Document:

arvn-ex103_145.htm

 

Exhibit 10.3

 

Certain identified information has been excluded from the exhibit because it is both (i) not material and (ii) would likely cause competitive harm to the Company, if publicly disclosed.  Double asterisks denote omissions.

 

OPTION AGREEMENT

This Option Agreement (this “Agreement”) is made and entered into as of July 16, 2019 (the “Effective Date”), by and among Arvinas Operations, Inc., a Delaware corporation (“Arvinas”), Bayer CropScience LP, a Delaware limited partnership (“Bayer”), and Protag LLC, a Delaware limited liability company (“Company”) (Arvinas and Bayer, collectively with the Company, the “Parties” and each individually, a “Party”).

RECITALS

WHEREAS, the Parties entered into that certain Commitment Agreement, dated as of June 3, 2019 (as amended, restated and/or otherwise modified from time to time, the “Commitment Agreement”), pursuant to which the parties thereto have agreed to take certain actions in connection with the formation, funding and operation of the Company; and

WHEREAS, as a condition to the Closing (as defined in the Commitment Agreement), the Parties are required to enter into this Agreement, pursuant to which the Company will provide certain procedures for, and preferential rights relating to, the Transfer of certain Company Products Researched, Developed and Commercialized by the Company to Bayer.

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

Article I 
DEFINITIONS

The following terms will have the following meanings:

1.1Certain Definitions.  For purposes of this Agreement, the following terms will have the meanings set forth in this Article I.  Any capitalized term used but not defined herein will have the meanings set forth in that certain Amended and Restated Limited Liability Agreement of the Company dated as of July 16, 2019 (as amended, restated and/or otherwise modified from time to time, the “LLC Agreement”), or the Commitment Agreement.

“Applicable Field” means the sub-field of the Field in which a Company Product will be and is Researched, Developed, Manufactured, used and Commercialized by or on behalf of Company or any of its Affiliates.

“Applicable Managers” means: (a) if Bayer is a Bidding Party, a majority of the Managers other than the Bidding Party Managers (in which case the Bidding Party Managers will be deemed Conflicted Managers for purposes of the applicable Product Transfer); provided, however, that the Bidding Party Managers will no longer be deemed Conflicted Managers (and the Bidding Party will thereafter be deemed a Non-Bidding Party) following the Bidding Party’s Formal Withdrawal with respect to such Product Transfer; or (b) if Bayer is a Non-Bidding Party, a majority of all of the Managers (including the Requisite Approval if required by the LLC Agreement).

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“Baseball Arbitration” means the arbitration procedures for resolving a dispute as provided for in Exhibit A.

“Bid” means a Solicited Bid or an Unsolicited Bid, as applicable. A Bid will also include any amended Bid provided by a Person from time to time.

“Bidding Party” means Bayer if it or one of its Affiliates has provided a Bid for a Company Product; provided, however, that Bayer will no longer be considered a Bidding Party following its delivery of a Formal Withdrawal.

“Bidding Party Managers” means the Managers designated by the Bidding Party.

“Bidding Process” means the bidding process for a Product Transfer as contemplated by Section 2.6. 

“Field” means any and all agricultural purposes.

“[**] Candidate” means a Company Product that is a Second Stage Product. 

“Formal Withdrawal” means, with respect to a Product Transfer, written notification to the Company and Arvinas signed by an authorized Representative of the Bidding Party which certifies that the Bidding Party no longer has any intent to participate in such Product Transfer process and withdraws from such Product Transfer process in its entirety. 

“Investor” means each of Arvinas and Bayer.

“Last Matching Right” means the right of Bayer to submit to the Company a final Bid, which Bid shall be binding upon Bayer, within [**] after the receipt by Bayer of the Superior Bid Notice.  [**].

“Licensed Field” means all or a sub-field of the Applicable Field for a specific Company Product in which such Company Product will be Researched and Developed (if applicable based on the stage of the Company Product at the time the corresponding Product Transfer Agreement is executed), Manufactured, used and/or Commercialized by the Product Transferee under such Product Transfer Agreement.

“Non-Bidding Party” means Bayer if it has not provided a Bid for a Company Product.

“Product Rights” means Bayer’s preferential rights with respect to Product Transfers of Company Products as provided for in this Agreement.

“Product Transfer” means a transaction pursuant to which a Company Product is (or would be) Transferred to a Person (other than to the Company or to a Company Subsidiary).

“Product Transfer Agreement” means the agreement between the Company and a Product Transferee to effect a Product Transfer.

“Product Transferee” means the Person that is the counterparty to a Product Transfer Agreement (other than the Company or a Company Subsidiary, as applicable).

“Relevant Experience” means experience with valuing agricultural products and licensing transactions involving agricultural products, which may include experience relevant to the determination of risks and costs associated with the Research, Development and Commercialization of agricultural products. 

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“ROFN Triggering Event” means (a) a Transfer Determination, or (b) the receipt of an Unsolicited Bid from a Third Party that is determined to be a Qualifying Offer pursuant to Section 2.4.

“Solicited Bid” means a bid (a) by a Person in connection with a Bidding Process for a Product, or (b) by Bayer pursuant to the exercise of Bayer’s rights under Section 2.5.

“Superior Bid” means the Bid for a Company Product that provides the most advantageous terms to the Company as determined by the Applicable Managers.

“Superior Bid Notice” means a written notice of the determination of the Superior Bid for a Company Product, together with the material terms of such Superior Bid.

“Third Party” means any Person other than the Company, an Investor or any Affiliate of the Company or such Investor. 

“Transfer” means a license of the exclusive right to Research, Develop, Manufacture, use and/or Commercialize, as applicable, a Company Product.

“Transfer Determination” means a decision by the Board to begin a Bidding Process with respect to a Company Product.

“Unsolicited Bid” means a bid for a Company Product that is not a Solicited Bid. 

“Valuation Firm” means a reputable investment banking firm (or a Person with expertise in providing valuations) with the Relevant Experience to the extent reasonably practicable. The Valuation Firm will be selected by the Applicable Managers and is required to be independent from any Party and/or any of its Affiliates unless otherwise approved by the Board (including the Requisite Approval).

“Winning Bid” means the Superior Bid for a Product Transfer that is finally determined to be accepted by the Applicable Managers.

The following terms will have the meanings defined in the Section or Exhibit indicated. Unless otherwise noted, the indicated Section or Exhibit refers to the appropriate Section or Exhibit of this Agreement.

 

	
Agreement
	
Introduction

	
Antitrust Authority
	
Exhibit B

	
Antitrust Approval
	
Exhibit B

	
Antitrust Condition 
	
Exhibit B

	
Antitrust Filing
	
Exhibit B

	
Antitrust Law
	
Exhibit B

	
Arvinas
	
Introduction

	
Baseball Expert
	
Exhibit A

	
Bayer
	
Introduction

	
Bayer Solicited Bid Notice
	
Section 2.5(b)

	
Bayer Unsolicited Bid Notice
	
Section 2.3

	
Bid Package
	
Section 2.5(a)

	
Commitment Agreement
	
Introduction

	
Company
	
Introduction

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Company Product
	
Section 1.21 of the Arvinas IP Contribution Agreement and the Bayer IP Contribution Agreement

	
Counterparty
	
Exhibit B

	
Effective Date
	
Introduction

	
Exclusive Field
	
Section 2.8

	
[**] Candidate Notice
	
Section 2.1(a)

	
Filing Party
	
Exhibit B

	
FMV
	
Section 2.5(b)(i)(A)

	
FMV Bid Period
	
Section 2.5(b)(i)(A)

	
FMV Report
	
Section 2.5(b)(i)(A)

	
JAMS
	
Exhibit A

	
LLC Agreement
	
Introduction

	
LM Superior Bid
	
Section 2.5(b)(i)(A)

	
Minimum Offer Terms
	
Section 2.2

	
Party or Parties
	
Introduction

	
Product Closing
	
Section 2.7

	
QOFMV
	
Section 2.5(b)(i)(A)

	
Qualifying Offer
	
Section 2.2

	
Required FMV Terms
	
Section 2.5(b)(i)(A)

	
Revised FMV Bid
	
Section 2.5(b)(i)(A)

	
ROFN Period
	
Section 2.5(b)

	
ROFN Trigger Notice
	
Section 2.5(a)

	
Second Stage Product
	
Section 1.1 of the Commitment Agreement

	
Submission Date
	
Section 2.6(a)

	
Term
	
Section 1.01 of the LLC Agreement

	
Third Party Valuation
	
Section 2.5(b)(i)(A)

	
Transfer Determination
	
Section 2.1(a)

	
Winning Bidder
	
Section 2.7

 

Article II 

2.1Determination of [**] Candidate and Timing of Product Transfers.  

(a)On a Company Product-by-Company Product basis, the Company will promptly (and, in any event, within [**]) notify the Board of any Company Product that the Company reasonably believes is a [**] Candidate.  In connection with such notification, the Company will provide the Board with a complete set of supporting data related to such Company Product that the Company has identified as a potential [**] Candidate.  The Board will determine whether the Company Product is a [**] Candidate.  If the Board determines that such Company Product is not a [**] Candidate, then the Company will continue to conduct additional Research and Development activities with respect to such Company Product.  If the Board determines that such Company Product is a [**] Candidate, the Board will promptly (and in any event, within [**]) provide a written notice to the Investors that such Company Product is a [**] Candidate (a “[**] Candidate Notice”).  The [**] Candidate Notice will include whether (i) the Board has determined to continue Research, Development and Commercialization of such Company Product, or (ii) whether the Board has made a Transfer Determination with respect to such Company Product and therefore such Company Product will be subject to the Product Rights (and therefore such [**] Candidate Notice will also be a ROFN Trigger Notice).  If the Board has provided a [**] Candidate Notice in which the Board had determined to continue Research, Development and Commercialization of such Company Product, and the Board subsequently makes a Transfer Determination with respect to such Company Product, the Company will provide the Investors with a ROFN Trigger Notice.  

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(b)Notwithstanding the foregoing, the Board will from time to time discuss and consider the appropriate timing of potential Product Transfers to optimize the aggregate return on investment for the Members in their capacities as such, and whether to make a Transfer Determination with respect to a Company Product.  Without limiting the foregoing, the Board will discuss and consider a potential Product Transfer as promptly as possible in anticipation of and following: (i) the achievement of [**] Candidate status of a Company Product (or earlier at the discretion of the Board); and (ii) an Unsolicited Bid from any Person for such Company Product.  If the Board makes a Transfer Determination with respect to a Company Product, the Company will provide the Investors with a ROFN Trigger Notice.

2.2Minimum Offer Terms; Qualifying Offers.  Bayer agrees to only make Bids in good faith and all Bids will be in writing addressed to the Company.  To the extent reasonably practicable prior to any Solicited Bid (or, with the approval of the Applicable Managers, following any Unsolicited Bid), the Company will provide Bayer with the Company’s current, minimum offer terms with respect to a potential Product Transfer (“Minimum Offer Terms”), [**].  A Bid from Bayer or a Third Party which is made in good faith and meets the Minimum Offer Terms, if applicable, in all material respects will be a “Qualifying Offer”.  If there is any dispute with respect to whether a Bid from Bayer is a Qualifying Offer, such dispute will be escalated in accordance with the procedures set forth in Section 8.14 of the LLC Agreement; provided, that if such dispute results in a Deadlock Matter, it will be referred to Baseball Arbitration.

2.3Unsolicited Bids by Bayer.  If Bayer wishes to make an Unsolicited Bid, Bayer will deliver to the Company a Bid for such Company Product which will include the material terms of the applicable Product Transfer (a “Bayer Unsolicited Bid Notice”).  If the Company has provided Minimum Offer Terms to Bayer with respect to such Company Product, such Unsolicited Bid shall include a certification letter signed by an authorized Representative of Bayer that certifies that such Unsolicited Bid is a Qualifying Offer for such Company Product.  Following receipt of such Bayer Unsolicited Bid Notice, the Company will promptly (and in any event, within [**]) provide Arvinas with notice of such Bayer Unsolicited Bid Notice.

(a)If the Bayer Unsolicited Bid Notice is delivered following the receipt of a [**] Candidate Notice in which the Board had determined not to begin a Bidding Process with respect to such Company Product, the Applicable Managers will have the sole discretion to (i) negotiate the terms of such Product Transfer with Bayer [**], (ii) accept the Unsolicited Bid, and/or (iii) begin a Bidding Process which will provide Bayer with a Last Matching Right for such Bidding Process so long as Bayer had not otherwise provided a Formal Withdrawal with respect to such Product Transfer.

(b)If the Bayer Unsolicited Bid Notice is delivered with respect to a Company Product that has not been determined to be at least a [**] Candidate based on its Development stage, the Applicable Managers will have the sole discretion to (i) negotiate the terms of such Product Transfer with Bayer [**], (ii) accept or reject the Unsolicited Bid of Bayer, (iii) begin a Bidding Process (which will provide Bayer with a Last Matching Right for such Bidding Process so long as Bayer had not otherwise provided a Formal Withdrawal with respect to such Product Transfer, and/or (iv) take no action with respect to such Unsolicited Bid from Bayer.

(c)Notwithstanding anything to the contrary contained in the LLC Agreement, only the approval of the Applicable Managers will be required for the Company to undertake any such Product Transfer, and if Bayer is a Bidding Party, neither Bayer’s nor the Bidding Party Managers approval, vote or consent will not be required for any Member or Board approval required for such Product Transfer (including the Requisite Majority and the Requisite Approval).

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2.4Unsolicited Bids by a Third Party.  If a Third Party makes an Unsolicited Bid, the Company will promptly (and in any event, within [**]) provide the Managers and the Investors with written notice of such Unsolicited Bid including all documents, data, and information related to the Unsolicited Bid received by the Third Party in tangible form.  As promptly as practicable thereafter, the Board (with the Requisite Approval if required to effect such Product Transfer under Section 8.12 of the LLC Agreement) will determine whether (a) such Bid is a Qualifying Offer for such Company Product, or (b) to reject the Bid of such Third Party.  If such Bid is determined to be a Qualifying Offer, the Company will provide the Managers and Investors with a ROFN Trigger Notice.

2.5Right of First Negotiation.

(a)Within [**] of a ROFN Triggering Event, the Company will provide the Managers and Investors a notice of such ROFN Triggering Event (a “ROFN Trigger Notice”), which will include data and information reasonably necessary for Bayer to evaluate the advisability of, and the preparation of, a Qualifying Offer for such Company Product (collectively, such terms, data and information for such Company Product, the “Bid Package”).  Following the Company’s delivery of a Bid Package to the Investors, an Investor may request in writing that the Company provide specific, additional background information and data (although not including raw data) to further clarify the contents of the Bid Package, which information and data the Company will promptly make available to the Investors to the extent that such request is commercially reasonable and to the extent and in such form as such information and data are in the Company’s possession and control.  The Company and the Company Subsidiaries will not have any obligation to conduct any additional studies or undertake any further analysis of any data or information in accordance with the preceding sentence.

(b)During the period starting on the date of delivery of the Bid Package for a Company Product and ending [**] following such delivery date (the “ROFN Period”), Bayer will have the exclusive right to review the Bid Package to make a Bid for such Company Product and to submit a Qualifying Offer for such Company Product, and the Company will not solicit Bids from a Third Party.  Without limiting the foregoing and for the avoidance of doubt, in the event an Unsolicited Bid from a Third Party is the ROFN Triggering Event, the Company will not negotiate such Unsolicited Bid with such Third Party or solicit additional Bids from other Third Parties during the ROFN Period. To exercise such right for a Company Product during the ROFN Period, Bayer will be required to provide to the Company (prior to the expiration of the ROFN Period for such Company Product) a Bid for such Company Product which will include the material terms of the applicable Product Transfer (a “Bayer Solicited Bid Notice”).  The timing of the ROFN Period for a Company Product may be delayed until a mutually agreed, subsequent time period with the written consent of all Parties prior to the start of such ROFN Period.

(i)If Bayer delivers a Bayer Solicited Bid Notice for such Company Product to the Company during the applicable ROFN Period for such Company Product, Bayer will be considered a Bidding Party.  The Company will promptly deliver such Bayer Solicited Bid Notice to Arvinas. Notwithstanding anything to the contrary contained in the LLC Agreement, only the approval of the Applicable Managers will be required for the Company to undertake any Product Transfer for such Company Product, and the Bidding Party’s and the Bidding Party Manager’s approval, vote or consent will not be required for any Member or Board approval required for such Product Transfer (including the Requisite Majority and the Requisite Approval). Subject to compliance with the remainder of this Section 2.5(b)(i), the Applicable Managers will determine in good faith whether Bayer’s Bid in such Bayer Solicited Bid Notice is a Qualifying Offer for such Company Product. 

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(A)If such Bid is a Qualifying Offer, then the Applicable Managers may, in their discretion, (1) negotiate the terms of such Product Transfer with Bayer, (2) accept or reject such Bid, (3) begin a Bidding Process as provided for in Section 2.6 (which will provide Bayer with a Last Matching Right for such Bidding Process so long as Bayer had not provided a Formal Withdrawal with respect to such Product Transfer), and/or (4) in the event the ROFN Triggering Event is an Unsolicited Bid from a Third Party which is a Qualifying Offer, accept such Third Party Unsolicited Bid (which will provide Bayer with a Last Matching Right for such Third Party Unsolicited Bid so long as Bayer had not provided a Formal Withdrawal with respect to such Product Transfer).  If the Applicable Managers determine to accept Bayer’s Bid or negotiate the terms of such Product Transfer with Bayer, and the Applicable Managers are unable to agree to the terms of such Product Transfer within [**] following the Company’s receipt of such Bayer Solicited Bid Notice, then the Company may, at the instruction of the Applicable Managers, seek an independent valuation of such Company Product from a Valuation Firm (a “Third Party Valuation”) to determine the fair market value of such Company Product (assuming the Minimum Offer Terms for such Product Transfer, as adjusted by the terms in such Qualifying Offer that the Applicable Managers have accepted in principle) (the “FMV”) and the fair market value of such Qualifying Offer (“QOFMV”).  The Valuation Firm will prepare and deliver to the Company a written report which provides the FMV and QOFMV for such Company Product, with reasonable supporting detail (the “FMV Report”), within [**] of its engagement by the Company for such Third Party Valuation. The FMV Report will be delivered to the Investors and the Applicable Managers within [**] of the Company’s receipt thereof. If the FMV is determined to be higher than the QOFMV for such Company Product, Bayer will have a right to provide a revised Bid, which will be binding upon Bayer, to the Company (the “Revised FMV Bid”) that includes terms that provide for [**] (the “Required FMV Terms”).  Such right to provide a revised Bid is required to be exercised by Bayer by submitting a Revised FMV Bid to the Company within [**] of delivery of the FMV Report to Bayer (the “FMV Bid Period”). If there is any dispute with respect to whether such Revised FMV Bid satisfies such Required FMV Terms, such dispute will be referred to Baseball Arbitration.  If the ROFN Triggering Event is an Unsolicited Bid from a Third Party and the Applicable Managers determine to accept such Unsolicited Bid from such Third Party, the Company will provide Bayer a Superior Bid Notice and Bayer may exercise its Last Matching Right with respect to such Product Transfer, and, if properly exercised, Bayer’s revised Bid, which will be binding upon Bayer, will thereafter be the Superior Bid (the “LM Superior Bid”).  If there is any dispute with respect to whether Bayer’s revised bid is the Superior Bid, such dispute will be referred to Baseball Arbitration.  The Superior Bid will be (1) such Qualifying Offer if the Company does not seek a Third Party Valuation or the QOFMV is determined to be higher than the FMV, (2) the Revised FMV Bid if it satisfies the Required FMV Terms, (3) any Bid agreed to by Bayer and approved by the Applicable Managers, or (4) the LM Superior Bid.  There will be no Superior Bid if, as applicable: (1) Bayer does not provide a Revised FMV Bid during the FMV Bid Period or the Revised FMV Bid does not satisfy the Required FMV Terms, and thereafter the Company may take any action with respect to such Company Product free and clear of any Product Rights; provided, however, that Bayer will maintain its Last Matching Rights for such Company Product; or (2) Bayer does not properly exercise any applicable Last Matching Rights in the [**] period or Bayer’s revised Bid is not the Superior Bid and thereafter the Company may take any action with respect to such Company Product free and clear of any Product Rights; [**].

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(B)If such Bid is not a Qualifying Offer, then the Applicable Managers may, in their sole discretion, take any of the following actions with respect to such Company Product: (1) accept or reject such Bid; (2) negotiate the terms of such Product Transfer with Bayer; (3) begin a Bidding Process as provided for in Section 2.6 (which will provide Bayer with a Last Matching Right for such Bidding Process so long as Bayer had not provided a Formal Withdrawal with respect to such Product Transfer and such Bid was made by Bayer in good faith); or (4) have the Company continue to further Research, Develop and Commercialize the applicable Company Product free and clear of any Product Rights; [**].

(ii)If Bayer does not deliver a Bayer Solicited Bid Notice for such Company Product to the Company during the ROFN Period or Bayer otherwise provides written notice to the Company that it does not intend to make a Bid for such Company Product, the Company may take any action with respect to such Company Product free and clear of any Product Rights; [**].

2.6Bidding Process.  

(a)If a Bidding Process for a Company Product is to be initiated by the Company as provided for in Section 2.1(a)(ii), Section 2.3(a)(iii), Section 2.3(b)(iii), Section 2.5(b)(i)(A) and Section 2.5(b)(ii)(B), the Applicable Managers will identify the appropriate Third Parties from whom to solicit Bids, and may engage an investment banker to assist with identifying bidders and the Bidding Process generally, in each case with the goal of including as many bidders that are reasonably capable of providing Qualifying Offers in the Bidding Process as reasonably practicable. The Company will take such commercially reasonable efforts to ensure that the Bidding Process is robust and that identified Third Party bidders participate in such Bidding Process.  The Applicable Managers will determine in their reasonable discretion the timing and process for the solicitation of Bids for the Company Product from Third Parties (and Bayer, as applicable), [**].  A copy of each Qualifying Offer received from any bidder will be promptly delivered to the Applicable Managers upon receipt by the Company.  Upon receipt of all Qualifying Offers or on the expiration of the applicable submission time for the Bidding Process (the “Submission Date”), the Applicable Managers will evaluate the Qualifying Offers and determine which is the Superior Bid and the Winning Bid, if any. 

(b)If no Qualifying Offers are submitted to the Company and outstanding as of the Submission Date with respect to such Company Product, the Applicable Managers will terminate the Bidding Process and the Board will determine appropriate next steps with respect to such Company Product (unless otherwise agreed by the Board with the Requisite Approval).

(c)If more than one Qualifying Offer is submitted to the Company and outstanding as of the Submission Date with respect to such Company Product (and one such Qualifying Offer is submitted by Bayer or one of its Affiliates), if Bayer’s Qualifying Offer is not determined to be the Superior Bid and (i) Bayer has a Last Matching Right with respect to such Product Transfer, then the Company will provide Bayer the Superior Bid Notice and Bayer may exercise its Last Matching Right as provided for herein with respect to such Product Transfer, and, if properly exercised, Bayer’s revised Bid will thereafter be the LM Superior Bid, or (ii) otherwise (including if Bayer does not properly exercise any applicable Last Matching Right in the [**] period), Bayer will have no further rights to make a revised Bid; [**].  

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(d)If the only Qualifying Offer submitted to the Company and outstanding with respect to such Company Product is from Bayer or one of its Affiliates as of (i) the Submission Date, or (ii) [**] following the submission of a Bayer Unsolicited Bid Notice or a Bayer Solicited Bid Notice, as applicable (if a Bidding Process was initiated pursuant to Section 2.1(a)(ii), Section 2.3(a)(iii) or Section 2.5(b)(i)(A) for a Company Product that is at least a Field Candidate based on its Development stage), then the Company may, at the instruction of the Applicable Managers, seek a Third Party Valuation to determine the FMV and the QOFMV.  The Valuation Firm will prepare and deliver to the Company a FMV Report within [**] of its engagement by the Company for such Third Party Valuation. The FMV Report will be delivered to the Investors and the Applicable Managers within [**] of the Company’s receipt thereof.  If the FMV is determined to be higher than the QOFMV for such Company Product, Bayer will have a right to provide a Revised FMV Bid that includes the Required FMV Terms.  Such right to provide a revised Bid is required to be exercised by Bayer submitting a Revised FMV Bid to the Company within the FMV Bid Period.  If there is any dispute with respect to whether such Revised FMV Bid satisfies such Required FMV Terms, such dispute will be referred to Baseball Arbitration.  The Superior Bid will be (i) such Qualifying Offer if the Company does not seek a Third Party Valuation or the QOFMV is determined to be higher than the FMV, or (ii) the Revised FMV Bid if it satisfies the Required FMV Terms.  Notwithstanding the foregoing, there will be no Superior Bid if Bayer does not provide a Revised FMV Bid during the FMV Bid Period or the Revised FMV Bid does not satisfy the Required FMV Terms, in which case the Applicable Managers will terminate the Bidding Process and the Board will determine appropriate next steps with respect to such Company Product, [**]; provided, however, that Bayer will maintain its Last Matching Rights for such Company Product. 

(e)If at least one Qualifying Offer is submitted to the Company and outstanding as of the Submission Date with respect to such Company Product (and no such Qualifying Offer is submitted by Bayer or one or one of its Affiliates), then the Superior Bid will be determined by the Board (including the Requisite Approval), and the Company will provide Bayer the Superior Bid Notice (which will provide Bayer with a Last Matching Right for such Bidding Process so long as Bayer had not provided a Formal Withdrawal with respect to such Product Transfer) and (i) Bayer may exercise its Last Matching Right with respect to such Product Transfer, and, if properly exercised, Bayer’s revised Bid will thereafter be the LM Superior Bid or (ii) otherwise (including if Bayer does not properly exercise any Last Matching Right in the [**] period), Bayer will have no further rights to make a Bid; [**].

(f)The Company may accept the Superior Bid in a Bidding Process as the Winning Bid, but acceptance will not be required; provided, however, that the Company must accept an LM Superior Bid submitted by Bayer or one of its Affiliates or a Superior Bid submitted by Bayer or one of its Affiliates pursuant to Section 2.6(d).  Any acceptance of a Superior Bid hereunder will not be a breach of fiduciary duties so long as such Superior Bid is a Qualifying Offer (and in no event if the Winning Bid is from Bayer or one of its Affiliates) and no rejection of a Superior Bid hereunder will be a breach of fiduciary duties if such Superior Bid is not a Qualifying Offer.

(g)Following the acceptance of a Superior Bid (or the LM Superior Bid) as the Winning Bid, the Company will provide written notice of such Winning Bid to the Investors within [**] of acceptance.

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2.7Winning Bid.  The Company will close the Product Transfer (the “Product Closing”) with Bayer or the Third Party providing the Winning Bid (the “Winning Bidder”) as soon as practicable (a) following the determination of the Winning Bid or (b) following the satisfaction of the Antitrust Condition (if applicable to such Product Transfer) and any other approvals of any Governmental Authority applicable to such Product Transfer. The Winning Bidder and the Company will enter into a Product Transfer Agreement substantially on the terms as set forth in the Winning Bid, [**].  At the Product Closing, each Investor not a party to such transaction will use reasonable best efforts to assist the Company in completing such Product Transfer, including to require its designated Managers to approve such Product Transfer and any related transactions (if such approval is required).  In connection with any such Product Transfer, the Company and each Investor, as applicable, will comply with the covenants set forth in Exhibit B. If the Antitrust Condition is not satisfied, the Board will determine in its discretion the process for effecting an alternative transaction with respect to the applicable Product Transfer.

2.8Effect of Product Transfer.  If a Winning Bidder successfully effects a Product Closing, such Winning Bidder will, from and after the date of consummation of such Product Transfer, have the exclusive right to Research, Develop, Manufacture, use and/or Commercialize, as applicable, the applicable Company Product in its Licensed Field (with respect to such Company Product, an “Exclusive Field”), subject to and in accordance with the terms and conditions of the corresponding Product Transfer Agreement.  [**].

2.9Quorum; Approvals.  Notwithstanding anything to the contrary set forth in the LLC Agreement and as except as expressly provided for herein, (a) a majority of the Applicable Managers will constitute a quorum for the transaction of business of the Board as provided for herein and (b) the Board (and Applicable Managers) will act by vote (or written consent) of at least a majority of the Applicable Managers then in office on any matter under consideration by the Board (or Applicable Managers) as provided for herein.

Article III 
TERM; TERMINATION

3.1Agreement Term; Termination. This Agreement is effective as of the Effective Date and will terminate at the earliest to occur of (a) the end of the Term, (b) the Initial Public Offering, (c) a Change of Control, and (d) only with respect to Bayer’s Last Matching Rights, Bayer and/or its Affiliates ceasing to hold at least 30% of the fully-diluted equity securities in the Company (or a successor thereto). 

3.2Consequences of Expiration or Termination of the Agreement.

(a)If this Agreement terminates in accordance with Section 3.1, the Parties will no longer have any rights hereunder, including the Product Rights and the Last Matching Rights, and the rights hereunder shall not apply to any Transfer contemplated by Article VI of the Commitment Agreement.

(b)The following provisions of this Agreement will survive any termination of this Agreement: Section 3.2, Article IV and Article V.

Article IV 
CONFIDENTIALITY

4.1Confidentiality. All information provided to an Investor under this Agreement will be governed by the confidentiality provisions specified in Section 11.01 of the LLC Agreement, and such terms are hereby incorporated by reference.  For the avoidance of doubt, the terms, status and existence of any Bid or the Bidding Process will be considered Confidential Information of the Company.

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Article V 
GENERAL PROVISIONS

5.1Notices.  All notices, requests, consents, claims, demands, waivers and other communications hereunder will be in writing and will be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid.  Such communications must be sent to the respective parties at the following addresses (or at such other address for a Party as will be specified in a notice given in accordance with this Section 5.1):

 

	
If to the Company:
	
 
	
c/o Arvinas, Inc.

	
 
	
 
	
5 Science Park

	
 
	
 
	
395 Winchester Avenue

	
 
	
 
	
New Haven, CT 06511

	
 
	
 
	
Attention: Legal Department

	
 
	
 
	
 

	
with a copy to:
	
 
	
Goodwin Procter LLP

	
 
	
 
	
100 Northern Avenue

	
 
	
 
	
Boston, MA  02210

	
 
	
 
	
Attention:  Robert Puopolo; Jason Breen

	
 
	
 
	
Email: rpuopolo@goodwinlaw.com; 

	
 
	
 
	
jbreen@goodwinlaw.com

	
 
	
 
	
 

	
If to Bayer:
	
 
	
Bayer CropScience LP

	
 
	
 
	
c/o Bayer AG

	
 
	
 
	
Law, Patents & Compliance / M&A

	
 
	
 
	
Kaiser-Wilhelm-Allee, Building 20

	
 
	
 
	
51373 Leverkusen

	
 
	
 
	
Attention:  Dr. Christian Bank

	
 
	
 
	
Email:  christian.bank@bayer.com

	
 
	
 
	
 

	
with a copy to:
	
 
	
Orrick, Herrington & Sutcliffe LLP

	
 
	
 
	
1000 Marsh Rd

	
 
	
 
	
Menlo Park, CA 94025

	
 
	
 
	
Attention: Matthew Gemello

	
 
	
 
	
Email: mgemello@orrick.com

	
 
	
 
	
 

	
If to Arvinas:
	
 
	
c/o Arvinas, Inc.

	
 
	
 
	
5 Science Park

	
 
	
 
	
395 Winchester Avenue

	
 
	
 
	
New Haven, CT 06511

	
 
	
 
	
Attention: Legal Department

	
 
	
 
	
 

	
with a copy to:
	
 
	
Goodwin Procter LLP

	
 
	
 
	
100 Northern Avenue

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Boston, MA  02210

	
 
	
 
	
Attention:  Robert Puopolo; Jason Breen

	
 
	
 
	
Email: rpuopolo@goodwinlaw.com; jbreen@goodwinlaw.com

 

5.2Successors and Assigns.  Other than an assignment of this Agreement in connection with a Permitted COC Transfer (for which non written consent will be required), neither this Agreement nor any of the rights, interests or obligations hereunder will be assigned by a Party without the prior written consent of (a) in the case of an Investor, the other Investor and the Company, or (b) in the case of the Company, both Investors; provided, however, that an Investor may assign this Agreement to any of its Affiliate upon providing prior written notice to the Company and the other Investor (provided, that such Investor remains primarily liable for all obligations of such Affiliate following such assignment).  Subject to the prior sentence, this Agreement will be binding upon and will inure to the benefit of the Parties and their respective heirs, executors, administrators, successors and assigns.

5.3Severability.  If any term or provision of this Agreement is held to be invalid, illegal or unenforceable under Applicable Law in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the Parties will negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

5.4Fees and Expenses.  Except as otherwise expressly provided for herein, all costs and expenses, including fees and disbursements of counsel, financial advisors and accountants, incurred in connection with the preparation and execution of this Agreement, or any amendment or waiver hereof, and the transactions contemplated hereby will be paid by the Party incurring such costs and expenses.

5.5Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.  All issues and questions concerning the application, construction, validity, interpretation and enforcement of this Agreement will be governed by and construed in accordance with the internal laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of Delaware.  Except as expressly set forth herein, the Parties hereby agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby, whether in contract, tort or otherwise, will be brought in the United States District Court for the District of Delaware or in the Court of Chancery of the State of Delaware (or, if such court lacks subject matter jurisdiction, in the Superior Court of the State of Delaware), so long as one of such courts will have subject-matter jurisdiction over such suit, action or proceeding, and that any case of action arising out of this Agreement will be deemed to have arisen from a transaction of business in the State of Delaware.  Each of the Parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient form.  Service of process, summons, notice or other document by registered mail to the address set forth in Section 5.1 will be effective service of process for any suit, action or other proceeding brought in any such court. Each Party hereby acknowledges and agrees that any controversy which may arise under this Agreement is likely to involve complicated and difficult issues and, therefore, each such Party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Agreement or the transactions contemplated hereby.

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5.6Amendment.  No provision of this Agreement may be amended or modified, or compliance otherwise waived, except by a writing executed by the Parties.

5.7Extension; Waiver.  The failure of any Party to insist upon strict performance of a covenant hereunder or of any obligation hereunder, irrespective of the length of time for which such failure continues, will not be a waiver of such Party’s right to demand strict compliance herewith in the future. No consent or waiver, express or implied, to or of any breach or default in the performance of any obligation hereunder, will constitute a consent or waiver to or of any other breach or default in the performance of the same or any other obligation hereunder.  Any agreement on the party of a Party to any extension or waiver will be valid only if set forth in a written instrument signed on behalf of the Party against which such waiver or extension is to be enforced.  Waiver of any term or condition of this Agreement by a Party will not be construed as a waiver of any subsequent breach or waiver of the same term or condition by such Party, or a waiver of any other term or condition of this Agreement by such Party.

5.8No Agreement Until Executed.  Irrespective of negotiations among the Parties or the exchanging of drafts of this Agreement, this Agreement will not constitute or be deemed to evidence a contract, agreement, arrangement or understanding among the Parties unless and until this Agreement is executed and delivered by the Parties.

5.9Equitable Remedies.  Each Party acknowledges that a breach or threatened breach by such Party of any of its obligations under this Agreement would give rise to irreparable harm to the other Parties, for which monetary damages would not be an adequate remedy, and hereby agrees that in the event of a breach or a threatened breach by such Party of any such obligations, each of the other Parties will, in addition to any and all other rights and remedies that may be available to them in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance and any other relief that may be available from a court of competent jurisdiction (without any requirement to post bond).

5.10Remedies Cumulative.  The rights and remedies under this Agreement are cumulative and are in addition to and not in substitution for any other rights and remedies available at law or in equity or otherwise.

5.11Entire Agreement.

(a)This Agreement, together with all related Exhibits, constitutes the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein and therein, and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter.

(b)In the event of an inconsistency or conflict between the provisions of this Agreement and any provision of another Transaction Document or LLC Agreement with respect to the subject matter of such Transaction Document or LLC Agreement, the Applicable Managers will attempt to resolve such conflict in its sole discretion.

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5.12Interpretation.  For purposes of this Agreement:  (a) the words “include,” “includes” and “including” will be deemed to be followed by the words “without limitation”; (b) the word “or” is not exclusive; (c) the words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this Agreement as a whole; and (d) the words “will” and “shall” are to be interpreted as having the same meaning.  The definitions given for any defined terms in this Agreement will apply equally to both the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun will include the corresponding masculine, feminine and neuter forms.  Unless the context otherwise requires, references herein:  (x) to Articles, Sections and Exhibits mean the Articles and Sections of, and Exhibits attached to, this Agreement; (y) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof; and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder.  This Agreement will be construed without regard to any presumption or rule requiring construction or interpretation against the Party drafting an instrument or causing any instrument to be drafted.  The Exhibits referred to herein will be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein.  The word “dollar” or symbol “$” refer to the lawful currency of the United States of America. The headings in this Agreement are inserted for convenience or reference only and are in no way intended to describe, interpret, define, or limit the scope, extent or intent of this Agreement or any provision of this Agreement in accordance herewith. 

5.13Counterparts.  This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of Electronic Transmission will be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

5.14Dispute Resolution.  Without limitation of the choice of law and jurisdiction of Section 5.5, except as expressly provided for herein (including disputes to be resolved using Baseball Arbitration), the Parties hereby agree that controversies or claims arising out of or relating to this Agreement, or the interpretation, performance, breach, termination or validity thereof, will be escalated in accordance with the escalation procedure set forth in Section 8.14 of the LLC Agreement (mutatis mutandis); provided, however, if such dispute is not resolved within the [**] period set forth therein, then such dispute will resolved in accordance with Section 5.5.

5.15Further Assurances.  In connection with this Agreement and the transactions contemplated hereby, each Party hereby agrees to execute and deliver such additional documents, instruments, conveyances and assurances and to take such further actions as may be required to carry out the provisions hereof and give effect to the transactions contemplated hereby.

5.16No Third-Party Beneficiaries.  This Agreement is for the sole benefit of the Parties (and their respective heirs, executors, administrators, successors and assigns) and nothing herein, express or implied, is intended to or will confer upon any other Person, including any creditor of the Company, any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

[SIGNATURE PAGE FOLLOWS]

 

 

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IN WITNESS WHEREOF, the Parties have executed this Option Agreement as of the date first set forth above.

 

	
COMPANY:
	
 
	
PROTAG LLC

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
 
	
/s/ Sean Cassidy

	
 
	
 
	
Name:
	
 
	
Sean Cassidy

	
 
	
 
	
Title:
	
 
	
Authorized Signatory

 

 

 

[SIGNATURE PAGE TO OPTION AGREEMENT]

 

 

	
ARVINAS:
	
 
	
ARVINAS OPERATIONS, INC.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
 
	
/s/ Sean Cassidy

	
 
	
 
	
Name:
	
 
	
Sean Cassidy

	
 
	
 
	
Title:
	
 
	
CFO & Treasurer

 

 

 

[SIGNATURE PAGE TO OPTION AGREEMENT]

 

 

	
BAYER:
	
 
	
BAYER CROPSCIENCE LP

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
 
	
/s/ Brian Branca

	
 
	
 
	
Name:
	
 
	
Brian Branca

	
 
	
 
	
Title:
	
 
	
Treasurer

 

 

 

[SIGNATURE PAGE TO OPTION AGREEMENT]

 

 

[SIGNATURE PAGE TO OPTION AGREEMENT]arvn-ex104_144.htm

 

Exhibit 10.4

 

Certain identified information has been excluded from the exhibit because it is both (i) not material and (ii) would likely cause competitive harm to the Company, if publicly disclosed.  

Double asterisks denote omissions.

 

ARVINAS IP Contribution AGREEMENT

This ARVINAS IP CONTRIBUTION AGREEMENT (this “Contribution Agreement”) is entered into as of July 16, 2019 (the “Effective Date”) by and between Protag LLC, a limited liability company organized under the laws of Delaware (“Company”), and Arvinas Operations, Inc., a corporation organized under the laws of Delaware (“Arvinas”).  Company and Arvinas are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

RECITALS

WHEREAS, pursuant to that certain Commitment Agreement dated as of June 3, 2019 (as amended, restated and/or otherwise modified from time to time, the “Commitment Agreement”), Bayer CropScience LP has committed to contribute certain cash and in-kind capital contributions and Arvinas has committed to contribute certain in-kind capital contributions to Company;

WHEREAS, Arvinas possesses certain Know-How and Patents (as defined below) and expertise in the field of targeted degradation of proteins for multiple applications; and

WHEREAS, Arvinas desires to license the Arvinas Contributed IP (as defined below) to Company in furtherance of the transactions contemplated by the Commitment Agreement in accordance with this Contribution Agreement.

NOW, THEREFORE, in consideration of the respective covenants, representations, warranties and agreements set forth herein, the Parties hereto agree as follows:

ARTICLE 1.

DEFINITIONS

For purposes of this Contribution Agreement, the following capitalized terms will have the following meanings:

1.1“Action” means any claim, action, cause of action, chose in action or suit (whether in contract or tort or otherwise), litigation (whether at law or in equity, whether civil or criminal), controversy, assessment, arbitration, examination, audit, investigation, hearing, charge, complaint, demand, notice or proceeding to, from, by or before any Governmental Authority or arbitrator(s).

1.2“ADME/PK” means absorption, distribution, metabolism, excretion and pharmacokinetics, as describing the disposition of a compound and any of its derivatives within an organism.

1.3“Affiliate” has the meaning assigned to such term in the LLC Agreement.  For the purposes of this Contribution Agreement, (a) neither Arvinas nor any of its Affiliates shall be considered an Affiliate of the Company or any of its Affiliates, and neither the Company nor any of its Affiliates shall be considered an Affiliate of Arvinas or any of its Affiliates, simply by virtue of this Contribution Agreement, and (b) no Person shall be considered an Affiliate of a Party solely as a result of their right to designate a member of such Party’s board of directors.

 

ACTIVE/98422684.12

 

1.4“Arvinas Assay IP” means any and all Know-How and Patents Controlled by Arvinas or any of its Affiliates as of the Effective Date or during the Term that (a) claim or Cover ADME/PK assays and/or data analysis directed at PROTAC characterization and/or predictions, and (b) are necessary or reasonably useful for the Research, Development, Manufacture, use or Commercialization of Company Products in the Field.

1.5“Arvinas Background IP” means, collectively, the Arvinas Assay IP, Arvinas Ligase IP, Arvinas Linker IP, Arvinas PROTAC IP and Arvinas Target IP.  For clarity, Arvinas Background IP includes all Improvements to Arvinas Background IP Controlled by Arvinas pursuant to Section 2.2(b)(ii) of the IPMA.

1.6“Arvinas Contributed IP” means all Arvinas Background IP.

1.7“Arvinas Ligase IP” means any and all Know-How and Patents Controlled by Arvinas or any of its Affiliates as of the Effective Date or during the Term that (a) claim or Cover (i) ubiquitin ligases or (ii) Ubiquitin Ligase Binding Moieties as independent components of protein degrader compositions, and (b) in each case of (i) and (ii), are necessary or reasonably useful for the Research, Development, Manufacture, use or Commercialization of Company Products in the Field.

1.8“Arvinas Linker IP” means any and all Know-How and Patents Controlled by Arvinas or any of its Affiliates as of the Effective Date or during the Term that (a) claim or Cover Linkers as independent components of protein degrader compositions, and (b) are necessary or reasonably useful for the Research, Development, Manufacture, use or Commercialization of Company Products in the Field.

1.9“Arvinas PROTAC IP” means any and all Know-How and Patents Controlled by Arvinas or any of its Affiliates as of the Effective Date or during the Term that (a) claim or Cover PROTACS, and (b) are necessary or reasonably useful for the Research, Development, Manufacture, use or Commercialization of Company Products in the Field, including for clarity the Licensed Yale IP.

1.10“Arvinas Target IP” means any and all Know-How and Patents Controlled by Arvinas or any of its Affiliates as of the Effective Date or during the Term that (a) claim or Cover (i) Targets or (ii) Target Binding Moieties as independent components of protein degrader compositions, and (b) in each case of (i) and (ii), are necessary or reasonably useful for the Research, Development, Manufacture, use or Commercialization of Company Products in the Field.

1.11“Bayer” means Bayer CropScience LP and any successor thereto.

1.12“Bayer IPCA” means that certain Bayer IP Contribution Agreement by and among Bayer and Company of even date herewith.

1.13“Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in any of (a) New Haven, Connecticut or (b) Leverkusen, Germany are authorized or required to close.

1.14“Commercialize” or “Commercializing” means to market, promote, distribute, offer for sale, sell, have sold, use, import, have imported, export, have exported or otherwise commercialize a compound or product.  When used as a noun, “Commercialization” means any and all activities involved in Commercializing.

1.15“Company Foreground IP” means such Foreground IP that is neither Improvements to Arvinas Background IP nor Improvements to Bayer Background IP.

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1.16“Company IP” means, collectively, (a) all Company Foreground IP, and (b) any other Know-How and Patents Controlled after the Effective Date and during the Term by Company or any of its Affiliates that are necessary or reasonably useful for the Research, Development, Manufacture, use or Commercialization of Company Products in the Field.

1.17“Company Ligase IP” means that subset of Company IP that exclusively relates to (a) ubiquitin ligases or (b) Ubiquitin Ligase Binding Moieties as independent components and not the Company Products themselves.

1.18“Company Linker IP” means that subset of Company IP that exclusively relates to Linkers as independent components and not the Company Products themselves.

1.19“Company Product” means, with respect to a specific Target, a PROTAC whose primary mechanism of action by design is the binding to and degradation of such Target.

1.20“Company Target IP” means that subset of Company IP that exclusively relates to (a) Targets and (b) Target Binding Moieties as independent components and not the Company Products themselves.

1.21“Control” or “Controlled” means, with respect to any Know-How, Patents and other intellectual property rights, possession by a Party of the power and authority, whether arising by ownership or by license or other authorization, to grant and authorize the licenses or sublicenses, as applicable, under such Know-How, Patents and other intellectual property rights of the scope granted to the other Party in this Agreement at the time such Party would be required hereunder to grant the other Party such license or sublicense, without violating the terms of any agreement or other arrangement with any Third Party existing at the time such Party would be first required hereunder to grant and authorize such license or sublicense.  Notwithstanding anything in this Contribution Agreement to the contrary, a Party will be deemed to not Control any Know-How, Patents or other intellectual property rights that are owned or controlled by a Third Party described in the definition of “Change of Control,” or such Third Party’s Affiliates (other than an Affiliate of such Party prior to the Change of Control), (a) prior to the closing of such Change of Control, except to the extent that any such Know-How, Patents or other intellectual property rights were developed prior to such Change of Control through the use of such Party’s technology, or (b) after such Change of Control to the extent that such Know-How, Patents or other intellectual property rights are developed or conceived by such Third Party or its Affiliates (other than such Party) after such Change of Control without using or incorporating such Party’s technology.

1.22“Covers” (including variations such as “Covered”, “Covering” and the like) means, with respect to a Patent and a product, that the manufacture, use, sale, offer for sale or importation of such product in a country would infringe a Valid Claim of such Patent in such country.

1.23“Develop” or “Developing” means to develop a process, compound or product, including work comprising the following activities: conducting preliminary formulation activities for field testing, producing field test materials for such testing (meeting minimum requirements for field handling, handling properties, stability, use rate, quality control, safety), performing field testing (including physiological and soil analysis, formulation (prototype development and field validation, formulation optimization) and field trials (demonstration of biological efficacy of a Company Product for expected phenotype compared to control treatments and reproduced for multiple genetics/geographies (in view of defining the business case))), developing commercial formulations (as included in the regulatory dossier, fully compatible with other active components), completing toxicity studies needed to obtain regulatory approval for a Company Product, and dossier generation and submission for regulatory approval.  When used as a noun, “Develop” means any and all activities involved in Developing.

3

 

1.24“Effective Date” has the meaning set forth in the first paragraph.

1.25“Field” means any and all agricultural purposes.

1.26“Foreground IP” means any and all Know-How developed, conceived, first reduced to practice or otherwise made by or on behalf of Company or any of its Affiliates, whether solely or jointly (including by or with any subcontractor), in connection with the Research, Development, Manufacture, use or Commercialization of Company Products in the Field, including any and all Patents claiming, and other intellectual property rights in and to, such Know-How.

1.27“Governmental Authority” means any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of law), or any arbitrator, court or tribunal of competent jurisdiction.

1.28“Improvements to Arvinas Background IP” means that subset of Foreground IP that is an adaptation, enhancement, modification, and/or improvement of any Arvinas Background IP, wherein the making, using, selling, offering for sale, or importation or exploitation of the same would infringe one or more issued claims of Patents within the Arvinas Background IP (or would have infringed such issued claims while in effect), but excluding the Company Products themselves.

1.29“Improvements to Bayer Background IP” means that subset of Foreground IP that is an adaptation, enhancement, modification, and/or improvement of any Bayer Background IP, wherein the making, using, selling, offering for sale, or importation or exploitation of the same would infringe one or more issued claims of Patents within the Bayer Background IP (or would have infringed such issued claims while in effect), but excluding the Company Products themselves.

1.30“In-License Agreement” means, when used for Arvinas, an agreement with a Third Party licensor under which Arvinas or any of its Affiliates obtains Control of any Arvinas Background IP, and, when used for Company, an agreement with a Third Party licensor under which Company or any of its Affiliates obtains Control of any Company IP.

1.31“IPMA” means that certain IP Management Agreement by and among the Company, Arvinas and Bayer of even date herewith.

1.32“Know-How” means all proprietary information, inventions (whether or not patentable), improvements, practices, formulae, trade secrets, techniques, methods, procedures, knowledge, results, test data (including related reports, structure-activity relationship data and statistical analysis), analytical and quality control data, protocols, processes, models, designs, computational processes, and other information regarding discovery, development, marketing, pricing, distribution, cost, sales and manufacturing.  Know-How shall not include any Patent or any information disclosed in a published Patent.

1.33“Licensed Field” has the meaning set forth in the Option Agreement.

1.34“Licensed Yale IP” means any and all Know-How and Patents licensed to Arvinas by Yale University pursuant to the Yale Agreement included in the Arvinas Background IP.

1.35“Linker” means any linker that attaches the Ubiquitin Ligase Binding Moiety and the Target Binding Moiety.

4

 

1.36“LLC Agreement” means that certain Amended and Restated Limited Liability Company Agreement by and among the Company, Arvinas and Bayer  dated as of June 3, 2019 (as amended, restated and/or otherwise modified from time to time).

1.37“Manufacture” or “Manufacturing” means to make, have made, produce, manufacture, process, fill, finish, package, label, perform quality assurance testing, release, ship or store a compound or product or any component thereof.  When used as a noun, “Manufacture” or “Manufacturing” means any and all activities involved in Manufacturing a compound or product or any component thereof.

1.38“Option Agreement” means that Option Agreement by and among Company, Bayer and Arvinas entered into on the date of the Closing, as amended, restated and/or otherwise modified from time to time.

1.39“Party” or “Parties” has the meaning set forth in the first paragraph.

1.40“Patent(s)” means any and all patents and patent applications and any patents issuing therefrom or claiming priority to, worldwide, together with any extensions (including patent term extensions and supplementary protection certificates) and renewals thereof, reissues, reexaminations, substitutions, confirmation patents, registration patents, invention certificates, patents of addition, renewals, divisionals, continuations, and continuations-in-part of any of the foregoing.

1.41“Product Transfer Agreement” has the meaning set forth in the Option Agreement.

1.42“PROTAC” means a molecule that contains a Target Binding Moiety and an Ubiquitin Ligase Binding Moiety, linked together via a Linker or chemical bond, and whose primary mechanism of action by design is the degradation of the protein target(s) of such Target Binding Moiety.

1.43“Research” means to identify, research or discover a process, compound or product, including work comprising the following activities: chemical synthesis, chemical optimization, developing in vitro screening assays and model plant assays, generating genetic tools for Company Product candidates, conducting comparative genomics on a structural and functional level, cloning and expression of genes and pathways, engineering cellular functions in view of use case, enzyme design and analytics, and testing the performance of a Company Product in model plants.  When used as a noun, “Research” means any and all activities involved in Researching.

1.44“Sublicense” means to sublicense, grant any other right with respect to, or agree not to assert, directly or indirectly, any Know-How or Patents licensed to a Party under this Contribution Agreement.  When used as a noun, “Sublicense” means any agreement to Sublicense.

1.45“Sublicensee” means any Third Party other than an Affiliate to whom a Party or an Affiliate of such Party grants a Sublicense.

1.46“Target” means any protein identified by its UniProt number, including all splice variants, mutants, natural variants, etc. reasonably associated with such UniProt number that could serve as a molecular target for a PROTAC.

1.47“Target Binding Moiety” means a moiety that binds to a Target and, for clarity, does not include a Linker or an Ubiquitin Ligase Binding Moiety.

1.48“Territory” means all countries of the world.

5

 

1.49“Third Party” means any entity other than Arvinas or Company or an Affiliate of either.

1.50“Third Party Obligations” means any non-financial encumbrances, obligations, restrictions, or limitations imposed by an In-License Agreement, including field or territory restrictions, covenants, diligence obligations or limitations pertaining to prosecution or enforcement of intellectual property rights.

1.51“Ubiquitin Ligase Binding Moiety” means a moiety that binds to an ubiquitin ligase complex.

1.52“Valid Claim” means, with respect to a particular country, a claim of an issued and unexpired Patent that has not been (a) rejected, revoked or held to be invalid, unenforceable or unpatentable by a court or other authority of competent jurisdiction, from which decision no appeal can be further taken, or (b) finally abandoned, disclaimed or admitted to be invalid, unenforceable or unpatentable, including through reissue or disclaimer.  In order to be a Valid Claim, any claim being prosecuted in a pending patent application must be prosecuted in good faith and not have been pending for more than [**] from the filing date of the first utility patent application (or equivalent concept in any such country) in the patent application family of such patent application in the country in question, in which case it will cease to be considered a Valid Claim unless such patent application issues as a patent reciting said claim and such patent otherwise satisfies this definition.

1.53“Yale Agreement” means that certain License Agreement between Yale University and Arvinas dated as of July 5, 2013, as previously amended as of May 8, 2014, October 23, 2014, April 1, 2015, September 30, 2015, December 19, 2018 and June 3, 2019.

1.54“Yale Letter Agreement” means that letter agreement between Yale University and Arvinas, dated as of June 3, 2019, and attached hereto as Schedule 1.54.

1.55The following terms will have the meanings defined in the Section of this Contribution Agreement or such other agreement as indicated.  Unless otherwise noted, the indicated Section refers to the appropriate Section of this Contribution Agreement.

 

		
	
Term
	
Where defined

	
Applicable Field
	
Section 1.1 of the Commitment Agreement

	
Applicable Law
	
Section 1.01 of the LLC Agreement

	
Arvinas
	
first paragraph

	
Bankrupt Party
	
Section 9.2.5

	
Bayer Background IP
	
Article 1 of the Bayer IPCA

	
Change of Control
	
Section 1.01 of the LLC Agreement

	
Closing
	
Section 1.1 of the Commitment Agreement

	
Commitment Agreement
	
first recital

	
Company
	
first paragraph

	
Effective Date
	
first paragraph

	
Electronic Transmission
	
Section 9.2.12

	
Exclusivity Research Exception
	
Section 1.1 of the Commitment Agreement

	
Existing Arvinas In-License Agreements
	
Section 2.1.5(a)(i)

	
Grantback Ex-Ag Field
	
Section 2.2.1

	
Initial Purpose
	
Section 1.01 of the LLC Agreement

	
Party(ies)
	
first paragraph

	
Permitted COC Transfer
	
Section 1.01 of the LLC Agreement

6

 

		
	
Term
	
Where defined

	
Person
	
Section 1.01 of the LLC Agreement

	
Term 
	
Section 1.01 of the LLC Agreement

	
Transaction Documents
	
Section 1.1 of the Commitment Agreement

 

ARTICLE 2.

LICENSE GRANTS

2.1License Grants to Company.

2.1.1License Grant to Arvinas Background IP.  Subject to the terms of this Contribution Agreement, Arvinas hereby grants to Company an irrevocable (except as specified in the Commitment Agreement), worldwide, royalty-free, fully paid-up, transferable (in accordance with Section 8.1): 

(a)exclusive (even as to Arvinas and its Affiliates) and sublicenseable (solely as permitted by Section 2.1.3), license under the Arvinas PROTAC IP, Arvinas Ligase IP and Arvinas Linker IP to Research, Develop, Manufacture, use and Commercialize Company Products in the Field; provided, however, that, Arvinas retains for itself and its Affiliates the non-exclusive, non-sublicenseable right to practice the foregoing Arvinas PROTAC IP, Arvinas Ligase IP and Arvinas Linker IP for the activities permitted under the Exclusivity Research Exception;

(b)non-exclusive and sublicenseable (solely as permitted by Section 2.1.3), license under the Arvinas Target IP to Research, Develop, Manufacture, use and Commercialize Company Products in the Field; and

(c)non-exclusive and non-sublicenseable license under the Arvinas Assay IP to Research, Develop, Manufacture, use and Commercialize Company Products in the Field.

2.1.2Acknowledgement.  Each of Arvinas and Company hereby acknowledge and agree that the licenses to Company of the Arvinas Contributed IP pursuant to Section 2.1.1 of this Contribution Agreement are intended to be treated as a contribution of property pursuant to 26 U.S. Code §721.

2.1.3Sublicenses.

(a)Company may grant a sublicense of its rights to the Arvinas PROTAC IP, Arvinas Ligase IP, Arvinas Linker IP and Arvinas Target IP, under the license grants to Company of Section 2.1.1 only in the following circumstances and to the following entities:

(i)to Research and Develop any Company Product in the Applicable Field for such Company Product to a subcontractor assisting Company or its Affiliates in performing Company’s Research and Development of such Company Product;

(ii)solely as necessary to Manufacture a Company Product in support of Company’s or its Affiliates’ Research and Development, use or Commercialization of such Company Product in the Applicable Field for such Company Product; and

(iii)to a distributor or importer assisting Company or its Affiliates in its Commercialization of any Company Product in the Applicable Field for such Company Product.

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(b)Under a Product Transfer Agreement and provided Company is licensing Know-How and Patents it Controls (other than Know-How or Patents licensed to it under this Contribution Agreement or the Bayer IPCA) in the same transaction, Company may grant a sublicense of its rights to the Arvinas PROTAC IP, Arvinas Ligase IP, Arvinas Linker IP and Arvinas Target IP, under the license grants to Company of Section 2.1.1, (i) to Bayer or one of its Affiliates or (ii) to a Third Party, in each case of (i) and (ii), to Research, Develop, Manufacture, use and Commercialize the Company Product that is the subject of such Product Transfer Agreement in the Licensed Field.

(c)Each such Sublicense granted pursuant to Section 2.1.3(a) or 2.1.3(b) will be subject and subordinate to, and consistent with, the terms and conditions of this Contribution Agreement and will require each Sublicensee thereunder to comply with all applicable terms of this Contribution Agreement and Third Party Obligations under Arvinas’ In-License Agreements for any in-licensed Arvinas Background IP being sublicensed.  Further, with respect to each sublicense granted by Company pursuant to Section 2.1.3(b), Company will, as soon as reasonably practicable thereafter, provide Arvinas with a copy of any such executed sublicense agreement.  Notwithstanding the grant of any Sublicense, Company shall remain primarily liable to Arvinas for the performance of all of Company’s obligations under, and Company’s compliance with all provisions of, this Contribution Agreement.

2.1.4License Conditions.  Company hereby acknowledges and agrees that its rights and obligations hereunder, including its rights pursuant to Sections 2.1.1 and 2.1.3 are subject to and limited by Third Party Obligations of any In-License Agreements for Know-How or Patents within the Arvinas Background IP, including, with respect to the Licensed Yale IP, the terms and conditions of Schedule 2.1.4.

2.1.5In-Licenses; Third Party Payments.

(a)In-License Agreements.

(i)Except as set forth on Schedule 2.1.5(a)(i), as of the Effective Date, Arvinas is not a party to any In-License Agreement for Know-How or Patents included within the Arvinas Background IP existing as of the Effective Date (the “Existing Arvinas In-License Agreements”).

(ii)Subject to Section 2.1.5(b)(ii) below, in the event that, after the Effective Date, Arvinas seeks to in-license Know-How or Patents that would be deemed Arvinas Background IP for purposes of the licenses granted to Company under Section 2.1.1, Arvinas will use commercially reasonable efforts to obtain under the corresponding In-License Agreements the right to sublicense such Know-How and Patents to Company as part of the Arvinas Background IP.

(b)Third Party Payments under In-License Agreements.

(i)Subject to Section 4.4 hereof and to Section 3 of Schedule 2.1.4, Arvinas will be responsible for all payments associated with any Existing Arvinas In-License Agreements as a result of the grant to, and exercise by, Company of the licenses under Section 2.1.1.

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(ii)In the event that, after the Effective Date, Arvinas in-licenses Know-How or Patents that would be deemed Arvinas Background IP for purposes of the licenses granted to Company under Section 2.1.1 but for Arvinas owing payments or other consideration under the corresponding In-License Agreement for such Know-How or Patents, Arvinas will notify Company of the existence of and anticipated amounts of such payments and Company will have the right to decline a sublicense to such in-licensed Know-How or Patents or take such a sublicense.  If Company elects to take such a sublicense, Company agrees to comply with any obligations of Arvinas, under any such In-License Agreement with respect to such Know-How or Patents, that apply to Company and of which Company was informed by Arvinas, including any obligation to make such payments.  Further, in the event Company elects to take such a sublicense, Company will make such payments, or deliver such other consideration as may be mutually agreed to between Arvinas and Company, within [**] of receiving an invoice from Arvinas for the same.

2.2Company License Grants.

2.2.1Subject to the terms of this Contribution Agreement, Company hereby grants to Arvinas a royalty-free, fully paid-up, worldwide, transferable (in accordance with Section 8.1), sublicenseable (through multiple tiers and without Company’s prior consent), non-exclusive license under the Company IP (other than the subset thereof licensed by Bayer to Company under the Bayer IPCA) for the Research, Development, Manufacture, use and Commercialization of products outside of the Field (the “Grantback Ex-Ag Field”); provided, however, that, for any such Company IP that is in-licensed by Company, if Company’s rights are for a field that includes the Grantback Ex-Ag Field and to the extent permitted under the terms of the corresponding In-License Agreement therefor and subject to Arvinas’ compliance with the rest of this Section 2.2.1, then Company hereby grants to Arvinas a non-exclusive, worldwide, transferable (in accordance with Section 8.1), sublicenseable, sublicense in and to such in-licensed Company IP for any and all purposes in the Grantback Ex-Ag Field; but, further provided that, Arvinas will have the right to decline any such sublicense grant in writing to Company and, if Arvinas does not so decline, then Arvinas hereby agrees to comply with any obligations of Company under any such In-License Agreement with respect to such in-licensed Company IP that apply to Arvinas and of which Arvinas was informed by Company, including any obligation to make payments for Arvinas’ use of the same in the Grantback Ex-Ag Field, and to make such payments (or deliver such other consideration as may be mutually agreed to between Company and Arvinas) to Company within [**] of receiving an invoice from Company for the same.

2.2.2In the event after the Effective Date Company elects to in-license Know-How or Patents that would be Company IP, Company will use commercially reasonable efforts to obtain in the corresponding In-License Agreement therefor all of the sublicense rights set forth above in Section 2.2.1 as well as an unrestricted right to assign its rights and obligations under any such In-License Agreement to an Affiliate or to a successor to substantially all of the business to which such In-License Agreement relates, whether in a merger, sale of stock, sale of assets, reorganization or other transaction.  Company will not renegotiate or agree to any amendment of any of its In-License Agreements that would adversely affect any sublicense or assignment rights of Company under such In-License Agreements without Arvinas’ and Bayer’s express prior written consent or adversely affect any rights of Arvinas or Bayer then existing under such In-License Agreements without the express prior written consent of Arvinas or Bayer, as applicable.

2.3No Implied Licenses.  All rights in and to Arvinas’ and its Affiliates’ Know-How, Patents and other intellectual property rights not expressly licensed to Company under this Contribution Agreement are hereby retained by Arvinas or its Affiliates, as applicable.  All rights in and to any Know-How, Patents and other intellectual property rights of Company and its Affiliates not expressly licensed to Arvinas under this Contribution Agreement are hereby retained by Company or its Affiliates, as applicable.  Except as expressly provided in this Contribution Agreement, no Party will be deemed by estoppel or implication to have granted the other Party any licenses or other right with respect to any of such Party’s Know-How, Patents and other intellectual property rights.

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ARTICLE 3.

INTELLECTUAL PROPERTY MATTERS

3.1Intellectual Property Matters.  Subject to the rights and licenses granted herein, the rights and obligations of the Parties with respect to the ownership of, prosecution and maintenance, and enforcement of Know-How and Patents arising under the activities performed in the exercise of rights licensed or retained under this Contribution Agreement will be governed by the IPMA.

3.2No Other Rights.  Except as otherwise expressly provided in this Contribution Agreement or the IPMA, under no circumstances will a Party or any of its Affiliates, as a result of this Contribution Agreement, obtain any ownership interest, license or other right in or to any Know-How, Patents or other intellectual property rights of the other Party, including tangible or intangible items owned, controlled or developed by such other Party, or provided by such other Party to such Party at any time, pursuant to this Contribution Agreement.  Neither Party nor any of its Affiliates will use or practice any Know-How, Patents or other intellectual property rights licensed or provided to such Party or any of its Affiliates outside the scope of or otherwise not in compliance with the rights and licenses granted to such Party and its Affiliates under this Contribution Agreement, except to the extent the same is otherwise available to the public through no fault or breach of a Party obligated to keep confidential such publicly available Know-How or other intellectual property rights.

3.3Unauthorized Use of Arvinas Contributed IP.  Company will institute reasonable procedures to prevent the Arvinas Contributed IP from being used, practiced, sublicensed or otherwise exploited outside of the Research, Development, Manufacture, use and Commercialization of Company Products in the Field.  After receiving notice from Arvinas alleging a specific breach, Company will investigate (with Arvinas having the right to participate in such investigation) the use of the Arvinas Contributed IP, and if Company identifies any unauthorized use of the Arvinas Contributed IP, Company will immediately cease, and will cause to immediately be ceased, such use, and will implement, and will cause to be implemented, reasonable procedures to prevent such unauthorized use of the Arvinas Contributed IP in the future.

ARTICLE 4.

REPRESENTATIONS AND WARRANTIES

4.1Representations and Warranties of the Parties.  Each of Arvinas and Company hereby represents and warrants to the other as of the Effective Date that:

4.1.1It is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation.

4.1.2It (a) has the requisite power and authority and the legal right to enter into this Contribution Agreement and to perform its obligations hereunder and (b) has taken all requisite action on its part to authorize the execution and delivery of this Contribution Agreement and the performance of its obligations hereunder.

4.1.3It has the requisite resources and expertise to perform its obligations hereunder.

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4.1.4The execution, delivery and performance of this Contribution Agreement by it (a) constitutes a legal, valid and binding obligation, enforceable against it in accordance with the terms hereof, except to the extent that the enforceability may be affected by bankruptcy, insolvency, and other laws of general application affecting the enforcement of creditors’ rights and by general principles of equity that may limit the availability of equitable remedies, and (b) will not constitute a default under or conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it is bound, or violate any law or regulation of any court, governmental body or administrative or other agency having jurisdiction over it.

4.1.5It has obtained all necessary consents, approvals and authorizations of all Governmental Authorities and other Persons or entities required to be obtained by it in connection with the execution and delivery of this Contribution Agreement.

4.2Additional Representations and Warranties of Arvinas.  Arvinas hereby further represents and warrants to Company, as of the Effective Date, that, except as otherwise set forth on Schedule 4.2:

4.2.1Schedule 4.2.1 sets forth a true, correct and complete list of all patents and patent applications within the Arvinas Background IP, as of the Effective Date, indicating for each such patent and patent application whether it is the subject of a registration or application issued, filed with, or recorded by any Governmental Authority, and specifying, where applicable, the jurisdiction in which such patent Controlled by Arvinas have been issued or registered or in which jurisdiction such patent application Controlled by Arvinas for such issuance and registration has been filed, including, as applicable, the respective registration and application numbers, the names of all registered owners or applicants, and the filing dates and, if applicable, issue dates.

4.2.2With respect to the patents and patent applications within the Arvinas Background IP for which Arvinas controls prosecution and maintenance, Arvinas has (a) to the knowledge of Arvinas, complied with all Applicable Laws in connection with the prosecution and maintenance of such patents and patent applications, and (b) timely paid all filing, issuance, maintenance and renewal fees payable for such patents and patent applications.  Arvinas or one of its Affiliates has obtained an assignment from each inventor of the inventions claimed by the Arvinas-owned patents and patent applications within the Arvinas Background IP, and all such assignments have been recorded with the Governmental Authority where such patents have issued or patent applications have been filed.

4.2.3Arvinas owns or has the right to use the Arvinas Background IP existing as of the Effective Date, except as set forth in Schedule 4.2.3, free and clear of any liens, charges and encumbrances (other than licenses granted to Third Parties that are not inconsistent with the rights and licenses granted to Company hereunder and other than the licenses granted to Company hereunder); provided, however, that the foregoing is not a representation of non-infringement of the intellectual property rights of another Person, which representation is solely set forth in Section 4.2.7 below.  Arvinas has the right to grant sublicenses to Company of the scope contemplated under Section 2.1.1 under the Licensed Yale IP, and any other in-licensed Patents or Know-How included in the Arvinas Background IP, in each case, existing as of the Effective Date of this Contribution Agreement.

4.2.4No Person has challenged in writing the scope, validity or enforceability of any Arvinas-owned patent within the Arvinas Background IP (including, by way of example, through the institution, or written threat of institution, of interference, cancellation, opposition, reissue, reexamination or similar invalidity proceeding before the United States Patent and Trademark Office or any equivalent foreign Governmental Authority).  To the knowledge of Arvinas, the Arvinas-owned patents within the Arvinas Background IP are valid and enforceable.

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4.2.5(a) To the knowledge of Arvinas, no Person has infringed, misappropriated or otherwise violated the owned Arvinas Background IP existing as of the Effective Date, and (b) neither Arvinas nor any of its Affiliates has filed or made any written claim against any Person alleging any infringement, misappropriation, or other violation of any owned Arvinas Contributed IP existing as of the Effective Date, in each case of (a) and (b), where such Person is engaged in activities that are reasonably similar to the Initial Purpose of the Company.

4.2.6As of the Effective Date and to the best of Arvinas’ knowledge, neither Arvinas nor any of its Affiliates Controls any Know-How or Patents other than the Arvinas Background IP, as the same exists as of the Effective Date, that would be necessary for Company to Research, Develop, Manufacture, use or Commercialize Company Products in the Field as contemplated under the LLC Agreement as of the Effective Date, excluding commercially available software and commercially available laboratory materials.

4.2.7As of the Effective Date and to the knowledge of Arvinas, the Research, Development, Manufacture, use and Commercialization of Company Products in the Field using the owned Arvinas Background IP as contemplated under the Transaction Documents does not infringe any duly issued and unexpired patent of any Third Party.

4.2.8As of the Effective Date, none of the Arvinas Background IP owned by Arvinas and existing as of the Effective Date is subject to any pending or outstanding injunction, order, decree, award, settlement, judgment or other disposition of dispute that (a) would reasonably be expected to adversely restrict the use of the same within the scope of the licenses granted to Company pursuant to Section 2.1.1, or (b) otherwise would reasonably be expected to adversely affect the scope, validity or enforceability of any Arvinas Background IP owned by Arvinas and existing as of the Effective Date.

4.2.9There have not been any, and, as of the Effective Date, there are no pending or, to the knowledge of Arvinas, threatened in writing, action, claim, demand, suit, proceeding, arbitration, citation, summons, subpoena, inquiry or investigation of any nature, civil, criminal, regulatory or otherwise, in law or in equity, against Arvinas or any of its Affiliates, in each case, in connection with the Arvinas Background IP owned by Arvinas and existing as of the Effective Date; provided, however, that nothing in this Section 4.2.9 will be interpreted as requiring Arvinas to have undertaken any inquiries or to have obtained any freedom to operate opinions.

4.3Arvinas Covenants.  Arvinas hereby covenants to Company that, except as expressly permitted under this Contribution Agreement, it will not amend, modify or terminate any In-License Agreements in a manner that would have a material adverse effect on Company’s rights hereunder.

4.4Company Covenants.  Company hereby covenants to Arvinas that, in the event that the Yale Agreement is terminated and, notwithstanding such termination, Company retains its sublicense under the Licensed Yale IP as included in the license granted to Company pursuant to Section 2.1.1(a), Company will comply with the obligations applicable to Company under the terms of the Yale Letter Agreement.  The foregoing will in no way limit the Company’s continued obligation under Section 2.1.4 hereof.

4.5Disclaimer.  Except as otherwise expressly set forth in this Contribution Agreement, neither Party nor its Affiliates makes any representation or extends any warranty of any kind, either express or implied, including any warranty of merchantability, fitness for a particular purpose or non-infringement.  Company and Arvinas acknowledge and agree that any Company Product will be the subject of ongoing Research and Development and that neither Party can assure the safety, usefulness, technical or scientific viability or commercial success of any Company Product.

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ARTICLE 5.

TERM; TERMINATION

5.1Contribution Agreement Term; Expiration.  This Contribution Agreement is effective as of the Effective Date and shall terminate upon expiration of the Term.

5.2Consequences of Expiration or Termination of the Contribution Agreement.

5.2.1The terms of Section 6.2 of the Commitment Agreement will determine the consequences of termination of this Contribution Agreement.

5.2.2The following Articles and Sections of this Contribution Agreement will survive termination of this Contribution Agreement:  Article 1 (Definitions), Article 6 (Confidentiality), Article 7 (Dispute Resolution) and Article 9 (Notices and Miscellaneous), and Section 2.1.4 (License Conditions) (together with Schedule 2.1.4), Section 4.5 (Disclaimer) and this Section 5.2.2.

ARTICLE 6.

CONFIDENTIALITY

6.1Confidentiality.  Each Party’s obligations with respect to Confidential Information (as defined in the LLC Agreement) of the other Party that such Party receives, has access to or becomes acquainted with will be governed by the confidentiality provisions specified in Section 11.01 of the LLC Agreement and such Section is hereby incorporated by reference.

ARTICLE 7.

DISPUTE RESOLUTION

7.1Dispute Resolution.  Without limitation of the choice of law and jurisdiction of Sections 7.3 and 7.4, respectively, hereof, the Parties hereby agree that controversies or claims arising out of or relating to this Contribution Agreement, or the interpretation, performance, breach, termination or validity thereof, shall be resolved in accordance with the escalation procedure set forth in Section 8.14 of the LLC Agreement and such Section is hereby incorporated by reference.

7.2Attorneys’ Fees.  If any Action at law or in equity (including, arbitration) is necessary to enforce or interpret the terms of this Contribution Agreement, including claims for fraud and/or fraudulent inducement, the prevailing Party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements, in addition to any other relief to which such Party may be entitled.

7.3Governing Law.  The Parties agree that this Contribution Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

7.4Jurisdiction.  Unless otherwise specified in this Contribution Agreement, each Party to this Contribution Agreement, by its execution hereof, unless otherwise prohibited by Applicable Law (a) hereby irrevocably submits to the exclusive jurisdiction of the state courts of the State of New York in the Borough of Manhattan and to the United States District Court for the Southern District of New York for the purpose of any Action among the Parties, (b) hereby waives and agrees not to assert, by way of motion, as a defense or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that any such Action brought in one of the above-named courts should be dismissed on grounds of forum non conveniens, should be transferred or removed to any court other than one of the above-named courts, or should be stayed by reason of the pendency of some other proceeding in any court other than one of the above-named courts, or that this Contribution Agreement or the subject matter hereof may not be enforced in or by such court, and (c) to the extent that an Action can be commenced in a court, agrees not to commence any such Action in any court other than before one of the above-named courts.  Notwithstanding the previous sentence, a Party hereto may commence any Action in a court other than the above-named courts for the purpose of enforcing an order or judgment issued by one of the above-named courts.

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7.5Venue.  No Party hereto will assert that venue should properly lie in any other location within the selected jurisdiction.

7.6Waiver of Jury Trial.  Each of the Parties hereby waives to the fullest extent permitted by Applicable Law any right it may have to a trial by jury with respect to any Action or liability directly or indirectly arising out of, under or in connection with this Contribution Agreement or the transactions contemplated by this Contribution Agreement.  Each of the Parties hereby (a) certifies that no representative of the other Party has represented, expressly or otherwise, that such other Party would not, in the event of any such Action or liability, seek to enforce the foregoing waiver, and (b) acknowledges that it has been induced to enter into this Contribution Agreement and the transactions contemplated by this Contribution Agreement, as applicable, by, among other things, the mutual waivers and certifications in this Section 7.6.

7.7Specific Performance.  Each of the Parties hereto acknowledges and agrees that the other Party would be damaged irreparably in the event any of the provisions of this Contribution Agreement are not performed in accordance with their specific terms or otherwise are breached or violated.  Accordingly, each of the Parties hereto agrees that, without posting a bond or other undertaking, the other Party may seek (and obtain) an injunction or injunctions to prevent breaches or violations of the provisions of this Contribution Agreement and to enforce specifically this Contribution Agreement and the terms and provisions hereof in any Action instituted in any court specified herein.  An Action for specific performance as provided herein shall not preclude a Party hereto from pursuing any other remedy to which such Party may be entitled, at law or in equity, in accordance with the terms of this Contribution Agreement.  Each Party hereto further agrees that, in the event of any action for specific performance in respect of such breach or violation, it will not assert as a defense that a remedy at law would be adequate; provided, however, that each Party hereto also agrees that any Party hereto can assert any other defense it may have other than the defense of adequate remedy at law.

ARTICLE 8.

ASSIGNMENT

8.1Assignment.  Except as permitted under the Commitment Agreement (including an assignment by Arvinas in connection with a Permitted COC Transfer, for which no consent will be required) or this Contribution Agreement, neither this Contribution Agreement nor any of the rights, interests and obligations hereunder will be assigned by a Party without the prior written consent of the other Party; provided, however, that either Party may assign this Contribution Agreement to an Affiliate upon providing prior written notice to the other Party (provided, that such Party remains primarily liable for all obligations of such Affiliate following such assignment).  Subject to the prior sentence, this Contribution Agreement will be binding upon and will inure to the benefit of the Parties and their respective heirs, executors, administrators, successors and assigns.

ARTICLE 9.

NOTICES AND MISCELLANEOUS

9.1Notices.  All notices, requests, consents, claims, demands, waivers and other communications hereunder will be in writing and will be deemed to have been given:  (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid.  Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as will be specified in a notice given in accordance with this Section 9.1):

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To Arvinas:
	
c/o Arvinas, Inc.

	
 
	
5 Science Park

	
 
	
395 Winchester Avenue

	
 
	
New Haven, CT 06511

	
 
	
USA

	
 
	
Attention:  Legal Department

	
 
	
 

	
With a copy to:
	
Goodwin Procter LLP

	
 
	
100 Northern Avenue

	
 
	
Boston, MA 02210

	
 
	
USA

	
 
	
Attention:  Robert E. Puopolo and Karen A Spindler

	
 
	
Email:  rpuopolo@goodwinlaw.com and kspindler@goodwinlaw.com

	
 
	
 

	
 
	
and

	
 
	
 

	
 
	
Bayer CropScience LP

	
 
	
c/o Bayer AG

	
 
	
Law, Patents & Compliance / M&A

	
 
	
Kaiser-Wilhelm-Allee, Building Q26

	
 
	
D-51368 Leverkusen

	
 
	
Germany

	
 
	
Attention:  Dr. Christian Bank

	
 
	
Email:  christian.bank@bayer.com

	
 
	
 

	
 
	
Orrick, Herrington & Sutcliffe LLP

	
 
	
1000 Marsh Road

	
 
	
Menlo Park, CA 94025-1015

	
 
	
USA

	
 
	
Attention:  Matthew R. Gemello

	
 
	
Email:  mgemello@orrick.com

	
 
	
 

	
To Company:
	
c/o Arvinas, Inc.

	
 
	
5 Science Park

	
 
	
395 Winchester Avenue

	
 
	
New Haven, CT 06511

	
 
	
USA

	
 
	
Attention:  Legal Department

	
 
	
 

	
With a copy to:
	
Goodwin Procter LLP

	
 
	
100 Northern Avenue

	
 
	
Boston, MA 02210

	
 
	
USA

	
 
	
Attention:  Robert E. Puopolo and Karen A Spindler

	
 
	
Email:  rpuopolo@goodwinlaw.com and kspindler@goodwinlaw.com

 

Solely for purposes of enforcing its rights to receive copies of notices to Arvinas under this Section 9.1, Bayer shall be an express Third Party beneficiary of this Section 9.1.

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9.2Miscellaneous.

9.2.1No provision of this Contribution Agreement may be amended or modified, or compliance otherwise waived, except by a writing executed by each Party.

9.2.2The terms and conditions of this Contribution Agreement shall be interpreted according to the common sense meaning intended by the Parties and in accordance with the principles of good faith and fair dealing.

9.2.3The Parties have participated jointly in the negotiation and drafting of this Contribution Agreement.  In the event an ambiguity or question of intent or interpretation arises, this Contribution Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Contribution Agreement.  Any reference to any federal, state, local or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise.

9.2.4Every day commences at 12:00 a.m. and ends at 11:59 p.m. (midnight) New York time.  Any reference in this Contribution Agreement to a number of days “in” which an action or notice is to be taken or given, shall be interpreted in such way that the term commences the day after the date taken as reference and that the action or notice shall be validly taken or given at the last day.  Any reference in this Contribution Agreement to a “day” or a number of “days” without explicit qualification of “business” shall be interpreted as a reference to a calendar day or number of calendar days.  If any action or notice is to be taken or given on or by a particular calendar day, and such calendar day is not a Business Day, then such action or notice shall be deferred until, or may be taken or given on, the next Business Day.

9.2.5All rights and licenses granted under or pursuant to this Contribution Agreement by Arvinas or Company, as applicable, are, and will otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of right to “intellectual property” as defined under Section 101 of the U.S. Bankruptcy Code.  The Parties agree that each Party, as licensee of certain rights under this Contribution Agreement, will retain and may fully exercise all of its rights and elections under the U.S. Bankruptcy Code.  The Parties further agree that, in the event of the commencement of a bankruptcy proceeding by or against a Party (such Party, the “Bankrupt Party”) under the U.S. Bankruptcy Code, the other Party will be entitled to a complete duplicate of (or complete access to, as appropriate) any intellectual property licensed to such other Party and all embodiments of such intellectual property, which, if not already in such other Party’s possession, will be promptly delivered to it (a) upon any such commencement of a bankruptcy proceeding upon such other Party’s written request therefor, unless the Bankrupt Party elects to continue to perform all of its obligations under this Contribution Agreement or (b) if not delivered under clause (a), following the rejection of this Contribution Agreement by the Bankrupt Party upon written request therefor by the other Party.

9.2.6This Contribution Agreement and the other Transaction Documents, constitute the sole and entire agreement of the Parties to this Contribution Agreement with respect to the subject matter contained herein and therein, and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter.  In the event of a conflict between this Contribution Agreement and the Commitment Agreement, the provisions of the Commitment Agreement shall control.

9.2.7The headings in this Contribution Agreement are inserted for convenience or reference only and are in no way intended to describe, interpret, define, or limit the scope, extent or intent of this Contribution Agreement or any provision of this Contribution Agreement.

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9.2.8If any term or provision of this Contribution Agreement is held to be invalid, illegal or unenforceable under Applicable Law in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other term or provision of this Contribution Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.  Upon such determination that any term or other provision is invalid, illegal or unenforceable, the Parties hereto will negotiate in good faith to modify this Contribution Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

9.2.9Any mistaken reference to Articles, clauses, Sections, Schedules or paragraphs of this Contribution Agreement shall be amended according to common sense and good faith rules.  When a reference is made in this Contribution Agreement to an Article, clause, Section, Schedule or paragraph, such reference will be to an Article, clause, Section, Schedule or paragraph unless otherwise indicated.

9.2.10No waiver by any Party of any default, misrepresentation or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.  No single or partial exercise of any right, power or privilege shall preclude any other or further exercise thereof, or the exercise of any other right, power or privilege unless explicitly provided for in this Contribution Agreement.

9.2.11Subject to the terms of and restrictions in this Contribution Agreement, the reference to any Party shall include its successors or permitted assignees or transferees that have legally acquired its rights, obligations and/or duties.  This Contribution Agreement shall be binding upon and inure solely to the benefit of the Parties and their respective successors and permitted assignees and transferees and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever, unless otherwise specified therein.

9.2.12This Contribution Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will be deemed to be one and the same agreement.  A signed copy of this Contribution Agreement delivered by facsimile, e-mail or other means of Electronic Transmission will be deemed to have the same legal effect as delivery of an original signed copy of this Contribution Agreement.  For purposes of this Section 9.2.12, “Electronic Transmission” means any form of communication not directly involving the physical transmission of paper that creates a record that may be retained, retrieved and reviewed by a recipient thereof and that may be directly reproduced in paper form by such a recipient through an automated process.

9.2.13Whenever the words “include,” “includes” or “including” are used in this Contribution Agreement, they will be deemed to be followed by the words “without limitation.”  The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Contribution Agreement will refer to this Contribution Agreement as a whole and not to any particular provision of this Contribution Agreement.  All terms used herein with initial capital letters have the meanings ascribed to them herein and all terms defined in this Contribution Agreement will have such defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.  The definitions contained in this Contribution Agreement are applicable to the singular as well as the plural forms of such terms.  Words importing gender include all genders.  Any agreement, instrument or statute defined or referred to herein, or in any agreement or instrument that is referred to herein, means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein.  The use of “or” is not intended to be exclusive unless expressly indicated otherwise.

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9.2.14Both Parties are independent contractors under this Contribution Agreement.  Nothing herein contained will be deemed to create an employment, agency or partnership relationship between the Parties hereto or any of their agents or employees, or any other legal arrangement that would impose liability upon one Party for the act or failure to act of the other Party, except to the extent specifically agreed to in a written agreement signed by the Parties.  Neither Party will have any express or implied power to enter into any contracts or commitments or to incur any liabilities in the name of, or on behalf of, the other Party, or to bind the other Party in any respect whatsoever.

9.2.15Sections 2.1 and 2.2 of this Contribution Agreement will automatically become effective as of the time of the Closing without any action by any Party, and this Contribution Agreement will terminate and be of no further force and effect upon a termination of the Commitment Agreement prior to the occurrence of the Closing, except for its surviving terms pursuant to Section 5.2.2 hereof.

 

[SIGNATURE PAGE FOLLOWS]

* - * - * - *

 

 

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IN WITNESS WHEREOF, the Parties have caused this Contribution Agreement to be executed by their representatives thereunto duly authorized as of the Effective Date.

 

	
PROTAG LLC
	
 
	
ARVINAS OPERATIONS, INC.

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
By:
	
 
	
/s/ Sean Cassidy
	
 
	
By:
	
 
	
/s/ Sean Cassidy

	
Name:
	
 
	
Sean Cassidy
	
 
	
Name:
	
 
	
Sean Cassidy

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Title:
	
 
	
Authorized Signatory
	
 
	
Title:
	
 
	
CFO & Treasurer

 

 

 

[Signature Page to Arvinas IP Contribution Agreement]

 

Schedule 2.1.4

Additional License Terms for Licensed Yale IP

 

Company acknowledges that its sublicense and other rights under this Contribution Agreement to the Licensed Yale IP are subject to the additional terms and conditions, and Company agrees to comply with such additional terms and conditions, set forth below.  Unless otherwise noted, the indicated Section refers to the appropriate Section of this Contribution Agreement.

	
1.
	
Government Rights.

	
 
	
(a)
	
Company acknowledges that, to the extent that any invention included within the Licensed Yale IP has been funded in whole or in part by the United States government, the United States government retains certain rights in such invention as set forth in 35 U.S.C. §200-212 and all regulations promulgated thereunder, as amended, and any successor statutes and regulations (the “Federal Patent Policy”).

 

	
 
	
(b)
	
As a condition of the licenses granted under Section 2.1 of this Contribution Agreement, Company acknowledges and shall comply with all aspects of the Federal Patent Policy that are applicable to the Licensed Yale IP, including any obligation that Company Products used or sold in the United States be manufactured substantially in the United States.

 

	
2.
	
Yale Retained Rights.  Company acknowledges that Yale University (“Yale”) retains the right, on behalf of itself and all other non-profit academic research institutions, to make, use and practice the Licensed Yale IP for research, clinical, teaching or other non-commercial purposes, and not for purposes of commercial development, use, manufacture or distribution purposes.

	
3.
	
Patent Challenge.  Company acknowledges that:

	
 
	
(a)
	
In the event that (i) (A) Company brings a Patent Challenge (as such term is defined in the Yale Agreement) anywhere in the world, or (B) Company assists another party in bringing a Patent Challenge (as such term is defined in the Yale Agreement) anywhere in the world (except under a court order or subpoena), then (1) provided such PATENT CHALLENGE is brought during the period specified in Sections 6.1 and 7.3 of the Yale Agreement during which Yale is owed an EARNED ROYALTY or a percentage of SUBLICENSE INCOME, then commencing on the date on which such PATENT CHALLENGE is brought and continuing until, as applicable, either (x) the date on which such PATENT CHALLENGE results in a determination that no challenged claims are valid or infringed or (y) the date of expiration of the period specified in Sections 6.1 and 7.3 of the Yale Agreement during which Yale is owed an EARNED ROYALTY or a percentage of SUBLICENSE INCOME (in the case where such PATENT CHALLENGE results in a determination that at least one challenged claim is both valid and infringed), Company will pay to Yale an annual penalty fee of [**] Dollars (U.S. $[**]) within [**], as applicable, the period specified in clause (x) or clause (y), and (2) solely if such PATENT CHALLENGE results in a determination that at least one challenged claim is both valid and infringed, Company will promptly reimburse Yale for all legal fees and expenses incurred in Yale’s defense against such PATENT CHALLENGE.

 

	
 
	
(b)
	
Company will not bring a PATENT CHALLENGE without first providing Yale at least [**] prior written notice setting forth (i) precisely which claims and patents are being challenged or claimed not to be infringed, (ii) a clear statement of the factual and legal basis for the challenge, and (iii) an identification of all prior art and other matter believed to invalidate any claim of the patent within the Licensed Yale IP at issue at issue or which supports the claim that the patent within the Licensed Yale IP at issue at issue is not infringed.

20

 

 

	
 
	
(c)
	
Any payments to be made to Yale by Company pursuant to Section 3(a) of this Schedule 2.1.4 will be made to the account listed below (or such other account as Arvinas designates before such payment is due):

 

	
Bank Name:
	
[**]

	
ABA Number:
	
[**]

	
ABA Number:
	
[**]

	
SWIFT Number:
	
[**]

	
Account Title:
	
[**]

	
Account Number:
	
[**]

	
Yale Contract Number:
	
[**]

	
Federal Tax ID # for Yale University: 06-0646973

 

	
 
	
(d)
	
Any payments to be made to Yale by Company pursuant to Section 3(a) of this Schedule 2.1.4 will be made in United States Dollars.  If overdue, such payment will bear interest until payment at a per annum rate of [**] percent ([**]%) above the prime rate in effect at Citibank on the due date and Yale will be entitled to recover reasonable attorneys’ fees and costs related to the collection of such payment following such failure to pay.  The payment of such interest will not foreclose Yale from exercising any other right it may have as a consequence of the failure of Company to make such payments when due.

 

	
4.
	
Patent Marking.  Company agrees to mark, and to require that its Affiliates and Sublicensees mark, all Company Products that are also VALID CLAIM PRODUCTS and tangible products, with the numbers of all issued patents included in Licensed Yale IP that cover such Company Products, and, without limiting the foregoing, all such Company Products will be marked in such a manner as to conform with the patent marking notices required by the law of any country where such Company Products are made, sold, used or shipped, including, but not limited to, the applicable patent laws of that country.

 

	
5.
	
Indemnification.  Company will indemnify, defend by counsel reasonably acceptable to Yale, and hold harmless Yale and its trustees, officers, employees and agents, from and against any liability, cost expense, damage, deficiency, loss or obligation, of any kind or nature arising out of a third party claim (including, without limitation, reasonable attorneys’ fees and other costs and expenses of defense) (collectively, “Claims”), based upon, arising out of or otherwise relating the license granted to Company under Section of 2.1.1(a) under the Licensed Yale IP, including, without limitation, any cause of action relating to product liability, or any theory of liability (including, without limitation, tort, warranty or strict liability) or the death, personal injury, or illness of any person, or out of damage to any property related in any way to the rights granted to Company under Section of 2.1.1(a) to the Licensed Yale IP, or resulting from the production, manufacture, sale, use, lease or other disposition or consumption or advertisement of the Company Products by Company, its Affiliates or (sub)licensees or any other transferees, or in connection with any statement, representation or warranty of Company, its affiliates or (sub)licensees or any other transferees with respect to the Company Products, but expressly excluding all Claims to the extent based upon, arising out of or otherwise relating to (a) Yale’s retained rights pursuant to Section 3.3 of the Yale Agreement to use the Licensed Yale IP, or (b) Yale’s gross negligence or willful misconduct.  Company will not settle or compromise any Claim without the prior written consent of Yale, such consent not to be unreasonably withheld, conditioned or delayed, if such settlement or compromise does not include a complete release of Yale from all Claims.  Without limiting the foregoing, Yale may withhold its consent to any settlement or compromise that would in any manner constitute or incorporate an admission of liability by Yale or require Yale to take or refrain from taking any action.

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6.
	
Patent Prosecution Expenses Conditional Obligation.  In the event that the Yale Agreement is terminated and, as provided under the terms of the Yale Agreement, Company’s sublicense under the Licensed Yale IP survives and continues in full force and effect (but subject to Company’s right to notify Yale of its election not to retain such sublicense), then Company will be responsible to Yale for the costs of filing, prosecution and maintenance of (i) the United States patent applications and patents contained in the Licensed Yale IP, and (ii) the foreign patent applications and patents contained in the Licensed Yale IP in the countries outside of the United States selected by Yale and agreed to in writing by Arvinas (as such list of countries exists on the date of termination of the Yale Agreement), in each case of (i) and (ii), shared proportionately with Yale’s other licensees and sublicensees of such Licensed Yale IP (if any) also reimbursing Yale for such costs.

 

	
7.
	
Insurance.

 

	
 
	
(a)
	
From and after such time as Company’s first Company Product commences field trials, Company will have purchased, and will have caused any of its Sublicensees to have purchased, and Company will maintain in effect, and will cause any of its Sublicensees to maintain in effect, a policy of commercial, general liability insurance in coverage amounts customary for its industry to protect Yale with respect to the Claims described in Section 5 of this Schedule 2.1.4.  Such insurance will:

 

	
 
	
(i)
	
list “Yale, its trustees, directors, officers, employees and agents” as additional insureds under the policy;

 

	
 
	
(ii)
	
provide that such policy is primary and not excess or contributory with regard to other insurance Yale may have;

 

	
 
	
(iii)
	
be endorsed to include product liability coverage in amounts no less than $[**] Dollars per incident and $[**] Dollars annual aggregate for Company’s indemnification obligation to Yale described in Section 5 of this Schedule 2.1.4; and

 

	
 
	
(iv)
	
not be construed to create a limit of Company’s liability with respect to its indemnification obligation to Yale described in Section 5 of this Schedule 2.1.4.

 

	
 
	
(b)
	
Upon Yale’s request, Company will furnish a Certificate of Insurance and a copy of the current insurance policy to Yale.  Company will secure agreement from its insurer to give [**] written notice to Yale prior to any cancellation of or material change to the policy.

 

	
8.
	
Yale Disclaimer of Representations & Warranties for the Licensed Yale IP.  In addition to the Parties’ disclaimer set forth in Section 4.4 of this Contribution Agreement, Company acknowledges and agrees that with respect to the Licensed Yale IP:

	
 
	
(a)
	
YALE MAKES NO, AND EXPRESSLY DISCLAIMS ALL, REPRESENTATIONS OR WARRANTIES THAT ANY CLAIMS OF PATENTS WITHIN THE LICENSED YALE IP, ISSUED OR PENDING, ARE VALID, OR THAT THE MANUFACTURE, USE, PRACTICE, SALE OR OTHER DISPOSAL OF COMPANY PRODUCTS THAT ARE ALSO LICENSED PRODUCTS (AS DEFINED IN THE YALE AGREEMENT) DOES NOT OR WILL NOT INFRINGE UPON ANY PATENT OR OTHER RIGHTS NOT VESTED IN YALE.

22

 

	
 
	
(b)
	
YALE MAKES NO, AND EXPRESSLY DISCLAIMS ALL, REPRESENTATIONS AND WARRANTIES WHATSOEVER WITH RESPECT TO PATENTS WITHIN THE LICENSED YALE IP AND COMPANY PRODUCTS THAT ARE ALSO LICENSED PRODUCTS (AS DEFINED IN THE YALE AGREEMENT), EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

	
 
	
(c)
	
COMPANY WILL MAKE NO STATEMENTS, REPRESENTATION OR WARRANTIES WHATSOEVER TO ANY THIRD PARTIES THAT ARE INCONSISTENT WITH THE DISCLAIMERS BY YALE IN CLAUSES (a) AND (b) IMMEDIATELY ABOVE.

	
 
	
(d)
	
IN NO EVENT WILL YALE OR ITS TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES AND AFFILIATES BE LIABLE FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL OR INDIRECT DAMAGES OF ANY KIND, INCLUDING ECONOMIC DAMAGE OR INJURY TO PROPERTY AND LOST PROFITS, REGARDLESS OF WHETHER YALE WILL BE ADVISED, WILL HAVE OTHER REASON TO KNOW, OR IN FACT WILL KNOW OF THE POSSIBILITY OF THE FOREGOING.

	
 
	
(e)
	
IN NO EVENT WILL YALE, OR ITS TRSUTEES, DIRECTORS, OFFICERS, EMPLOYEES AND AFFILIATES, BE LIABLE FOR MONEY DAMAGES IN EXCESS OF YALE HAS RECEIVED FROM ARVINAS IN CONNECTION WITH COMPANY’S RIGHTS UNDER THE LICENSED YALE IP.

	
9.
	
Compliance with Laws; Export Controls.  Company will comply, and will cause its Affiliates and (sub)licensees to comply, with all foreign and United States federal, state and local laws, regulations, rules and orders applicable to the testing, production, transportation, packaging, labeling, export, practice, sale and use of Company Products that are also LICENSED PRODUCTS.  In particular, Company will be responsible for assuring compliance with all United States export laws and regulations applicable to Company’s use and practice of the Licensed Yale IP.

	
10.
	
Non-Use of Yale Name.  Company acknowledges and agrees that it will not use the name “Yale” or “Yale University”, or any variation or adaptation thereof, or any trademark, tradename or other designation owned by Yale, or the names of any of its trustees, officers, faculty, students, employees or agents, for any purpose without the prior written consent of Yale, in each instance, such consent to be granted or withheld by Yale in its sole discretion, except that Company may state that it has a sublicense under the Licensed Yale IP.

	
11.
	
Governing Law for Disputes Regarding Licensed Yale IP.  Notwithstanding Article 7 of this Contribution Agreement, Company acknowledges and agrees that any matter arising out of or related to Company’s use and practice of the Licensed Yale IP will be governed by and in accordance with the substantive laws of the State of Connecticut, without regard to its conflicts of law principles, except where the federal laws of the United States are applicable and have precedence.  Any dispute arising out of or related to Company’s use and practice of the Licensed Yale IP will be brought exclusively in a court of competent jurisdiction in the State of Connecticut, and Company hereby irrevocably submits to the jurisdiction of such courts.

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