Document:

Exhibit

Exhibit 10.16

	
		
	
	 

	 

	 

 
Wells Fargo Bank, National Association 
375 Park Avenue
New York, NY 10152 
Attn: Structuring Services Group
Telephone: 212-214-6101 
Facsimile: 212-214-5913

	
		
	DATE:
	January 31, 2019

	TO:
	Wright Medical Group, Inc.
1023 Cherry Road
Memphis, TN 38117
Wright Medical Group N.V.
Prins Bernhardplein 200
1097 JB Amsterdam
The Netherlands

	ATTENTION:
	James Lightman Sr. Vice President, General Counsel and Secretary

	TELEPHONE:
	+ 31 20 675 4002

	EMAIL:
	James.Lightman@wright.com 

	FROM:
	Wells Fargo Bank, National Association

	SUBJECT:
	Partial Terminations of Relevant Transactions Listed on Attached Schedule A and Related Amendments

The purpose of this communication (this “Confirmation”) is to set forth the terms and conditions of the partial termination (the “Transaction”) of the rights and obligations under and in respect of the following transactions (each such transaction, a “Relevant Transaction” and collectively the “Relevant Transactions” and the terminated portion of each such Relevant Transaction, the “Terminated Portion”) and to modify the confirmations of the Relevant Transactions as described herein:  Additional call option transaction confirmation, dated as of February 10, 2015, by and between Wells Fargo Bank, National Association (“Dealer”)  and Wright Medical Group, Inc. (“Wright Inc.”), as partially terminated by the confirmation (the “Prior Amendment”) in re Partial Termination of Relevant Transactions Listed on Attached Schedule A and Related Attachments dated January 30, 2019 by and between Dealer, Wright Inc. and Wright Medical Group N.V. (“Wright N.V.”, and together with Wright Inc., the “Counterparties” and each a “Counterparty”)(the “Additional Call Options”); and the additional warrant transaction confirmation, dated as of February 10, 2015, by and between Dealer and Wright Inc., as amended by (x) the Amendment dated as of November 24, 2015, by and between Dealer and the Counterparties and (y) the Prior Amendment (the “Additional Warrants”).  The Terminated Portion of each of the above Relevant Transactions shall be as set forth on Schedule A in the column labeled “Number of Options or Warrants, As Applicable, of such Relevant Transaction Subject to Termination”.  The Terminated Portion of each Relevant Transaction shall be terminated as of February 7, 2019 (the “Termination Effective Date”).
1.The definitions and provisions of the 2000 ISDA Definitions (including the Annex thereto) (the “2000 Definitions”) and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions” and, together with the 2000 Definitions, the “Definitions”), in each case, as published by the International Swaps and Derivatives Association, Inc. (“ISDA”) are incorporated into this Confirmation.  Any capitalized term not otherwise defined herein shall have the meaning set forth for such term in the confirmation for 

1

the Additional Call Options or Additional Warrants, as applicable.  In the event of any inconsistency between the 2000 Definitions and the Equity Definitions, the Equity Definitions will govern.
2.In consideration for the termination of the Terminated Portion of each Relevant Transaction, a “Termination Payment” with respect to the Terminated Portion of each Relevant Transaction shall be made in the amount set forth in Section 6, such Termination Payments to be made as further specified in Paragraph 4 below.  Each of Dealer, Wright Inc. and Wright N.V. hereby agrees that, upon receipt of the Termination Payments (as aggregated into a Net Termination Payment as provided in Paragraph 4 below), with respect to the Terminated Portion of each Relevant Transaction: (i) such Terminated Portion of the Relevant Transaction and all of the respective rights and obligations of Dealer and any applicable Counterparty thereunder are cancelled and terminated as of the Termination Effective Date; (ii) Dealer releases and discharges each of Wright Inc. and Wright N.V. from and agrees not to make any claim against Wright Inc. or Wright N.V. with respect to any obligations of Wright Inc. or Wright N.V. arising out of, and to be performed in connection with, any Terminated Portion of a Relevant Transaction after the Termination Effective Date, including, but not limited to, any rights or obligations said to survive the termination of a Relevant Transaction in such Relevant Transaction’s confirmation in respect of the Terminated Portion of such Relevant Transaction and; (iii) each of Wright Inc. and Wright N.V. releases and discharges Dealer from and agrees not to make any claim against Dealer with respect to any obligations of Dealer arising out of, and to be performed in connection with, any Terminated Portion of a Relevant Transaction after the Termination Effective Date, including, but not limited to, any rights or obligations said to survive the termination of a Relevant Transaction in such Relevant Transaction’s confirmation in respect of the Terminated Portion of such Relevant Transaction.  Each of the parties hereby represents and acknowledges to the other that, upon receipt of the Termination Payments (as aggregated into a Net Termination Payment as provided in Paragraph 4 below), no further amounts are owed by Dealer, Wright Inc. or Wright N.V. to any other party with respect to the Terminated Portion of each Relevant Transaction.
3.Wright N.V. hereby transfers and assigns its obligations to make Termination Payments to Dealer in respect of the Terminated Portion of the Additional Warrants to Wright Inc., and Wright Inc. hereby accepts Wright N.V.’s obligation to make Termination Payments in respect of the Terminated Portion of the Additional Warrants.  Dealer hereby consents to the transfer and assignment of the obligation to make Termination Payments in respect of the Terminated Portion of the Additional Warrants from Wright N.V. to Wright Inc.
4.The parties hereby agree to net the Termination Payments with respect to the Terminated Portion of each of the Relevant Transactions such that a single payment shall be made with respect to the Terminated Portion of each of the Relevant Transactions (such net payment, the “Net Termination Payment”), such Net Termination Payment satisfying each party’s obligations to make payments to the others.  On the Termination Effective Date, Dealer shall deliver to Wright Inc. the Net Termination Payment in accordance with the Wright Inc. Payment Instructions below.
5.Wright Inc. Payment Instructions:
Bank:  Bank of America
ABA#:  026009593
Swift:  BOFAUS3N
Acct: 
Beneficiary:  Wright Medical Group, Inc.

6.The Termination Payment with respect to the Terminated Portion of each Relevant Transaction shall be determined by referencing the VWAP Price for the Relevant Transaction as set forth in the table below.

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	VWAP Price

	 
	$25.00
	$26.00
	$27.00
	$28.00
	$29.00
	$30.00
	$31.00
	$32.00

	Termination Payment in respect of the Terminated Portion of the Additional Call Options
	$195,062
	$240,817
	$293,797
	$351,593
	$415,410
	$484,043
	$557,492
	$636,962

	Termination Payment in respect of the Terminated Portion of the Additional Warrants
	$139,192
	$167,007
	$199,638
	$234,797
	$273,930
	$316,073
	$361,467
	$411,798

If the VWAP Price is between two VWAP Prices in the table above, the amount of the Termination Payment with respect to the Terminated Portion of the Relevant Transaction shall be determined by a straight-line interpolation between the amount of the Termination Payment set forth for the higher and lower VWAP Prices.  If the VWAP Price exceeds the highest or is below the lowest VWAP Price in the table above, the amount of the Termination Payment with respect to the Terminated Portion of the Relevant Transaction shall be extrapolated from the table in a commercially reasonable manner.
“VWAP Price” shall mean the arithmetic average of the per-Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page WMGI <equity> AQR in respect of the period from the scheduled opening time of the Exchange to the Scheduled Closing Time of the Exchange on each Scheduled Trading Day that is not a Disrupted Day during the Unwind Period (or if such volume-weighted average price is unavailable at such time, the market value of one Share on such Valid Day, as determined by the Calculation Agent using, if practicable, a volume-weighted average method).
“Unwind Period” shall mean the 3 Scheduled Trading Days beginning on and including February 1, 2019 and ending on and including February 5, 2019; provided, however, that (a) if any such Scheduled Trading Day is a Disrupted Day, the Unwind Period shall be extended by one Scheduled Trading Day for each such Disrupted Day (which provision shall be applied successively until 3 Scheduled Trading Days that are not Disrupted Days occur, in which case the Termination Effective Date shall be postponed by one Scheduled Trading Day for each such Disrupted Day) and (b) Dealer may (x) postpone the Unwind Period or (y) add, in whole or in part, Scheduled Trading Days to the Unwind Period, in either case, if Dealer reasonably and in good faith, (i) determines that such action is reasonably necessary or appropriate to preserve Dealer’s commercially reasonable hedging or hedge unwind activity hereunder in light of existing liquidity conditions or (ii) determines, based on the advice of counsel, that such action is reasonably necessary or appropriate to enable Dealer to effect transactions with respect to Shares in connection with its commercially reasonable hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Issuer or an affiliated purchaser of Issuer, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer.

7.The parties agree that from and after the Termination Effective Date, each of the Relevant Transactions shall be amended and restated in its entirety but with the adjustments shown in the column labeled “Revisions to the Terms of the Relevant Transaction” in Schedule A beside each Relevant Transaction.  The parties further agree that each of the following side letters to the Relevant Transactions shall continue in full force and effect:
		
	•
	The letter agreement by and between Dealer and Wright Inc. dated as of February 10, 2015, specifying certain additional terms and conditions of the Additional Warrants issued by Wright Inc. to Dealer, as amended on November 24, 2015 (the “Initial Additional Warrant Side Letter”);

		
	•
	The letter agreement by and between Dealer, Wright Inc. and Wright N.V. dated as of November 24, 2015, amending the Initial Additional Warrant Side Letter; and

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	•
	The letter agreement by and between Dealer and Wright Inc. dated as of February 10, 2015, specifying certain additional terms and conditions of the Additional Call Options issued by Dealer to Wright Inc.

8.10b5-1 Plan.  Each Counterparty represents, warrants and covenants to Dealer that:
		
	a.
	it is entering into this Confirmation and the Transaction in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1 under the Exchange Act (“Rule 10b5-1”) or any other antifraud or anti-manipulation provisions of the federal or applicable state securities laws and that it has not entered into or altered and will not enter into or alter any corresponding or hedging transaction or position with respect to the Shares.  Each Counterparty acknowledges that it is the intent of the parties that this Transaction comply with the requirements of paragraphs (c)(1)(i)(A) and (B) of Rule 10b5-1 and this Transaction shall be interpreted to comply with the requirements of Rule 10b5-1(c).

		
	b.
	it will not seek to control or influence Dealer’s decision to make any “purchases or sales” (within the meaning of Rule 10b5-1(c)(1)(i)(B)(3)) in connection with this Transaction, including, without limitation, Dealer’s decision to enter into any hedging transactions.  Each Counterparty represents and warrants that it has consulted with its own advisors as to the legal aspects of its adoption and implementation of this Confirmation under Rule 10b5-1.

		
	c.
	it acknowledges and agrees that any amendment, modification, waiver or termination of this Transaction must be effected in accordance with the requirements for the amendment or termination of a “plan” as defined in Rule 10b5-1(c).  Without limiting the generality of the foregoing, any such amendment, modification, waiver or termination shall be made in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5, and no such amendment, modification, waiver or termination shall be made at any time at which any Counterparty or any officer, director, manager or similar person of any Counterparty is aware of any material non-public information regarding Issuer or the Shares.

9.Each Counterparty represents and warrants to Dealer on the date hereof and, with respect to all representations below other than the representation in subsection 9(f), on the Termination Effective Date that:
		
	a.
	Counterparty has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of this Confirmation; such execution, delivery and performance have been duly authorized by all necessary corporate action on Counterparty’s part; and this Confirmation has been duly and validly executed and delivered by Counterparty and constitutes its valid and binding obligation, enforceable against Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto.

		
	b.
	Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Counterparty or any of its subsidiaries is a party or by which Counterparty or any of its subsidiaries is bound or to which Counterparty or any of its subsidiaries is subject, 

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or constitute a default under, or result in the creation of any lien under, any such agreement or instrument.
		
	c.
	No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by Counterparty of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act of 1933, as amended, or state securities laws or, with respect to Wright N.V., under the Dutch Act on Financial Supervision (Wet op het Financieel Toezicht).

		
	d.
	Counterparty is not and, after consummation of the transactions contemplated hereby, will not be required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

		
	e.
	Counterparty is an “eligible contract participant” (as such term is defined in Section 1a(18) of the Commodity Exchange Act, as amended, other than a person that is an eligible contract participant under Section 1a(18) (C) of the Commodity Exchange Act).

		
	f.
	Counterparty and each of its affiliates are not, on the date hereof, in possession of any material non-public information with respect to Wright N.V. or the Shares.

		
	g.
	No state or local (including any non-U.S. jurisdiction’s) law, rule, regulation or regulatory order applicable to the Shares would give rise to any reporting, consent, registration or other requirement (including without limitation a requirement to obtain prior approval from any person or entity), except for the reporting requirements of the Exchange Act and rules promulgated thereunder, or, with respect to Wright N.V., the reporting or registration requirements pursuant to the Dutch Corporate Income Tax Act 1969 (Wet op de vennootschapsbelasting 1969) and the Dutch State Taxes Act (Algemene wet inzake rijksbelastingen), in each case, as a result of Dealer or its affiliates owning or holding (however defined) Shares.

		
	h.
	Counterparty (A) is capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities; (B) will exercise independent judgment in evaluating the recommendations of any broker-dealer or its associated persons, unless it has otherwise notified the broker-dealer in writing; and (C) has total assets of at least $50 million.

		
	i.
	Counterparty is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares) or otherwise in violation of the Exchange Act.

10.Dealer hereby repeats the representations made to Counterparty in Section 3 of the 2002 ISDA Master Agreement on the date hereof and on the Termination Effective Date.
11.US QFC Stay Rules
 (i)     Recognition of U.S. Resolution Regimes. In the event that Dealer becomes subject to a proceeding under the Federal Deposit Insurance Act and the regulations promulgated thereunder or Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder (each, a “U.S. Special Resolution Regime”), the transfer of the Agreements (as defined in the confirmations related to the Relevant Transactions, the “Agreements”) (and any interest and obligation in or under the Agreements) from Dealer will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Agreements (and any such interest and 

5

obligation) were governed by the laws of the United States or a state of the United States. In the event that Dealer or any BHC Act Affiliate of Dealer becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights against Dealer with respect to the Agreements are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Agreements were governed by the laws of the United States or a state of the United States.  
(ii)    Limitation on the Exercise of Default Rights Related to Affiliate Insolvency Proceedings. Notwithstanding anything to the contrary in the Agreement or any other agreement, but subject to the requirements of clause (i), Counterparties shall not be permitted to exercise any Default Right against Dealer with respect to the Agreements that is related, directly or indirectly, to a BHC Act Affiliate of Dealer becoming subject to receivership, insolvency, liquidation, resolution or similar proceedings (“Insolvency Proceedings”), except to the extent such exercise would be permitted under 12 C.F.R. § 252.84, 12 C.F.R. § 47.5, or 12 C.F.R. § 382.4, as applicable. After a BHC Act Affiliate of Dealer has become subject to Insolvency Proceedings, if Counterparty seeks to exercise a Default Right against Dealer with respect to the Agreements, Counterparty shall have the burden of proof, by clear and convincing evidence, that the exercise of such Default Right is permitted hereunder.  
For purposes of this paragraph (x),  “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable, and “BHC Act Affiliate” shall mean an “affiliate” as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k).  

[The remainder of page intentionally left blank]

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This Confirmation may be executed in several counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.  Facsimile or portable document format (.pdf) copies of this Confirmation shall have the same force and effect as an original.
Please confirm that the foregoing correctly sets forth the terms of the agreement between Dealer, Wright Inc. and Wright N.V. with respect to the Transaction, by manually signing this Confirmation as evidence of agreement to such terms and returning an executed copy to us.
Very Truly Yours,
	
		
	Wells Fargo Bank, National Association

By:/s/ Craig McCracken                                                    
Name:   Craig McCracken
Title:     Managing Director
	 

Each of Wright Inc. and Wright N.V. hereby agrees to, accepts and confirms the terms of the foregoing as of the Termination Effective Date.
	
		
	WRIGHT MEDICAL GROUP, INC.

By:/s/ Lance A. Berry                                                        
Name:   Lance A. Berry
Title:     Executive Vice President, Chief Financial and Operations Officer
	 

	 
	 

	WRIGHT MEDICAL GROUP N.V.

By:/s/ Lance A. Berry                                                        
Name:   Lance A. Berry
Title:     Executive Vice President, Chief Financial and Operations Officer
	 

Schedule A
	
					
	Relevant Transaction
	 
	Number of Options or Warrants, As Applicable, of such Relevant Transaction Subject to Termination
	 
	Revisions to the Terms of the Relevant Transaction

	Additional call option transaction confirmation, dated as of February 10, 2015, by and between Wells Fargo Bank, National Association and Wright Medical Group, Inc.
	 
	18,028 Options
	 
	Number of Options shall be revised to equal 56,455

	Additional warrant transaction confirmation, dated as of February 10, 2015, by and between Wells Fargo Bank, National Association and Wright Medical Group, Inc., as amended by the Amendment dated as of November 24, 2015, by and between Wells Fargo Bank, National Association, Wright Medical Group, Inc. and Wright Medical Group N.V.
	 
	120,409 Warrants
	 
	Number of Warrants shall be revised to equal 377,061

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

A-1Exhibit

[***] Certain information in this document, indicated by brackets, has been excluded pursuant to Regulation S-K, Item 601(b)(10)(iv).  Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

AMENDMENT NO. 2 TO PLATFORM TECHNOLOGY
TRANSFER AND LICENSE AGREEMENT

This AMENDMENT NO. 2 TO PLATFORM TECHNOLOGY TRANSFER AND LICENSE AGREEMENT (“Amendment No. 2”) is effective as of January 1, 2019 (the “Amendment No. 2 Effective Date”) by and between CODEXIS, INC., a Delaware corporation, having a place of business at 200 Penobscot Drive, Redwood City, CA 94063 (“CODEXIS”) and MERCK SHARP AND DOHME CORP., having a place of business at One Merck Drive, Whitehouse Station, NJ 08889-0100. (“MERCK”).

W I T N E S S E T H:

WHEREAS, MERCK and CODEXIS are Parties to that certain Platform Technology Transfer and License Agreement dated as of August 3, 2015, as amended by that certain Amendment No. 1 to Platform Technology Transfer and License Agreement dated as of October 10, 2018  (collectively, the “Agreement”); and

WHEREAS, the Parties desire to further amend the Agreement to modify the terms of the Agreement as more fully set forth below;

NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises, covenants and conditions contained in this Agreement, the Parties agree as follows:

		
	1.
	As of the Amendment No. 2 Effective Date, Section 1.33 of the Agreement is amended to read in its entirety as follows:

‘1.31    “Codexis Software” means, collectively, the software components listed in Exhibit 1.31.  
  
		
	2.
	As of the Amendment No. 2 Effective Date, Section 3.2.5 is added to the Agreement as follows:

“3.2.5    Codexis Software Additional Terms.  As of the Amendment No. 2 Effective Date, the Software Additional Terms listed in Exhibit 3.2.5 shall apply to the Codexis Software for the Exhibit 3.2.5 Term (as defined in Exhibit 3.2.5). 

-1-

		
	3.
	As of the Amendment No. 2 Effective Date, CODEXIS shall be entitled to issue the press release set forth in Exhibit 3.

		
	4.
	All other terms and conditions of the Agreement remain unchanged.

IN WITNESS WHEREOF, the Parties have caused this Amendment No. 2 to be executed by their respective duly authorized officers as of the Amendment No. 2 Effective Date.

	
		
	Codexis, Inc.
	Merck Sharp and Dohme Corp.

	By: /s/ John Nicols
	By: /s/ Karen L. MacNaul

	Name: John Nicols
	Name: Karen L. MacNaul
Title: Executive Director, Business Development and Licensing-MRL

	Title: President and CEO
	On behalf of Joseph P. Miletic, M.D, PhD., SVP, Discovery Research, MRL

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Exhibit 1.31
Codexis Software means the current versions (as of December 31, 2018) of the following software programs (as implemented by Codexis in its own business operations): 
[***] Software
1.    [***]
2.    [***]
3.    [***]

Other Software
1.    [***]
2.    [***]
3.    [***]
4.    [***]
5.    [***]
6.    [***]
7.    [***]
8.    [***]

    

-1-

Exhibit 3.2.5
Codexis Software Additional Terms
TERM
The term of the Parties’ rights and obligations under this Exhibit 3.2.5 shall commence on the Amendment No. 2 Effective Date and shall expire on 3rd anniversary of the Amendment No. 2 Effective Date (“Exhibit 3.2.5 Term”).
PAYMENT
In consideration of the rights and obligations of the Parties under Amendment No. 2 and this Exhibit 3.2.5, MERCK shall pay to CODEXIS the following sums:
		
	a)
	a non-refundable, non-creditable payment of US$[***] within [***] ([***]) days after the completion of the Initial Technology Transfer and Installation; and

		
	b)
	a non-refundable, non-creditable payment of US$[***] within [***] ([***]) days after the 1st anniversary of the Amendment No. 2 Effective Date; and

		
	c)
	a non-refundable, non-creditable payment of US$[***] within [***] ([***]) days after completion of the Enhancements as under Section 2.1 and Section 2.2 of this Exhibit 3.2.5 but only in the event such Enhancements installed on or before [***] include [***]; and

		
	d)
	a non-refundable, non-creditable payment of US$[***] within [***] ([***]) days after the 2nd anniversary of the Amendment No. 2 Effective Date; and

		
	e)
	a non-refundable, non-creditable payment of US$[***] within [***] ([***]) days after completion of the Enhancements as under Section 2.1 and Section 2.2 of this Exhibit 3.2.5 but only in the event such Enhancements installed on or before [***] include [***]; and

The following provisions apply exclusively to the Codexis Software during the Exhibit 3.2.5 Term:
Definitions:
“Call Ticket” means a request for Support Services submitted to CODEXIS under this Exhibit 3.2.5, each being uniquely identifiable.
“Documentation” means the operating manuals and user instructions in printed form or read-only electronic form, if any, supplied by CODEXIS to MERCK to aid the use of the Codexis Software.
“Enhancement” means a change or addition, other than a Maintenance Modification, to the Codexis Software and related Documentation, including (a) releases of new software programs (to be added to Exhibit 1.3.1) and (b) releases of new major versions of existing software programs (already listed in Exhibit 1.3.1) that improve functions, add new functions, screens or data sources or significantly improve performance by virtue of changes in system 

-1-

design or coding, that, in the case of both (a) and (b), CODEXIS implements (in its sole discretion) in CODEXIS’ own internal commercial operations. A “major version” means an enhancement of a prior version of the Codexis Software that would be considered by the software industry community as the next generation of such Codexis Software, which is usually evidenced by an increment in the version number of the Codexis Software. By way of illustration, versions 2.0 and 3.0 are incremental major versions, whereas versions 2.1 and 2.2 are not.   
“Critical Error” means any error, problem, or defect resulting from or constituting an incorrect functioning of the Codexis Software if such an error, problem, or defect prevents the use of the Codexis Software in the manner it was intended.
“Critical Fix” means a temporary bypass/workaround and/or patch of a Critical Error performed and/or implemented so as to cause the Codexis Software to continue performing functionally.
“Error” means either a Critical Error or a Non-Critical Error.
“Error Acknowledgement” means providing acknowledgement of an Error by issuing a Call Ticket. 
“Error Correction” means the completion of all activities, including, but not limited to Fixes and Problem Resolution, necessary to diagnose, resolve and/or provide a solution for a reported Error.
“Maintenance Modification” means any modifications or revisions to the Codexis Software and/or Documentation that correct Critical Errors, support new releases to the operating systems with which the Codexis Software is designed to operate, support new input/output devices, or provide other incidental changes, updates and corrections.
“Non-Critical Fix” means a temporary bypass/workaround and/or patch of a Non-Critical Error performed and/or implemented so as to cause the Codexis Software to continue performing functionally in material conformance with the Documentation.
“Non-Critical Error” means any error, problem, or defect resulting from or constituting an incorrect functioning of the Codexis Software, or an incorrect statement or diagram in the Documentation, which error, problem, or defect does not prevent the use of the Codexis Software in the manner it was intended.
“Problem Resolution” means identification of the root cause of an Error and object code fix, or new Update and supporting Documentation necessary to effectuate Error Correction.
“Question” means a technical question relating to the function of the Codexis Software or non-technical question relating to the Maintenance Services provided under this Exhibit 3.2.5. 
“Services” means the services described in this Exhibit 3.2.5 with respect to the Codexis Software, including (without limitation) the Maintenance Services and the Support Services, in each case which CODEXIS is obliged to perform for MERCK under this Exhibit 3.2.5. 
“Standard of Care” means the standard of care with which CODEXIS shall perform the Services.  CODEXIS shall perform the Services in [***].  

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“Updates” means any updates (including, without limitation, bug fixes, patches, maintenance modifications and, when and if due, Enhancements) to the Codexis Software made available to MERCK by CODEXIS.
		
	1.
	TECHNOLOGY TRANSFER AND INSTALLATION OF THE CODEXIS SOFTWARE

		
	1.1
	Initial Technology Transfer and Installation.  On or before [***], Codexis will provide to MERCK a one-time transfer and installation of the Codexis Software on a dedicated server at the MERCK Designated Lab. The transfer and installation shall be performed in approximately the same manner as the Codexis Software was installed on the dedicated server at the MERCK Designated Lab under the Technology Transfer Plan and the Party’s shall cooperate with each other in good faith to facilitate such transfer and installation.  During the [***] day period starting with the date CODEXIS completes transfer and installation, MERCK shall have the right to conduct such functional testing of the Codexis Software as it may desire. 

		
	1.2
	Acceptance.  The Amendment No. 2 initial technology transfer under Section 1.1 of this Amendment No. 2 and any subsequent installation of Enhancements under Section 2.1 of this Amendment No. 2 will be deemed complete upon the completion of the applicable Codexis Software installation at the MERCK Designated Lab.  If the completion of the applicable Codexis Software installation at the MERCK Designated Lab does not occur by the installation date set forth in Section 1.1 or Section 2.1 of Amendment No. 2, and the delay in the completion of the Codexis Software installation at the MERCK Designated Lab is proximately caused [***], then the installation date set forth in Section 1.1 or Section 2.1 of Amendment No. 2 shall be extended by the period of time equal to [***] provided, however, in no event will the installation date set forth in Section 1.1 or Section 2.1 of Amendment No. 2 be extended pursuant to this Section 1.1 or Section 2.1 of Amendment No. 2 beyond [***] from the installation date set forth in Section 1.1 or Section 2.1 of Amendment No. 2 where any such extension is proximately caused [***].  If the installation date set forth in Section 1.1 or Section 2.2 of Amendment No. 2 is not achieved on or before [***] from the installation date set forth in Section 1.1 or Section 2.1 of Amendment No. 2 where such non-achievement is proximately caused [***], the applicable payment set forth in the PAYMENT section of this Exhibit 3.2.5 shall be paid to Codexis in the manner set forth in Exhibit 3.2.5.   In the event either Party reasonably disputes whether or not the installation date set forth in Section 1.1 or Section 2.1 of Amendment No. 2, the Parties will submit such dispute for resolution in accordance with Article 13 of the Agreement.

		
	2.
	TECHNOLOGY TRANSFER AND INSTALLATION OF ENHANCEMENTS

		
	2.1
	Enhancements.  On or before [***] and each [***] thereafter during the Term, CODEXIS will provide to MERCK, if and when available, a one-time transfer and installation of any Enhancements that have (i) been implemented by CODEXIS in its own commercial business operations during the previous [***] and (ii) have been cleared by CODEXIS for release to MERCK and its other licensees in accordance with Section 5.5(a) of this Exhibit 3.2.5.  The transfer and installation of the Enhancements shall be performed in approximately the same manner as the Codexis Software was installed on the dedicated server at the MERCK Designated Lab under the Technology Transfer Plan and the Party’s shall cooperate with each other in good faith to facilitate such transfer and installation.

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	2.2
	Enhancements Requiring Payment. If any Enhancement includes one or more new software program(s) which are not already installed at the Merck Designated Lab under the Agreement at the time of such installation and which installation would trigger a non-refundable, non-creditable payment of US$[***] to CODEXIS under the PAYMENT section, then CODEXIS shall, not later than [***] and each [***] thereafter during the Term, notify MERCK in writing of the new software program(s) to be offered in the Enhancement and provide MERCK reasonable information regarding the new software program(s) and their functions.  MERCK shall have [***] calendar days from its receipt of CODEXIS’ written notice to notify CODEXIS that MERCK either accepts or rejects the installation of all or any of the new software programs.  If MERCK notifies CODEXIS that MERCK accepts the installation of one or more new software program(s) offered by CODEXIS pursuant to such Enhancement, then CODEXIS will install such new software program(s) in accordance with Section 2.1 and CODEXIS will invoice MERCK for the non-refundable non-creditable payment of US$[***] under the PAYMENT section.  If MERCK either notifies CODEXIS that MERCK rejects the installation of all new software program(s) pursuant to such Enhancement, or fails to provide a written notice to CODEXIS of MERCK’s election during such thirty (30) calendar day period, then CODEXIS will not install such new software program(s) in accordance with Section 2.1 and CODEXIS will not invoice MERCK for the non-refundable, non-creditable payment of US$[***] under the PAYMENT section.  If two or more new software programs are offered by CODEXIS in an Enhancement, and MERCK accepts the installation of one or more such new software programs but MERCK also rejects the installation of one or more other such new software programs, the installation by CODEXIS of one or more new software programs accepted by MERCK will trigger the payment of the non-refundable non-creditable payment of US$[***] and [***].  If MERCK either notifies CODEXIS that MERCK rejects the installation of all new software program(s) pursuant to an Enhancement, or fails to provide a written notice to CODEXIS of MERCK’s election during such [***] calendar day period, then, if MERCK should desire to accept, in a subsequent Enhancement offering, the installation of one or more of the previously rejected new software program(s), then MERCK shall pay CODEXIS the non-refundable, non-creditable payment of US$[***] under the PAYMENT section for the installation of one or all of the previously rejected new software program(s) in addition to any US$[***] payment due as a result of any new software program(s) offered as part of the subsequent Enhancement Offering.

		
	3.
	CODEXIS SOFTWARE SUPPORT AND MAINTENANCE

		
	3.1
	Included Services. With respect to the Codexis Software, CODEXIS shall provide to MERCK the Services, including (a) the Support Services and (b) the Maintenance Services, in each case as provided for in this Exhibit 3.2.5. 

		
	3.2
	MERCK Support Liaisons. MERCK may designate up to two (2) technical contacts (“MERCK Support Liaisons”) to request Support Services, Maintenance Services or Training Services. MERCK will notify CODEXIS if MERCK wishes to remove or add or change Support Liaisons or if a Support Liaison terminates employment with MERCK. MERCK initially designates the following persons as its Support Liaisons:

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	Name
	Email

	 
	[***]
	[***]

	 
	[***]
	[***]

		
	3.3
	Codexis Project Manager. The Codexis Project Manager shall be a single point of contact for reporting progress, delivering documentation, and resolving technical issues. CODEXIS may, upon written notice to MERCK, appoint one or more alternate Codexis Project Managers to receive requests from MERCK Support Liaisons for Services. 

		
	3.4
	Project Managers.

	
			
	Party
	Name
	Email

	CODEXIS
	[***]
	[***]

	MERCK
	[***]
	[***]

A Party may change the identity and contact information of its Project Manager by written notice to the other party.
		
	4.
	SUPPORT SERVICES

		
	4.1
	Hours of operation. CODEXIS shall exercise commercially reasonable efforts to provide Support Services on those days that CODEXIS’ Redwood City, CA offices are open for business (generally Monday through Friday, Codexis scheduled holidays and closures excepted) and during CODEXIS’ normal business hours which are 9:00 AM to 4:00 PM Pacific time.  MERCK recognizes that CODEXIS does not and is not required to maintain a support 

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center to provide Services and that CODEXIS shall only be required to use commercially reasonable efforts to receive, acknowledge, schedule and answer MERCK’s requests for Services on a timely basis.  
		
	4.2
	Requests for Support Services.  All requests for Support Services shall be submitted by e-mail to the Codexis Project Manager.  Requests for Support Services may be submitted by either the MERCK Project Manager or the MERCK Support Liaisons.    

		
	5.
	MAINTENANCE SERVICES

		
	5.1
	Critical Errors. 

		
	(a)
	If MERCK discovers that the Codexis Software fails to function in accordance with the Documentation and that such failure is a Critical Error, the MERCK Support Liaison shall notify the Codexis Project Manager by e-mail or telephone of the Critical Error in question and provide CODEXIS (so far as MERCK is reasonably able) with a documented example of such Critical Error. 

		
	(b)
	CODEXIS shall thereupon promptly use commercially reasonable efforts correct the Critical Error in accordance with the Standard of Care. Upon correcting the Critical Error, CODEXIS shall deliver to MERCK the correct version of the Object Code of the Codexis Software and appropriate amendments to the Documentation specifying the nature of the correction and providing instructions for the proper use of the corrected version of the Codexis Software. CODEXIS shall provide MERCK with reasonable technical assistance to enable MERCK to implement the use of the corrected version of the Codexis Software.

		
	5.1
	Non-Critical Errors.

		
	(a)
	If MERCK discovers that the Codexis Software fails to function in accordance with the Documentation, or there is an issue with the Documentation, but such failure or issue is a Non-Critical Error, the MERCK Support Liaison shall notify the Codexis Project Manager by e-mail (only) of the Non-Critical Error in question and provide CODEXIS (so far as MERCK is reasonably able) with a documented example of such Non-Critical Error.

		
	(b)
	Upon receipt of MERCK’s notice of a Non-Critical Error, the Codexis Project Manager will log the issue.  CODEXIS will then prioritize the Non-Critical Error for corrective action, and, if warranted, use commercially good faith efforts to address the issue in the next release or Update of the Codexis Software or Documentation.

		
	(c)
	CODEXIS makes no warranty that Non-Critical Errors will be corrected or resolved, and that Non-Critical Errors will be addressed according to any particular timetable.  The resolution of Non-Critical Errors brought to its attention by MERCK will be addressed by CODEXIS in accordance with the Standard of Care.   

		
	5.2
	Product maintenance services and support requirements. CODEXIS shall also provide and/or perform the following Maintenance Services in support of the Codexis Software:

		
	(a)
	provide version control and release Documentation for the Codexis Software;

		
	(b)
	promptly provide MERCK with all releases that CODEXIS may release for the Codexis Software;

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	(c)
	make any and all necessary and corresponding changes to any and all Codexis Software as required by any Maintenance Modification and/or enhancement to maintain its compliance with the Specifications, Documentation and warranties set out in the Agreement;

		
	(d)
	provide MERCK with technical support for all Call Tickets assigned to CODEXIS;

		
	(e)
	perform CODEXIS’ standard component, Product and system integration and test activities for the Product as necessary; and

		
	(f)
	provide appropriate quality control/quality assurance testing of the Codexis Software during the Term.

All requests for Maintenance Services will be made by the MERCK Support Liaison and sent by e-mail to the Codexis Project Manager.
		
	5.3
	Updates. CODEXIS shall deliver to MERCK any Updates which CODEXIS shall from time to time incorporate in its own business operations and MERCK shall have the option whether or not to use such Updates. CODEXIS shall deliver to MERCK the Object Code of the new Updates together with any amendments to the Documentation which shall be necessary to enable proper use of the improved facilities and functions of the Updates. If MERCK notifies CODEXIS of any failure of the new Updates to function in accordance with the Documentation then CODEXIS shall at its option either correct such Updates and re-issue it (as if it were a new Update).

		
	5.4
	Enhancements. 

		
	(a)
	MERCK recognizes that prior to releasing Enhancements to its licensees, including MERCK, CODEXIS will beta test such Enhancements in its own business operations to determine whether there are any issues associated with the Enhancements and obtain feedback from its own personnel utilizing the software.  Following this period of beta testing, and once CODEXIS has determined in good faith that the Enhancements are ready for delivery to and installation by its licensees, including MERCK, as Enhancements, CODEXIS will provide the Enhancement to MERCK in accordance with the Standard of Care, with accompanying Documentation, as appropriate, at no additional charge and provide reasonable assistance to MERCK in MERCK’s installation and operation of the Enhancement. Upon delivery to MERCK, any such Enhancement will be considered “Codexis Software” for purposes of this Exhibit 3.2.5.

		
	(b)
	Notwithstanding anything contained in this Exhibit 3.2.5 to the contrary, MERCK shall be under no obligation to install any Enhancement made available by CODEXIS. However, MERCK recognizes that CODEXIS will only be able to provide Support Services and Maintenance Services for the then current version of the Codexis Software as being used by CODEXIS in its own business operations.  CODEXIS will not be required to supply Support Services or Maintenance Services for older versions of the Codexis Software, including bug fixes and the correction of Errors.

		
	1.
	ADDITIONAL PROVISIONS

		
	1.1
	Cost of Services.  For each Contract Year during the Term of this Exhibit 3.2.5, the first [***] incurred by CODEXIS in the supplying the Services shall be [***].  For each Contract Year during the Term of this Exhibit 3.2.5, all man hours above the [***] incurred by CODEXIS in 

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supplying the Services shall be [***].  MERCK shall pay all CODEXIS invoices for Services within [***] of MERCK’s receipt of CODEXIS’ invoice.
		
	1.2
	Notice by MERCK to Codexis.  MERCK will provide to CODEXIS reasonable notice of all requests for Services.

		
	1.3
	Other Service Obligations in the Agreement.  This Exhibit 3.2.5 and the obligations of the Parties hereunder are in addition to and without prejudice to any other services obligations contained in the Agreement (without reference to Exhibit 3.2.5).

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Exhibit 3
Press Release

Codexis Secures Multi-Year Technology Upgrade Package for its CodeEvolver® Protein Engineering Platform License with Merck.
 
REDWOOD CITY, Calif. (Release Date, 2019) – Codexis, Inc. (NASDAQ: CDXS), a leading protein engineering company, announces the signing of a new agreement with Merck, through a subsidiary.  Under the terms of the agreement, Codexis will install certain CodeEvolver® protein engineering technology upgrades into Merck’s platform license installation and will maintain those upgrades for a multi-year term.  Financial terms of the agreement are undisclosed.  
“We are thrilled to work with Merck to upgrade and improve the productivity of their licensed CodeEvolver® protein engineering technology platform,” stated John Nicols, Codexis President and CEO.  “CodeEvolver® continues to benefit from Codexis’ focused investments, enabling novel protein discovery to hit new targets at a continuously increasing speed.” 
In August 2015 Codexis announced the signing of a CodeEvolver® platform technology license agreement with Merck. Under this agreement, Codexis has granted Merck a non-exclusive license to use the CodeEvolver® protein engineering platform technology to develop novel enzymes for use in the manufacture of pharmaceutical products. 
About Codexis, Inc.
Codexis is a leading protein engineering company that applies its proprietary CodeEvolver® technology to develop proteins for a variety of applications, including as biocatalysts for the commercial manufacture of pharmaceuticals, fine chemicals and industrial enzymes, and enzymes as biotherapeutics and for use in molecular diagnostics. Codexis’ proven technology enables improvements in protein performance, meeting customer needs for rapid, cost-effective and sustainable manufacturing in multiple commercial-scale implementations of biocatalytic processes. For more information, see www.codexis.com.
Forward-Looking Statements
To the extent that statements contained in this press release are not descriptions of historical facts regarding Codexis, they are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. You should not place undue reliance on these forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond Codexis’ control and that could materially affect actual results. Additional information about factors that could materially affect actual results can be found in Codexis’ Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 15, 2018 and Form 10-Q filed November 9, 2018, including under the caption “Risk Factors” and in Codexis’ other periodic reports filed with the 

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SEC. Codexis expressly disclaims any intent or obligation to update these forward-looking statements, except as required by law.

Contacts:  

Investors    Media
LHA Investor Relations    SCORR Marketing
		
	Jody Cain, 310-691-7100 
	Lea Studer, 402-366-1752

jcain@lhai.com    lea@scorrmarketing.com

#  #  #

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