Document:

arwr-ex1019_309.htm

EXHIBIT 10.19

 

THE USE OF THE FOLLOWING NOTATION IN THIS EXHIBIT INDICATES THAT A CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION: [***]

 

SECOND COLLABORATION AND LICENSE AGREEMENT

This Second Collaboration And License Agreement (the “Agreement”) is entered into as of September 28, 2016 (the “Effective Date”) by and between (a) Amgen Inc. a Delaware corporation (“Amgen”) and (b) Arrowhead Pharmaceuticals, Inc., a Delaware corporation (“Arrowhead”).  Arrowhead and Amgen are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.

RECITALS

Whereas, Arrowhead possesses proprietary technology and know-how related to the discovery, identification, synthesis and development of RNA interference (“RNAi”) therapeutics, using a GalNAc liver targeting approach;

Whereas, Amgen possesses resources and expertise in the development and commercialization of pharmaceutical products in the field of medicine, and is interested in developing RNAi therapeutics as drug candidates in such field; 

Whereas, Amgen and Arrowhead desire to engage in a transaction pursuant to which Arrowhead will deliver optimized drug candidates as part of a specific target program it has developed, and pursuant to which Amgen will obtain an exclusive license from Arrowhead to further develop and commercialize Licensed Products with respect to such target, all on the following terms and conditions; and

Whereas, concurrently herewith, the Parties are entering into a Common Stock Purchase Agreement dated as of the Effective Date (“Stock Purchase Agreement”) pursuant to which Amgen agrees to purchase, and Arrowhead agrees to sell, up to $12,500,000 worth of shares of common stock, par value $0.001 per share, of Arrowhead. 

Now, Therefore, in consideration of the foregoing premises and the mutual covenants and conditions contained in this Agreement, the Parties agree as follows:

Article 1
DEFINITIONS

1.1“Acquiree” has the meaning set forth in Section 15.6(b).

1.2“Acquiror” has the meaning set forth in Section 15.6(a).

1.3“Acquisition” has the meaning set forth in Section 15.6(b).

1.4“Affiliate” means, with respect to a particular Party, a person, corporation, partnership, or other entity that controls, is controlled by or is under common control with such Party.  For the purposes of this definition, the word “control” (including, with correlative meaning, 

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the terms “controlled by” or “under common control with”) shall mean the actual power, either directly or indirectly through one or more intermediaries, to direct or cause the direction of the management and policies of such entity, whether by the ownership of fifty percent (50%) or more of the voting stock of such entity, or by contract or otherwise.

1.5“Agreement” has the meaning set forth in the introductory paragraph.

1.6“Amgen” has the meaning set forth in the introductory paragraph.

1.7“Amgen Indemnitees” has the meaning set forth in Section 11.1.

1.8“Amgen Withholding Tax Action” has the meaning set forth in Section 8.10(c).

1.9“Arrowhead” has the meaning set forth in the introductory paragraph.

1.10“Arrowhead Indemnitees” has the meaning set forth in Section 11.2.

1.11“Arrowhead Know-How” means all Information Controlled by Arrowhead or any of its Affiliates (a) as of the Effective Date or during the Term, and (b) (i) (A) that was used by Arrowhead or its Affiliates in its research and development of RNAi Molecules prior to the Effective Date or (B) that is used by Arrowhead or its Affiliates in the course of conducting activities under this Agreement during the Term, and, in each case, is related to the Development, Manufacturing, or Commercialization of Licensed Compounds or Licensed Products in any field, or (ii) that is necessary or reasonably useful for the Development, Manufacturing, Commercialization, use, sale, offer for sale, importation or other exploitation of any Licensed Compound or Licensed Product in any field.

1.12“Arrowhead Licensed Technology” means the Arrowhead Know-How, Arrowhead Patents and Arrowhead Collaboration Results.  

1.13“Arrowhead Patent” means any Patent (other than a Joint Patent) that (a) is Controlled by Arrowhead or any of its Affiliates as of the Effective Date or at any time during the Term, and (b) (i) absent a license, would be infringed (or, for purposes of pending patent applications, would be infringed if a patent was issued therefor with claims in their then-current form) by, or (ii) would be reasonably necessary or useful for, in either case, the Development, Manufacture, Commercialization, use, sale, offer for sale, importation or other exploitation of any Licensed Compound or Licensed Product in any field.  

1.14“Arrowhead Platform Patents” has the meaning set forth in Section 9.3(a)(i).

1.15“Arrowhead Product Patents” has the meaning set forth in Section 9.3(a)(ii).

1.16“Background IP” has the meaning set forth in Section 9.2(c).

1.17“Bankruptcy Code” means Title 11, U.S. Code Sections 101 et. seq.

1.18“Blocking Patents” means as to a Licensed Compound or Licensed Product, any Patent rights of a Third Party that claim, in a particular country, the composition or use or 

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manufacture of such Licensed Compound or Licensed Product, and which such Patent rights would be infringed by the manufacture, use, offer for sale, sale, import or export of such Licensed Compound or Licensed Product in such country.

1.19“Business Day” means any weekday that is not a legal holiday in New York, New York, U.S., and is not a day on which banking institutions are required by Law to be closed. 

1.20“Calendar Quarter” means the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31; provided, however, that (a) the first Calendar Quarter of any particular period shall extend from the commencement of such period to the end of the first complete Calendar Quarter thereafter; and (b) the last Calendar Quarter shall end upon the expiration or termination of this Agreement.

1.21“Calendar Year” means (a) for the first Calendar Year of the Term, the period beginning on the Effective Date and ending on December 31, 2016, (b) for each Calendar Year of the Term thereafter, each successive period beginning on January 1 and ending twelve (12) consecutive calendar months later on December 31, and (c) for the last Calendar Year of the Term, the period beginning on January 1 of the Calendar Year in which the Agreement expires or terminates and ending on the effective date of expiration or termination of this Agreement.

1.22“Change of Control” means the occurrence of any of the following: (a) a Party enters into a merger, consolidation, business combination, recapitalization, share exchange, stock sale or sale or transfer of all or substantially all of its assets to which this Agreement relates, or other similar transaction or series of transactions with a Third Party; or (b) any transaction or series of related transactions in which any Third Party or group of Third Parties acquires beneficial ownership of securities of a Party representing more than fifty percent (50%) of the combined voting power of the then outstanding securities of such Party.  Notwithstanding the foregoing clauses (a) or (b), a stock sale to underwriters of a public offering of a Party’s capital stock or other Third Parties solely for the purpose of financing or a transaction solely to change the domicile of a Party shall not constitute a Change of Control.

1.23“Claims” has the meaning set forth in Section 11.1.

1.24“Clinical Trial” means any human clinical trial of a Licensed Product as defined in 21 C.F.R. § 312.21, or an equivalent human clinical trial prescribed by the Regulatory Authorities in a foreign country.

1.25“Closing Date” has the meaning set forth in Section 15.14.

1.26“CMC” has the meaning set forth in Section 1.60.

1.27“Code” has the meaning set forth in Section 8.10(b).

1.28“Collaboration Target” means the Target identified in Exhibit A.

1.29“Combination Product” means a Licensed Product sold in combination with at least one (1) additional pharmaceutical product other than a Licensed Compound.

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1.30“Commercialization” means the marketing, promotion, sale, distribution or other activities relating to the commercialization of a Licensed Product in any field in the Territory. “Commercialize” has a correlative meaning.

1.31“Commercially Reasonable Efforts” means efforts consistent with the efforts and resources normally used by a similarly situated pharmaceutical or biotechnology company in the exercise of its reasonable business discretion relating to the development or commercialization of a pharmaceutical product with similar product characteristics that is of similar market potential at a similar stage of development or commercialization, and in the case of either Party taking into account other relevant factors including technical, legal, intellectual property, competition, scientific and medical factors.

1.32“Competing Product” means any compound directed to the Collaboration Target.

1.33“Competing Program” means the research, development, commercialization or manufacture, in the Territory, of any Competing Product.

1.34“Confidentiality Agreement” means the Confidential Disclosure Agreement between Arrowhead and Amgen, effective as of April 21, 2014, as amended.

1.35“Confidential Information” of a Party means any and all Information of such Party (or of any Third Parties) that is disclosed by a Party to the other Party under this Agreement, except as otherwise set forth in Article 12 or as otherwise expressly set forth in this Agreement, whether in oral, written, graphic, or electronic form.  All Information disclosed by a Party pursuant to the Confidentiality Agreement shall be deemed to be such Party’s Confidential Information disclosed hereunder (with the mutual understanding and agreement that any use or disclosure thereof that is authorized under Article 12 shall not be restricted by, or be deemed a violation of, the Confidentiality Agreement).

1.36“Control” means, with respect to any Information or intellectual property right, that an entity (a) owns or (b) has the right to grant access, a license, or a sublicense (as applicable) to such Information or intellectual property right on the terms and conditions set forth in this Agreement without (i) violating the terms of any then-existing agreement with any Third Party or (ii) requiring any payment (whether or not then due and payable) with respect to the grant or exercise of such access, license or sublicense under any then-existing agreement with any Third Party (unless the other Party agrees in writing to be responsible for such payments).  

1.37“Cure Period” has the meaning set forth in Section 13.3.

1.38“Development” means all activities that relate to obtaining, maintaining or expanding Regulatory Approval for a Licensed Product, including preclinical testing, toxicology, formulation, Clinical Trials, preparation, submission, review, and development of data or information for the purpose of submission to a Governmental Authority to obtain, maintain or expand Regulatory Approval for a Licensed Product.  “Develop” and “Developing” have correlative meanings.

1.39“Disputes” has the meaning set forth in Section 14.1.

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1.40“DOJ” has the meaning set forth in Section 15.14.

1.41“Dollar” means a U.S. dollar, and “$” shall be interpreted accordingly.

1.42 “Effective Date” has the meaning set forth in the introductory paragraph.

1.43“EMA” means the European Medicines Agency or any successor entity.

1.44“Executive Officer” means, with respect to Arrowhead, its Chief Executive Officer, and with respect to Amgen, a designated official who shall be a Vice President or higher with authority to resolve such matter

1.45“FD&C Act” means the U.S. Federal Food, Drug and Cosmetic Act, as amended, and applicable regulations promulgated thereunder by the FDA.

1.46“FDA” means the U.S. Food and Drug Administration or any successor entity.

1.47“First Collaboration Agreement” means that certain First Collaboration and License Agreement entered into between Arrowhead and Amgen as of even date herewith. 

1.48“First Commercial Sale” means, with respect to a Licensed Product, the first sale to a Third Party for end use or consumption of such Licensed Product in a given country following the receipt of Regulatory Approval in such country, provided that “First Commercial Sale” shall not include sale, disposal or use of a Licensed Product for marketing, regulatory, development or charitable purposes, such as clinical trials, pre-clinical trials, compassionate use, named patient use, or indigent patient programs, without consideration.

1.49“FTC” has the meaning set forth in 15.14.

1.50“GAAP” means the then current generally accepted accounting principles in the U.S., as applied on a consistent basis. 

1.51“GCP” or “Good Clinical Practices” means the then-current standards, practices and procedures promulgated or endorsed by the FDA as set forth in the guidelines entitled “Guidance for Industry E6 Good Clinical Practice: Consolidated Guidance,” including related regulatory requirements imposed by the FDA and comparable regulatory standards, practices and procedures promulgated by the EMA or other Regulatory Authority applicable to the Territory, as they may be updated from time to time, including applicable quality guidelines promulgated under the ICH.

1.52“GLP” or “Good Laboratory Practices” means the then-current good laboratory practice standards promulgated or endorsed by the FDA as defined in 21 C.F.R. Part 58, and comparable regulatory standards promulgated by the EMA or other Regulatory Authority applicable to the Territory, as they may be updated from time to time, including applicable quality guidelines promulgated under the ICH.

1.53“GMP” or “Good Manufacturing Practices” means the then-current Good Manufacturing Practices required by the FDA, as set forth in the FD&C Act and the regulations 

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promulgated thereunder, for the manufacture and testing of pharmaceutical materials, and comparable laws or regulations applicable to the manufacture and testing of pharmaceutical materials promulgated by other Regulatory Authorities, as they may be updated from time to time.

1.54“Governmental Authority” means any multinational, federal, state, local, municipal, provincial or other governmental authority of any nature (including any governmental division, prefecture, subdivision, department, agency, bureau, branch, office, commission, council, court or other tribunal).

1.55“HSR Act” has the meaning set forth in Section 15.14.

1.56“ICH” means International Conference on Harmonisation.

1.57“IND” means (a) an Investigational New Drug Application as defined in the FD&C Act and applicable regulations promulgated thereunder by the FDA, or (b) the equivalent application to the equivalent agency in any other regulatory jurisdiction, the filing of which is necessary to Initiate or conduct a Clinical Trial of a pharmaceutical product in humans in such jurisdiction.

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

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

1.60“Information” means any and all data, results, technology, business or financial information or information of any type whatsoever, in any tangible or intangible form, including know-how, trade secrets, practices, techniques, methods, processes, developments, specifications, formulations, or formulae of any type or kind (patentable or otherwise), software, algorithms, marketing reports, expertise, technology, test data (including pharmacological, biological, chemical, biochemical, clinical test data and data resulting from non-clinical studies), chemistry, manufacture and control (“CMC”) information, stability data and other study data and procedures.

1.61“Initiation” of a Clinical Trial means the first dosing of the first subject in such Clinical Trial.  “Initiate” has a correlative meaning.

1.62“Invention” has the meaning set forth in Section 9.1.

1.63“Inventory” means drug substance and drug product containing Licensed Compounds and raw materials specific to Licensed Compounds, manufactured and stored by Arrowhead as of the Closing Date.

1.64“Joint Invention” has the meaning set forth in Section 9.2(a).

1.65“Joint IPR” has the meaning set forth in 9.2(a).

1.66“Joint Patent” has the meaning set forth in Section 9.2(a).

1.67“Joint Research Committee” or “JRC” has the meaning set forth in Section 4.1

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1.68“Knowledge” of a Party has the meaning set forth in Section 10.6.

1.69“Laws” means all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law of any federal, national, multinational, state, provincial, county, city or other political subdivision.

1.70“License Fee” has the meaning set forth in Section 8.1.

1.71“Licensed Compounds” means any RNAi Molecules for inhibiting the expression of the Collaboration Target that have been generated by Arrowhead on or before the Effective Date or during the Term, which RNAi Molecules are licensed to Amgen hereunder.  Licensed Compounds includes, without limitation, ARC-2713 and ARC-3460. 

1.72“Licensed Product” means any pharmaceutical product containing or comprising a Licensed Compound as an active pharmaceutical ingredient.  

1.73“Manufacture” means all activities related to the manufacturing of a Licensed Compound or Licensed Product, or any ingredient thereof, including test method development and stability testing, formulation, process development, manufacturing scale-up, manufacturing any Licensed Compound or Licensed Product in bulk or finished form for Development, manufacturing finished Licensed Product for Commercialization, packaging, in-process and finished Licensed Product testing, release of Licensed Product or any component or ingredient thereof, quality assurance activities related to manufacturing and release of Licensed Product, and regulatory activities related to any of the foregoing.  “Manufacturing” has a correlative meaning.

1.74 “Net Sales” means, with respect to a given period of time, gross sales of Licensed Product (following its Regulatory Approval) by Amgen, its Affiliates and Sublicensees in such period, less the following deductions which are actually incurred, allowed, paid, accrued or specifically allocated to such gross sales amounts of Licensed Product using GAAP applied on a consistent basis:

(a)credits or allowances for defective or damaged Licensed Product (including allowances for spoiled, outdated or withdrawn Licensed Product), returns or rejections of Licensed Product, price adjustments and billing errors;

(b)governmental payments and other rebates, refunds and chargebacks (or equivalents thereof) granted to managed health care organizations; pharmacy benefit managers (or equivalents thereof); federal, state/provincial, local and other governments, their agencies and purchasers and reimbursers; or to trade customers;

(c)normal and customary trade, cash, prompt payment and/or quantity discounts, allowances and credits and mandated discounts;

(d)distribution services agreement fees allowed or paid to Third Party distributors and reasonable fees paid to wholesalers, selling agents (excluding any sales representatives of Amgen or any of its Affiliates or Sublicensees), group purchasing organizations, Third Party payors, other contractees and managed care entities, in each case with respect to such Licensed Product;

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(e)[***]% of gross sales to cover such items as transportation costs, including insurance, for outbound freight, other transportation charges, additional special packaging and bad debt;  

(f)sales taxes, value added taxes and other taxes (other than income taxes)  and duties paid in relation to such Licensed Product and any other equivalent governmental charges imposed upon the importation, use or sale of Licensed Product; and

(g)retroactive price reductions to the Third Party applicable to sales of such Licensed Product.

Sales of Licensed Product between or among Amgen and its Affiliates or Sublicensees shall be excluded from the computation of Net Sales, but the subsequent final sales of Licensed Product to Third Parties by such Affiliates and Sublicensees shall be included in the computation of Net Sales.

Notwithstanding the foregoing, in the event a Licensed Product is sold in a country in the Territory as a Combination Product, Net Sales of the Combination Product will be calculated as follows: 

(i)If Licensed Product and other active component(s) each are sold separately in such country, Net Sales will be calculated by multiplying the total Net Sales (as described above) of the Combination Product by the fraction A/(A+B), where A is the average gross selling price in such country of the Licensed Product sold separately in the same formulation and dosage, and B is the sum of the average gross selling prices in such country of such other active component(s) sold separately in the same formulation and dosage, during the applicable Calendar Quarter, or if sales of both the Licensed Product and the other product(s) did not occur in such period, then the most recent royalty reporting period in which such separate sales of both such Licensed Product and the other product(s) occurred.  

(ii)If the Licensed Product is sold independently of the other active component(s) therein in such country, but the average selling price of such other active component(s) cannot be determined, Net Sales will be calculated by multiplying the total Net Sales (as described above) of the Combination Product by the fraction A/C where A is the average selling price in such country of such Licensed Product sold independently and C is the average selling price in such country of the entire Combination Product.

(iii)If the Licensed Product is not sold independently in such country, the Parties shall determine Net Sales for such Combination Product by mutual agreement based on the relative contribution of the Licensed Product and the other active ingredient(s) in the Combination Product.

All discounts, allowances, credits, rebates and other deductions shall be fairly allocated to the Licensed Product and, as between Licensed Product and other products or services of Amgen, its Affiliates or Sublicensees, shall not be inappropriately allocated.  Amgen shall not attempt to reduce compensation rightly due to Arrowhead hereunder by shifting compensation otherwise payable to Amgen from a Third Party with respect to any Licensed Product to another product or service for which no royalties are payable hereunder.

1.75“Non-Breaching Party” has the meaning set forth in Section 13.3.

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1.76“Party” has the meaning set forth in the introductory paragraph.

1.77 “Patents” means (a) pending patent applications, issued patents, utility models and designs; (b) reissues, substitutions, confirmations, registrations, validations, re-examinations, additions, continuations, continued prosecution applications, continuations-in-part, or divisions of or to any of the foregoing; and (c) extensions, renewals or restorations of any of the foregoing by existing or future extension, renewal or restoration mechanisms, including supplementary protection certificates or the equivalent thereof.

1.78“Phase 1 Clinical Trial” means a Clinical Trial of a Licensed Product in any and all fields conducted in patients with the disease or condition under study to evaluate the effectiveness of the Licensed Product, as and to the extent defined for the U.S. in 21 C.F.R. § 312.21(a), as amended from time to time, or equivalent law or regulation in regulatory jurisdictions outside the U.S.

1.79“Phase 2 Clinical Trial” means a Clinical Trial of a Licensed Product in any and all fields conducted in patients with the disease or condition under study to evaluate the effectiveness of the Licensed Product, as and to the extent defined for the U.S. in 21 C.F.R. § 312.21(b), as amended from time to time, or equivalent law or regulation in regulatory jurisdictions outside the U.S.

1.80“Phase 3 Clinical Trial” means a pivotal Clinical Trial of a Licensed Product in any and all fields with a defined dose or a set of defined doses of such Licensed Product on sufficient numbers of human patients designed to confirm with statistical significance the safety and efficacy of such Licensed Product and to support a Regulatory Approval as and to the extent defined for the U.S. in 21 C.F.R. § 312.21(c), as amended from time to time, or equivalent law or regulation in regulatory jurisdictions outside the U.S.

1.81“Regulatory Approval” means all approvals from the relevant Regulatory Authority in a given country or regulatory jurisdiction of the Regulatory Approval Application for a Licensed Product in any field, including all licenses, registrations, and pricing or reimbursement approvals, that are necessary for the sale and marketing of such Licensed Product, including clinical testing, manufacture, distribution, or use of such Licensed Product, in such country or regulatory jurisdiction. 

1.82“Regulatory Approval Application” means an application to the appropriate Regulatory Authority for approval to sell a Licensed Product in any particular jurisdiction, including an NDA in the U.S.

1.83“Regulatory Authority” means, in a particular country or jurisdiction, any applicable Governmental Authority that has the authority to regulate the manufacture, marketing, testing, pricing, or sale of drug products in such country or jurisdiction.

1.84“Regulatory Exclusivity” means any exclusive marketing rights or data exclusivity rights conferred by any Governmental Authority under applicable Law with respect to a Licensed Product in a country or jurisdiction in the Territory to prevent Third Parties from Commercializing such Licensed Product in such country or jurisdiction, other than a Patent right, including orphan drug exclusivity, pediatric exclusivity, rights conferred in the U.S. under the 

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Hatch-Waxman Act or the FDA Modernization Act of 1997, in the EU under Directive 2001/83/EC, or rights similar thereto in other countries or regulatory jurisdictions in the Territory.

1.85“Regulatory Materials” means regulatory applications, submissions, notifications, communications, correspondence, registrations, Regulatory Approvals or other filings made to, received from or otherwise conducted with a Regulatory Authority in order to Develop, Manufacture, or Commercialize a Licensed Product in a particular country or jurisdiction.

1.86“RNAi Molecule” means an exogenous double-stranded oligomeric (i.e., RNA or modified variants thereof) molecule incorporating N-acetyl-galactosamine (GalNAc) ligand conjugates capable of binding to the asialoglycoprotein receptor (ASGPR) to enhance targeting to the liver.  

1.87“Royalty Term” has the meaning set forth in Section 8.4(b).

1.88“Stock Purchase Agreement” has the meaning set forth in the Recitals.

1.89“Subject Patent” has the meaning set forth in Section 9.6.

1.90“Sublicensee” has the meaning set forth in Section 3.3(a).

1.91“Target” means (a) a polypeptide or entity comprising a combination of at least one polypeptide and other macromolecules, that is a site or potential site of therapeutic intervention by a therapeutic agent; (b) variants of a polypeptide (including any splice variant thereof), cellular entity or nucleic acid described in clause (a); or (c) a defined non-peptide entity, including a microorganism, virus, or bacterium or single cell parasite, provided that the entire genome of a virus shall be regarded as a single Target.  

1.92“Term” has the meaning set forth in Section 13.1.

1.93“Territory” means all of the countries of the world. 

1.94“Third Party” means any entity other than Arrowhead or Amgen or an Affiliate of either of them.

1.95“U.S.” means the United States of America, including all possessions and territories thereof.

1.96“Valid Claim” means an issued claim that has not: (a) expired or been revoked or canceled; (b) been declared invalid or unenforceable by a patent office or a decision of a court or other Governmental Authority of competent jurisdiction; provided that if any such claim that has been declared invalid or unenforceable is subsequently determined to be valid and enforceable by a court or other Governmental Authority of competent jurisdiction from which no appeal can be taken (or was taken within the allowable time period), then such claim shall thereafter be a Valid Claim except as otherwise provided under subsection (a), (c), or (d); (c) been admitted to be invalid or unenforceable through reissue, re-examination, disclaimer or otherwise; or (d) been abandoned or disclaimed.

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1.97“Work Plan” means the work plan attached hereto as Exhibit B setting forth certain activities to be conducted by the Parties.

Article 2
EXCLUSIVITY AND RELATED RESTRICTIONS

2.1Exclusivity.  During the Term, Arrowhead and its Affiliates shall not conduct or participate in, or advise, assist or enable any Third Party to conduct or participate in, the research, development, manufacture or commercialization of any compound directed to the Collaboration Target.

2.2Change of Control.  Notwithstanding anything to the contrary in this Agreement, in the event of any Change of Control of Arrowhead (or successor entity thereto, applying the definition of Change of Control to such successor in place of Arrowhead) occurring after the Closing Date, and subject to Section 15.6, Section 2.1 shall not apply to or otherwise restrict (i) the activities of the Acquiror or its Affiliates (except for Arrowhead and its Affiliates prior to the acquisition) with respect to any product, product candidate or device being clinically developed or commercialized prior to or after the date of acquisition, including the making, using, selling, offering for sale, importing, or otherwise developing, commercializing, or exploiting thereof, or the intellectual property rights Controlled by such Acquiror or its Affiliates (other than Arrowhead and its Affiliates prior to the acquisition) related thereto; provided that, such product, product candidate, device or service was not developed through the use of any Information or intellectual property right Controlled by Arrowhead or its pre-acquisition Affiliates as of the date of such Change of Control or thereafter.  Arrowhead shall give Amgen written notice within five (5) days after the public announcement or disclosure of any proposed Change of Control of Arrowhead.  From and after such notice, Amgen (i) may exclude Arrowhead (following such Change of Control) from participation in whole or in part from any working teams, (ii) shall no longer be subject to the obligations set forth in Section 6.2 and Section 6.3 and (iii) shall not be required to (A) share correspondence, filings or other information with Arrowhead or (B) discuss with Arrowhead and consider its comments, in either case with respect to intellectual property matters as set forth in Article 9.  In the event of a Change of Control of Arrowhead, if the Acquiror, itself or through any of its Affiliates, directly or indirectly conducts or participates in any Competing Program, the Acquiror shall hold separate such Competing Program, including ensuring that no personnel working on Licensed Compounds or Licensed Products or activities hereunder works on a Competing Program (and vice versa), and ensuring that information and materials relating to Licensed Compounds or Licensed Products or activities hereunder are not shared with or used for the benefit of, and are sequestered from, personnel working on the Competing Program (and vice versa). 

Article 3
LICENSES

3.1License to Amgen.  

(a)Arrowhead Developed IP.  Subject to the terms and conditions of this Agreement, and further subject to Arrowhead’s receipt of the License Fee, Arrowhead hereby grants to Amgen an exclusive (even as to Arrowhead except as provided in Section 3.2), royalty-

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bearing license, with the right to sublicense solely as provided in Section 3.3, under the Arrowhead Licensed Technology with respect to the Licensed Compounds and Licensed Products, and Arrowhead’s rights under the Joint IPR, to make, have made, use, sell, offer for sale, import and otherwise exploit such Licensed Compound and Licensed Product for any and all uses in the Territory.  

(b)Arrowhead Background IP.  Subject to the terms and conditions of this Agreement, and further subject to Arrowhead’s receipt of the License Fee, Arrowhead hereby grants to Amgen a non-exclusive license, with the right to sublicense solely as provided in Section 3.3, under the Arrowhead Background IP with respect to the Licensed Compounds and Licensed Products, to make, have made, use, sell, offer for sale, import and otherwise exploit such Licensed Compound and Licensed Product for any and all uses in the Territory.

3.2Arrowhead Retained Rights.  Except as expressly granted under Section 3.1, Arrowhead retains the right, under the Arrowhead Licensed Technology, (a) in the Territory, to fulfill its obligations under this Agreement, (b) to exploit the Arrowhead Licensed Technology and Joint IPR other than in connection with compounds directed to the Collaboration Target, Licensed Compounds and Licensed Products; and (c) to use the Arrowhead Know-How in connection with Arrowhead’s conduct of general research and discovery of molecules other than compounds directed to the Collaboration Target, Licensed Compound and Licensed Products. 

3.3Sublicense Rights and Subcontracting.

(a)Amgen shall have the right to grant a sublicense of the licenses granted in Section 3.1 to its Affiliates or Third Parties (whether directly or through multiple tiers in accordance with the terms of subsection (v) below) (each, a “Sublicensee”); provided that Amgen reports the identity of any Third Party Sublicensee to Arrowhead within thirty (30) days of granting such sublicense and provided further that any sublicenses to Third Parties shall be subject to Sections 3.3(a)(i) through (v):

(i)Amgen shall remain primarily responsible for the performance of its obligations hereunder and any and all failures by its Sublicensees to comply with the applicable terms of this Agreement;

(ii)such sublicense shall refer to this Agreement, shall not conflict with Amgen’s obligations hereunder;

(iii)within a reasonable time after execution of such sublicense, Amgen shall provide to Arrowhead a copy of such sublicense, which may be redacted to omit any terms not relevant to determining Amgen’s and such Sublicensee’s obligations under this Agreement; and

(iv)except as otherwise provided in the sublicense, if this Agreement terminates for any reason, upon Amgen’s written request to Arrowhead, any Sublicensee of the licenses set forth in Section 3.1 shall, from the effective date of such termination, automatically become a direct licensee of Arrowhead on the terms and conditions hereunder with respect to the rights licensed to Amgen and sublicensed to the Sublicensee by Amgen; and  

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(v)such Sublicensees of the licenses contained in Section 3.1 shall have the right to grant further sublicenses to Third Parties of same or lesser scope as its sublicense from Amgen under the licenses contained in Section 3.1, provided that such further Sublicenses shall be in accordance with and subject to all of the terms and conditions of this Section 3.3 (i.e., such Sublicensee shall be subject to this Section 3.3 in the same manner and to the same extent as Amgen).  For clarity, any person or entity to whom a Sublicensee grants a sublicense as permitted by the terms of this Agreement shall be deemed to be a Sublicensee for purposes of this Agreement.

(b)Amgen shall have the right to retain Third Party contractors, to perform any activity in connection with Amgen’s exercise of any of its rights granted under Section 3.1, where such activity is to be performed at the direction and control and for the sole benefit of Amgen, its Affiliates and/or Sublicensees.  Such retention of the Third Party contractor shall not be a sublicense within the meaning of this Section 3.3 but shall be considered an activity of Amgen under the license granted in Section 3.1.

3.4No Implied Licenses.  Except as explicitly set forth in this Agreement, neither Party shall be deemed by estoppel or implication to have granted the other Party any license or other right to any intellectual property of such Party.

3.5Contractors.  To the extent that a Party contracts with a Third Party contractor to perform services hereunder, it shall do so on terms that are commercially reasonable, including with respect to confidentiality and intellectual property rights.

Article 4
GOVERNANCE AND WORK PLAN

4.1Joint Research Committee.  The joint research committee established pursuant to this Article 4 (the “Joint Research Committee” or “JRC”), will have oversight responsibility for the overall review of the activities pursuant to and subject to the terms and conditions of this Agreement during the Term.  

(a)Formation and Purpose. Within [***] after the Closing Date, the Parties shall promptly establish and convene a JRC that will direct and oversee activities under this Agreement during the Term.  The JRC shall consist of representatives from Arrowhead and Amgen, and operate in accordance with the procedures set forth in this Section 4.1 and any other procedures as agreed upon by the JRC members.  Except as otherwise provided herein, the role of the Joint Research Committee shall be:

(i)to encourage and facilitate ongoing communication and cooperation between the Parties with respect to the activities during the Term under this Agreement, 

(ii)to oversee the activities to be undertaken by the Parties pursuant to the Work Plan; 

(iii)to establish other such working groups or subcommittees, as needed to further the purposes of the Agreement relating to Licensed Compounds and Licensed Products, as mutually agreed by the Parties in writing;

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(iv)to resolve any disputes referred to the JRC; and

(v)to approve or decide such other matters as provided in this Agreement.

(b)JRC Decisions; Final Decision Authority.The JRC will make good faith efforts to make all decisions by consensus.  Except as set forth in this Section 4.1(b), actions to be taken by the Joint Research Committee shall be taken only following unanimous vote, with each Party’s representatives collectively having one (1) vote.  If the Joint Research Committee fails to reach unanimous agreement on a matter before it for decision for a period in excess of fifteen (15) days from the date first presented to the JRC in writing, either Party may submit such matter for resolution to the Executive Officers of the Parties for attempted resolution by good faith negotiation after such notice is received among the Executive Officers.  In the event that such Executive Officers are unable to reach agreement regarding any matter referred to them, then the decision will be made by Amgen; provided, however, that Amgen shall not have the power to resolve such a matter in a manner that would require Arrowhead to incur additional costs to a material extent or to perform activities not contemplated by this Agreement.

(c)Membership.  Arrowhead and Amgen shall each designate an equal number of representatives to serve on the JRC by written notices to the other Party.  Promptly after the Closing Date, each Party shall designate three (3) representatives for the JRC.  The JRC may elect to vary the number of representatives from time to time during the Term; provided that the JRC shall maintain an equal number of representatives from each Party.  Each representative shall have the appropriate level of experience in the subject area of the JRC, and at least one (1) representative shall have sufficient seniority within the applicable Party’s organization to have the necessary decision-making authority in order for the JRC to fulfill its responsibilities.  Either Party may designate substitutes for its JRC representatives if one (1) or more of such Party’s designated representatives is unable to be present at a meeting.  From time to time each Party may replace its JRC representatives by written notice to the other Party specifying the prior representative(s) and their replacement(s).  The JRC in its discretion may create functional subcommittees or working teams.

(d)Chairperson. The JRC will have two chairpersons, one designated by each of the Parties.  The chairpersons shall be responsible for calling and convening meetings, but shall have no special authority over the other members of the JRC, and shall have no additional voting rights.  The chairpersons (or their designates) shall jointly: (i) prepare and circulate an agenda reasonably in advance of each upcoming meeting; and (ii) prepare and issue minutes of each JRC meeting as promptly as practicable thereafter.  Such minutes shall not be finalized until each JRC representative reviews and approves such minutes in writing.

(e)Meetings.

(i)JRC Meetings.  The JRC shall meet at such frequency as shall be agreed by the members of the JRC.  In addition, as they may mutually agree, the Parties may hold joint meetings of the JRC and any governance body established under the First Collaboration Agreement.

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(ii)General Requirements. Other than the initial meeting, which shall be held in person, the JRC may meet either (A) in person at either Party’s facilities or at such locations as the Parties may otherwise agree; or (B) by audio or video teleconference.  Additional non-member representatives of a Party having relevant experience may from time to time be invited to participate in a JRC meeting.  Non-member participants who are not employees of a Party or its Affiliates shall only be allowed to attend if: (i) the other Party’s representatives have consented to the attendance; and (ii) such non-member participant is subject to confidentiality and non-use obligations at least as restrictive as those set forth in this Agreement.  Each Party shall be responsible for all of its own expenses incurred in connection with participating in the JRC including all travel and all expenses associated with an initial alliance kick-off meeting.  All other expenses incurred by the JRC in furtherance of a meeting, such as expenses associated with off-site meetings, shall be shared equally by the Parties.

(f)Alliance Managers.  Promptly following the Closing Date, each Party shall designate in writing an Alliance Manager to serve as the primary point of contact for the Parties regarding all collaboration and transition activities contemplated under this Agreement.  Each Alliance Manager shall facilitate communication and coordination of the Parties’ activities under this Agreement relating to the Products and shall plan the JRC meetings.  The Alliance Managers shall be allowed to attend JRC meetings as observers.

4.2Work Plan.  The JRC shall oversee the activities to be conducted by each Party pursuant to the Work Plan.  Other than as set forth in the Work Plan and in accordance with Article 6, Amgen shall be solely responsible for research and Development of the Licensed Compounds and Licensed Products in any and all fields and in accordance with applicable Laws.      

4.3Costs.  The Parties’ respective responsibilities for the costs of Work Plan activities is as set forth therein.

Article 5
REGULATORY

5.1Regulatory Responsibilities.  Amgen shall be solely responsible, at its expense, for preparing, filing and maintaining all Regulatory Materials for Licensed Products with Regulatory Authorities related to Licensed Products in the Territory, and Amgen shall own all Regulatory Materials (including all INDs, NDAs, Regulatory Approval Applications and Regulatory Approvals) for Licensed Products in the Territory and otherwise shall be responsible for all regulatory matters with respect to Licensed Products in the Territory.

5.2Regulatory Matters.  Amgen shall keep Arrowhead reasonably informed of all material regulatory developments relating to Licensed Products in the Territory through the annual development reports under Section 6.3.  Arrowhead shall provide Amgen with such documentation that is in Arrowhead's possession and reasonably required to support applications to Regulatory Authorities with respect to the Development, Manufacture and Commercialization, as applicable, of Licensed Compounds and Licensed Products.

5.3Adverse Event Reporting.  

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(a)Amgen shall be responsible for creating and maintaining a global safety database for the Licensed Product in the Territory, at Amgen’s expense.  Amgen shall be responsible for reporting quality complaints, adverse events and safety data related to the Licensed Product to applicable Regulatory Authorities in the Territory, as well as responding to safety issues and to all requests of Regulatory Authorities relating to the Licensed Product in the Territory. Arrowhead will not have direct access to the global safety database. Amgen will provide to Arrowhead such information from the safety database as Arrowhead may reasonably require to satisfy Arrowhead’s obligations under applicable Laws.

(b)Prior to the commencement of clinical development of the Licensed Product, Arrowhead may request that the Parties discuss in good faith to determine whether a procedure for the mutual exchange of adverse event reports and safety information associated with the Licensed Product is reasonably required of the Parties in order to comply with applicable Laws.  If the Parties so determine, the operating procedure respecting such adverse event reports and safety information exchange shall be the subject of a mutually-agreed written pharmacovigilance agreement between the Parties.

Article 6
DEVELOPMENT AND COMMERCIALIZATION

6.1General.  Amgen (itself and with its Affiliates and Sublicensees), will be solely responsible, at its expense, for all aspects of the Development and Commercialization of the Licensed Compounds and Licensed Product in the Territory  Subject to the express written terms of this Agreement, all decisions concerning the development, marketing and sales of Licensed Products, including the clinical and regulatory strategy, design, sale, price and promotion of Licensed Products under this Agreement shall be within the sole discretion of Amgen.  Following the Closing Date, Arrowhead will promptly transfer to Amgen all Arrowhead Know-How as is reasonably necessary or useful for Amgen to Develop and seek Regulatory Approval for the Licensed Compounds and Licensed Products, including all materials for supporting regulatory filings consistent with Amgen’s obligations under Article 5.

6.2Diligence.  Amgen shall use Commercially Reasonable Efforts to Develop, seek Regulatory Approval of, and, if successful, Commercialize a Licensed Product in one or more fields in the Territory. 

6.3Communication.  During the Term until a Licensed Product receives Regulatory Approval, Amgen shall provide Arrowhead summaries once per Calendar Year, of (i) material developments with respect to Licensed Products, including the anticipated timing of completion of any in-process Clinical Trial and results of any Phase 3 Clinical Trials, (ii) an estimate of its progress towards meeting key milestones that are expected to be achieved within the following six months, (iii) any Regulatory Approvals for Licensed Products in the Territory received and (iv) manufacturing information pursuant to Section 7.4 of this Agreement.  All reports and other Information provided by Amgen under this Section 6.3 will be Amgen’s Confidential Information subject to the terms of Article 12.

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Article 7
MANUFACTURE AND SUPPLY

7.1Responsibilities.  Except as otherwise expressly provided in this Article 7 or as set forth in the Work Plan, as between the Parties, Amgen will be solely responsible for the Manufacture of Licensed Compounds and Licensed Products, at its expense, for Development and Commercialization purposes in the Territory.  Following the Closing Date and as more fully set forth in the Work Plan, Arrowhead will transfer to Amgen all relevant manufacturing processes and Arrowhead Know-How as is reasonably necessary or useful for Amgen (or its Third Party manufacturer) to manufacture the Licensed Compounds and Licensed Products, including all materials for supporting regulatory filings.  Any such manufacturing processes transferred by Arrowhead to Amgen shall be similar in quality to the processes used by Arrowhead for its internal compounds and products of a similar stage in development and applicable for the intended use.  Upon request by Amgen, the Parties shall negotiate in good faith to enter into an agreement under which Arrowhead would provide process development and manufacturing services to Amgen on customary terms and conditions (including financial terms consistent with market practices).     

7.2Third Party Manufacture.  Amgen may perform the Manufacture of Licensed Compounds or Licensed Products through one or more Third Party manufacturers, provided that (a) Amgen remains responsible for such Third Party manufacturer performing activities under this Agreement and for any unauthorized use by such Third Party manufacturers of Arrowhead Licensed Technology provided to it by Amgen; (b) the Third Party manufacturer undertakes in writing obligations of confidentiality and non-use regarding Confidential Information that are no less protective than those set forth in Article 12; and (c) the Third Party manufacturer agrees in writing to commercially reasonable terms with respect to the intellectual property relating to such Licensed Compound or Licensed Product.

7.3Existing Manufacturing Arrangements.  If upon the Closing Date Arrowhead has made arrangements with a competent and capable Third Party manufacturers to manufacture up to 2 kilograms of Licensed Compounds under GMP on customary terms and conditions (including financial terms consistent with market practices) Arrowhead shall deliver and Amgen shall receive the benefits and costs of such arrangements; provided, however, that upon Amgen’s request, Arrowhead shall assign, and Amgen shall assume, any agreement with a Third Party manufacturer in respect of such arrangement.  To the extent Arrowhead has paid any such costs in advance, Amgen will reimburse such paid costs to Arrowhead within [***] days following the Closing Date, provided such costs will not exceed [***] dollars ($[***]).

7.4Manufacturing Cooperation.  Amgen and Arrowhead shall each keep the other Party reasonably informed of the identities of any Third Party manufacturers performing Manufacturing activities for Licensed Compounds and the Licensed Product (in the case of Amgen, through the annual development reports under Section 6.3 and, once a Licensed Product receives Regulatory Approval, through annual updates communicated through the Alliance Managers).  Arrowhead shall keep Amgen reasonably informed of any material improvements made by it or its Affiliates or Third Party Manufactures to the manufacturing processes for RNAi Molecules through periodic updates communicated through the Alliance Managers.

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7.5Use of Manufacturing Information.  Amgen and its Affiliates and Third Party manufacturer shall use any Arrowhead Know-How related to the manufacture of Licensed Compounds or Licensed Products in accordance with the licenses granted in Section 3.1 and only for the purpose of Manufacturing Licensed Compounds or Licensed Products.  Prior to any transfer of any Arrowhead Know-How that is Confidential Information to a Third Party manufacturer, Amgen shall require that such Third Party be bound to confidentiality restrictions at least as protective in the aggregate as those of Article 12.

7.6Inventory.  As of the Closing Date, Arrowhead hereby conveys, assigns and transfers to Amgen all right, title and interest in and to the Inventory.  Arrowhead shall enter into customary documents (e.g., Certificates of Analysis, Material Safety Data Sheet) for the shipment of Inventory to Amgen.  Arrowhead shall deliver to Amgen all quantities of Inventory to the location designated by Amgen using a carrier selected by and paid for by Amgen EXW (Incoterms 2010).  Prior to the delivery of such Inventory to Amgen, Arrowhead will store and handle all Inventory in the same manner and using the same degree of care in which such Inventory was stored and handled immediately prior to the Closing Date (and in all events in accordance with GMP).  

Article 8
COMPENSATION

8.1License Fee.  Within [***] days after the Closing Date, Amgen shall pay to Arrowhead a one-time, non-refundable and non-creditable upfront payment of thirty million Dollars ($30,000,000), and Amgen shall also purchase the Second Tranche Closing Shares pursuant to Section 1.3 of the Stock Purchase Agreement (the upfront payment and the purchase of the Second Tranche Closing Share collectively the “License Fee”).

8.2Development and Regulatory Milestone Payments.  Amgen shall make each of the following one-time, non-refundable, non-creditable development and regulatory milestone payments to Arrowhead upon the achievement by Amgen or its Affiliates or Sublicensees of the applicable development milestone event by the Licensed Product.  Amgen shall pay to Arrowhead each such amount within [***] days after the achievement of the applicable development and regulatory milestone event.  [***].

		
	
Development and Regulatory Milestone Event
	
Development and Regulatory Milestone Payment (each paid one time only)

[***]

8.3Commercial Milestones.  Amgen shall make each of the following one-time, non-refundable (except as set forth in Section 8.9), non-creditable sales milestone payments to Arrowhead when the Net Sales of a Licensed Product in the Territory first reach the amount specified below.  Amgen shall pay to Arrowhead such amount within [***] days after the Calendar Quarter in which such commercial milestone event is achieved.  [***].

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Sales Milestone Event
	
Milestone Payment

[***]

8.4Royalties

(a)Royalty Rates.  Subject to Sections 8.4(b), 8.4(c), 8.4(d), and 8.5, Amgen shall pay to Arrowhead non-creditable, non-refundable (except as set forth in Section 8.9) royalties on annual Net Sales of Licensed Products in the Territory, as calculated by multiplying the applicable royalty rate by the corresponding amount of incremental Net Sales of the Licensed Product in the Territory in each Calendar Year as follows: 

		
	
Annual Net Sales of Licensed Products in the Territory
	
Royalty Rate

[***]

(b)Royalty Term.  Royalties shall be paid under this Section 8.4, on a country-by-country basis, [***].  Following the Royalty Term, Amgen shall have a fully paid-up, irrevocable, freely transferable and sublicensable license in such country under the relevant Arrowhead Patents to make, have made, use, sell, offer for sale, import and otherwise exploit such Licensed Product for any and all uses in the Territory.

(c)[***].

(d)[***].

(e)Royalty Reports and Payments.  Within sixty (60) days following the end of each Calendar Quarter, commencing with the Calendar Quarter in which the First Commercial Sale of any Licensed Product is made anywhere in the Territory, Amgen shall provide Arrowhead with a report containing the following information for the applicable Calendar Quarter: (i) the amount of gross sales of Licensed Product in the Territory, (ii) an itemized calculation of Net Sales in the Territory (iii) a calculation of the royalty payment due on such sales, and (iv) the exchange rate for such country.  Concurrent with the delivery of the applicable quarterly report, Amgen shall pay in Dollars all amounts due to Arrowhead pursuant to Section 8.4 in such Calendar Quarter.

8.5[***].

8.6Blocked Currency.  In each country in the Territory where the local currency is blocked and cannot be removed from the country, at the election of Amgen, royalties accrued on Net Sales in such country shall be paid to Arrowhead in local currency by deposit in a local bank in such country designated by Arrowhead.

8.7Currency of Payments.  Unless otherwise set forth in this Agreement or agreed to by the Parties, all payments under this Agreement shall be made in Dollars by wire transfer of immediately available funds into an account designated by Arrowhead.  Net Sales outside of the U.S. shall be first determined in the currency in which they are earned and shall then be converted into an amount in Dollars using Amgen’s customary and usual conversion procedures used in preparing its financial statements pursuant to GAAP for the applicable reporting period.

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8.8Late Payments.  If Arrowhead does not receive payment of any sum due to it on or before the due date, then any portions thereof due hereunder which are not paid on the date such payments are due under this Agreement will bear interest at the lower of [***].

8.9Records; Audits.  Amgen and its Affiliates will, and Amgen will cause each of its Sublicensees, if any, to, maintain complete and accurate records in sufficient detail to confirm the accuracy of the calculation of royalty payments and the achievement of milestone events, for a period of [***] after the Calendar Year in which such sales or events occurred.  Upon reasonable prior notice and without disruption to Amgen’s business, such records of Amgen and its Affiliates shall be made available during regular business hours for a period of [***] from the end of the Calendar Year to which they pertain for examination, and not more often than once each Calendar Year, by an independent certified public accountant selected by Arrowhead and reasonably acceptable to Amgen, for the sole purpose of and only to the extent necessary for verifying the accuracy of the financial reports furnished by Amgen pursuant to this Article 9.  Such independent accountant shall disclose to Arrowhead only the amounts that such independent accountant believes to be due and payable hereunder to Arrowhead, details concerning any discrepancy from the amount paid and the amount due, and shall disclose no other information revealed in such audit.  The records for any particular Calendar Year shall only be subject to one (1) audit hereunder.  Any and all records examined by such independent accountant shall be deemed Amgen’s Confidential Information which may not be disclosed by such independent accountant to any Third Party, and Amgen may require such independent accountant to enter into an appropriate written agreement obligating it to be bound by obligations of confidentiality and restrictions on use of such Confidential Information that are no less protective than those set forth in Article 12.  If, as a result of any inspection of the books and records of Amgen, it is shown that payments under this Agreement were less than the amount which should have been paid, then Amgen shall make all payments required to be made from the original due date to eliminate any discrepancy revealed by such inspection within [***].  If, as a result of any inspection of the books and records of Amgen, it is shown that payments under this Agreement were more than the amount which should have been paid, then Arrowhead shall, at Amgen’s election, either make all payments required to be made to eliminate any discrepancy revealed by such inspection within [***] or credit such amounts to Amgen against future payments.  Arrowhead shall pay for such audits, except that in the event that the audited amounts were underpaid by Amgen by more than [***] of the undisputed amounts that should have been paid during the period in question as per the audit, Amgen shall pay the costs of the audit.

8.10Taxes. 

(a)Taxes on Income.  Each Party shall be solely responsible for the payment of all taxes imposed on its share of income arising directly or indirectly from the efforts of the Parties under this Agreement.

(b)Cooperation.  The Parties agree to cooperate with one another and use reasonable efforts to reduce or eliminate tax withholding or similar obligations in respect of royalties, milestone payments, and other payments made by Amgen to Arrowhead under this Agreement.  To the extent Amgen is required under the Internal Revenue Code of 1986, as amended (the “Code”), or any other tax Laws to deduct and withhold taxes on any payment to Arrowhead, Amgen shall pay the amounts of such taxes to the proper Governmental Authority in 

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a timely manner and promptly transmit to Arrowhead an official tax certificate or other evidence of such withholding sufficient to enable Arrowhead to claim such payment of taxes.  Except as otherwise provided in Section 8.10(c), if any taxes are so deducted or withheld, such deducted or withheld amounts shall be treated for all purposes of this Agreement as having been paid to Arrowhead. Upon Amgen’s reasonable request, Arrowhead shall provide Amgen any tax forms (including Internal Revenue Service Form W-8BEN or W-8ECI or other applicable Internal Revenue Service Form) that may be reasonably necessary in order for Amgen to determine whether to withhold tax on any such payments or to withhold tax on such payments at a reduced rate under the Code or any other tax Laws, including any applicable bilateral income tax treaty.  Amgen shall give reasonable support so that any withholding tax or value added tax may be minimized or avoided to the extent permitted under the applicable Laws and treaties.  Each Party shall provide the other with reasonable assistance to enable the recovery, as permitted by applicable Laws, of withholding taxes, value added taxes, or similar obligations resulting from payments made under this Agreement, such recovery to be for the benefit of the Party bearing such withholding tax or value added tax.  Amgen shall require its sublicensees in the Territory to cooperate with Arrowhead in a manner consistent with this Section 8.10(b).

(c)Taxes Resulting From Amgen Action.  If Amgen is required to make a payment to Arrowhead that is subject to increased deduction or withholding of tax as a result of any willful action by Amgen, such as an assignment or sublicense by Amgen, or any failure on the part of Amgen to comply with applicable Laws or filing or record retention requirements (an “Amgen Withholding Tax Action”), then the sum payable by Amgen (in respect of which such increased deduction or withholding is required to be made) shall be increased to the extent necessary to ensure that Arrowhead receives a sum equal to the sum which it would have received had no such Amgen Withholding Tax Action occurred.  Notwithstanding the foregoing, any assignment or sublicense by Amgen that is agreed or consented to by Arrowhead in advance in writing shall not constitute an Amgen Withholding Tax Action.  To the extent that Arrowhead actually realizes a tax benefit in any jurisdiction as a result of any such withholding taxes paid by Amgen pursuant to this Section 8.10(c), Arrowhead shall cooperate with Amgen to convey the additional tax benefit, if possible, to Amgen.

Article 9
INTELLECTUAL PROPERTY MATTERS

9.1Inventions.  Any inventions, whether or not patentable, and whether (a) invented solely by a Party’s own employees, agents, consultants, or independent contractors (including any partner, joint venturer, licensee, sublicensee or similar arrangement) or (b) invented by a Party’s own employees, agents, consultants, or independent contractors jointly with employees, agents, consultants, or independent contractors of the other Party, in each case in the course of conducting a Party’s activities under this Agreement (including the Development, Manufacture or Commercialization of the Licensed Compounds and the Licensed Products), together with all intellectual property rights therein, shall be referred to herein as an “Invention”.  Inventorship shall be determined in accordance with U.S. patent laws (without reference to any conflict of law principles).

9.2Ownership.  

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(a)Except as otherwise expressly provided in this Agreement, (i) if an Invention is solely invented by one or more employees, agents, consultants, subcontractors or independent contractors of a Party, such Invention, and any and all intellectual property rights therein, shall be solely owned by such Party; and (ii) if an Invention is jointly invented by one or more employees, agents, consultants, subcontractors or independent contractors of each Party, such Invention (a “Joint Invention”), and each Patent claiming such Joint Invention (each, a “Joint Patent”) and other intellectual property rights in such Joint Invention (such intellectual property rights, together with any such Joint Patent, “Joint IPR”), shall be jointly owned by the Parties.  Subject to the terms of this Agreement and except as otherwise licensed to the other Party under this Agreement, and subject to any other intellectual property owned by the Parties, each Party shall be entitled to practice and exploit the Joint Inventions and Joint IPR, subject to the licenses granted under Article 4, without the duty of accounting, paying a share of the proceeds to, or seeking consent from the other Party, and each Party hereby waives any right it may have under the laws of any jurisdiction to require such accounting, payment or consent, provided that for any Joint Patent that, but for Amgen’s inventive contribution, would be an Arrowhead Platform Patent, Amgen’s rights to practice and exploit the Joint Patent shall be limited to its use with a RNAi Molecule directed toward the Collaboration Target, Licensed Compounds, and Licensed Products.  Each Party agrees to be named as a party, if necessary, to bring or maintain a lawsuit involving a Joint Invention or Joint IPR.  

(b)Each Party shall notify the other Party promptly after developing any Invention of which the other Party is the sole owner.  Each Party shall assign and hereby assigns to the other Party its entire right, title and interest in and to such Inventions and the Patents and other intellectual property rights therein as needed to implement the ownership of the Patents in accordance with the provisions of Section 9.2(a).  

(c)Nothing in this Agreement shall obligate either Party to transfer any ownership interest in any Patents or other intellectual property rights of such Party existing on the Closing Date (“Background IP”). 

9.3Prosecution of Patents.

(a)Arrowhead Patents.

(i)Subject to Section 9.3(a)(ii) and (iii), as between the Parties, Arrowhead shall have the sole right to prepare, file, prosecute and maintain all Arrowhead Patents (A) listed as “Platform Patents” on Exhibits C and D or (B) filed after the Effective Date and during the Term, except for any Arrowhead Product Patents as defined in Section 9.3(a)(ii), in each case including all Patents that claim priority, directly or indirectly, from such Patents; and any Patent from which such Patents claim priority, directly or indirectly (collectively, the “Arrowhead Platform Patents”), at Arrowhead’s cost and expense.  On a Calendar Quarter basis, Arrowhead shall update Amgen on the status of the prosecution and maintenance of all Arrowhead Platform Patents and shall provide Amgen with copies of material filings with and communications from patent authorities with respect to such Patents to the extent applicable to Licensed Compounds or Licensed Products.  Arrowhead shall respond to all reasonable requests of Amgen for additional Information with respect to all such prosecution and maintenance efforts.  Arrowhead agrees to discuss and consider in good faith any recommendations of Amgen toward the objective of 

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optimizing overall patent protection for Licensed Compounds (during the Term) and Licensed Products (during the Term).  If Arrowhead decides to cease the prosecution or maintenance of all claims in an Arrowhead Platform Patent that claims the Development, Manufacture or Commercialization of a Licensed Compound or Licensed Product in the Territory, it shall notify Amgen in writing sufficiently in advance so that Amgen may, at its discretion, assume the responsibility for the prosecution or maintenance of such Arrowhead Platform Patent to the extent claiming the Development, Manufacture or Commercialization of a Licensed Compound or Licensed Product in the Territory, at Amgen’s cost and expense.  If Amgen assumes such responsibility in a jurisdiction, then no such claim shall be deemed a Valid Claim in such jurisdiction.  

(ii)As between the Parties (x) until the Closing Date, Arrowhead shall have the first right to prepare, file, prosecute and maintain all Arrowhead Patents having claims solely directed to compositions of matter comprising the nucleotide sequence and/or the modification pattern of Licensed Compounds or Licensed Products or methods of using or making Licensed Compounds or Licensed Products (collectively, and including those listed as “Product Patents” on Exhibits C and D, the “Arrowhead Product Patents”) in the Territory, at Arrowhead’s cost and expense and (y) from and after the Closing Date, Amgen shall have the first right to prepare, file, prosecute and maintain all Arrowhead Product Patents in the Territory, at Amgen’s cost and expense.  Promptly following the Closing Date, Arrowhead shall transfer control of the Arrowhead Product Patents to Amgen.  The prosecuting Party shall reasonably inform and consult with the other Party, and shall take the other Party’s comments into good faith consideration, with respect to the preparation, prosecution and maintenance of such Arrowhead Product Patents.  The prosecuting Party shall provide to the other Party copies of any correspondence relating to the filing, prosecution or maintenance of such Arrowhead Product Patents reasonably in advance of their being filed or promptly upon their being received, including draft filings, reasonably in advance of their being filed, so that the other Party can comment and provide input with respect to such draft filings.  The prosecuting Party agrees to discuss and consider in good faith any changes reasonably requested by the other Party to such correspondence, including draft filings, as promptly as practicable upon their being received, toward the objective of optimizing overall patent protection for Licensed Compounds or the Licensed Products.  If the prosecuting Party decides to cease the prosecution or maintenance of an Arrowhead Product Patent, it shall notify the other Party in writing sufficiently in advance so that the other Party may, at its discretion, assume the responsibility for the prosecution or maintenance of such Arrowhead Product Patents at such other Party’s cost and expense.  Notwithstanding the foregoing, while Arrowhead is the prosecuting Party pursuant to clause (x) above, Arrowhead shall not file any Patent application with respect to an Arrowhead Product Patent without the prior written consent of Amgen, not to be unreasonably withheld, conditioned or delayed.      

(iii)Following the Closing Date, the Parties shall meet and discuss the extent to which it is feasible to allocate certain claims in the Arrowhead Platform Patents to the Arrowhead Product Patents.  At the reasonable request of Amgen, Arrowhead shall make such filings as the Parties reasonably agree to allocate claims solely claiming Licensed Compounds and/or Licensed Products in any and all fields to the Arrowhead Product Patents.  The Parties shall equally share in the costs associated with such actions reasonably requested by Amgen. 

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(b)Joint Patents.  Amgen shall have the first right to prepare, file, prosecute and maintain all Joint Patents in the Territory, at Amgen’s cost and expense. Amgen shall reasonably inform and consult with Arrowhead, and shall take such other Arrowhead’s comments into good faith consideration, with respect to the preparation, prosecution and maintenance of such Joint Patents.  Amgen shall provide to Arrowhead copies of any correspondence relating to the filing, prosecution or maintenance of such Joint Patents reasonably in advance of their being filed or promptly upon their being received, including draft filings, reasonably in advance of their being filed so that Arrowhead can comment and provide input with respect to such draft filings.  Amgen agrees to discuss and consider in good faith any changes reasonably requested by Arrowhead to such correspondence, including draft filings, promptly upon their being received, toward the objective of optimizing overall patent protection for Licensed Compounds and the Licensed Product.  If Amgen decides to cease the prosecution or maintenance of a Joint Patent, it shall notify Arrowhead in writing sufficiently in advance so that Arrowhead may, at its discretion, assume the responsibility for the prosecution or maintenance of such Joint Patent at Arrowhead’s cost and expense.  

(c)Cooperation.  Each Party shall provide the other Party all reasonable assistance and cooperation, at the other Party’s request and expense, in the patent prosecution efforts as provided above in this Section 9.3, including providing any necessary powers of attorney and executing any other required documents or instruments for such prosecution.  Each Party shall execute and deliver to the other assignments with respect to any Patents, including Joint Inventions, as applicable, in a mutually agreeable form and will take whatever actions reasonably necessary (including the appointment of the other Party as its attorney in fact solely to make such assignment) to effect such assignment, in accordance with the ownership provisions provided above in Section 9.2.  The prosecuting Party under this Section 9.3 agrees to conduct such prosecution toward the objective of optimizing overall patent protection for Licensed Compounds and Licensed Products.

9.4Enforcement of Arrowhead Patents and Joint Patents.

(a)Notification.  If either Party becomes aware of any existing or threatened infringement of Arrowhead Patents or Joint Patents with respect to Third Party products involving RNAi Molecules in any and all fields in the Territory, which infringing activity involves the using, making, importing, offering for sale or selling RNAi Molecules directed to the Collaboration Target, Licensed Compounds or Licensed Products, in each case in any and all fields and in the Territory, or any such Arrowhead Patent or Joint Patent is challenged in any action or proceeding to the extent directly relating to RNAi Molecules directed to the Collaboration Target, Licensed Compounds or Licensed Products, in each case in any field  and in the Territory (other than any oppositions, cancellations, interferences, reissue proceedings or reexaminations, which are addressed in Section 9.7) (a “Product Infringement”), it shall promptly notify the other Party in writing to that effect and the Parties will consult with each other regarding any actions to be taken with respect to such Product Infringement.  Each Party shall share with the other Party all Information available to it regarding such alleged Product Infringement.

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(b)Enforcement.

(i)Arrowhead shall have the first right, but not the obligation, to bring an appropriate suit or other action against any person or entity engaged in a Product Infringement of the Arrowhead Platform Patents.  Arrowhead shall keep Amgen regularly informed of the status and progress of such enforcement efforts, shall reasonably consider Amgen’s comments on any such efforts, and shall seek consent of Amgen in any important aspects of such enforcement, including determination of litigation strategy and filing of material papers to the competent court, which consent shall not be unreasonably withheld or delayed.  In addition, Arrowhead shall provide Amgen with drafts of all material papers to be filed with the court and shall in good faith incorporate all reasonable comments thereto by Amgen before filing such papers.  Amgen shall provide to Arrowhead reasonable assistance in such enforcement pursuant to this subsection (b)(i), at Arrowhead’s request and expense, including joining such action as a party plaintiff if required by applicable Laws to pursue such action. 

(ii)If Arrowhead elects not to commence a suit to enforce the applicable Arrowhead Platform Patents or settle or otherwise secure the abatement of such Product Infringement, then Amgen shall have the right, but not the obligation, to commence a suit or take action to enforce such Arrowhead Platform Patents against such Product Infringement in any and all fields in the Territory at its own cost and expense.  In such event, promptly after Arrowhead’s notice to Amgen that it does not elect to enforce such Arrowhead Platform Patents, the Parties shall meet to discuss in good faith the strategy for enforcing such Arrowhead Platform Patents.  Amgen acknowledges and agrees that the Arrowhead Platform Patents may be licensed to Third Parties who have rights with respect to the enforcement of such Patents, and that Amgen’s rights to conduct any enforcement activities are subject to such rights.  In any event, Arrowhead shall have the right to consult with such Third Party licensees prior to making any decisions with respect to enforcement activities under this Section 9.4(b)(ii).  In addition, Amgen shall provide Arrowhead with drafts of all material papers to be filed with the court and shall incorporate all reasonable comments thereto by Arrowhead before filing such papers.  Arrowhead shall be entitled to separate representation in such matter by counsel of its own choice and at its own expense.

(iii)Amgen shall have the first right, but not the obligation, to bring and control an appropriate suit or other action against any person or entity engaged in a Product Infringement of the Arrowhead Product Patents or Joint Patents, in its own name and entirely under its own direction and control, subject to the following.  Amgen shall keep Arrowhead regularly informed of the status and progress of such enforcement efforts.  Amgen shall consult with Arrowhead and take any Arrowhead comments into good faith consideration with respect to the infringement, claim construction, or defense of the validity or enforceability of any claim in any Arrowhead Product Patent or Joint Patent.  In addition, Amgen shall provide Arrowhead with drafts of all material papers to be filed with the court and shall incorporate all reasonable comments thereto by Arrowhead before filing such papers.  Arrowhead shall provide to Amgen reasonable assistance in such enforcement pursuant to this Section 9.4(b)(iii), at Amgen’s request and expense, including joining such action as a party plaintiff if requested by Amgen or required by applicable Laws to pursue such action.  Arrowhead shall be entitled to separate representation in such matter by counsel of its own choice and at its own expense.

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(iv)If Amgen elects not to settle, or bring any action or proceeding as described in Section 9.4(b)(iii), then it will notify Arrowhead thereof and Arrowhead may bring such suit or other action against any person or entity engaged in a Product Infringement of the Arrowhead Product Patents or Joint Patents, in its own name and entirely under its own direction and control, subject to the following.  Arrowhead shall consult with Amgen and take any Amgen comments into good faith consideration with respect to the infringement, claim construction, or defense of the validity or enforceability of any claim in any Arrowhead Product Patent or Joint Patent.  Amgen shall provide to Arrowhead reasonable assistance in such enforcement pursuant to this Section 9.4(b)(iv), at Arrowhead’s request and expense, including joining such action as a party plaintiff if requested by Arrowhead or required by applicable Laws to pursue such action.  Amgen shall have the right to participate and be represented in any such suit by its own counsel at its own expense with respect to a Product Infringement.  No settlement of any such action or proceeding which restricts the scope, or adversely affects the enforceability, of any Arrowhead Product Patent or Joint Patent, or imposes on Amgen any restrictions, obligations or other liabilities, shall be entered into by Arrowhead without the prior written consent of Amgen, which consent shall not be unreasonably withheld, conditioned, or delayed.  Arrowhead shall not knowingly take any action during such litigation of any Arrowhead Product Patent or Joint Patent that would materially and adversely affect them, without Amgen’s prior written consent, which shall not be unreasonably withheld, delayed, or conditioned.  Notwithstanding the foregoing, Arrowhead will not have the right to enforce or settle any such action or proceeding if Amgen has a good faith belief that enforcement of such Arrowhead Product Patent or Joint Patent in such circumstances could unreasonably jeopardize the rights licensed to Amgen under such Patent. 

(v)Notwithstanding Section 9.4(b)(ii) or (iv), if a Third Party submits an application to the appropriate Regulatory Authority for approval to sell a drug product, and supports the application with any safety, efficacy, or other data that either Party has generated in Developing a Licensed Compound or Licensed Product, then the following will apply:

(1)if a Party receives from the Third Party a notice alleging that the Third Party’s manufacture, use, or sale of the drug product does not infringe an Arrowhead Patent, or that such Patent is invalid or unenforceable (such as a certification under 21 U.S.C. §§ 355(b)(2)(A)(iv) or 355(j)(2)(A)(vii)(IV), 21 C.F.R. §§ 314.94 or 314.95, 42 U.S.C. § 262(l), or under any other law anywhere in the world that by its effect permits a Third Party to support its application for approval with any safety, efficacy, or other data generated in Developing a Licensed Compound or Licensed Product), then the Party receiving the notice will provide it to the other Party via facsimile and overnight courier as soon as practicable and at least within five (5) days after receiving the notice.

(2)Arrowhead will have the first right, but not the obligation, to institute and control (where Arrowhead is a plaintiff) or defend and control (where Arrowhead is a defendant) an action before any government or private tribunal against the Third Party concerning the infringement, validity, and enforceability of any Arrowhead Platform Patent and to settle any claims in connection with such Patents.  Amgen will have the first right, but not the obligation, to institute and control (where Amgen is a plaintiff) or defend and control (where Amgen is a defendant) an action before any government or private tribunal against the Third Party concerning the infringement, validity, and enforceability of any Arrowhead Product Patent and to settle any claims in connection with such Patents.  If the applicable Party decides not to institute 

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(or defend, as applicable) such action, such Party will give notice to the other Party of its decision within twenty (20) days of the deadline for initiating the action (or, if such Party is defending the action, within twenty (20) days of any deadline required to maintain the action), upon receipt of which the other Party may institute (or defend, as applicable) and control such action.  Each Party will cooperate fully with the other Party in such actions and will provide reasonable assistance (including making available to such other Party documents possessed by such Party that are reasonably required by such other Party and making available personnel for interviews and testimony) in any actions undertaken in accordance with this Section 9.4(b)(v).  At the controlling Party’s request, the other Party agrees to join any such action, or, in the case of Arrowhead, to use reasonable efforts to cause any Third Party licensor under any license agreement between Arrowhead and such Third Party pursuant to which Arrowhead has obtained rights to any Arrowhead Licensed Technology, including the agreements set forth on Exhibit E, to join any such action, for the purpose of establishing standing.  Each Party will have the right to approve any settlement under Section 9.4(b)(v) that would adversely affect the Arrowhead Patents or result in any liability, restriction, obligation or admission on behalf of such Party, such approval not to be unreasonably withheld, conditioned, or delayed.  Any recovery, by settlement or otherwise, realized as a result of such litigation will be allocated in accordance with Section 9.4(d).

(c)Settlement.  Neither Party shall settle any claim, suit or action that it brought under Section 9.4(b) without the prior written consent of the other Party, not to be unreasonably withheld, delayed, or conditioned.  Nothing in this Article 9 shall require such other Party to consent to any settlement that is reasonably anticipated by such other Party to have a material and adverse impact upon any Arrowhead Patents or Joint Patents.

(d)Expenses and Recoveries.  The enforcing Party bringing a claim, suit or action under Section 9.4(b) shall be solely responsible for any expenses incurred by such Party as a result of such claim, suit or action.  If such Party recovers monetary damages in such claim, suit or action, such recovery shall first be allocated to the reimbursement of any expenses incurred by the Parties in such litigation (including, for this purpose, a reasonable allocation of expenses of internal counsel).  If such recovery is insufficient to cover all such costs and expenses of both Parties, it shall be shared in proportion to the total of such costs and expenses incurred by each Party.  If after such reimbursement any funds remain from such damages or other sums recovered, if Amgen brought such suit, such remaining funds shall [***].

(e)Infringement Other Than a Product Infringement.  For any and all infringement of any Arrowhead Patents or Joint Patents other than a Product Infringement, as between the Parties, (i) Arrowhead shall have the sole and exclusive right to bring an appropriate suit or other action against any person or entity engaged in such other infringement of an Arrowhead Patent, in its sole discretion, and shall bear all related expenses and retain all related recoveries, and (ii) each Party shall have the right to bring an appropriate suit or other action against any person or entity engaged in such other infringement of a Joint Patent, in its sole discretion, and shall bear all related expenses and retain all related recoveries, and the other Party shall provide reasonable assistance in such enforcement action, including joining such action as a party plaintiff if required by applicable Laws to pursue such action, at the request and expense of the Party bringing the suit or action.  

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9.5Patents Licensed From Third Parties.  Each Party’s rights under this Article 9 with respect to the prosecution, maintenance and enforcement of any Arrowhead Patent that is licensed by Arrowhead from a Third Party shall be subject to the rights of such Third Party to prosecute, maintain and enforce such Patent.

9.6Infringement of Third Party Rights in the Territory.  If any Licensed Compound or Licensed Product used or sold by Amgen, its Affiliates or sublicensees becomes the subject of a Third Party’s claim or assertion of infringement of a Patent granted by a jurisdiction within the Territory, Amgen shall promptly notify Arrowhead and the Parties shall agree on and enter into a “common interest agreement” wherein the Parties agree to their shared, mutual interest in the outcome of such potential dispute, and thereafter, the Parties shall promptly meet to consider the claim or assertion and the appropriate course of action.  Amgen shall be solely responsible for the defense of any such infringement claims, provided that Amgen shall provide to Arrowhead the ability to join such action, at Arrowhead’s request and expense, to pursue such action in which a patent asserted by a Third Party under this Section 9.6, claims (a) the composition of matter or use, sale, offer for sale, or importation in any and all fields of any Licensed Compound or Licensed Product or (b) the manufacture of any such Licensed Compound or Licensed Product using the process employed by Arrowhead as of the Effective Date (any such patent, “Subject Patent”).  To the extent directly related to the Subject Patent, Amgen shall keep Arrowhead regularly informed of the status and progress of any action to the extent involving a Subject Patent, shall reasonably consider Arrowhead’s comments on any such action with respect to such Subject Patent, including determination of litigation strategy and filing of material papers to the competent court.  In addition, Amgen shall provide Arrowhead with drafts of all material papers to be filed with the court to the extent directly related to the Subject Patent and shall in good faith incorporate all reasonable comments thereto by Arrowhead before filing such papers. 

9.7Parties’ Patent Rights.  If any Arrowhead Patent or Joint Patent becomes the subject of any proceeding commenced by a Third Party within the Territory in connection with an opposition, reexamination request, action for declaratory judgment, nullity action, interference, inter partes review, or other attack upon the validity, title or enforceability thereof (except insofar as such action is a counterclaim to or defense of, or accompanies a defense of, an action for infringement against a Third Party under Section 9.4, in which case the provisions of Section 9.4 shall govern), then Arrowhead shall control such defense with respect to the Arrowhead Platform Patents and Amgen shall control such defense with respect to the Arrowhead Product Patents and Joint Patents.  The defending Party shall be responsible for all costs and expenses incurred by such Party under this Section 9.7.  The defending Party shall provide to the other Party copies of any papers relating to any such opposition, reexamination request, action for declaratory judgment, nullity action, interference or other attack upon any Arrowhead Platform Patents, Arrowhead Product Patents or Joint Patents, as applicable, reasonably in advance of their being filed or promptly upon their being received, including draft filings reasonably in advance of their being filed so that the other Party can comment and provide input with respect to such draft filings.  The defending Party agrees to discuss and consider in good faith any changes reasonably requested by the other Party to such papers, including draft filings, promptly upon their being received, toward the objective of optimizing overall patent protection for Licensed Compounds or the Licensed Product.  The defending Party shall permit the other Party to participate in the proceeding for an Arrowhead Platform Patent, Arrowhead Product Patent or Joint Patent, as applicable, to the extent permissible under applicable Laws, and to be represented by its own counsel in such proceeding, 

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at such other Party’s expense.  If the defending Party decides that it does not wish to defend against such action, then the other Party shall have a backup right to assume defense of such Third Party action at its own expense.  Any awards or amounts received in defending any such Third Party action shall be allocated between the Parties as provided in Section 9.4(d).

9.8Patent Term Extension.  In the event Amgen desires to seek a patent term extension (including any pediatric exclusivity extensions as may be available) or supplemental protection certificate or their equivalents in any country for any Arrowhead Product Patent or Joint Patent, then the Parties shall meet and discuss such request in good faith, provided that Amgen shall have the final decision-making authority with respect thereto. In the event Amgen desires to seek any of the foregoing extensions for any Arrowhead Platform Patent, then the Parties shall meet and discuss such request in good faith and Arrowhead will not unreasonably withhold consent to such extension, provided that it shall not be unreasonable for Arrowhead to withhold its consent if such extension would materially adversely affect such Arrowhead Platform Patent or Arrowhead’s or its licensee’s development or commercialization of compounds covered by such Arrowhead Platform Patent.

9.9Regulatory Data Protection.  To the extent required by or permitted by Law, Amgen will, at its sole discretion, decide whether to list with the applicable Regulatory Authorities during the Term any applicable Arrowhead Product Patents claiming any Licensed Compound or Licensed Product that Amgen intends to, or has begun to, Commercialize, and that has become the subject of a Regulatory Approval Application submitted to FDA.  In the event Amgen desires to include in such listing any Arrowhead Platform Patent, then the Parties shall meet and discuss such request in good faith and Arrowhead will not unreasonably withhold consent to such listing, provided that it shall not be unreasonable for Arrowhead to withhold its consent if such extension would materially adversely affect such Arrowhead Platform Patent.  Such listings may include all so called “Orange Book” listings required under the Hatch-Waxman Act or listing of Patents as provided in the patent dispute resolution procedures of the Biologics Price Competition and Innovation Act of 2009 or under 42 U.S.C. § 262(l) or similar provisions in the Territory during the Term.  Prior to such decision on listings, the Parties will meet to evaluate and identify all applicable Patents to be listed and Amgen shall reasonably incorporate and address suggestions provided by Arrowhead as to the listing or non-listing of any applicable Patents.

Article 10
REPRESENTATIONS AND WARRANTIES; COVENANTS; DISCLAIMERS

10.1Mutual Representations and Warranties.  Each Party hereby represents and warrants to the other Party as follows:

(a)as of the Effective Date, it is a corporation duly organized, validly existing, and in good standing under the Laws of the jurisdiction in which it is incorporated; and

(b)as of the Effective Date, (i) it has the corporate power and authority and the legal right to enter into this Agreement and perform its obligations hereunder; (ii) it has taken all necessary corporate action on its part required to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder; and (iii) this Agreement has been 

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duly executed and delivered on behalf of such Party, and constitutes a legal, valid, and binding obligation of such Party that is enforceable against it in accordance with its terms.

10.2Additional Representations and Warranties of Arrowhead.  Arrowhead represents and warrants to Amgen, as of the Effective Date, as follows:

(a)Arrowhead has (i) the right under the Arrowhead Licensed Technology to grant the licenses to Amgen as purported to be granted pursuant to this Agreement, (ii) sufficient legal or beneficial title in the Arrowhead Licensed Technology to grant the licenses to Amgen as purported to be granted pursuant to this Agreement, and (iii) not granted any right or license to any Third Party under the Arrowhead Licensed Technology that would conflict or interfere with any of the rights and licenses granted to Amgen hereunder;

(b)Arrowhead owns all right, title, and interest in the Arrowhead Patents (including those set forth on Exhibit C) except for the Arrowhead Patents set forth on Exhibit D, which Patent rights Arrowhead has licensed from Third Parties pursuant to the corresponding agreements set forth on Exhibit E and such licensed rights are sufficient to grant the rights purported to be granted to Amgen under this Agreement; 

(c)no lien, encumbrance, or security interest (including in connection with any indebtedness) exists in the Arrowhead Patents in favor of any creditor;

(d)(i) all existing agreements between Arrowhead and any Third Party under which Arrowhead receives a license under any intellectual property rights relating to the Arrowhead Licensed Technology are listed in Exhibit E, (ii) such agreements were made available to Amgen by Arrowhead, and were true, accurate and complete copies of such agreements, and have not been modified, supplemented or amended since the date they were made available to Amgen; (iii) each of such agreements is in full force and effect; and (iv) Arrowhead is not in material breach of any such agreements, and, to its Knowledge, no other party to any such agreements is in material breach thereof, in each respect in, any manner that would give such other party the right to terminate such agreements;

(e)no written communications have been received by Arrowhead from any Third Parties that allege, and there is no pending or threatened litigation as of the Effective Date that alleges, either (x) that any Arrowhead Patent in existence as of the Effective Date is, or for any patent application included in the Arrowhead Patents in existence as of the Effective Date, if issued, would be, invalid or unenforceable or (y) the use of Arrowhead Licensed Technology or the manufacture, use, sale, offer for sale or importation of the Licensed Compounds, Licensed Products or products made using Arrowhead Licensed Technology infringes or misappropriates or would infringe or misappropriate any right of any Third Party, and, to the Knowledge of Arrowhead, no Third Party (i) is infringing any Arrowhead Patents in existence as of the Effective Date or has misappropriated any Arrowhead Know-How in the Arrowhead Licensed Technology or (ii) has challenged the ownership, scope, duration, validity, enforceability, priority or right to use any Arrowhead Patents in existence as of the Effective Date (including, by way of example, through the institution of or written threat of institution of interference, reexamination, protest, opposition, derivation, nullity or similar invalidity proceeding before the U.S. Patent and 

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Trademark Office or any analogous foreign entity) or any Arrowhead Know-How in existence as of the Effective Date;

(f)each of the issued Patents, and any currently pending Patent application or Patent application from which any such Patent has issued, in each case within the Arrowhead Patents in existence as of the Effective Date, (i) has been prosecuted in compliance with all applicable rules, policies, and procedures of the U.S. Patent and Trademark Office in all material respects, and (ii) is subsisting; 

(g)Arrowhead has disclosed to Amgen all Third Party issued Patents identified as relevant by counsel to Arrowhead in any freedom to operate or patentability searches or opinions relating to the Arrowhead Licensed Technology in existence as of the Effective Date in the Territory;

(h)all of Arrowhead’s and its Affiliates’ employees and officers involved in development of the Licensed Technology have been obligated to assign to Arrowhead or such Affiliate, as the case may be, all inventions claimed in the Patents in such Arrowhead Licensed Technology and to maintain as confidential the Confidential Information of Arrowhead or such Affiliate, as the case may be; 

(i)all inventors of any inventions included within the Arrowhead Patents owned by Arrowhead have assigned their entire right, title, and interest in and to such inventions and the corresponding Patents to Arrowhead and have been listed in such Patents as inventors; 

(j)neither the execution and delivery of this Agreement nor the performance hereof by Arrowhead requires Arrowhead to obtain any permits, authorizations or consents from any Governmental Authority or from any other person, firm or corporation, and such execution, delivery and performance will not result in the breach of or give rise to any right of termination, rescission, renegotiation or acceleration under, or trigger any other rights under, any agreement or contract to which Arrowhead is a party or to which it may be subject that relates to the Arrowhead Licensed Technology; 

(k)there are no pending actions, claims, investigations, suits or proceedings against Arrowhead or its Affiliates, at law or in equity, or before or by any Governmental Authority, and neither Arrowhead nor any Affiliate has received any written notice regarding any pending or threatened actions, claims, investigations, suits or proceedings against Arrowhead or such Affiliate, at law or in equity, or before or by any Governmental Authority, in either case with respect to the Arrowhead Licensed Technology; 

(l)Arrowhead Licensed Technology has not been created or developed using government funding that grants rights to step-in, seize, restrict or otherwise compromise the ability of Arrowhead to use such technology or to grant to Amgen the rights purported to be granted hereunder; and

(m)Arrowhead has provided to Amgen all material preclinical data related to ARC-2713, ARC-3460, and Arrowhead’s program against the Collaboration Target.

10.3Mutual Covenants.

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(a)No Debarment.  In the course of the Development of Licensed Compounds and Licensed Products, each Party shall not knowingly use any employee or consultant who has ever been debarred or is the subject of debarment or convicted of a crime for which an entity or person could be debarred (including by the FDA under 21 U.S.C. § 335a (or subject to a similar sanction of any other Governmental Authority)).  Each Party shall notify the other Party promptly upon becoming aware that any of its employees or consultants has been debarred or is the subject of debarment proceedings by any Regulatory Authority.

(b)Compliance.  Each Party and its Affiliates shall comply in all material respects with all applicable Laws in the Development, Manufacture, and Commercialization of Licensed Compounds and Licensed Products performed under this Agreement, including the statutes, regulations and written directives of the FDA, the EMA and any Regulatory Authority having jurisdiction in the Territory, the FD&C Act, the Prescription Drug Marketing Act, the Federal Health Care Programs Anti-Kickback Law, 42 U.S.C. § 1320a-7b(b), the statutes, regulations and written directives of Medicare, Medicaid and all other health care programs, as defined in 42 U.S.C. § 1320a-7b(f), and the Foreign Corrupt Practices Act of 1977, each as may be amended from time to time.

10.4Additional Covenants.

(a)Arrowhead represents and warrants to and covenants with Amgen that all of Arrowhead’s employees and officers involved in research and development of the Arrowhead Licensed Technology, Licensed Compounds, or Licensed Products shall be obligated to assign to Arrowhead all inventions relating to such Arrowhead Licensed Technology, Licensed Compounds, or Licensed Products and to maintain as confidential the Confidential Information of Arrowhead;

(b)Amgen represents and warrants to and covenants with Arrowhead that all of Amgen’s employees and officers involved in Development of the Licensed Compounds or the Licensed Product shall be obligated to assign to Amgen all inventions relating to such Licensed Compounds or the Licensed Product and to maintain as confidential the Confidential Information of Amgen;

(c)Arrowhead represents and warrants to and covenants with Amgen that Arrowhead shall not sell, assign, or otherwise transfer to any person (other than any Affiliate of Arrowhead) any Arrowhead Patents (or agree to do any of the foregoing) in any manner that would be inconsistent with the rights and licenses granted to Amgen under this Agreement, except to the extent permitted by, and in compliance with, Section 15.6; and

(d)Arrowhead represents and warrants to and covenants with Amgen that Arrowhead shall not grant to any Third Party any right or license under the Arrowhead Licensed Technology that is within the scope of licenses granted to Amgen under Section 3.1.

10.5Disclaimer.  Amgen understands that the Licensed Compounds and Licensed Products will be the subject of research and development and that Arrowhead cannot assure the safety or usefulness of any Licensed Compound or Licensed Product.  In addition, Arrowhead makes no warranties except as set forth in this Article 11 concerning the Arrowhead Licensed 

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Technology.  EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, WHETHER EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, OR NON-MISAPPROPRIATION OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS, ARE MADE OR GIVEN BY OR ON BEHALF OF A PARTY, AND ALL REPRESENTATIONS AND WARRANTIES, WHETHER ARISING BY OPERATION OF LAW OR OTHERWISE, ARE HEREBY EXPRESSLY EXCLUDED.  Without limiting the generality of the foregoing, (i) neither Party represents or warrants as to the success of any study or test conducted by such Party pursuant to this Agreement or the safety or usefulness for any purpose of the technology, right or materials it provides hereunder, or that either Party will be successful in obtaining any patents rights, or that any patents will issue based on a pending application; and (ii) each Party specifically disclaims any guarantee that the Licensed Compounds or Licensed Products will be successful, in whole or in part

10.6Knowledge Standard.  “Knowledge” means, as applied to a Party in this Article 10, the actual knowledge, as of the Effective Date, of a Party’s executive officers or personnel with primary responsibility for the applicable subject matter exercising reasonably diligent inquiry.

Article 11
INDEMNIFICATION

11.1Indemnification by Arrowhead.  Arrowhead shall defend, indemnify, and hold Amgen and its Affiliates and their respective officers, directors, employees, and agents (the “Amgen Indemnitees”) harmless from and against any and all Third Party claims, suits, proceedings, damages, expenses (including court costs and reasonable attorneys’ fees and expenses) and recoveries (collectively, “Claims”) to the extent that such Claims arise out of, are based on, or result from (a) the breach of any of Arrowhead’s obligations under this Agreement, including Arrowhead’s representations, warranties, and covenants set forth herein, (b) the performance by or on behalf of Arrowhead or its Affiliates or licensees of Arrowhead’s obligations under this Agreement or the development, manufacture, or commercialization by Arrowhead, its Affiliates or licensees (other than Amgen, its Affiliates or Sublicensees) of products containing RNAi Molecules solely to the extent such Claim is based on the use of the Arrowhead Licensed Technology (excluding in all cases Claims covered by the scope of 11.2) by Arrowhead, its Affiliates or licensees (other than Amgen, its Affiliates or Sublicensees) in connection with such development, manufacture or commercialization by such parties of such products, or (c) the willful misconduct or negligent acts of Arrowhead or its Affiliates in performing under this Agreement.  The foregoing indemnity obligation shall not apply to the extent that (i) the Amgen Indemnitees fail to comply with the indemnification procedures set forth in Section 11.3 and Arrowhead’s defense of the relevant Claims is actually prejudiced by such failure, or (ii) any Claim arises from, is based on, or results from any activity set forth in Section 11.2(b) or 11.2(c) for which Amgen is obligated to indemnify the Arrowhead Indemnitees under Section 11.2.

11.2Indemnification by Amgen.  Amgen shall defend, indemnify, and hold Arrowhead and its Affiliates and their respective officers, directors, employees, and agents (the “Arrowhead Indemnitees”) harmless from and against any and all Claims to the extent that such Claims arise out of, are based on, or result from (a) the Development, Manufacture or Commercialization of Licensed Compounds or Licensed Products by or on behalf of Amgen or its Affiliates or 

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Sublicensees, including Claims based upon product liability and patent infringement, (b) the breach of any of Amgen’s obligations under this Agreement, including Amgen’s representations, warranties, and covenants set forth herein, or (c) the willful misconduct or negligent acts of Amgen or its Affiliates in performing under this Agreement.  The foregoing indemnity obligation shall not apply to the extent that (i) the Arrowhead Indemnitees fail to comply with the indemnification procedures set forth in Section 11.3 and Amgen’s defense of the relevant Claims is actually prejudiced by such failure, or (ii) any Claim arises from, is based on, or results from any activity set forth in Section 11.1(b) or 11.1(c) for which Arrowhead is obligated to indemnify the Amgen Indemnitees under Section 11.1. 

11.3Indemnification Procedures.  The Party claiming indemnity under this Article 11 (the “Indemnified Party”) shall give written notice to the Party from whom indemnity is being sought (the “Indemnifying Party”) promptly after learning of such Claim.  The Indemnified Party shall provide the Indemnifying Party with reasonable assistance, at the Indemnifying Party’s expense, in connection with the defense of the Claim for which indemnity is being sought and, if the Indemnifying Party has failed to assume defense of such Claim and the Indemnified Party has assumed and is conducting the defense of the Claim, the Indemnifying Party shall provide the Indemnified Party with reasonable assistance, at the Indemnifying Party’s expense, in connection with the defense of the Claim for which the indemnity is being sought.  The Indemnified Party may participate in and monitor such defense with counsel of its own choosing at its sole expense; provided, however, the Indemnifying Party shall have the right to assume and conduct the defense of the Claim with counsel of its choice.  The Indemnifying Party shall not settle any Claim without the prior written consent of the Indemnified Party, not to be unreasonably withheld, conditioned or delayed.  For clarity, the Indemnified Party may freely withhold its consent to a settlement of a claim with respect to Claims if (i) such settlement does not include a complete release from liability of the Indemnified Party or if such settlement would involve undertaking an obligation (including the payment of money by an Indemnified Party), (ii) would bind or impair the Indemnified Party or (iii) includes any admission of wrongdoing or that any intellectual property or proprietary right of the Indemnified Party or this Agreement is invalid, narrowed in scope or unenforceable.  So long as the Indemnifying Party is actively defending the Claim in good faith, the Indemnified Party shall not settle or compromise any such Claim without the prior written consent of the Indemnifying Party.  If the Indemnifying Party does not assume and conduct the defense of the Claim as provided above, (a) the Indemnified Party may defend against, consent to the entry of any judgment, or enter into any settlement with respect to such Claim in any manner the Indemnified Party may deem reasonably appropriate (and the Indemnified Party need not consult with, or obtain any consent from, the Indemnifying Party in connection therewith), and (b) the Indemnifying Party shall remain responsible to indemnify the Indemnified Party as provided in this Article 12.  

11.4Limitation of Liability.  NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR INDIRECT DAMAGES ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES.  NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 11.4 IS INTENDED TO OR SHALL LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF ANY PARTY UNDER SECTION 11.1 OR 11.2 WITH RESPECT TO THIRD PARTY CLAIMS, OR DAMAGES AVAILABLE FOR A PARTY’S BREACH OF 

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CONFIDENTIALITY OBLIGATIONS IN ARTICLE 12 OR ITS OBLIGATIONS IN SECTION  2.1.

11.5Insurance.  Each Party shall procure and maintain insurance (or self-insure sufficiently to provide materially the same level and type of protection) adequate to cover its obligations hereunder during the Term and consistent with normal business practices of companies similarly situated.  It is understood that such insurance shall not be construed to create a limit of either Party’s liability with respect to its indemnification obligations under this Article 11.  Each Party shall provide the other Party with written evidence of such insurance upon request.  

Article 12
CONFIDENTIALITY

12.1Confidentiality.  Each Party agrees that, during the Term and for a period of [***] years thereafter, it shall keep confidential and shall not publish or otherwise disclose and shall not use for any purpose other than as provided for in this Agreement (which includes the exercise of any rights or the performance of any obligations hereunder) any Confidential Information furnished to it by the other Party pursuant to this Agreement, except to the extent expressly authorized by this Agreement or otherwise agreed in writing by the Parties.  Each Party will use at least the same standard of care as it uses to protect proprietary or confidential information of its own (but no less than reasonable care) to ensure that its employees, agents, consultants, contractors and other representatives do not disclose or make any unauthorized use of the Confidential Information of the other Party.  Each Party will promptly notify the other upon discovery of any unauthorized use or disclosure of the Confidential Information of the other Party.  The foregoing confidentiality and non-use obligations shall not apply to any portion of the other Party’s Confidential Information that:

(a)was already known to the receiving Party or any of its Affiliates, other than by previous disclosure of the disclosing Party or any of its Affiliates, at the time of disclosure by the other Party;

(b)was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving Party;

(c)becomes generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the receiving Party in breach of this Agreement;

(d)was disclosed to the receiving Party or any of its Affiliates on a non-confidential basis by a Third Party who is not known by the Receiving Party after due inquiry to be subject to an obligation of confidentiality to the other Party; or

(e)was independently discovered or developed by the employees, subcontractors, consultants or agents of the receiving Party or any of its Affiliates without use of the other Party’s Confidential Information, as evidenced by a contemporaneous writing.

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12.2Authorized Disclosure.  Notwithstanding the obligations set forth in Section 12.1, a Party may disclose the other Party’s Confidential Information and the terms of this Agreement to the extent:

(a)such disclosure is reasonably necessary (i) to comply with the requirements of Regulatory Authorities with respect to obtaining and maintaining Regulatory Approval of a Licensed Product; or (ii) for prosecuting or defending litigation as contemplated by this Agreement;

(b)such disclosure is reasonably necessary to its employees, agents, consultants, contractors, licensees or sublicensees on a need-to-know basis for the sole purpose of performing its obligations or exercising its rights under this Agreement; provided that in each case, the disclosees are bound by written obligations of confidentiality and non-use consistent with those contained in this Agreement; 

(c)such disclosure is reasonably necessary to any bona fide potential or actual investor, acquirer, merger partner, licensee, sublicensee, or other financial or commercial partner for the sole purpose of evaluating an actual or potential investment, acquisition or other business relationship; provided that in connection with such disclosure, such Party shall inform each disclosee of the confidential nature of such Confidential Information and, in each case, the disclosees are bound by written obligations of confidentiality and non-use consistent with those contained in this Agreement; and provided further, that no financial terms shall be disclosed to any such potential investor, acquirer or partner if it has a competing product to any Licensed Compound or Licensed Product; or

(d)such disclosure is reasonably necessary to comply with applicable Laws, including regulations promulgated by applicable security exchanges, court order, administrative subpoena or order.

Notwithstanding the foregoing, in the event a Party is required to make a disclosure of the other Party’s Confidential Information pursuant to Section 12.2(a) or 12.2(d), such Party shall promptly notify the other Party of such required disclosure and shall use reasonable efforts to obtain, or to assist the other Party in obtaining, a protective order preventing or limiting the required disclosure.  Any information disclosed pursuant to Section 12.2(a) through Section 12.2(d) shall still be deemed Confidential Information and subject to the restrictions set forth in this Agreement, including the foregoing provisions of Article 12.

12.3Technical Publication.  During the Term, neither Party may publish peer reviewed manuscripts, or give other forms of public disclosure such as abstracts and presentations, of results of studies carried out under this Agreement, without the opportunity for prior review by the other Party, and subject to this Section 12.3, below, except to the extent required by applicable Laws; provided, however, that Amgen will have the sole right (without Arrowhead’s consent) to publish and make scientific presentations with respect to Licensed Compounds or Licensed Products or make other public disclosures regarding any such Licensed Compounds or Licensed Products, and Arrowhead will not do so without Amgen’s prior written consent, except as required by applicable Law.  No publication shall include the other Party’s Confidential Information without the prior written consent of such other Party.  A Party seeking publication shall provide the other Party the 

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opportunity to review and comment on any proposed publication (or where a copy of such publication or presentation is not available at such time, a draft or outline of such publication or description of such presentation) that relates to an RNAi Molecule directed to the Collaboration Target or any Licensed Compound or Licensed Product, at least [***] days prior to its intended submission for publication.  The other Party shall provide the Party seeking publication with its comments in writing, if any, as promptly as practicable after receipt of such proposed publication.  The Party seeking publication shall consider in good faith any comments thereto provided by the other Party and shall comply with the other Party’s request to remove any and all of such other Party’s Confidential Information from the proposed publication.  In addition, the Party seeking publication shall delay the submission for a period up to [***] days in the event that the other Party can demonstrate reasonable need for such delay, including the preparation and filing of a patent application (or, in the case that a Party has a compelling business justification, for a longer period reasonably selected by that Party).  Each Party agrees to acknowledge the contributions of the other Party and its employees in all publications as scientifically appropriate.

12.4Publicity; Terms of this Agreement.

(a)The Parties agree that the terms of this Agreement are the Confidential Information of both Parties, subject to the special authorized disclosure provisions set forth in this Section 13.4.

(b)Public announcement of the execution of this Agreement shall be made substantially in the form of the press release attached hereto as Exhibit F, on or promptly after the Effective Date.  On or promptly after the Closing Date the Parties shall issue a public announcement limited to announcing information contained in Exhibit F, clearance under the HSR Act and the fact that the transactions contemplated by this Agreement have closed.

(c)After release of such press release, if either Party desires to make a public announcement concerning the terms of this Agreement, such Party shall give reasonable prior advance notice of the proposed text of such announcement to the other Party for its prior review and approval (except as otherwise provided herein).  A Party commenting on such a proposed press release shall provide its comments, if any, within [***] after receiving the press release for review.  Notwithstanding the foregoing, a Party shall have the right to make a public announcement or press release announcing the achievement of each Regulatory Approval development and regulatory milestone event set forth in Section 8.2 (excluding, for clarity, the Initiation of Phase 3 Clinical Trial milestones) as it is achieved either (i) with the consent of the other Party (not to be unreasonably withheld); (ii) where required by applicable Laws or regulations promulgated by an applicable security exchange; or (iii) as permitted under Section 12.2.  Except as provided in this subsection (c) or permitted under Section 12.2, no press release shall include the other Party’s Confidential Information without the prior written consent of such other Party.  In relation to the other Party’s review of such an announcement, such other Party may make specific, reasonable comments on such proposed press release within the prescribed time for commentary.  Neither Party shall be required to seek the permission of the other Party to repeat any information regarding the terms of this Agreement that has already been publicly disclosed by such Party, or by the other Party, in accordance with this Section 12.4, provided such information remains accurate as of such time.

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(d)The Parties acknowledge that either or both Parties may be obligated to file a copy of this Agreement and summaries of the terms hereof with the U.S. Securities and Exchange Commission or other Governmental Authority as reasonably required to comply with applicable Laws or the rules of a nationally-recognized securities exchange.  Each Party shall be entitled to make such filings, provided that it requests confidential treatment of the commercial terms, sensitive technical terms and other terms of this Agreement that a Party reasonably deems sensitive or competitive to the extent such confidential treatment is reasonably available to such Party; provided that the foregoing obligation to request confidential treatment shall not apply with respect to any disclosure of this Agreement by either Party to the U.S. Internal Revenue Service or similar Governmental Authority outside the U.S.  In the event of any such filing, each Party will provide the other Party with a copy of this Agreement and related filings marked to show provisions for which such Party intends to seek confidential treatment and shall reasonably consider and incorporate the other Party’s comments thereon to the extent consistent with the legal requirements and the rules of any nationally recognized securities exchange, with respect to the filing Party, governing disclosure of material agreements and material information to be publicly filed.

12.5Equitable Relief.  Each Party acknowledges that its breach of this Article 12 may cause irreparable harm to the other Party, which cannot be reasonably or adequately compensated in damages in an action at law.  By reasons thereof, each Party agrees that the other Party shall be entitled, in addition to any other remedies it may have under this Agreement or otherwise, to seek preliminary and permanent injunctive and other equitable relief to prevent or curtail any actual or threatened breach of the obligations relating to Confidential Information set forth in this Article 12 by the other Party.

12.6Attorney-Client Privilege.  Neither Party is waiving, nor will be deemed to have waived or diminished, any of its attorney work product protections, attorney-client privileges or similar protections and privileges recognized under the applicable law of any jurisdiction as a result of disclosing information pursuant to this Agreement, or any of its Confidential Information (including Confidential Information related to pending or threatened litigation) to the receiving Party, regardless of whether the disclosing Party has asserted, or is or may be entitled to assert, such privileges and protections.  The Parties may become joint defendants in proceedings to which the information covered by such protections and privileges relates and may determine that they share a common legal interest in disclosure between them that is subject to such privileges and protections, and in such event, may enter into a joint defense agreement setting forth, among other things, the foregoing principles, but are not obligated to do so.

Article 13
TERM AND TERMINATION

13.1Term.  This Agreement shall become effective on the Effective Date and, unless earlier terminated pursuant to this Article 13, shall remain in effect until last expiration of the Royalty Term for Licensed Products (the “Term”).

13.2Termination by Amgen.  Amgen may terminate this Agreement in its entirety at any time and for any reason or for no reason upon delivery of (i) at least [***] prior written notice to Arrowhead if no First Commercial Sale has occurred with respect to a Licensed Product and (ii) 

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at least [***] prior written notice to Arrowhead if First Commercial Sale has occurred with respect to a Licensed Product.  

13.3Termination for Breach.  Each Party (the “Non-Breaching Party”) shall have the right, without prejudice to any other remedies available to it at law or in equity, to terminate this Agreement in its entirety upon written notice to the other Party if the other Party materially breaches its obligations under this Agreement and, after receiving written notice identifying such material breach in reasonable detail, fails to cure such material breach, or if such material breach is not susceptible to cure within the Cure Period, fails to deliver to the Non-Breaching Party a written plan that is reasonably calculated to resolve such material breach, within ninety (90) days from the date of such notice (or within thirty (30) days from the date of such notice in the event such material breach is solely based on the breaching Party’s failure to pay any undisputed amounts due hereunder) (the “Cure Period”).  If the Parties reasonably and in good faith disagree as to whether there has been a material breach, the Party that disputes that there has been a material breach may contest the allegation in accordance with Article 14.  It is understood and acknowledged that, during the pendency of such a Dispute, the Cure Period shall be extended by the period of time of such pendency, all of the terms and conditions of this Agreement shall remain in effect, and the Parties shall continue to perform all of their respective obligations under this Agreement; provided that for any Dispute over payment, such tolling of the Cure Period will only apply with respect to payment of the disputed amounts and not with respect to any undisputed amounts.  Nothing in this Section 13.3 shall limit a Party’s ability to seek remedies available under this Agreement in law or equity.

13.4Termination for Patent Challenge.  Arrowhead may terminate this Agreement in its entirety immediately upon written notice to Amgen if (i) Amgen or its Affiliates (directly or indirectly) challenges the validity, enforceability or scope of any Arrowhead Patent anywhere in the world or (ii) any Sublicensee (directly or indirectly) challenges the validity, enforceability or scope of any Arrowhead Patent anywhere in the world and (A) Amgen does not cause such Sublicensee to withdraw such action or (B) Amgen does not initiate termination of the sublicense agreement with such Sublicensee, in each case, within ten (10) days of Amgen receiving from Arrowhead written notice of any such action being taken by such Sublicensee.  Notwithstanding the foregoing, Arrowhead shall have no such right to terminate this Agreement in the case of (I) Amgen’s or any of its Affiliates’ good faith assertion that (x) any Invention claimed by a Patent filed by or on behalf of Arrowhead as an Arrowhead Patent was an Invention of Amgen or a Joint Invention or (y) any Invention claimed by a Joint Patent filed by or on behalf of Arrowhead as a Joint Patent was an Invention of Amgen; (II) Amgen’s or any of its Affiliates’ good faith assertion, in the context of whether a payment of royalties is due to Arrowhead, that no Valid Claim within the Arrowhead Patents licensed from Third Parties applies with respect to a Licensed Product; (III) any claim made by Amgen or any of its Affiliates or Sublicensees as a defense in any lawsuit or administrative proceeding brought by Arrowhead; or (IV) any lawsuit, reexamination proceeding or opposition brought by Amgen or any of its Affiliates or Sublicensees challenging the validity or enforceability of any claim within an issued Arrowhead Patent that does not claim the Arrowhead Licensed Technology that is licensed to Amgen under 3.1 to exploit Licensed Compounds or Licensed Products.

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13.5Consequences of Termination.  Upon any termination of this Agreement pursuant to Section 13.2, 13.3, or 13.4, except as otherwise set forth in Section 13.6 and 8.4(b), all licenses and rights granted by either Party under this Agreement shall terminate.

13.6Survival.  Termination or expiration of this Agreement shall not affect any liabilities of the Parties under this Agreement that have accrued prior to the date of termination or expiration.  Notwithstanding anything to the contrary, the following provisions shall survive any expiration or termination of this Agreement: Article 1, Article 11, Article 12, (for the period set forth in Section 12.1), and Article 15 (except Section 15.6(b) and (c)); and Sections , 8.3, 8.4, 8.5, 8.7, 8.8 (each such listed section in Article 8 to the extent applicable to payments for milestone events or sales of Licensed Products that occurred prior to the effective date of such termination or expiration and payable by Amgen under Article 8), 8.9, 9.1, 9.2, 10.5, 13.5 (as applicable), 13.6, and 13.7.

13.7No Limitation on Remedies.  Notwithstanding anything to the contrary in this Agreement, termination or expiration of this Agreement shall not relieve the Parties of any liability or obligation which accrued hereunder prior to the effective date of such termination or expiration nor prejudice either Party’s right to obtain performance of any obligation.  Subject to the terms and conditions of this Agreement, each Party shall be free to seek (without restriction as to the number of times it may seek) damages, costs and remedies that may be available at Law or in equity and shall be entitled to offset the amount of any damages and costs obtained in a final, non-appealable judgment (or judgment from which no appeal was taken within the allowable time period) of monetary damages or costs (as permitted by this Agreement) against the other Party against any amounts otherwise due to such other Party under this Agreement.

Article 14
INITIAL DISPUTE RESOLUTION 

14.1Disputes.  The Parties recognize that controversies or claims arising out of, relating to or in connection with any provision of this Agreement as to certain matters may from time to time arise that relate to either Party’s rights or obligations hereunder (collectively, “Disputes”).  It is the objective of the Parties to establish procedures to facilitate the resolution of Disputes in an expedient manner by mutual cooperation.  Accordingly, with respect to all Disputes, including any alleged breach under this Agreement or any issue relating to the interpretation or application of this Agreement, if the Parties are unable to resolve such Dispute within [***] after such Dispute is first identified by either Party in writing to the other, the Parties shall refer such Dispute to the Executive Officers of the Parties for attempted resolution by good faith negotiations prior to commencing litigation in accordance with Section 15.1.

14.2Preliminary Injunctions.  Notwithstanding anything in this Agreement to the contrary, a Party may, at any time, seek a temporary restraining order or a preliminary injunction from any court of competent jurisdiction in order to prevent immediate and irreparable injury, loss, or damage on a provisional basis.

14.3Patent Disputes.  Notwithstanding anything in this Agreement to the contrary, any and all issues regarding the validity and enforceability of any patent in a country within the Territory shall be determined in a court or other tribunal, as the case may be, of competent 

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jurisdiction under the applicable patent laws of such country, except as to any issue that depends on the validity, scope or enforceability of any Joint Inventions, which shall be determined in accordance with U.S. federal law.

Article 15
MISCELLANEOUS

15.1English Language; Governing Law; Jurisdiction.  This Agreement was prepared in the English language, which language shall govern the interpretation of, and any dispute regarding, the terms of this Agreement.  This Agreement and all disputes arising out of or related to this Agreement or any breach hereof shall be governed by and construed under the laws of the State of New York, U.S., without giving effect to any choice of law principles that would require the application of the laws of a different jurisdiction.  Each of the Parties hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the federal and state courts located in the State of New York for any matter arising out of or relating to this Agreement and the transactions contemplated hereby, and agrees not to commence any litigation relating thereto except in such courts.  Each of the Parties hereby irrevocably and unconditionally waives any objection to the laying of venue of any matter arising out of this Agreement or the transactions contemplated hereby in the federal and state courts located in the City and State of New York and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such matter brought in any such court has been brought in an inconvenient forum.  The Parties agree that a final judgment in any such matter shall be conclusive and may be enforced in other jurisdictions by suits on the judgment or in any other manner provided by law.  

15.2Entire Agreement; Amendment.  This Agreement, including the Exhibits hereto, and the Stock Purchase Agreement, set forth the complete, final and exclusive agreement and all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties with respect to the subject matter hereof and supersedes, as of the Effective Date, all prior and contemporaneous agreements and understandings between the Parties with respect to the subject matter hereof, including the Confidentiality Agreement.  No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by an authorized officer of each Party. 

15.3Force Majeure.  Both Parties shall be excused from the performance of their obligations under this Agreement to the extent that such performance is prevented by force majeure and the nonperforming Party promptly provides notice of the prevention to the other Party.  Such excuse shall be continued so long as the condition constituting force majeure continues and the nonperforming Party takes reasonable efforts to remove the condition.  For purposes of this Agreement, force majeure shall include conditions beyond the control of the Parties, including an act of God, war, terrorist act, labor strike or lock-out, epidemic, and fire, earthquake, storm, release of radioactive material into the environment, or like catastrophe.  Notwithstanding the foregoing, a Party shall not be excused from making payments owed hereunder because of a force majeure affecting such Party.  If a force majeure persists for more than ninety (90) days, then the Parties will discuss in good faith the modification of the Parties’ obligations under this Agreement in order to mitigate the delays caused by such force majeure.

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15.4Notices.  Any notice required or permitted to be given under this Agreement shall be in writing, shall specifically refer to this Agreement, and shall be addressed to the appropriate Party at the address specified below or such other address as may be specified by such Party in writing in accordance with this Section 15.4, and shall be deemed to have been given for all purposes (a) when received, if hand-delivered or sent by confirmed facsimile or a reputable courier service, or (b) five (5) Business Days after mailing, if mailed by first class certified or registered airmail, postage prepaid, return receipt requested.

	
 
	
If to Arrowhead:  
	
Arrowhead Pharmaceuticals, Inc.

	
 
	

	
225 S. Lake Ave Suite 1050

	
 
	

	
Pasadena, CA 91101
Attn: General Counsel

	
 
	

	
Facsimile: (626) 304-3401

 

	

	
With a copy to (which shall not constitute notice): 

 

	
 
	

	
Gibson, Dunn & Crutcher LLP
555 Mission Street, Suite 3000
San Francisco, California 94105
Attn: Ryan A. Murr

	

	
Facsimile: (415) 374-8430

 

	
 
	
If to Amgen:  
	
Amgen Inc.
One Amgen Center Drive
Thousand Oaks, California 91320
Attention: Corporate Secretary

Facsimile: (805) 499-6751

 

With a copy to (which shall not constitute notice):

 

	
 
	
 
	
Amgen Inc.
One Amgen Center Drive
Thousand Oaks, California 91320
Attention: SVP, Business Development 

Facsimile: (805) 499-6751

15.5No Strict Construction; Headings.  This Agreement has been prepared jointly by the Parties and shall not be strictly construed against either Party.  Ambiguities, if any, in this Agreement shall not be construed against any Party, irrespective of which Party may be deemed to have authored the ambiguous provision.  The headings of each Article and Section in this Agreement have been inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular Article or Section.  The use of any gender shall be applicable to all genders.  The word “or” is used in the inclusive sense (and/or) unless the context dictates otherwise because the subjects of the conjunction are mutually exclusive.  The term “including” means “including without limitation,” without limiting the generality of any description preceding such term.  The term “shall” means “will”.

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15.6Assignment.  

(a)Neither Party may assign or transfer this Agreement or any rights or obligations hereunder without the prior written consent of the other Party, except that a Party may make such an assignment or transfer without the other Party’s consent (i) to an Affiliate (for so long as such entity remains an Affiliate) or (ii) only of the entire Agreement (not just certain rights or obligations) to a Third Party acquiror or its Affiliate in connection with a Change of Control of such Party (such Third Party, an “Acquiror”).  Any successor or assignee of rights or obligations permitted hereunder shall, in writing to the other Party, expressly assume performance of such rights or obligations.  Any permitted assignment shall be binding on the successors of the assigning Party.  Any assignment or attempted assignment by either Party in violation of the terms of this Section 16.6 shall be null, void and of no legal effect.

(b)In the event of any such assignment under Section 15.6(a)(ii) in connection with a Change of Control of Arrowhead, all intellectual property rights (including any Information or Patents) owned or otherwise Controlled by the Acquiror or its Affiliates (except for Arrowhead, if remaining as a separate Affiliate or otherwise the successor entity thereto) shall be excluded from the licenses granted to Amgen under this Agreement and the Arrowhead Licensed Technology (including in each case any such intellectual property rights (including any Information or Patents) owned or otherwise Controlled by such Acquiror as of the date of consummation of such transaction), except for any Invention generated by the Acquiror or its Affiliates in performing any activity under this Agreement.  Notwithstanding the foregoing, in the case of either of (x) a Change of Control of Arrowhead or (y) the acquisition by Arrowhead of all or substantially all of the business of a Third Party (together with any entities that were Affiliates of such Third Party immediately prior to such acquisition, a “Acquiree”), whether by merger, consolidation, divesture, restructure, sale of stock, sale of assets or otherwise (an “Acquisition”), to the extent that any Third Party acquirer in such Change of Control or such Acquiree, as applicable, owns any Blocking Patents relative to a Licensed Compound or a Licensed Product, Arrowhead shall and hereby does grant to Amgen a non-exclusive license, for no additional consideration (provided, however, that in the event that Arrowhead would be obligated to make any payments to a Third Party in connection with the grant of the foregoing license to any Blocking Patents, then unless Amgen agrees to assume such payment obligations, such license grant will exclude a license under the applicable Blocking Patents), until the expiration of the last to expire of such Blocking Patents, on a country-by-country basis, or termination of this Agreement relative to such Licensed Compound or Licensed Product, whichever comes first, provided that at the time of such transaction contemplated by (x) or (y), such non-exclusive license rights are available for such grant and have not been exclusively licensed to any Third Party.

(c)In the event of any such assignment under Section 15.6(a)(ii) in connection with a Change of Control of Amgen, all intellectual property rights (including any Information or Patents) owned or otherwise Controlled by the Acquiror or its Affiliates (except for Amgen, if remaining as a separate Affiliate or otherwise the successor entity thereto) shall be excluded from the licenses granted to Arrowhead under this Agreement (including any such intellectual property rights (including any Information or Patents) owned or otherwise Controlled by such Acquiror as of the date of consummation of such transaction), except for any Invention generated by the Acquiror or its Affiliates in performing any activity under this Agreement.

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15.7Further Actions.  Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.

15.8Rights in Bankruptcy.  All rights and licenses granted under or pursuant to this Agreement by Arrowhead are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the Bankruptcy Code, licenses of rights to "intellectual property" as defined under Section 101 of the Bankruptcy Code.  The Parties agree that Amgen, as licensee of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the Bankruptcy Code including without limitation Amgen's right to retain all licenses to Arrowhead Licensed Technology granted herein.  Without limiting the generality of the foregoing, the Parties intend and agree that any sale of Arrowhead's assets under Section 363 of the Bankruptcy Code shall be subject to Amgen’s rights under Section 365(n), that Amgen cannot be compelled to accept a money satisfaction of its interests in Arrowhead Licensed Technology, and that any such sale therefore may not be made to a purchaser "free and clear" of Amgen's license rights without the consent of Amgen.  The Parties further agree that, in the event of the commencement of a bankruptcy proceeding by or against Arrowhead under the Bankruptcy Code, Amgen shall be entitled to a complete duplicate of (or complete access to, as appropriate) any such intellectual property and all embodiments of such intellectual property, and the same, if not already in its possession, shall be promptly delivered to them (i) upon any such commencement of a bankruptcy proceeding upon its written request therefor, unless Arrowhead elects to continue to perform all of its obligations under this Agreement, or (ii) if not delivered under (i) above, following the rejection of this Agreement by or on behalf of Arrowhead upon written request therefor by Amgen. (The Parties acknowledge and agree that "embodiments" of intellectual property within the meaning of Section 365(n) include without limitation laboratory notebooks, RNAi Molecules, inventory, research studies, data, and regulatory approvals).  Additionally, if (a) a case under the Bankruptcy Code is commenced by or against Arrowhead, (b) this Agreement is rejected as provided in the Bankruptcy Code, and (c) Amgen elects to retain its rights hereunder as provided in Section 365(n) of the Bankruptcy Code, Arrowhead (in any capacity, including debtor-in-possession) and its successors and assigns (including a trustee) shall not interfere with Amgen's rights under this Agreement to Arrowhead Licensed Technology (including such embodiments), including any right to obtain such Arrowhead Licensed Technology (or such embodiments) from another entity, to the extent provided in Section 365(n) of the Bankruptcy Code.  All rights, powers and remedies of Amgen provided herein are in addition to and not in substitution for any and all other rights, powers and remedies now or hereafter existing at law or in equity (including the Bankruptcy Code) in the event of the commencement of a case under the Bankruptcy Code with respect to Arrowhead. The Parties agree that they intend the following rights to extend to the maximum extent permitted by law, and to be enforceable under Section 365(n) of the Bankruptcy Code: (I) the right of access to any Arrowhead Licensed Technology (including all embodiments thereof) of Arrowhead, or any Third Party with whom Arrowhead contracts to perform an obligation of Arrowhead under this Agreement, and, in the case of the Third Party, which is necessary for the development, manufacture, supply, commercialization, sale, import or export of Licensed Compounds or Licensed Products, in any case solely as provided under this Agreement; and (II) the right to contract directly with any Third Party to complete the same.

15.9Severability.  If any one or more of the provisions of this Agreement is held to be invalid or unenforceable by any court of competent jurisdiction from which no appeal can be or is 

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taken, the provision shall be considered severed from this Agreement and shall not serve to invalidate any remaining provisions hereof.  The Parties shall make a good faith effort to replace any invalid or unenforceable provision with a valid and enforceable one such that the objectives contemplated by the Parties when entering this Agreement may be realized.

15.10No Waiver.  Any delay in enforcing a Party’s rights under this Agreement or any waiver as to a particular default or other matter shall not constitute a waiver of such Party’s rights to the future enforcement of its rights under this Agreement, except with respect to an express written and signed waiver relating to a particular matter for a particular period of time.

15.11Independent Contractors.  Each Party shall act solely as an independent contractor, and nothing in this Agreement shall be construed to give either Party the power or authority to act for, bind, or commit the other Party in any way.  Nothing herein shall be construed to create the relationship of partners, principal and agent, or joint-venture partners between the Parties.

15.12No Third Party Beneficiaries.  This Agreement is neither expressly nor impliedly made for the benefit of any party other than the Parties and their successors and permitted assigns, except for the persons expressly entitled to indemnification as provided in Article 11 and only in accordance with the terms of such Article 11

15.13Counterparts; Electronic Delivery.  This Agreement may be executed in counterparts, by original, facsimile or PDF signature, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  Signatures to this Agreement transmitted by facsimile, by email in “portable document format” (“.pdf”), or by any other electronic means intended to preserve the original graphic and pictorial appearance of this Agreement shall have the same effect as physical delivery of the paper document bearing original signature.

15.14HSR.  As soon as is reasonably practicable following the Effective Date and in any event within thirty (30) days of the Effective Date, each of Amgen (or its Affiliate, as appropriate) and Arrowhead (or its Affiliate, as appropriate) shall prepare and submit appropriate filings under the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) and the rules promulgated thereunder, and request early termination of the waiting period under the HSR Act.  The Parties shall furnish, or cause their respective Affiliates to furnish, as the case may be, promptly to the United States Federal Trade Commission (the “FTC”) and the Antitrust Division of the United States Department of Justice (the “DOJ”) any additional information requested within their authority under the HSR Act, use reasonable efforts to obtain antitrust clearance for the transactions contemplated hereunder as soon as practicable, and otherwise cooperate with each other in the United States governmental antitrust clearance process.  Subject to the applicable Laws relating to the exchange of information, Amgen shall have the right to direct all matters with respect to the FTC and DOJ hereunder, consistent with its obligations hereunder.  Amgen shall have the right to review in advance any filing or submission to be made by Arrowhead, and Arrowhead shall consider in good faith the view of Amgen in light of Amgen’s right to direct issues related to reviews by the FTC and DOJ.  To the extent practicable, Amgen will consult with Arrowhead on, and consider in good faith the view of Arrowhead in connection with, all of the information relating to Arrowhead that appears in any filing or form (excluding 

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attachments or exhibits thereto) made with or submitted to the FTC or DOJ in connection with this Section 15.14.  Amgen shall bear all fees in connection with any filing under this Section 15.14 and each Party shall bear their respective attorneys’ fees in connection therewith.  This Agreement shall bind the Parties upon execution and continue in full force and effect unless and until the termination or expiration of the Agreement by its terms, provided, however, that each Party’s grant of license rights hereunder, Amgen’s obligations to make payments hereunder, and Amgen’s rights and obligations hereunder in connection with the Development and Commercialization of the Licensed Products shall not become effective unless and until each of the following conditions are met: (i) the waiting period provided by the HSR Act shall have expired or terminated (and all antitrust clearance has been obtained), (ii) no court or administrative challenges to the transactions are pending, and (iii) no court or administrative orders are outstanding blocking the completion of the transactions, (the date of such, the “Closing Date”).  Nothing in this Agreement shall require or be deemed to require either Party (or their Affiliates) to commit to any divestitures or licenses or agree to hold separate any assets or agree to any similar arrangements or commit to conduct its business in a specified manner, or to submit and respond to a formal discovery procedure initiated by the FTC or DOJ (i.e., a “Request for Additional Information and Documentary Materials” also known as a “second request”, or Civil Investigative Demand if a filing is not required under the HSR Act), in each case as a condition to obtaining antitrust clearance for transactions contemplated hereunder. If antitrust clearance is not received on or before ninety (90) days after the date on which both Parties have submitted to the FTC and DOJ their respective initial filings to request 

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antitrust clearance of the transaction hereunder, then either Party shall have the right to terminate this Agreement without liability therefor at any time thereafter, but prior to receipt of antitrust clearance of the transactions contemplated hereunder, by written notice to the other Party.

 

{Signature page follows}

 

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In Witness Whereof, the Parties have executed this Agreement by their duly authorized officers as of the Effective Date.

		
	
Amgen Inc.
	
Arrowhead Pharmaceuticals, Inc.

 

	
By:/S/ David Meline
	
By:/S/ Chris Anzalone

	
Name: David Meline
	
Name:  Chris Anzalone

	
Title:   EVP & CFO

 

 
	
Title:    CEO

	
 

 

 
	
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Second Collaboration and License Agreement]

 

LIST OF EXHIBITS: 

Exhibit A:Collaboration Target 

Exhibit B:Work Plan

Exhibit C:Certain Arrowhead Owned Patents

Exhibit D:Certain Arrowhead Licensed Patents

Exhibit E:Third Party License Agreements

Exhibit F:Initial Press Release

 

 

 

EXHIBIT A

Collaboration Target:

[***]

 

 

EXHIBIT B

Work Plan

[***]

 

 

EXHIBIT C

Certain Arrowhead Owned Patents1

[***]

 

 

	
	 

	
1 
	
 [***].

 

 

 

EXHIBIT D

Certain Arrowhead Licensed Patents

[***]

 

 

 

EXHIBIT E

Third Party License Agreements

	
 
	
•
	
Asset Purchase and Exclusive License Agreement by and between Arrowhead Research Corporation and Novartis Institute for BioMedical Research, Inc., dated March 3, 2015. 

 

	
 
	
•
	
Non-Exclusive License Agreement between City of Hope and F. Hoffmann-La Roche Ltd. and Hoffmann-La Roche Inc., dated September 19, 2011.  

 

	
 
	
•
	
Non-Exclusive License Agreement between Hoffmann-La Roche Inc. and F. Hoffmann-La Roche Ltd. and MDRNA, Inc., dated February 12, 2009. 

 

 

 

 

 

 

 

EXHIBIT F

Initial Press ReleaseExhibit 4.1

EXECUTION VERSION

CLASS A WARRANT AGREEMENT

THIS WARRANT AGREEMENT (this "Agreement"), dated as of December 13, 2016, is by and between SEANERGY MARITIME HOLDINGS CORP., a Marshall Islands corporation (the "Company"), and Continental Stock Transfer & Trust Company, as the Warrant Agent (the "Warrant Agent").

WHEREAS, the Company is engaged in a public offering (the "Offering") of common shares, par value $0.0001 per share, of the Company (the "Common Shares") and Class A warrants to purchase Common Shares and, in connection therewith, has determined to issue and deliver up to 11,500,000 Class A Warrants (including up to 1,500,000 Class A Warrants subject to an over-allotment option granted to the underwriters by the Company) to public investors in the Offering, each such Class A Warrant evidencing the right of the holder thereof to purchase one Common Share for $2.00 per share, subject to adjustment as described herein (the "Warrants");

WHEREAS, the Company has filed with the Securities and Exchange Commission (the "Commission") a Registration Statement on Form F-1 (File No. 333-214322) (as the same may be amended from time to time, the "Registration Statement") for the registration, under the Securities Act of 1933, as amended (the "Securities Act"), of the Common Shares and the Warrants to be sold to investors in the Offering and the Common Shares underlying the Warrants;

WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer, exchange and exercise of the Warrants;

WHEREAS, the Company desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants, or if the Warrants are held in "street name", a Participant (as defined below) or a designee appointed by such Participant (each, a "Holder" or "Registered Holder"); and

WHEREAS, all acts and things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf of the Warrant Agent, as provided herein, the valid, binding and legal obligations of the Company, and to authorize the execution and delivery of this Agreement.

NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:

1.          Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants, and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the express terms and conditions set forth in this Agreement (and no duties or obligations shall be inferred or implied). The Warrant Agent shall not assume any obligations or relationship of agency or trust with any of the Holders.

2.          Warrants.

2.1          Form of Warrant. Each Warrant shall be issued in registered form only and shall be in substantially the form of Exhibit A hereto, the provisions of which are incorporated herein. Each Warrant shall be signed by, or bear the facsimile signature of, the President, Chief Executive Officer, Chief Financial Officer, Secretary or other principal officer of the Company. In the event the person whose facsimile signature has been placed upon any Warrant shall have ceased to serve in the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued with the same effect as if he or she had not ceased to be such at the date of issuance.  All of the Warrants shall initially be represented by one or more book-entry certificates (each, a "Book-Entry Warrant Certificate").

2.2          Effect of Countersignature. Unless and until countersigned by, or issued bearing the facsimile signature of the Warrant Agent pursuant to this Agreement, a Warrant shall be invalid and of no effect and may not be exercised by the holder thereof.

2.3          Registration.

2.3.1          Warrant Register. The Warrant Agent shall maintain books (the "Warrant Register") for the registration of the original issuance and the registration of transfer of the Warrants. Upon the initial issuance of the Warrants, the Warrant Agent shall issue and register the Warrants in the names of the respective holders thereof in such denominations and otherwise in accordance with instructions delivered to the Warrant Agent by the Company. To the extent the Warrants are eligible for the book entry and depository services of The Depository Trust Company ("DTC Eligible") as of the date of issuance (the "Issuance Date"), all of the Warrants shall be represented by one or more Book-Entry Warrant Certificates deposited with The Depository Trust Company (the "Depository") and registered in the name of Cede & Co., a nominee of the Depository. Ownership of beneficial interests in the Book-Entry Warrant Certificates shall be shown on, and the transfer of such ownership shall be effected through, records maintained (i) by the Depository or its nominee for each Book-Entry Warrant Certificate; (ii) by institutions that have accounts with the Depository (such institution, with respect to a Warrant in its account, a "Participant"); or (iii) directly on the book-entry records of the Warrant Agent with respect only to owners of beneficial interests represented by such direct registration. If the Warrants are not DTC Eligible as of the Issuance Date or the Depository subsequently ceases to make its book-entry settlement system available for the Warrants, the Company may instruct the Warrant Agent regarding making other arrangements for book-entry settlement within ten (10) days after the Depository ceases to make its book-entry settlement available. In the event that the Company does not make alternative arrangements for book-entry settlement within ten (10) days or the Warrants are not eligible for, or it is no longer necessary to have the Warrants available in, book-entry form, the Warrant Agent shall provide written instructions, upon receipt of written instructions from the Company, to the Depository to deliver to the Warrant Agent for cancellation each Book-Entry Warrant Certificate, and the Company shall instruct the Warrant Agent to deliver to the Depository definitive certificates ("Warrant Certificates") in physical form evidencing such Warrants. Such Warrant Certificates shall be in substantially the form annexed hereto as Exhibit A.

2.3.2          Beneficial Owner; Registered Holder. The term "beneficial owner" shall mean any person in whose name ownership of a beneficial interest in the Warrants evidenced by a Book-Entry Warrant Certificate is recorded in the records maintained by the Depository or its nominee. Prior to due presentment to the Warrant Agent for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat the person in whose name such Warrant is registered in the Warrant Register as the absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation of ownership or other writing on the Warrant Certificate (as defined below) made by anyone other than the Company or the Warrant Agent), for the purpose of any exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.

2.4          Uncertificated Warrants. Notwithstanding the foregoing and anything else herein to the contrary, the Warrants may be issued in uncertificated form.

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3.          Terms and Exercise of Warrants.

3.1          Exercise Price. Each Warrant shall, when countersigned by the Warrant Agent, entitle the Registered Holder thereof, subject to the provisions of such Warrant and of this Agreement, to purchase from the Company the number of Common Shares stated therein, at the price of $2.00 per share, subject to the adjustments provided herein.  The term "Exercise Price" as used in this Agreement shall mean the price per share at which Common Shares may be purchased at the time a Warrant is exercised.

3.2          Duration of Warrants. A Warrant may be exercised only during the period (the "Exercise Period") commencing on the Issuance Date and ending on December 13, 2021 (the "Expiration Date"); provided, however, that the exercise of any Warrant shall be subject to the satisfaction of any applicable conditions, as set forth in Section 3.3.2 or with respect to an effective registration statement. Each Warrant not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under this Agreement shall cease at 5:00 p.m. New York City time on the Expiration Date.

3.3          Exercise of Warrants.

3.3.1          Payment. Subject to the provisions of the Warrant and this Agreement, a Warrant, when countersigned by the Warrant Agent, may be exercised by the Registered Holder thereof by submitting a duly executed Election to Purchase attached to the applicable Warrant, at the office of the Warrant Agent, or at the office of its successor as Warrant Agent, which may be done by fax or email delivery, and by paying, within one Trading Day of the date of exercise, in full the Exercise Price for each full Common Share as to which the Warrant is exercised (the "Aggregate Exercise Price"), in lawful money of the United States, by wire transfer or in good certified check or good bank draft payable to the order of the Company or by Cashless Exercise, if permitted under, and in accordance with, Section 3.3.2. Except as otherwise set forth in this Agreement, no ink-original Election to Purchase shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Election to Purchase form be required; provided, however, that if the Company's transfer agent is not participating in the Depository's Fast Automated Securities Transfer Program and the Registered Holder requests that the Common Shares be issued or registered to a holder other than the Registered Holder, then an ink-original Election to Purchase and a medallion guarantee shall be required. If a Warrant Certificate is held by a Depository, then no physical delivery of a Warrant Certificate in order to effect an exercise hereunder shall be required and, if a Warrant Certificate is held by any person other than the Depository, the Registered Holder shall be required to physically deliver a Warrant Certificate in order to effect an exercise hereunder. The term "Trading Day" means a day on which the principal securities exchange or trading market on which the Common Shares are listed or quoted for trading is open for trading.

3.3.2          Cashless Exercise. Notwithstanding anything contained herein to the contrary, if and only if an effective registration statement covering the issuance of the Common Shares that are subject to the Election to Purchase is not available for the issuance of such Common Shares, the Registered Holder may exercise a Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the aggregate Exercise Price, elect instead to receive upon such exercise the "Net Number" of Common Shares determined according to the following formula (a "Cashless Exercise"):

3

	
Net Number =

	
      (A x B) - (A x C)

       ____________

 

                    B

For purposes of the foregoing formula:

	
A =

	
the total number of shares with respect to which a Warrant is then being exercised.

 

	 
	
B =

	
the last VWAP immediately preceding the time of delivery of the Election to Purchase giving rise to the applicable "cashless exercise", which shall be set forth in the applicable Election to Purchase (to clarify, the "last VWAP" will be the last VWAP as calculated over an entire Trading Day such that, in the event that the Warrant is exercised at a time that the principal securities exchange or trading market on which the Common Shares are listed or quoted for trading is open for trading, the prior Trading Day's VWAP shall be used in this calculation).

 

	
C =

	
the Exercise Price then in effect for the applicable Common Shares at the time of such exercise.

 

In connection with any Cashless Exercise pursuant to this Section 3.3.2, the Warrant Agent will promptly deliver a copy of the Election to Purchase to the Company to confirm the Net Number of Common Shares issuable in connection with the Cashless Exercise. The Company shall calculate and transmit such calculations to the Warrant Agent, and the Warrant Agent shall have no obligation under this Section 3.3.2 to calculate, verify or confirm the Net Number of Common Shares to be issued with respect to such Cashless Exercise.

For purposes of Rule 144(d) promulgated under the Securities Act, as in effect on the date hereof, assuming the Registered Holder is not an affiliate of the Company, the Common Shares issued in a Cashless Exercise shall be deemed to have been acquired by the Registered Holder, and the holding period for the Common Shares shall be deemed to have commenced, on the date the Warrant was originally issued. Also, the Common Shares issued in a Cashless Exercise shall take on the registered characteristics of the Warrant being exercised.

3.3.3          Issuance of Common Shares on Exercise. Subject to funds for exercise being received by the Company on or before the first Trading Day following the date of receipt by the Company of an Election to Purchase, then on or before the Share Delivery Deadline, the Company shall cause its transfer agent to (i) provided that the transfer agent is participating in the Depository's Fast Automated Securities Transfer Program, credit such aggregate number of Common Shares to which the Holder is entitled pursuant to such exercise to the Holder's or its designee's balance account with the Depository through its Deposit/Withdrawal at Custodian System, or (ii) if the transfer agent is not participating in the Depository's Fast Automated Securities Transfer Program, issue and deliver to the Holder, or at the Holder's instruction pursuant to the delivered Election to Purchase, the Holder's agent or designee, in each case pursuant to this clause (ii), sent by reputable overnight courier to the address specified in the applicable Election to Purchase, a certificate, registered in the Company's share register in the name of the Holder or its designee (as indicated in the applicable Election to Purchase), for the number of Common Shares to which the Holder is entitled pursuant to such exercise. While any Warrants remain outstanding, the Company shall maintain a transfer agent that participates in the Depository's Fast Automated Securities Transfer Program.  Notwithstanding anything to the contrary contained herein, neither the Company nor the Warrant Agent shall be required to deliver any Common Shares upon a cash exercise of a Warrant unless or until the Aggregate Exercise Price with respect to such exercise has been delivered to the Company in accordance with Section 3.3.1 above.

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3.3.4          Valid Issuance. All Common Shares issued or issuable upon the proper exercise of a Warrant in conformity with this Agreement shall be validly issued, fully paid and nonassessable.

3.3.5          Date of Issuance. Each person in whose name any certificate for the Common Shares are issued, or is required to be issued hereunder, or to whom Common Shares are credited (or are required to be credited) to such person's account at the Depository shall be deemed to have exercised the Warrants for purposes of Regulation SHO as of the time that a duly executed Election to Purchase is delivered in accordance with Section 3.3.1. Each person in whose name any certificate for the Common Shares are issued, or is required to be issued hereunder, or to whom Common Shares are credited (or are required to be credited) to such person's account at the Depository shall for all purposes be deemed to have become the holder of record of such Common Shares as of the time that a duly executed Election to Purchase is delivered in accordance with Section 3.3.1, except that, in the case of a cash exercise in accordance with Section 3.3.1, such person shall for all purposes be deemed to have become the holder of record of such Common Shares on the first Trading Day after the date on which the Aggregate Exercise Price has been received by the Company, irrespective of the date of delivery of such certificate or the date the Common Shares are credited to such person's account at the Depository, except that, if the date of such delivery and/or payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open.

3.3.6          Share Delivery Failure. Subject to funds for exercise being received by the Company on or before the first Trading Day following the date of receipt by the Company of an Election to Purchase, then if the Company shall fail, for any reason or for no reason, to issue to the Holder within the earlier of (x) three (3) Trading Days and (y) the number of Trading Days comprising the Standard Settlement Period (as defined below), after receipt of the applicable Election to Purchase (the "Share Delivery Deadline"), a certificate for the number of Common Shares to which the Holder is entitled upon the Holder's exercise of a Warrant or credit the Holder's balance account with the Depository for such number of Common Shares to which the Holder is entitled upon the Holder's exercise of this Warrant (as the case may be, but in each case without a restrictive legend) (a "Delivery Failure"), and if on or after such Share Delivery Deadline the Holder purchases (in an open market transaction or otherwise) Common Shares to deliver in satisfaction of a sale by the Holder of all or any portion of the number of Common Shares issuable upon such exercise that the Holder so anticipated receiving from the Company, then, in addition to all other remedies available to it, the Company shall, within three (3) Business Days (as defined below) after the Holder's request and in the Holder's discretion, either (i) pay cash to the Holder in an amount equal to 100% of the Holder's total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the Common Shares so purchased (including, without limitation, by any other person in respect, or on behalf, of the Holder) (the "Buy-In Price"), at which point the Company's obligation to so issue and deliver such certificate or credit the Holder's balance account with the Depository for the number of Common Shares to which the Holder is entitled upon the Holder's exercise hereunder (as the case may be) (and to issue such Common Shares) shall terminate, or (ii) promptly honor its obligation to so issue and deliver to the Holder a certificate or certificates representing such Common Shares or credit the Holder's balance account with the Depository for the number of Common Shares to which the Holder is entitled upon the Holder's exercise hereunder (as the case may be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of Common Shares multiplied by (B) the lowest VWAP of the Common Shares on any Trading Day during the period commencing on the date of the applicable Election to Purchase and ending on the date immediately preceding the date of such issuance and payment under this clause (ii). The term "Business Day" as used in this Agreement shall mean any day except a Saturday, a Sunday or any other day on which commercial banks are required or authorized to close in the City of New York, State of New York or the City of Athens in the Country of Greece.  If the Company fails for any reason to deliver to the Holder the Common Shares subject to an Election to Purchase by the Share Delivery Deadline, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Common Shares subject to such exercise (based on the VWAP of the Common Shares on the date of the applicable Election to Purchase), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Share Delivery Deadline until such Common Shares are delivered or Holder rescinds such exercise. For the purposes of this provision "VWAP" means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Shares are then listed or quoted on the NASDAQ Stock Market, The New York Stock Exchange or The NYSE MKT, the daily volume weighted average price of the Common Shares for such date (or the nearest preceding date) on such exchange on which the Common Shares are then listed or quoted as reported by Bloomberg, L.P. ("Bloomberg") (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Common Shares are listed or quoted on the OTCQB or OTCQX (each as operated by OTC Markets Group, Inc., or any successor market), the volume weighted average price of the Common Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares are then reported in the OTC Pink published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Shares so reported, or (d) in all other cases, the fair market value of a Common Share as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company. As used herein, "Standard Settlement Period" means the standard settlement period, expressed in a number of Trading Days, on the Company's principal securities exchange or trading market with respect to the Common Shares as in effect on the date of delivery of the Election to Purchase.

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3.4          Beneficial Ownership Limitation on Exercises. The Company shall not effect the exercise of any portion of a Warrant, and the Registered Holder of such Warrant shall not have the right to exercise any portion of such Warrant, to the extent that after giving effect to such exercise, the Registered Holder (together with the Registered Holder's affiliates, and any persons acting as a group together with the Registered Holder or any Registered Holder's affiliates) would beneficially own in excess of 4.99% (the "Maximum Percentage") of the Common Shares outstanding immediately after giving effect to such exercise, provided, however, that the foregoing limitation on exercise shall not apply to any Registered Holder who, together with such Registered Holder's affiliates, and any persons acting as a group together with such Registered Holder and such Registered Holder's affiliates, owns in excess of the Maximum Percentage immediately prior to the closing of the Offering. For purposes of the foregoing sentence, the aggregate number of Common Shares beneficially owned by such Registered Holder and its affiliates, and any persons acting as a group together with such Registered Holder and such Registered Holder's affiliates, shall include the number of Common Shares issuable upon exercise of the Warrant with respect to which the determination of such sentence is being made, but shall exclude Common Shares which would be issuable upon (i) exercise of the remaining, unexercised portion of the Warrant beneficially owned by the Registered Holder and its affiliates, and any persons acting as a group together with such Registered Holder and such Registered Holder's affiliates, and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned by the Registered Holder and its affiliates, and any persons acting as a group together with such Registered Holder and such Registered Holder's affiliates (including, without limitation, any convertible notes or convertible preferred stock or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Warrant Agent shall not be responsible for calculating beneficial ownership in accordance with the provisions of this Section 3.4, nor shall it have any duty to monitor or ensure compliance with this Section or take any action with respect thereto (unless specifically instructed in writing by the Company).  To the extent that the limitation contained in this Section 3.4 applies, the Registered Holder's submission of an Election to Purchase shall be deemed to be the Registered Holder's determination of whether a Warrant is exercisable (in relation to any other securities owned by the Registered Holder together with any affiliates, and any persons acting as a group together with such Registered Holder and such Registered Holder's affiliates) and of which portion of a Warrant is exercisable, in each case subject to the Maximum Percentage, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of the Warrants, in determining the number of outstanding Common Shares, the Registered Holder may rely on the number of outstanding Common Shares as reflected in the most recent of (1) the Company's most recent Form 20-F, Form 6-K or other public filing with the Commission, as the case may be, (2) a more recent written public announcement by the Company, or (3) any other notice by the Company or its transfer agent setting forth the number of Common Shares outstanding. For any reason at any time, upon the written or oral request of the Registered Holder, the Company shall within three (3) Trading Days confirm to the Registered Holder the number of Common Shares then outstanding. In any case, the number of outstanding Common Shares shall be determined after giving effect to the conversion or exercise of securities of the Company, including any Warrant, by the Registered Holder and its affiliates, and any persons acting as a group together with such Registered Holder and such Registered Holder's affiliates, since the date as of which such number of outstanding Common Shares was reported. By written notice to the Company, a Registered Holder may from time to time increase or decrease the Maximum Percentage to 9.99% of the number of shares of the Common Shares outstanding immediately after giving effect to the issuance of Common Shares upon exercise of a Warrant and the provisions of this Section 3.4 shall continue to apply; provided that (y) any such increase will not be effective until the sixty-first (61st) day after such notice is delivered to the Company, and (z) any such increase or decrease will apply only to that Registered Holder. For purposes of clarity, the Common Shares underlying any Warrant in excess of the Maximum Percentage for a Registered Holder shall not be deemed to be beneficially owned by that Registered Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the Exchange Act. The provisions set forth herein shall be construed and implemented in a manner otherwise than in strict conformity with the other terms of this Section 3.4 to the extent necessary to correct any such provision which may be defective or inconsistent with the intended beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation.

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3.5          Cost Basis Information.

3.5.1          In the event of a cash exercise, the Company shall instruct the Warrant Agent to record cost basis for newly issued shares in a manner reasonably determined by the Company to be subsequently communicated by the Company to the Warrant Agent. In the absence of basis information provided by the Company, securities will be recorded by the Warrant Agent as noncovered.

3.5.2          In the event of a Cashless Exercise, the Company shall provide cost basis for shares issued pursuant to a Cashless Exercise at the time the Company confirms the Net Number to the Warrant Agent pursuant to Section 3.3.2 hereof.

4.          Adjustments.

4.1          Stock Dividends.

4.1.1          Split-Ups. If after the date hereof, the number of outstanding Common Shares are increased by a stock dividend payable in Common Shares, or by a split-up of Common Shares or other similar event, then, on the effective date of such stock dividend, split-up or similar event, the number of Common Shares issuable on exercise of each Warrant shall be increased in proportion to such increase in the outstanding Common Shares and the Exercise Price shall be proportionally decreased such that the aggregate Exercise Price, after such adjustments, remains the same for each Warrant.

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4.1.2          Extraordinary Dividends and Other Distributions. If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of Common Shares, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction), except to the extent an adjustment was already made pursuant to Section 4.1.1 or Section 4.2, and other than  regular quarterly or other periodic dividends that may be initiated in the future (a "Distribution"), at any time after the issuance of a Warrant, then, in each such case, then the Exercise Price shall be decreased, effective immediately after the effective date of such Distribution, by the amount of cash and/or the fair market value (as determined by the Company's Board of Directors, in good faith) of any securities or other assets paid on each Common Share in respect of such Distribution in order that subsequent thereto upon exercise of the Warrants the Holder may obtain the equivalent benefit of such Distribution.

4.2          Aggregation of Shares. If after the date hereof, and subject to the provisions of Section 4.6, the number of outstanding Common Shares are decreased by a consolidation, combination, reverse stock split or reclassification of Common Shares or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of Common Shares issuable on exercise of each Warrant shall be decreased in proportion to such decrease in outstanding Common Shares and the Exercise Price shall be proportionally increased such that the aggregate Exercise Price, after such adjustments, remains the same for each Warrant.

4.3          Subsequent Rights Offerings. In addition to any adjustments stated herein, if at any time the Company grants, issues or sells any security of the Company or any other entity that is convertible into, or exercisable or exchangeable for Common Shares or any warrant or other right to purchase Common Shares or any other security of the Company or any other entity that is convertible into, or exercisable or exchangeable for Common Shares or other property pro rata to all the record holders of any class of Common Shares (the "Purchase Rights"), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of Common Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation on the Maximum Percentage immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Shares are to be determined for the grant, issue or sale of such Purchase Rights; provided, however, to the extent that the Holder's right to participate in any such Purchase Right would result in the Holder exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such Common Shares as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Maximum Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase Right to be held similarly in abeyance) to the same extent as if there had been no such limitation.

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4.4          Call Provision.

Subject to the provisions of Section 3.4 and this Section 4.4, if, after the thirteen (13) month anniversary of the Issuance Date (the "Effective Date"), (i) the VWAP for each of 10 consecutive Trading Days (the "Measurement Period," which 10 consecutive Trading Day period shall not have commenced until after the Effective Date) exceeds $7.00 (subject to adjustment for forward and reverse stock splits, recapitalizations, stock dividends or similar event during the Exercise Period) and (ii) the average daily volume for such Measurement Period exceeds $100,000 per Trading Day, then the Company may, within one (1) Trading Day of the end of such Measurement Period, call for cancellation of all or any portion of the Warrants for which an Election to Purchase has not yet been delivered (such right, a "Call") for consideration equal to $0.0001 per Common Share issuable on exercise of the Warrants subject to cancellation, provided that (x) the Company may not call for cancellation of any Warrants held by a Holder which, as of the date of the Call Notice (as defined below), is in possession of any information that constitutes, or might constitute, material non-public information which was provided by the Company or any of its subsidiaries, or any of their respective officers, directors, employees or agents, and (y) in the event that the exercise of the Warrants subject to such Call would cause a breach of any provision of Section 3.4 herein with respect to any Holder, the Company may, with respect to such Holder, call for cancellation only that maximum number of Warrants upon exercise of which such Holder would beneficially own up to, but not exceeding, the Maximum Percentage of the Common Shares outstanding (such number of Warrants to be determined by such Holder and provided by written notice to the Company prior to the Call Date). To exercise this right, the Company must deliver to the Holders an irrevocable written notice (a "Call Notice") indicating therein the portion of the Warrants to which such notice applies. If the conditions set forth below for such Call are satisfied from the period from the date of the Call Notice through and including the Call Date (as defined below), then any portion of the Warrants subject to such Call Notice for which an Election to Purchase shall not have been received by the Call Date will be cancelled at 6:30 p.m. (New York City time) on the tenth Trading Day after the date of the Call Notice (such date and time, the "Call Date"). Any unexercised portion of the Warrants to which the Call Notice does not pertain will be unaffected by such Call Notice. In furtherance thereof, the Company covenants and agrees that it will honor all Elections to Purchase with respect to Warrants subject to a Call Notice that are tendered through 6:30 p.m. (New York City time) on the Call Date. The parties agree that any Election to Purchase delivered following a Call Notice which calls less than all of the Warrants shall first reduce to zero the number of Common Shares issuable on exercise of the Warrants subject to such Call Notice prior to reducing the remaining Common Shares issuable on exercise of the remaining Warrants held by such Holder. For example, if (A) a Holder holds Warrants to acquire 100 Common Shares, (B) a Call Notice pertains to Warrants to purchase 75 Common Shares, and (C) prior to 6:30 p.m. (New York City time) on the Call Date, such Holder tenders an Election to Purchase in respect of 50 Common Shares, then (x) on the Call Date the right under such Warrants to acquire 25 Common Shares will be automatically cancelled, (y) the Company, in the time and manner required under such Warrants, will have issued and delivered to the Holder 50 Common Shares in respect of the exercises following receipt of the Call Notice, and (z) the Holder may, until the Expiration Date, exercise Warrants to purchase 25 Common Shares (subject to adjustment as herein provided and subject to subsequent Call Notices). Subject again to the provisions of this Section 4.4, the Company may deliver subsequent Call Notices for any portion of the Warrants for which Holders shall not have delivered an Election to Purchase and not called for cancellation pursuant to this Section 4.4. Notwithstanding anything to the contrary set forth in the Warrants, the Company may not deliver a Call Notice or require the cancellation of the Warrants (and any such Call Notice shall be void), unless, from the beginning of the Measurement Period through the Call Date, (1) the Company shall have honored in accordance with the terms of the Warrants all Elections to Purchase delivered by 6:30 p.m. (New York City time) on the Call Date, and (2) the Common Shares shall be listed or quoted for trading on a securities exchange or trading market. The Company's right to call the Warrants under this Section 4.4 shall be exercised ratably among the Holders.

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4.5          Fundamental Transactions.

4.5.1          If, at any time while the Warrants are outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another person) is completed pursuant to which holders of Common Shares are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Shares, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Shares or any compulsory share exchange pursuant to which the Common Shares are effectively converted into or exchanged for other securities, cash or property, (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another person or group of persons (other than Claudia Restis or Jelco Delta Holding Corp. or associated or affiliated persons in connection with the conversion of either of the convertible promissory notes issued to Jelco Delta Holding Corp. by the Company prior to the date hereof, as such notes may be amended from time to time, or any other convertible promissory notes that may be issued to Claudia Restis or Jelco Delta Holding Corp. or associated or affiliated persons by the Company after the date herof ), whereby such other person or group acquires more than 50% of the outstanding Common Shares (not including any Common Shares held by the other person or other persons making or party to, or associated or affiliated with the other persons making or party to, such stock or share purchase agreement or other business combination) (each a "Fundamental Transaction"), then, upon any subsequent exercise of a Warrant, the Registered Holder of each Warrant shall have the right to receive, for each Common Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Registered Holder (without regard to any limitation in Section 3.4 on the exercise of the Warrants), the number of Common Shares of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the "Alternate Consideration") receivable as a result of such Fundamental Transaction by a holder of the number of Common Shares for which a Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 3.4 on the exercise of the Warrants), without duplication of the Successor Entity securities deliverable under Section 4.5.2 below. For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one Common Share in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Shares are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then each Registered Holder shall be given the same choice as to the Alternate Consideration such Registered Holder receives upon any exercise of a Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder's option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction, purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value of the remaining unexercised portion of this Warrant outstanding as of the date of the exercise of the Holder's option. "Black Scholes Value" means the value of this Warrant based on the Black and Scholes Option Pricing Model obtained from the "OV" function on Bloomberg determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Expiration Date, (B) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of the Trading Day immediately following the public announcement of the applicable Fundamental Transaction, or, if the Fundamental Transaction is not publicly announced, the date the Fundamental Transaction is consummated, (C) the underlying price per share used in such calculation shall be the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction, (D) (iv) a zero cost of borrow and (v) a 360 day annualization factor. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds within five Business Days of the Holder's election (or, if later, on the effective date of the Fundamental Transaction).

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4.5.2          The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the "Successor Entity") and for which stockholders of the Company received any equity securities of the Successor Entity to assume in writing all obligations of the Company under each Warrant in accordance with the provisions of this Section 4.5 pursuant to agreements in form and substance reasonably satisfactory to the Registered Holders and approved by the Registered Holders holding Warrants to purchase at least a majority of the shares of Common Shares underlying the then outstanding Warrants (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of each Registered Holder, deliver to such Registered Holder in exchange for such Registered Holder's Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to such Registered Holder's Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the Common Shares acquirable and receivable upon exercise of such Warrant (without regard to the limitations on exercise set forth in Section 3.4) prior to such Fundamental Transaction, and with an exercise price which applies the Exercise Price hereunder to such shares of capital stock (but taking into account the relative value of the Common Shares pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of such Warrant immediately prior to the consummation of such Fundamental Transaction). Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Agreement and each Warrant referring to the "Company" shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Agreement and each Warrant with the same effect as if such Successor Entity had been named as the Company herein.

4.6          Calculations. All calculations under this Section 4 shall be made by the Company and shall be made to the nearest cent or the nearest whole share, as the case may be. For purposes of this Section 4, any calculation of the number of Common Shares deemed to be issued and outstanding as of a given date shall not include treasury shares, if any. Notwithstanding anything to the contrary in this Section 4, no adjustment in the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least 1% in such price; provided, however, that any adjustments which by reason of the immediately preceding sentence are not required to be made shall be carried forward and taken into account in any subsequent adjustment.

4.7          Notices of Changes in Warrant. Upon every adjustment of the Exercise Price or the number of shares issuable upon exercise of a Warrant, the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Exercise Price resulting from such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Upon the occurrence of any event specified in Sections 4.1, 4.2 or 4.3  (each, an "Adjustment Event"), the Company shall give written notice of the occurrence of such event to each Warrant holder, at the last address set forth for such holder in the Warrant Register, of the record date or the effective date of the event. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event.  The Company hereby agrees that it will provide the Warrant Agent with reasonable notice of Adjustment Events or any event under Section 4.5. The Company further agrees that it will provide to the Warrant Agent with any new or amended exercise terms. The Warrant Agent shall have no obligation under any Section of this Agreement to determine whether an Adjustment Event or an event under Section 4.5 has occurred or are scheduled or contemplated to occur or to calculate, verify or confirm any of the adjustments set forth in this Agreement. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a report on Form 6-K.

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4.8          No Fractional Shares. Notwithstanding any provision contained in this Agreement to the contrary, the Company shall not issue fractional shares upon exercise of Warrants. If, by reason of any adjustment made pursuant to this Section 4, the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the Company shall, upon such exercise, round down to the nearest whole number the number of Common Shares to be issued to such Holder. If fewer than all the Warrants evidenced by a Book-Entry Warrant Certificate are exercised, a notation shall be made to the records maintained by the Depository, its nominee for each Book-Entry Warrant Certificate, or a Participant, as appropriate, evidencing the balance of the Warrants remaining after such exercise.

4.9          Form of Warrant. The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued after such adjustment may state the same Exercise Price and the same number of shares as is stated in the Warrants initially issued pursuant to this Agreement.

5.          Transfer and Exchange of Warrants.

5.1          Registration of Transfer. The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant Register, upon surrender of such Warrant for transfer, properly endorsed with signatures properly guaranteed by an eligible guarantor institution participating in a signature guarantee program approved by the Securities Transfer Association and accompanied by appropriate instructions for transfer, as well as any other evidence of authority that may be reasonably required by the Warrant Agent. Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants shall be issued and the old Warrant shall be cancelled by the Warrant Agent. The Warrants so cancelled shall be delivered by the Warrant Agent to the Company from time to time upon request.

5.2          Procedure for Surrender of Warrants. Warrants may be surrendered to the Warrant Agent, together with a written request for exchange or transfer reasonably acceptable to the Warrant Agent, duly executed by the Registered Holder thereof, or by a duly authorized attorney, and thereupon the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the Registered Holder of the Warrants so surrendered, representing an equal aggregate number of Warrants; provided, however, that except as otherwise provided herein or in any Book-Entry Warrant Certificate, each Book-Entry Warrant Certificate may be transferred only in whole and only to the Depository, to another nominee of the Depository, to a successor depository, or to a nominee of a successor depository.

5.3          Fractional Warrants. The Warrant Agent shall not be required to effect any registration of transfer or exchange which shall result in the issuance of a Book-Entry Warrant Certificate or Warrant Certificate for a fraction of a Warrant.

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5.4          Warrant Execution and Countersignature. The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the terms of this Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5 and the Company, whenever required by the Warrant Agent, will supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purpose.

6.          Other Provisions Relating to Rights of Holders of Warrants.

6.1          No Rights as Stockholder. Except as otherwise specifically provided herein, a Registered Holder, solely in its capacity as a holder of a Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Agreement be construed to confer upon a Registered Holder, solely in its capacity as the Registered Holder of a Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Registered Holder of the Common Shares which it is then entitled to receive upon the due exercise of a Warrant. A Warrant does not entitle the Registered Holder thereof to any of the rights of a stockholder.

6.2          Lost, Stolen, Mutilated, or Destroyed Warrants. If any Warrant Certificate is lost, stolen, mutilated, or destroyed, absent notice to the Company or the Warrant Agent that such Warrant Certificate has been acquired by a "protected" purchaser, the Company may, upon receipt by the Warrant Agent of an open penalty surety bond satisfactory to it and holding it and Company harmless, or any other condition as the Company and the Warrant Agent may in their discretion impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant Certificate of like denomination, tenor, and date as the Warrant Certificate so lost, stolen, mutilated, or destroyed, and countersigned by the Warrant Agent. Any such new Warrant Certificate shall constitute a substitute contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated, or destroyed Warrant Certificate shall be at any time enforceable by anyone. The Warrant Agent may, at its option, issue replacement Warrant Certificates for mutilated certificates upon presentation thereof without such indemnity.

6.3          Reservation of Common Shares. The Company shall at all times reserve and keep available a number of its authorized but unissued Common Shares that shall be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Agreement.

7.          Concerning the Warrant Agent and Other Matters.

7.1          Payment of Taxes.  The Company shall from time to time promptly pay all taxes and charges that may be imposed upon the Company or the Warrant Agent in respect of the issuance or delivery of Common Shares upon the exercise of the Warrants, but neither the Company nor the Warrant Agent shall be obligated to pay any income taxes of the Holder in respect of the Warrants or such shares.

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7.2          Resignation, Consolidation, or Merger of Warrant Agent.

7.2.1          Appointment of Successor Warrant Agent. The Warrant Agent, or any successor hereafter appointed, may resign its duties and be discharged from all further duties and liabilities hereunder after giving thirty (30) days' notice in writing to the Company. If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor Warrant Agent in place of the Warrant Agent. If the Company shall fail to make such appointment within a period of thirty (30) days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of a Warrant (who shall, with such notice, submit his Warrant for inspection by the Company), then the holder of any Warrant may apply to the Supreme Court of the State of New York for the County of New York for the appointment of a successor Warrant Agent at the Company's cost. Any successor Warrant Agent, whether appointed by the Company or by such court, shall be authorized under applicable laws to exercise powers of a transfer agent and subject to supervision or examination by federal or state authority. After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as the Warrant Agent hereunder, without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority, powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations.

7.2.2          Notice of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof to the predecessor Warrant Agent and the transfer agent for the Common Shares not later than thirty (30) days before the effective date of any such appointment.

7.2.3          Merger or Consolidation of Warrant Agent. Any entity into which the Warrant Agent may be merged or with which it may be consolidated or any entity resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor Warrant Agent under this Agreement without any further act.

7.3          Fees and Expenses of Warrant Agent.

7.3.1          Remuneration. The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent hereunder and any transfer agent fees which are in addition thereto and shall, pursuant to its obligations under this Agreement, reimburse the Warrant Agent upon demand for all expenditures that the Warrant Agent may reasonably incur in the execution of its duties hereunder.

7.3.2          Further Assurances. The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed, executed, acknowledged, and delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of the provisions of this Agreement.

7.4          Liability of Warrant Agent.

7.4.1          Reliance on Company Statement. Whenever in the performance of its duties under this Agreement, the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a statement signed by the President, Chief Executive Officer, Chief Financial Officer, Secretary or other principal officer of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon, and be held harmless for such reliance upon, such statement for any action taken or suffered in good faith by it pursuant to the provisions of this Agreement, and shall not be held liable in connection with any delay in receiving such statement.

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7.4.2          Indemnity. The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct or bad faith (each as determined by a final judgment of a court of competent jurisdiction). The Company covenants and agrees to indemnify and to hold the Warrant Agent harmless against any costs, expenses (including reasonable fees of its legal counsel), losses or damages, which may be paid, incurred or suffered by or to which it may become subject, arising from or out of, directly or indirectly, any claims or liability resulting from its actions as Warrant Agent pursuant hereto; provided, that such covenant and agreement does not extend to, and the Warrant Agent shall not be indemnified with respect to, such costs, expenses, losses and damages incurred or suffered by the Warrant Agent as a result of, or arising out of, its gross negligence, bad faith, or willful misconduct (each as determined by a final judgment of a court of competent jurisdiction).

7.4.3          Exclusions. The Warrant Agent shall have no responsibility with respect to the validity of this Agreement or with respect to the validity or execution of any Warrant (except its countersignature thereof). The Warrant Agent shall not be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Warrant. The Warrant Agent shall not be responsible to make any adjustments required under the provisions of Section 4 or responsible for the manner, method, or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment; nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any Common Shares to be issued pursuant to this Agreement or any Warrant or as to whether any Common Shares shall, when issued, be valid and fully paid and nonassessable.

7.4.4          Instructions. From time to time, the Company may provide the Warrant Agent with instructions concerning the services performed by the Warrant Agent hereunder. In addition, at any time the Warrant Agent may apply to any officer of Company for instruction, and may consult with legal counsel for the Warrant Agent or the Company with respect to any matter arising in connection with the services to be performed by the Warrant Agent under this Agreement. The Warrant Agent and its agents and subcontractors shall not be liable and shall be indemnified by Company for any action taken or omitted to be taken by the Warrant Agent in reliance upon any Company instructions or upon the advice or opinion of such counsel. The Warrant Agent shall not be held to have notice of any change of authority of any person, until receipt of written notice thereof from the Company.

7.4.5          Rights and Duties of the Warrant Agent.

7.4.5.1          The Warrant Agent may consult with legal counsel (who may be legal counsel for the Company), and the advice or opinion of such counsel shall be full and complete authorization and protection to the Warrant Agent as to any action taken or omitted by it in accordance with such opinion.

7.4.5.2          The Warrant Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Warrant Certificates (except its countersignature thereof) or be required to verify the same, and all such statements and recitals are and shall be deemed to have been made by the Company only.

7.4.5.3          The Warrant Agent shall not have any duty or responsibility in the case of the receipt of any written demand from any holder of Warrants with respect to any action or default by the Company, including, without limiting the generality of the foregoing, any duty or responsibility to initiate or attempt to initiate any proceedings at law or otherwise or to make any demand upon the Company.

15

7.4.5.4          The Warrant Agent and any stockholder, director, officer or employee of the Warrant Agent may buy, sell or deal in any of the Warrants or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Warrant Agent under this Agreement. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any other legal entity.

7.4.5.5          The Warrant Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorney or agents, and the Warrant Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorney or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct, absent gross negligence, bad faith or willful misconduct (each as determined by a final judgment of a court of competent jurisdiction) in the selection and continued employment thereof.

7.4.5.6          The Warrant Agent may rely on and shall be held harmless and protected and shall incur no liability for or in respect of any action taken, suffered or omitted to be taken by it in reliance upon any certificate, statement, instrument, opinion, notice, letter, facsimile transmission, telegram or other document, or any security delivered to it, and believed by it to be genuine and to have been made or signed by the proper party or parties, or upon any written or oral instructions or statements from the Company, with respect to any matter relating to its acting as Warrant Agent hereunder.

7.4.5.7          The Warrant Agent shall not be obligated to expend or risk its own funds or to take any action that it believes would expose or subject it to expense or liability or to a risk of incurring expense or liability, unless it has been furnished with assurances of repayment or indemnity satisfactory to it.

7.4.5.8          The Warrant Agent shall not be liable or responsible for any failure of the Company to comply with any of its obligations relating to any registration statement filed with the Commission or this Agreement, or otherwise relating to the Company's failure to comply with federal or state securities laws, whether referenced herein or otherwise.

7.4.5.9          The Warrant Agent shall not be accountable or under any duty or responsibility for the use by the Company of any Warrants authenticated by the Warrant Agent and delivered by it to the Company pursuant to this Agreement or for the application by the Company of the proceeds of the issue and sale, or exercise, of the Warrants.

7.4.5.10          The Warrant Agent shall act hereunder solely as agent for the Company, and its duties shall be determined solely by the express provisions hereof (and no duties or obligations shall be inferred or implied). The Warrant Agent shall not assume any obligations or relationship of agency or trust with any of the owners or holders of the Warrants.

7.4.5.11          The Warrant Agent may rely on and be fully authorized and protected in acting or failing to act upon (a) any guaranty of signature by an "eligible guarantor institution" that is a member or participant in the Securities Transfer Agents Medallion Program or other comparable "signature guarantee program" or insurance program in addition to, or in substitution for, the foregoing; or (b) any law, act, regulation or any interpretation of the same even though such law, act, or regulation may thereafter have been altered, changed, amended or repealed.

7.4.5.12          In the event the Warrant Agent reasonably believes any ambiguity or uncertainty exists hereunder or in any notice, instruction, direction, request or other communication, paper or document received by the Warrant Agent hereunder, the Warrant Agent, may, in its reasonable discretion, refrain from taking any action, and shall be fully protected and shall not be liable in any way to Company, the holder of any Warrant Certificate or Book-Entry Warrant Certificate or any other person or entity for refraining from taking such action, unless and until the Warrant Agent receives written instructions signed by the Company which eliminates such ambiguity or uncertainty to the satisfaction of Warrant Agent.

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7.5          Acceptance of Agency. The Warrant Agent hereby accepts the agency established by this Agreement and agrees to perform the same upon the terms and conditions herein set forth and among other things, shall account promptly to the Company with respect to Warrants exercised and concurrently account for, and pay to the Company, all monies received by the Warrant Agent for the purchase of Common Shares through the exercise of the Warrants.

7.6          Limitation of Liability. Notwithstanding anything contained herein to the contrary, the Warrant Agent's aggregate liability during any term of this Agreement with respect to, arising from, or arising in connection with this Agreement, or from all services provided or omitted to be provided under this Agreement, whether in contract, or in tort, or otherwise, is limited to, and shall not exceed, the amounts paid hereunder by the Company to the Warrant Agent as fees and charges, but not including reimbursable expenses, during the twelve (12) months immediately preceding the event for which recovery from the Warrant Agent is being sought. Neither party to this Agreement shall be liable to the other party for any consequential, indirect, special, punitive or incidental damages under any provisions of this Agreement or for any consequential, indirect, punitive, special or incidental damages arising out of any act or failure to act hereunder even if that party has been advised of or has foreseen the possibility or likelihood of such damages.

7.7          Survival. The provisions of this Section 7 shall survive the termination of this Agreement and the resignation, removal or replacement of the Warrant Agent.

8.          Miscellaneous Provisions.

8.1          Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns.

8.2          Notices. Any notice, statement or demand authorized by this Agreement to be given or made by the Warrant Agent or by the holder of any Warrant to or on the Company shall be sufficiently given if in writing (i) when so delivered if by hand or (ii) when sent, if delivered by internationally recognized overnight delivery service, facsimile (provided that confirmation of transmission is mechanically or electronically generated and kept on file by the sending party) or by electronic mail (provided that such sent e-mail is kept on file (whether electronically or otherwise) by the sending party and the sending party does not receive an automatically generated message from the recipient's e-mail server that such e-mail could not be delivered to such recipient) as follows:

Seanergy Maritime Holdings Corp.

16 Grigoriou Lambraki Street

166 74 Glyfada

Athens, Greece

Attn: Stamatios Tsantanis, Chief Executive Officer

Email: snt@seanergy.gr

17

with a copy to (which shall not constitute notice):

Seward & Kissel LLP

One Battery Park Plaza

New York, New York 10004

Attn: Gary J. Wolfe, Esq.

Facsimile: (212) 480- 8421

Email: wolfe@sewkis.com

Any notice, statement or demand authorized by this Agreement to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be sufficiently given if in writing (i) when so delivered if by hand or (ii) when sent, if delivered by internationally recognized overnight delivery service, facsimile (provided that confirmation of transmission is mechanically or electronically generated and kept on file by the sending party) or by electronic mail (provided that such sent e-mail is kept on file (whether electronically or otherwise) by the sending party and the sending party does not receive an automatically generated message from the recipient's e-mail server that such e-mail could not be delivered to such recipient) as follows:

Continental Stock Transfer & Trust Company

17 Battery Place

New York, NY 10004

Attention: Compliance Department

Email: compliance@continentalstock.com

8.3          Applicable Law; Process Agent. The validity, interpretation, and performance of this Agreement and of the Warrants shall be governed in all respects by the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The Company hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.  The Company hereby irrevocably designates and appoints Seward & Kissel LLP (the "Process Agent") as its authorized agent upon whom process may be served in any claim or cause of action brought against the Company, it being understood that the designation and appointment of the Process Agent as such authorized agent shall become effective immediately without any further action on the part of the Company.  The Company represents to the Warrant Agent that it has notified the Process Agent of such designation and appointment and that the Process Agent has accepted the same in writing.  The Company hereby irrevocably authorizes and directs the Process Agent to accept such service.  The Company further agrees that service of process upon the Process Agent and written notice of said service to the Company, mailed by first-class mail and delivered to the Process Agent, shall be deemed in every respect effective service of process upon the Company in any such claim or cause of action.

8.4          Persons Having Rights under this Agreement. Nothing in this Agreement shall be construed to confer upon, or give to, any person or corporation other than the parties hereto and the Registered Holders of the Warrants any right, remedy, or claim under or by reason of this Agreement or of any covenant, condition, stipulation, promise, or agreement hereof. All covenants, conditions, stipulations, promises, and agreements contained in this Agreement shall be for the sole and exclusive benefit of the parties hereto and their successors and assigns and of the Registered Holders of the Warrants.

18

8.5          Examination of the Warrant Agreement. A copy of this Agreement shall be available at all reasonable times at the office of the Warrant Agent, for inspection by the Registered Holder of any Warrant. The Warrant Agent may require any such Registered Holder to submit his Warrant for inspection by it.

8.6          Counterparts. This Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. A signature to this Agreement transmitted electronically shall have the same authority, effect and enforceability as an original signature.

8.7          Effect of Headings. The section headings herein are for convenience only and are not part of this Agreement and shall not affect the interpretation thereof.

8.8          Amendments. This Agreement may be amended by the Company and the Warrant Agent with the written consent of the Company and the Registered Holders holding Warrants to purchase at least a majority of the Common Shares underlying the then outstanding Warrants. No consideration shall be offered by the Company to any Registered Holder in connection with a modification, amendment or waiver of this Agreement or any Warrant without also offering the same consideration to all Registered Holders.

8.9          Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.

8.10          Force Majeure. Notwithstanding anything to the contrary contained herein, the Warrant Agent will not be liable for any delays or failures in performance resulting from acts beyond its reasonable control including, without limitation, acts of God, terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss of data due to power failures or mechanical difficulties with information storage or retrieval systems, labor difficulties, war, or civil unrest.

19

8.11          Bank Accounts. All funds received by the Warrant Agent under this Agreement that are to be distributed or applied by the Warrant Agent in the performance of its services hereunder (the "Funds") shall be held by the Warrant Agent as agent for the Company and deposited in one or more bank accounts to be maintained by the Warrant Agent in its name as agent for the Company. Until paid pursuant to the terms of this Agreement, the Warrant Agent will hold the Funds through such accounts in: deposit accounts of commercial banks with Tier 1 capital exceeding $1 billion or with an average rating above investment grade by S&P (LT Local Issuer Credit Rating), Moody's (Long Term Rating) and Fitch Ratings, Inc. (LT Issuer Default Rating) (each as reported by Bloomberg Finance L.P.). The Warrant Agent shall have no responsibility or liability for any diminution of the Funds that may result from any deposit made by the Warrant Agent in accordance with this paragraph, including any losses resulting from a default by any bank, financial institution or other third party. The Warrant Agent may from time to time receive interest, dividends or other earnings in connection with such deposits. The Warrant Agent shall not be obligated to pay such interest, dividends or earnings to the Company, any Holder of Warrants or any other party.

8.12          Confidentiality. The Warrant Agent and the Company agree that all books, records, information and data pertaining to the business of the other party, including inter alia, personal, non-public information about the Holders, which are exchanged or received pursuant to the negotiation or the carrying out of this Agreement including the fees for services shall remain confidential, and shall not be voluntarily disclosed to any other person, except as may be required by law, including, without limitation, pursuant to subpoenas from state or federal government authorities (e.g., in divorce and criminal actions).

  

[Signature Page Follows]

20

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

	 	
SEANERGY MARITIME HOLDINGS CORP.

 

	 	 
	 	
By:

	
/s/ Stamatios Tsantanis

	 	 	
Name:

	
Stamatios Tsantanis

	 	 	
Title:

	
Chief Executive Officer

 

 

	 	
CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Warrant Agent

 

	 	 
	 	
By:

	
/s/ Kevin Jennings

	 	 	
Name:

	
Kevin Jennings

	 	 	
Title:

	
Vice President

[SIGNATURE PAGE TO WARRANT AGREEMENT]

21

EXHIBIT A

FORM OF CLASS A WARRANT CERTIFICATE

Number

[             ] CLASS A WARRANTS

THIS WARRANT SHALL BE VOID IF NOT EXERCISED PRIOR TO THE EXPIRATION OF THE EXERCISE PERIOD PROVIDED FOR

 IN THE WARRANT AGREEMENT DESCRIBED BELOW

 SEANERGY MARITIME HOLDINGS CORP.

(Incorporated Under the Laws of The Republic of Marshall Islands)

CUSIP Y73760145

Warrant Certificate

This Warrant Certificate certifies that [__________], or its registered assigns, is the registered holder of [             ]  Class A warrant(s) (the "Warrants" and each, a "Warrant") to purchase Common Shares, par value $0.0001 per share ("Common Shares"), of Seanergy Maritime Holdings Corp., a Marshall Islands corporation (the "Company").  Each Warrant entitles the holder, upon exercise during the period set forth in the Warrant Agreement referred to below, to receive from the Company that number of fully paid and nonassessable Common Shares as set forth below, at the exercise price (the "Exercise Price") as determined pursuant to the Warrant Agreement, payable in lawful money of the United States of America (or through "cashless exercise" as provided for in the Warrant Agreement), subject to the conditions set forth herein and in the Warrant Agreement. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement (as defined on the reverse hereof).

Each Warrant is initially exercisable for one fully paid and non-assessable Common Share. The number of Common Shares issuable upon exercise of the Warrants is subject to adjustment upon the occurrence of certain events set forth in the Warrant Agreement.

The initial Exercise Price per Common Share for any Warrant is equal to $2.00 per share. The Exercise Price is subject to adjustment upon the occurrence of certain events set forth in the Warrant Agreement.

Subject to the conditions set forth in the Warrant Agreement, the Warrants may be exercised only during the Exercise Period and to the extent not exercised by the end of such Exercise Period, such Warrants shall become void.

Reference is hereby made to the further provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions shall for all purposes have the same effect as though fully set forth at this place.

This Warrant Certificate shall not be valid unless countersigned by the Warrant Agent, as such term is used in the Warrant Agreement.

This Warrant Certificate shall be governed by and construed in accordance with the internal laws of the State of New York, without regard to conflicts of laws principles thereof.

IN WITNESS WHEREOF, the parties hereto have caused this Warrant Certificate to be duly executed as of the date first above written.

	 	
SEANERGY MARITIME HOLDINGS CORP.

	 	
 

 

	 	
By:

	
 

	 	 	
Name:

	 
	 	 	
Title:

	 

 

 

	 	
CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Warrant Agent

 

	 	 
	 	
By:

	 
	 	 	
Name:

	 
	 	 	
Title:

	 

 

 

[SIGNATURE PAGE TO WARRANT CERTIFICATE]

[Form of Warrant Certificate]

[Reverse]

The Warrants evidenced by this Warrant Certificate are part of a duly authorized issue of Warrants entitling the holder on exercise to receive Common Shares and are issued or to be issued pursuant to a Warrant Agreement dated as of ________ ____, 2016 (the "Warrant Agreement"), duly executed and delivered by the Company to [_______], a [______] corporation, as the Warrant Agent (the "Warrant Agent"), which Warrant Agreement is hereby incorporated by reference in and made a part of this instrument and is hereby referred to for a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the Warrant Agent, the Company and the holders (the words "holders" or "holder" meaning the Registered Holders or Registered Holder) of the Warrants. A copy of the Warrant Agreement may be obtained by the holder hereof upon written request to the Company. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement. Warrants may be exercised at any time during the Exercise Period set forth in Section 3.2 of the Warrant Agreement.

The Warrant Agreement provides that upon the occurrence of certain events the number of Common Shares issuable upon exercise of the Warrants set forth on the face hereof may, subject to certain conditions, be adjusted. If, upon exercise of a Warrant, the holder thereof would be entitled to receive a fractional interest in a Common Share, the provisions of Section 4.8 of the Warrant Agreement shall apply.

Warrant Certificates, when surrendered at the office of the Warrant Agent by the Registered Holder thereof in person or by legal representative or attorney duly authorized in writing, may be exchanged, in the manner and subject to the limitations provided in the Warrant Agreement, but without payment of any service charge, for another Warrant Certificate or Warrant Certificates of like tenor evidencing in the aggregate a like number of Warrants.

Upon due presentation for registration of transfer of this Warrant Certificate at the office of the Warrant Agent, a new Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this Warrant Certificate, subject to the limitations provided in the Warrant Agreement (including requiring a signature guarantee from an eligible guarantor institution participating in a signature guarantee program approved by the Securities Transfer Association, or other evidence of authority of the transferor required by the Warrant Agent), without charge except for any tax or other governmental charge imposed in connection therewith.

The Company and the Warrant Agent may deem and treat the Registered Holder(s) hereof as the absolute owner(s) of this Warrant Certificate (notwithstanding any notation of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, of any distribution to the holder(s) hereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary. Neither the Warrants nor this Warrant Certificate entitles any holder hereof to any rights of a stockholder of the Company.

Election to Purchase

(To Be Executed Upon Exercise of Warrant)

The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, to receive Common Shares and herewith tenders payment for such shares to the order of Seanergy Maritime Holdings Corp. (the "Company") in the amount of $_______ in accordance with the terms hereof.  The undersigned requests that a [certificate][credit to the undersigned or its designee's balance account with the Depository Trust Company through its Deposit/Withdrawal at Custodian System] for such shares [be registered in the name of ________________, whose address is _________________________, and that such shares be delivered to ______________, whose address is ______________________] [be made to the following account name and information: __________________________].  If said number of shares is less than all of the Common Shares purchasable hereunder, the undersigned requests that a new Warrant Certificate representing the remaining balance of such shares be registered in the name of ______________, whose address is __________________________, and that such Warrant Certificate be delivered to ____________________, whose address is _____________________________________.

In the event that the Warrant is to be exercised on a "cashless" basis pursuant to Section 3.3.2 of the Warrant Agreement, the number of shares that this Warrant is exercisable for shall be determined in accordance with Section 3.3.2 of the Warrant Agreement.

_____ a "Cash Exercise" with respect to ________________ Common Shares; and/or

_____ a "Cashless Exercise" with respect to           _______________ Common Shares, resulting in a delivery obligation by the Company to the Holder of Common Shares representing the applicable Net Number, subject to adjustment.

In the event that the Warrant may be exercised, to the extent allowed by the Warrant Agreement, through cashless exercise (i) the number of shares that this Warrant is exercisable for shall be determined in accordance with the relevant section of the Warrant Agreement which allows for such cashless exercise and (ii) the holder hereof shall complete the following: The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, through the cashless exercise provisions of the Warrant Agreement, to receive Common Shares. If said number of shares is less than all of the Common Shares purchasable hereunder (after giving effect to the cashless exercise), the undersigned requests that a new Warrant Certificate representing the remaining balance of such shares be registered in the name of ________________, whose address is _________________________________, and that such Warrant Certificate be delivered to ___________________, whose address is _______________________________.

	
Date: ____________, 20____

	 
	 	
Signature

 

	 	 
	 	
Address

 

	 	 
	 	
(Tax Identification Number)

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