Document:

Exhibit 10.1

 

SECOND AMENDMENT OF

INVESTMENT AGREEMENTS

 

This Second Amendment of Investment Agreements (this "Amendment") is entered into and made effective as of June 30, 2015 (the "Effective Date"), by and among RiceBran Technologies (formerly known as NutraCea), a California corporation ("RBT"), and AF Bran Holdings-NL LLC ("AFBH-NL") and AF Bran Holdings LLC ("AFBH"), in each case, a Delaware limited liability company (AFBH-NL and AFBH being referred to collectively as "AF" or "AF") and Nutra SA, LLC, a Delaware limited liability company (the "Company") and Industria Riograndese de Oleos Vegetais Ltda, a limited liability company organized under the laws of the Federative Republic of Brazil ("Irgovel"). The Company, Irgovel, RBT and AF are sometimes referred herein collectively as the "Parties."

 

WHEREAS, certain of the Parties entered into a Contribution and Subscription Agreement (the "Contribution Agreement") dated as of December 24, 2012 (as amended on January 29, 2013), a Membership Interest Purchase Agreement dated as of December 29, 2010 (as amended on January 18, 2011), a Second Amended and Restated Limited Liability Company Agreement for Nutra SA, LLC dated as of December 24, 2012 (the "LLC Agreement"), an Investor Rights Agreement dated as of January 18, 2011 ("Investor Rights Agreement"), a Waiver of Investor Rights Agreement dated as of December 6, 2013 (the "IRA Waiver"), and an Amendment of Investment Agreements dated as of October 31, 2013 ("First Amendment" and collectively, the "Original Agreements");

 

WHEREAS, in December of 2013, RBT contributed to the Company $3,000,000 as required pursuant to Section 2(e) of the Contribution Agreement, as such Section was amended and restated pursuant to the First Amendment, and has continued to make additional Capital Contributions required by the Company for the operations of Irgovel, the Company's wholly-owned subsidiary;

 

WHEREAS, from the date of the formation of the Company through April 30, 2015, RBT has contributed a total of $28,405,000 to the Company and AF has contributed a total of $14,445,000 to the Company;

 

WHEREAS, during May 2015, in order to assist with regard to cash flow requirements of the Company and Irgovel, RBT prepaid Irgovel $550,000 for certain product purchases ("Prepayment"), and in exchange for the Prepayment, RBT was entitled to receive such product purchases valued at the amount of the Prepayment at a later date (the "Product Purchase Rights");

 

WHEREAS, on or about June 3, 2015, RBT, with the consent of AF, provided an additional Capital Contribution of $1,500,000 to the Company to fund certain Irgovel cash flow requirements ("Additional Capital Contribution");

 

WHEREAS, the Company and RBT desire for RBT to contribute the Product Purchase Rights to the Company as a $550,000 Capital Contribution by RBT; and have agreed that the Company will contribute the Product Purchase Rights as a Capital Contribution to Irgovel;

 

WHEREAS, the Additional Capital Contribution of $1,500,000 and the contribution of the Product Purchase Rights valued at $550,000 increase RBT's total Capital Contributions to the Company as of the Effective Date to $30,455,000; and

 

WHEREAS, the Parties desire to amend and revise certain terms of the LLC Agreement, the IRA Waiver and the Investor Rights Agreement as set forth below. Capitalized terms used in this Amendment which are not defined herein shall have the meanings ascribed to them in the LLC Agreement.

 

NOW, THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

1.                   Contribution of Product Purchase Rights.

 

a.         RBT hereby contributes the Product Purchase Rights to the Company as a Capital Contribution. RBT, AF and the Company each agree that such contribution shall comprise a $550,000 additional Capital Contribution by RBT to the Company as of the Effective Date.

 

b.        Immediately upon receipt of the Product Purchase Rights, the Company hereby contributes the Product Purchase Rights to Irgovel as a capital contribution to Irgovel. RBT, AF, the Company and Irgovel each agree that such contribution shall comprise a $550,000 additional capital contribution by the Company to Irgovel as of the Effective Date.

 

2.                   Contribution of Additional Funds. The Parties acknowledge and agree that, in addition to the Additional Capital Contribution of $1,500,000 and the contribution of the Product Purchase Rights valued at $550,000, RBT, in its discretion, may contribute an additional $1,000,000 on the same terms and conditions as the Additional Capital Contribution at any time on or before May 31, 2016.

 

3.                   Amendment of LLC Agreement. The LLC Agreement is amended as follows:

 

(a)                 Deletion of AF Yield Payments. Section 7.1 of the LLC Agreement is hereby deleted in its entirety effective as of January 1, 2014. The Company shall have no obligation to pay any AF Yield Payments to AF, whether for past or future accruals. Subsection (y) of Section 6.2.7 and subsection (y) of Section 6.14 and all references to either of such subsections are hereby deleted in their entirety.

 

(b)                 Distribution of Qualifying Securities. New Section 7.1 of the LLC Agreement is added as follows:

 

"7.1 Issuance of Qualifying Listed Securities. If RBT engages in a merger, reorganization, share transfer or other business combination with another company of similar or greater size whose primary business operations are in the rice industry on or prior to May 31, 2016 ("Strategic Transaction"), before any further Distributions to AF occur pursuant to Section 7.2, RBT shall have the right, but no obligation, concurrently with or within 30 days following the consummation of the Strategic Transaction, to cause the Company to redeem in full AF's Membership Interest as follows: (x) RBT will contribute to the Company the number of Qualifying Listed Securities that is equal in value to the Capital Contributions of AF as of such date (provided that such Qualified Listed Securities are approved by AF, which approval AF shall not unreasonably withhold or delay), and (y) the Company will immediately thereafter Distribute to AF as a return of capital hereunder, and a full redemption of AF's Membership Interest, (i) such Qualifying Listed Securities, plus (ii) an amount of cash equal to the Capital Contributions of AF as of such date. RBT will provide AF with 5 trading days' notice prior to the contribution described in clause (x) above. The Qualifying Listed Securities Distributed to AF shall be valued at the lower of the average VWAP for (a) the twenty (20) trading days preceding such issuance or (b) the date of the receipt of such issuance (which shall occur following the close of normal trading on such day); provided that such Qualifying Listed Securities shall be registered and free and clear of all liens and restrictions on transfer, in whole or in part. The foregoing shall be subject to compliance with all applicable securities laws and listing requirements, and the Parties agree to cooperate in good faith to accomplish the foregoing."

 

(c) Certain Definitions. Article II of the LLC Agreement is hereby amended to delete in their entirety the defined terms and corresponding definitions "AF Unpaid Yield," "AF Yield" and "AF Yield Percentage." Article II of the LLC Agreement is further amended to add certain new defined terms and definitions and to amend and restate in their entirety certain other defined terms and definitions as follows:

 

"Additional Capital Preference Percentage" means (i) with respect to RBT, the percentage that the RBT Additional Capital Contributions comprises of the total of the RBT Additional Capital Contributions plus $14,445,000, and (ii) with respect to AF, the percentage that $14,445,000 comprises of the sum of (x) the RBT Additional Capital Contributions plus (y) $14,445,000.

 

"Drag Along Trigger Date" means the earliest of: (i) January 1, 2018; or (ii) the Bankruptcy of RBT.

 

"Qualifying Listed Securities" means the securities registered under the Securities Act of 1933, as amended, of the surviving entity of a Strategic Transaction, or of the listed direct or indirect parent of such entity, that has stock with a market capitalization in excess of $75 million that is registered on the New York Stock Exchange, the NASDAQ or the NYSE MKT LLC.

 

"RBT Additional Capital Contributions" means the total Capital Contributions by RBT to the Company on or after June 3, 2015, not to exceed an aggregate maximum of $3,050,000.

 

"Selling Members" means, collectively, the Transferring Member and all Participating Members pursuant to Section 9.5.

 

"Strategic Transaction" has the meaning set forth in Section 7.1.

 

"Unreturned AF Capital Contributions" means as of any date of determination (i) the product of (but not less than zero) of two (2) times the Capital Contributions of AF, less (ii) the aggregate amount of Distributions paid to AF in respect of AF's Units pursuant to Sections 7.2.1 and 7.2.2.

 

"Unreturned RBT Additional Capital Contributions" means, as of any date of determination, the total (but not less than zero) of the RBT Additional Capital Contributions, less the aggregate amount of Distributions paid to RBT in respect of RBT's Units pursuant to Sections 7.2.1 and 7.2.3.

 

"Unreturned RBT Capital Contributions" means, as of any date of determination, (i) the product (but not less than zero) of two (2) times the Capital Contributions of RBT, less (ii) the aggregate amount of Distributions paid to RBT in respect of RBT's Units pursuant to Sections 7.2.1 and 7.2.3.

 

"VWAP" shall mean, for any security as of any date, the dollar volume-weighted average price for such security on the applicable principal market during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its "Volume at Price" function or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the "pink sheets" by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.).

 

(d)               Distributions of Distributable Cash. Section 7.2 of the LLC Agreement is hereby amended and restated in its entirety to provide as follows:

 

"7.2 Distributions of Distributable Cash. Subject to applicable law, Section 7.5 and Section 12.3 and except in the case of Distributions pursuant to Section  7.1, the Manager shall Distribute all Distributable Cash to the Members on the 31' day of March of each calendar year and at such other time or times as AF and RBT may mutually agree (and at no other times); provided, that the Manager shall Distribute all or a portion of Distributable Cash arising from Capital Transactions at such time or times as AF may designate (and at no other times). Subject to the foregoing, Distributions of Distributable Cash shall be made in the following order and priority:

 

7.2.1 Additional Capital Preference. First, to RBT and AF, in proportion to the Additional Capital Preference Percentages of each, until the Unreturned RBT Additional Capital Contributions amount is zero;

 

7.2.2 AF Preference. Next, to AF to the extent of the Unreturned AF Capital Contributions;

 

7.2.3 RBT Preference. Next, to RBT to the extent of the Unreturned RBT Capital Contributions; and

 

7.2.4 Percentage Interests. Next, to the Members in proportion to the Members' Percentage Interests."

 

(e)                 Right of Co-Sale. The second sentence of Section 9.5 of the LLC Agreement is hereby amended and restated in its entirety to provide as follows:

 

"Each such Non-Transferring Member who timely elects to participate in such sale (a "Participating Member") shall be entitled to sell a portion of its Membership Interest equal to a fraction, the numerator of which is (i) the amount of consideration such Participating Member would receive in accordance with Section 17.1 in a hypothetical sale of 100% of the equity securities of the Company at its fair market value, and the denominator of which is (ii) the Company's fair market value, in each case, determined as of the delivery of the Transfer Notice."

 

(f)                   Certain References. Sections 12.3, 17.1 and 17.2 of the LLC Agreement are hereby amended to delete in their entirety each reference to Section 7.1.

 

5.                    Partial Rescission of IRA Waiver. The Parties hereby agree to suspend and rescind in its entirety the waiver set forth in Section 1(b) of the IRA Waiver as it relates to Section 6.2 (Roll Up Into NutraCea) of the Investor Rights Agreement, effective from the date hereof until January 1, 2018. As a result of such rescission, all rights and obligations of the Parties under Section 6.2 (Roll Up Into NutraCea) of the Investor Rights Agreement are hereby reinstated until January 1, 2018. For purposes of Section 6.2 (Roll Up Into NutraCea) of the Investor Rights Agreement and all defined terms used therein, NutraCea shall include any publicly-traded successor to NutraCea.

 

6.                  Acknowledgement of Ownership. The Parties acknowledge and agree that immediately following the date hereof, and including the effect of the conversion of the Prepayment to a Capital Contribution, but not including the balance of the RBT Additional Capital Contributions, RBT owns 15,227,500 Units (constituting a 67.83% Percentage Interest) and AF owns 7,222,500 Units (constituting a 32.17% Percentage Interest).

 

7.                    No Further Amendment. The Parties acknowledge and agree that there are no other amendments, changes, waivers or modifications to the Original Agreements other than as set forth in this Amendment, and all other terms of the Original Agreements remain in full force and effect except as expressly modified or waived herein. The Parties agree that except as expressly set forth herein, this Amendment shall not be construed as a waiver by any Party of any of its other rights or obligations under the Original Agreements.

 

8.                    Counterparts. This Amendment may be executed in any number of counterparts with the same effect as if the Parties had all signed the same document. All counterparts shall be construed together and shall constitute one agreement. This Amendment, to the extent executed and delivered by means of a photographic, photostatic, facsimile or similar reproduction of such signed writing using a facsimile machine or electronic mail shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any Party or to any such agreement or instrument, each other Party or party thereto shall re execute original forms thereof and deliver them to all other Parties. No Party shall raise the use of a facsimile machine or electronic mail to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine or electronic mail as a defense to the formation or enforceability of a contract and each such Party forever waives any such defense.

 

9.                    Headings. The article and section headings of this Amendment are for convenience of reference only and shall not be deemed to alter or affect the meaning or interpretation of any provision hereof.

 

10.                 Effectiveness. This Amendment shall be effective and binding upon all parties to the Original Agreements upon the written consent of the Parties.

 

11.                 Entire Agreement. This Amendment constitutes the entire agreement among the Parties with respect to the amendment and waiver of the Original Agreements with respect to the subject matter hereof.

 

12.                Governing Law; Venue. The laws of the State of Delaware, including, with limitation, the Act, shall govern the organization and internal affairs of the Company and the liability of the Members. Nevertheless, to the extent that reference need be made to the law of any state to enforce the decision made in any legal proceeding brought pursuant hereto, the internal laws of the State of New York (without reference to the rules regarding conflict or choice of laws of such State) shall be utilized for such purpose. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. THE PARTIES HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY.

 

[SIGNATURE PAGE TO FOLLOW]

 

The Parties have executed this Second Amendment of Investment Agreements as of the date first above written.

 

RICEBRAN TECHNOLOGIES

 

	
By:

	
/s/ W. John Short

	 

Name: W. John Short

Title: Chief Executive Officer

 

	
Address:

	
6720 N. Scottsdale Road, Suite 390

	
 

	
Scottsdale, Arizona 85253

	
Facsimile:

	
(602) 522-3001

 

	
AF BRAN HOLDINGS-NL LLC

	 	
AF BRAN HOLDINGS LLC

	 		
	By: 	
/s/ Ettore V. Biagioni

	 	By:	
/s/ Ettore V. Biagioni

	
Name: Ettore V. Biagioni

	 	
Name: Ettore V. Biagioni

	
Title: President

	 	
Title: President

 

	
Address:

	
10 East 53rd Street, 36th Floor 

	Address:	
10 East 53rd  Street, 36th 

	 	
New York, NY 10022

		Floor New York, NY 10022
	
Facsimile:

	
(212) 750-0191

	Facsimile:   	
(212) 750-0191

 

	
NUTRA SA, LLC

	 	
INDUSTRIA RIOGRANDESE DE OLEOS

		 	
VEGETAIS LIMITADA

	 		
	By:	
/s/ W. JohnShort

	 	By:	
/s/ W. JohnShort

	
Name: W. John Short

	 	
Name: W. John Short

	
Title:

	 	
Title:

 

	
Address:

	
6720 N. Scottsdale Road, Suite 390

	Address:	
	 	
Scottsdale, Arizona 85253

		
	
Facsimile:

	
(602) 522-3001

	Facsimile:   	

 

[SIGNATURE PAGE TO SECOND AMENDMENT OF INVESTMENT AGREEMENTS]xene-ex101_125.htm

Exhibit 10.1

 

May 13, 2015

Genentech, Inc.

1 DNA Way

South San Francisco 

California, USA 94080

	
Re: 
	
Collaborative Research and License Agreement between Xenon Pharmaceuticals Inc. (“Xenon”) and Genentech, Inc. (“GNE”) together with F. Hoffmann-La-Roche Ltd (“Roche”) (GNE and Roche, collectively, “Genentech”), made as of December 22, 2011, as amended (the “Agreement”)

Attention:Kate Skrable, Alliance Management 

Dear Kate,

Further to our recent discussions and in accordance with Section 16.14 of the Agreement, and in consideration of the premises and mutual covenants contained herein, Xenon and Genentech agree as follows:

1.This amendment to the Agreement shall hereinafter be referred to as the “Letter Amendment #4.”  Except as specifically defined below, capitalized terms used in this Letter Amendment #4 shall have the same meaning as ascribed to such terms in the Agreement.

	
2.
	
DEFINITIONS.  For purposes of this Letter Amendment #4:

“Field” means treating the following diseases by modulating NaV1.6: epilepsy, including Dravet Syndrome.

“NaV1.6” means the voltage gated sodium channel polypeptide of the SCN8A gene, having the sequence described in Schedule A-1 hereto and mutant and splice variants thereof, provided in any case, NaV1.6 shall exclude NaV1.7.

“NaV1.6 Modulator(s)” means a [†].

“NaV1.6 IP” means Intellectual Property conceived, identified, or first made by Xenon (either alone, jointly with any Third Parties and/or by any Third Parties on behalf of Xenon) as a result of conducting any research activities under the NaV1.6 Research Program.  For clarity, Xenon Collaboration IP and Post-Research Term IP exclude NaV1.6 IP. NaV1.6 IP does not include Intellectual Property that was owned or controlled by a Third Party prior to the date of a Change of Control Event involving such Third Party and Xenon, provided that such Third Party Intellectual Property was conceived, identified, or first made independently from Xenon.

[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION“NaV1.6 Research Program” means those research and discovery activities conducted by Xenon (either alone, jointly with any Third Parties and/or by any Third Parties on behalf of 

Page 1 of 9

 

Xenon) outside the Research Program that are directed toward the identification, design, synthesis, discovery and optimization of NaV1.6 Modulators.

“Other Compound” means a Compound that Xenon conceived, identified or first made (either alone, jointly with any Third Parties and/or by any Third Parties on behalf or Xenon) (i) during the course of conducting a NaV1.6 Research Program, and (ii) through the exercise of the license granted in paragraph 6(a) below, (iii) that is not otherwise a Collaboration Compound and (iv) was not conceived, identified or first made by Genentech prior to the date Xenon conceived, identified or first made such Compound.

“Xenon Research Data” means the data, results and information that are specifically set forth under paragraph 4(a) below, if and to the extent that the foregoing is generated by Xenon (either alone, jointly with any Third Parties and/or by any Third Parties on behalf of Xenon) in the course of conducting the NaV1.6 Research Program from [†] until the date that the [†] expires under the Agreement.

3.XENON NAV1.6 RESEARCH PROGRAM.  Further to the discussions of the JRC in its meeting of [†] regarding Xenon’s interest to conduct a NaV1.6 Research Program in the Field outside of the Research Program and outside the Agreement and GNE’s support of Xenon’s interest to conduct such a NaV1.6 Research Program, and notwithstanding anything to the contrary in the Agreement including without limitation the Exclusivity provision set forth under Section 3.8 of the Agreement, for good and valuation consideration the sufficiency and receipt thereof which is specifically acknowledged by each Party hereto, the Parties have agreed to enter into this Letter Amendment #4, and specifically agree to the terms set out herein.

	
4.
	
DISCLOSURE AND USE OF DATA.

	
a.
	
Xenon shall disclose to the JRC or a member of the JRC designated by Genentech (or, following the dissolution of the JRC, such former JRC member as is then-designated by Genentech) and a Genentech Alliance Manager designated by Genentech the following Xenon Research Data:

	
·
	
[†]

	
·
	
NaV1.6 [†]

	
·
	
NaV1.6 [†]

	
·
	
[†]

	
·
	
[†].

	
b.
	
[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSIONDuring and after the Research Term, Xenon shall disclose the above-noted Xenon Research Data to Genentech on a regular basis as generated, but in no event less often than [†] (unless otherwise agreed), in a format similar to that which analogous information respecting Collaboration Compounds is exchanged between the Parties under the Agreement during the Research Term.  Xenon is responsible for [†] relating to the generation of such Xenon Research Data and the disclosure of same to Genentech.  All Xenon Research Data (to the extent that it is specific to Compounds or related to NaV1.7) shall be held and maintained as 

Page 2 of 9

 

		
Confidential Information of each party in accordance with Article 11 of the Agreement, subject to the license grant to Genentech under paragraph 6(c) herein.  All Xenon Research Data (to the extent that it is not specific to Compounds nor related to NaV1.7) shall be held and maintained as Confidential Information of Xenon in accordance with Article 11 of the Agreement, subject to the license grant to Genentech under paragraph 6(c)(iii) below.

	
5.
	
MILESTONES AND ROYALTIES.  For purposes of calculating milestone and royalty payments pursuant to Article 7 and Article 8 of the Agreement and paragraph 6(c)(i) below, all Other Compounds and products containing Other Compounds shall be deemed to be SMC Licensed Products containing Collaboration Compounds to which the following terms of the Agreement are applicable:

	
a.
	
clause (a) of the SMC Milestone Product definition, and

	
b.
	
clause (a) of the SMC Royalty Products definition, if such Other Compound is Covered by a Valid Claim in a Patent Right within NaV1.6 IP, and regardless of whether any such Other Compound is conceived, identified or first made during the Research Term, during the [†], or after the [†].  For clarity no milestone and royalty payment shall be due on Other Compounds and products containing Other Compounds, other than as set forth under this paragraph 5.

	
6.
	
LICENSES AND RIGHTS OF FIRST NEGOTIATION. 

	
a.
	
Research License to Xenon.

Effective as of [†], Genentech hereby:

	
i.
	
grants-back to Xenon under Licensed IP (to the extent exclusively licensed to Genentech pursuant to Section 9.1 of the Agreement); and

	
ii.
	
grants to Xenon under Genentech Collaboration IP,

a royalty-free, non-exclusive, fully paid, revocable, perpetual, world-wide license under such Licensed IP and/or Genentech Collaboration IP that is necessary or useful to make and use (but not to sell, or offer for sale) NaV1.6 Modulators under the NaV1.6 Research Program in the Field.

The license granted in this paragraph 6(a) is and shall be revocable at Genentech’s sole discretion, upon delivery of ninety (90) days prior written notice to Xenon at any time after the third (3rd) year anniversary of the date of this Letter Agreement #4.  In the event of uncured material breach (pursuant to Section 12.4) of Xenon’s obligations or duties under the Letter Amendment #4, Genentech may terminate the license granted in this paragraph 6(a) at any time following the date set forth on page 1 of Letter Amendment #4.  Nothing in the foregoing shall waive or otherwise alter Genentech’s right to terminate the Agreement pursuant to Section 12.3(a)(i).

[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSIONFor clarity, the terms “make and use” referenced in this paragraph 6(a) include, without limitation, “research, identify, design, synthesize, discover, import and export.” The 

Page 3 of 9

 

rights granted by this paragraph 6(a) may be exercised by Third Parties conducting research, identification, design, synthesis or discovery activities with or on behalf of Xenon under the NaV1.6 Research Program (hereinafter referred to as “Xenon CROs”).

The Parties further agree that notwithstanding s 3.8(a)(ii) of the Agreement:

	
·
	
Xenon may transfer Collaboration Compounds to Xenon CROs, solely for purposes its NaV1.6 Research Program provided that the JRC (or, following the dissolution of the JRC, such former JRC member as is then-designated by Genentech) and a Genentech Alliance Manager designated by Genentech has first approved such transfer; and

	
·
	
The JRC (or, following the dissolution of the JRC, such former JRC member as is then-designated by Genentech) has the authority to approve, on behalf of Genentech, [†].

	
b.
	
Xenon Right of First Negotiation for NaV1.6 Commercialization License. Genentech also grants to Xenon a right of first negotiation to obtain an exclusive, world-wide license, with the right to grant and authorize sublicenses, under the Licensed IP (to the extent exclusively licensed to Genentech pursuant to Section 9.1 of the Agreement) and/or under the Genentech Collaboration IP, to offer to sell, and sell, and import NaV1.6 Modulators to treat any disease in the Field (the “NaV1.6 Commercialization License”).

Xenon may exercise the foregoing right by providing written notice to Genentech at any time within [†] from the date of this Letter Agreement #4.  Following receipt by Genentech of such written notice, the Parties shall enter into good faith negotiations for the NaV1.6 Commercialization License.  Such NaV1.6 Commercialization License shall be on terms that are [†] under the circumstances.  The total compensation for such license shall not exceed [†].  In the event that:

i.the Parties do not reach mutual agreement on a definitive NaV1.6 Commercialization License within [†] following the receipt of the notice by Genentech:

	
A.
	
the NaV1.6 Commercialization License shall provide for [†] coordination and decision making by Genentech in consultation with Xenon, with respect to (x) Prosecution and enforcement of Patent Rights that are the subject of the NaV1.6 Commercialization License; and (y) any Development and Commercialization of such NaV1.6 Modulators by Xenon, to the extent that such Development and Commercialization of NaV1.6 Modulators impose a material risk [†] to the Development or Commercialization of Licensed Products that Genentech is actively Developing or Commercializing, including, without limitation, potential patient safety or action by a Regulatory Authority; and

	
B.
	
[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSIONthe provisions within the NaV1.6 Commercialization License that have not yet been agreed shall be settled first in accordance with Section 13.1 of the Agreement and, if necessary, by [†] (as defined in the Agreement) 

Page 4 of 9

 

		
provided that the resulting terms shall be reasonably consistent with clause (i) above.

ii.The Right of First Negotiation set forth in this paragraph 6(b) shall expire [†] from the date of this Letter Agreement, or until such time that Xenon gives notice to Genentech that Xenon is not interested in pursuing a NaV1.6 Commercialization License, whichever comes first.

	
c.
	
License to Genentech: Xenon hereby grants to Genentech, to the extent not exclusively licensed to Genentech under the Agreement (in which case the Agreement terms shall prevail):

i.under NaV1.6 IP, an exclusive, world-wide license to make, use, sell, offer for sale and import Other Compounds and Licensed Products containing Other Compounds, for all uses other than for uses in the Field; and

ii.under the NaV1.6 IP, a royalty-free, exclusive, fully paid, perpetual, world-wide license to make, use, sell, offer for sale and import Compounds (excluding Other Compounds) and Licensed Products containing Compounds (excluding Other Compounds), for all uses; and

iii.the right to grant sublicenses to Third Parties of its licensed rights under subparagraph 6(c)(i) and 6(c)(ii) above [†], such sublicense rights to be subject to the same terms and conditions, mutatis mutandis, as are set forth in Sections 9.3 and 9.4 of the Agreement.

7.RIGHT OF FIRST NEGOTIATION FOR DEVELOPING AND COMMERCIALIZING XENON’S NAV 1.6 MODULATORS.

	
a.
	
During the Term of the Agreement (the “Option Period”), Xenon hereby grants to Genentech (and its Affiliates) a right of first negotiation to enter into a drug research and development collaboration with Xenon directed to NaV1.6 Modulators (the “Genentech ROFN”).

	
b.
	
If at any time during the Option Period, (i) Xenon receives a bona fide written offer from a Third Party expressing such Third Party’s interest in negotiating a collaboration agreement for the research, development and commercialization of NaV1.6 Modulators, and Xenon has advised such Third Party that it is prepared to negotiate the terms of such an agreement, or (ii) the Board of Directors of Xenon have directed Xenon management to pursue a partner for its NaV1.6 Research Program, Xenon will deliver to Genentech written notice of Xenon’s interest in negotiating a drug research and development collaboration agreement directed to NaV1.6 Modulators (“ROFN Exercise Notice”).

	
c.
	
[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSIONWithin the [†] following Genentech’s receipt of a ROFN Exercise Notice (the “Term Sheet Finalization Period”), the Parties shall diligently and in good faith negotiate and finalize a mutually-agreed, non-binding term sheet.  Such term sheet shall set forth the terms and conditions of a drug research and development 

Page 5 of 9

 

		
collaboration agreement for the research, development and commercialization of therapeutic product(s) directed to NaV1.6 Modulators for the treatment of any disease in the Field (the “Proposed Transaction”).

	
d.
	
During the [†] following the execution by the Parties of the non-binding term sheet, if any, described in paragraph 7(c) above (the “License Finalization Period”), Xenon and Genentech shall in good faith negotiate the terms and conditions of a definitive and binding agreement for the Proposed Transaction.

	
e.
	
During the Option Period, Term Sheet Finalization Period and the License Finalization Period, except as set forth in paragraph 7(f) below, Xenon shall not enter into any agreement with, or enter into any discussions, with any Third Party regarding the applicable Proposed Transaction or solicit or knowingly encourage any Third Party to submit any proposal for the Proposed Transaction.

	
f.
	
If (A) Genentech and Xenon fail to reach a mutual agreement upon the terms and conditions of a term sheet during the Term Sheet Finalization Period, or fail to agree upon the terms and conditions of the definitive agreement for the Proposed Transaction during the License Finalization Period or (B) Genentech gives notice to Xenon that Genentech is not interested in pursuing a Proposed Transaction, Xenon shall be free to enter into discussions with Third Parties and/or negotiate and conclude a definitive agreement with any Third Party for the Proposed Transaction within the subsequent [†] period.  In the event Xenon does not enter into a definitive agreement with a Third Party for a Proposed Transaction within such [†] period, Xenon shall notify Genentech in the event that the events described in (i) or (ii) of Section 7 (b) occur again during the remainder of the Option Period, Xenon shall again provide Genentech with a ROFN Exercise Notice and the process described in this Section 7 shall apply to the new Proposed Transaction.

	
8.
	
OWNERSHIP OF INTELLECTUAL PROPERTY

All NaV1.6 IP (including without limitation Xenon Research Data and Other Compounds) is owned solely by Xenon.

	
9.
	
PATENT FILING AND PROSECUTION.

[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSIONNaV1.6 Research Program.  Should Xenon wish to file a patent application for NaV1.6 IP (“NaV1.6 Patent Filing”) Xenon shall inform in writing to an individual designated in writing by Genentech (e.g., Genentech’s outside counsel) of its intention to file such application and in confidence shall specify with particularity the subject matter of the application, including for composition of matter applications directed to new small molecule compounds [†] disclosed in the application.  Genentech shall have [†] from the receipt of such notification by such an individual designated by Genentech to inform Xenon’s Alliance Manager in writing as to whether Genentech wishes to coordinate with Xenon on the filing of the NaV1.6 Patent Filing with a filing of a patent application related to Compounds.  Upon such notification by Genentech, the Parties shall coordinate 

Page 6 of 9

 

and cooperate in good faith to ensure the disclosure and timing of any such NaV1.6 Patent Filing would not adversely affect the validity of claims in (i) any Patent Rights covering Compounds that are being Prosecuted by Genentech and/or (ii) any Patent Rights covering Compounds that Genentech reasonably anticipates Prosecuting following such notification by Genentech (each (i) and (ii) hereinafter referred to as “Genentech Compound Patents”), provided that, such process of coordination and cooperation shall not delay the filing of Xenon’s NaV1.6 Patent Filing for a timeframe greater than [†] following receipt of Genentech’s notification that it wishes to coordinate with Xenon on such filing.  Thereafter, during the further Prosecution of NaV1.6 Patent Filings, Xenon shall not and shall not permit any Third Party on its behalf to cite or characterize (i) Xenon Background Patent Rights, (ii) Genentech Background Patent Rights, (iii) Patent Rights comprised in Collaboration IP, or (iv) Patent Rights covering Compounds developed independently by Genentech, in such Prosecution of NaV1.6 IP Patent Filings without Genentech’s prior review, comment, and written permission, provided that such comments by Genentech shall be promptly delivered to Xenon’s Alliance Manager, and further provided that such written permission by Genentech will not be withheld or delayed except in circumstances where such citation or characterization would adversely affect the validity of claims of Genentech Compound Patents, in which case the Parties will enter into good faith discussions respecting the NaV1.6 IP Patent Filing(s) at issue, and will devote [†] efforts to finding a [†] compromise that would allow Xenon to continue its Prosecution of such NaV1.6 Patent Filing(s).

	
10.
	
GENERAL

	
a.
	
In the event of a conflict between the terms of this Letter Amendment #4 and the terms of the Agreement, the terms of the Agreement shall prevail.

	
b.
	
Except as specifically provided above in this Letter Amendment #4, the Agreement remains in full force and effect, unamended.

	
c.
	
Any rights and obligations of the Parties set out in this Letter Amendment #4 which, from the context hereof, are intended to survive any termination or expiration of the Agreement, including those rights and obligations set out in paragraph 5 above, shall survive any such termination or expiration.

[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

Page 7 of 9

 

By the signatures below, the Parties have caused this Letter Amendment #4 to be executed by their respective duly authorized officers to be effective as of [†].

Sincerely,

XENON PHARMACEUTICALS INC.

By:/s/ Simon Pimstone

Simon Pimstone

President & CEO

GENETECH, INC

By: /s/ James Sabry

Name: James Sabry

Title: SVP

F. HOFFMAN-LA ROCHE LTD

By: /s/ Stefan Arnold/s/ Dr. Melanie Frey Wick

Name: Stefan ArnoldDr. Melanie Frey Wick

Title: Head Legal PharmaAuthorized Signatory

 

 

[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

Page 8 of 9

 

Schedule A-1

NaV1.6

NCBI LOCUSAAD157891980 aa

DEFINITION voltage-gated sodium channel alpha subunit [Homo sapiens].

NCBI ACCESSIONAAD15789

VERSIONAAD15789.1GI:4321647

Nav1.6 SCN8A AMINO ACID SEQ

							
	
1
	
maarllappg
	
pdsfkpftpe
	
slanierria
	
esklkkppka
	
dgshredded
	
skpkpnsdle

	
61
	
agkslpfiyg
	
dipqglvavp
	
ledfdpyylt
	
qktfvvinrg
	
ktlfrfsatp
	
alyilspfnl

	
121
	
irriaikili
	
hslfsmiimc
	
tiltncvfmt
	
fsnppdwskn
	
veytftgiyt
	
feslvkiiar

	
181
	
gfcidgftfl
	
rdpwnwldfs
	
vimmayvtef
	
vdlgnvsalr
	
tfrvlralkt
	
isvipglkti

	
241
	
vgaliqsvkk
	
lsdvmiltvf
	
clsvfaligl
	
qlfmgnlrnk
	
cvvwpinfne
	
sylengtkgf

	
301
	
dweeyinnkt
	
nfytvpgmle
	
pllcgnssda
	
gqcpegyqcm
	
kagrnpnygy
	
tsfdtfswaf

	
361
	
lalfrlmtqd
	
ywenlyqltl
	
raagktymif
	
fvlvifvgsf
	
ylvnlilavv
	
amayeeqnqa

	
421
	
tleeaeqkea
	
efkamleqlk
	
kqqeeagaaa
	
matsagtvse
	
daieeegeeg
	
ggsprsssei

	
481
	
sklssksake
	
rrnrrkkrkq
	
kelsegeekg
	
dpekvfkses
	
edgmrrkafr
	
lpdnrigrkf

	
541
	
simnqsllsi
	
pgspflsrhn
	
skssifsfrg
	
pgrfrdpgse
	
nefaddehst
	
veesegrrds

	
601
	
lfipirarer
	
rssysgysgy
	
sqgsrssrif
	
pslrrsvkrn
	
stvdcngvvs
	
liggpgshig

	
661
	
grllpeatte
	
veikkkgpgs
	
llvsmdglas
	
ygrkdrinsi
	
msvvtntive
	
eleesqrkcp

	
721
	
pcwykfantf
	
liwechpywi
	
klkeivnliv
	
mdpfvdlait
	
icivintlfm
	
amehhpmtpq

	
781
	
fehvlavgnl
	
vftgiftaem
	
flkliamdpy
	
yyfqegwnif
	
dgfivslslm
	
elsladvegl

	
841
	
svlrsfrllr
	
vfklakswpt
	
lnmlikiign
	
svgalgnitl
	
vlaiivfifa
	
vvgmqlfgks

	
901
	
ykecvckinq
	
dcelprwhmh
	
dffhsflivf
	
rvlcgewiet
	
mwdcmevagq
	
amclivfmmv

	
961
	
mvignlvvln
	
lflalllssf
	
sadnlaatdd
	
dgemnnlqis
	
virikkgvaw
	
tklkvhafmq

	
1021
	
ahfkgreade
	
vkpldelyek
	
kancianhtg
	
adihrngdfq
	
kngngttsgi
	
gssvekyiid

	
1081
	
edhmsfinnp
	
nitvrvpiav
	
gesdfenlnt
	
edvssesdpe
	
gskdklddts
	
ssegstidik

	
1141
	
peveevpveq
	
peeyldpdac
	
ftegcvqrfk
	
ccqvnieegl
	
gkswwilrkt
	
cflivehnwf

	
1201
	
etfiifmill
	
ssgalafedi
	
yieqrktirt
	
ileyadkvft
	
yifilemllk
	
wtaygfvkff

	
1261
	
tnawcwldfl
	
ivayslvsli
	
analgyselg
	
aikslrtlra
	
lrplralsrf
	
egmrvvvnal

	
1321
	
vgaipsimnv
	
llvclifwli
	
fsimgvnlfa
	
gkyhycfnet
	
seirfeiedv
	
nnkteceklm

	
1381
	
egnnteirwk
	
nvkinfdnvg
	
agylallqva
	
tfkgwmdimy
	
aavdsrkpde
	
qpkyedniym

	
1441
	
yiyfiifiif
	
gsfftlnlfi
	
gviidnfnqq
	
kkkfggqdif
	
mteeqkkyyn
	
amkklgskkp

	
1501
	
qkpiprpink
	
iqgivfdfit
	
qqafdivimm
	
liclnmvtmm
	
vetdtqskqm
	
enilywinlv

	
1561
	
fvifftcecv
	
lkmfalrhyy
	
ftigwnifdf
	
vvvilsivgm
	
fladiiekyf
	
vsptlfrvir

	
1621
	
larigrilrl
	
ikgakgirtl
	
lfalmmslpa
	
lfniglllfl
	
vmfifsifgm
	
snfayvkhea

	
1681
	
giddmfnfet
	
fgnsmiclfq
	
ittsagwdgl
	
llpilnrppd
	
csldkehpgs
	
gfkgdcgnps

	
1741
	
vgifffvsyi
	
iisflivvnm
	
yiaiilenfs
	
vateesadpl
	
seddfetfye
	
iwekfdpdat

	
1801
	
qfieycklad
	
fadalehplr
	
vpkpntieli
	
amdlpmvsgd
	
rihcldilfa
	
ftkrvlgdsg

	
1861
	
eldilrqqme
	
erfvasnpsk
	
vsyepitttl
	
rrkqeevsav
	
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arrgfickkt

	
1921
	
tsnklenggt
	
hrekkestps
	
taslpsydsv
	
tkpekekqqr
	
aeegrrerak
	
rqkevreskc

 

Page 9 of 9

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