connection with obtaining an Acceptance of an IND for a Product containing or consisting of such Candidate Product directed to the applicable Target and (ii) a proposed timeline and budget for the performance of the Development Plan (“Development Plan”).  The Lead Discovery/Development Program including a Discovery Plan and a Development Plan setting forth the specific activities to be conducted by ZEALAND to identify and Develop Candidate Products directed to the Lead Target as agreed to by the Parties is attached hereto as APPENDIX 1.

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

2.1.3                              Target Option.  At any time during the Target Option Period, ALEXION shall have the option (“Target Option”) to select any Complement Pathway Target in addition to the Lead Target (each a “Selected Target”) as the subject of Discovery/Development Activities under a Discovery/Development Program with respect to such Selected Target, provided that ALEXION may have no more than three (3) Complement Pathway Targets as Selected Targets unless the Parties otherwise agree in writing.  ALEXION shall exercise each Target Option by written notice that specifies the Selected Target and is delivered to ZEALAND prior to the expiration of the Target Option Period (each, such notice a “Target Exercise Notice”).  The Selected Targets are in addition to the Additional Targets.

 

2.1.4                              Discovery/Development Programs For Selected Targets and Additional Targets.  Upon receipt by ZEALAND of a Target Exercise Notice specifying a Selected Target or an Additional Target Notice specifying an Additional Target, ZEALAND shall promptly prepare a Discovery Plan and Development Plan under a Discovery/Development Program for such Selected Target or Additional Target to be agreed by ALEXION in writing. Upon ALEXION’s written approval of such Discovery Plan and Development Plan pursuant to this Section 2.1.4 and payment of the Target Option Exercise Fee: (i) such Selected Target or Additional Target shall become a Target for all purposes hereunder, (ii) such Discovery Plan and Development Plan shall be attached hereto in APPENDIX 3, and (iii) ZEALAND shall commence Discovery/Development Activities under such Discovery Plan.

 

2.1.5                              Discovery/Development Program Term.  Each Discovery/Development Program shall have a term: (1) commencing: (i) for the Lead Discovery/Development Program, on the Effective Date and (ii) for any other Discovery/Development Program, upon approval by ALEXION of the Discovery Plan and first Development Plan under such Discovery/Development Program and (2) expiring upon the earlier of: (a) the date of termination of the last of any remaining Discovery Plan and Development Plan under such Discovery/Development Program as determined by the JSC; (b) in the case of a Selected Target, the date of receipt by ZEALAND of a notice from ALEXION nominating a replacement pursuant to Section 2.2.3 of the Target that is the subject of such Discovery/Development Program; (c) the date of termination by ALEXION in its sole discretion of such Discovery/Development Program; or (d) when ZEALAND has expended an amount under such Discovery/Development Program equal to the relevant Per Target Development Cap and ALEXION declines to pay ZEALAND Costs for further Discovery/Development Activities pursuant to Section 2.3.3 (the “Discovery/Development Program Term”).

 

2.1.6                              Discovery Plan Term.  Each Discovery Plan shall be performed, on a Target-by-Target basis by ZEALAND, under a corresponding Discovery/Development Program during the period (1) commencing (i) for the Discovery Plan of the Lead Discovery/Development Program, on the Effective Date or (ii) for any other Discovery Plan, upon ALEXION’s approval of such Discovery Plan and (2) expiring upon the earlier of (a) the date of completion of all activities contemplated by the Parties under such Discovery Plan as determined by the JSC; (b) the date of termination by ALEXION in its sole discretion of

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

such Discovery Plan; or (c) the date of termination of the corresponding Discovery/Development Program (the “Discovery Plan Term”).

 

2.1.7                              Development Plan Term.  Each Development Plan shall be performed, on a Candidate Product-by-Candidate Product basis by ZEALAND, during the period (1) commencing, for any Development Plan under a Discovery/Development Program directed to any Target, upon ALEXION’s confirmation of approval of such Development Plan, as may be updated or modified, following the delivery of a Development Decision Notice pursuant to Section 2.2.5 and (2) expiring upon the earlier of (a) the date of Acceptance by a Regulatory Authority, in [***] of an IND filed in connection with the Candidate Product applicable to such Development Plan; (b) the date of completion of all activities contemplated by the Parties under such Development Plan as determined by the JSC; (c) the date of termination by ALEXION in its sole discretion of such Development Plan; or (d) the date of termination of the applicable Discovery/Development Program (the “Development Plan Term”).

 

2.2                               Performance of Discovery/Development Program.

 

2.2.1                              Diligent Efforts.  On a Target-by-Target and Candidate Product-by-Candidate Product basis, ZEALAND shall use its Diligent Efforts to conduct each Discovery/Development Program in accordance with the timeframes set forth in the relevant Discovery Plan and any Development Plans thereunder, in accordance with all Applicable Laws (including GLP) and the provisions of this Agreement.  On a Discovery/Development Program-by-Discovery/Development Program Basis, ZEALAND shall dedicate the efforts of a number of FTEs capable of carrying out the Discovery/Development Activities set forth in the corresponding Discovery Plan and any Development Plans to a professional workmanlike standard and shall provide all necessary materials and facilities therefor, as provided in each such Discovery/Development Program.

 

2.2.2                              Discovery Plan.  During each Discovery Plan Term, ZEALAND will deliver to ALEXION samples of all peptide(s) or other molecule(s) that meet the Candidate Product Criteria set forth in the applicable Discovery Plan, together with a report as set forth in Section 2.4, summarizing the Results and Deliverables of the Discovery Plan within [***] days of submission to ALEXION of each such peptide(s) or other molecule(s).  With respect to peptides or other molecules evaluated by ZEALAND which did not meet the Candidate Product Criteria but [***], the Results and Deliverables shall also include the identities of such other peptides or molecules and the results of each such evaluation.  ZEALAND shall deliver to ALEXION, upon its written request, samples of each peptide or other molecule that did not meet the Candidate Product Criteria but [***] and sufficient data and information with respect to such peptide or molecule for ALEXION to determine whether to designate such peptide or molecule as an Existing Lead Product, Created Lead Product, or Optioned Product as applicable.  Any and all costs incurred by ALEXION in the evaluation of such Candidate Products or such other molecules by ALEXION during the applicable Evaluation Period shall be borne by ALEXION.

 

2.2.3                              Failure to Deliver Candidate Products. On a Selected Target-by-Selected Target basis, in the event that ZEALAND fails to deliver to ALEXION any peptides or other molecules

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

meeting the Candidate Product Criteria, within [***] months of [***] under a given Discovery/Development Program, or as otherwise agreed by the JSC, ALEXION shall have the right to nominate in writing any [***] Target as a replacement for the Selected Target that is the subject of such Discovery/Development Program (a “Replacement Target”).  On the receipt by ZEALAND of such nomination, the peptides or other molecules included in the Results and Deliverables under the Discovery/Development Program for the Selected Target that has been replaced shall be treated to the extent the minimum information required in Section 2.5 has been provided, as though they were peptides or molecules for which ALEXION has not elected to add to this Agreement pursuant to Section 2.5.  Effective as of such nomination (i) the JSC shall prepare a Discovery Plan and a Development Plan under a Discovery/Development Program corresponding to such Replacement Target pursuant to Section 2.1.4 and (ii) upon ALEXION’s approval of such Discovery Plan and Development Plan the Replacement Target shall automatically be deemed a Target for all purposes under this Agreement and ZEALAND shall commence Discovery/Development Activities under such Discovery Plan.  Within [***] days of the nomination of a Replacement Target by ALEXION, ZEALAND shall provide ALEXION with a summary of ZEALAND Costs expended under the Discovery Plan of the Discovery/Development Program directed to the replaced Selected Target (“Expended Discovery Costs”).  The Per Target Development Cap for the Discovery/Development Program directed to the Replacement Target shall be equal to [***] (“Replacement Development Cap”).  Each Selected Target may [***] pursuant to this Section 2.2.3 (and [***]) and this Section 2.2.3 shall [***].

 

2.2.4                              Development Decision Notice. For each peptide or molecule, ALEXION shall determine whether ALEXION wishes to designate one or more peptide(s) or molecule(s) to be Candidate Product(s) for progression to Discovery/Development Activities under a Development Plan of the applicable Discovery/Development Program.  In the case of any Development Decision Notice delivered under the Lead Discovery/Development Program, such notice shall, for an Existing Lead Molecule or Created Lead Molecule, whether such molecule is [***] or [***].  ALEXION shall consider ZEALAND’S comments regarding such designation(s) but shall make any designation(s) in its sole discretion.  For clarity, a Development Decision Notice with respect to a peptide or other molecule that did not meet all of the applicable Candidate Product Criteria but which [***] shall be considered a designation of such peptide or other molecule as a “Candidate Product”.  In the event that ALEXION does not provide a Development Decision Notice in respect of any Candidate Products with respect to a Selected Target, Replacement Target or Additional Target prior to the end of the Evaluation Period applicable to such Target, such Candidate Products shall be treated as though they are peptides or molecules ALEXION has not elected to add to this Agreement pursuant to Section 2.5.

 

2.2.5                              Development Plan.  Upon the receipt by ZEALAND of a Development Decision Notice designating, in accordance with this Agreement, a peptide or molecule as a Candidate Product for further Development, the JSC will promptly review the Development Plan under the applicable Discovery/Development Program approved by ALEXION with respect to the applicable Target and determine whether any updates or other modifications are warranted based on the identity of the Candidate Product and other information including the Results and Deliverables generated during the applicable Discovery Plan.

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Upon ALEXION’s confirmation of approval of such Development Plan, or approval with respect to any updates or modifications, such Development Plan (if updated or modified) shall become part of the applicable Discovery/Development Program and, in the case of a Development Plan directed to the Lead Target, be attached hereto in APPENDIX 1 or, in the case of an Optioned Target, be attached hereto in APPENDIX 3, and, only then, shall ZEALAND commence Discovery/Development Activities thereunder.

 

2.2.6                              Subcontracting.  ZEALAND may not subcontract any of its Discovery/Development Activities except with the prior written consent, not to be unreasonably withheld, conditioned or delayed, of ALEXION and in compliance with the provisions of Section 9.2.6; provided that, ALEXION’s consent shall not be required with respect to any subcontractor listed on APPENDIX 6, which list shall be provided for approval by ALEXION, such approval not to be unreasonably withheld, conditioned or delayed, within [***] days after the Effective Date.

 

2.2.7                              Research and Evaluation Material and Technology Transfer. The Results and Deliverables under any Discovery/Development Program shall include materials and samples of any previously identified, existing or new peptides or molecules that do not meet the Candidate Product Criteria but [***], that were screened, analyzed, identified, discovered, or generated during any Discovery/Development Activities under the Discovery/Development Program, including of any specific activities to be conducted by ZEALAND to identify Candidate Products, as reasonably necessary or useful for ALEXION to exercise its rights to evaluate Candidate Products as set forth herein and otherwise practice the licenses granted under this Agreement.

 

2.3                               Discovery/Development Program Costs.

 

2.3.1                              ZEALAND’s Responsibilities.  ZEALAND shall be responsible for all costs and expenses of conducting all Discovery/Development Activities under the Discovery Plan and any Development Plans, including as may be updated by the JSC, of each Discovery/Development Program, provided that ZEALAND Costs in total for the Discovery/Development Activities under a given Discovery/Development Program for a Target shall not exceed the following amounts (each the “Per Target Development Cap” for an applicable Target):

 

(a)                        the Per Target Development Cap for the Lead Target shall be [***] Dollars ($[***]);

 

(b)                        the Per Target Development Cap for a Selected Target that has not been replaced pursuant to Section 2.2.3 shall be [***] Dollars ($[***]);

 

(c)                         the Per Target Development Cap for a Replacement Target shall be: (i) for the Discovery Plan, [***]; and (ii) for the Development Plan, [***].

 

2.3.2                              Effect of a Development Decision Notice in relation to a Replacement Target.  Where ALEXION has replaced a Selected Target pursuant to Section 2.2.3, and it subsequently delivers a Development Decision Notice in respect of one or more Candidate Products in

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

respect of such Replacement Target, it shall, in accordance with Section 2.3.3(a) pay to ZEALAND an amount equivalent to [***].

 

2.3.3                              ALEXION’S Payment Obligations. ALEXION’s payment obligations with respect to the performance of a Discovery/Development Program shall be limited to amounts payable pursuant to Sections 2.3.2, 6.1.1 and 6.2; provided that [***].  The Parties shall [***].

 

(a)                                          Reimbursement Procedure. For all Discovery/Development Activities for which ALEXION is responsible under this Section 2.3.3, ALEXION shall pay [***].  ZEALAND shall invoice ALEXION for [***], with an itemized documentation reasonably supporting the Invoice, and ALEXION shall pay ZEALAND all undisputed amounts due under this Section 2.3.3 within [***] days following ALEXION’s receipt of the applicable Invoice for [***].

 

(b)                                          No Obligation. Except as expressly set forth in this Section 2.3.3 ALEXION shall have no obligation to [***].  ZEALAND shall not be required to [***].

 

2.4                               Reports. During the Discovery/Development Program Term of a Discovery/Development Program for a particular Target, ZEALAND shall furnish ALEXION with written reports to update ALEXION on the status of the Discovery/Development Activities being performed thereunder.  During each Discovery Plan Term, ZEALAND shall provide such reports [***] and each such report shall include at a minimum [***].  During the Development Plan Term of each Development Plan, ZEALAND shall provide reports on a [***] basis and each such report shall include at a minimum [***].  Each report (whether for the Discovery Plan or Development Plan) must be sufficient in content and detail to allow ALEXION to evaluate the progress of the Discovery/Development Activities in relation to the requirements, goals, and budget of the applicable Discovery/Development Program and to exercise its rights hereunder.  In addition, ZEALAND will provide to ALEXION such other information as may be related to or required under any Discovery Plan or Development Plan or otherwise for the performance of the Discovery/Development Program, and which is reasonably requested by ALEXION.

 

2.5                               Additional Targets. From [***] until [***], ZEALAND shall not and shall cause its Affiliates not to (a) Develop, Commercialize or Manufacture any molecule or other product that is directed to, binds to, or otherwise modulates any [***] Target (other than activities performed on behalf of ALEXION with respect to a Target) or (b) enable, assist or grant any rights to a Third Party to conduct any activities described in clause (a) without first notifying ALEXION in writing (“ZEALAND Target Notice”). The ZEALAND Target Notice shall specify the [***] Target and include such information as has been generated by ZEALAND on such [***] Target (including, at a minimum [***]).  Upon the receipt of a ZEALAND Target Notice, ALEXION shall have [***] days in which to request reasonable additional information and access with respect to such [***] Target and ZEALAND shall provide ALEXION with such information and access.  The date on which ALEXION has received such additional information and access shall be the “Additional Target Trigger Date”.  ALEXION shall have the right, in its sole discretion, to add such [***] Target as an “Additional Target” under the terms and conditions of this Agreement applicable to an Optioned Target in addition to the three Optioned Targets provided in this Agreement by written notice delivered within [***] months of the Additional Target Trigger Date (“Additional Target

 

21

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Notice”).  If ALEXION does not so elect to add the Additional Target within [***] months of the Additional Target Trigger Date, ZEALAND may pursue the manufacture, development and commercialization of the peptides or molecules with respect to the [***] Target (other than any Target) in each case solely if and as set forth in the ZEALAND Target Notice.

 

2.6                               Exclusivity.  Prior to [***], other than: (i) [***] performance under this Agreement; (ii) the [***]; and (iii) the [***] as permitted under Section 2.5; [***] shall not, and shall cause its Affiliates not to, (a) Develop, Commercialize or Manufacture any [***] or (b) enable, assist or grant any rights to a Third Party to conduct any activities described in clause (a) of this sentence.  During ***], [***] shall not, and shall cause its Affiliates not to (x) commence or conduct the Development, Commercialization or Manufacture of any [***] or (y) assist, enable, or grant any rights to a Third Party to conduct any activities described in clause (x) of this sentence.

 

2.7                               [***] Model.

 

2.7.1                              [***] Model Work Plan.  Within [***] days of the Effective Date, the JSC will prepare a work plan describing specific activities to be conducted by ZEALAND for Developing a [***] model (“[***] Model”)] for use in Developing Candidate Products or Products.  Such work plan (“[***] Model Work Plan”) will include, at a minimum, a detailed timeline for Developing the [***] Model and a budget for all activities described therein. The JSC may, from time to time, update the work plan.

 

2.7.2                              Performance of [***] Work Plan.

 

(a)                                 ZEALAND will use its Diligent Efforts (in accordance with Section 2.7.2(b)) to carry out the activities within the times agreed upon and set forth in the [***] Work Plan, accordance with all Applicable Laws and the provisions of this Agreement.

 

(b)                                 ZEALAND shall devote the efforts of suitably qualified and trained employees and research assistants capable of carrying out the activities set forth in the [***] Work Plan to a professional workmanlike standard and shall provide all necessary materials and facilities therefor.

 

(c)                                  ZEALAND may not subcontract any of its activities under the [***] Work Plan except with the prior written consent of ALEXION (such consent not to be unreasonably withheld, conditioned or delayed), and in compliance with the provisions of Section 9.2.6; provided that, ALEXION’s consent shall not be required with respect to any subcontractor listed on APPENDIX 6.

 

(d)                                 The Results and Deliverables under the [***] Work Plan shall include materials and samples including of any previously identified, existing or new molecules used in, screened, analyzed, identified, discovered, or generated in the [***] Work Plan.

 

22

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

2.7.3                              [***] Work Plan Costs; Payment.  For all activities under the [***] Work Plan, ALEXION shall pay [***].  ZEALAND shall invoice ALEXION, and ALEXION shall pay ZEALAND all undisputed amounts due under this Section 2.7.3 for each [***], with an itemized documentation reasonably supporting the Invoice within [***] days following ALEXION’s receipt of the applicable Invoice for [***].

 

2.7.4                              [***] Technology Transfer. In addition to the information, data and materials exchanged between the Parties through the JSC with respect to the [***] Work Plan, within [***] days after the conclusion of the [***] Work Plan, ZEALAND shall transfer, at [***], to ALEXION all the data, information, materials and samples set out as Results and Deliverables under the [***] Work Plan.  In addition to the foregoing technology transfer, at ALEXION’s reasonable request, ZEALAND shall provide ALEXION at [***] up to [***] FTE hours of support, including technical and quality support, to enable ALEXION to use such Results and Deliverables in the Development, Commercialization, Manufacture and other exploitation of any Product, Target, or Candidate Product.

 

2.8                               Discovery/Development Quality. ZEALAND will conduct all Discovery/Development Activities and any activities under the [***] Work Plan in accordance with Applicable Law (including GLP) and the provisions of this Agreement.

 

2.9                               Inspection and Auditing Rights.  ALEXION shall have the right, at [***], to audit, inspect and observe the facilities utilized by ZEALAND for the Discovery/Development Activities, and any activities under the [***] Work Plan, including ZEALAND’s compliance with Applicable Laws and the terms and conditions of this Agreement, during normal business hours and upon at least [***] days’ prior notice.  ZEALAND shall make available to ALEXION all relevant records and reports.  ZEALAND agrees to respond to ALEXION’s audit findings within [***] days of receipt of ALEXION’s audit report, to take prompt corrective action to remedy any observed violations of the terms of this Agreement or of Applicable Law.  Such audits may be conducted no more than [***] per [***], provided that ALEXION may also conduct follow-up audits or inspections at [***] at any time or times during a Calendar Year that are directed at significant or critical quality issues observed during the regular audit or brought to ALEXION’s attention by Regulatory Authorities.

 

3.             GOVERNANCE

 

3.1                               Collaboration Management.

 

3.1.1                              Discovery/Development Program Leaders. Each Party will appoint a single individual to act as a point of contact between the Parties to support the Discovery/Development Programs and the Discovery/Development Programs (the “Program Leaders”). The initial Program Leaders shall be set forth in APPENDIX 4 — Title: “Contact List” hereto.  Either Party may change the person designated as Program Leader upon written notice (including, in this case, via email notification) to the other Party, provided that such new Program Leader is, in the reasonable opinion of the appointing Party, suitably qualified.

 

3.1.2                              Roles and Responsibilities. The Program Leaders will be responsible for (i) facilitating the flow of information and otherwise promoting communication of the day-to-day work

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

for each Discovery/Development Program and Discovery/Development Program, (ii) coordinating all work to be conducted under each Discovery/Development Program and Discovery/Development Program, and (iii) all scientific and technical questions addressed by one Party to the other Party. The Program Leaders shall conduct regular telephone conferences every [***] weeks, or more frequently as deemed necessary or appropriate by the Parties, to exchange information regarding the progress of each research project under and according to the applicable Discovery Plan or any Development Plans under a Discovery/Development Program and [***] Work Plan.

 

3.2                               Governance.

 

3.2.1                              Joint Steering Committee.  Within thirty (30) days after the Effective Date of this Agreement, ZEALAND and ALEXION will form a joint steering committee (the “Joint Steering Committee” or “JSC”), which will be comprised of an equal number of representatives from each Party, as further provided below.  Subject to (i) the prior written consent of the other Party, (ii) a written non-conflict of interest statement of any individual invited by a Party but not employed by such Party, and (iii) execution of a confidentiality agreement, either Party may invite non-voting employees and, as approved in advance by the other Party, which approval shall not be unreasonably withheld, conditioned or delayed, consultants or scientific advisors to attend meetings of the JSC and to review and discuss the Discovery/Development Program and the Discovery/Development Program.

 

3.2.2                              Meetings. The JSC will meet in person (alternating between a site designated by each of ZEALAND and ALEXION) or by teleconference at least once every [***], or with such other frequency as the Parties may mutually agree provided always that there shall be at least one face-to-face meeting [***].  Specific meeting dates will be defined by mutual agreement of the Parties.

 

3.2.3                              Responsibilities.  The JSC shall oversee the Discovery/Development Programs and activities under the [***] Work Plan.  Within such scope the JSC shall, subject to Section 3.2.4 and Section 3.2.5:

 

(a)                                 review the efforts and the progress of the Parties in the conduct of the Discovery/Development Programs and activities under the [***] Work Plan;

 

(b)                                 review ZEALAND Costs (both for the past and expected) under each Discovery/Development Program with respect to the applicable Per Target Development Cap or Replacement Development Cap during the Discovery Plan Term of each Discovery Plan, review the [***] reports under Section 2.4 and any Results and Deliverables with respect to each peptide or molecule (i) meeting the Candidate Product Criteria (if any) or (ii) evaluated with respect to the Candidate Product Criteria (if any).  The JSC shall consider and advise regarding the progress towards the

 

24

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Candidate Product Criteria and any technical and budgetary issues that arise;

 

(c)                                  during each Discovery Plan Term, review ZEALAND’s [***] update reports to ALEXION on the status of the Discovery/Development Activities being performed for each Target, including with respect to the status of the [***] Activities and any peptides or other molecules in relation to the Candidate Product Criteria;

 

(d)                                 during each Development Plan Term, review ZEALAND’s [***] update reports to ALEXION on the status of the Discovery/Development Activities being performed for each Target;

 

(e)                                  review and amend any Discovery Plans, Development Plans and the [***] Work Plan including with respect to any proposed revision or modification to such plan that (i) changes any timeline to complete any part of any such Discovery Plans, Development Plans or [***] Model Work Plan; (ii) alters the allocation of resources devoted by ZEALAND to any such Discovery Plans, Development Plans or [***] Model Work Plan; (iii) changes any of the Deliverables under any such any such Discovery Plans, Development Plans or [***] Model Work Plan; or (iv) changes any of the Candidate Product Criteria in any such Discovery Plan;

 

(f)                                   consider and advise on any technical, quality or safety issues that arise under the Discovery/Development Programs or the [***] Work Plan;

 

(g)                                  form such other committees as the JSC may deem appropriate, provided that such committees may make recommendations to the JSC but may not be delegated JSC decision-making authority;

 

(h)                                 attempt to resolve any disputes on an informal basis; and

 

(i)                                     address such other matters relating to the Discovery/Development Activities and the activities under the [***] Work Plan as either Party may bring before the JSC.

 

3.2.4                              Decision Making Authority.  A quorum for a meeting of the JSC shall require the presence of at least one (1) representative from each Party.  The JSC shall endeavor to reach decisions by consensus, with each Party, through its representative members of the JSC, having one (1) vote.  In the event that any subcommittee formed by the JSC does not reach a consensus agreement with respect to any material decision within [***] Business Days following a vote on such decision, the matter shall first be referred to the JSC for resolution.  If the JSC cannot agree on a certain matter, then [***].

 

25

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

3.2.5                              Limits on JSC Decision Making Authority. Except as provided under [***], neither Party shall have the authority to make any decision without the prior written consent of the other Party that would result in any revision or modification to any Discovery/Development Program (including any Discovery Plan or Development Plan thereunder) that (i) [***] or (ii) [***].  Further, except as expressly set forth herein, the JSC shall not have the power to amend the terms of, or waive compliance with, this Agreement.

 

3.3                               Disbandment of the JSC. Upon the later of the expiration (or earlier termination) of the (i) last Discovery/Development Program for the last Product and (ii) the completion of activities under the [***] Work Plan, the JSC will have a final meeting to review the results of the overall collaboration and will thereafter be disbanded and will have no further authority with respect to the activities hereunder; provided that, in the event of an [***], the JSC shall, at [***], be disbanded and will have no further authority with respect to the activities hereunder.

 

4.             DEVELOPMENT, REGULATORY APPROVALS AND COMMERCIALIZATION

 

4.1                               Technology Transfer. In addition to the information, data and materials exchanged between the Parties through the JSC, on a Product-by-Product, Target-by-Target, and Candidate Product-by-Candidate Product basis, within [***] days after the conclusion of each Discovery Plan Term, Development Plan Term, and Discovery/Development Program Term in respect of the relevant Product, Target, and Candidate Products and at ALEXION’s reasonable request, ZEALAND shall transfer to ALEXION, at [***], all the data, information, materials, samples, know-how, and technology, in each case to the extent Controlled by ZEALAND and, in relation to the Manufacture of Products, from its CMOs (to the extent available to ZEALAND under (and subject to the terms of) a CMO Supply Agreement), set out as Results and Deliverables in the relevant Discovery Plan, Development Plan, and Discovery/Development Program.  In addition to the foregoing technology transfer, ZEALAND shall provide ALEXION up to [***] FTE hours of support, including technical and quality support, to enable ALEXION to use such Results and Deliverables in the Development, Commercialization, Manufacture and other exploitation of the subject Product, Target, and Candidate Product.

 

4.2                               Subsequent Development. Following the conclusion of the Development Plan Term in respect of a Product, ALEXION shall have sole control over, shall bear all costs and expenses of, and shall have sole discretion and decision-making authority with respect to, any further Development of such Product.

 

4.3                               Regulatory Activities. ALEXION shall have sole control over, will own and control, and will bear all costs and expenses of, preparing and submitting applications for and obtaining and maintaining Regulatory Approvals for Products, including the filing of INDs for Products and communications with Regulatory Authorities. ZEALAND will [***] and provide [***] to ALEXION in its efforts to prepare and submit any submissions, documents or other correspondence to any Regulatory Authority in connection with obtaining, supporting, or maintaining Regulatory Approvals for any Products, including any preclinical packages, regulatory meeting requests, and any IND, NDA, sNDA and necessary drug master files (“DMFs”)

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

submissions (“Regulatory Documentation”). ZEALAND shall provide [***], and ALEXION will [***].

 

4.4                               Commercialization. ALEXION shall have sole control over, shall bear all costs and expenses of, and shall have sole discretion and decision-making authority with respect to, the Commercialization of Products.

 

4.5                               Diligence.

 

4.5.1                              Development Diligence. ALEXION will, either itself or through an Affiliate or Sublicensee, use Commercially Reasonable Efforts in compliance with Applicable Law (including cGCP), to Develop and seek Regulatory Approval for [***].  ALEXION’s obligations under this Section begin on the date of the delivery by ZEALAND of Results and Deliverables containing all necessary data and information to prepare and submit an application for an IND to the applicable Regulatory Authority, in [***] in respect of such Product.

 

4.5.2                              Deemed Satisfaction of ALEXION Diligence Obligations. On a Target-by-Target basis, and without in any way expanding ALEXION’s obligations under this Agreement, ALEXION’s expenditure of at least [***] dollars ($[***]) (including [***]) during any Calendar Year directly allocable to the Development, Regulatory Approval, or Commercialization of [***] Products directed to a given Target will be conclusive evidence that ALEXION has satisfied all ALEXION diligence obligations under this Agreement with respect to such Target for such Calendar Year.

 

4.5.3                              Commercial Diligence. Upon receiving Regulatory Approval for a Product in [***], ALEXION will use, or will cause its Affiliates or Sublicensees to use, Commercially Reasonable Efforts to Commercialize such Product in such country in compliance with the requirements of all Applicable Laws.  ALEXION shall have no other diligence obligations with respect to the Commercialization of Candidate Products.

 

4.5.4                              ALEXION’s Development Reports.  At least [***], ALEXION will prepare, and provide to ZEALAND, a report summarizing ALEXION’s [***] (the “Development Report”), including [***].  Upon ZEALAND’s reasonable request to ALEXION within [***] days after receipt of a Development Report, ZEALAND will [***].  The Development Report and [***] will be [***] under this Section 4.5.

 

4.5.5                              Discontinuation.  ALEXION reserves at all times the freedom and right, in its own discretion, to decide to discontinue any Development, Commercialization or Manufacturing of any Product, without any liability of ALEXION or its Affiliates to ZEALAND by reason of such discontinuation.  In the event that ALEXION notifies ZEALAND there is a Discontinued Product, ZEALAND may request in writing that the Discontinued Product be returned to ZEALAND pursuant to Section 12.9.2, provided that ZEALAND shall consider in good faith ALEXION’s input with respect to any further Development or Commercialization by ZEALAND of such Discontinued Product.

 

4.5.6                              Prudent Business Judgment.  For the avoidance of doubt, nothing in this Section 4 will be construed to require ALEXION to act contrary to its prudent business judgment.

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

4.6                               Other [***]. [***] understands and acknowledges that [***] or [***], including [***], involving [***] this Agreement.  [***] acknowledges and agrees that [***] this Agreement will be [***] that [***] will not [***] or [***] this Agreement.

 

4.7                               ZEALAND Support.  The Parties understand and agree that it may be necessary for ALEXION from time to time to seek guidance from ZEALAND following the Initial Development Period, and ZEALAND hereby agrees, upon reasonable request by ALEXION, to provide such guidance as a consultant.  ZEALAND shall provide [***].  ZEALAND shall [***], and ALEXION shall [***].

 

5.             MANUFACTURING

 

5.1                               Clinical Trial and Commercial Supply. Subject to the agreement of (i) applicable CMO Supply Agreements to which ZEALAND is a Party and (ii) any supply agreement between ZEALAND and ALEXION, ZEALAND shall use diligent efforts to supply through permitted CMOs each Product for pre-clinical, clinical trial and commercial supply for a minimum period of [***] in accordance with this Article 5.  ZEALAND and ALEXION shall agree prior to engaging any such CMO (which approval shall not be unreasonably withheld, conditioned or delayed), and ALEXION shall pay for such supply at a cost equal to [***].  Within [***] days following the Effective Date, the Parties shall discuss the basis on which any clinical and commercial supply of Candidate Products to ALEXION will be made including the terms that should be included in the agreement pursuant to which supply will be made and whether the relevant agreement with permitted CMOs (each a “CMO Supply Agreement”) will be entered into by ALEXION and/or ZEALAND and which of the Parties should lead such negotiations.

 

5.1.1                              Clinical CMO Supply Agreement. Subject to Sections 5.1 and 5.4, the Parties shall negotiate diligently with permitted CMOs with a view to executing a CMO Supply Agreement for pre-clinical and Clinical Trial supply of each Product within [***] days following the Effective Date, such CMO Supply Agreement to contain mutually agreed supply terms and conditions consistent with the principles set forth on Schedule 5 hereto reasonably acceptable to ALEXION.

 

5.1.2                              Commercial CMO Supply Agreement. Subject to Sections 5.1 and 5.4, the Parties shall negotiate diligently with permitted CMOs with a view to executing a CMO Supply Agreement for commercial supply of each Product within [***] following the Effective Date, such CMO Supply Agreement to contain mutually agreed supply terms and conditions consistent with the principles set forth on Schedule 5 hereto reasonably acceptable to ALEXION.

 

5.2                               Where ZEALAND is to be the sole party to the CMO Supply Agreement, then ZEALAND shall lead negotiations provided that ZEALAND shall keep ALEXION fully informed of the progress of any such negotiations and shall provide copies of each draft of the CMO Supply Agreement received from such CMO.  ZEALAND shall include all of ALEXION’s reasonable comments in such CMO Supply Agreement and shall use its reasonable efforts to include in such CMO Supply Agreement the provisions set out in Schedule 5, provided always that ZEALAND shall not be in breach of this Agreement if a CMO is not prepared to give such contract terms.  ZEALAND will use its reasonable efforts to ensure that ALEXION is a third party beneficiary of all of

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

ZEALAND’s rights under the CMO Supply Agreement provided always that ZEALAND’s liability in relation to the supply of Product to ALEXION pursuant to such CMO Supply Agreement shall not [***] other than to the extent that [***]. In any event, ZEALAND shall not enter into any such CMO Supply Agreement without ALEXION’s prior written consent, both as to the identity of the CMO and the terms of the CMO Agreement.

 

5.3                               Where ALEXION is to be a party to the CMO Supply Agreement, then ALEXION shall lead negotiations provided that ZEALAND shall give ALEXION all advice and cooperation reasonably requested by ALEXION, including on each draft of the CMO Supply Agreement received by ZEALAND from ALEXION.  In the event that ZEALAND is also a party to the CMO Supply Agreement ZEALAND’s liability in relation to the supply of Product to ALEXION pursuant to such CMO Supply Agreement shall not [***] other than to the extent that [***]. In any event, ZEALAND shall not be required to be a party to a CMO Supply Agreement unless it has agreed to the identity of the CMO and the terms of the CMO Supply Agreement.

 

5.4                               Manufacturing Step In. On a Product-by-Product basis, subject to the terms of the relevant CMO Supply agreement and any supply agreement between ALEXION and ZEALAND, ALEXION shall have the right, but not the obligation, at any time, for any reason or for no reason, to assume responsibility for Manufacturing any Product. Such Manufacturing responsibility may be executed directly by ALEXION or through one or more CMOs. ALEXION will provide ZEALAND [***] day notice of its intention to assume responsibility for Manufacturing and such notice will also act as a termination notice for the applicable CMO Supply Agreement, such termination to become effective upon the initiation of such Manufacturing by ALEXION or its CMOs (subject to the terms of the relevant CMO Agreement).

 

5.5                               ZEALAND Support.  The Parties understand and agree that it may be necessary for ALEXION from time to time to seek guidance from ZEALAND in relation to the Manufacture of Products, following the technology transfer contemplated by this Agreement, including with respect to scale-up activities, and ZEALAND hereby agrees to provide reasonable guidance as a consultant.  ZEALAND shall provide [***].  ZEALAND shall [***], and ALEXION shall [***].

 

6.             PAYMENTS AND ROYALTIES

 

6.1                               One-time Upfront Payment; Equity Investment.

 

6.1.1                              Upfront Payment. Within [***] Business Days following the Effective Date, ALEXION shall pay to ZEALAND a one-time and non-refundable, upfront payment of Twenty-Five Million Dollars ($25,000,000), which amount shall be payable in cash by wire transfer into an account designated in writing by ZEALAND.

 

6.1.2                              Equity Investment. As of the Effective Date, the Parties have entered into a share issuance agreement, pursuant to which an ALEXION Affiliate will purchase ordinary shares of ZEALAND.

 

6.2                               Target Option Exercise Fee.  On an Optioned Target-by-Optioned Target basis, within [***] Business Days of ALEXION’s approval of a Discovery Plan under a Discovery/Development Program for such Optioned Target in accordance with Section 2.1.3 and 2.1.4, as full consideration for and payment of ZEALAND’s Discovery/Development Activities subject to Section 2.3 for

 

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each such Optioned Target: ALEXION shall pay to ZEALAND a one-time non-refundable, non-reimbursable and non-creditable payment of Fifteen Million Dollars ($15,000,000) (“Target Option Exercise Fee”).

 

6.3                               Milestone Payments.

 

6.3.1                              Discovery/Development Program Milestones.  On a Target-by-Target basis (except as expressly set forth below with respect to a [***] Product and a [***] Product), ALEXION shall make the one-time non-refundable milestone payments (each, a “Development Milestone Payment”) to ZEALAND set forth below in this Section 6.3.1 upon the first occurrence of the corresponding development or regulatory milestones events set forth below in this Section 6.3.1 (each, a “Development Milestone Event”) for the first Product directed to a given Target. As the [***] payment of Development Milestone Payments, such payments shall be payable with respect to each of a [***] Product] and a [***] Product that is the [***] Product and [***] Product to achieve the corresponding Development Milestone Events.  In the event that one (1) or more Development Milestone Events in a given region are skipped for a Product, such skipped Development Milestone Events shall be payable upon achievement of the subsequent Development Milestone Event applicable to the same region.  For clarity, a Development Milestone Event in one (1) region shall not be deemed to be skipped solely because of the achievement of any Development Milestone Event in a different region (e.g., a [***] in [***] shall not trigger any Development Milestone Payment applicable to [***] or [***] even if no Development Milestone Events had yet been achieved in [***] or [***]).  ALEXION shall, within [***] days after ALEXION becomes aware of the achievement of a Development Milestone Event, notify ZEALAND in writing that such Development Milestone Event has occurred, and ZEALAND shall provide ALEXION with an Invoice related to the respective Development Milestone Payment.  Each of the Development Milestone Payments shall be payable to ZEALAND by ALEXION within [***] days of receipt by ALEXION of such Invoice.  The maximum amount payable by ALEXION with respect to the Lead Target, assuming there is [***], under this Section 6.3.1, if all Development Milestone Events occur, is [***] Dollars ($[***]).  The maximum amount payable by ALEXION with respect to any Target other than the Lead Target under this Section 6.3.1, if all Development Milestone Events occur, is [***] Dollars ($[***]).

 

	
Development Milestone Event
    	
 
    	
Development
   Milestone Payment
   for each
   Development
   Milestone Event
    	
 
    
	
Each of the   following shall be a Development Milestone Event: [***]
    	
 
    	
$
    	
[***]
    	
 
    
	
Each of the   following shall be a Development Milestone Event: [***]
    	
 
    	
$
    	
[***]
    	
 
    

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

	
Development Milestone Event
    	
 
    	
Development
   Milestone Payment
   for each
   Development
   Milestone Event
    	
 
    
	
Each of the   following shall be a Development Milestone Event: [***]
    	
 
    	
$
    	
[***]
    	
 
    
	
Each of the   following shall be a Development Milestone Event: [***]
    	
 
    	
$
    	
[***]
    	
 
    
	
Each of the   following shall be a Development Milestone Event: [***]
    	
 
    	
$
    	
[***]
    	
 
    
	
The first to   occur of: (i) [***] or (ii) [***] shall be a Development Milestone Event for   each of the following: [***]
    	
 
    	
$
    	
[***]
    	
 
    
	
Each of the   following shall be a Development Milestone Event: [***]
    	
 
    	
$
    	
[***]
    	
 
    
	
Each of the   following shall be a Development Milestone Event: [***]
    	
 
    	
$
    	
[***]
    	
 
    
	
Each of the   following shall be a Development Milestone Event: [***]
    	
 
    	
$
    	
[***]
    	
 
    

 

6.3.2                              Existing Lead Product Sales Milestones. ALEXION shall make a one-time, non-refundable sales milestone payment (each, an “Existing Product Sales Milestone Payment”) to ZEALAND upon the first occurrence of each of the corresponding milestone events based on worldwide, total Net Sales of all Products that are, contain or consist of any Existing Lead Molecules in a Calendar Year (each, an “Existing Product Sales Milestone Event”) as set forth in the table below in this Section 6.3.2.  If a particular Existing Product Sales Milestone Event threshold triggering an Existing Product Sales Milestone Payment first occurs in the same Calendar Year as the first occurrence of one (1) or more lower Existing Product Sales Milestone Event thresholds, then any unpaid Existing Product Sales Milestone Payments for such lower Existing Product Sales Milestone Events shall be payable in addition to the Existing Product Sales Milestone Payment in respect of the higher Existing Product Sales Milestone Event.  Net Sales of any Product not containing an Existing Lead Molecule shall not (1) count toward the achievement of any Existing Product Sales Milestone Event or (2) otherwise be considered in determining whether an Existing Product Sales Milestone Payment was triggered.  For clarity: (i) no Existing Product Sales Milestone Payment shall be payable more than one (1) time for all Existing Lead Products, and (ii) the total of the Existing

 

31

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Product Sales Milestone Payments for the Lead Target payable during the Term shall not exceed $[***] Dollars ($[***]).

 

	
Existing Product Sales Milestone Events
    	
 
    	
Existing Product
   Sales Milestone
   Payments
    	
 
    
	
First Calendar   Year in which aggregate annual Net Sales of Products containing Existing Lead   Molecules in the Territory equal or exceed $[***]
    	
 
    	
$
    	
[***]
    	
 
    
	
First Calendar   Year in which aggregate annual Net Sales of Products containing Existing Lead   Molecules in the Territory $[***]
    	
 
    	
$
    	
[***]
    	
 
    
	
First Calendar   Year in which aggregate annual Net Sales of Products containing Existing Lead   Molecules in the Territory $[***]
    	
 
    	
$
    	
[***]
    	
 
    
	
First Calendar   Year in which aggregate annual Net Sales of Products containing Existing Lead   Molecules in the Territory $[***]
    	
 
    	
$
    	
[***]
    	
 
    
	
First Calendar   Year in which aggregate annual Net Sales of Products containing Existing Lead   Molecules in the Territory $[***]
    	
 
    	
$
    	
[***]
    	
 
    

 

6.3.3                              Created Lead Product and Optioned Product Sales Milestones. ALEXION shall make on a Target-by-Target basis, a one-time, non-refundable sales milestone payment (each, a “Sales Milestone Payment”) to ZEALAND upon the first occurrence of each of the corresponding milestone events based on the worldwide, total Net Sales of all Created Lead Products or Optioned Products in each case as directed to a given Target, in a Calendar Year (each, a “Sales Milestone Event”) as set forth in the table below in this Section 6.3.3.  If a particular Sales Milestone Event threshold triggering a Sales Milestone Payment first occurs in the same Calendar Year as the first occurrence of one (1) or more lower Sales Milestone Event thresholds, then any unpaid Sales Milestone Payments for such lower Created Lead Product or Optioned Product Sales Milestone Events shall be payable in addition to the Sales Milestone Payment in respect of the higher Sales Milestone Event.  Net Sales of (a) any Product which is not a Created Lead Product shall not (1) count toward the achievement of any Sales Milestone Event for Created Lead Products or (2) otherwise be considered in determining whether a Sales Milestone Payment was triggered for Created Lead Products and (b) Optioned Products not directed to a given Target shall not (1) count toward the achievement of any Sales Milestone Event for such given Target or (2) otherwise be considered in determining whether a Sales Milestone Payment was triggered for such given Target.  For clarity: (i) no Sales Milestone Payment for Created Lead Products shall be payable more than one (1) time for all Created Lead Products and no Sales Milestone Payments for Optioned Products shall be payable more than one (1) time for each Optioned Target, and (ii) the total of Sales Milestone Payments payable for all Created Lead Products shall not exceed [***]

 

32

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Dollars ($[***]), and (iii) on a Target-by-Target basis the Total of Sales Milestone Payments for all Optioned Products directed to a given Target shall not exceed [***] Dollars ($[***]).

 

Created Product and Optioned Product Sales 
 Milestone Events and Payments on a 
 Target-by-Target basis

 

	
Sales Milestone Event
    	
 
    	
Sales Milestone
   Payment
    	
 
    
	
First Calendar   Year in which aggregate annual Net Sales of (i) in the case of the Lead Target,   all Created Lead Products or (ii) in the case of other Targets, all Optioned   Products directed to such Target in the Territory equal or exceed $[***]
    	
 
    	
$
    	
[***]
    	
 
    
	
First Calendar   Year in which aggregate annual Net Sales of (i) in the case of the Lead Target,   all Created Lead Products or (ii) in the case of other Targets, all Optioned   Products directed to such Target in the Territory equal or exceed $[***]
    	
 
    	
$
    	
[***]
    	
 
    
	
First Calendar   Year in which aggregate annual Net Sales of (i) in the case of the Lead Target,   all Created Lead Products or (ii) in the case of other Targets, all Optioned   Products directed to such Target in the Territory equal or exceed $[***]
    	
 
    	
$
    	
[***]
    	
 
    
	
First Calendar   Year in which aggregate annual Net Sales of (i) in the case of the Lead Target,   all Created Lead Products or (ii) in the case of other Targets, all Optioned   Products directed to such Target in the Territory equal or exceed $[***]
    	
 
    	
$
    	
[***]
    	
 
    
	
First Calendar   Year in which aggregate annual Net Sales of (i) in the case of the Lead Target,   all Created Lead Products or (ii) in the case of other Targets, all Optioned   Products directed to such Target in the Territory equal or exceed $[***]
    	
 
    	
$
    	
[***]
    	
 
    

 

6.4                               Sales Milestone Payment Terms.  Subject to Sections 6.3.2 and 6.3.3, ALEXION will make any Existing Product Sales Milestone Payment or Sales Milestone Payment within [***] days after the end of the Calendar Quarter within which the corresponding Existing Product Sales Milestone Payment or Sales Milestone Event first occurred.

 

6.5                               Royalties.

 

6.5.1                   Existing Lead Products Royalties.  On an Existing Lead Product-by-Existing Lead Product and country-by-country basis and subject to Section 6.9 ALEXION shall pay royalties to ZEALAND based on total worldwide Net Sales of a given Existing Lead Product (excluding Net Sales of all other Products including other Existing Lead

 

33

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Products) in a given Calendar Year (“Per Existing Lead Product Sales”) during the Royalty Term applicable to such Existing Lead Product and country at the rates set forth in the table set forth below. In the event that a Product contains or consists of an Existing Lead Product and a Created Lead Product and/or an Optioned Product, such Product shall be an Existing Lead Product for the duration of the Royalty Term applicable to such Existing Lead Product and country and, to the extent that the Royalty Term applicable to the relevant Created Lead Product and/or an Optioned Product contained in or comprising such Product and country has not expired, shall thereafter be a Created Lead Product or Optioned Product (as relevant) for the duration of the Royalty Term applicable to such Created Lead Product or Optioned Product (as relevant) and country.

 

	
Per Existing Lead Product Annual Net Sales
    	
 
    	
Royalty Rate
    	
 
    
	
Up to and   including [***] Dollars ($[***])
    	
 
    	
[***]
    	
%
    
	
Portion that is   greater than [***] Dollars ($[***]) up to and including [***] Dollars   ($[***])
    	
 
    	
[***]
    	
%
    
	
Portion that is   greater than [***] Dollars ($[***])
    	
 
    	
[***]
    	
%
    

 

6.5.2                              Created Lead Products and Optioned Product Royalties.  On a Created Lead Product-by-Created Lead Product or Optioned Product-by-Optioned Product basis and in each case on a country-by-country basis and subject to Section 6.9, ALEXION shall pay royalties to ZEALAND based on aggregate worldwide Net Sales of a given Created Lead Product or Optioned Product (excluding in each case Net Sales of all other Products including other Created Lead Products or Optioned Products) in a given Calendar Year (as applicable, “Per Created Lead Product Sales” or “Per Optioned Lead Product Sales”) during the Royalty Term applicable to such Created Lead Product or Optioned Product and country at the rates set forth in the following table.

 

	
Per Created Lead Product or Per Optioned Product Sales
    	
 
    	
Royalty Rate
    	
 
    
	
Up to and   including [***] Dollars ($[***])
    	
 
    	
[***]
    	
%
    
	
Portion that is   greater than [***] Dollars ($[***]) up to and including [***] Dollars   ($[***])
    	
 
    	
[***]
    	
%
    
	
Portion that is   greater than [***] Dollars ($[***]) up to and including [***] Dollars   ($[***])
    	
 
    	
[***]
    	
%
    
	
Portion that is   greater than [***] Dollars ($[***])
    	
 
    	
[***]
    	
%
    

 

6.6                               Royalty Calculation Example.  By way of example, in a given Calendar Year and without giving effect to any potential reductions under this Agreement, if the Per Existing Lead Product Sales of a given Existing Lead Product for which a royalty is payable pursuant to Section 6.5.1 is $[***] (excluding any Net Sales attributable to any other Product whether or not an Existing Lead Product), the following royalty payment would be payable for those Net Sales: ([***]% of $[***]) + ([***]% of $[***]) = $[***].

 

6.7                               Royalty Term.  ALEXION’s obligation to pay royalties shall begin, on a country-by-country and Product-by-Product basis, with the First Commercial Sale of such Product in such country, and

 

34

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

shall expire, on a country-by-country and Product-by-Product basis, upon the expiry of the Royalty Term in such country.  Upon expiration (but not upon the earlier termination of this Agreement) of the Royalty Term for a given Product in a given country (a) no further royalties shall be payable in respect of sales of such Product in such country, and (b) the licenses granted to ALEXION under Section 9.2.2, and 9.2.4 with respect to such Product in such country shall automatically become fully paid-up, irrevocable and royalty free on a non-exclusive basis.  For the sake of clarity, no multiple royalties shall be payable even if more than one Valid Claim Covers a Product during the Royalty Term.

 

6.8                               Royalty Reports; Payments.

 

6.8.1                              Royalty Reports.  Within [***] days following the end of each Calendar Quarter during which any royalty payments are owed, ALEXION shall submit to ZEALAND a written report on a Product-by-Product and country-by-country basis of Net Sales of Products sold, in the currency for which such Products were sold (and, if the currency of sale was not Dollars, also in Dollars), by or on behalf of ALEXION, its Affiliates and Sublicensees during such Calendar Quarter, and the royalty payments payable on such Net Sales in sufficient detail to permit confirmation of the accuracy of royalty payments payable hereunder.

 

6.8.2                              Royalty Payments. Royalties will be payable on a Calendar Quarter basis and any such payments shall be made within [***] days after the end of the Calendar Quarter during which the applicable Net Sales of Products occurred.

 

6.8.3                              Payment Method.  All payments to be made between the Parties under this Agreement shall be made in Dollars and may be paid by wire transfer, or electronic funds transfer in immediately available funds to a bank account designated by ZEALAND or ALEXION, as applicable.

 

6.8.4                              Currency Conversion.  With respect to sales of Products invoiced in United States Dollars, all such amounts shall be expressed in United States Dollars.  With respect to sales of Products invoiced in a currency other than United States Dollars, all such amounts shall be expressed both in the currency in which the sale is invoiced and in the United States Dollar equivalent.  All royalties payable hereunder shall be calculated based on ALEXION Net Sales expressed in United States Dollars.  For purposes of this Section 6.8.4, the United States Dollar equivalent shall be calculated using the rate of exchange at the close of business on the date ALEXION records the net revenue from the ALEXION customer.  Each daily exchange rate will be the Bloomberg mid-market rate as of the 5:00 PM New York close, or, if not so available, as otherwise agreed by the Parties.

 

6.9                               Royalty Adjustments.

 

6.9.1                              Generic Competition.  In the event that there is Generic Competition with respect to a Product in a country during [***], then royalties payable by ALEXION pursuant to Section 6.5 for such Product in such country shall in such [***] shall, subject to Section 6.9.4, be reduced to [***] percent ([***]%) of the royalty rate otherwise payable under

 

35

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Section 6.5 for such Product in such [***] and for so long as there is Generic Competition at such level with respect to such Product in such country.

 

6.9.2                              No Valid Claim.  During the applicable Royalty Term for a Product in a country, if such Product is sold in such country is not Covered by a Valid Claim of any Licensed Patent Right in the such country at the time of such sale, then the royalties payable for such Product in such country shall be reduced to a percentage which is [***] percent ([***]%) of the royalty rate otherwise payable.

 

6.9.3                              Third Party Royalties Offset.  In the event that ALEXION enters into an agreement with a Third Party to obtain a license under a Patent Right that is [***] a Candidate Product in a country, then, subject to Section 6.9.4, the amounts of any royalties due to ZEALAND for the respective Product in such country shall be reduced by [***] percent ([***]%) of the [***] paid to such Third Party in respect of such agreement.

 

6.9.4                              Application of Royalty Adjustments.  On a Product-by-Product and country-by-country basis, in any particular [***], the reduction under Section 6.9.1 shall be applied first to the amount of royalties otherwise owed under Section 6.5.1 and 6.5.2 for such Product, then the reduction under Section 6.9.2 shall be applied, and finally the offset under Section 6.9.3 shall be applied.  In no event, shall the royalties payable to ZEALAND for a Product in a given country and [***], as reduced by Sections 6.9.1—6.9.3 above, be reduced to an amount less than a royalty of less than [***] percent ([***]%) of the amount otherwise owed under Section 6.5.1 and 6.5.2.  ALEXION may carry forward any offsets permitted under Section 6.9.3 that are incurred or accrued in a [***] but are not applied against royalties due to ZEALAND for such Product in such country in such [***] as a result of the foregoing floor and apply such amounts against royalties due to ZEALAND for such Product in such country in any [***] (subject to the minimum floor set forth in this Section 6.9.4) until the amount of such offset under Section 6.9.3 has been fully applied against royalties due to ZEALAND for such Product in such country.

 

6.9.5                              ZEALAND Third Party Agreements. ZEALAND shall [***]. In the event that ZEALAND [***], ZEALAND shall [***].  ALEXION shall [***].  To the extent that ALEXION [***], the [***].

 

6.10                        Late Payments.  If ALEXION fails to make any undisputed payment due under this Agreement as provided herein on or before the date that such payment is due, then the amount of such payment will bear interest at an annual rate equal to [***] (the “U.S. Prime Rate”) which applied on the first date on which such payment was delinquent or (ii) the maximum rate permitted by Applicable Law, in each case, [***].  If the U.S. Prime Rate is [***], the Parties will [***].

 

6.11                        Taxes.  All payments are exclusive of value added taxes, sales taxes, consumption taxes and other similar taxes as required by Applicable Law (the “Indirect Taxes”).  If any Indirect Taxes are chargeable in respect of any payments, the paying Party shall pay such Indirect Taxes at the applicable rate in respect of such payments following receipt, where applicable, of an Indirect Taxes invoice in the appropriate form issued by the receiving Party in respect of those payments. The Parties shall issue invoices for all amounts payable under this Agreement consistent with Indirect Tax requirements and irrespective of whether the sums may be netted for settlement

 

36

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

purposes.  If the Indirect Taxes originally paid or otherwise borne by the paying Party are in whole or in part subsequently determined not to have been chargeable, all necessary steps will be taken by the receiving Party to receive a refund of these undue Indirect Taxes from the applicable governmental authority or other fiscal authority and any amount of undue Indirect Taxes repaid by such authority to the receiving Party will be transferred to the paying Party within [***] days of receipt.  Notwithstanding the foregoing, [***].

 

6.12                        Withholding Taxes.  The Parties agree that ALEXION and/or its Affiliates shall make each payment paid under this Agreement for the benefit of ZEALAND and/or its Affiliates from an account owned by an entity domiciled within [***] (as determined for Tax purposes under Applicable Law) to an account owned by ZEALAND and/or its Affiliates in [***].  Subject to the foregoing, if Applicable Law requires withholding by ALEXION and/or its Affiliates of any Taxes on account of any royalties or any other payments paid under this Agreement for the benefit of ZEALAND and/or its Affiliates, ALEXION and/or its Affiliates may deduct the amount of such Taxes from the applicable payment that is otherwise payable to ZEALAND and/or its Affiliates and such withheld amount shall be remitted by ALEXION and/or its Affiliates to the proper governmental authorities on behalf of ZEALAND and/or its Affiliates.  Any Taxes that are so deducted, withheld and remitted to the proper governmental authorities will be treated for all purposes of this Agreement as having been paid to ZEALAND and/or its applicable Affiliate(s).  Official receipts of the remittance by ALEXION and/or its Affiliates of any such withholding Tax shall be reasonably promptly secured and sent by ALEXION and/or its Affiliates to ZEALAND and/or its Affiliates as evidence of such payment.  The Parties shall reasonably cooperate with each other in claiming exemptions from, or reductions of, any withholding Taxes imposed on ZEALAND and/or its Affiliates under the provisions of any Applicable Law.  If ALEXION elects to make any payment, or to cause any of its Affiliates to make any payment, under this Agreement for the benefit of ZEALAND and/or its Affiliates from an account owned by an entity domiciled in a jurisdiction other than [***] for Tax purposes under Applicable Law, and such payment results in ZEALAND and/or its Affiliates being subject to a withholding tax that it would not have been subject to if the payment had instead been subject to [***] withholding tax (if any) under Applicable Law, as applicable, ALEXION shall pay to ZEALAND such an amount that would result in ZEALAND receiving the same amount under this Agreement as it would have received under this Agreement, had such payment been subject to [***] withholding tax (if any) under Applicable Law, as applicable.

 

6.13                        Financial Audits.

 

6.13.1                       Audits by ZEALAND. ALEXION shall [***] to permit ZEALAND to [***].  ZEALAND shall have the right to cause an independent, certified public accountant of nationally recognized standing selected by ZEALAND and reasonably acceptable to ALEXION (the “Auditor”) to [***].  The accounting firm shall [***].  The Auditor will [***].  The report of the Auditor will [***].  Any disputes with respect to the findings of such Auditor may be [***].  ALEXION shall [***].  If such final Auditor’s report [***], ALEXION shall have the right to [***].  Upon the expiration of [***], the calculation of [***] shall [***]. Any disclosures or reports disclosed to ZEALAND under this Section 6.13.1 shall [***].

 

37

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

6.13.2                       Audits by ALEXION. Upon [***], ZEALAND shall [***].  An examination by ALEXION under this Section 6.13.2 shall [***].  The accounting firm shall [***].  The auditor will [***].  Upon completion of the audit, the accounting firm shall provide both ZEALAND and ALEXION with a written report disclosing [***].  Such report shall [***].  Any disputes with respect to the findings of such Auditor may be [***].  ALEXION shall [***]. ALEXION shall [***].  If such final Auditor’s report [***], ALEXION shall have the right to [***].  Any disclosures or reports disclosed to ALEXION under this Section 6.13.2 shall [***].

 

7.             REPRESENTATIONS, WARRANTIES AND COVENANTS

 

7.1                               Mutual Representations, Warranties and Covenants of the Parties.  Each Party represents and warrants to the other Party as of the Effective Date, and as applicable, covenants to the other Party, that:

 

7.1.1                              it is validly existing and in good standing under the Applicable Laws of the jurisdiction of its incorporation and has the full right, power and authority to enter into this Agreement, conduct the activities allocated to it under this Agreement, grant the licenses and assign the rights under this Agreement and disclose such information and Know-How that is disclosed in performance of its obligations under this Agreement;

 

7.1.2                              this Agreement has been duly executed by it and is legally binding upon it, enforceable in accordance with its terms, and does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material Applicable Law of any court, governmental body or administrative or other agency having jurisdiction over it;

 

7.1.3                              neither it, nor any of its Affiliates are party to any agreements, oral or written, that conflict with its obligations under this Agreement; and

 

7.1.4                              neither it, nor any of its Affiliates, have been Debarred, and during the Term, neither it, nor any of its Affiliates shall use, in any capacity in connection with the obligations to be performed under this Agreement, any person or entity who has been Debarred.

 

7.2                               Additional Representations and Warranties of ZEALAND.  ZEALAND represents and warrants to ALEXION as of the Effective Date that:

 

7.2.1                              all Licensed Patent Rights existing as of the Effective Date are set forth on APPENDIX 5 hereto, and all Licensed Patent Rights (i) are being diligently prosecuted in the respective patent offices in the Territory in accordance with Applicable Law, (ii) all applicable fees have been paid on or before the due date for such payments, and (iii) excluding any information submitted to or received from any patent office in the Territory or as disclosed to ALEXION, ZEALAND is not aware of information “material to the patentability” (as such term is used in 37 C.F.R 1.56) of any claim under the Licensed Patent Rights;

 

7.2.2                              ZEALAND is the sole and exclusive owner of, or Controls, the Existing Lead Molecules and the Licensed Intellectual Property and none of the Licensed Intellectual Property or

 

38

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Existing Lead Molecules constitutes or results from any misappropriated Intellectual Property;

 

7.2.3                              ZEALAND has the necessary rights to grant the licenses under the Licensed Intellectual Property to ALEXION under this Agreement;

 

7.2.4                              ZEALAND has the necessary rights to the Licensed Intellectual Property licensed to ALEXION under this Agreement to conduct the Discovery/Development Programs (including any Discovery Plan and Development Plan thereunder), the [***] Work Plan, and the Manufacturing in the manner contemplated under the applicable Research Work Plans and Development Plans;

 

7.2.5                              it is entitled to grant the licenses to ALEXION under this Agreement, and has taken all appropriate measures (including having appropriate agreements in place with any person or contractor that will be involved in Discovery/Development Activities, or Manufacturing) under all Applicable Laws to grant such licenses and assign such rights;

 

7.2.6                              neither ZEALAND, nor any of its Affiliates have previously assigned, transferred, conveyed or otherwise encumbered its right, title or interest in or to the Existing Lead Molecules, the Licensed Intellectual Property in a manner that would prevent (i) ZEALAND from performing the Discovery/Development Activities in accordance with the Development Plans or the Discovery/Development Activities in accordance with the Development Plans, the Manufacturing obligations as they exist at the Effective Date, or assigning and granting the rights to ALEXION set forth in Section 9; or (ii) ALEXION or its Affiliates, subcontractors, CMOs and Sublicensees from researching, Developing, Manufacturing or Commercializing Products or from otherwise exploiting its rights and licenses granted or assigned by ZEALAND hereunder;

 

7.2.7                              there are no pending claims, judgments or settlements against, or amounts owed to a Third Party by ZEALAND or any of its Affiliates in connection with a claim, judgment or settlement, involving the Existing Lead Molecules or Licensed Intellectual Property licensed by ZEALAND to ALEXION under this Agreement and ZEALAND has not received written notice threatening any such claims, judgments or settlements;

 

7.2.8                              to ZEALAND’s knowledge, all information disclosed to ALEXION by ZEALAND relating to the Existing Lead Products, the Licensed Intellectual Property and the materials and methods to be employed by ZEALAND in the execution of the Development Plan and this Agreement is, at the time of disclosure, accurate in all material respects;

 

7.2.9                              to ZEALAND’s knowledge, no person is infringing or threatening to infringe or misappropriate or threatening to misappropriate the Licensed IP;

 

7.2.10                       each person who has or has had any rights in or to any the Existing Lead Molecules or Licensed IP in each case existing as of the Effective Date and owned by ZEALAND has assigned and has executed an agreement assigning its entire right, title and interest in and to such Licensed IP to ZEALAND and as far as ZEALAND is aware, each person who has or has had any rights in or to any Existing Lead Molecules or Licensed IP in each

 

39

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

case existing as of the Effective Date and licensed to ZEALAND by a Third Party has assigned and has executed an agreement assigning its entire right, title and interest in and to such Existing Lead Molecules or Licensed IP to such Third Party;

 

7.2.11                       other than the Intellectual Property that is licensed or assigned by ZEALAND to ALEXION in this Agreement and as disclosed in Section 7.2.7, ZEALAND is not aware and has not received any written notice of any Intellectual Property (including any Intellectual Property Controlled by a Third Party) that would be infringed, either by ALEXION or ZEALAND, in the course of conducting Discovery/Development Activities, or Manufacturing, or ALEXION’s use, Manufacture, Commercialization or other exploitation of any Existing Lead Molecule, Candidate Product or Product as contemplated hereunder;

 

7.2.12                       Schedule 1.63 sets forth a complete list of all Existing Lead Molecules owned or Controlled by ZEALAND as of the Effective Date.

 

7.3                               Covenants.  Each Party shall, and shall ensure that its Affiliates and Sublicensees, obtain written agreements from any and all persons involved in or performing any Discovery/Development Activities, Manufacturing or otherwise involved in the performance of a Party’s obligations under this Agreement assigning such persons’ right, title and interest in and to any Licensed IP, Results, or Collaboration IP to such Party prior to any such person performing such activities. During the Term, ZEALAND shall maintain sufficient resources to perform the Discovery/Development Activities and Manufacturing ascribed to it in accordance with this Agreement.  Neither ZEALAND, nor any of its Affiliates, shall assign, transfer, convey or otherwise encumber during the Term, its right, title or interest in or to any Existing Lead Molecule, Candidate Product, the Licensed Intellectual Property, Collaboration IP, Results or Deliverables in a manner that would prevent (i) ZEALAND from performing the Discovery/Development Activities in accordance with the Development Plans or the Discovery/Development Activities in accordance with the Development Plans, or assigning and granting the rights to ALEXION set forth in Section 9; or (ii) ALEXION or its Affiliates, subcontractors and Sublicensees from researching, Developing, Manufacturing or Commercializing Products or from otherwise exploiting its rights and licenses granted or assigned by ZEALAND hereunder.

 

7.4                               During the Term, ZEALAND shall ensure that all laboratories, rooms and equipment and the conduct of all activities to be carried out by on behalf of ZEALAND in connection with the Discovery/Development Programs or the Discovery/Development Programs, comply with the Development Plans, the Development Plans, and Applicable Laws (including, as applicable GLP).

 

7.5                               DISCLAIMER OF WARRANTIES.  EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.  IN PARTICULAR, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTY THAT THE CANDIDATE PRODUCTS OR PRODUCT(S) WILL BE SUCCESSFULLY DEVELOPED HEREUNDER.

 

40

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

7.6                               NO CONSEQUENTIAL DAMAGES. EXCEPT FOR DAMAGES RESULTING FROM BREACHES OF SECTION 2.5 (ADDITIONAL TARGETS), SECTION 2.6 (EXCLUSIVITY) OR ARTICLE 8 (CONFIDENTIALITY), OR INDEMNIFIABLE CLAIMS UNDER ARTICLE 11 (INDEMNIFICATION), IN NO EVENT WILL EITHER PARTY HAVE ANY CLAIMS AGAINST OR LIABILITY TO THE OTHER PARTY WITH RESPECT TO ANY INDIRECT, PUNITIVE, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES (INCLUDING ANY CLAIMS FOR LOST PROFITS OR REVENUES) ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT UNDER ANY THEORY OF LIABILITY, EVEN IF SUCH PARTY HAS BEEN INFORMED OR SHOULD HAVE KNOWN OF THE POSSIBILITY OF SUCH DAMAGES.

 

8.             CONFIDENTIALITY

 

8.1                               Confidential Information.  “Confidential Information” means all non-public Know-How or other information, including proprietary materials or information, transferred, disclosed or otherwise made available by or on behalf of a Party (the “Disclosing Party”) to the other Party or its permitted recipients (the “Receiving Party”) prior to, on or after the Effective Date, whether or not patentable and whether or not disclosed in written, oral graphical, machine-readable, electronic or other form or otherwise observed by the Receiving Party, and whether or not such information is marked as confidential or proprietary.  It is understood and agreed by the Parties that:

 

8.1.1                              The terms and conditions of this Agreement will be considered Confidential Information of both Parties and kept confidential by each of the Parties as set forth in this Article 8.

 

8.1.2                              (i) the identities of the Targets, Existing Lead Molecules, Created Lead Molecules, the Candidate Products, and the Products and (ii) all [***], except insofar as any of the foregoing in (i) or (ii) solely relate to Discontinued Products (which shall be considered the Confidential Information of ZEALAND, with ZEALAND deemed to be the Disclosing Party and ALEXION deemed to be the Receiving Party with respect thereto), shall be considered the Confidential Information of ALEXION, with ALEXION deemed to be the Disclosing Party and ZEALAND deemed to be the Receiving Party with respect thereto.

 

8.2                               Non-Disclosure and Non-Use Obligation.  Except as otherwise expressly set forth herein, the Receiving Party shall keep the Confidential Information of the Disclosing Party confidential using at least the same degree of care with which the Receiving Party holds its own confidential information and shall not (i) disclose such Confidential Information to any person or entity without the prior written approval of the Disclosing Party, except, solely to the extent necessary to exercise its rights, perform its obligations under this Agreement, or to evaluate the economic value of and otherwise assess this Agreement (e.g., by sharing portfolio information) including any Results, Deliverables, Candidate Products and Products, to its employees, Affiliates, Sublicensees and contractors, consultants or agents who have a need to know such Confidential Information, all of whom will be similarly bound by the provisions of this Article 8 and for whom the Disclosing Party will be responsible, or (ii) use such Confidential Information for any purpose other than for the purposes contemplated by this Agreement.  The Receiving Party will use diligent efforts to cause the foregoing entities and persons to comply with the restrictions on use and disclosure set

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

forth in this Section 8.2, and shall be responsible for ensuring that such entities and persons maintain the Disclosing Party’s Confidential Information in accordance with this Article 8.

 

8.3                               Return of Confidential Information.  Upon the expiration or termination of this Agreement, the Receiving Party shall return (or, as directed by the Disclosing Party, destroy) all Confidential Information of the Disclosing Party to the Disclosing Party that is in the Receiving Party’s possession or control, provided, however, one (1) copy may be retained and stored solely for the purpose of determining its obligations under this Agreement, provided that the non-disclosure and non-use obligation under this Article 8 shall continue to apply to any such copies.  In addition, the Receiving Party shall not be required to return or destroy Confidential Information contained in any computer system back-up records made in the ordinary course of business; provided, that such Confidential Information may not be accessed without the Disclosing Party’s prior written consent or as required by Applicable Law.

 

8.4                               Exemption.  The foregoing confidentiality and non-use obligations shall not apply, to the extent that the Receiving Party can so demonstrate, to: (i) information already in the possession of the Receiving Party prior to its disclosure by the Disclosing Party as evidenced by written records, (ii) information which comes into the public domain by publication or otherwise through no breach of the obligations of confidentiality and non-use hereunder by the Receiving Party, including with respect to Section 10.1, (iii) information which has been disclosed to the Receiving Party from another source free from any obligation of confidentiality and which was not directly or indirectly obtained from the Disclosing Party, or (iv) information which is developed independently by employees, subcontractors, consultants or agents of the Receiving Party or any of its Affiliates without use of or reliance upon the Disclosing Party’s Confidential Information, as evidenced by contemporaneous written records.

 

8.5                               Permitted Disclosures.  In addition to the exceptions contained in Sections 8.2 and 8.4, the Receiving Party may disclose Confidential Information of the Disclosing Party to the extent (and solely to the extent) that such disclosure is reasonably necessary in the following instances:

 

8.5.1                              to comply with Applicable Law (including any securities law or regulation or the rules of a securities exchange pursuant to Section 8.6 below) or the order of a court of competent jurisdiction, provided that, where legally permissible, the Receiving Party promptly notifies the Disclosing Party of such obligation sufficiently prior to making such disclosure, so as to allow the Disclosing Party adequate time to take whatever action it may deem appropriate to protect the confidentiality of the information to be disclosed, and the information to be disclosed and fully cooperates with the Disclosing Party, if so requested, in maintaining the confidentiality of such information by applying for a protective order or any similar legal instrument.  In any event, the compelled Receiving Party shall only disclose such Confidential Information to the extent required under Applicable Law and shall continue to treat such information as Confidential Information for all other purposes under this Agreement;

 

8.5.2                              to prosecute or defend litigation or to otherwise exercise its rights or perform its obligations in Section 9.4.2 below, Regulatory Approvals and other regulatory filings and communications, to file or prosecute patent applications or regulatory filings as contemplated by this Agreement so long as there is [***] days’ prior written notice before

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

filing and to enforce Patent Rights in connection with the Receiving Party’s rights and obligations pursuant to this Agreement; and

 

8.5.3                              to allow the Receiving Party to exercise its rights and perform its obligations hereunder provided that such disclosure is covered by terms of confidentiality and non-use at least as restrictive as those set forth herein.

 

8.6                               Disclosure of Agreement.  Either Party may disclose the terms of this Agreement (a) to the extent required or advisable to comply with the rules and regulations promulgated by the United States Securities and Exchange Commission or any equivalent governmental agency in any country in the Territory, provided that such Party shall submit a confidential treatment request in connection with such disclosure and shall submit with such confidential treatment request only such redacted form of this Agreement as may be mutually agreed in writing by the Parties; (b) to bona fide prospective or actual acquirers, permitted assignees or merger candidates or to bona fide existing or potential investment bankers, investors and lenders, or financing sources, in a redacted form of this Agreement or its terms which shall be redacted in respect of (i) the identity of Targets, (ii) Development Milestone Events, Existing Product Sales Milestone Events or Sales Milestone Events and Development Milestone Payments, Existing Product Sales Milestone Payments or Sales Milestone Payments under Section 6.3 (other than total potential milestones per Target), and (iii) royalties and computations in Section 6.5; provided that, either Party may disclose an unredacted form of this Agreement (including the foregoing information regarding Targets and payments) to bona fide potential or actual acquirers and permitted assignees or merger candidates, but only at such time as the (x) Disclosing Party acting reasonably and in good faith believes, that the contemplated merger or acquisition is likely to take place with such potential transaction partner to whom ZEALAND wishes to disclose the Agreement to and (y) such transaction partner has executed with such Disclosing Party a confidentiality agreement with terms restricting such partner’s use solely for evaluating the potential transaction, restricting access to such individuals as may need to know the information for such evaluation and strictly prohibit disclosure of such terms by the partner and otherwise as protective with respect to Confidential Information as contained herein; and provided further, that in the case of disclosure by ZEALAND to a Competitor, ZEALAND may only disclose such unredacted Agreement or its terms in a secure data room accessible only on a need to know basis with watermarking and controlled access with respect to the proposed transaction with such Competitor and in accordance with the foregoing (x) and (y) and (c) to the extent necessary to perform obligations or exercise rights under this Agreement, any sublicensee, collaborator or potential sublicensee or potential collaborator of such Party, provided that any sublicensee, collaborator or potential sublicensee or collaborator agree in writing to be bound by obligations of confidentiality and non-use no less protective of the Disclosing Party than those set forth in this Article 8.

 

8.7                               Use of Name and Logo.  Subject to Section 10.2, neither ZEALAND nor ALEXION shall use the other Party’s or its Affiliates’ name or logo in any label, press release or product advertising, or for any other promotional purpose, without first obtaining the other Party’s written consent.

 

8.8                               Engaging Individuals.  Each Party hereby agrees that all individuals (including Sublicensees, subcontractors, and CMOs) engaged to perform any activities under this Agreement (including students, research assistants, etc.) shall be contractually bound by confidentiality obligations at

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

least as restrictive as the obligations of confidentiality and non-use set forth in this Article 8 prior to performing such activities.

 

8.9                               Survival.  This Article 8 shall survive the expiry or termination of this Agreement and shall remain in full force and effect for [***] years after the expiry or termination of this Agreement.

 

9.             INTELLECTUAL PROPERTY

 

9.1                               Ownership.

 

9.1.1                              Background IP.  Each Party shall be and shall remain the owner of any Intellectual Property that (i) it developed or owned prior to the Effective Date of this Agreement or (ii) it independently develops or acquires during the Term outside the scope of Discovery/Development Activities, or other performance of such Party’s obligations under this Agreement.

 

9.1.2                              Ownership.  As between the Parties (a) ZEALAND will own all right, title and interest in and to any Collaboration IP and Licensed IP conceived, reduced to practice or otherwise discovered solely by or on behalf of ZEALAND or its Affiliates or subcontractors and any Patent Rights that Cover or claim such Collaboration IP or Licensed IP and (b) the Parties will jointly own all right, title and interest in and to any Licensed IP or Collaboration IP conceived, reduced to practice or otherwise discovered jointly by or on behalf of ZEALAND or its Affiliates and subcontractors on the one hand and ALEXION or its Affiliates and subcontractors on the other hand including any Patent Rights that disclose or claim such joint Licensed IP or Collaboration IP (collectively, “Joint Patent Rights”).  Subject to this Agreement including the licenses granted herein, each Party may exercise its ownership rights in and to any such jointly owned Licensed IP or Collaboration IP, including Joint Patent Rights, including the right to license and sublicense or otherwise to exploit, transfer or encumber its ownership interest, without an accounting or obligation to, or consent required from, the other Party.  Without limiting a Party’s obligations hereunder, each Party shall require its employees (and Affiliates or subcontractors and employees thereof) performing the Discovery/Development Activities, Manufacturing or the Discovery/Development Programs on its behalf or with access to the other Party’s Background IP or Confidential Information to assign to such Party any Licensed IP or Collaboration IP and to cooperate with such Party in connection with obtaining patent protection therefor.

 

9.1.3                              Disclosure of Inventions by Personnel.  Where any personnel of a Party (including any employee, agent or consultant hired by a Party, and any person or entity performing work on behalf of a Party or such Party’s Affiliates) is involved in or performing activity that may result in Licensed IP or Collaboration IP, including in performing the Discovery/Development Activities, Manufacturing, or otherwise involved in the performance of a Party’s obligations under this Agreement, such Party shall ensure that such personnel informs such Party about and assigns to such Party any Licensed IP or Collaboration IP and such Party shall promptly inform the other Party of the same.  The receiving Party shall treat any information on such Licensed IP or Collaboration IP as Confidential Information in accordance with Article 8 of this Agreement.

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

9.1.4                              Inventorship.  Inventorship of patentable Inventions conceived, reduced to practice or otherwise discovered in the course of conducting the Discovery/Development Activities, Manufacturing, or otherwise arising out of a Party’s performance of its obligations under this Agreement shall be determined in accordance with U.S. patent laws.

 

9.2                               Licenses.

 

9.2.1                              Research License.  Subject to the terms and conditions of this Agreement, ALEXION hereby grants to ZEALAND, during the Discovery/Development Program Term, a royalty-free, non-exclusive, worldwide license to use the ALEXION Background Intellectual Property solely for the purpose of conducting any Discovery/Development Activities expressly allocated to ZEALAND under this Agreement.

 

9.2.2                              Research and Evaluation License.  Subject to the terms and conditions of this Agreement, ZEALAND hereby grants to ALEXION and its Affiliates, during the Discovery/Development Program Term, a worldwide, royalty-free, co-exclusive (with ZEALAND) license, with the right to sublicense (subject to the provisions of Section 9.2.6 below), under the Licensed Intellectual Property solely for the purpose of evaluating of any Results, Deliverables, Candidate Products, or Products.

 

9.2.3                              Manufacturing License.  Subject to the terms and conditions of this Agreement, ALEXION hereby grants to ZEALAND and its Affiliates, a worldwide, royalty-free, non-exclusive license, without the right to sublicense (except to CMOs of ZEALAND as permitted under this Agreement or the applicable Clinical or Commercial Supply Agreement), under the ALEXION Background Intellectual Property, solely for the purpose of carrying out Manufacturing activities expressly allocated to ZEALAND pursuant to this Agreement, the Clinical Supply Agreement or the Commercial Supply Agreement.

 

9.2.4                              Development and Commercialization License.  Subject to the terms and conditions of this Agreement, ZEALAND hereby grants to ALEXION and its Affiliates a worldwide, royalty-bearing in accordance with Article 6 of this Agreement, exclusive (even as to ZEALAND, except to the extent necessary for ZEALAND to conduct any Discovery/Development Activities or Manufacturing activities expressly allocated to ZEALAND under this Agreement or the Clinical Supply Agreement or Commercial Supply Agreement) license, with the right to sublicense through multiple tiers (subject to the provisions of Section 9.2.6 below), under the Licensed Intellectual Property to Develop, have Developed, Manufacture, have Manufactured, use, have used, offer for sale, have offered for sale, sell, have sold, export, have exported, import, have imported, Commercialize and have Commercialized Products, or otherwise fully exploit Products in the Field in the Territory.

 

9.2.5                              Collaboration IP License.  Subject to the terms and conditions of this Agreement, ZEALAND hereby grants to ALEXION and its Affiliates a worldwide, royalty free, fully paid-up, non-exclusive license, with the right to sublicense through multiple tiers (subject to the provisions of Section 9.2.6 below), in and to any Collaboration IP to Develop, have Developed, Manufacture, have Manufactured, use, have used, offer for sale, have offered

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

for sale, sell, have sold, export, have exported, import, have imported, Commercialize and have Commercialized any and all products that, as its primary mechanism of action [***].

 

9.2.6                              Sublicensing.  ZEALAND may not grant any sublicense under Section 9.2.1 or Section 9.2.3 without the prior written consent of ALEXION, except to ZEALAND’s permitted subcontractors on APPENDIX 6 as approved by ALEXION, such approval not to be unreasonably withheld, conditioned or delayed.  ALEXION and its Affiliates may grant sublicenses under Section 9.2.2 and Section 9.2.4 to any Affiliate or Third Party.  A Party granting a sublicense under this Section 9.2.6 (the “Sublicensing Party”) shall promptly provide the other Party (the “Non-Sublicensing Party”) with a copy of each sublicense agreement within [***] days after execution of such sublicense agreement, which may be redacted to omit any terms not necessary to confirm the Sublicensing Party’s compliance with this Section 9.2.6.  Any such sublicense agreement shall comply with the terms of this Agreement and shall include (a) confidentiality, non-disclosure and non-use provisions at least as restrictive or protective of the Parties as those set forth in this Agreement and (b) solely with respect to ALEXION as the Sublicensing Party, (i) an obligation to submit to ALEXION reports sufficient to enable ALEXION to comply with its obligations under Section 6.8.1, and (ii) audit requirements permitting audits by ALEXION of such Sublicensee consistent with the requirements set forth in Section 6.13.1 and (iii) indemnities that cover ZEALAND on terms substantially equivalent to those set out in Section 11.2. Each Party will remain responsible and liable for the performance of all Affiliates and Sublicensees under their respective sublicensed rights to the same extent as if such activities were conducted by the sublicensing Party.  In no event will any sublicense relieve the sublicensing Party of any of its obligations under this Agreement.

 

9.2.7                              [***].  By written notice delivered during the [***] Period applicable to any [***] Product, [***].  Subsequent to the delivery of such notice, [***].  If the Parties agree that such [***] Product is [***], the Parties shall [***].  Nothing in this Agreement or any course of conduct by either Party before or after the Effective Date of this Agreement, including during any [***] Period, shall give rise to any [***].  If [***], then [***] with respect to ZEALAND for such [***] Product under this Section 9.2.7.

 

9.2.8                              No Implied Licenses.  Except as expressly provided in this Agreement, neither Party shall be deemed to have granted the other Party any license or other right, title or interest, whether by implication, estoppel, reliance, or otherwise, with respect to any Intellectual Property of such Party.

 

9.3                               Patent Prosecution and Maintenance.

 

9.3.1                              Patent Prosecution by ALEXION.  ALEXION shall have the first right (but not the obligation) to prosecute, defend and maintain all (i) Patent Rights that are [***] comprised in and to [***], including any [***] Patent Rights (collectively, “[***] Patent Rights”) and (ii) any [***] Patent Rights other than [***] Patent Rights (collectively, such [***] Patent Rights and other [***] Patent Rights “Agreement Patent Rights”) and ALEXION shall be responsible for and pay all future costs and expenses incurred for the

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

preparation, filing, prosecution, issuance and maintenance of such Agreement Patent Rights.  ZEALAND shall provide ALEXION reasonable assistance and cooperation in respect thereto, including as specified in Section 9.3.4 below and including providing any necessary powers of attorney and executing any other required documents or instruments therefor.  If ALEXION elects not to prosecute, defend or maintain any Agreement Patent Rights including electing not to file a patent application with respect thereto or to allow any such Patent Rights to lapse or become abandoned or unenforceable, then ALEXION shall promptly notify ZEALAND in writing (which such notice shall be at least [***] days prior to the lapse or abandonment of any such Patent Rights).  Thereafter ZEALAND may, but is not required to, at its sole expense and in its sole discretion, prosecute, defend or maintain such Patent Rights through counsel of its choosing.  In the event that ZEALAND undertakes such prosecution, defense or maintenance, ALEXION shall provide ZEALAND reasonable assistance and cooperation in respect thereto, including as specified in Section 9.3.4 below and including providing any necessary powers of attorney and executing any other required documents or instruments therefor.

 

9.3.2                              Patent Prosecution by ZEALAND.  ZEALAND shall have the first right (but not the obligation) to prosecute, defend and maintain all Patent Rights comprised in and to [***] that are not Agreement Patent Rights (collectively “ZEALAND Patent Rights”) and ZEALAND shall be responsible for and pay all future costs and expenses incurred for the preparation, filing, prosecution, issuance and maintenance of such ZEALAND Patent Rights.  ALEXION shall provide ZEALAND reasonable assistance and cooperation in respect thereto, including as specified in Section 9.3.4 below and including providing any necessary powers of attorney and executing any other required documents or instruments therefor.  If ZEALAND elects not to prosecute, defend or maintain any such ZEALAND Patent Rights including electing not to file a patent application with respect thereto or to allow any such Patent Rights to lapse or become abandoned or unenforceable, then ZEALAND shall promptly notify ALEXION in writing (which such notice shall be at least [***] days prior to the lapse or abandonment of any such Patent Rights).  Thereafter ALEXION may, but is not required to, at its sole expense and in its sole discretion, prosecute, defend or maintain such ZEALAND Patent Rights through counsel of its choosing.  In the event that ALEXION undertakes such prosecution, defense or maintenance, ZEALAND shall provide ALEXION reasonable assistance and cooperation in respect thereto, including as specified in Section 9.3.4 below and including providing any necessary powers of attorney and executing any other required documents or instruments therefor.

 

9.3.3                              Comment Rights.  In furtherance of Section 9.3.1 and 9.3.2, the prosecuting Party shall provide to the other Party or its designated patent counsel, reasonably in advance of each substantive submission to be filed in the United States, a Major European Market, Japan, China, or Canada, including any PCT application, a reasonable opportunity to review and comment on the proposed submission to any such patent office and consider in good faith all reasonable comments provided by such other the other Party, provided that the prosecuting Party shall have the final decision with respect thereto.  The prosecuting Party will keep the other Party reasonably informed of the status of the applicable Patent Rights by timely providing the other Party with copies of filings or submissions relating to such

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Patent Rights and material communications relating to such Patent Rights that are received from any patent office.

 

9.3.4                              Prosecution Cooperation.  Each Party will cooperate with and reasonably assist the other Party in such preparation, filing, prosecution, issuance and maintenance, including making its relevant scientists and scientific records reasonably available.  In addition, each Party will sign and deliver, or use reasonable efforts to have signed and delivered, at no charge to the requesting Party, all documents reasonably necessary for such preparation, filing, prosecution, issuance and maintenance of any Intellectual Property assigned to such requesting Party under this Agreement.

 

9.4                               Patent Enforcement.

 

9.4.1                              Third Party Infringement.  During the Term, each Party shall promptly provide the other Party with a written notice if such Party becomes aware of any suspected, threatened or actual infringement by any Third Party of a [***] (in each case an “Infringed Patent”) and shall provide any available evidence of such suspected, threatened or actual infringement with such notification.

 

9.4.2                              Infringement Actions.

 

(a)                                 Enforcement.  During the Term, ALEXION shall have the first right, but not the obligation, to enforce or defend any infringement proceedings, to the extent that the Infringed Patent is included in the [***] Patent Rights, against such Third Party, at ALEXION’s risk, cost and expense.  During the Term, ZEALAND shall have the first right, but not the obligation, to enforce or defend any infringement proceedings in respect of any Patent Rights other than the [***] Patent Rights against such Third Party, at ZEALAND’s risk, cost and expense.

 

(b)                                 Cooperation.  Where a Party (the “Enforcing Party”) desires to enforce or defend such proceedings but may not – even as the co-owner or exclusive licensee of such Patent – do so due to Applicable Law or regulation, then the Enforcing Party may request that the other Party join as a named party in such action or itself enforce or defend such Infringed Patent against such Third Parties, at the Enforcing Party’s sole direction, cost and expense.  The Enforcing Party shall take the lead in the control and conduct of any such enforcement or defense under this Section 9.4.2, in close coordination with the other Party, and the other Party shall reasonably assist the Enforcing Party at the Enforcing Party’s cost and expense, in any such enforcement or defense action under this Section 9.4.2.

 

(c)                                  [***].

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

9.4.3                              Third Party Patent Challenges.  In the case of any objection, opposition or challenge by a Third Party to any [***] Patent Rights, ALEXION shall have the first right, but not the obligation, to defend such [***] Patent Rights against such Third Party, at ALEXION’s cost and expense, and the provisions of Section 9.4.2 shall apply as if such opposed, challenged or objected to [***] Patent Rights was an Infringed Patent.  Objections, oppositions and challenges to a Patent Right under this Section include, for example, declaratory judgment proceedings, inter partes review proceedings, post grant review proceedings, patent interference proceedings, ex parte and inter partes reexamination proceedings, and patent opposition proceedings in a court, patent office or other administrative authority with competent jurisdiction in any country within the Territory.

 

9.4.4                              Patent Listing.  [***] shall [***] the listing of any [***] Patent Rights in the then-current edition of the United States Food and Drug Administration publication “Approved Drug Products with Therapeutic Equivalence Evaluations” (the “Orange Book”), or in equivalent patent listings in any other country within the Territory, in connection with the Regulatory Approval of any Product.  If [***] desires to include in any such listing any such [***] Patent Rights, then [***] shall notify [***] and shall consider in good faith [***] reasonable comments with respect thereto, provided that [***] shall [***] with respect to any such listing.  If [***] reasonably believes that a Patent Right other than any [***] Patent Rights should be included in any such listing, [***] shall consider in good faith [***] request with respect thereto.

 

9.4.5                              Enforcement of Listed Patents.  The provisions of Sections 9.4.2 and 9.4.3 notwithstanding, the following shall apply with respect to any notification provided by a Third Party to either ALEXION or ZEALAND under 21 U.S.C. § 355(j)(2)(B) making a certification described in 21 U.S.C. §355(j)(2)(A)(vii)(IV) with respect to any Agreement Patent Rights listed in the Orange Book for a Product and with respect to equivalent actions in the United States or in any other country within the Territory (a “Paragraph IV Certification”):

 

(a)                                 The Party receiving a Paragraph IV Certification shall, without any avoidable delay and in any case within [***] Business Days after receiving such a Paragraph IV Certification, notify the other Party in writing and shall attach a copy of the Paragraph IV Certification to such notification.

 

(b)                                 The rights to initiate or continue any infringement proceeding as a result of the Paragraph IV Certification with respect to a Product, including the commencement of a patent infringement action under 35 U.S.C. § 271(e)(2)(A), or under an equivalent statute or regulation within any other country in the Territory (a “Paragraph IV Proceeding”) shall be governed by Section 9.4.2, and any [***] Patent Rights (or other Patent Rights listed pursuant to Section 9.4.4) subject to a Paragraph IV Proceeding shall be considered an Infringed Patent under the [***] Patent Rights for purposes of interpreting Section 9.4.2.

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

9.4.6                              Recoveries.  Any amount recovered in any action under Section 9.4.2, 9.4.3 or 9.4.5, including any amount recovered in any settlement of such action, shall first be used to [***] and shall thereafter be for [***] provided that such amount shall [***].

 

9.5                               Defense of Claims.  Each Party shall promptly inform the other in writing of any written notice to it of alleged infringement or misappropriation, based upon its performance of its obligations or exercise of its rights hereunder, of a Third Party’s Intellectual Property of which it shall become aware.  Except as otherwise set forth herein (including under Article 11), each Party shall have the sole right to defend against any such claim brought against it, provided, however, that to the extent such action resulting from such claim involves an objection, opposition or challenge to any Agreement Patent Rights or ZEALAND Patent Rights by such Third Party or a counterclaim involving such Patent Rights, Section 9.4.2 or Section 9.4.3 shall apply, as applicable.  Each Party shall each keep the other advised of all material developments in the conduct of any proceedings in defending any claim of such alleged infringement or misappropriation and shall reasonably cooperate with the other in the conduct of such defense.  In no event may either Party settle any such infringement or misappropriation claim in a manner that would limit the rights of the other Party, admit the fault of the other Party or impose any obligation on the other Party, without such other Party’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed.

 

9.6                               Patent Term Extensions.  [***] shall [***] all filings of requests for patent term extensions, supplementary protection certificates or equivalents thereto, in any country in the Territory, for any [***] and [***] shall have the rights to make such filing if [***] (hereinafter “Patent Term Extensions”).  All costs and expenses relating to the Patent Term Extensions shall be born solely by [***].  Upon request of the filing Party and at the filing Party’s costs, the non-filing Party shall provide support, assistance and all necessary documents, in full executed form if needed, to the filing Party for the purpose of supporting, filing, obtaining and maintaining Patent Term Extensions.

 

10.             PUBLICATIONS

 

10.1                        Publication Rights.  ALEXION shall [***] to publish on [***], subject to the prior review of ZEALAND.  ALEXION shall submit to ZEALAND any such abstract, publication or presentation of [***] shall be subject to the prior review of ZEALAND and shall be provided by ALEXION at least [***] Business Days prior to its submission for publication or presentation.  ZEALAND will use diligent efforts to complete its review at least [***] Business Days prior to ALEXION’s intended publication or presentation date.  ALEXION shall, as reasonably requested by ZEALAND, (a) delete from such publication any of ZEALAND’s Confidential Information, or (b) upon a determination that such publication includes patentable material, delay the submission of such publication or presentation for an additional period of up to [***] Business Days in order to allow the appropriate Party to pursue patent protection.

 

10.2                        Press Release.  The Parties shall issue a press release following the execution of this Agreement describing the nature of the collaboration between ALEXION and ZEALAND in the form set out in Schedule 10.

 

50

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

11.             INDEMNIFICATION AND LIABILITY

 

11.1                        Indemnification by ZEALAND.  ZEALAND shall indemnify, defend, and hold harmless ALEXION and its Affiliates and their respective officers, directors, employees, licensees, sublicensees, and agents, and their respective successors, heirs and assigns and representatives (the “ALEXION Indemnitees”), from and against any and all damages, losses, suits, proceedings, liabilities, costs and expenses (including reasonable legal expenses, costs of litigation and reasonable attorney’s fees) or judgments, whether for money or equitable relief, of any kind (collectively, “Damages”) resulting from any and all suits, investigations, claims or demands of Third Parties (collectively, “Third Party Claims”) brought against an ALEXION Indemnitee, to the extent directly or indirectly arising out of or relating to: (i) the gross negligence or willful misconduct of ZEALAND, its Affiliates and its respective officers, directors, or employees in connection with ZEALAND’s performance of its obligations under this Agreement, (ii) any breach by ZEALAND of any obligation, representation, warranty or covenant set forth in this Agreement and (iii) the failure of ZEALAND or its Affiliates to comply with any Applicable Laws, in each case except to the extent ALEXION is liable for such Damages pursuant to Section 11.2.

 

11.2                        Indemnification by ALEXION.  ALEXION shall indemnify, defend, and hold harmless ZEALAND and its Affiliates, and its and their respective officers, directors, employees, and agents, and their respective successors, heirs and assigns and representatives (the “ZEALAND Indemnitees”), from and against any and all Damages resulting from Third Party Claims against a ZEALAND Indemnitee (including by ALEXION employees), to the extent directly or indirectly arising out of or relating to (i) the gross negligence or willful misconduct of ALEXION, its Affiliates, and its and their respective licensees, officers, directors, employees in connection with ALEXION’s performance of its obligations or exercise of its rights under this Agreement, (ii) any breach by ALEXION of any obligation, representation, warranty or covenant set forth in this Agreement, (iii) the failure to comply with any Applicable Laws by ALEXION, its Affiliates, or any of its licensees, or (iv) use, Development, Manufacture, Commercialization or other exploitation of any Candidate Product or Product by or on behalf of ALEXION or its Affiliates or Sublicensees, in each case except to the extent ZEALAND is liable for such Damages pursuant to Section 11.1.

 

11.3                        Notification; Assumption of Defense; Cooperation and Assistance.  In the event that a Party seeks indemnification hereunder with respect to a Third Party Claim, the Party seeking indemnification (the “Indemnified Party”) shall promptly notify the other Party (the “Indemnifying Party”) in writing (an “Indemnification Claim Notice”) of any Third Party Claim in respect of which it intends to claim indemnification under this Section 11.3 upon actual knowledge of any such claim or proceeding resulting in Damages, but in no event will the Indemnifying Party be liable for any Damages that result from any delay in providing such notice.  The Indemnification Claim Notice must contain a description of the claim and the nature and amount of such Damages (to the extent that the nature and amount of such Damages is known at such time).  The Indemnifying Party may, at its option, assume exclusive control of the defense and settlement of the Third Party Claim, subject to the limitations on settlement set forth below and in Section 9.5.  If the Indemnifying Party assumes such defense, such assumption shall not be construed as an acknowledgement that the Indemnifying Party is liable to indemnify the Indemnified Party of any defenses it may assert against the Indemnified Party’s claim for indemnification.  Following such assumption, the Indemnifying Party may appoint as lead counsel

 

51

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

in the defense of the Third Party Claim any legal counsel selected by the Indemnifying Party (the Indemnifying Party will consult with the Indemnified Party with respect to a possible conflict of interest of such counsel retained by the Indemnifying Party).  The Indemnified Party will have the right to participate in the defense thereof and to employ counsel, at its own expense, separate from the counsel employed by the Indemnifying Party.  If the Indemnifying Party does not commence actions to assume control of the defense of a Third Party Claim within [***] days after the receipt by the Indemnifying Party of the Indemnification Claim Notice required pursuant to this Section 11.3, or if shorter, prior to the date which is [***] Business Days before the expiry of any deadline to respond to a claim, the Indemnified Party will have the right to defend such claim in such manner as it may deem appropriate at the reasonable cost and expense of the Indemnifying Party.  The Indemnified Party shall cooperate as may be reasonably requested by the Indemnifying Party (and at the Indemnifying Party’s expense) in order to ensure the proper and adequate defense of any action, claim or liability covered by this indemnification.  The Indemnifying Party may not settle or otherwise dispose of any Third Party Claim without the prior written consent of the Indemnified Party unless such settlement includes only the payment of monetary damages (which are fully paid by the Indemnifying Party), does not impose any injunctive or equitable relief upon the Indemnified Party, does not require any admission or acknowledgment of liability or fault of the Indemnified Party and contains an unconditional release of the Indemnified Party in respect of such Third Party Claim.  Regardless of whether the Indemnifying Party chooses to defend or prosecute any Third Party Claim, no Indemnified Party will admit any liability with respect to or settle or otherwise dispose of any Third Party Claim for which the Indemnifying Party may be liable for Damages under this Agreement without the prior written consent of the Indemnifying Party, such consent not to be unreasonably withheld, conditioned or delayed.

 

12.             TERM AND TERMINATION

 

12.1                        Term.  This Agreement shall commence upon the Effective Date and, if not otherwise terminated earlier pursuant to this Article 12, shall continue in full force and effect on a Product-by-Product basis, until the expiration of the last payment obligation by ALEXION with respect to such Product (collectively, the “Term”).

 

12.2                        Termination for Cause.

 

12.2.1                       By ALEXION.  In the event of a material breach of this Agreement by ZEALAND, which material breach remains uncured for [***] days measured from the date of written notice of such material breach by ALEXION as may be extended for the Mediation Period pursuant to Section 12.3, which notice identifies the material breach and the actions or conduct that it reasonably considers would be an acceptable cure of such material breach, ALEXION may terminate this Agreement in whole or with respect to one or more Candidate Products, Products or Targets, at any time during the Term of this Agreement by written notice of termination to ZEALAND.

 

12.2.2                       By ZEALAND.  In the event of a material breach of this Agreement by ALEXION, which material breach remains uncured for [***] days measured from the date of written notice of such material breach by ZEALAND as may be extended for the Mediation Period pursuant to Section 12.3, which notice identifies the material breach and the actions or conduct that it reasonably considers would be an acceptable cure of such material breach,

 

52

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

ZEALAND may terminate this Agreement in whole or with respect to one or more Candidate Products, Products or Targets to which such material breach relates, at any time during the Term of this Agreement by written notice of termination to ALEXION.

 

12.3                        Disputes regarding Material Breach.  In case the Party alleged to have committed the material breach (the “Defaulting Party”) disputes the material breach identified under Section 12.2.1 or 12.2.2 by the other Party (the “Non-Defaulting Party”), then the issue of whether the Non-Defaulting Party may properly terminate this Agreement on expiration of the Mediation Period in accordance with Section 13.8. This Agreement shall remain in full force and effect while any mediation pursuant to Section 13.8.2 is pending, such mediation shall not suspend any obligations of either Party hereunder, and each Party shall use reasonable efforts to mitigate any damage.  If as a result of any dispute resolution proceeding (including litigation) it is determined that the Defaulting Party did not commit such material breach or such material breach was cured at any time during the Mediation Period in accordance with this Section 12.3, then no termination shall be effective, and this Agreement shall continue in full force and effect.

 

12.4                        Termination for Insolvency.  To the extent permitted by Applicable Laws, either Party may terminate this Agreement upon the filing or institution of bankruptcy, restructuring, reorganization, liquidation or receivership proceedings, upon the appointment of a receiver or trustee in respect of the other Party or over all or substantially all property, or upon an assignment of a substantial portion of the assets for the benefit of creditors by the other Party; provided, however, that in the case of any involuntary bankruptcy proceeding such right to terminate shall only become effective if (i) the other Party consents to the involuntary bankruptcy, (ii) a bankruptcy decree is rendered or (iii) the bankruptcy filing is not dismissed within [***] days after the filing thereof (an “Insolvency Event”).

 

12.4.1                       All rights and licenses now or hereafter granted by ZEALAND to ALEXION under or pursuant to this Agreement are, for all purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of rights to “intellectual property” as defined in the U.S. Bankruptcy Code. Upon an Insolvency Event, ZEALAND agrees that ALEXION, as licensee of such rights under this Agreement, will retain and may fully exercise all of its rights and elections under the U.S. Bankruptcy Code. ZEALAND will, during the Term, create and maintain current copies or, if not amenable to copying, detailed descriptions or other appropriate embodiments, to the extent feasible, of all intellectual property licensed under this Agreement.  Each Party acknowledges and agrees that “embodiments” of intellectual property within the meaning of Section 365(n) include laboratory notebooks, cell lines, product samples and inventory, research studies and data, all Regulatory Approvals (and all applications for Regulatory Approval) and rights of reference therein, the Licensed IP and Collaboration IP and all information related to the Licensed IP and Collaboration IP.  If (i) a case under the U.S. Bankruptcy Code is commenced by or against ZEALAND, (ii) this Agreement is rejected as provided in section 365 of the U.S. Bankruptcy Code and (iii) ALEXION elects to retain its rights hereunder as provided in Section 365(n) of the U.S. Bankruptcy Code, ZEALAND (in any capacity, including debtor-in-possession) and its successors and assigns (including a trustee) will:

 

(a)                                 provide ALEXION with embodiments of all Licensed IP and Collaboration IP held by ZEALAND and such successors and assigns,

 

53

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

or otherwise available to them, immediately upon ALEXION’s written request, and ALEXION will have the right to perform ZEALAND’s obligations hereunder and exercise all of the rights of a licensee of intellectual property under section 365(n) of the Bankruptcy Code, provided that neither such provision nor such performance by ALEXION will release ZEALAND from liability resulting from rejection of the license or the failure to perform such obligations; and

 

(b)                                 not interfere with ALEXION’s rights under this Agreement, or any agreement supplemental hereto, to such intellectual property (including such embodiments), including any right to obtain such intellectual property (or such embodiments) from another entity, to the extent provided in Section 365(n) of the U.S. Bankruptcy Code.

 

12.4.2                       All rights, powers and remedies of ALEXION provided herein are in addition to and not in substitution for any other rights, powers and remedies now or hereafter existing at law or in equity (including the U.S. Bankruptcy Code) in the event of the commencement of a case under the U.S. Bankruptcy Code with respect to ZEALAND.  The Parties intend the following rights to extend to the maximum extent permitted by Applicable Law, and to be enforceable under U.S. Bankruptcy Code Section 365(n):

 

(a)                                 the right of access to any intellectual property rights (including all embodiments thereof) of ZEALAND, or any Third Party with whom ZEALAND contracts to perform an obligation of ZEALAND under this Agreement to the extent that ZEALAND is not performing such obligation, and, in the case of any such Third Party, which is necessary for the Manufacture, use, sale, offer for sale, import or export of Products; and

 

(b)                                 the right to contract directly with any Third Party to complete the contracted work to the extent that ZEALAND is not completing or having completed the contracted work.

 

12.5                        [***].  [***] shall use all diligent efforts, as soon as practicable and not later than [***] months after the Effective Date, to [***].  Subject to the agreement of the Parties on [***], [***] shall [***], including [***]. The [***] shall be [a Danish limited liability company (in Danish: anpartsselskab) wholly owned by ZEALAND], and [***]. Concurrently with the [***], [***] shall negotiate the relevant [***], and the Parties will use their diligent efforts to finalise as soon as practicable the documentation for [***] (which the Parties intend [***] solely in connection with the [***]) within the foregoing [***] month period.  The [***] documentation shall be in form and substance reasonably satisfactory to [***].  It is intended that, to the extent of [***], [***] will continue to perform this Agreement [***].  [***] acknowledges and agrees that a breach of its obligations under this Article 12 shall constitute a material breach of this Agreement, and any such breach would cause [***] irreparable harm and damage for which [***] would have no adequate remedy at law and for which monetary damages would be inadequate, and [***] further agrees

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

that in the event of a breach of such obligations [***] would be entitled to seek an injunction to compel [***] compliance with such obligations, in addition to any other remedies.

 

12.6                        Termination at Will.  ALEXION shall be entitled to terminate this Agreement, in whole or with respect to one or more Candidate Products, Products or Targets, at its sole discretion at any time upon [***] days prior written notice to ZEALAND.

 

12.7                        Termination for Patent Challenge.  In the event that ALEXION or any of its Affiliates or Sublicensees directly assert in its own respective name or directs or assists a Third Party to assert a Patent Challenge, ZEALAND will have the right to terminate this Agreement in its entirety upon [***] days written notice to ALEXION.  For purposes of this Section 12.7, “Patent Challenge” means any challenges to a [***] Patent Right including, filing any opposition or objection with a patent office, declaratory judgment proceedings, inter partes review proceedings, post grant review proceedings, patent interference proceedings, ex parte and inter partes reexamination proceedings, and patent opposition proceedings in a court, patent office or other administrative authority with competent jurisdiction in any country within the Territory.

 

12.8                        Termination for ZEALAND Change of Control. In the event of a Change of Control involving a Competitor, ALEXION may terminate this Agreement in whole or with respect to one or more Candidate Products, Products or Targets, within [***] days after receiving the Change of Control Notice, by sending written notice of such termination to ZEALAND within such [***] day period, with such termination being effective immediately prior to the closing of such Change of Control transaction; provided, however, that if ZEALAND [***], ALEXION shall [***].

 

12.9                        Effects of Termination.

 

12.9.1                       Generally.  Upon termination (but not expiration) of the Agreement in whole or with respect to one or more Candidate Products, Products or Targets:

 

(a)                                 The Receiving Party shall promptly return to the other Party or destroy all Confidential Information of the Disclosing Party that is solely related to any such terminated Candidate Product, Product or Target in accordance with Section 8.3 above;

 

(b)                                 All licenses granted by ZEALAND to ALEXION under this Agreement with respect to any such terminated Candidate Product, Product or Target shall immediately terminate; and

 

(c)                                  The licenses granted by ALEXION to ZEALAND pursuant to Section 9.2.1 and 9.2.3 with respect to any such terminated Candidate Product, Product or Target shall immediately terminate.

 

12.9.2                       Return of Discontinued Product.

 

(a)                                 Upon any Product becoming a Discontinued Product, any license rights granted by ZEALAND to ALEXION with respect to the Discontinued Product shall cease and revert to ZEALAND.  ALEXION shall [***].

 

55

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

(b)                                 ALEXION shall grant to ZEALAND an [***], and worldwide, which [***] shall [***].  Any [***] shall [***].  If permitted under [***], upon [***], such [***].

 

(c)                                  Payments Regarding Discontinued Products.  The milestones and royalty rates with respect to a Discontinued Product shall vary based on [***]:

 

	
[***] of the Product at
   Discontinuation
    	
 
    	
Royalty Payments
   to ALEXION
    
	
Less than [***] months   after [***] applicable to such Discontinued Product
    	
 
    	
[***]
    
	
After the period above   and prior to [***]
    	
 
    	
[***]
    
	
After [***]
    	
 
    	
[***]
    

 

12.10                 Rights Accruing Prior to Expiration or Termination.  Expiration or termination of this Agreement shall not relieve the Parties of any obligation accruing prior to such expiration or termination.  Any expiration or termination of this Agreement shall be without prejudice to the rights of either Party against the other accrued or accruing under this Agreement prior to expiration or termination, including any payment obligation that accrued prior to the effective date of such expiration or termination.

 

12.11                 Survival.  In addition to any provisions specified in this Agreement as surviving as set forth therein, the provisions of Articles 1 (Definitions), 6 (Payments and Royalties) solely with respect to payment obligations accruing prior to the effective date of termination, 8 (Confidentiality, for the applicable time period set forth therein) and 11 (Indemnification and Liability, solely with respect to Third Party Claims arising out of circumstances occurring prior to the effective date of termination), Sections 4.6 (Other ALEXION Programs), 7.5 (Disclaimer of Warranties), 7.6 (No Consequential Damages), 9.1 (Ownership), 9.2.8 (No Implied Licenses), 9.3.4 (Prosecution Cooperation), 9.4.2(a) (Cooperation), Sections 12.4 (Termination for Insolvency) and 12.5 (Special Purpose Entity), 12.9 (Effects of Termination), 12.10 (Rights Accruing Prior to Expiration or Termination), this Section 12.11 (Survival) and Sections 13.1 (Assignment) through 13.13 (Further Assurances) shall survive any termination or expiration of the Agreement.  In addition, all rights and obligations contained in this Agreement, which by their nature or effect contemplate performance or observance subsequent to expiration or termination of this Agreement will survive and remain binding upon and for the benefit of the Parties, their successors and permitted assigns.

 

13.             CONCLUDING PROVISIONS

 

13.1                        Assignment and Change of Control.  Neither Party shall be entitled to assign or otherwise transfer its rights and/or obligations under this Agreement in whole or in part to any Third Party without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed; provided that, notwithstanding the foregoing, each Party may

 

56

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

assign this Agreement to (i) any Affiliate, or (ii) any successor corporation or entity resulting from any Change of Control of such Party; and provided further, that any such successor Affiliate, entity or Third Party to which this Agreement is assigned expressly agrees in writing to assume and be bound by all obligations of the assigning Party under this Agreement.  Any Third Party involved in a Change of Control as set forth in the foregoing subclause (ii) of this Section 13.1 and such Third Party’s Affiliates immediately prior to such Change of Control shall be referred to herein as the “Acquirer”.  Notwithstanding the foregoing, in the event that a Change of Control with respect to ZEALAND pursuant to the foregoing (ii) involves a Competitor, then ZEALAND shall promptly notify ALEXION of such contemplated Change of Control, but in any event within [***] Business Days prior to [***] with respect to such contemplated Change of Control, and ALEXION shall have the right to terminate this Agreement in accordance with Section 12.2.1.  In the event of a Change of Control of ZEALAND, in addition to [***], ZEALAND shall implement effective walls and screens between personnel working on activities under this Agreement and activities performed on behalf of Third Parties.

 

13.2                        Entire Agreement; Amendments.  This Agreement sets forth the entire agreement between the Parties and supersedes all previous and contemporaneous negotiations, representations or agreements, written or oral, regarding the subject matter hereof.  This Agreement may be amended only by an instrument in writing duly executed on behalf of the Parties.  In case of inconsistencies between this Agreement and any Appendix hereof, the terms of this Agreement shall prevail unless agreed to explicitly that the Appendix should prevail.

 

13.3                        Force Majeure.  Neither Party shall be liable or deemed in default for failure to perform any duty or obligation that such Party may have under this Agreement where such failure has been occasioned by any act of God, fire, external strike, inevitable accidents, war, or any other cause outside the reasonable control of that Party, and occurring without its fault or negligence; provided that the Party affected will promptly notify the other of the force majeure condition and will exert all reasonable efforts to eliminate, cure or overcome any such causes and to resume performance of its obligations as soon as possible.

 

13.4                        Waiver.  The failure of either Party to require performance by the other Party of any of that other Party’s obligations under this Agreement shall in no manner affect the right of such Party to enforce the same at a later time.  No waiver by any Party of any condition, or of the breach of any provision, term, representation or warranty contained in this Agreement shall be deemed to be or construed as a further or continuing waiver of any such condition or breach, or of any other condition or of the breach of any other provision, term, representation, or warranty hereof.  The remedies provided in this Agreement are not exclusive and the Party suffering from a breach or default of this Agreement may pursue all other remedies, both legal and equitable, alternatively or cumulatively.

 

13.5                        Severability.  In the event that any provision or portion thereof in this Agreement is for any reason held to be invalid, illegal or unenforceable, the same shall not affect any other portion of this Agreement and its validity, as it is the intent of the Parties that this Agreement shall be construed in such fashion as to maintain its existence, validity and enforceability to the greatest extent possible.  In any such event, this Agreement shall be construed as if such provision or portion thereof had never been contained in this Agreement, and there shall be deemed substituted therefore such provision as will most nearly carry out the intent of the Parties as expressed in this

 

57

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Agreement to the fullest extent permitted by Applicable Law unless doing so would have the effect of materially altering the right and obligations of the Parties in which event this Agreement may be terminated by mutual written agreement of the Parties.

 

13.6                        Notices.  Any notices and Invoices given under this Agreement shall be in writing and shall be addressed as follows (or at such other address for a Party as shall be specified by like notice, provided, however, that notices of a change of address shall be effective only upon receipt thereof):

 

If to ZEALAND:

 

Zealand Pharma A/S

Smedeland 36

2600 Glostrup Denmark

 

Attn: CEO

 

With copies (which is required but shall not constitute notice by themselves) to:

 

Zealand Pharma A/S

Smedeland 36

2600 Glostrup Denmark

 

Attn: General Counsel

 

and

 

Cooley (UK) LLP

Dashwood House, 69 Old Broad Street

London

EC2M 1QS

Attn: John Wilkinson

 

If to ALEXION:

 

ALEXION Pharma Holding Unlimited Company

22 Victoria Street

Hamilton HM 12 Bermuda

Attn: Secretary

 

With a copy to (which is required but shall not constitute notice by itself):

 

ALEXION Pharmaceuticals, Inc.
 121 Seaport Blvd
 Boston, MA 02210
 Attn: General Counsel

 

13.7                        Governing Law.  This Agreement shall be construed in accordance with and governed exclusively by the law of [***], without reference to its rules of conflict of law.

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

13.8                        Dispute Resolution.  Any dispute arising out of or in connection with this Agreement shall be settled, if possible, through good faith negotiations between the Parties.  If the Parties are unable to settle such dispute within [***] days of first written notice by a Party of such dispute, such dispute shall:

 

13.8.1                       be referred to the Chief Executive Officer of ZEALAND and the authorized designee of the [***] of ALEXION (the “Executive Officers”).  Within [***] days of such notice, the Executive Officers of both Parties shall meet to attempt to resolve such dispute (the “Executive Meeting”).  Such resolution, if any, of a referred issue shall be final and binding on the Parties. All negotiations pursuant to this Section 13.8 are confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence; and

 

13.8.2                       if the Executive Officers cannot resolve such dispute within [***] days after either Party requests the Executive Meeting, then the Parties agree that the dispute shall be submitted to [***] for mediation under the [***].  Either party may commence mediation by providing to [***] and the other party a written request for mediation, setting forth the subject of the dispute and the relief requested.  The parties will cooperate with [***] and with one another in selecting a mediator with relevant experience in the subject matter of the dispute.  Appointment of appointment mediator is to be made within [***] days of the request for mediation, and the mediation is to take place within [***] days of such appointment.  The mediation shall take place in [***] and both Parties shall make available sufficiently senior and suitably qualified and authorized representatives to resolve such dispute.  The Mediation Period shall be the period from the Executive Meeting to [***] days after the application for the appoint of a mediator is made; and

 

13.8.3                       if the dispute is not resolved within the Mediation Period, then either Party shall have the right to pursue any and all remedies available at law or equity.

 

13.9                        Relationship of the Parties. Nothing in this Agreement is intended or will be deemed to constitute a partnership, agency, employer-employee or joint venture relationship between the Parties.  No Party will incur any debts or make any commitments for the other.  There are no express or implied third party beneficiaries hereunder (except for ALEXION Indemnitees and ZEALAND Indemnitees for purposes of Sections 11.1 or 11.2).

 

13.10                 Headings.  The captions to the Articles and Sections of this Agreement are not a part of this Agreement, but are merely for convenience to assist in locating and reading the several Sections of this Agreement.

 

13.11                 Counterparts; Facsimiles. This Agreement may be executed in one or more counterparts, each of which will be deemed an original, and all of which together will be deemed to be one and the same instrument.  Facsimile or PDF execution and delivery of this Agreement by either Party will constitute a legal, valid and binding execution and delivery of this Agreement by such Party.

 

13.12                 Interpretation.  Except where the context expressly requires otherwise, (a) the use of any gender herein shall be deemed to encompass references to either or both genders, and the use of the singular shall be deemed to include the plural (and vice versa), (b) the words and phrases e.g.,

 

59

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

“include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, (c) the word “will” shall be construed to have the same meaning and effect as the word “shall”, (d) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (e) any reference herein to any person or entity shall be construed to include the person’s or entity’s successors and assigns, (f) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (g) all references herein to Articles, Sections, Exhibits or Schedules shall be construed to refer to Articles, Sections, Exhibits or Schedules of this Agreement, and references to this Agreement include all Exhibits, Schedules and Appendixes hereto, (h) the word “notice” means notice in writing (whether or not specifically stated) and shall include notices, consents, approvals and other written communications contemplated under this Agreement, (i) provisions that require that a Party, the Parties or any committee hereunder “agree,” “consent” or “approve” or the like shall require that such agreement, consent or approval be specific and in writing, whether by written agreement, letter, approved minutes or otherwise (but excluding e-mail and instant messaging), (j) references to any specific law, rule or regulation, or article, section or other division thereof, shall be deemed to include the then-current amendments thereto or any replacement or successor law, rule or regulation thereof, (k) the term “or” shall be interpreted in the inclusive sense commonly associated with the term “and/or”, and (l) references to any Sections include Sections and subsections that are part of the related Section (e.g., a section numbered “Section 2.2” would be part of “Section 2”, and references to “Section 2.2” would also refer to material contained in the subsection described as “Section 2.2(a)”).

 

13.13                 Further Assurances.  Subject to the terms and conditions of this Agreement, each of ZEALAND and ALEXION agrees to duly execute and deliver, or cause to be duly executed or delivered, such further instruments and do and cause to be done such further acts, including the filing of additional assignments, agreements, documents and instruments, as the other Party may at any time and from time to time reasonably request in connection with this Agreement or to carry out more effectively the provisions and purposes of, or to better assure and confirm unto such other Party its rights and remedies under, this Agreement.

 

{Signature Page Follows}

 

60

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate originals by their duly authorized representatives as of the date and year first above written

 

 

ALEXION Pharma Holding Unlimited Company

 

	
By:
    	
/s/   Patrick Riley
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Patrick   Riley
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Senior   Director of Research & Development, Director
    	
 
    

 

 

ZEALAND Pharma A/S

 

	
By:
    	
/s/   Martin Nicklasson
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Martin   Nicklasson
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Chairman   of the Board
    	
 
    

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Appendices:

 

	
APPENDIX   1:
    	
Discovery   Plan and Development Plan for the Lead Target
    
	
APPENDIX   2:
    	
Complement   Pathway Targets
    
	
APPENDIX   3:
    	
Discovery   Plan and Development Plan(s) for any Selected Target(s), Additional Target(s),   and Replacement Targets
    
	
APPENDIX   4:
    	
Contact   List
    
	
APPENDIX   5:
    	
Licensed   Patent Rights
    
	
APPENDIX   6:
    	
Approved   Subcontractors
    

 

Schedules:

 

	
Schedule   1.63:
    	
Existing   Lead Molecules
    
	
Schedule   1.155:
    	
[***]   Activities
    
	
Schedule   5:
    	
Supply   Agreement Key Terms
    
	
Schedule   10:
    	
Press   Release
    

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

APPENDIX 1

 

Discovery Plan and Development Plan for the Lead Target

 

[***]

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

APPENDIX 2

 

Complement Pathway Targets

 

[***]

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

APPENDIX 3

 

Discovery Plan and Development Plan(s) for any Selected Target(s), 
 Additional Target(s), and Replacement Targets

 

[***]

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

APPENDIX 4

 

Contact List

 

[***]

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

APPENDIX 5

 

Licensed Patent Rights

 

[***]

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

APPENDIX 6

 

Approved Subcontractors

 

[***]

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

SCHEDULE 1.63

 

Existing Lead Molecules

 

[***]

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

SCHEDULE 1.155

 

[***] Activities

 

[***]

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

SCHEDULE 5

 

Supply Agreement Key Terms

 

Below are the terms that the Parties intend that the CMO Supply Agreement should contain, provided always that neither Party shall be in breach of this Agreement to the extent that a CMO will not agree such terms.

 

[***]

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

SCHEDULE 10

 

Press Release

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

 

Company announcement — No. 06 / 2019

 

Alexion and Zealand Pharma Announce Collaboration to Discover and Develop Peptide Therapies for Complement-Mediated Diseases

 

·                 Collaboration furthers Alexion’s complement leadership with expansion into peptide therapies.

 

·                            Agreement provides Alexion with exclusive worldwide licenses for one preclinical target, with option for up to three additional targets, in the complement pathway.

 

·                           Zealand Pharma to receive upfront payment of $25 million and equity investment of $15 million, with potential for additional milestone-dependent and royalty payments.

 

·                           Collaboration further strengthens Zealand Pharma’s position as a leading developer of next generation peptide-based therapeutics.

 

BOSTON & COPENHAGEN, Denmark, March 20, 2019 - Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN) and Zealand Pharma A/S (NASDAQ: ZEAL) today announced a collaboration to discover and develop novel peptide therapies for complement-mediated diseases. Peptides offer a number of advantages, including being highly selective and potent, allowing low dosage volumes for ease of administration, and having the potential to treat a broad range of complement-mediated diseases. The agreement provides Alexion with exclusive worldwide licenses, as well as development and commercial rights, for up to four targets within the complement pathway.

 

“We know that uncontrolled activation of the complement pathway is responsible for many devastating diseases, and through the development of the first two complement inhibitors — SOLIRIS and ULTOMIRIS — we have shown the transformative impact of C5 inhibition on several of these diseases,” said John Orloff, M.D., Executive Vice President and Head of Research & Development at Alexion. “We are excited by the potential to explore different targets in the complement pathway and look forward to building on Alexion’s more than 20 years of complement expertise with the development of next-generation peptide therapies in collaboration with Zealand Pharma, which may provide the opportunity to treat many additional diseases.”

 

“Collaborating with Alexion is further evidence of the strength of our peptide discovery platform, which has delivered both approved novel peptide-based therapeutics and a deep late-stage pipeline,” said Adam Steensberg, Interim CEO and Chief Medical and Development Officer at Zealand. “We believe that peptide-based therapies hold great promise in inhibiting complement activation. Alexion’s demonstrated expertise in treating rare and complement-mediated diseases makes this the ideal collaboration to advance Zealand’s complement-focused peptide programs.”

 

Under the terms of the agreement, Alexion and Zealand will enter into an exclusive collaboration for the discovery and development of subcutaneously delivered peptide therapies directed to up to four complement pathway targets. Zealand will lead the joint discovery and research efforts through the preclinical stage, and Alexion will lead development efforts beginning with IND filing and Phase 1 studies. The agreement provides Alexion with exclusive worldwide licenses and commercial rights to the peptide therapies developed in the collaboration. Zealand will receive an immediate upfront payment of $25 million for the first target, with Alexion making a concurrent $15 million equity investment in Zealand Pharma at a premium to the market price as of the collaboration effective date. For the lead target, the agreement provides the potential for development-related milestones of up to $115 million, as well as up to $495 million in sales-related milestones and the potential for high single- to low double-digit royalty payments. Each of the three subsequent targets can be selected for an option fee of $15 million and has the potential for additional development-milestones and sales-milestones and royalty payments at a reduced price to the lead target.

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Alexion will discuss the collaboration further during today’s Investor Day event and webcast. Zealand will host a conference call on Thursday, March 21, at 4 p.m. CET.

 

About Alexion

 

Alexion is a global biopharmaceutical company focused on serving patients and families affected by rare diseases through the discovery, development and commercialization of life-changing therapies. As the global leader in complement biology and inhibition for more than 20 years, Alexion has developed and commercializes two approved complement inhibitors to treat patients with paroxysmal nocturnal hemoglobinuria (PNH) as well as the first and only approved complement inhibitor to treat atypical hemolytic uremic syndrome (aHUS) and anti-acetylcholine receptor (AchR) antibody-positive generalized myasthenia gravis (gMG), and is also developing it for patients with neuromyelitis optica spectrum disorder (NMOSD). Alexion also has two highly innovative enzyme replacement therapies for patients with life-threatening and ultra-rare metabolic disorders, hypophosphatasia (HPP) and lysosomal acid lipase deficiency (LAL-D). In addition, the company is developing several mid-to-late-stage therapies, including a second complement inhibitor, a copper-binding agent for Wilson disease and an anti-neonatal Fc receptor (FcRn) antibody for rare Immunoglobulin G (IgG)-mediated diseases as well as several early-stage therapies, including one for light chain (AL) amyloidosis and a second anti-FcRn therapy. Alexion focuses its research efforts on novel molecules and targets in the complement cascade and its development efforts on the core therapeutic areas of hematology, nephrology, neurology, and metabolic disorders. Alexion has been named to the Forbes list of the World’s Most Innovative Companies seven years in a row and is headquartered in Boston, Massachusetts’ Innovation District. The company also has offices around the globe and serves patients in more than 50 countries. This press release and further information about Alexion can be found at: www.alexion.com.

 

About Zealand Pharma

 

Zealand Pharma is a biotechnology company focused on the discovery and development of innovative peptide-based medicines. The company’s peptide discovery platform is built on 20 years of experience and has been extensively validated by their clinical pipeline, partnerships and marketed products; these include more than 10 drug candidates invented by Zealand that have advanced into clinical development, of which two have reached the market. Zealand’s current pipeline of internal product candidates focus on specialty gastrointestinal and metabolic diseases. Zealand’s portfolio also includes two clinical license collaborations with Boehringer Ingelheim. Zealand is based in Copenhagen (Glostrup), Denmark. For further information about the company’s business and activities, please visit www.zealandpharma.com.

 

Forward-Looking Statement

 

This press release includes forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statements. Examples of forward-looking statements include, among others, statements we make regarding: (i) the therapeutic and commercial potential of peptide-based therapies; (ii) research and development plans related to peptide-based therapies; (iii) the potential of peptide-based therapies for the treatment of complement-mediated diseases; (iv) the potential for the collaboration between Alexion and Zealand; and (v) the closing of the equity investment by Alexion into Zealand, which is subject to standard closing conditions. The process by which early stage products such as Zealand’s peptide-based therapies could potentially lead to an approved product is long and subject to highly significant risks, particularly with respect to a preclinical research collaboration. Applicable risks and uncertainties include those relating to preclinical research and other risks identified under the heading “Risk Factors” included in Alexion’s and Zealand’s most recent Form 10-K and 20-F filings and in other future filings with the SEC. The forward-looking statements contained in this press release reflect Alexion’s and Zealand’s current views with respect to future events, and neither Alexion nor Zealand undertakes and specifically disclaims any obligation to update any forward-looking statements, except as required by law.

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Alexion Contacts:

 

Media

Megan Goulart, 857-338-8634

Senior Director, Corporate Communications

 

Investors

Susan Altschuller, Ph.D., 857-338-8788

Vice President, Investor Relations

 

Zealand Pharma Contacts:

 

Adam Steensberg, +45 5060 3601

Interim CEO, Chief Medical and Development Officer

 

Mats Blom, +45 3153 7973

Chief Financial OfficerExhibit 4.2

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

SHARE PURCHASE AGREEMENT

 

BETWEEN

 

EACH PERSON IDENTIFIED AS A “SELLER” IN SCHEDULE A

 

— and —

 

ZEALAND PHARMA A/S

 

— and —

 

ENCYCLE THERAPEUTICS INC.

 

OCTOBER 22, 2019

 

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 1
    	
 
    	
INTERPRETATION
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
1.1
    	
 
    	
Definitions
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
1.2
    	
 
    	
Certain Rules of   Interpretation
    	
12
    
	
 
    	
 
    	
 
    	
 
    
	
1.3
    	
 
    	
Governing Law
    	
13
    
	
 
    	
 
    	
 
    	
 
    
	
1.4
    	
 
    	
Entire Agreement
    	
13
    
	
 
    	
 
    	
 
    	
 
    
	
1.5
    	
 
    	
Schedules and Exhibits
    	
13
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 2
    	
 
    	
PURCHASE AND SALE
    	
14
    
	
 
    	
 
    	
 
    	
 
    
	
2.1
    	
 
    	
Agreement of Purchase   and Sale
    	
14
    
	
 
    	
 
    	
 
    	
 
    
	
2.2
    	
 
    	
Purchase Price
    	
14
    
	
 
    	
 
    	
 
    	
 
    
	
2.3
    	
 
    	
Allocation of Payments
    	
19
    
	
 
    	
 
    	
 
    	
 
    
	
2.4
    	
 
    	
Payment of Purchase   Price
    	
19
    
	
 
    	
 
    	
 
    	
 
    
	
2.5
    	
 
    	
Withholding Rights
    	
20
    
	
 
    	
 
    	
 
    	
 
    
	
2.6
    	
 
    	
Capitalised Value
    	
20
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 3
    	
 
    	
REPRESENTATIONS AND   WARRANTIES
    	
20
    
	
 
    	
 
    	
 
    	
 
    
	
3.1
    	
 
    	
Disclosure Schedule
    	
20
    
	
 
    	
 
    	
 
    	
 
    
	
3.2
    	
 
    	
Representations   Relating to the Sellers
    	
21
    
	
 
    	
 
    	
 
    	
 
    
	
3.3
    	
 
    	
Representations   Relating to the Corporation
    	
22
    
	
 
    	
 
    	
 
    	
 
    
	
3.4
    	
 
    	
Representations   Relating to the Buyer
    	
36
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 4
    	
 
    	
COVENANTS
    	
37
    
	
 
    	
 
    	
 
    	
 
    
	
4.1
    	
 
    	
Delivery of Books and Records
    	
37
    
	
 
    	
 
    	
 
    	
 
    
	
4.2
    	
 
    	
Tax Returns
    	
37
    
	
 
    	
 
    	
 
    	
 
    
	
4.3
    	
 
    	
Tax Refunds
    	
37
    
	
 
    	
 
    	
 
    	
 
    
	
4.4
    	
 
    	
Amendments to Tax   Returns
    	
37
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 5
    	
 
    	
CLOSING ARRANGEMENTS
    	
38
    
	
 
    	
 
    	
 
    	
 
    
	
5.1
    	
 
    	
Closing
    	
38
    
	
 
    	
 
    	
 
    	
 
    
	
5.2
    	
 
    	
Closing Deliveries
    	
38
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 6
    	
 
    	
INDEMNIFICATION AND   SURVIVAL
    	
39
    
	
 
    	
 
    	
 
    	
 
    
	
6.1
    	
 
    	
Indemnification by the   Sellers
    	
39
    
	
 
    	
 
    	
 
    	
 
    
	
6.2
    	
 
    	
Indemnification by the   Buyer
    	
40
    
	
 
    	
 
    	
 
    	
 
    
	
6.3
    	
 
    	
Survival Periods for   Claims by Buyer Indemnified Parties
    	
40
    
	
 
    	
 
    	
 
    	
 
    
	
6.4
    	
 
    	
Survival Periods for   Claims by Seller Indemnified Parties
    	
41
    
	
 
    	
 
    	
 
    	
 
    
	
6.5
    	
 
    	
Amount Limitations on   Indemnification Obligations
    	
41
    
	
 
    	
 
    	
 
    	
 
    
	
6.6
    	
 
    	
Rules Relating to   Indemnification Obligations
    	
42
    
	
 
    	
 
    	
 
    	
 
    
	
6.7
    	
 
    	
Notice of Indemnity   Claims
    	
42
    
	
 
    	
 
    	
 
    	
 
    
	
6.8
    	
 
    	
Procedure for Direct   Claims
    	
43
    

 

i

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
6.9
    	
 
    	
Procedure for Third   Party Claims
    	
43
    
	
 
    	
 
    	
 
    	
 
    
	
6.10
    	
 
    	
Payment of Claims
    	
45
    
	
 
    	
 
    	
 
    	
 
    
	
6.11
    	
 
    	
Indemnity Adjustments   to Purchase Price
    	
45
    
	
 
    	
 
    	
 
    	
 
    
	
6.12
    	
 
    	
Exclusive Remedy
    	
45
    
	
 
    	
 
    	
 
    	
 
    
	
6.13
    	
 
    	
No Right of Subrogation
    	
46
    
	
 
    	
 
    	
 
    	
 
    
	
6.14
    	
 
    	
Third Party   Indemnification
    	
46
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 7
    	
 
    	
GENERAL
    	
46
    
	
 
    	
 
    	
 
    	
 
    
	
7.1
    	
 
    	
The Sellers’   Representative
    	
46
    
	
 
    	
 
    	
 
    	
 
    
	
7.2
    	
 
    	
Time of Essence
    	
47
    
	
 
    	
 
    	
 
    	
 
    
	
7.3
    	
 
    	
Notices
    	
47
    
	
 
    	
 
    	
 
    	
 
    
	
7.4
    	
 
    	
Severability
    	
48
    
	
 
    	
 
    	
 
    	
 
    
	
7.5
    	
 
    	
Submission to   Jurisdiction
    	
49
    
	
 
    	
 
    	
 
    	
 
    
	
7.6
    	
 
    	
Amendment and Waiver
    	
49
    
	
 
    	
 
    	
 
    	
 
    
	
7.7
    	
 
    	
Further Assurances
    	
49
    
	
 
    	
 
    	
 
    	
 
    
	
7.8
    	
 
    	
Assignment and   Enurement
    	
49
    
	
 
    	
 
    	
 
    	
 
    
	
7.9
    	
 
    	
Counterparts and   Electronic Delivery
    	
49
    
	
 
    	
 
    	
 
    	
 
    
	
7.10
    	
 
    	
Electronic Delivery
    	
50
    
	
 
    	
 
    	
 
    	
 
    
	
7.11
    	
 
    	
Costs and Expenses
    	
50
    
	
 
    	
 
    	
 
    	
 
    
	
7.12
    	
 
    	
Tender
    	
50
    
	
 
    	
 
    	
 
    	
 
    
	
7.13
    	
 
    	
Payment and Currency
    	
50
    
	
 
    	
 
    	
 
    	
 
    
	
7.14
    	
 
    	
Public Announcements
    	
51
    
	
 
    	
 
    	
 
    	
 
    
	
7.15
    	
 
    	
Equitable Remedies
    	
51
    
	
 
    	
 
    	
 
    	
 
    
	
7.16
    	
 
    	
No Contra Proferentem
    	
51
    
	
 
    	
 
    	
 
    	
 
    
	
7.17
    	
 
    	
Independent Legal   Advice
    	
51
    
	
 
    	
 
    	
 
    	
 
    
	
7.18
    	
 
    	
Language
    	
51
    
	
 
    	
 
    	
 
    	
 
    
	
7.19
    	
 
    	
Third Party   Beneficiaries
    	
51
    

 

ii

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

SHARE PURCHASE AGREEMENT

 

THIS AGREEMENT is dated as of October 22, 2019.

 

B E T W E E N :

 

Each Person identified as a “Seller” in Schedule A
  (each, a “Seller” and, collectively, the “Sellers”)

 

- and -

 

ZEALAND PHARMA A/S, a company existing under the 
 laws of Denmark

 

(the “Buyer”)

 

- and -

 

ENCYCLE THERAPEUTICS INC., a corporation
 incorporated under the laws of Ontario

 

(the “Corporation”)

 

CONTEXT:

 

A.                                    The Sellers collectively own all of the issued and outstanding shares in the capital of the Corporation.

 

B.                                    The Sellers want to sell to the Buyer and the Buyer wants to purchase from the Sellers all of the issued and outstanding shares in the capital of the Corporation.

 

THEREFORE, the Parties agree as follows:

 

ARTICLE 1
 INTERPRETATION

 

1.1                                                  Definitions

 

In this Agreement, in addition to terms defined elsewhere in this Agreement, the following terms have the following meanings:

 

1.1.1                                        “Accounting Principles” means the same accounting principles, methods, policies, practices and procedures, with consistent classifications, judgments and estimation methodology, as were used in the preparation of the Financial Statements.

 

1.1.2                                        “Affiliate” means an affiliate as that term is defined in the Business Corporations Act (Ontario).

 

1.1.3                                        “Agreement” means this agreement, including all Schedules and Exhibits, as it may be confirmed, amended, supplemented or restated by written agreement between the Parties.

 

1.1.4                                        “Arm’s Length” means arm’s length as that term is interpreted in connection with its use in the ITA.

 

1

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

1.1.5                                        “Audited Balance Sheet” the audited balance sheet of the Corporation as at and for the year ended December 31, 2018.

 

1.1.6                                        “Books and Records” means all books, ledgers, files, lists, reports, plans, logs, deeds, surveys, correspondence, operating records, Tax Returns and other data and information, including all data and information stored on computer-related or other electronic media, of and related to the Corporation or the Business.

 

1.1.7                                        “Business” means the drug discovery business as is carried on by the Corporation including, without limitation, (a) the synthetic platform that has been developed by the Corporation enabling the generation of enhanced peptide macrocycles; and (b) the production of the Lead Product.

 

1.1.8                                        “Business Day” means any day excluding a Saturday, Sunday or statutory holiday in the Province of Ontario or the State of Denmark.

 

1.1.9                                        “Buyer” is defined in the recital of the Parties above.

 

1.1.10                                 “Buyer Indemnified Parties” means the Buyer, the Corporation, their respective Affiliates, and their respective directors, officers, shareholders, agents and employees, and the respective Successors of each of them.

 

1.1.11                                 “Benchmark Price Per Share” shall mean the volume weighted average closing price of Common Shares for the preceding ten (10) trading days on the Copenhagen Nasdaq Stock Exchange, converted to United States dollars using the spot foreign exchange rate published in the Wall Street Journal, European Edition on the day that such calculation is made.

 

1.1.12                                 “CFDA” means the Canada Food and Drugs Act and any rules and regulations promulgated thereunder.

 

1.1.13                                 “CFR” means the United Stated Code of Federal Regulations.

 

1.1.14                                 “Claim” means any claim, demand, action, cause of action, suit, arbitration, investigation, proceeding, complaint, grievance, charge, prosecution, assessment or reassessment, including any appeal or application for review.

 

1.1.15                                 “Claim Amount” is defined in Section 6.10.1.

 

1.1.16                                 “Claim Dispute Period” is defined in Section 6.8.1.

 

1.1.17                                 “Closing” means the completion of the sale to, and purchase by, the Buyer of the Purchased Shares under this Agreement.

 

1.1.18                                 “Closing Balance Sheet” means the unaudited trial balance of the Corporation as at and for the period ended as of the Closing Date.

 

1.1.19                                 “Closing Date” means the date of execution of this Agreement or any other date that the Parties may agree is the date upon which the Closing will take place.

 

1.1.20                                 “Closing Time” means 10:00 a.m. (Toronto time) on the Closing Date or any other time on the Closing Date as may be agreed by the Parties.

 

2

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

1.1.21                                 “Commercial Sale” means a sale to an independent third party for value after a Product receives market authorization in a jurisdiction and for clarity does not include sampling or product sold under a special access program.

 

1.1.22                                 “Common Shares” means common shares of the Buyer.

 

1.1.23                                 “Communication” means any notice, demand, request, consent, approval or other communication which is required or permitted by this Agreement to be given or made by a Party.

 

1.1.24                                 “Composition of Matter Claim” means all patents and patent applications originating or derived from [***], including all provisional and non-provisional applications, continuations, continuations-in-part, divisions and renewals, and all patent rights granted thereon, reissues, re-examinations and extensions or restorations by existing or future extension or restoration mechanisms, including supplementary protection certificates and equivalents thereof anywhere in the world.

 

1.1.25                                 “Confidentiality Agreement” means the Confidential Disclosure Agreement between the Corporation and the Buyer dated as of May 30, 2019.

 

1.1.26                                 “Constating Documents” means the certificate and articles of incorporation of the Corporation dated January 24, 2012, the by-laws of the Corporation dated January 24, 2012 and the shareholders agreement between the Corporation and its shareholders made on January 24, 2012 and amended on July 14, 2014, March 17, 2015, August 21, 2015, January 29, 2016, November 24, 2016 and August, 2017.

 

1.1.27                                 “Contract” means any agreement, understanding, undertaking, commitment, licence or lease, whether written or oral.

 

1.1.28                                 “Corporation” is defined in the recital of the Parties above.

 

1.1.29                                 “Direct Claim” means an Indemnity Claim that does not arise as the result of a Third Party Claim.

 

1.1.30                                 “Disclosure Schedule” means the disclosure attached as Schedule B.

 

1.1.31                                 “Designated Paying Agent” means the paying agent designated from time to time by the Sellers’ Representative in writing.

 

1.1.32                                 “Earnout Payment” means any payment required to be made by the Buyer pursuant to Section 2.2.2.

 

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

 

1.1.34                                 “Employees” means all personnel and independent contractors employed, engaged or retained by the Corporation in connection with the Business, including any that are on medical or long-term disability leave, or other statutory or authorized leave or absence.

 

1.1.35                                 “Encumbrance” means any security interest, mortgage, charge, pledge, hypothec, lien, encumbrance, restriction, option, adverse claim or other encumbrance of any kind.

 

1.1.36                                 “Environment” means the ambient air, all layers of the atmosphere, all water including surface water and underground water, all land, all living organisms and the interacting natural

 

3

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

systems that include components of air, land, water, living organisms and organic and inorganic matter, and includes indoor spaces.

 

1.1.37                                 “Environmental Laws” means any Laws relating to the Environment and protection of the Environment, the regulation of chemical substances or products, health and safety including occupational health and safety, and the transportation of dangerous goods.

 

1.1.38                                 “ETA” means the Excise Tax Act (Canada).

 

1.1.39                                 “FDA” means the U.S. Food and Drug Administration or any successor agent thereto.

 

1.1.40                                 “FDCA” means the U.S. Federal Food, Drug and Cosmetic Act and any rules and regulations promulgated thereunder.

 

1.1.41                                 “Financial Statements” means:

 

1.1.41.1                                 the audited financial statements of the Corporation as at and for the year ended December 31, 2018;

 

1.1.41.2                                 the unaudited trial balance of the Corporation as at and for the period ended September 13, 2019; and

 

1.1.41.3                                 the Closing Balance Sheet.

 

1.1.42                                 “Former Employees” means all personnel and independent contractors who had been employed, engaged or retained by the Corporation in connection with the Business and who are no longer so employed, engaged or retained.

 

1.1.43                                 “Fundamental Representations” means the representations and warranties in Sections 3.2.1 (Corporate Existence of Seller), 3.2.2 (Capacity and Authority), 3.2.3 (Binding Obligation), 3.2.6 (Absence of Conflict), 3.3.1 (Capacity and Authority), 3.3.2 (Binding Obligation), 3.3.3 (Restrictive Covenants), 3.3.4 (Absence of Conflict), 3.3.8 (Corporate Existence of Corporation), 3.3.12 (No Purchase Rights), 3.3.18 (Absence of Undisclosed Liabilities) and 3.3.39 (Brokerage Fees).

 

1.1.44                                 “GAAP” means Canadian generally accepted accounting principles applicable to private enterprises under Part II of the CPA Canada Handbook of the Chartered Professional Accountants of Canada, applicable on the date of the relevant preparation or calculation or on the date of the relevant financial statements or records.

 

1.1.45                                 “Governmental Authority” means:

 

1.1.45.1                                 any federal, provincial, state, local, municipal, regional, territorial, aboriginal, or other government, governmental or public department, branch, ministry, or court, domestic or foreign, including any district, agency, commission, board, arbitration panel or authority and any subdivision of any of them exercising or entitled to exercise any administrative, executive, judicial, ministerial, prerogative, legislative, regulatory, or taxing authority or power of any nature; and

 

1.1.45.2                                 any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of them, and any subdivision of any of them.

 

4

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

1.1.46                                 “Hazardous Substance” means any substance, waste, liquid, gaseous or solid matter, fuel, micro-organism, sound, vibration, ray, heat, odour, radiation, energy vector, plasma, organic or inorganic matter which is or is deemed to be, alone or in any combination, hazardous, hazardous waste, solid or liquid waste, toxic, a pollutant, a deleterious substance, a contaminant or a source of pollution or contamination, regulated by any Environmental Laws.

 

1.1.47                                 “HPFB” means Health Canada’s Health Products and Food Branch.

 

1.1.48                                 “IND” means an investigational new drug application to the FDA of the United States pursuant to CFR title 21, Part 312, or other such national equivalent.

 

1.1.49                                 “Indebtedness” means, without duplication, all obligations as at immediately prior to the Closing Time in respect of:

 

1.1.49.1                                 borrowed money at the full amount payable, including with respect to deposits or advances of any kind;

 

1.1.49.2                                 indebtedness evidenced by notes, debentures or similar instruments;

 

1.1.49.3                                 leases required to be capitalized in accordance with GAAP;

 

1.1.49.4                                 the deferred purchase price of assets, services or securities;

 

1.1.49.5                                 interest rate swap, forward contract, foreign currency hedge or other hedging or similar arrangement;

 

1.1.49.6                                 all letters of credit or similar facilities (to the extent drawn);

 

1.1.49.7                                 seller expenses and change of control payments, both including all fees, expenses and other payments of the Corporation incurred, triggered by or otherwise payable in connection with the transactions contemplated by this Agreement and the consummation of the transactions contemplated hereby that are unpaid as of Closing, whether accrued or not;

 

1.1.49.8                                 any obligation in the foregoing Sections 1.1.49.1 to 1.1.49.7 guaranteed directly or indirectly;

 

1.1.49.9                                 royalty payments;

 

1.1.49.10                          stock options;

 

1.1.49.11                          promissory notes;

 

1.1.49.12                          employee liabilities (contractual or discretionary) including taxes thereon;

 

1.1.49.13                          all current liabilities in accordance with GAAP to the extent not captured as part of a working capital adjustment, if any;

 

1.1.49.14                          management services payable;

 

1.1.49.15                          vendor termination payments;

 

1.1.49.16                          withholding tax on convertible debt;

 

5

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

1.1.49.17                          Tax liabilities in respect of any period ending on the Closing Date including in respect or as a result of any debt forgiveness; and

 

1.1.49.18                          interest, premium, fees, expenses, penalties (including prepayment and early termination penalties) and other amounts owing in respect of the line items in the foregoing Sections 1.1.49.1 to 1.1.49.17,

 

provided that Indebtedness shall not include up to US$50,000.00 owing to Wuxi AppTec (Hong Kong) Limited.

 

1.1.50                                 “Indemnified Party” means a Buyer Indemnified Party or a Seller Indemnified Party.

 

1.1.51                                 “Indemnifying Party” means the Party providing indemnification under any provision of Article 6.

 

1.1.52                                 “Indemnity Claim” is defined in Section 6.7.

 

1.1.53                                 “Indemnity Notice” is defined in Section 6.7.

 

1.1.54                                 “Insurance Policies” means the insurance policies maintained by the Corporation with respect to the Business.

 

1.1.55                                 “Intellectual Property” means all intellectual property rights of every kind and description throughout the world, including all U.S., Canadian and other foreign (i) patents, patent applications, invention disclosures, and all related continuations, continuations-in-part, divisionals, reissues, re-examinations, substitutions, and extensions thereof (“Patents”), (ii) trademarks, service marks, names, corporate names, trade names, domain names, logos, slogans, trade dress, design rights, and other similar designations of source or origin, together with the goodwill symbolized by any of the foregoing (“Trademarks”), (iii) copyrights and copyrightable subject matter (“Copyrights”), (iii) rights in computer programs (whether in source code, object code, or other form), algorithms, databases, compilations and data, technology supporting the foregoing, and all documentation, including user manuals and training materials, related to any of the foregoing (“Software”), (iv) trade secrets ideas, know- how, inventions, proprietary processes, data, formulae, models, and methodologies (“Trade Secrets”), (v) moral rights and rights of attribution and integrity and benefits waiver of moral rights, (vi) all rights in the foregoing and in other similar intangible assets, and (vii) all applications and registrations for the foregoing.

 

1.1.56                                 “Inventories” means all inventories of every kind owned by the Corporation and pertaining to the Business including raw materials and supplies.

 

1.1.57                                 “[***] Agreement” means the Collaborative Research Agreement made effective [***] between [***], [***] and the Corporation as the same may be amended from time to time.

 

1.1.58                                 “ITA” means the Income Tax Act (Canada).

 

1.1.59                                 “Key Personnel” means either or both of [***] and [***].

 

1.1.60                                 “Knowledge of the Corporation” means the knowledge that either of the Key Personnel either has, or would have obtained, after having made or caused to be made all reasonable inquiries necessary to obtain informed knowledge, including inquiries of the Corporation’s records.

 

6

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

1.1.61                                 “Law” or “Laws” means all laws, statutes, codes, ordinances, decrees, rules, regulations, by-laws, statutory rules, principles of law, published policies and guidelines, judicial or arbitral or administrative or ministerial or departmental or regulatory judgments, orders, decisions, rulings or awards, including general principles of common and civil law, and the terms and conditions of any grant of approval, permission, authority or licence of any Governmental Authority.

 

1.1.62                                 “Lead Product” means the [***] developed by the Corporation to [***] and is known as [***], the chemical structure of which is described in Exhibit 1.1.62 and shall also include any back-up compounds listed in Exhibit 1.1.62 or that otherwise falls within the claims of [***].

 

1.1.63                                 “Loss” means any loss, liability, damage, cost, expense, charge, fine, penalty or assessment, including:

 

1.1.63.1                                 the reasonable costs and expenses of any action, suit, proceeding, demand, assessment, judgment, settlement or compromise;

 

1.1.63.2                                 all interest, fines and penalties; and

 

1.1.63.3                                 all reasonable professional fees and disbursements,

 

and including loss of value and the monetary value of lost opportunity.

 

1.1.64                                 “Marketing Approval” shall mean, with respect to the Lead Product, (a) any and all licenses, registrations, authorizations and approvals of the applicable Regulatory Authority, including NDAs or any foreign equivalent thereof, as applicable, and (b) if applicable, any and all pricing or reimbursement authorizations and approvals, in each case ((a) and (b)) that are necessary to manufacture, distribute, sell, obtain reimbursement for, market, use, store, and import such Product in such country.

 

1.1.65                                 “Material Adverse Effect” means an effect resulting from any change, event, occurrence or state of facts, either individually or in the aggregate, that:

 

1.1.65.1                                 is, or could reasonably be expected to be, material and adverse to the business, condition (financial or otherwise), properties, assets (tangible or intangible), liabilities (whether absolute, accrued, conditional, contingent or otherwise), capitalization, operations, prospects or results of operations of the Corporation; or

 

1.1.65.2                                 would, or would reasonably be expected to, materially impair or delay the consummation of the transactions contemplated by this Agreement,

 

except that:

 

1.1.65.3                                 any change, event, occurrence or state of facts relating to:

 

1.1.65.3.1.                                       conditions affecting the pharmaceutical industry generally in jurisdictions in which the Corporation carries on business, including changes in commodity prices, generally accepted accounting principles, Laws or Taxes;

 

1.1.65.3.2.                                       general economic conditions, or financial, credit, currency exchange, securities or commodities markets in general; or

 

7

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

1.1.65.3.3.                                       war, armed hostilities or acts of terrorism,

 

will not result in a Material Adverse Effect unless it relates primarily to (or has the effect of relating primarily to) the Corporation, or adversely affects the Corporation disproportionately, compared to other businesses of similar size operating in the same industry as the Corporation.

 

1.1.66                                 “Material Contract” means a Contract to which the Corporation is a party or is bound that:

 

1.1.66.1                                 involves or may result in the payment of money or money’s worth by or to the Corporation in an amount in excess of $[***];

 

1.1.66.2                                 has an unexpired term of more than one year (including renewals);

 

1.1.66.3                                 cannot be terminated by the Corporation without penalty upon less than 60 days’ notice; or

 

1.1.66.4                                 the termination of which, or under which the loss of rights, would have a material and adverse effect on the business, condition (financial or otherwise), properties, assets (tangible or intangible), liabilities (whether absolute, accrued, conditional, contingent or otherwise), capitalization, operations, prospects or results of operations of the Corporation,

 

and in any event includes the Contracts set out in Exhibit 3.3.25.

 

1.1.67                                 “Milestone” is defined in Section 2.2.1.

 

1.1.68                                 “Milestone Payment” is defined in Section 2.2.1.

 

1.1.69                                 “Net Sales” means the gross amount invoiced for bona fide arms’ length sales of the Lead Product by or on behalf of the Buyer or its Affiliates or distributors to Third Parties, less the following deductions, determined in accordance with the Buyer’s standard accounting methods as generally and consistently applied by the Buyer at the time that such sales are recorded:

 

1.1.69.1                                 normal and customary trade, cash and/or quantity discounts allowed and taken directly with respect to sales of the Lead Product;

 

1.1.69.2                                 amounts repaid or credited by reason of defects, rejections, recalls, returns, rebates and allowances in respect of the Lead Product;

 

1.1.69.3                                 chargebacks and other amounts paid on sale or dispensing of the Lead Product;

 

1.1.69.4                                 Third Party cash rebates and chargebacks related to sales of the Lead Product, to the extent allowed;

 

1.1.69.5                                 retroactive price reductions that are actually allowed or granted in respect of the Lead Product;

 

1.1.69.6                                 compulsory payments and rebates directly related to the sale of the Lead Product, accrued, paid or deducted pursuant to agreements (including, but not limited to, managed care agreements) or governmental regulations;

 

8

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

1.1.69.7                                 freight, insurance and other transportation charges, to the extent included in the invoice price of the Lead Product;

 

1.1.69.8                                 tariffs, duties, excise, sales, value-added, consumption or other taxes (other than taxes based on income), to the extent included in the invoice price of the Lead Product;

 

1.1.69.9                                 amounts paid or payable to, or withheld by, any distributor of the Lead Product used or engaged by the Buyer or its Affiliates in connection with the sale of the Lead Product, and

 

1.1.69.10                          any other specifically identifiable costs or charges included in the gross invoiced sales price of the Lead Product falling within categories substantially equivalent to those listed above.

 

1.1.70                                 “NDA” means a new drug application as described in §505(b) of the FDCA and subject to CFR Title 21, Part 314, including any amendments submitted pursuant to CFR Title 21, §314.60, or any analogous application or submission with any Regulatory Authority to obtain authorization to market a pharmaceutical product outside of the United States.

 

1.1.71                                 “NRC Agreement” means the agreement between the Corporation and the National Research Counsel of Canada dated effective October 3, 2014.

 

1.1.72                                 “Parties” means the Sellers, the Corporation and the Buyer, collectively, and “Party” means any one of them.

 

1.1.73                                 “Permits” means the authorizations, registrations, permits, certificates of approval, approvals, grants, licences, quotas, consents, commitments, rights or privileges (other than those relating to the Intellectual Property) issued or granted by any Governmental Authority to the Corporation.

 

1.1.74                                 “Permitted Encumbrances” means:

 

1.1.74.1                                 unregistered liens for Taxes, assessments or similar charges incurred by the Corporation in the ordinary course of the Business that are not yet due and payable or, if due and payable, are to be adjusted between the Sellers and the Buyer on Closing; and

 

1.1.74.2                                 inchoate mechanic’s, construction and carrier’s liens and other similar liens arising by operation of law or statute in the ordinary course of the Business for obligations which are not delinquent and will be paid or discharged in the ordinary course of the Business.

 

1.1.75                                 “Person” will be broadly interpreted and includes:

 

1.1.75.1                                 a natural person, whether acting in his or her own capacity, or in his or her capacity as executor, administrator, estate trustee, trustee or personal or legal representative, and the heirs, executors, administrators, estate trustees, trustees or other personal or legal representatives of a natural person;

 

1.1.75.2                                 a corporation or a company of any kind, a partnership of any kind, a sole proprietorship, a trust, a joint venture, an association, an unincorporated association, an unincorporated syndicate, an unincorporated organization or any other association, organization or entity of any kind; and

 

9

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

1.1.75.3                                 a Governmental Authority.

 

1.1.76                                 “Personal Information” means information about an individual who can be identified by the Person who holds that information.

 

1.1.77                                 “PIPEDA” means the Personal Information Protection and Electronic Documents Act (Canada).

 

1.1.78                                 “Phase 3 Clinical Trial” means a human clinical trial of a product the design of which is acknowledged by the FDA to be sufficient for such clinical trial to satisfy the requirements of 21 CFR § 312.21(c) or, if conducted in a country outside the United States, a similar clinical trial prescribed by the applicable Regulatory Authority in such country which is acknowledged by such Regulatory Authority to be sufficient for such clinical trial to satisfy the requirements of a pivotal efficacy and safety clinical trial.

 

1.1.79                                 “Plans” means all employee benefit plans, programs, agreements or arrangements, domestic or foreign, including all bonus, incentive, profit sharing, pension, retirement compensation, retirement savings, retirement income, deferred compensation, incentive compensation, welfare, fringe benefit, vacation, salary continuation, legal, health and other medical, dental, life, accident, disability, supplemental retirement, nonqualified trusts, profit sharing, stock purchase, stock option, restricted stock, phantom stock, stock appreciation rights or other equity incentive plans, programs, agreements or arrangements, and all termination, severance or other plans, programs, agreements or arrangements, whether formal or informal, written or unwritten, funded or unfunded, registered or unregistered, insured or self-insured, whether covering one person or more than one person, and all other benefit plans, programs, agreements or arrangements which are maintained, contributed to, required to be contributed to, or sponsored by the Corporation, or under which the Corporation has any liability or contingent liability, for the benefit of, or relating to, any Employee or Former Employee or their respective dependants or beneficiaries or which otherwise provide coverage for any current or Former Employees or their respective dependants and beneficiaries.

 

1.1.80                                 “PMDA” means the Pharmaceuticals and Medical Devices Agency of Japan and any successor thereto.

 

1.1.81                                 “Privacy Laws” means any Laws that regulate the collection, use or disclosure of Personal Information.

 

1.1.82                                 “Pro Rata Share” means, with respect to any Seller, the percentage set out in Schedule A opposite that Seller’s name under the heading “Pro Rata Share of Seller”.

 

1.1.83                                 “Purchase Price” is defined in Section 2.2.1.

 

1.1.84                                 “Purchase Price Instalment” has the meaning set forth in Section 2.4.2.

 

1.1.85                                 “Purchased Shares” means all of the issued and outstanding shares in the capital of the Corporation.

 

1.1.86                                 “Quarterly Earnout Payment” means a payment determined in accordance with Section

 

1.1.86.1.1.                                       as may be adjusted pursuant to Section 2.2.2.2.7.

 

1.1.87                                 “Regulatory Authority” means (i) any Governmental Authority, notified body or other organization in a country or region that regulates the manufacture or sale of pharmaceutical

 

10

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

or medicinal products or medical devices, including the FDA, the PMDA and the EMA, and any successors thereto, and (ii) any other relevant bodies authorized by Applicable Law to review or otherwise exercise oversight over MAAs, other regulatory filings or Regulatory Approvals

 

1.1.88                                 “Release” means to release, spill, leak, pump, pour, emit, empty, discharge, deposit, inject, leach, dispose, dump or permit to escape.

 

1.1.89                                 “Remedial Order” means any remedial order, including any notice of non-compliance, order, other complaint, direction or sanction issued, filed or imposed by any Governmental Authority under Environmental Laws, with respect to any failure or neglect to comply with Environmental Laws.

 

1.1.90                                 “Representatives” means the advisors, agents, consultants, directors, officers, management, employees, subcontractors, and other representatives, including accountants, auditors, financial advisors, lenders and lawyers of a Person.

 

1.1.91                                 “Second Milestone” is defined in Section 2.2.1.2.

 

1.1.92                                 “Second Milestone Payment” is defined in Section 2.2.1.2.

 

1.1.93                                 “Securities” has the meaning given to that term in the Securities Act (Ontario).

 

1.1.94                                 “Seller” and “Sellers” are defined in the recital of the Parties above.

 

1.1.95                                 “Seller Indemnified Parties” means each Seller and, as applicable, its Affiliates, and their respective directors, officers, shareholders, agents and employees, and the respective Successors of each of them.

 

1.1.96                                 “Seller Indemnifying Party” means any Seller providing indemnification under any provision of Article 6.

 

1.1.97                                 “Sellers’ Representative” is defined in Section 7.1.

 

1.1.98                                 “Straddle Period” means any taxation period of the Corporation ending after the Closing Date which commenced before the Closing Date and includes a period before the Closing Date.

 

1.1.99                                 “Stub Period Returns” is defined in Section 4.2.

 

1.1.100                          “Successful Read-Out of Phase 2 Clinical Trial” means the earlier of (i) the first dose administered to a patient in a second Phase 2 Clinical Trial for the same compound as was administered in the first Phase 2 Clinical Trial, and (ii) the receipt of written final minutes from an end of phase 2 meeting with a Regulatory Authority confirming that safety and efficacy data for the Lead Product are sufficient to initiate a Phase 3 Clinical Trial.

 

1.1.101                          “Successful Read-Out of Phase 3 Clinical Trial” means shall mean the first to occur of (i) a press release issued by the Buyer stating that the results of a completed Phase 3 Clinical Trial combined with other completed clinical and non-clinical studies are sufficient for the Buyer to submit an NDA for the Lead Product, and (ii) receipt of written confirmation of acceptance for filing of an NDA by a Regulatory Authority for evaluation of the Lead Product.

 

1.1.102                          “Successors” means, as applicable, the heirs, executors, administrators, estate trustees, trustees, personal or legal representatives, successors and permitted assigns of a Person.

 

11

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

1.1.103                          “Tax” or “Taxes” means all taxes, duties, fees, premiums, assessments, imposts, levies, rates, withholdings, dues, government contributions and other charges of any kind imposed by any Governmental Authority, whether direct or indirect, together with all interest, penalties, fines, additions to tax or other additional amounts imposed in respect thereof, including those levied on, or measured by, or referred to as income, gross income, gross receipts, net proceeds, profits, capital gains, alternative or add-on, or minimum, capital, transfer, land transfer, sales, retail sales, consumption, use, goods and services, harmonized sales, value- added, ad valorem, turnover, excise, stamp, non-resident withholding, business, franchising, business licences, real and personal property (tangible and intangible), environmental, payroll, employee withholding, employment, health, employer health, social services, development, occupation, education or social security, and all contributions, premiums, surtaxes, all customs duties, countervail, anti-dumping, special import measures and import and export taxes, all licence, franchise and registration fees, all provincial workers’ compensation payments, and all employment insurance, health insurance and Canada, Québec and other government pension plan contributions.

 

1.1.104                          “Tax Law” means any Law that imposes Taxes or that deals with the administration or enforcement of liabilities for Taxes.

 

1.1.105                          “Tax Return” means any return, report, declaration, designation, election, undertaking, waiver, notice, filing, information return, statement, form, certificate or any other document or materials relating to Taxes, including any related or supporting information with respect to any of those documents or materials listed above in this Section 1.1.105, filed or to be filed with any Governmental Authority in connection with the determination, assessment, collection or administration of Taxes.

 

1.1.106                          “Technology” shall mean all know-how, patents, patent applications and other Intellectual Property owned or controlled by Encycle as of the Effective Date.

 

1.1.107                          “Third Party” shall mean any Person other than the Buyer or any Affiliate of the Buyer.

 

1.1.108                          “Third Party Claim” means a Claim made against an Indemnified Party by a Person who is not a Party.

 

1.1.109                          “TPD” means the Therapeutic Products Directorate of Health Canada.

 

1.1.110                          “[***] Agreement” means the Technology License Agreement dated as of [***] between [***] and the Corporation (as amended by a [***] Agreement dated [***]).

 

1.2                                                  Certain Rules of Interpretation

 

1.2.1                                        Gender, etc. In this Agreement, words signifying the singular number include the plural and vice versa, and words signifying gender include all genders.

 

1.2.2                                        Including. Every use of the words “including” or “includes” in this Agreement is to be construed as meaning “including, without limitation” or “includes, without limitation”, respectively.

 

1.2.3                                        Division and Headings. The division of this Agreement into Articles and Sections, the insertion of headings and the inclusion of a table of contents are for convenience of reference only and do not affect the construction or interpretation of this Agreement.

 

12

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

1.2.4                                        Articles, Sections, etc. References in this Agreement to an Article, Section, Schedule or Exhibit are to be construed as references to an Article, Section, Schedule or Exhibit of or to this Agreement unless otherwise specified.

 

1.2.5                                        Time Periods. Unless otherwise specified in this Agreement, time periods within which or following which any calculation or payment is to be made, or action is to be taken, will be calculated by excluding the day on which the period begins and including the day on which the period ends. If the last day of a time period is not a Business Day, the time period will end on the next Business Day.

 

1.2.6                                        Statutory Instruments. Unless otherwise specified, any reference in this Agreement to any statute includes all regulations and subordinate legislation made under or in connection with that statute at any time, and is to be construed as a reference to that statute as amended, restated, supplemented, extended, re-enacted, replaced or superseded at any time.

 

1.3                                                  Governing Law

 

This Agreement is governed by, and is to be construed and interpreted in accordance with, the Laws of the Province of Ontario and the Laws of Canada applicable therein without giving effect to any choice or conflict of law provision or rule (whether of the Province of Ontario or any other jurisdiction).

 

1.4                                                  Entire Agreement

 

This Agreement, and any other agreements and documents to be delivered under this Agreement, constitutes the entire agreement between the Parties pertaining to the subject matter of this Agreement and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties, other than the provisions of the Confidentiality Agreement, and there are no representations, warranties or other agreements between the Parties in connection with the subject matter of this Agreement except as specifically set out in this Agreement, or in any other agreements and documents delivered under this Agreement. No Party has been induced to enter into this Agreement in reliance on, and there will be no liability assessed, either in tort or contract, with respect to, any warranty, representation, opinion, advice or assertion of fact, except to the extent it has been reduced to writing and included as a term in this Agreement, or in any other agreements and documents delivered under this Agreement.

 

1.5                                                  Schedules and Exhibits

 

The following is a list of Schedules and Exhibits:

 

Schedule               Subject Matter

 

A             Sellers and Purchased Shares

 

B             Disclosure Schedule

 

	
Exhibit
    	
 
    	
Subject Matter
    
	
 
    	
 
    	
 
    
	
1.1.62
    	
 
    	
Lead Product
    
	
 
    	
 
    	
 
    
	
5.2.1.3
    	
 
    	
Form of Consulting   and Transitional Services Agreement
    
	
 
    	
 
    	
 
    
	
5.2.1.5
    	
 
    	
Form of Release
    

 

13

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

ARTICLE 2
  PURCHASE AND SALE

 

2.1                                                  Agreement of Purchase and Sale

 

Subject to the terms and conditions of this Agreement, on the Closing Date the Sellers will sell, and the Buyer will purchase, the Purchased Shares.

 

2.2                                                  Purchase Price

 

2.2.1                                        The aggregate purchase price (the “Purchase Price”) payable by the Buyer to the Sellers in accordance with Section 2.4 is the sum of the Quarterly Earnout Payments provided for in Section 2.2.2, and the following one-time payments (each, a “Milestone Payment”) upon achievement of the following milestones (each, a “Milestone”):

 

2.2.1.1                                        an amount equal to US$[***] upon the Buyer or any of its Affiliates, or a Third Party on behalf of and as directed by the Buyer or any of its Affiliates, first administering a dose of the Lead Product to an animal in a preclinical toxicity study (the “First Milestone”);

 

2.2.1.2                                        an amount equal to US$[***] (the “Second Milestone Payment”) upon the acceptance by the FDA of an IND (or other such national equivalent) in respect of the Lead Product (the “Second Milestone”);

 

2.2.1.3                                        an amount equal to US$[***] upon a Successful Read-Out of Phase 2 Clinical Trial in respect of the Lead Product;

 

2.2.1.4                                        an amount equal to US$[***] upon a Successful Read-Out of Phase 3 Clinical Trial in respect of the Lead Product;

 

2.2.1.5                                        an amount equal to US$[***] upon the first Commercial Sale in [***] of the Lead Product;

 

2.2.1.6                                        an amount equal to US$[***] upon the first Commercial Sale in either [***] or [***] of the Lead Product; and

 

2.2.1.7                                        an amount equal to US$[***] the first time that annual global Net Sales total at least US$[***] in a single calendar year.

 

For the avoidance of doubt, each Milestone may only be achieved one time and each Milestone Payment may only be paid one time, if at all.

 

2.2.2                                        Earnout.

 

2.2.2.1                                        The Buyer shall pay, or cause to be paid, to the Sellers:

 

2.2.2.1.1.                                              in respect of sales of the Lead Product in any jurisdiction in which the Corporation has an issued patent having at least one Composition of Matter Claim that effectively and legally prevents a generic or interchangeable product entry (or competition) in the respective jurisdiction, an amount equal to [***]% of the [***] Net Sales in such jurisdiction commencing on the date of the first Commercial Sale of the Lead Product in such jurisdiction, and ending on the later of (i) the 10th anniversary of the first Commercial

 

14

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Sale of the Lead Product in such jurisdiction and (ii) the expiration of the issued patent of the Lead Product in such jurisdiction; and

 

2.2.2.1.2.                                              in respect of sales of the Lead Product in any jurisdiction in which the Corporation does not have an issued patent having at least one Composition of Matter Claim that effectively and legally prevents a generic or interchangeable product entry (or competition) in the respective jurisdiction, an amount equal to [***]% of the [***] Net Sales in such jurisdiction during a period commencing on the date of the first Commercial Sale of the Lead Product in such jurisdiction, and ending on the tenth anniversary of the first Commercial Sale of the Lead Product in such jurisdiction.

 

2.2.2.2

 

2.2.2.2.1.                                              The Buyer shall, within 90 days following the end of each quarter of the financial year of the Buyer, provide a report (each an “Quarterly Earnout Report”) to the Sellers’ Representative detailing the Buyer’s calculation of such payment as at the relevant quarter end and pay the amount of the Quarterly Earnout Payment set forth in the Quarterly Earnout Report to the Designated Payment Agent on behalf of the Sellers in accordance with Section 2.4.2.2.

 

2.2.2.2.2.                                              The Buyer shall provide the Sellers’ Representative with reasonable access to the applicable records of the Buyer and its Affiliates to the extent reasonably requested by the Sellers’ Representative during the dispute resolution process described in this Section 2.2.2.2 and to the extent necessary for the Sellers’ Representative to review the applicable calculations.

 

2.2.2.2.3.                                              If the Sellers’ Representative objects to any Quarterly Earnout Report, the Sellers’ Representative shall notify the Buyer in writing of such objection(s) within 120 days of the end of the relevant financial year of the Buyer (a “Notice of Objection”). The Notice of Objection shall describe, in reasonable detail, the basis for such dispute and shall include all disputes related to any Quarterly Earnout Report provided by the Buyer in the relevant financial year.

 

2.2.2.2.4.                                              If the Sellers’ Representative does not deliver a Notice of Objection within the time limited therefor, then each Quarterly Earnout Report provided by the Buyer in the relevant financial year of the Buyer will be conclusive, final and binding in its entirety on all of the parties.

 

2.2.2.2.5.                                              If the Sellers’ Representative does deliver a Notice of Objection in accordance with Section 2.2.2.2.3, then the Sellers’ Representative and the Buyer shall attempt to resolve such disputed items, and to the extent that the Sellers’ Representative and the Buyer are unable to resolve any such disputes, the items set forth in the Notice of Objection shall be resolved in accordance with the procedures set forth in Section 2.2.2.2.6 below.

 

2.2.2.2.6.                                              In the event that the Sellers’ Representative and the Buyer are unable to resolve the disputed items within 20 Business Days after delivery of the Notice of Objection, either the Buyer or the Sellers’

 

15

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Representative may demand that such disputed items be referred to an accounting firm mutually agreed by the Sellers’ Representative and the Buyer (the “Accounting Firm”) to finally resolve such disputed items. The Accounting Firm shall act as an expert and not as an arbitrator to determine only the disputed items, and the determination of each disputed item shall be within the range established by the relevant Quarterly Earnout Report or Quarterly Earnout Reports and the Notice of Objection, if any. The determination of the Accounting Firm shall be made as promptly as possible and shall be final and binding upon the parties. Each party hereto shall be permitted to submit such data and information to the Accounting Firm as such party deems appropriate. The fees and expenses of the Accounting Firm incurred in resolving the disputed matter shall be borne by each of the Buyer, on the one hand, and the Sellers, on the other hand, in proportion to the difference between their respective position(s) on the matter(s) under dispute and the ultimate determined amount. For all other costs and expenses, the Sellers’ Representative and the Buyer shall each pay their own costs and expenses incurred under this Section 2.2.2.2.

 

2.2.2.2.7.                                              Once the Accounting Firm has determined the disputed items, the amount that the Accounting Firm determines in respect of each disputed Quarterly Earnout Report shall be the deemed to be the Quarterly Earnout Amount payable to the Sellers. If the relevant Quarterly Earnout Amount determined by the Accounting Firm is greater than the amount paid by the Buyer pursuant to Section 2.2.2.2.1 in respect of the relevant Quarterly Earnout Report, the Buyer shall, within 10 Business Days of receipt of the Accounting Firm’s determination, pay to the Designated Paying Agent on behalf of the Sellers, in accordance with Section 2.4.2.2, an amount equal to the difference between the amount actually paid in respect of the relevant Quarterly Earnout Report and the relevant Quarterly Earnout Amount as determined by the Accounting Firm. If the relevant Quarterly Earnout Amount determined by the Accounting Firm is less than the amount paid by the Buyer pursuant to Section 2.2.2.2.1 in respect of the relevant Quarterly Earnout Report, the Buyer shall, without limiting its other remedies, be entitled to set-off such amount from any subsequent payments due by the Buyer on account of the Purchase Price.

 

2.2.3                                        The payments to the Sellers pursuant to Section 2.2.1 and Section 2.2.2 shall, notwithstanding the provisions thereof, be net of and reduced by, and the Purchase Price shall be reduced by, any amounts paid or payable by the Corporation or any of its Affiliates pursuant to the [***] Agreement, the [***] Agreement and, if applicable, the [***] Agreement by any amounts paid or payable by the Corporation or any of its Affiliates to any other Third Party in connection with such Third Party’s rights or entitlements (including Intellectual Property rights) in or to the Lead Product, where the existence of such rights or entitlement constitute a breach by the Corporation of the Corporation’s representations and warranties in this Agreement, or where the Buyer is entitled to indemnification from the Sellers as a result of the existence of such Third Party’s rights or entitlement.

 

16

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

2.2.4                                        Commercially Reasonable Efforts.

 

2.2.4.1                                        Subject to Section 2.2.4.2, the Buyer shall, and shall cause its Affiliates to, (i) act in good faith and use Commercially Reasonable Efforts to achieve the First Milestone and the Second Milestone, where “Commercially Reasonable Efforts” means such commercially reasonable efforts as are typically used by a similarly situated pharmaceutical company in comparable circumstances for the development and commercialization of prescription pharmaceutical products of similar commercial potential at a similar stage in product lifecycle, taking into consideration the safety and efficacy of such product, the development work that is to be completed by the Buyer and its Affiliates (or any Third Party), the development of other products in the pipeline of the Buyer and its Affiliates, its competitiveness compared to alternative Third Party products, the proprietary position of the product (including scope and duration of relevant patents), the scope, timing and likelihood of regulatory approval, the regulatory status of the product, whether the product is subject to a clinical hold, recall or market withdrawal, and the anticipated reimbursability and pricing of the product, and (ii) refrain from taking any action in bad faith or without reasonable basis which is primarily intended to prevent, or the primary effect of which is to prevent, the realization of the achievement of the First Milestone and the Second Milestone.

 

2.2.4.2                                        In the event that the Buyer breaches any of its obligations pursuant to Section 2.2.4.1 prior to achieving the Second Milestone and has failed to cure such breach within 15 Business Days of its receipt of notice in writing from the Sellers Representative of such breach, the Buyer, if requested by Sellers’ Representative in writing within 10 Business Days of the expiry of such Buyer cure period, shall, and shall cause its Affiliates, including the Corporation, to (i) assign all rights, title and interest in and to the Lead Product held by it or its Affiliates to an entity then specified in writing by the Sellers’ Representative, and (ii) grant to such entity all of its right, title and interest in and to: (A) all data relating to non-clinical and clinical studies conducted on, and all filings made with regulatory agencies specifically with respect to, the Lead Product and (B) any regulatory approvals and regulatory documentation specifically relating to the Lead Product. Such transfer of the Lead Product shall be on an “as is, where is” basis with no representations, warranties, indemnities from the Buyer or the Corporation whatsoever, all of which being expressly disclaimed, and will be in full satisfaction of any Buyer, Corporation, or any Affiliate, liability or obligation, if any, to the Sellers on account of the Purchase Price and/or pursuant to this Section 2.2, other than such amounts, if any, then due and owing to the Sellers pursuant to the express provisions of Section 2.2.1 or Section 2.2.2 of this Agreement that have not been paid in full or set-off in accordance with the provisions of this Agreement; provided that, and for greater certainty, the amounts then due and owing to the Sellers shall only comprise the Milestone Payments and Quarterly Earnout Payments, if any, then due and owing at the time of such breach, and shall not include any amount not then due and owing to the Sellers including any damages or similar amounts resulting from such breach or any acceleration of any amounts on account of the Purchase Price. As a condition, and in consideration, of the grant and transfer of rights by the Buyer pursuant to this section, the Sellers covenant and agree to (a) pay contemporaneous with and as a condition precedent to any such grant and transfer any and all reasonable costs and expenses incurred by the Buyer or the Corporation (including, without limitation, any sales or transfer Tax that may arise) in connection with any such transfer or assignment; (b) assume all obligations of the Buyer or Corporation relating to the Lead Product arising pursuant to the [***] Agreement and the [***] Agreement and any other obligations previously approved in writing by the Sellers’ Representative or that

 

17

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

are otherwise acceptable to the Sellers’ Representative, and the Sellers shall indemnify and hold harmless the Buyer and the Corporation for such obligations; and (c) deliver a release to the Buyer and the Corporation of any claims against the Buyer or the Corporation on terms reasonably acceptable to the Buyer and the Corporation.

 

2.2.4.3                                        Notwithstanding any other provision in this Agreement including, without limitation, Article 6, the Sellers’ rights and recourse pursuant to this Section 2.2.4 shall be the Sellers’ sole and exclusive remedy for a breach by the Buyer of its obligations pursuant to Section 2.2.4.1.

 

2.2.5                                        Return of Rights to the Lead Product if Cessation of Development.

 

2.2.5.1                                        The Buyer may, at any time and in the Buyer’s sole and absolute discretion, decide to cease or discontinue all development activities with regard to the Lead Product.

 

2.2.5.2                                        In the event that the Buyer decides to cease or discontinue all development activities with regard to the Lead Product prior to achieving the Second Milestone, the Buyer shall notify the Sellers’ Representative of its decision and, if requested by Sellers’ Representative in writing within 20 Business Days of the receipt of such notice, shall, and shall cause its Affiliates, including the Corporation, to, (i) assign all rights, title and interest in and to the Lead Product held by it or its Affiliates to an entity then specified in writing by the Sellers’ Representative, and (ii) grant to such entity all of its right, title and interest in and to: (A) all data relating to non-clinical and clinical studies conducted on, and all filings made with regulatory agencies specifically with respect to, the Lead Product and (B) any regulatory approvals and regulatory documentation specifically relating to the Lead Product. Such transfer of the Lead Product shall be on an “as is, where is” basis with no representations, warranties, indemnities from the Buyer or the Corporation whatsoever, all of which being expressly disclaimed, and will be in full satisfaction of any Buyer, Corporation, or any Affiliate, liability or obligation, if any, to the Sellers on account of the Purchase Price and/or pursuant to this Section 2.2, other than such amounts, if any, then due and owing to the Sellers pursuant to the express provisions of Section 2.2.1 or Section 2.2.2 of this Agreement that have not been paid in full or set-off in accordance with the provisions of this Agreement; provided that, and for greater certainty, the amounts then due and owing to the Sellers shall only comprise the Milestone Payments and Quarterly Earnout Payments, if any, then due and owing at the time of such determination by the Buyer, and shall not include any amount not then due and owing to the Sellers including any damages or similar amounts resulting from such determination by the Buyer or any acceleration of any amounts on account of the Purchase Price. As a condition, and in consideration, of the grant and transfer of rights by the Buyer pursuant to this section, the Sellers covenant and agree to (a) pay contemporaneous with and as a condition precedent to any such grant and transfer any and all reasonable costs and expenses incurred by the Buyer or the Corporation (including, without limitation, any sales or transfer Tax that may arise) in connection with any such transfer or assignment; and (b) assume all obligations of the Buyer or Corporation relating to the Lead Product arising pursuant to the [***] Agreement and the [***] Agreement and any other obligations previously approved in writing by the Sellers’ Representative or that are otherwise acceptable to the Sellers’ Representative, and the Sellers shall indemnify and hold harmless the Buyer and the Corporation for such obligations.

 

18

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

2.2.5.3                                        In the event that the Buyer decides to cease or discontinue all development activities with regard to the Lead Product following achieving the Second Milestone, none of the Buyer, the Corporation or any of their Affiliates shall have any further obligation or liability whatsoever to the Sellers on account of the Purchase Price and/or pursuant to this Section 2.2 as a result of the Buyer’s decision to cease or discontinue such development activities with regard to the Lead Product, other than such amounts, if any, then due and owing to the Sellers pursuant to the express provisions of Section 2.2.1 or Section 2.2.2 of this Agreement that have not been paid in full or set-off in accordance with the provisions of this Agreement; provided that, and for greater certainty, the amounts then due and owing to the Sellers shall only comprise the Milestone Payments and Quarterly Earnout Payments, if any, then due and owing at the time of such determination by the Buyer, and shall not include any amount not then due and owing to the Sellers including any damages or similar amounts resulting from such determination by the Buyer or any acceleration of any amounts on account of the Purchase Price.

 

2.2.5.4                                        Notwithstanding any other provision in this Agreement including, without limitation, Article 6, the Sellers’ rights and recourse pursuant to Section 2.2.4 or this Section 2.2.5 shall be the Sellers’ sole and exclusive remedy for any breach by the Buyer of its obligations under Section 2.2.4.1 or any discontinuance by the Buyer or the Corporation of such development activities for any reason whatsoever.

 

2.3                                                  Allocation of Payments

 

The Purchase Price will be paid to the Designated Paying Agent who will [***]. The Buyer’s obligations with respect to the payment of the Purchase Price will be fully and finally discharged upon the Buyer delivering to the Designated Paying Agent, from time to time, the full amount of any portion of the Purchase Price that is then due and the Buyer shall have no obligation to oversee, and no liability to any Seller in respect of, any allocation of the Purchase Price to and among the Sellers (or any of them), or any failure to allocate all or any portion of the Purchase Price, by the Designated Paying Agent. For the avoidance of any doubt, neither the Buyer nor any of its Affiliates (including the Corporation) shall have any obligation with respect to the allocation and distribution of any portion of the Purchase Price among the Sellers and shall not be liable for any determination made by the Designated Paying Agent with respect to such allocations and distributions, or any dispute among the Sellers and/or between the any of the Sellers and the Designated Paying Agent with respect to the distribution of or failure to distribute all or any portion of the Purchase Price. The Sellers acknowledge and agree that the Designated Paying Agent is the agent of the Sellers and will be receiving payments of the Purchase Price from the Buyer in its capacity as agent of the Sellers and in no other capacity.

 

2.4                                                  Payment of Purchase Price

 

2.4.1                                        The Buyer will pay and satisfy the Purchase Price by paying each Milestone Payment (within 30 days of attainment of the applicable Milestone) and each Quarterly Earnout Payment (upon determination of the applicable amount in accordance with Section 2.2.2.2), subject to adjustment after the Closing in accordance with Section 6.11 (Indemnity Adjustments to Purchase Price), as follows:

 

2.4.1.1                                        the Buyer will pay to the Designated Payment Agent on behalf of the Sellers, in aggregate:

 

2.4.1.1.1.                                              the amount of any Milestone Payment that is due pursuant to Section 2.2.1 (Purchase Price), and;

 

19

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

2.4.1.1.2.                                              each Quarterly Earnout Payment determined in accordance with Section 2.2.2.2.

 

2.4.2                                        Each payment of the Purchase Price (each a “Purchase Price Instalment”):

 

2.4.2.1                                        that is a Milestone Payment may be satisfied by any of the following as determined by the Buyer from time to time in its absolute discretion:

 

2.4.2.1.1.                                              by wire transfer of immediately funds to the account designated by the Designated Paying Agent; or

 

2.4.2.1.2.                                              by an issuance to each Seller or as each such Sellers may, in writing direct of such number of Common Shares in the share capital of the Buyer as have a value (calculated by reference to the Benchmark Price Per Share), as at the date of the payment, equal to the portion of the Milestone Payment then due to such Seller, provided that share certificates evidencing such issued Common Shares shall be delivered by the Buyer to Designated Paying Agent; or

 

2.4.2.1.3.                                              partly in accordance with Section 2.4.2.1.1 and partly in accordance with Section 2.4.2.1.2; and

 

2.4.2.2                                        that is a Quarterly Earnout Payment shall be satisfied by wire transfer of immediately funds to the account designated by the Designated Paying Agent.

 

2.5                                                  Withholding Rights

 

The Buyer shall be entitled to deduct and withhold from the consideration otherwise payable to any Person pursuant to this Article 2, and is hereby irrevocably directed by the Sellers to withhold, such amounts as may be required to be deducted and withheld with respect to the making of such payment under any provision of applicable Law. To the extent that amounts are so deducted and withheld by the Buyer and remitted to the applicable Governmental Authority, such amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which the Buyer made such deduction and withholding.

 

2.6                                                  Capitalised Value.

 

The parties agree that the capitalised value of the payments of the Purchase Price pursuant to this Article 2 is, according to the Section 12B of the Danish tax assessment act (Ligningsloven), CDN$[***]. The parties further agree that they will each prepare and file any Tax Return related to the transactions contemplated by this Agreement in a manner consistent with that value provided that, in the event that a relevant Governmental Authority finally determines that [***], then any Tax Return related to the transactions contemplated by this Agreement will be prepared and filed in a manner consistent with the value as finally determined by such Governmental Authority.

 

ARTICLE 3
  REPRESENTATIONS AND WARRANTIES

 

3.1                                                  Disclosure Schedule

 

Each exception to the representations and warranties that is set out in the Disclosure Schedule is identified by reference to one or more specific individual Sections of this Agreement and is only effective to create an exception to each specific individual Section listed. Any statement in this Agreement that is not expressly qualified by a reference to an exception in the Disclosure Schedule will prevail, despite

 

20

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

anything to the contrary that is disclosed in the Disclosure Schedule. The exceptions to representations and warranties set out in the Disclosure Schedule are intended only to qualify and limit the representations and warranties of the Corporation and the Sellers, and will not be construed to expand in any way the scope or effect of any of those representations and warranties, and will not be construed to constitute a new representation, warranty or covenant of the Corporation or any Seller. The disclosure of any matter in the Disclosure Schedule will not be construed as an admission or indication that the matter is material or that the matter is necessarily required to be disclosed in order for any representation or warranty in this Agreement to be true and correct, and will not be construed as an admission of any obligation or liability to any third party. No disclosure in the Disclosure Schedule relating to any possible breach or violation of any Contract or Law will be construed as an admission or indication that any breach or violation exists or has actually occurred.

 

3.2                                                  Representations Relating to the Sellers

 

Each Seller, on its own behalf, represents and warrants to the Buyer as follows, and acknowledges that the Buyer is relying upon these representations and warranties in connection with the purchase of the Purchased Shares, despite any investigation made by or on behalf of the Buyer.

 

3.2.1                                        Corporate Existence of Seller. If the Seller is not an individual, the Seller is a corporation duly incorporated and validly existing under the Laws of the jurisdiction set out in Schedule A opposite that Seller’s name under the heading “Jurisdiction”.

 

3.2.2                                        Capacity and Authority. If the Seller is not an individual, the Seller has all necessary corporate power, authority and capacity to enter into and perform its obligations under this Agreement. If the Seller is an individual, the Seller is of the full age of majority and has the legal capacity and competence to enter into and perform its obligations under this Agreement.

 

3.2.3                                        Binding Obligation. This Agreement has been duly executed and delivered by the Seller and constitutes a valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, subject to applicable bankruptcy, insolvency and other Laws of general application limiting the enforcement of creditors’ rights generally and to the fact that equitable remedies, including specific performance, are discretionary and may not be ordered in respect of certain defaults.

 

3.2.4                                        Title to Purchased Shares. The Seller is the legal and beneficial owner of the number of Purchased Shares set out in Schedule A opposite that Seller’s name under the heading “Number of Purchased Shares Owned by Seller”, and has good title to them, free and clear of any Encumbrance except for any restriction on transfer contained in the Constating Documents. At Closing, the Seller will have the absolute and exclusive right to sell those Purchased Shares to the Buyer as contemplated by this Agreement.

 

3.2.5                                        Residence of Seller. The Seller is resident in the jurisdiction set out in Schedule A opposite that Seller’s name under the heading “Jurisdiction”, and, except as disclosed in the Disclosure Schedule, is not a non-resident of Canada for purposes of the ITA.

 

3.2.6                                        Absence of Conflict. None of the execution and delivery of this Agreement by the Seller, the performance of the Seller’s obligations under this Agreement, or the completion by the Seller of the transactions contemplated by this Agreement will:

 

3.2.6.1                                        result in or constitute a breach of any term or provision of, or constitute a default under, any Contract to which the Seller is a party or which affects the Purchased Shares owned by the Seller;

 

21

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

3.2.6.2                                        if the Seller is not an individual, result in or constitute a breach of any term or provision of, or constitute a default under, the Constating Documents of the Seller;

 

3.2.6.3                                        contravene any applicable Law; or

 

3.2.6.4                                        contravene any judgment, order, writ, injunction or decree of any Governmental Authority.

 

3.3                                                  Representations Relating to the Corporation

 

The Corporation represents and warrants to the Buyer as follows, and acknowledges that the Buyer is relying upon these representations and warranties in connection with the purchase of the Purchased Shares, despite any investigation made by or on behalf of the Buyer.

 

3.3.1                                        Capacity and Authority. The Corporation has all necessary corporate power, authority and capacity to enter into and perform its obligations under this Agreement, to own or lease its assets and to carry on the Business as currently being conducted.

 

3.3.2                                        Binding Obligation. This Agreement has been duly executed and delivered by the Corporation and constitutes a valid and binding obligation of the Corporation, enforceable against the Corporation in accordance with its terms, subject to applicable bankruptcy, insolvency and other Laws of general application limiting the enforcement of creditors’ rights generally and to the fact that equitable remedies, including specific performance, are discretionary and may not be ordered in respect of certain defaults.

 

3.3.3                                        Restrictive Covenants. The Corporation is not a party to, or bound or affected by, any Contract containing any covenant expressly limiting its ability to compete in any line of business, or limiting its ability to transfer or move any of its assets or operations.

 

3.3.4                                        Absence of Conflict. None of the execution and delivery of this Agreement by the Corporation, the performance of the Corporation’s obligations under this Agreement, or the completion by the Corporation of the transactions contemplated by this Agreement will:

 

3.3.4.1                                        result in or constitute a breach of any term or provision of, or constitute a default under, the Constating Documents;

 

3.3.4.2                                        result in or constitute a breach of any term or provision of, or constitute a default under, any Contract to which the Corporation is a party or which affects the Purchased Shares, except as disclosed in the Disclosure Schedule;

 

3.3.4.3                                        constitute an event that would permit any party to any Contract with the Corporation to amend, cancel, terminate or sue for damages with respect to that Material Contract, or to accelerate the maturity of any Indebtedness of the Corporation, or other obligation of the Corporation, under that Material Contract, except as disclosed in the Disclosure Schedule;

 

3.3.4.4                                        result in the creation or imposition of any Encumbrance on the Purchased Shares;

 

3.3.4.5                                        contravene any applicable Law; or

 

3.3.4.6                                        contravene any judgment, order, writ, injunction or decree of any Governmental Authority.

 

22

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

3.3.5                                        Consents. Except as disclosed in the Disclosure Schedule, there is no requirement to obtain any consent, approval or waiver of a party under any Material Contract in order to complete the transactions contemplated by this Agreement.

 

3.3.6                                        Regulatory Matters and Approvals.

 

3.3.6.1                                        No authorization, approval, order or consent of, or filing with, any Governmental Authority is required on the part of the Corporation in connection with the execution, delivery and performance of this Agreement or any other documents and agreements to be delivered under this Agreement.

 

3.3.6.2                                        The Lead Product is being and has been developed, tested, manufactured, stored, imported, exported, and distributed in compliance in all material respects with all applicable Laws, except such non-compliance as would not have a Material Adverse Effect.

 

3.3.6.3                                        The Corporation is not subject to any pending or, to the Knowledge of the Corporation, threatened Claim by the HPFB or FDA alleging that any operation or activity of the Corporation is in violation of the FDCA, the CFDA or any other Law, or any equivalent Governmental Authority outside Canada pursuant to any foreign Law.

 

3.3.6.4                                        The Corporation has made available and provided to the Buyer as of the date of this Agreement a complete and correct copy of all material communications with regulatory authorities (including, without limitation, the FDA and Health Canada and comparable Regulatory Authorities).

 

3.3.6.5                                        The Corporation has not commenced or conducted any IND-enabling or clinical investigations, studies, trials, or other studies and tests and none have been conducted on behalf of the Corporation.

 

3.3.6.6                                        The Corporation has timely filed all reports, statements, documents, registrations, filings, amendments, supplements and submissions required to be filed by it under applicable Laws. Each such filing complied and complies in all material respects with applicable Laws and any legally necessary or required updates, changes, corrections, amendments, supplements or modifications to such filings have been submitted to the applicable Governmental Authority.

 

3.3.6.7                                        The Corporation has complied in all material respects with all applicable security and privacy standards under (i) the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, including the regulations promulgated thereunder, (ii) any comparable Laws in any other relevant jurisdiction relating to the security or privacy of medical information including PIPEDA and other substantially similar laws in any province of Canada, and (iii) any applicable state and provincial privacy Laws, except in each such case such breaches or violations as would not have a Material Adverse Effect.

 

3.3.6.8                                        There have been no manufacturing activities conducted by or on behalf of the Corporation of any products for human use, trials, administration or consumption.

 

3.3.6.9                                        No data generated by the Corporation with respect to the Lead Product that has been provided to any third party or otherwise made public is the subject of

 

23

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

any regulatory or other action, either pending or threatened, by any Governmental Authority relating to the truthfulness of such data.

 

3.3.6.10                                 Neither the Corporation nor any of its Representatives, has been convicted of any crime or engaged in any conduct that has resulted, or would reasonably be expected to result, in debarment or exclusion from clinical trials under applicable Laws. No Claims that would reasonably be expected to result in such a material debarment or exclusion of the Corporation are pending or threatened against the Corporation or any of its Representatives.

 

3.3.6.11                                 The Corporation is not a party to any consent decree, settlement order, or similar agreement with, or imposed by, any Governmental Authority.

 

3.3.7                                        Subsidiaries and Investments. The Corporation has no subsidiaries and does not own or hold, directly or indirectly, any Securities of, and does not have any other interest in, any Person and the Corporation has not entered into any agreement to acquire any such interest.

 

3.3.8                                        Corporate Existence of Corporation. The Corporation has been duly incorporated and organized, and is validly existing and in good standing as a corporation under the Business Corporations Act (Ontario). No proceedings have been taken or authorized by the Corporation in respect of the bankruptcy, insolvency, liquidation, dissolution or winding up of the Corporation.

 

3.3.9                                        Constating Documents. The Constating Documents include all of the charter documents of the Corporation and are in full force and effect. No action has been taken to amend the Constating Documents and no changes to the Constating Documents are planned.

 

3.3.10                                 Jurisdictions. The Corporation is qualified to do business in the Province of Ontario. The nature of the Business does not require qualification to do business in any other jurisdiction.

 

3.3.11                                 Authorized and Issued Capital. The authorized capital of the Corporation consists of an unlimited number of common shares, of which 13,974,378 common shares, and no other shares, are issued and outstanding as fully paid shares.

 

3.3.12                                 No Purchase Rights. No Person has any written or oral agreement or option or any right or privilege (whether by Law, pre-emptive, contractual or otherwise) capable of becoming an agreement or option, including Securities, warrants or convertible obligations of any kind, for:

 

3.3.12.1                                 the purchase of any Securities of the Corporation; or

 

3.3.12.2                                 the purchase of any of the assets of the Corporation, other than in the ordinary course of the Business.

 

3.3.13                                 Corporate Records. The corporate records and minute books of the Corporation have been maintained in accordance with all applicable statutory requirements and are complete and accurate in all material respects. All those corporate records and minute books of the Corporation have been made available to the Buyer.

 

3.3.14                                 Books and Records. The Financial Statements fairly and correctly set out and disclose in accordance with GAAP and in all material respects the financial position of the Corporation, and all material financial transactions of the Corporation have been accurately recorded in the Books and Records.

 

24

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

3.3.15                                 Financial Statements. Copies of the Financial Statements are included in the Disclosure Schedule. The Financial Statements have been prepared in accordance with GAAP and present fairly:

 

3.3.15.1                                 the assets, liabilities (whether accrued, absolute, contingent or otherwise) and financial condition of the Corporation as at the respective dates of the Financial Statements; and

 

3.3.15.2                                 the sales, earnings and results of the operations of the Corporation during the periods covered by the Financial Statements,

 

but the unaudited interim financial statements:

 

3.3.15.3                                 do not contain all notes required under GAAP; and

 

3.3.15.4                                 are subject to normal year-end audit adjustments, which individually or in the aggregate would not be material to any buyer contemplating the purchase of the Purchased Shares.

 

3.3.16                                 Tax Matters.

 

3.3.16.1                                 Except as disclosed in the Disclosure Schedule:

 

3.3.16.1.1.                                       all Tax Returns required by applicable Tax Law to be filed on or before the Closing Date by or on behalf of the Corporation have been or will be duly filed on a timely basis in compliance with their due dates under applicable Tax Law with the appropriate Governmental Authorities on or before the Closing Date. Each of those Tax Returns is or will be true, correct and complete in all material respects and none of them has been or will be amended;

 

3.3.16.1.2.                                       the Corporation has duly, and on a timely basis, paid or remitted all Taxes required to be paid or remitted by it on or before the Closing Date, including all Taxes shown as due and owing on all Tax Returns, all Taxes assessed or reassessed by any Governmental Authority, all Taxes held in trust or deemed to be held in trust for any Governmental Authority, and all instalments on account of Taxes for the current year. The Corporation will not have any liability for Taxes for any period ending on or before the Closing Date, or that portion of any Straddle Period up to and including the Closing Date, other than those liabilities for Taxes reflected as reserves on the Financial Statements. The liabilities reflected as reserves for Taxes on the Financial Statements are sufficient for the payment or remittance of all Taxes which may become payable or remittable by the Corporation, whether or not disputed, in respect of any period ending on or before the Closing Date;

 

3.3.16.1.3.                                       there are no liens for Taxes (other than for Taxes not yet due and payable) on any of the properties or assets of the Corporation, nor are those properties or assets the subject of any trust arising under Tax Law; and

 

3.3.16.1.4.                                       the Corporation has not requested, executed, received, or entered into any Contract relating to any waiver, which is still outstanding

 

25

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

and which provides for any extension of time in respect of: (i) the assessment, reassessment or collection of any Taxes by any Governmental Authority; (ii) the filing of any Tax Returns in respect of any Taxes for which the Corporation is or may be liable; or (iii) the payment or remittance of any Taxes or amounts on account of Taxes.

 

3.3.16.2                                 The Corporation has not been required, and is not currently required, to file any Tax Returns with any Governmental Authority outside Canada or outside the Province of Ontario. No Claims have ever been made by any Governmental Authority that the Corporation is or may be subject to Tax in a jurisdiction where the Corporation does not file Tax Returns. There is no basis for a Claim that the Corporation is subject to Tax in a jurisdiction in which it does not file Tax Returns.The Corporation has received notices of assessment and reassessment from all relevant Governmental Authorities with respect to its Tax liabilities for all taxation years and other periods ending [***].

 

3.3.16.3                                 Except as disclosed in the Disclosure Schedule, there are no Tax deficiencies that have been claimed, proposed or asserted in writing against the Corporation that have not been fully paid or finally settled and there are no discussions, audits, assertions or Claims now pending, or to the Knowledge of the Corporation, threatened, in respect of Taxes due from the Corporation. No Governmental Authority has challenged, disputed or questioned in writing any Taxes of or any Tax Returns filed by the Corporation or indicated that an assessment, reassessment or determination in respect of Taxes is proposed.

 

3.3.16.4                                 All Taxes required to be deducted, withheld or remitted by the Corporation under any applicable Tax Law from amounts paid or credited by it to or for the account or benefit of any Person, including Taxes on payments to any of its present or Former Employees, officers or directors and Taxes on payments to any Person who is a non-resident of Canada, have been properly deducted, withheld and remitted on a timely basis to the appropriate Governmental Authorities.

 

3.3.16.5                                 Copies of all Tax rulings pertaining to the Corporation have been provided to the Buyer. There is no Claim or, to the Knowledge of the Corporation, threatened Claim to revoke any such Tax ruling. Except as disclosed in the Disclosure Schedule, there are no Tax rulings or requests for Tax rulings pertaining to the Corporation that could affect the liability for Taxes or the amount of the taxable income or loss for any taxation year or period ending after the Closing Date.

 

3.3.16.6                                 Except as disclosed in the Disclosure Schedule, there are no amounts outstanding and unpaid for which the Corporation has previously claimed a deduction from income under the ITA or any other applicable Tax Law and which may be included in the Corporation’s income for any taxation year ending after the Closing Date.

 

3.3.16.7                                 The Corporation has not, directly or indirectly, transferred property to or acquired property from or provided services to or received services from any Person with whom the Corporation was not dealing at Arm’s Length, for consideration the fair market value of which was less than the fair market value of the property or service at the time of (in the case of property) the disposition or acquisition of the property or (in the case of services) the provision or receipt

 

26

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

of the services, nor been a party to any contract or transaction that could result in a liability for Tax under section 160 of the ITA or any substantially similar provisions of other applicable Tax Laws. The Corporation has provided the Buyer with copies of all Contracts and any other relevant documents relating to transactions entered into by it before the Closing Date with Persons with whom the Corporation was not dealing at Arm’s Length at the time the transaction occurred.

 

3.3.16.8                                 There are no transactions or events that have resulted, and no circumstances existing, which could result, in the application to the Corporation of sections 80, 80.01, 80.02, 80.03, 80.04 of the ITA or any analogous provision of any comparable Law of any province or territory of Canada.

 

3.3.16.9                                 The Corporation is registered for purposes of the ETA and the Corporation’s goods and services tax or harmonized sales tax registration number is [***]. The Corporation has complied on a timely basis with all registration, reporting, collection, remittance and other requirements in respect of all applicable commodity and sales taxes. The Corporation has provided to the Buyer all invoices, purchase orders and all other documents as are necessary to make any claim for input tax credits, refunds or rebates claimed or to be claimed under the applicable commodity and sales taxes.The Corporation has provided to the Buyer copies of all Tax Returns for all fiscal periods for which the relevant limitation period has not expired and all working papers, calculations, and schedules relating to those Tax Returns, together with all written communications relating to those Tax Returns from any Governmental Authority and the written response, if any, of the Corporation to those communications.

 

3.3.16.10                          For all transactions between the Corporation and any non-resident person with whom it was not dealing at Arm’s Length, the Corporation has made or obtained records or documents that meet the transfer pricing requirements of subsection 247(4) of the ITA. Except as disclosed in the Disclosure Schedule, the Corporation has not made any elections or designations for the purposes of the ITA or the ETA or other applicable Tax Law, or for the purposes of any administrative rulings or notices or administrative practices under any Tax Law.

 

3.3.16.11                          The Corporation has not acquired any property on a Tax-deferred or rollover basis and no election under sections 13, 44, 83 or 85 of the ITA (or any substantially similar provision of any applicable Tax Law) has been made or filed by or on behalf of the Corporation with respect to the acquisition or disposition of property.

 

3.3.16.12                          Except for elections under section 167 of the ETA and under section 75 of An Act respecting the Québec sales tax, the Corporation is not a party to any elections made under the ETA or An Act respecting the Québec sales tax.

 

3.3.16.13                          The Corporation has not made or authorized any payments to its directors, officers, former directors, shareholders or Employees or to any Person not dealing at Arm’s Length with any of its directors, officers, former directors, shareholders or Employees, except in the ordinary course of the Business and at the regular rates payable to them of salary, pension, bonuses, rents or other payments of any nature.

 

27

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

3.3.16.14                          The Corporation has no loans or Indebtedness outstanding made to any Employee or to any director, former director, officer or shareholder of the Corporation or to any Person not dealing at Arm’s Length with any of those Persons.

 

3.3.16.15                          The Corporation has been since its incorporation a Canadian-controlled private corporation as defined in the ITA.

 

3.3.16.16                          The Corporation has not been and is now not associated, as determined for the purposes of the ITA, with any corporations. All non-capital losses not deducted but still deductible by the Corporation have been incurred and are derived from the carrying on of the Business. The Business has been carried on by the Corporation since the date of its inception for profit and with a reasonable expectation of profit.

 

3.3.16.17                          In the three years before the date of this Agreement, the Corporation has not received or taken advantage of, directly or indirectly, any grants, Tax benefits other than as may be provided for in the ITA, subsidies, loan guarantees, government contracts, or other forms of preferential treatment or assistance from any Governmental Authority.

 

3.3.16.18                          For purposes of the ITA, the taxation year end of the Corporation is December 31 of each year. The taxation year end of the Corporation has not changed since its incorporation.

 

3.3.17                                 Absence of Changes. Except as disclosed in the Disclosure Schedule, since December 31, 2018, there has not been any change, event or occurrence that, either individually or in the aggregate, has resulted in, or would reasonably be expected to result in, a Material Adverse Effect.

 

3.3.18                                 Absence of Undisclosed Liabilities.

 

3.3.18.1                                 Except as set forth in the Disclosure Schedule and except for liabilities and obligations specifically and adequately reserved in the Audited Balance Sheet, the Corporation does not have and has not incurred any liabilities or obligations (whether accrued, absolute, contingent or otherwise, including under any guarantee of any debt).

 

3.3.18.2                                 Except as set forth in the Disclosure Schedule, the Corporation does not have any outstanding Indebtedness.

 

3.3.19                                 Absence of Unusual Transactions. Except as disclosed in the Disclosure Schedule, since December 31, 2018, the Corporation has not:

 

3.3.19.1                                 given any guarantee of any debt, liability or obligation of any Person;

 

3.3.19.2                                 subjected, or permitted to be subjected, any of its assets to any Encumbrance other than the Permitted Encumbrances;

 

3.3.19.3                                 acquired, sold, leased or otherwise disposed of or transferred any assets, other than in the ordinary course of the Business;

 

3.3.19.4                                 made or committed to any capital expenditures, other than in the ordinary course of the Business;

 

28

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

3.3.19.5                                 declared or paid any dividend or otherwise made any distribution or other payment of any kind to any of its shareholders or any other Person, or taken any corporate proceedings for that purpose;

 

3.3.19.6                                 redeemed, purchased or otherwise retired any of its shares or otherwise reduced its stated capital;

 

3.3.19.7                                 entered into or become bound by any Contract, other than in the ordinary course of the Business;

 

3.3.19.8                                 amended or terminated any Contract (except for Contracts which expire by the passage of time) resulting, collectively or individually, in a material and adverse effect on the business, condition (financial or otherwise), properties, assets (tangible or intangible), liabilities (whether absolute, accrued, conditional, contingent or otherwise), capitalization, operations, prospects or results of operations of the Corporation;

 

3.3.19.9                                 waived or released any rights which it has or had, or any debts owed to it, resulting, collectively or individually, in a material and adverse effect on the business, condition (financial or otherwise), properties, assets (tangible or intangible), liabilities (whether absolute, accrued, conditional, contingent or otherwise), capitalization, operations, prospects or results of operations of the Corporation;

 

3.3.19.10                          increased any compensation arrangement or agreement with any Employee or officer, director or shareholder of the Corporation;

 

3.3.19.11                          changed any method of accounting or auditing practice; or

 

3.3.19.12                          agreed or offered to do any of the things described in this Section 3.3.19.

 

3.3.20                                 Title to and Condition of Assets. The Corporation owns, possesses and has good and valid title to all of its undertakings, property and assets not otherwise the subject of specific representations and warranties in this Section 3.3, including all the undertakings, property and assets reflected in the most recent balance sheet included in the Financial Statements, free and clear of all Encumbrances other than Permitted Encumbrances. The undertakings, property and assets of the Corporation comprise all of the undertakings, property and assets necessary for the Corporation to carry on the Business as it is currently operated. All machinery, equipment, fixtures and other tangible assets owned, leased or used by the Corporation are in good operating condition and repair, ordinary wear and tear excepted, and are reasonably fit and usable for the purposes for which they are being used.

 

3.3.21                                 Real Property. The Corporation does not now hold, nor has it ever held, any interest in any real property other than right to use office space at [***] and laboratory spaced provided by [***], which arrangements have been terminated and the Corporation has no obligations, liabilities or other Indebtedness related to such arrangements. The Corporation is not currently a party to nor does it have any obligations, liabilities or other Indebtedness in respect of any leases or other arrangements in respect of real property.

 

3.3.22                                 Intellectual Property.

 

3.3.22.1                                 The Disclosure Schedule sets forth a correct and complete list of all (i) issued Patents and Patent applications, (ii) Trademark registrations and applications, (iii) Copyright registrations and applications, and (iv) material Software, in each

 

29

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

case which is owned by the Corporation, or which the Corporation has rights in (including license rights and options, other than licenses granting rights to use readily available shrink wrap or click wrap Software having a replacement cost and annual license fee of less than US$[***]), in any jurisdiction in the world. The Corporation is the sole and exclusive beneficial and, with respect to applications and registrations (including Patents), recorded owner of all of the Intellectual Property items set forth in the Disclosure Schedule which are identified as owned by the Corporation, and all such Intellectual Property that is pending or registered is subsisting. Further, the Corporation is the sole and exclusive beneficial rights owner with respect to the applications and registrations (including Patents) of all of the Intellectual Property items set for in the Disclosure Schedule which are identified as owned by the Corporation and all such Intellectual Property that is pending or registered is subsisting. For any Intellectual Property that is registrable (e.g. Patents, Trademarks, Copyright, Domain Names) and for which an application has been filed or registration has been obtained and in which the Corporation owns or has rights in, all applicable Laws have been complied with, there have been no technical or formality breaches of applicable Law (including for Patents, any obligation to submit all known prior art and payment of fees and responses to any office actions), and is not aware of any reasons nor received any communications that would indicate that any such registrations would not be valid or enforceable or that any pending applications for same would not be registered.

 

3.3.22.2                                 Copies of the Corporation’s standard form(s) of proprietary information, confidentiality and assignment agreements have been delivered to the Buyer or its counsel. All Employees, all current and former consultants of the Corporation and all other individuals who have been involved in the creation, invention or development of Corporation Intellectual Property for or on behalf of the Corporation (each, a “Contributor”) have executed the applicable form of agreement or other written agreements, all of which have been provided to the Buyer or its counsel, that assign (to the extent permitted by applicable Law) to the Corporation all rights in and to, any Intellectual Property created by such Employees and consultants in the course of their employment or consulting relationship with the Corporation. Without limiting the foregoing, no Contributor owns or has any right, including the right to assert any moral rights (except to the extent such rights are non-waivable under applicable Law) to the products of the Corporation or Intellectual Property, nor has any Contributor made any assertions with respect to any alleged ownership or rights over the foregoing.

 

3.3.22.3                                 The Disclosure Schedule sets forth a true, correct, and complete list of all Contracts (i) pursuant to which the Corporation (A) is granted or obtains or agrees to obtain any right to use any material Intellectual Property (other than standard form Contracts granting rights to use readily available shrink wrap or click wrap Software having a replacement cost and annual license fee of less than US$25,000 for all such related Contracts in the aggregate), (B) is restricted in its right to use or register any material Intellectual Property, or (C) permits or agrees to permit any other Person, to use, obtain, enforce, or register any material Intellectual Property, including any license agreements, coexistence agreements, and covenants not to sue, (ii) that would require, following the Closing, the Buyer to license, assign, or make available its or its Affiliates’ (other than Corporation) Intellectual Property to any other Person, or restrict the use by the Buyer or its Affiliates of such Intellectual Property as a result of the transactions contemplated hereby, in the case of each of clauses (i) and (ii), excluding all non-disclosure, material transfer, clinical trial and similar Contracts.

 

30

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

3.3.22.4                                 Except as set forth in the Disclosure Schedule:

 

3.3.22.4.1.                                       The Corporation owns, or has a valid right to use, or can develop or obtain rights to use on commercially reasonable terms, free and clear of all Liens, all material Intellectual Property used or held for use in the business of the Corporation.

 

3.3.22.4.2.                                       Except for research use exceptions in any jurisdiction worldwide, (A) the conduct of the business of the Corporation (including the products and services of the Corporation), as conducted in the past three years, as currently conducted, and as currently contemplated to be conducted for future commercialization (including the practice of any Intellectual Property in which it owns or has rights and the commercialization of the Lead Product) has not, does not and will not infringe, misappropriate, or otherwise violate, in each case in a manner that is or would be material to the Corporation, any Person’s Intellectual Property, and (B) there has been no such claim asserted or threatened in writing (including in the form of offers or invitations to obtain a license) in the past three (3) years against the Corporation.

 

3.3.22.4.3.                                       To the Knowledge of the Corporation, no Person is materially infringing, misappropriating, or otherwise violating any Intellectual Property owned, used, or held for use by the Corporation (or in which the Corporation has rights), and no such claims have been asserted or threatened in writing against any Person by the Corporation in the past three (3) years.

 

3.3.22.4.4.                                       There has been no Claim asserted or threatened in writing by any Person against the Corporation challenging the scope, validity, or enforceability of any applications or registrations for Patents or Trademarks owned by the Corporation. The Corporation has not granted any Person any right to control the prosecution or registration of any material Intellectual Property owned by the Corporation or to commence, defend, or otherwise control any claim with respect to such Intellectual Property.

 

3.3.22.4.5.                                       The Corporation takes reasonable measures to protect the confidentiality of material Trade Secrets. To the Knowledge of the Corporation, there has not been any disclosure of any material Trade Secret of the Corporation (including any such information of any other Person disclosed in confidence to the Corporation) to any Person in a manner that has resulted or is likely to result in the loss of such Trade Secret or other rights in and to such information.

 

3.3.22.4.6.                                       Each Employee and Former Employee and officer of the Corporation is bound by proprietary information provisions contained in their employment or contracting agreements with the Corporation substantially in the form made available to the Buyer prior to the date hereof.

 

3.3.22.4.7.                                       Except as disclosed in the Disclosure Schedule, no current or former director, shareholder, officer, or Employee of the Corporation will, after giving effect to the transactions contemplated hereby,

 

31

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

own, license, or retain any proprietary rights of the Corporation in and to Intellectual Property owned, used, or held for use (including for defensive purposes) by the Corporation.

 

3.3.22.4.8.                                       The consummation of the transactions contemplated by this Agreement will not result in the loss or impairment of or payment of any additional amounts with respect to, nor require the consent of any other Person in respect of, the Corporation’s right to own, use, or hold for use any of the Intellectual Property as owned, used, or held for use (including for defensive purposes) as of the date hereof.

 

3.3.22.4.9.                                       The Corporation has at all times complied in all material respects with all applicable material Legal Requirements relating to privacy, data protection, and the collection and use of personal information collected, used, or held for use by or on behalf of the Corporation. No claims have been asserted or threatened in writing against the Corporation alleging a violation of any Person’s privacy or personal information or data rights and the consummation of the transactions contemplated hereby will not breach or otherwise cause any violation of any Legal Requirement or procedure related to privacy, data protection, or the collection and use of personal information collected, used, or held for use by or on behalf of the Corporation, except such breaches or violations as would not have a Corporation Material Adverse Effect. The Corporation takes reasonable measures to ensure that such information is protected against unauthorized access, use, modification, or other misuse.

 

3.3.22.5                                 With respect to the [***] Agreement and except as set forth in the Disclosure Schedule:

 

3.3.22.5.1.                                       There have been no activities conducted and there are no ongoing activities being conducted or approved or consented to by the Corporation under Part II of the Project, and there have been no Targets selected and no Compounds screened;

 

3.3.22.5.2.                                       No Project IP has been developed or has arisen from Part II of the Project and all Project IP relating or pertaining to the Lead Project has been developed under Part I of the Project; and

 

3.3.22.5.3.                                       The Corporation has been granted a perpetual worldwide, exclusive license in whole and without limitations, and for no other consideration than that set out at Article 3.0 of the [***] Agreement for any and all Project IP relating or pertaining to the Lead Product and any Lead Targets (including any art, process, machine, manufacture or composition of matter, or any new and useful improvement in any art, process, machine, manufacture or composition of matter relating or pertaining to the Lead Product or the commercialization thereof, including the exclusive right, privilege and liberty of making, constructing and using the Project IP relating or pertaining to any of the foregoing and selling it to others to be used).

 

The terms “Part I”, “Part II”, “Project”, “Targets”, “Compounds”, and “Project IP” as used in this Section 3.3.22.5 have the meanings as ascribed to them in the [***] Agreement.

 

32

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

3.3.23                                 Accounts Receivable. All accounts receivable of the Corporation reflected in the Financial Statements, or which have come into existence since the date of the most recent Financial Statements, were created in the ordinary course of the Business from bona fide arm’s length transactions, and, except to the extent that they have been paid in the ordinary course of the Business since the date of the Financial Statements, are valid and enforceable and payable in full, without any right of set-off or counterclaim or any reduction for any credit or allowance made or given, except to the extent of the allowance for doubtful accounts reflected in the Financial Statements and, in the case of accounts receivable which have come into existence since the date of the most recent Financial Statements, of a reasonable allowance for doubtful accounts, which allowances are, and will as of the Closing Date be, adequate and calculated in a manner consistent with GAAP.

 

3.3.24                                 Inventories. The Inventories have been accumulated by the Corporation for use in the ordinary course of the Business. The present levels of the Inventories are consistent with those maintained in the ordinary course of the Business.

 

3.3.25                                 Material Contracts. The Disclosure Schedule lists all Material Contracts. The Corporation is not in default or breach of any Material Contract, and, to the Knowledge of the Corporation, there exists no state of facts which, after notice or lapse of time or both, would constitute a default or breach under any Material Contract. To the Knowledge of the Corporation, no counterparty to any Material Contract is in default of any of its obligations under any Material Contract, the Corporation is entitled to all benefits under each Material Contract, and the Corporation has not received any notice of termination of any Material Contract.

 

3.3.26                                 Accounts and Powers of Attorney. The Disclosure Schedule lists:

 

3.3.26.1                                 the name of each bank or other depository in which the Corporation maintains any bank account, trust account or safety deposit box and the names of all individuals authorized to draw on them or who have access to them; and

 

3.3.26.2                                 the name of each Person holding a general or special power of attorney from the Corporation and a summary of its terms.

 

3.3.27                                 Compliance with Laws. The Corporation is, and at all times since the date of its incorporation has been, conducting the Business in compliance with all applicable Laws, and the Corporation has not received notice of any violation by the Corporation of any Laws.

 

3.3.28                                 Permits. The Corporation does not have any material Permits and no such Permits are required to enable the Corporation to carry on the Business as currently conducted and to enable the Corporation to own, lease and operate its assets.

 

3.3.29                                 Environmental Conditions.

 

3.3.29.1                                 The Corporation, the conduct by the Corporation of the Business has been and are in compliance with all applicable Environmental Laws and there are no facts that would reasonably be expected to give rise to any non-compliance by the Corporation with any Environmental Laws, either in the conduct by the Corporation of the Business, or in Corporation’s prior use of office or laboratory premises provided by third parties.

 

3.3.29.2                                 The Corporation has all Permits required by all Environmental Laws for the conduct by the Corporation of the Business, and the Corporation is in compliance with all those Permits.

 

33

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

3.3.29.3                                 The Corporation, and any Person for whom the Corporation is responsible under all Environmental Laws, have imported, manufactured, processed, distributed, used, treated, stored, disposed of, transported, exported or handled Hazardous Substances in strict compliance with all Environmental Laws.

 

3.3.29.4                                 There has been no Release of any Hazardous Substance in the course of the Business, except in compliance with all Environmental Laws.

 

3.3.29.5                                 There has been no Remedial Order issued to the Corporation in respect of the Business and, to the Knowledge of the Corporation, no Remedial Orders are threatened, and there are no facts that facts that would reasonably be expected to give rise to any Remedial Orders.

 

3.3.29.6                                 The Corporation has not received any notice of Claim, summons, order, direction or other communication relating to non-compliance with any Environmental Laws from any Governmental Authority or other third party.

 

3.3.29.7                                 There is no pending or, to the Knowledge of the Corporation, threatened matter, act or fact that could cause the Corporation or the conduct of the Business to be no longer in compliance with all applicable Environmental Laws.

 

3.3.30                                 Suppliers. The Disclosure Schedule lists each material supplier of goods and services from whom the Corporation has purchased goods or services in the 12 months immediately preceding the date of this Agreement.

 

3.3.31                                 Rights to Use Personal Information.

 

3.3.31.1                                 All Personal Information in the possession of the Corporation has been collected, used and disclosed in compliance with all applicable Privacy Laws in those jurisdictions in which the Corporation conducts, or is deemed by operation of law in those jurisdictions to conduct, the Business.

 

3.3.31.2                                 The Corporation has disclosed to the Buyer all Contracts and facts concerning the collection, use, retention, destruction and disclosure by the Corporation of Personal Information, and there are no other Contracts or facts which, on completion of the transactions contemplated by this Agreement, would restrict or interfere with the use of any Personal Information by the Corporation in the continued operation of the Business as conducted before the Closing.

 

3.3.31.3                                 There are no Claims pending or, to the Knowledge of the Corporation, threatened with respect to the Corporation’s collection, use or disclosure of Personal Information.

 

3.3.32                                 Product Warranties. The Corporation has not given any warranties to buyers or users of products or services supplied by or on behalf of the Corporation and there are no Claims against the Corporation on account of warranties or with respect to the production or sale of products or the provision of services, nor is there any basis for any possible prospective Claim against, or Loss on the part of, the Corporation arising from, relating to, or in connection with the production or sale of products or the provision of services.

 

3.3.33                                 Employees and Employment Contracts.

 

3.3.33.1                                 The Corporation has no Employees. [***] and [***] are the only individuals currently providing services to the Corporation.

 

34

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

3.3.33.2                                 There are no employment Law-related Claims pending, commenced or, to the Knowledge of the Corporation, threatened, and there exists no state of facts that could reasonably be expected to give rise to any such Claims. There are no outstanding employment Law-related orders, awards or rulings involving the Corporation.

 

3.3.33.3                                 The employment, engagement or retainer of all Former Employees has been terminated in accordance with their respective agreements and applicable Law. The Corporation has complied with all of its obligations to such employees and has no outstanding or undischarged liability to any such Former Employee and each such Former Employee has executed and delivered an unconditional release to the Corporation in respect of all obligations and liabilities that the Corporation owed to such Former Employee.

 

3.3.34                                 Employee Confidentiality Agreements. The Corporation has entered into enforceable confidentiality agreements, true and complete copies of which have been provided to the Buyer, with all of its relevant Employees that protect confidential information relating to, and the intellectual property of, the Corporation and third party licensors. All current and former officers and Employees who have been involved in the development, modification or use of Intellectual Property have assigned all of their rights, title and interest in and to the Intellectual Property to the Corporation, have expressly waived any moral rights in the Intellectual Property, and have executed and delivered written agreements to the Corporation to that effect.

 

3.3.35                                 Unions. There are no apparent or, to the Knowledge of the Corporation, threatened union organizing activities involving Employees, and there have not been any union organizing activities since the Corporation’s incorporation.

 

3.3.36                                 Pension and Benefit Plans.

 

3.3.36.1                                 The Disclosure Schedule lists and describes each Plan. True and complete copies of each written Plan, as amended to the date of this Agreement, have been made available to the Buyer. There have been no promised improvements, increases or changes to the benefits provided under any Plan, whether legally binding or not.

 

3.3.36.2                                 The Corporation has never (i) sponsored or participated in a defined benefit pension plan, or (ii) participated in a multi-employer pension plan as that term is defined under the Pension Benefits Act (Ontario) or the Pension Benefits Standards Act, 1985 (Canada), or in any similar type of plan for purposes of any other applicable pension benefits standards legislation.

 

3.3.36.3                                 All liabilities of the Corporation (whether accrued, absolute, contingent or otherwise) related to all Plans have been fully disclosed in the Financial Statements.

 

3.3.37                                 Insurance Policies. The Disclosure Schedule lists all Insurance Policies in force as of the date of this Agreement, copies of which have been made available to the Buyer. All Insurance Policies are in full force and effect and the Corporation (i) is not in default, whether as to the payment of premiums or otherwise, under any material term or condition of any of the Insurance Policies and (ii) has not failed to give notice or present any Claim under any of the Insurance Policies in a due and timely fashion.

 

35

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

3.3.38                                 Litigation.

 

3.3.38.1                                 There are no Claims, whether or not purportedly on behalf of or against the Corporation, pending, commenced, or, to the Knowledge of the Corporation, threatened, that might reasonably be expected to have a Material Adverse Effect or that might result in an Encumbrance against the undertakings, property or assets of the Corporation.

 

3.3.38.2                                 There is no outstanding judgment, decree, order, ruling or injunction in favour of, against or otherwise involving the Corporation or relating in any way to the transactions contemplated by this Agreement.

 

3.3.39                                 Brokerage Fees. The Corporation has not retained any financial advisor, broker, agent or finder, or entered into any agreement entitling any Person to any broker’s commission, finder’s fee or similar payment, relating to this Agreement or the transactions contemplated by this Agreement.

 

3.3.40                                 Disclosure. No representation or warranty or other statement made by the Corporation or the Sellers in this Agreement or otherwise in connection with the transactions contemplated by this Agreement contains any untrue statement of material fact or omits to state a material fact necessary to make those statements, in light of the circumstances in which they were made, not misleading.

 

3.4                                                  Representations Relating to the Buyer

 

The Buyer represents and warrants to the Sellers as follows, and acknowledges that the Sellers are relying upon these representations and warranties in connection with the sale of the Purchased Shares, despite any investigation made by or on behalf of any of the Sellers.

 

3.4.1                                        Corporate Existence of Buyer. The Buyer is a company duly incorporated and validly existing under the laws of Denmark.

 

3.4.2                                        Capacity and Authority. The Buyer has all necessary corporate power, authority and capacity to enter into and perform its obligations under this Agreement.

 

3.4.3                                        Binding Obligation. This Agreement has been duly executed and delivered by the Buyer and constitutes a valid and binding obligation of the Buyer, enforceable against the Buyer in accordance with its terms, subject to applicable bankruptcy, insolvency and other Laws of general application limiting the enforcement of creditors’ rights generally and to the fact that equitable remedies, including specific performance, are discretionary and may not be ordered in respect of certain defaults.

 

3.4.4                                        Absence of Conflict. None of the execution and delivery of this Agreement by the Buyer, the performance of the Buyer’s obligations under this Agreement, or the completion by the Buyer of the transactions contemplated by this Agreement, will result in or constitute a breach of any term or provision of, or constitute a default under, the constating documents of the Buyer or any agreement or other commitment to which the Buyer is a party.

 

3.4.5                                        Regulatory Approvals. No authorization, approval, order or consent of, or filing with, any Governmental Authority is required on the part of the Buyer in connection with the execution, delivery and performance of this Agreement or any other documents and agreements to be delivered under this Agreement.

 

36

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

ARTICLE 4
  COVENANTS

 

4.1                                                  Delivery of Books and Records

 

At the Closing Time, the Sellers will cause to be delivered to the Buyer all of the Books and Records, including copies of all of the Insurance Policies. The Buyer agrees that it will preserve the Books and Records so delivered to it for a period of two years after the Closing Date, or for any longer period required by any applicable Law, and will permit the Sellers or their authorized Representatives reasonable access to them in connection with the affairs of the Sellers, but the Buyer will not be responsible or liable to the Sellers for or as a result of any accidental loss or destruction of or damage to any Books and Records.

 

4.2                                                  Tax Returns

 

The Buyer will cause to be prepared and filed on a timely basis all Tax Returns for the Corporation for any period that ends on or before the Closing Date and for which Tax Returns have not been filed as of the Closing Date. The Buyer will also cause to be prepared and filed on a timely basis all Tax Returns for the Corporation for all Straddle Periods (all these Tax Returns together with the Tax Returns referred to in the first sentence of this Section 4.2 being referred to as “Stub Period Returns”). The Buyer shall prepare each Stub Period Return on a basis consistent with (i) applicable Law and GAAP, and, to the extent not inconsistent with applicable Law and GAAP, (ii) the Closing Balance Sheet, and (iii) the past practices and procedures of the Corporation. The Sellers and the Buyer will cooperate fully with each other and make available to each other in a timely fashion all data and other information as may reasonably be required for the preparation of all Stub Period Returns and will preserve that data and other information until the expiration of any applicable limitation period for maintaining books and records under any applicable Tax Law with respect to the Stub Period Returns. The Buyer will provide to the Sellers for their review, at least 30 Business Days before the relevant filing deadline, a copy of the Stub Period Returns and, before filing the Stub Period Returns, will take into account, acting reasonably, any comments of the Sellers on the Stub Period Returns. The Buyer will pay all of the costs of the preparation and filing of the Stub Period Returns. In addition, the Buyer will cause the Corporation to make, and file, an election under subsection 256(9) of the ITA in its Tax Return under the ITA for the taxation year ending immediately before the Buyer’s acquisition of control of the Corporation on the Closing Date, such that subsection 256(9) of the ITA does not apply, and the Buyer’s acquisition of control of the Corporation for the purposes of the ITA occurs at the Closing Time, and not at the beginning of the Closing Date.

 

4.3                                                  Tax Refunds.

 

Any refunds or credits of Taxes (including any interest paid or credited with respect thereto but net of any Taxes paid or payable by the Corporation on such interest, and net of any Taxes paid or payable by the Corporation on such refunds or credits) of, or with respect to, the Corporation for any period ending on or before the Closing Date will be for the account of the Sellers (except to the extent such refunds or credits were reflected on the Closing Balance Sheet). The Buyer shall promptly inform the Sellers of any such refunds or credits to which the Sellers may be entitled hereunder and shall pay to the Sellers an amount equal to the amount of any such refunds or credits within 10 days following the date such refunds or credits were paid or credited by the relevant Governmental Authority to the Corporation. Any payment made pursuant to this Section 4.3 shall constitute an increase to the Purchase Price.

 

4.4                                                  Amendments to Tax Returns.

 

Except as required by applicable Law, none of the Buyer or the Corporation shall, or cause or permit their Affiliates to, without the prior written consent of the Sellers not to be unreasonably withheld, (a) refile, amend or otherwise modify any Tax Return of the Corporation filed for a period ending on or before the Closing Date or for any Straddle Period, or (b) make any Tax election that would have any

 

37

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

retroactive effect to any such period. The Sellers shall have no liability whatsoever resulting from any action by the Buyer, the Corporation or any Affiliate contrary to this Section.

 

ARTICLE 5
  CLOSING ARRANGEMENTS

 

5.1                                                  Closing

 

The Closing will take place at the Closing Time. All required documents may be delivered as originals or may be delivered by electronic transmission, except that the share certificates representing the Purchased Shares must be delivered in original form.

 

5.2                                                  Closing Deliveries

 

At the Closing Time:

 

5.2.1                                        the Sellers will deliver or cause to be delivered to the Buyer the following documents and instruments:

 

5.2.1.1                                        original share certificates representing all of the issued and outstanding shares in the capital of the Corporation, duly endorsed by an effective endorsement for transfer to the Buyer;

 

5.2.1.2                                        certified copies of resolutions of the directors of the Corporation authorizing the transfer of the Purchased Shares to the Buyer;

 

5.2.1.3                                        a consulting and transitional services agreement executed by each of the Key Personnel, substantially in the form attached as Exhibit 5.2.1.3;

 

5.2.1.4                                        executed resignations effective as at the Closing Time of each director or officer of the Corporation;

 

5.2.1.5                                        releases from each Seller and each of the individuals specified in Section 5.2.1.4 of all Claims they may have against the Corporation, substantially in the form attached as Exhibit 5.2.1.5;

 

5.2.1.6                                        the Closing Balance Sheet;

 

5.2.1.7                                        the consents, if any, required under Material Contracts, on terms acceptable to the Buyer, acting reasonably;

 

5.2.1.8                                        an agreement amending the terms of the [***] Agreement, substantially in the form attached as Exhibit 5.2.1.8;

 

5.2.1.9                                        evidence of the exercise, conversion, exchange or termination in full of all contracts and options for the purchase or grant of any options, warrants, rights, additional securities, debentures, loans or notes convertible or exchangeable for any shares or other securities of the Corporation, on terms acceptable to the Buyer, acting reasonably;

 

5.2.1.10                                 all Books and Records, including copies of all of the Insurance Policies;

 

5.2.1.11                                 a full and final release from each Seller in favour of the Corporation and the Buyer, its directors, officers, employees and representatives and their

 

38

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

respective Affiliates, of all Claims (excluding obligations owing by the Buyer under this Agreement) and including in the case of Sellers who were former holders of debt, options or other convertible obligations Claims with respect to such obligations and any security therefore, substantially in the form attached as Exhibit 5.2.1.11; and

 

5.2.1.12                                 all other documentation and evidence reasonably requested by the Buyer in order to establish the due authorization and completion by each of the Sellers and the Corporation of the transactions contemplated by this Agreement, including the taking of all corporate proceedings by the boards of directors and shareholders of each non-individual Seller and the Corporation required to effectively carry out their respective obligations under this Agreement; and

 

5.2.2                                        the Buyer will deliver or cause to be delivered to the Sellers all documentation and other evidence reasonably requested by any Seller in order to establish the due authorization and completion by the Buyer of the transactions contemplated by this Agreement, including the taking of all corporate proceedings by the board of directors and the shareholders of the Buyer required to effectively carry out the obligations of the Buyer under this Agreement.

 

ARTICLE 6
  INDEMNIFICATION AND SURVIVAL

 

6.1                                                  Indemnification by the Sellers

 

Subject to the other provisions of this Article 6, each Seller will:

 

6.1.1                                        Indemnify and hold harmless each Buyer Indemnified Party from and against any Loss that a Buyer Indemnified Party may suffer as a result of:

 

6.1.1.1                                        any breach of any representation or warranty made by the Corporation in this Agreement;

 

6.1.1.2                                        any non-performance of any covenant or agreement of the Corporation contained in this Agreement;

 

6.1.1.3                                        any Taxes of the Corporation for any taxation year or period ending on or before the Closing Date or related to the portion of any Straddle Period up to and including the Closing Date including without limitation any Taxes (a) arising due to the conversion of any convertible debentures issued by the Corporation, (b) arising in connection with any debt forgiveness by the Corporation, and (c) due as withholding tax in respect of any payment made by the Corporation to a non- resident of Canada; and

 

6.1.1.4                                        any Indebtedness of the Corporation outstanding on the Closing Date; and

 

6.1.2                                        Indemnify and hold harmless each Buyer Indemnified Party from and against any Loss that a Buyer Indemnified Party may suffer as a result of:

 

6.1.2.1                                        any breach of any representation or warranty made by that Seller in Section 3.2 (Representations Relating to the Sellers); and

 

6.1.2.2                                        any non-performance of any covenant or agreement of that Seller contained in this Agreement.

 

39

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

6.1.3                                        In respect of any Buyer claim for indemnification pursuant to Section 6.1.1, the Buyer shall be entitled to:

 

6.1.3.1                                        set-off all or any portion of the Buyer’s Indemnity Claim against any Purchase Price Instalment that is then or thereafter payable to the Designated Paying Agent on behalf of the Sellers; and/or

 

6.1.3.2                                        pursue from and satisfy against each Seller on a several basis, and not a joint and several basis, all or any portion of the Buyer’s Indemnity Claim in an amount equal to such Seller’s Pro Rata Share of the Purchase Price that has previously been paid to the Designated Paying Agent, less any amount previously paid by such Seller to the Buyer pursuant to any previous Indemnity Claims.

 

6.1.4                                        In respect of any Buyer claim for indemnification against a Seller pursuant to Section 6.1.2, the Buyer shall be entitled to:

 

6.1.4.1                                        set-off all or any portion of the Buyer’s Indemnity Claim against any Purchase Price Instalment that is then or thereafter payable to the Designated Paying Agent on behalf of the Sellers; and/or

 

6.1.4.2                                        pursue from and satisfy against that Seller all or any portion of such Buyer’s Indemnity Claim in an amount equal to such Seller’s Pro Rata Share of the Purchase Price that has previously been paid to the Designated Paying Agent, less any amount previously paid by such Seller to the Buyer pursuant to any previous Indemnity Claims.

 

6.2                                                  Indemnification by the Buyer

 

Subject to the other provisions of this Article 6, the Buyer will, if the Closing occurs, indemnify and hold harmless each Seller Indemnified Party from and against any Loss that a Seller Indemnified Party may suffer as a result of:

 

6.2.1                                        any breach of any representation or warranty made by the Buyer in this Agreement or in any agreement or document delivered under this Agreement; and

 

6.2.2                                        any non-performance of any covenant or agreement of the Buyer contained in this Agreement or in any agreement or document delivered under this Agreement.

 

6.3                                                  Survival Periods for Claims by Buyer Indemnified Parties

 

6.3.1                                        The covenants, representations and warranties made by the Corporation and the Sellers in this Agreement, in the relevant Closing Certificates and in any other agreements and documents delivered under this Agreement will survive the Closing and completion of the transactions contemplated by this Agreement, and will continue in full force and effect for the periods specified in this Section 6.3.

 

6.3.2                                        Subject to Section 6.3.3, a Buyer Indemnified Party may make an Indemnity Claim by delivering an Indemnity Notice in respect of such Indemnity Claim to the Sellers’ Representative:

 

6.3.2.1.1.1                                       if the Indemnity Claim relates to a breach of any representation and warranty made in Section 3.2.4 (Title to Purchased Shares), Section 3.3.11 (Authorized and Issued Capital), Section 3.3.18

 

40

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

(Absence of Undisclosed Liabilities) or Section 3.3.22 (Intellectual Property), at any time after the Closing without limitation; or

 

6.3.2.1.1.2                                       if the Indemnity Claim relates to any breach of the Fundamental Representations and Warranties, prior to the later of (i) the third anniversary of the satisfaction of the Milestone set out in Section 2.2.1.4, and (ii) the fifth anniversary of the Closing Date; or

 

6.3.2.1.1.3                                       if the Indemnity Claim relates to any breach of the representations and warranties made in Section 3.3.16 (Tax Matters), or if the Indemnity Claim is made under Section 6.1.1.3 (Taxes), prior to the later of (i) the third anniversary of the satisfaction of the Milestone set out in Section 2.2.1.4, and (ii) on or before 90 days after the last day upon which any of the relevant Governmental Authorities is entitled to assess or reassess the Corporation (or to raise Claims against the Buyer or the Corporation relating to that assessment or reassessment) with respect to any Tax for any taxation year ending on or before the Closing Date or related to the portion of any Straddle Period up to and including the Closing Date; or

 

6.3.2.1.1.4                                       in all other cases, prior to the third anniversary of the Closing Date.

 

6.3.3                                        The notice periods set out in Section 6.3.2 will not apply to, and there will be an indefinite survival period for, an Indemnity Claim based on intentional misrepresentation or fraud by the Corporation or the Sellers, or any of them, relating to this Agreement.

 

6.3.4                                        Notwithstanding anything to the contrary contained herein, provided the Buyer has made an Indemnity Claim prior to the expiry of any applicable survival period, the Buyer shall retain and be able to exercise its set-off rights herein or at Law against any portion of the Purchase Price that relates to any period, or is payable, subsequent to the expiry of such applicable survival period.

 

6.4                                                  Survival Periods for Claims by Seller Indemnified Parties

 

6.4.1                                        The covenants, representations and warranties made by the Buyer in this Agreement or in any agreements or documents delivered under this Agreement will survive the Closing and completion of the transactions contemplated by this Agreement, and will continue in full force and effect for the periods specified in this Section 6.4.

 

6.4.2                                        Subject to Section 6.4.3, a Seller Indemnified Party may make an Indemnity Claim under Section 6.2.1 only if an Indemnity Notice of that Indemnity Claim is delivered to the Buyer as Indemnifying Party within 24 months after the Closing Date.

 

6.4.3                                        The notice period set out in Section 6.4.2 will not apply to, and there will be an indefinite survival period for, an Indemnity Claim based on intentional misrepresentation or fraud by the Buyer relating to this Agreement or any document delivered under this Agreement.

 

6.5                                                  Amount Limitations on Indemnification Obligations

 

6.5.1                                        The indemnification obligations of the Sellers under this Article 6 are subject to the limitations, if any, set out in Section 6.1.3 and Section 6.1.4. The Sellers shall not be liable to the Buyer Indemnified Parties for indemnification in respect of Indemnity Claims under this Article 6 (other than Indemnity Claims for any breach of the representations and warranties

 

41

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

made in Section 3.3.18 (Absence of Undisclosed Liabilities) or Section 3.3.16 (Tax Matters), or if the Indemnity Claim is made under Section 6.1.1.3 (Taxes) or under Section 6.1.1.4 (Indebtedness)), until the aggregate amount of all Losses in respect of all Indemnity Claims exceeds US$50,000 (the “Basket”), in which event Sellers shall be required to pay or be liable such Losses from the first dollar without regard to the Basket or any deductible or similar credit in respect of the Basket. For the avoidance of doubt, the Sellers shall be liable for Indemnity Claims relating to any breach of the representations and warranties made in Section 3.3.18 (Absence of Undisclosed Liabilities) or Section 3.3.16 (Tax Matters) or for any Indemnity Claim made under Section 6.1.1.3 (Taxes) or under Section 6.1.1.4 (Indebtedness) from the first dollar of such Indemnity Claims without regard to the Basket or any deductible or similar credit in respect of the Basket.

 

6.5.2                                        The indemnification obligations of the Buyer under this Article 6 are limited in the aggregate to the sum of Milestone Payments and Earnout Payments that are or become due and owing by the Buyer and that have not been paid. For greater certainty, the amount of Milestone Payments and Earnout Payments that are due and owing by the Buyer at any time will be reduced by the amount of any Indemnity Claims of the Buyer that have been set-off against such payment amounts.

 

6.6                                                  Rules Relating to Indemnification Obligations

 

The following will apply to the indemnification obligations under this Article 6.

 

6.6.1                                        Effect of Waiver. The waiver of any condition relating to any representation, warranty or covenant will not affect the right to indemnification under this Article 6 based on that representation, warranty or covenant.

 

6.6.2                                        No Double Recovery. No Indemnified Party is entitled to double recovery for any Indemnity Claim even though the Indemnity Claim may have resulted from the breach or inaccuracy of more than one of the representations, warranties, covenants and obligations of the Indemnifying Party under this Agreement, the relevant Closing Certificates or in any other agreements and documents delivered under this Agreement.

 

6.6.3                                        Materiality. In the case of an Indemnity Claim by a Buyer Indemnified Party under this Article 6 for breach by the Corporation or by the Sellers or any of them of a representation or warranty that is qualified by materiality or Material Adverse Effect, the Buyer Indemnified Party will be entitled to claim the full amount of the Loss resulting from that breach without regard to the materiality or Material Adverse Effect qualifier. However, the determination under this Article 6 of whether there has been a breach of a representation or warranty that is qualified by materiality or Material Adverse Effect will be made having regard to the materiality or Material Adverse Effect qualifier.

 

6.6.4                                        Remoteness and Mitigation. The quantum of Losses that can be recovered by an Indemnified Party under this Article 6 will not be affected by the application of principles of remoteness of damages, or the duty to mitigate.

 

6.7                                                  Notice of Indemnity Claims

 

If an Indemnified Party becomes aware of a Loss or potential Loss in respect of which an Indemnifying Party has agreed to indemnify it under this Article 6, the Indemnified Party will promptly give written notice (an “Indemnity Notice”) of its Claim or potential Claim for indemnification (an “Indemnity Claim”) to the Indemnifying Party. The Buyer’s obligation to deliver an Indemnity Notice, and any information, documentation or notices with respect thereto provided therefor in Sections 6.7, 6.8 or 6.9 to the Sellers or any of them shall be satisfied by the Buyer delivering the Indemnity Notice or such information,

 

42

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

documentation or notices to the Sellers’ Representative, and the Buyer shall have no obligation to deliver such Indemnity Notice or such information, documentation or notices to a Seller or the Sellers. The Buyer shall have no liability or obligation for the failure of the Sellers’ Representative to deliver an Indemnity Notice or such information, documentation or notices to any of the Sellers. An Indemnity Notice must specify whether the Indemnity Claim arises as the result of a Third Party Claim or whether the Indemnity Claim is a Direct Claim, and must also specify with reasonable particularity (to the extent that the information is available):

 

6.7.1                                        the factual basis for the Indemnity Claim;

 

6.7.2                                        the amount of the Indemnity Claim, if known; and

 

6.7.3                                        if the Indemnified Party is a Buyer Indemnified Party, the portion of such Indemnity Claim that the Indemnified Party intends to set-off against Milestone Payments and Earnout Payments, in each case if known and subject to the Indemnified Party’s right to modify that determination at any time that any portion of the Indemnity Claim remains due and outstanding.

 

If, through the fault of the Indemnified Party, the Indemnifying Party does not receive an Indemnity Notice of an Indemnity Claim in time to effectively contest the determination of any liability capable of being contested, the Indemnifying Party will be entitled to set off against the amount claimed by the Indemnified Party the amount of any Loss incurred by the Indemnifying Party resulting from the Indemnified Party’s failure to give an Indemnity Notice on a timely basis. For greater certainty, an Indemnified Party that is a Seller will be deemed to have received an Indemnity Notice from the Buyer once the Indemnity Notice is delivered to the Sellers’ Representative.

 

6.8                                                  Procedure for Direct Claims

 

6.8.1                                        Following receipt of an Indemnity Notice from the Indemnified Party of a Direct Claim, the Indemnifying Party will have 20 Business Days, or any other period of time agreed to by the Indemnifying Party and the Indemnified Party, (in either case, the “Claim Dispute Period”) to make any investigations it considers necessary or desirable. For the purpose of those investigations, the Indemnified Party will make available to the Indemnifying Party the information relied upon by the Indemnified Party to substantiate the Direct Claim, together with all other information that the Indemnifying Party may reasonably request.

 

6.8.2                                        If the Indemnifying Party disputes the validity or amount of the Direct Claim, the Indemnifying Party may provide written notice of the dispute to the Indemnified Party within the Claim Dispute Period. That dispute notice must describe in reasonable detail the nature of the Indemnifying Party’s dispute. Upon receipt of a dispute notice, the Indemnified Party may pursue all rights and remedies available to it, subject to this Agreement.

 

6.8.3                                        If the Indemnifying Party does not provide written notice of a dispute with respect to the Direct Claim within the Claim Dispute Period, the Indemnifying Party will be deemed to have agreed to the validity and amount of the Direct Claim.

 

6.9                                                  Procedure for Third Party Claims

 

6.9.1                                        The Indemnified Party will promptly deliver to the Indemnifying Party copies of all correspondence, notices, assessments or other written communication received by the Indemnified Party in respect of any Third Party Claim that is or might become the basis of an Indemnity Claim.

 

43

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

6.9.2                                        The Indemnified Party will not negotiate, settle, compromise or pay any Third Party Claim that is or might become the basis of an Indemnity Claim without the prior written consent of the Indemnifying Party, which consent will not be unreasonably withheld; provided that the foregoing does not preclude the exercise of any right of set off provided for in this Agreement or at Law, which exercise of rights are permitted notwithstanding the absence of such consent.

 

6.9.3                                        The Indemnified Party will not cause or permit the termination of any right to defend or right of appeal in respect of any Third Party Claim which is or might become the basis of an Indemnity Claim without giving the Indemnifying Party written notice of the contemplated or potential termination in time to grant the Indemnifying Party an opportunity to contest the Third Party Claim.

 

6.9.4                                        Each of the Indemnified Party and the Indemnifying Party will make all commercially reasonable efforts to make available to the Party (or other Indemnified Party) who has assumed carriage and control of the negotiation, defence or settlement of a Third Party Claim which is or might reasonably be expected to become the basis of an Indemnity Claim all employees and other Persons under its control whose assistance or evidence is necessary to assist that Party (or other Indemnified Party) in evaluating and defending that Third Party Claim and all documents, records and other materials in its possession or control required for use in the negotiation, defence or settlement of that Third Party Claim.

 

6.9.5                                        If the Indemnifying Party acknowledges in writing its obligation, subject to the limits in this Article 6, to satisfy an Indemnity Claim to the extent of any binding determination or settlement in connection with a Third Party Claim, then:

 

6.9.5.1                                        the Indemnifying Party will have the right, by written notice delivered to the Indemnified Party within 20 Business Days of receipt by the Indemnifying Party of the Indemnity Notice, and subject to the right of any insurer or other Person to assume carriage and control of the negotiation, defence or settlement of the Third Party Claim, to assume carriage and control of the negotiation, defence or settlement of the Third Party Claim and the conduct of any related legal or administrative proceedings at the expense of the Indemnifying Party and by its own counsel;

 

6.9.5.2                                        if the Indemnifying Party elects to assume carriage and control, the Indemnified Party will have the right to participate at its own expense (which will not be indemnified under this Article 6) in the negotiation, defence or settlement of the Third Party Claim assisted by its own counsel; and

 

6.9.5.3                                        despite Section 6.9.5.1, the Indemnifying Party will not, except with the Indemnified Party’s prior written consent, settle the Third Party Claim or conduct any related legal or administrative proceeding in a manner that would, in the opinion of the Indemnified Party, acting reasonably, have a material adverse effect on the Indemnified Party.

 

6.9.6                                        Despite Section 6.9.2, if the Indemnified Party is, before the completion of related settlement negotiations or legal proceedings, required by applicable Law to make a payment into court, into escrow, or to any third party, with respect to a Third Party Claim which is the basis of an Indemnity Claim, the Indemnified Party may make the required payment and the Indemnifying Party will, promptly after demand by the Indemnified Party, reimburse the Indemnified Party for the required payment made, subject to the limits in this Article 6. If the Indemnifying Party makes that reimbursement, and if the amount of the Indemnity Claim relating to the Third Party Claim in respect of which the required payment was made, as

 

44

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

finally determined, is less than the amount that was paid by the Indemnifying Party to the Indemnified Party, the Indemnified Party will promptly pay that surplus amount to the Indemnifying Party. A reimbursement made by the Indemnifying Party under this Section

 

6.9.7                                        will reduce the related Claim Amount, if any, payable by the Indemnifying Party under Section 6.10 (Payment of Claims) and, despite Section 6.10, will not be paid to a Buyer Indemnified Party out of the Indemnity Escrow Fund.

 

6.9.8                                        If the Indemnified Party has been permitted by the Indemnifying Party to retain or assume the carriage and control of the negotiation, defence or settlement of a Third Party Claim which is the basis of an Indemnity Claim, the Indemnifying Party will not contest the amount of the Loss with respect to that Third Party Claim.

 

6.9.9                                        The Indemnifying Party will not be required to indemnify for any Loss relating to a Third Party Claim that is settled or contested in violation of the terms of this Section 6.9.

 

6.10                                           Payment of Claims

 

6.10.1                                 Once the validity and amount of an Indemnity Claim has been finally determined (the “Claim Amount”), by agreement between the Indemnifying Party and the Indemnified Party or by binding determination or settlement, then:

 

6.10.1.1                                 if the Indemnifying Party is a Seller, the Claim Amount will be satisfied, at the option of the Indemnified Party, by either (i) setting off such Claim Amount against the next Purchase Price Instalment(s) due to be made to the Sellers if and to the extent the Buyer has not previously exercised its set off rights with respect to such Claim Amount, or (ii) by direct recourse to the Indemnifying Party whereby the Seller Indemnifying Party will promptly pay the Claim Amount to the Buyer Indemnified Party subject to the limitations set out in Sections 6.1.3.2 and 6.1.4.2; and

 

6.10.1.2                                 if the Indemnifying Party is the Buyer, the Indemnifying Party will promptly pay the Claim Amount to the Indemnified Party subject to the limitations set out in Section 6.5.2.

 

6.11                                           Indemnity Adjustments to Purchase Price

 

Any payment made to, or set off right exercised by, a Buyer Indemnified Party under this Article 6 will constitute a decrease to the Purchase Price, and any payment made to a Seller Indemnified Party under this Article 6 will constitute an increase to the Purchase Price, in each case to the extent consistent with applicable Law. Despite Section 2.3 (Allocation of Payments), any decrease in the Purchase Price under this Article 6 will be allocated to the Seller or Sellers making the payment or being subject to the right of set off, and any increase in the Purchase Price under this Article 6 will be allocated to the Seller or Sellers receiving the payment (or to the Seller whose related Seller Indemnified Party is receiving the payment).

 

6.12                                           Exclusive Remedy

 

6.12.1                                 Subject to Section 2.2.5 and Section 6.12.2, the rights of indemnity in this Article 6 will be the sole and exclusive remedy of any Indemnified Party for any breach of a representation or warranty, or non-performance of any covenant or agreement, contained in this Agreement, or any agreement and document delivered under this Agreement and each Indemnified Party waives any other recourse or remedy it may have in contract, tort or otherwise.

 

45

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

6.12.2                                 Nothing in this Section 6.12 will limit or restrict an Indemnified Party from seeking:

 

6.12.2.1                                 equitable remedies, under Section 7.15 (Equitable Remedies) or otherwise; or

 

6.12.2.2                                 any remedies that may be available to an Indemnified Party in the case of fraud.

 

6.13                                           No Right of Subrogation

 

The Sellers shall have no right of recourse against the Corporation, including without limitation any subrogated right, by virtue of the Sellers’ obligation to provide indemnification in relation to Losses arising from any matter referred to in Section 6.1.1.

 

6.14                                           Third Party Indemnification

 

To ensure that the indemnities provided by each of the Sellers and the Buyer to any Indemnified Parties that are not parties to this Agreement are enforceable, it is agreed by the Parties that each of the Sellers is acting as agent for its Seller Indemnified Parties (that are not Parties), and the Buyer is acting as agent for its Buyer Indemnified Parties (that are not Parties), with respect to the indemnities intended to be given to those Persons under this Article 6. Each of the Sellers and the Buyer agrees that it will hold any right to indemnification that any relevant Indemnified Party is intended to have under this Article 6 in trust for that Person, and that funds received by the Sellers or the Buyer in respect of any Claims under this Article 6 by the relevant Indemnified Party will be held in trust for that Person.

 

ARTICLE 7
  GENERAL

 

7.1                                                  The Sellers’ Representative

 

7.1.1                                        Each Seller appoints Dr. Jeffrey Coull as its representative (the “Sellers’ Representative”) and its true and lawful attorney in fact, with full power and authority in its name and on its behalf:

 

7.1.1.1                                        to direct all payments due to be paid to a Designated Paying Agent, by the Buyer to the Sellers from time to time pursuant to this Agreement, save and except for payments that are to be satisfied by an issuance of shares, on behalf of the Sellers and to enure that the payment is directed to a Designated Paying Agent and distribute such payment among the Sellers in accordance with their respective interests therein or as otherwise directed by the relevant Sellers;

 

7.1.1.2                                        to act in the absolute discretion of the Sellers’ Representative with respect to all matters relating to this Agreement, including execution and delivery of any amendment of, or supplement to, this Agreement, any waiver of any condition under, or right arising out of, this Agreement, and any termination of this Agreement; and

 

7.1.1.3                                        in general, to do all things and to perform all acts, including negotiating, executing and delivering all agreements, certificates, receipts, instructions, and other instruments, contemplated by, or deemed advisable to complete the transactions contemplated by, this Agreement.

 

Subject to Section 7.1.5, this appointment and grant of power and authority is coupled with an interest and is irrevocable, and will not be terminated by the death or incapacity of any Seller.

 

46

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

7.1.2                                        The Sellers hereby irrevocably direct that all payments due to be paid by the Buyer to the Sellers from time to time pursuant to this Agreement, save and except for payments that are to be satisfied by an issuance of shares, shall be paid to the Designated Paying Agent engaged by the Sellers’ Representative on behalf of the Sellers or as the Sellers’ Representative may otherwise direct and this shall be the Buyer’s good and sufficient authority for so doing.

 

7.1.3                                        The Sellers’ Representative is serving in this capacity solely for purposes of administrative convenience, and is not personally liable in his capacity as a Sellers’ Representative for any of the obligations of the Sellers under this Agreement, or any other documents or agreement contemplated hereby, and the Buyer agrees that it will not look to the personal assets of the Sellers’ Representative for the satisfaction of any obligations of the Sellers hereunder (except to the extent that such Sellers’ Representative is also a Seller, and then subject to the terms of this Agreement). The Sellers’ Representative and the Sellers agree as between themselves, but without prejudice to any rights the Buyer may have, that the Sellers’ Representative will have no obligation or liability to any Person for any action taken or not taken by the Sellers’ Representative (in its capacity as Sellers’ Representative) under this Section 7.1 in good faith, and the Sellers will jointly and severally indemnify and hold harmless the Sellers’ Representative from any Loss that the Sellers’ Representative may suffer as a result of any such action or omission by the Sellers’ Representative under this Agreement.

 

7.1.4                                        The Buyer will be entitled to rely upon any document or other instrument delivered by the Sellers’ Representative, in that capacity, as being authorized by all of the Sellers, and the Buyer will not be liable to any Seller for any action taken or not taken by the Buyer based on that reliance.

 

7.1.5                                        The mandate of the Sellers’ Representative under this Section 7.1 will terminate immediately in the event that this Agreement is terminated prior to Closing.

 

7.1.6                                        The Sellers’ Representative shall be entitled to engage counsel, accountants and other advisors, the expense of which shall be wholly for the account of the Sellers and not for the account of the Buyer or the Corporation.

 

7.1.7                                        The Sellers’ Representative, or any subsequent Person serving as Sellers’ Representative hereunder, may resign from such role upon at least ten days prior written notice to the Buyer. The Sellers shall appoint a replacement within ten days of such resignation. All rights of such Person to indemnification and exculpation hereunder shall survive such resignation.

 

7.2                                                  Time of Essence

 

Time is of the essence in all respects of this Agreement.

 

7.3                                                  Notices

 

Any Communication must be in writing and either:

 

7.3.1                                        delivered personally or by courier;

 

7.3.2                                        sent by prepaid registered mail; or

 

7.3.3                                        transmitted by e-mail or functionally equivalent electronic means of transmission, charges (if any) prepaid.

 

47

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Any Communication must be sent to the intended recipient at its address as follows:

 

to any of the Sellers at:

 

C/O The Sellers’ Representative

 

	
Attention:
    	
Jeffrey Coull
    
	
Tel. No.:
    	
[***]
    
	
E-mail:
    	
[***]
    

 

to the Buyer or to the Corporation at:

 

Zealand Pharma A/S
 Sydmarken 11
 DK-2860 Soborg
 Denmark

	
Attention:
    	
Ravinder Chahil, Vice President, General   Counsel
    
	
Tel. No.:
    	
[***]
    
	
E-mail:
    	
[***]
    

 

with a copy to:

 

[***]

	
Attention:
    	
[***]
    
	
Tel. No.:
    	
[***]
    
	
E-mail:
    	
[***]
    

 

or at any other address as any Party may at any time advise the others by Communication given or made in accordance with this Section 7.3. Any Communication delivered to the Party to whom it is addressed will be deemed to have been given or made and received on the day it is delivered at that Party’s address, provided that if that day is not a Business Day then the Communication will be deemed to have been given or made and received on the next Business Day. Any Communication sent by prepaid registered mail will be deemed to have been given or made and received on the fifth Business Day after which it is mailed. If a strike or lockout of postal employees is then in effect, or generally known to be impending, every Communication must be delivered personally or by courier or transmitted by facsimile, e-mail or functionally equivalent electronic means of transmission. Any Communication transmitted by facsimile, e-mail or other functionally equivalent electronic means of transmission will be deemed to have been given or made and received on the day on which it is transmitted; but if the Communication is transmitted on a day which is not a Business Day or after 5:00 p.m. (local time of the ecipient), the Communication will be deemed to have been given or made and received on the next Business Day. Sending a copy of a Communication to a Party’s legal counsel is for information purposes only and does not constitute delivery of that Communication to that Party, subject to Section 7.12 (Tender). The failure to send a copy of a Communication to a Party’s legal counsel does not invalidate delivery of that Communication to the Party.

 

7.4                                                  Severability

 

Each Section of this Agreement is distinct and severable. If any Section of this Agreement, in whole or in part, is or becomes illegal, invalid, void, voidable or unenforceable in any jurisdiction by any court of competent jurisdiction, the illegality, invalidity or unenforceability of that Section, in whole or in part, will not affect:

 

7.4.1                                        the legality, validity or enforceability of the remaining Sections of this Agreement, in whole or in part; or

 

48

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

7.4.2                                        the legality, validity or enforceability of that Section, in whole or in part, in any other jurisdiction.

 

7.5                                                  Submission to Jurisdiction

 

Without prejudice to the ability of any Party to enforce this Agreement in any other proper jurisdiction, each of the Parties irrevocably and unconditionally submits and attorns to the exclusive jurisdiction of the courts of the Province of Ontario to determine all issues, whether at law or in equity, arising from this Agreement. To the extent permitted by applicable Law, each of the Parties:

 

7.5.1                                        irrevocably waives any objection, including any claim of inconvenient forum, that it may now or in the future have to the venue of any legal proceeding arising out of or relating to this Agreement in the courts of that Province of Ontario, or that the subject matter of this Agreement may not be enforced in those courts;

 

7.5.2                                        irrevocably agrees not to seek, and waives any right to, judicial review by any court which may be called upon to enforce the judgment of the courts referred to in this Section 7.5, of the substantive merits of any suit, action or proceeding; and

 

7.5.3                                        to the extent that Party has or may acquire any immunity from the jurisdiction of any court or from any legal process, whether through service or notice, attachment before judgment, attachment in aid of execution, execution or otherwise, with respect to itself or its property, irrevocably waives that immunity in respect of its obligations under this Agreement.

 

7.6                                                  Amendment and Waiver

 

No amendment, discharge, restatement, supplement, termination or waiver of this Agreement or any Section of this Agreement is binding unless it is in writing and executed by the Party to be bound. No waiver of, failure to exercise or delay in exercising, any Section of this Agreement constitutes a waiver of any other Section (whether or not similar) nor does any waiver constitute a continuing waiver unless otherwise expressly provided.

 

7.7                                                  Further Assurances

 

Each Party will, at the requesting Party’s expense, execute and deliver any further agreements and documents and provide any further assurances, undertakings and information as may be reasonably required by the requesting Party to give effect to this Agreement.

 

7.8                                                  Assignment and Enurement

 

Neither this Agreement nor any right or obligation under this Agreement may be assigned by any Party without the prior written consent of the other Parties. This Agreement enures to the benefit of and is binding upon the Parties and their respective Successors.

 

7.9                                                  Counterparts and Electronic Delivery

 

This Agreement may be executed and delivered by the Parties in one or more counterparts, each of which will be an original, and each of which may be delivered by facsimile, e-mail or other functionally equivalent electronic means of transmission, and those counterparts will together constitute one and the same instrument.

 

49

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

7.10                                           Electronic Delivery

 

Delivery of this Agreement by facsimile, e-mail or other functionally equivalent electronic means of transmission constitutes valid and effective delivery.

 

7.11                                           Costs and Expenses

 

7.11.1                                 Except as otherwise specified in this Agreement, and without limiting the indemnification provisions in Article 6 (Indemnification and Survival), all costs and expenses (including the fees and disbursements of accountants, financial advisors, legal counsel and other professional advisers) incurred in connection with the negotiation and settlement of this Agreement, and the completion of the transactions contemplated by this Agreement, are to be paid by the Party incurring those costs and expenses. All costs and expenses incurred in connection with the retention of, and any services provided by, the Sellers’ Representative and the Designated Paying Agent are to be paid by the Sellers.

 

7.11.2                                 Notwithstanding the foregoing, the Buyer covenants and agrees to reimburse the Corporation for all costs incurred by the Corporation in connection with the Reimbursable Matters (as defined below) from August 17, 2019 up to the date of this Agreement provided that:

 

7.11.2.1                                 the Sellers’ Representative delivers to the Buyer at or before Closing a statement setting forth all the amount actually incurred in respect of each line item set forth in Schedule 7.11.2 together with a copy of each invoice in respect of such amounts and any other documentation as is reasonably requested by the Buyer; and

 

7.11.2.2                                 the maximum total amount to be reimbursed by the Buyer in connection with all Reimbursable Matters is US$[***].

 

7.11.3                                 For purposes of Section 7.11.2, “Reimbursable Matters” means the ordinary course operations of the Corporation, management of the Corporation’s patent portfolio and the legal review, negotiation and preparation of this Agreement and any other agreements and documents to be delivered under this Agreement.

 

7.11.4                                 The Sellers hereby irrevocably direct the Buyer to pay the maximum amounts set out in this Section 7.11 due to those Persons as set out in the statement contemplated in Section 7.11.2.2. The Sellers, and not the Corporation nor the Buyer, shall pay to the Persons set out in the statement contemplated in Section 7.11.2.2 any amounts due to them in excess of the maximum amount payable by the Buyer pursuant to this Section 7.11.

 

7.12                                           Tender

 

Any tender of documents or money to the Parties under this Agreement may be made upon the Parties or their respective counsel.

 

7.13                                           Payment and Currency

 

Any money to be advanced, paid or tendered by any Party under this Agreement must be advanced, paid or tendered by bank draft, certified cheque or wire transfer of immediately available funds payable to the Person to whom the amount is due. Unless otherwise specified, the word “dollar” and the “$” sign refer to Canadian currency, and all amounts to be advanced, paid, tendered or calculated under this Agreement are to be advanced, paid, tendered or calculated in Canadian currency.

 

50

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

7.14        Public Announcements

 

All public announcements, press releases and publicity concerning the execution of this Agreement, or the Closing of the transactions contemplated by this Agreement, must be jointly planned and co- ordinated by the Sellers, the Corporation and the Buyer, and no Party will act unilaterally in this regard without the prior consent of the other Parties unless, and only to the extent that, disclosure is required to meet the timely disclosure obligations of any Party under applicable securities Laws or stock exchange rules in circumstances where prior consultation with the other Parties is not practicable. Nothing in this Section 7.14 will limit the ability of a Party to make any announcements to employees, clients or other Persons having business relations with a Party to the extent the Party, after consultation with the other Parties, reasonably determines in good faith that the announcement is necessary or advisable.

 

7.15        Equitable Remedies

 

The Parties acknowledge that the failure to comply with a covenant or obligation contained in this Agreement may give rise to irreparable injury to a Party, inadequately compensable in damages. Accordingly, a Party may seek to enforce the performance of this Agreement by injunction or specific performance upon application to a court of competent jurisdiction without proof of actual damage (and without the requirement of posting bond or other security).

 

7.16        No Contra Proferentem

 

This Agreement has been reviewed by each Party’s professional advisors, and revised during the course of negotiations between the Parties. Each Party acknowledges that this Agreement is the product of their joint efforts, that it expresses their agreement, and that, if there is any ambiguity in any of its provisions, no rule of interpretation favouring one Party over another based on authorship will apply.

 

7.17        Independent Legal Advice

 

Each of the Sellers acknowledges that it has read and understands the terms and conditions of this Agreement and acknowledges and agrees that it has had the opportunity to seek, and was not prevented or discouraged by any other Party from seeking, any independent legal advice which it considered necessary before the execution and delivery of this Agreement and that, if it did not avail itself of that opportunity before signing this Agreement, it did so voluntarily without any undue pressure, and agrees that its failure to obtain independent legal advice will not be used by it as a defence to the enforcement of its obligations under this Agreement.

 

7.18        Language

 

The Parties have expressly required that this Agreement, any Communication and all other contracts, documents and notices relating to this Agreement be drafted in the English language. Les parties ont expressément exigé que la présente convention, toute communication et tous les autres contrats, documents et avis qui y sont afférents soient rédigés en anglais seulement.

 

7.19        Third Party Beneficiaries

 

This Agreement is not intended to, and does not, confer any rights or remedies on any Person other than the Parties (and their respective Successors) and the Indemnified Parties. The Parties reserve their right to vary or rescind, at any time and in any way, the rights, if any, granted by or under this Agreement to any Person who is not a Party, without notice to or consent of that Person.

 

THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK

 

51

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Each of the Parties has executed and delivered this Agreement as of the date noted at the beginning of this Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

52

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

	
 
    	
 
    
	
 
    	
[SELLER]
    

 

Signature page to Share Purchase Agreement

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

	
 
    	
ZEALAND PHARMA A/S
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Per:
    	
/s/ Emmanuel Dulac
    
	
 
    	
 
    	
Name:
    	
Emmanuel Dulac
    
	
 
    	
 
    	
Title:
    	
Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
Per:
    	
/s/ Martin Nicklasson
    
	
 
    	
 
    	
Name:
    	
Martin Nicklasson
    
	
 
    	
 
    	
Title:
    	
Chairman of the Board
    

 

Signature page to Share Purchase Agreement

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

	
 
    	
ENCYCLE THERAPEUTICS INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Per:
    	
/s/ Jeffrey Coull
    
	
 
    	
 
    	
Name:
    	
Jeffrey Coull
    
	
 
    	
 
    	
Title:
    	
Director
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Per:
    	
/s/ Raphael Hofstein
    
	
 
    	
 
    	
Name:
    	
Raphael Hofstein
    
	
 
    	
 
    	
Title:
    	
Chairman of the Board
    

 

Signature page to Share Purchase Agreement

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

SCHEDULE A

TO SHARE PURCHASE AGREEMENT

 

SELLERS

 

[***]

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

SCHEDULE B

TO SHARE PURCHASE AGREEMENT

 

DISCLOSURE SCHEDULE

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

SCHEDULE B

TO SHARE PURCHASE AGREEMENT

 

DISCLOSURE SCHEDULE

 

Schedule 1.1.74

 

PERMITTED ENCUMBRANCES

 

1.     Nil.

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Schedule 3.2.5

 

RESIDENCE

 

2.     The following Sellers are non-residents of Canada: [***]

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Schedule 3.3.5

 

CONSENTS

 

1.     [***]

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Schedule 3.3.15

 

FINANCIAL STATEMENTS

 

[***]

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Schedule 3.3.16.3

 

TAX MATTERS: TAX DEFICIENCIES

 

[***]

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Schedule 3.3.16.14

 

CERTAIN INDEBTEDNESS

 

[***]

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Schedule 3.3.17

 

ABSENCE OF CHANGES: EQUIPMENT AND SUPPLIES

 

[***]

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Schedule 3.3.18

 

UNDISCLOSED LIABILITIES

 

1.     [***].

 

2.     Please refer to Disclosure Schedule 3.3.16.14.

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Schedule 3.3.19

 

ABSENCE OF UNUSUAL TRANSACTIONS

 

[***]

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Schedule 3.3.20

 

TITLE TO AND CONDITION OF ASSETS

 

[***]

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Schedule 3.3.22

 

INTELLECTUAL PROPERTY

 

1.              Patents and Patent applications, Trademark registrations and applications, Copyright registrations and applications, and material Software (3.3.22.1):

 

(a)         Issued Patents and Patent applications

 

Aziridine aldehydes, aziridine-conjugated amino derivatives, aziridine-conjugated biomolecules and processes for their preparation (filed Oct. 22, 2007)

 

	
Application/
   Patent No.
    	
 
    	
Jurisdiction
    	
 
    	
Owner
    	
 
    	
License
    
	
PCT/CA2007/001882
    	
 
    	
International
    	
 
    	
University of Toronto
    	
 
    	
Yes
    
	
US Patent No. 8,143,375
    	
 
    	
US
    	
 
    	
University of Toronto
    	
 
    	
Yes
    
	
CA Patent No. 2,702,605
    	
 
    	
Canada
    	
 
    	
University of Toronto
    	
 
    	
Yes
    

 

Cyclic amino acid molecules and methods of preparing the same (filed March 16, 2010)

 

	
Application/
   Patent No.
    	
 
    	
Jurisdiction
    	
 
    	
Owner
    	
 
    	
License
    
	
PCT/CA/2010/000408
    	
 
    	
International
    	
 
    	
University of Toronto
    	
 
    	
Yes
    
	
US Patent No. 9,260,479
    	
 
    	
US
    	
 
    	
University of Toronto
    	
 
    	
Yes
    
	
US Patent No. 10,385,099
    	
 
    	
US
    	
 
    	
University of Toronto
    	
 
    	
Yes
    
	
*EP Patent No. 2408802
    	
 
    	
Europe
    	
 
    	
University of Toronto
    	
 
    	
Yes
    
	
CA Patent Appl. No. 2,756,804
    	
 
    	
Canada
    	
 
    	
University of Toronto
    	
 
    	
Yes
    
	
JP Patent No. 5866277
    	
 
    	
Japan
    	
 
    	
University of Toronto
    	
 
    	
Yes
    
	
CN Patent No. 102498124
    	
 
    	
China
    	
 
    	
University of Toronto
    	
 
    	
Yes
    
	
HK Patent No. 12112752.9
    	
 
    	
Hong Kong
    	
 
    	
University of Toronto
    	
 
    	
Yes
    
	
AU Patent No. 2010225426
    	
 
    	
Australia
    	
 
    	
University of Toronto
    	
 
    	
Yes
    
	
IN Patent Appl.

No. 7853/DELNP/2011
    	
 
    	
India
    	
 
    	
University of Toronto
    	
 
    	
Yes
    

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

*validated in Great Britain, France, Germany, Ireland, Switzerland, Spain, Portugal, Italy, Norway, Sweden, Denmark, Netherlands, Belgium

 

Fragment synthesis of cyclic peptides (filed November 11, 2016)

 

	
Application/
   Patent No.
    	
 
    	
Jurisdiction
    	
 
    	
Owner
    	
 
    	
License
    
	
PCT Patent Appl. No. PCT/CA2016/000275
    	
 
    	
International
    	
 
    	
Encycle/

Université de

Montreal
    	
 
    	
Yes
    
	
US Pat. Appl. No. 15/775,319
    	
 
    	
US
    	
 
    	
Encycle/

Université de

Montreal
    	
 
    	
Yes
    
	
EP Pat. Appl. No. 16863254.5
    	
 
    	
Europe
    	
 
    	
Encycle/

Université de

Montreal
    	
 
    	
Yes
    
	
CA Pat. Appl. No. 3,004,714
    	
 
    	
Canada
    	
 
    	
Encycle/

Université de

Montreal
    	
 
    	
Yes
    
	
CN Pat. Appl. No. 2016800785451
    	
 
    	
China
    	
 
    	
Encycle/

Université de

Montreal
    	
 
    	
Yes
    

 

Cyclic peptides targeting integrin alpha-4-beta-7 (filed November 11, 2016)

 

	
Application/
   Patent No.
    	
 
    	
Jurisdiction
    	
 
    	
Owner
    	
 
    	
License
    
	
PCT Patent Appl. No. PCT/CA2016/000274
    	
 
    	
International
    	
 
    	
Encycle/

Université de

Montreal
    	
 
    	
Yes
    
	
US Pat. Appl. No. 15/775,309
    	
 
    	
US
    	
 
    	
Encycle/

Université de

Montreal
    	
 
    	
Yes
    
	
EP Pat. Appl. No. 16863253.7
    	
 
    	
Europe
    	
 
    	
Encycle/

Université de

 
    	
 
    	
Yes
    

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

	
 
    	
 
    	
 
    	
 
    	
Montreal
    	
 
    	
 
    
	
CA Pat. Appl. No. 3,004,641
    	
 
    	
Canada
    	
 
    	
Encycle/

Université de

Montreal
    	
 
    	
Yes
    
	
CN Pat. Appl. No. 2016800791486
    	
 
    	
China
    	
 
    	
Encycle/

Université de

Montreal
    	
 
    	
Yes
    
	
JP Pat. Appl. No. 2019-503340
    	
 
    	
Japan
    	
 
    	
Encycle/

Université de

Montreal
    	
 
    	
Yes
    
	
KR Pat. Appl. No. 10-2018-7016390
    	
 
    	
South Korea
    	
 
    	
Encycle/

Université de

Montreal
    	
 
    	
Yes
    
	
AU Pat. Appl. No. 2016353547
    	
 
    	
Australia
    	
 
    	
Encycle/

Université de

Montreal
    	
 
    	
Yes
    
	
IN Pat. Appl. No. 201817021544
    	
 
    	
India
    	
 
    	
Encycle/

Université de

Montreal
    	
 
    	
Yes
    

 

Cyclic peptide multimers targeting integrin alpha-4-beta-7 (filed November 10, 2017)

 

	
Application/
   Patent No.
    	
 
    	
Jurisdiction
    	
 
    	
Owner
    	
 
    	
License
    
	
Intl. Patent Appl. No. PCT/CA2017/000244
    	
 
    	
International
    	
 
    	
Encycle
    	
 
    	
N/A
    
	
US Pat. Appl. No. 16/348,103
    	
 
    	
US
    	
 
    	
Encycle
    	
 
    	
N/A
    
	
EP Pat. Appl. No. 17870529.9
    	
 
    	
Europe
    	
 
    	
Encycle
    	
 
    	
N/A
    
	
CA Pat. Appl. No. 3,042,576
    	
 
    	
Canada
    	
 
    	
Encycle
    	
 
    	
N/A
    
	
CN Pat. Appl. No. 2017800761057
    	
 
    	
China
    	
 
    	
Encycle
    	
 
    	
N/A
    
	
JP Pat. Appl. No. 2019-524203
    	
 
    	
Japan
    	
 
    	
Encycle
    	
 
    	
N/A
    

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

	
IN Pat. Appl. No. 201927019614
    	
 
    	
India
    	
 
    	
Encycle
    	
 
    	
N/A
    

 

Homodetic cyclic peptide multimers targeting alpha-4-beta-7 integrin (filed May 10, 2018)

 

	
Application/
   Patent No.
    	
 
    	
Jurisdiction
    	
 
    	
Owner
    	
 
    	
License
    
	
Intl. Patent Appl. No. PCT/CA2018/000087
    	
 
    	
International
    	
 
    	
Encycle
    	
 
    	
N/A
    

 

(b)         Trademark registrations and applications

 

	
Mark
    	
 
    	
Application/
   Registration No.
    	
 
    	
Jurisdiction
    	
 
    	
Owner
    	
 
    	
License
    
	
Encycle word mark
    	
 
    	
Reg. No. 976,228
    	
 
    	
Canada
    	
 
    	
Encycle
    	
 
    	
N/A
    
	
Encycle word mark
    	
 
    	
Reg. No. 5,830,828
    	
 
    	
US
    	
 
    	
Encycle
    	
 
    	
N/A
    

 

(c)          Material Software:

 

NIL.

 

(d)         Domain Names:

 

http://www.encycletherapeutics.com/

 

*created August 8, 2011 (owned)

 

2.              Standard Forms of Agreement (3.3.22.2)

 

[***]

 

3. Contracts (3.3.22.3)

 

[***]

 

4.              Confidentiality agreements (3.3.22.4.6)

 

[***]

 

5.              License rights (3.3.22.4.7)

 

[***]

 

 

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Schedule 3.3.22.5

 

[***] AGREEMENT

 

[***]

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Schedule 3.3.25

 

MATERIAL CONTRACTS

 

[***]

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Schedule 3.3.26

 

ACCOUNTS AND POWER OF ATTORNEY

 

1.              Banks or Other Depository (3.3.26.1): [***]

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Schedule 3.3.29

 

ENVIRONMENTAL CONDITIONS

 

1.              NIL.

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Schedule 3.3.30

 

SUPPLIERS

 

1.              Please refer to the following list: [***]

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Schedule 3.3.31

 

RIGHTS TO USE PERSONAL INFORMATION

 

1.                       Claims (3.3.31.3):

 

NIL.

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Schedule 3.3.36

 

PENSION AND BENEFIT PLANS

 

1.              Encycle Therapeutics Inc. Amended and Restated Stock Option Plan effective as of December 31, 2017.

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Schedule 3.3.37

 

INSURANCE POLICIES

 

[***]

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Schedule 7.11.2

 

COSTS AND EXPENSES

 

[***]

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Exhibit 1.1.62

 

LEAD PRODUCT

 

[***]

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

Exhibit “5.2.1.3”

 

FORM OF CONSULTING AND TRANSITIONAL SERVICES AGREEMENT

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

 

CONSULTING AGREEMENT

 

This Consulting Agreement (the “Agreement”) is made effective as of [dd. Month yyyy] (the “Effective Date”), by and between

 

(1)                                 ENCYCLE THERAPEUTICS INC., a corporation incorporated under the laws of Ontario (hereinafter “Encycle”) and

 

(2)                                               with principal place of business at [insert address] , (“ADVISOR”).

 

Recitals

 

(A)                               WHEREAS, ENCYCLE desires to obtain the Consulting Services (as defined below) of ADVISOR in order to obtain the benefit and unique experience and ability of ADVISOR; and

 

(B)                              WHEREAS, ADVISOR is willing to render such Consulting Services upon the terms and conditions set forth in this Agreement.

 

Agreement

 

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

 

1.                                      Definitions

 

Unless otherwise specifically provided in this Agreement, the following terms shall have the following meanings:

 

1.1.                            “Affiliates” means, with respect to a Person, any Person that controls, is controlled by or is under common control with such first Person. For purposes of this definition only, “control” means (a) to possess, directly or indirectly, the power to direct the management or policies of a Person, whether through ownership of voting securities or by contract relating to voting rights or corporate governance, or (b) to own, directly or indirectly, more than fifty percent (50%) of the outstanding voting securities or other ownership interest of such Person.

 

1.2.                            “Confidential Information” means any and all data, information or material that is provided or communicated by or on behalf of ENCYCLE or its Affiliates, or otherwise becomes known, to ADVISOR, or is collected or generated by or on behalf of ADVISOR, in connection with this Agreement or the activities contemplated hereunder, including, without limitation, information relating to ENCYCLE’s and/or its Affiliates’ business, together with all Results (as defined below).

 

1.3.                            “Consulting Services” means the services set forth in Schedule 1, with such modifications to Schedule 1 as ENCYCLE may reasonably request from time to time.

 

1.4.                            “Loss” means any and all liabilities, claims, demands, causes of action, damages, loss and expenses, including interest, penalties, and reasonable lawyers’ fees and disbursements.

 

1

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

1.5.                           “Parties” means ENCYCLE and ADVISOR and “Party” shall mean either of ENCYCLE or ADVISOR.

 

1.6.                           “Person” means an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, incorporated association, joint venture or similar entity or organization, including a government or political subdivision, department or agency of a government.

 

1.7.                           “Results” means any ideas, inventions, discoveries, know-how, data, documentation, reports, materials, writings, designs, computer software, processes, principles, methods, techniques and other information, recorded in any form, that are discovered, conceived, reduced to practice or otherwise generated as a result of or in connection with the Services by or on behalf of ADVISOR (whether solely or jointly with others) and any patent, trade secret, copyright or other intellectual property rights pertaining to any of the foregoing.

 

1.8.                           “Term” means the period beginning on the Effective Date and continuing six (6) months after the Effective Date, with possibility of extension by written consent of both Parties.

 

2.                                     Scope of Consulting Services

 

2.1.                           ENCYCLE hereby retains ADVISOR, and ADVISOR hereby agrees, to provide the Consulting Services. ADVISOR will furnish, at ADVISOR’s own expense (subject to Article 3), any and all materials, equipment, services or supplies necessary or useful to successfully complete the Consulting Services. ADVISOR shall use his or her best reasonable efforts to successfully complete the Consulting Services and shall perform such Consulting Services with the highest professional standards and in compliance with all applicable laws and regulations. The Parties agree that completion of the Consulting Services within the agreed-upon time period is an essential term of this Agreement. The contact person at ENCYCLE for the Consulting Services will be Dr. Rie Schultz Hansen (Interim Chief Scientific Officer) of Zealand Pharma A/S or such other person as is appointed from time to time.

 

3.                                     Compensation and Out-of- Pocket Expenses

 

3.1.                           Compensation.  ENCYCLE shall pay ADVISOR a fee of CA $       in consideration of the ADVISOR’s satisfactory performance of the Consulting Services; provided, however, that the total hours worked by ADVISOR, shall not exceed 30 hours without the prior written consent of ENCYCLE. ENCYCLE may request, and ADVISOR may agree in writing, that ADVISOR will perform additional hours as needed from time to time in a rate and basis to be agreed in addition to the flat fee referred to in the clause. In addition, ENCYCLE will reimburse ADVISOR for reasonable, pre-agreed, necessary and verifiable out-of-pocket expenses incurred by ADVISOR in connection with the Consulting Services. Compensation paid by ENCYCLE under this Agreement are stated exclusive of any sales tax, which ADVISOR may be obliged to charge. For the sake of clarity, air travel in excess of 6 hrs. the expenses will have to be pre-approved in writing, and a full working day will be defined as a total of seven (7) hours and will be compensated as such as outlined in Schedule 2

 

3.2.                           Invoices. ADVISOR will provide invoices to ENCYCLE for compensation and out-of-pocket expenses as provided in Section Compensation. Each invoice shall be sent by email to finance@zealandpharma.com att: “Dr. Rie Schultz Hansen” and will include: (a) a written progress report, which will describe the work ADVISOR has performed and evaluate the work performed in relation to the goals of the Consulting Services, (b) a reasonable

 

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BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

accounting, and supporting documentation, of reimbursable out-of-pocket expenses incurred, and (c) other information as reasonably requested by ZEALAND. Within thirty (30) days after receipt by ENCYCLE of a satisfactory invoice and the other information set forth in this Section 3.2, ENCYCLE will make payment to ADVISOR at the following address:

 

[Address]

 

[For payment by wire transfer please also state: (i) Bank Account Number; (ii) Sort Code; (iii) Swift Code; (iv) Bank Name and Address; (v) ADVISOR’s Payment Reference]

 

3.3.                            Timing of Invoices. ENCYCLE will have no obligation to reimburse ADVISOR for compensation or out-of-pocket expenses not invoiced to ENCYCLE within sixty (60) days after such compensation or out-of-pocket expenses was incurred or within thirty (30) days after the effective date of termination whichever is earlier.

 

3.4.                            Entire Compensation. Except as modified by Section 10.2 due to early termination, ADVISOR agrees that the compensation and out-of-pocket expenses set forth in Section 3.1 represents ENCYCLE’s full and complete obligation for any and all Consulting Services to be rendered pursuant to this Agreement.

 

4.                                     Relationship of the Parties

 

4.1.                           The status of a Party under this Agreement shall be that of an independent contractor. Nothing contained in this Agreement shall be construed as creating a partnership, joint venture or agency relationship between the Parties or, except as otherwise expressly provided in this Agreement, as granting either Party the authority to bind or contract any obligation in the name of or on the account of the other Party or to make any statements, representations, warranties or commitments on behalf of the other Party. ADVISOR agrees that neither this Agreement nor the Consulting Services performed hereunder will entitle ADVISOR to participate in or accrue or receive benefits under any employee benefits plans, group insurance plans or programs, or any other arrangement, program, or policy maintained by ENCYCLE that provides employee benefits. ADVISOR will be solely and unconditionally responsible for paying any and all taxes and assessments relating to any income or other consideration that ADVISOR derives from this Agreement. All persons employed by a Party shall be employees of such Party and not of the other Party and all costs and obligations incurred by reason of any such employment shall be for the account and expense of such Party.

 

5.                                     Ownership of Results

 

5.1.                           ADVISOR will fully disclose all Results to ENCYCLE. ADVISOR agrees that all Results that relate to ENCYCLE’s technology programs are the exclusive property of ENCYCLE (or such Person as ENCYCLE may designate). ADVISOR hereby assigns and transfers, without additional consideration, to ENCYCLE (or such designee) all right, title and interest in and to such Results throughout the world. For the avoidance of doubt, copyrightable Results will be considered “work made for hire” and ENCYCLE shall own all right, title, and interest in and to such Results. At ENCYCLE’s request and expense, ADVISOR will execute documents and take all actions necessary to perfect ENCYCLE’s ownership of Results.

 

6.                                     Confidential Information

 

6.1.                           ADVISOR agrees that he or she will have access to, or become acquainted with, Confidential Information of ENCYCLE and/or its Affiliate(s). Confidential Information may be disclosed

 

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either orally, visually, in writing, by delivery of materials containing Confidential Information or in any other form or medium. Confidential Information does not include information that: (a) ADVISOR can prove by competent evidence was known to ADVISOR prior to the Effective Date and that was not subject to confidentiality restrictions, (b) was lawfully obtained from a third party without any confidentiality obligations, or (c) is or becomes part of the public domain through no violation of any obligation of ADVISOR.

 

6.2.                           ADVISOR will keep Confidential Information in strict confidence, will use Confidential Information only in connection with the performance of the Consulting Services, and will not, during or after the Term, without ENCYCLE’s prior written consent, disclose, disseminate or otherwise make available Confidential Information. If ADVISOR becomes aware of disclosure or misuse, he or she will immediately notify ENCYCLE and take reasonable steps to prevent further disclosure or misuse.

 

6.3.                           Notwithstanding Section 6.2, if ADVISOR is requested to disclose Confidential Information by a lawful judicial or government order, ADVISOR will immediately notify ENCYCLE to permit ENCYCLE to defend against any such order of disclosure, and ADVISOR will assist in such defense to the extent permitted by law. If ADVISOR is thereafter required to disclose Confidential Information, ADVISOR and ENCYCLE will agree to a mutually satisfactory means to disclose such information.

 

6.4.                           The obligations of nondisclosure set forth in this Article 6 will commence upon the Effective Date and shall survive and continue for five (5) years after the expiration or termination of this Agreement.

 

6.5.                           In addition, ADVISOR expressly acknowledges that ENCYCLE is listed on the regulated market of Nasdaq in New York and Copenhagen and is thus subject to applicable laws and stock exchange regulations, in particular with regard to transparency rules. ADVISOR accordingly understands and agrees that since it may have access to inside information (i.e., information on ENCYCLE that is specific, (ii) non-public and (iii) likely to have a material effect on the market price of ENCYCLE’s securities if and when made public, i.e., that a reasonable investor would consider material in deciding whether to buy, hold or sell ENCYCLE securities), it must comply with applicable securities laws and regulations, which provide, in particular, that certain uses of inside information, communication of inside information or manipulation of the market price of any securities constitute a criminal offence. ADVISOR also acknowledges that, pursuant to European securities law, ENCYCLE may be required to place its name, or the names of its Affiliates and of their respective Representatives, on an “insider list” that ENCYCLE may be required to communicate at any time to the Danish Financial Authorities upon request.

 

7.                                     Subcontractors

 

7.1.                           ADVISOR shall not engage or make use of subcontractors for the purpose of providing the Consulting Services or any other obligations under this Agreement except as expressly authorized by ENCYCLE in writing. Any such permitted subcontract shall be subject to the applicable terms and conditions of this Agreement, and, upon ENCYCLE’s request, ADVISOR shall require any such subcontractor to enter into an agreement, pursuant to which the terms and conditions of this Agreement shall apply directly between such subcontractor and ENCYCLE prior to disclosing to such subcontractor any of Confidential Information, provided, however, that no such subcontract shall release ADVISOR from any of its obligations under this Agreement except to the extent such obligations are satisfactorily performed by such

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

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DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

subcontractor in accordance with this Agreement.

 

8.                                     Use of Name

 

8.1.                           Each Party shall not mention or otherwise use the name, insignia, symbol, trademark, trade name or logotype of the other Party or its Affiliates in any publication, press release, promotional material or other form of publicity without the prior written consent of the other Party in each instance (which shall not be unreasonably withheld). The restrictions imposed by this Section shall not prohibit either Party from making any disclosure identifying the other Party that is required by applicable law, rule or regulation or the requirements of a national securities exchange or another similar regulatory body, provided that any such disclosure shall be governed by Article 6.

 

9.                                     Representations, Warranties and Covenants of ADVISOR

 

9.1.                           ADVISOR represents and warrants to ENCYCLE that (a) it has full power and authority, and has taken all necessary actions and has obtained all necessary authorizations, licenses, consents and approvals required, to execute and perform this Agreement, (b) its retention as an ADVISOR by ENCYCLE and its performance of the Consulting Services do not, and will not, breach any agreement that obligates ADVISOR to keep in confidence any trade secrets or confidential information of ADVISOR or any other third party or to refrain from competing, directly or indirectly, with the business of any other party, (c) neither it nor any of its personnel engaged in the Consulting Services has been debarred or is subject to debarment or has otherwise been disqualified or suspended from performing scientific or clinical investigations or otherwise subjected to any restrictions or sanctions by the FDA or any other governmental or regulatory authority or professional body with respect to the performance of scientific or clinical investigations (a “Debarred Person”), and ADVISOR shall not use in any capacity, in connection with the Consulting Services, any Debarred Person; and (d) the Consulting Services are not intended to be part of any US government-funded grants or activities undertaken by ADVISOR and have not been funded in whole or in part by the US government and, consequently, any Results conceived pursuant to this Agreement shall not be subject to the conditions of 37 CFR Parts 401 and 404.

 

10.                              Termination and Effect of Termination

 

10.1.                    Termination. This Agreement shall terminate without further notice on the expiry of the Term. However, ENCYCLE may terminate this Agreement in its sole discretion at any time upon thirty (30) days prior written notice to ADVISOR.

 

10.2.                    Effect of Termination. Upon termination of this Agreement, ADVISOR shall, promptly cease performance of its obligations under this Agreement. The expiration or termination of this Agreement shall be without prejudice to any rights or obligations of the Parties that may have accrued prior to the termination and, except as otherwise expressly provided herein, shall not limit any rights or remedies which may be available by law or otherwise.

 

a)             Upon the termination or expiration of this Agreement, ADVISOR shall at ENCYCLE’s option, either destroy or return to ENCYCLE all Confidential Information received from ENCYCLE, provided, however, that ADVISOR shall be permitted to retain one copy of such Confidential Information for archival purposes.

 

b)             In the event of such termination, ADVISOR will be entitled to receive (a) any compensation due and payable under Article 3 but not yet paid as of the effective date of termination, and

 

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(b) payment of out-of- pocket expenses reimbursable under Article 3 that are paid or incurred by ADVISOR prior to the effective date of termination.

 

c)              Any invoice, together with the other information required pursuant to Article 3, must be received no later than thirty (30) days after the effective date of termination. Such payments will constitute full and complete settlement of all claims of ADVISOR against ENCYCLE in connection with this Agreement.

 

10.3.           Extension. This Agreement may be extended, on the same terms, at any time with mutual written consent by both Parties.

 

11.                    Indemnification and Insurance

 

11.1.          In addition to any other remedy available to the Parties, each Party shall defend, indemnify and hold harmless the other Party, its Affiliates and its and their respective officers, directors, partners, shareholders, employees and agents from and against any and all Losses incurred by them to the extent resulting from or arising out of or in connection with (a) any breach of any obligation in this Agreement by the other Party, (b) the inaccuracy or breach of any representation or warranty made by the other Party in this Agreement or (c) the enforcement of a Party’s rights under this Article 11, except to the extent such Losses arise as a result of the negligence, fraud, willful misconduct or wrongful act of the Indemnified Party, its Affiliates or its or their respective officers, directors, partners, shareholders, employees or agents.

 

11.2.          ADVISOR shall maintain during the Term insurance coverage of the types and in the amounts typically carried by providers of consultancy services in the pharmaceutical or research area. ADVISOR will provide to ENCYCLE upon written request certificates of insurance evidencing its insurance coverage and limits.

 

11.3    ENCYCLE agrees that, subject to ADVISOR providing Consulting Services in good faith, ENCYCLE will not hold ADVISOR liable for any financial losses it might incur at any stage through actions taken pursuant to ADVISOR’S Consulting Services.

 

12.                     Assignment

 

12.1.          This Agreement may not be assigned by either Party in whole or in part without the prior written consent of the other Party, except that ENCYCLE without such consent may assign this Agreement and its rights and obligations hereunder to any of its Affiliates or any successor in interest (whether by merger, acquisition, asset purchase or otherwise) to all or substantially all of the business to which this Agreement relates. ENCYCLE shall always have the right to perform any or all of its obligations and exercise any or all of its rights under this Agreement through any of its Affiliates.

 

13.                     Governing Law and Jurisdiction

 

13.1.          Without prejudice to the ability of any Party to enforce this Agreement in any other proper jurisdiction, each of the Parties irrevocably and unconditionally submits and attorns to the exclusive jurisdiction of the courts of the Province of Ontario, Canada, to determine all issues, whether at law or in equity, arising from this Agreement.

 

13.2.          The Parties hereby irrevocably and unconditionally consent to the exclusive jurisdiction of Ontario, Canada for any action, suit or proceeding arising out of or relating to this

 

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Agreement, and agree not to commence any action, suit or proceeding related thereto except in such courts. In all events the proceedings will be conducted in the English Language.

 

14.       Notices

 

14.1.          Any notice, request, or other communication permitted or required under this Agreement shall be in writing, shall refer specifically to this Agreement, and shall be deemed given only if hand delivered or sent by an internationally recognised overnight delivery service, costs prepaid, or by facsimile (with transmission confirmed), to the Party to whom notice is to be given at the address set forth in the preamble to this Agreement or at such other address such Party may have provided to the other Party in accordance with this Article 14. Such notice, shall be deemed to have been given as of the date delivered by hand or transmitted by facsimile (with transmission confirmed), or on the second business day (at the place of delivery) after deposit with an internationally recognised overnight delivery service, whichever is the earlier.

 

15.       Survival

 

15.1.          The respective rights and obligations of the parties in Sections 1, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 16 and this Article 15 will survive the termination or expiration of this Agreement to the extent necessary to the intended preservation of such rights and obligations.

 

16.                     Entire Agreement and Amendment

 

16.1.           This Agreement constitutes the entire agreement between the Parties with respect to the subject matter of the Agreement. This Agreement supersedes all prior agreements, whether written or oral, with respect to the subject matter of the Agreement. Each Party confirms that it is not relying on any representations, warranties or covenants of the other Party except as specifically set out in this Agreement. Nothing in this Agreement is intended to limit or exclude any liability for fraud. All Schedules referred to in this Agreement are intended to be and are hereby specifically incorporated into and made a part of this Agreement. No modification will be effective unless in writing and signed by authorized representatives of both Parties.

 

17.                     Signature

 

17.1              Signatures of any Party transmitted by facsimile or electronic mail (including, without limitation, electronic mailing of a so-called portable document format or “pdf’ of a scanned counterpart) shall be treated as and deemed to be original signatures for all purposes, and will have the same binding effect as if they were original, signed instruments delivered in person.

 

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Execution
    	
 
    
	
 
    	
 
    
	
Accepted   by ADVISOR:
    	
 
    
	
 
    	
 
    
	
Date
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

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Signed on behalf of Encycle   Therapeutics Inc.
    	
 
    
	
 
    	
 
    
	
Date
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Encycle Therapeutics Inc.
    	
 
    

 

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Schedule 1

 

CONSULTING AGREEMENT

 

Consulting Services to be provided:

 

The scope of the services will be to:

 

·                  [***]

·                  [***]

·                  Further services to be agreed between the parties in writing.

 

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

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Schedule 2

 

PAYMENT SCHEDULE

 

ENCYCLE will compensate the ADVISOR for performance of the Consulting Services in accordance with the following schedule:

 

[***]

 

Furthermore, ENCYCLE will reimburse ADVISOR for any reasonable and documented out-of-pocket expenses related to the work conducted for ENCYCLE if submitted within sixty (60) days. (Examples are travel expenses to and from meetings, parking expenses etc.). The expenses should not exceed 10% of the value of the total agreed consultancy agreement, unless previously agreed in writing.]

 

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Exhibit “5.2.1.5”

 

FORM OF RELEASE

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

RELEASE

 

	
TO:
    	
 
    	
Encycle Therapeutics Inc. (the “Corporation”)
    
	
 
    	
 
    	
 
    
	
AND TO:
    	
 
    	
Zealand Pharma A/S (the “Buyer”)
    
	
 
    	
 
    	
 
    
	
RE:
    	
 
    	
Share purchase agreement dated October {{day}},   2019 between the Buyer, the Corporation, and the Sellers identified in   Schedule A to the share purchase agreement (the “Purchase   Agreement”)
    

 

For value received, each of the undersigned irrevocably releases the Corporation and Buyer, the directors, officers, employees, and representatives of the Corporation and Buyer and each of their respective legal representatives, successors and assigns (all of those persons and entities being called the “Releasees”) from all claims of any kind which the undersigned or its heirs, executors, administrators, legal representatives, successors and assigns ever had, now have, or may in the future have against any of the Releasees by reason of any cause, whether known or unknown, arising from, connected with, or in any way related to the undersigned having been a shareholder, creditor, employee, consultant and/or representative of the Corporation up to and including the date of this release; but expressly excluding (i) any claims, rights or entitlements which any of the undersigned may have for indemnification under applicable law and (ii) any obligations that the Buyer has to the undersigned arising from, connected with or in any way related to the Purchase Agreement.

 

In addition, each of the undersigned:

 

1.               represents and warrants that it, he, or she has not assigned and will not assign to any other person or entity any of the claims which the undersigned is releasing in this Release; and

 

2.               agrees not to make any claim or to initiate any proceedings against any person who or entity which, in respect of the claims released by this Release, might claim contribution from, or to be indemnified by, any of the Releasees.

 

This Release may be executed and delivered in one or more counterparts, each of which will be an original, and each of which may be delivered by facsimile, e-mail or other functionally equivalent electronic means of transmission, and those counterparts will together constitute one and the same instrument.

 

The provisions of this Release shall enure to the benefit of each of the Releasees and will be binding upon the undersigned and his or her heirs, executors, administrators, legal representatives, successors and assigns.

 

This Release is governed by, and is to be interpreted in accordance with, the laws of the Province of Ontario and the laws of Canada applicable in that Province.

 

The undersigned have executed this Release as of {{month}} {{day}}, 2019.

 

[Signature pages follow]

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS

BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY

DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

 

	
 
    	
 
    
	
 
    	
 
    	
[Seller]
    

 

Signature page to Release

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